Polish Market No. 1-2 (208) / 2014 by Polish Market

PUBLISHED SINCE 1996 No. 1-2 (208)/ 2014 :: www.polishmarket.com.pl

INSIDE: ECONOMY INNOVATION

WOJCIECH

SZPIL

PRESIDENT OF TOTALIZATOR SPORTOWY

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Contents

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From The President’s Press Office From The Government Information Centre

Our Guest

Janusz Piechociński, Deputy Prime Minister and Minister of the Economy; 2014 - stable economic growth

10 Bank of Poland’s Management Board;

Prof. Małgorzata Zaleska, a member of the National Light at the end of the tunnel

van Rompuy, President of the European Council; 12 Herman Poland’s business community can be proud!

26 28 30

14 Jerzy Bojanowicz; Going beyond the standard

Marcin Haber; Air transport market in Poland is constantly evolving Bogdan Sadecki; Polish roads - the current state and plans for 2014

Construction

Bogdan Sadecki; Hopes for Polish construction in 2014

Law & Taxes

Joanna Hamera, Legal Counsel BHS Law Firm; Government launches home ownership support scheme for young people

Investment

Innovation

Kraków Airport - leader among Polish regional airports

Monika Piątkowska, Member of the Board of the Polish Information and Foreign Investment Agency; Investments in special economic zones in 2013 Marcin Haber; 2014 - a year of mild growth

Transport Energy

Prof. Janusz Dyduch, Chairman of the Transport Committee of the Polish Academy of Sciences; Intelligent Transport Systems new face of Polish transport

Mieczysław T. Starkowski; King coal and what next?

Ecology

20 Kisilowski, University of Technology and Humanities in Radom;

Andreas Koszuta, president of Scheidt & Bachmann, and Prof. Jerzy Smart industrial policy – a necessary condition for the effective technological development of Poland

Marcin Haber; ITS Cluster - a new hope for Polish transport

Szafrański, Director - Southern Poland, Michael Page; 24 Radosław Poland develops its logistics sector

25 Delta Trans Group - 25 years of innovative approach to transport

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Patryk Mirecki; No breakthrough

Finance

44 46

Radosław Kuczyński, President of the Board of EFL; The leasing industry in 2013

6th European Economic Forum

Contents

4th KPMG Tax and Accounting Congress 47 The the most important changes in the regulations under scrutiny

Culture

48 Cultural Monitor

64 66

22nd Gala of Ability and Competence Laurels Maciej Proliński; A story about those who still want...

Food Industry

Waldemar Dąbrowski, director of the Grand Theatre-National Opera in Warsaw; Partner for the world’s top operas

Bożena Gargas, president of the Institute of Industrial Design (IWP) in Warsaw; Industrial design - an opportunity for strong Polish brands!

54 Maciej Proliński; Shakespeare’s immortal dance 55 Maciej Proliński; The Castle that rose from the ashes… 56 Maciej Proliński; A unique place with a great patron 57

Events

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Bożena Skarżyńska; New Year’s meeting A strong note for the beginning of 2014 Maciej Bartoń; Organic chokeberry - black gold

The 12th edition of the Pearls of the Polish Economy got started more information:

www.perlygospodarki.pl

Maciej Proliński; The fourth one…

Pearls of the Polish Economy

The Grand Awards Gala of the Pearls of the Polish Economy 2013

Publisher: Oficyna Wydawnicza RYNEK POLSKI Sp. z o.o. (RYNEK POLSKI Publishers Co. Ltd.) President: Krystyna Woźniak-Trzosek Vice - Presidents: Błażej Grabowski, Grażyna Jaskuła Adress: 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 Editor-in-Chief: Krystyna Woźniak-Trzosek Deputy Editor-in-Chief: Ewelina Janczylik-Foryś redakcja@polishmarket.com.pl

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Managing Editor: Rita Schultz rita.schultz@polishmarket.com.pl

Writers/Editors: Maciej Proliński, Jan Sosna, Sylwia WesołowskaBetkier, Grażyna Śleszyńska, Janusz Korzeń, Jerzy Bojanowicz, Janusz Turakiewicz, Marcin Haber Contributors: Przemysław Rudowski, Agnieszka Turakiewicz Photographer: Agnieszka Andrzejczak -Charuba Sales: Phone (+48 22) 620 38 34, 654 95 77 Natalia Suhoveeva natalia.s@polishmarket.com.pl Public Relations: Joanna Fijałkowska j_fijalkowska@polishmarket.com.pl

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Editorial

f measured by GDP, Poland should be among the 20 richest countries in the world by 2022. Until then Poland’s GDP is expected to be 80% of the EU average. Today, it is 67%, while in 2004 it was only 50%. This is, according to Prime Minister Donald Tusk, a synthetic expression of Polish macroeconomic target for the next decade.

Is it realistic?

Economists are obviously not unanimous. In the opinion of Stanisław Gomułka, one of the architects of Polish post-communist transition, if GDP remains at 4% per year - as it has been the case for 20 years - the prediction is very likely to fulfill that Poland will be among the 20 richest countries in the world. But if the economy grows at 2.5-3%, the assumptions of the government will probably not be realized. After last year’s successful recession avoidance optimism prevails. At a January meeting of the Monetary Policy Council, setting interest rates of the National Bank of Poland (NBP), its president Marek Belka had to restrain excessive - in his opinion - optimism of those anticipating a 4% growth rate already in the third quarter. Official forecasts by the government and Polish banks hover around 2.9-3.2%. It was assumed in the budget that economic growth in 2014 will be 2.5%, but - according to the new finance minister Mateusz Szczurek - it is possible to achieve 2.9% as predicted by NBP. The minister also believes that the latest European Commission’s forecasts for the EU (an increase by 1.4% compared to the stagnation in 2013) and the eurozone (an increase by 1.1% after a decline by 0.4%) sound optimistic tune, and in 2015 the Polish economy is likely to return on to the path of growth at a rate above 3%.

The economy for people – at last ?

But as the optics of the development debate changes, the prospects do not look so powerful any more. The same indicators calculated per capita seem to no longer be as impressive. The prospect of catching up with Europe’s leaders in terms of income level moves already into three decades, and the necessary conditions for its fulfillment remain unchanged -an average annual growth rate above 4%. But before that happens, says the Polish government, certain sectoral challenges should be tackled. Poland’s leap forward in the upcoming decade should be accompanied by a jump also when it comes to well-being and security of Polish families. The poverty level is set to decrease below the EU average - at least 1.5 million people will come out of poverty (according to the data from the Central Statistical Office(GUS), about 2.7 million people were threatened with poverty in 2011). In order to achieve this goal, strategic intervention areas (structural poverty areas) will be identified, to which extra money from European funds will be directed to help them catch up with the richer parts of the country. This would be the Polish national version of the EU cohesion policy based on the poverty risk indicator. According to Eurostat, the at-risk-of-poverty rate is more truthful about the quality of life than, say, the average wage.

However, the average wage increase will also be crucial for the future of the Polish economy. Research by the NBP’s Economics Institute shows that for several years wage growth has been slower than that of labour productivity. Economists increasingly say that without the wage increase the Polish economy will not return on to the path of rapid growth. The issue is not easy to solve and one can hardly count here on the positive effects of the “invisible hand of the market.” Analyses show that wage growth in Poland is mainly due to large companies whose share in total employment is decreasing though. Meanwhile, in the SME sector a model is applied to achieve efficiency through cost-cutting. This model questions the long-term ability to increase competitiveness. How to handle this? It is probably observing effects of Abenomics, a doctrine introduced by Japan’s Prime Minister Shinzō Abe to revive the Japanese economy. Unable to cope with the real wage decline continuing for 15 years, Abe called on the biggest corporations in December to raise wages. Hitachi and Toyota have already responded positively, but is such an example workable in Europe? In Poland? The government will probably have to come up with something else. Therefore, 2014 promises to be a very creative year. ::

Krystyna Woźniak-Trzosek Editor-in-Chief President Rynek Polski Publishers Co. Ltd.

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President

President concerned about the situation in Ukraine

Herman van Rompuy in Poland

n January 25, a meeting was held in the Belvedere Palace between President Bronisław Komorowski and President of the European Council Herman Van Rompuy. The main topic of conversation was civil unrest in Ukraine as well as Poland’s and EU’s ideas on how to ease tensions and ultimately resolve the conflict, which has been the object of major concern of the European leaders recently. The Polish President stressed that “the European Union strongly believes that the Eastern Partnership cannot be foregone, that we cannot turn a blind eye to the bloodshed and any steps backwards when it comes to the process of democratization of the East, including Ukraine, that we need to respond to the anti-democratic practices, but at the same time we have to build up potential to prevent escalation of the conflict and to open new prospects for the future.” Herman Van Rompuy and Bronisław Komorowski also discussed the upcoming European Union – Russia summit (scheduled for January 28), mainly in the context of the unrest in Ukraine and the EU’s stance on it. ::

resident Bronisław Komorowski is seriously concerned about the protracted unrest in the Ukraine. In an interview with Monika Olejnik Komorowski said: “I am concerned about what is happening in Ukraine and with Ukraine. The decision not to sign the Association Agreement with the EU extremely narrows the room for manoeuvre both for Ukraine and the EU, including Poland - Ukraine’s neighbour, but also a country that has been advocating European aspirations of Ukraine.” He also stressed that Poland has for years maintained close partnership relations with Ukraine. Therefore, the situation in Ukraine is all the more worrying for Poland. The Maidan, according to the President, slowly ceases to be a voice of opposition. Protracted demonstrations are beginning to cause frustration among the crowd, which leads to the emancipation of demonstrators and a highly undesirable increase in aggression: “Opposition leaders say they are losing control over the Maidan’s behaviour. The Maidan which is the centre of the protest, today does not fully identify itself with the opposition. It seems that the phenomenon occurs of the emancipation of the Maidan, of the people full of impatience, extremely tired of the situation and demanding from the opposition and the government a whole range of moves. This is not a good situation.” The conduct of Ukraine’s authorities is also upsetting, as it is preparing for a forceful intervention: May this not happen, because then it would be a tragedy from the point of view of the Western world,” said Bronisław Komorowski. ::

The reform of the pension funds – a step backwards

resident Bronisław Komorowski signed amendments to the Open Pension Funds into law. The law is controversial from the point of view of the public and opposition leaders. At the same time, however, he sent it to the Constitutional Court. he President stressed that when signing the bill he considered not only compliance with the Constitution but also the financial security of the state and hence the citizens: “You cannot always use the veto without doing even more harm to society, the state and citizens. This is an example of two standpoints, with the divided opinions of lawyers, constitutionalists, and extremely conflicting views of economists. I had to make a decision guided by the need to find solutions that are safe both constitutionally and financially. This is also a constitutional norm.” The law raises doubts among constitutionalists, economists and experts on pension funds. The President considers it to be ambiguous, too. He stressed, however, that if he had felt it was “drastically unconstitutional”, he would have never signed it and would have rather sent it preventively to the Court. It is now up to the Constitutional Court to assess its lawfulness “by weighing these conflicting arguments.” The Constitutional Court has to analyze mainly a ban, instituted by the reform, on investment by pension funds in stocks or Treasury bonds. The President stressed that in this wording the Law is “a step backwards in terms of reforms in Poland.” ::

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Prime Minister

Conversation Tusk - Cameron

n January 8 Prime Minister Donald Tusk had a phone conversation with the British Prime Minister David Cameron. It was in reaction to the British government’s new social policy and especially the harsh words that Cameron said about Poles working in the British Isles. Cameron argued that Britain should no longer provide social support for immigrants whose families reside in their homelands. The reaction of Prime Minister Tusk and Foreign Minister Radosław Sikorski was so firm because the British Prime Minister cited in his speech Poles as an example. It is worth noting that the actions of the British government go hand in hand with social trends. The majority of the British public is in fact opposed to the payment of child benefits to immigrants whose children live in their home countries. Prime Minister Tusk, for his part, said that “Poland will not allow any legislative changes that would discriminate agains Poles anywhere in the European Union.” ::

Premier helps the Grand Orchestra of Christmas Charity

match shirt of the former English Arsenal football player Robin van Persie was a gift that Prime Minister Donald Tusk donated to the 22nd Grand Orchestra of Christmas Charity, which took place on January 12. The Prime Minister received it a few years ago from British Prime Minister David Cameron in gratitude for the selfless help of Poland when the UK needed it. Tusk stressed: “This gift is a good symbol because the Grand Orchestra is selfless helping and Poland has often shown in the history of our bilateral relationship that it is ready to offer selfless help in critical situations.” Tusk admitted that for many years he has been a fan of London’s Arsenal, that is why the shirt has an exceptional value for him. This year’s Orchestra was conducted by Jerzy Owsiak already for the 22nd time. Every year, it collects ever larger amounts to charity. This year the money raised will be used to purchase specialized equipment for paediatric emergency and to provide decent health care to seniors. ::

2014 – the beginning of major changes proposed by those present at the conference included:

he government led by Donald Tusk began 2014 striking a high note. At a press conference – convened at the beginning of January and attended by Prime Minister Donald Tusk, Deputy Prime Minister and Minister of the Economy, Janusz Piechociński and Deputy Prime Minister and Minister of Infrastructure and Development, Elżbieta Bieńkowska – a number of ideas were announced that are supposed to make life easier for Polish families. The Prime Minister said that thanks to a successful recovery from the crisis Poland can afford to improve the social situation of citizens: “We were able to protect the country against the crisis, so now we can start heading towards the social and financial security of Polish families.” Shortening the queues for doctors - in March the government will put forward a plan that will help achieve this goal. The Prime Minister admitted that it is mainly about the

queues for oncologists. Changes in the so-called “junk” job contracts - these are to be subject to further social insurance contributions; access to public procurement will also be limited for companies that employ workers based on such contracts. Self-completion of PIT as of 2014. Tax statements will be filled out by tax administration based on data provided over the Internet. The Prime Minister announced also a number of other changes. The idea of free textbook for first-class pupils raised much debate. From September 1, 2014 the government intends to introduce a textbook that will replace the existing package. Parents will save up to several hundred zlotys. Such textbooks are to be reused by subsequent classes. ::

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Our Guest

2014- stable economic growth Deputy Minister of the Economy Janusz Piechociński talks to “Polish Market.”

What are the economic forecasts for 2014? What can we expect of the Polish economy this year? Last year, our economy performed very well and we expect that these positive trends will continue in 2014. Let me remind you that, although the year 2013 was projected to be the most difficult year of the present crisis, we managed to maintain positive trends thanks to our stable economic policy, a rise in consumption and concentration on exports and investment growth. Of course, this optimistic picture depends on how the external situation will be developing and on whether or not the global economy will be hit by a major turbulence. An economic revival in Germany has had a favourable pm

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impact on Polish exports. A gradual improvement in the manufacturing and construction sectors has resulted in improved labour market conditions. This, in turn, is expected to boost consumption and consequently lead to higher investment spending by businesses. And public investment associated with the European Union’s new financial period – the EU budget for 2014-2020 - should significantly enhance this effect. The further development of infrastructure will be supported by the development of the research and development sector so as to enhance the competitiveness of Polish businesses. We also hope for a continued GDP growth. In its autumn projection, the European Commission expected the Polish economy to grow by 1.3% in 2013 and by 2.5% in 2014, and to accelerate further in 2015 to 2.9%. Other forecasting centres project similar economic growth rate figures for Poland. And this is good news for us. What economic plans do you have for 2014? Our economic plans for this year are to a large extent associated with the launch of the first projects under the operational programmes drawn up for the EU’s new financial period. The money Poland is to receive in coming years as part of the EU’s cohesion policy is a big chance for us. Let us remember that this is going to be the last major injection of funding from this source. We must not waste this chance. The EU money has to be utilized wisely so as to truly support investment spending by pm

businesses, something which would have a favourable influence on economic development in coming years. Additionally, if we manage to enhance innovation in a broad sense Poland will be able to enter a new phase of economic growth. The goals of our institutional activities designed to support investment by Polish and foreign businesses in Poland are similar. In 2013, the government – at my initiative – decided to extend the lifetime of special economic zones until 2026. This year, we are going to expand the zones by new sites for investment projects and relax the rules for including private land into the zones. We will continue to provide financial support for investment projects of special importance for the economy. Apart from boosting investment spending and directing it wisely, Poland still needs many structural changes. After a few years of deregulatory activity, we are persisting in our efforts to create a friendly legal environment for entrepreneurs and ensure economic freedom. To achieve this, we are considering replacing the existing law on economic freedom, adopted in 2004 and then amended many times, with a new law guaranteeing the constitutional and treaty rights of entrepreneurs - a kind of “constitution for entrepreneurs.” We are also analysing the functioning of the law regulating the operation of economic information offices so as to improve the way in which they work. We are promoting mediation in disputes between businesses as we believe that mediation is better than court proceedings, both in

Our Guest

terms of business relations and costs. We are examining the provisions of the law on bankruptcy and reorganization because we can see here much room for change. We would like to reduce the scale of bankruptcies by promoting preventive methods of management and strengthening the role of restructuring. In order to achieve this goal, the procedures involved have to be made simpler. The year 2014 will be a time of important decisions for the energy sector, like for example decisions concerning shale gas, nuclear energy and renewable energy sources. We are going to tackle the challenge of climate change and the problem of building the EU’s common energy market. The decisions will be closely related to the way in which we are going to use the European funding for the new financial period of 2014-2020. We also plan to modify the system of support for renewable energy sources to reduce costs and disturbances on the energy market while at the same time ensuring stable conditions for their development. In the face of the planned

retirement of some generating units by the end of the decade, we will have to create stable and favourable conditions for investment in new generating capacity, especially in baseload energy sources. Does the crisis continue to affect the Polish economy? If so, when can we expect to come out of this situation? The financial crisis we have experienced in recent years was special in many respects. First of all, methods used to combat recession, based on strong stimuli designed to boost spending, were unprecedented as was the course and extent of the crisis. It is worth remembering that in 2009 Poland was the only economy in the European Union to have successfully counteracted the crisis, recording a 1.6% rate of economic growth, while the EU as a whole slid into recession, with a negative growth rate of over 4%. However, Polish households were hit by the crisis equally hard because our economy is still in the development phase. Consequently, any disturbances pm

have a stronger impact on us than on people in countries with well-established and strong economies. The next three years were a period when the stability of economic growth was being restored. The performance of the economy in 2013 gives us much reason for optimism. After a weaker first half of the year, signals from the market indicated that economic activity was accelerating, both in the third and fourth quarter. Importantly, the Polish economy is still driven by foreign demand, which at a time of economic slowdown effectively makes up for a weaker domestic demand. The same was the case in the crisis year of 2009. This trend shows how flexible our businesses are and how effectively they use any source of growth available in Poland and abroad. On the other hand, it indicates that Poland’s economic growth is balanced as it is driven by domestic demand in times of economic expansion and by foreign demand when the economy is contracting. ::

- fuel storage so as to meet day-to-day demand from gas stations, - warehousing of stocks and reserves of petroleum products, - blending fuels with biocomponents and refining additives, ob - maintaining obligatory reserves of liquid fuels (stock ticket contract service), - transshipment of fuels and petroleum products.

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Our Guest

Light at the end of the tunnel Prof. Małgorzata Zaleska, a member of the National Bank of Poland’s Management Board, talks to Ewelina Janczylik- Foryś

Economists believe that 2014 will be a peaceful time when the economy will continue to come out of the crisis. A positive sign is that most of the experts we have asked agree that the economy will be on an upward trend. They expect that the GDP will grow by around 3.1%. Do you share this view? Undoubtedly, 2014 should see the economy to continue to come out of the crisis. However, the GDP growth rate will still be far from the pre-crisis levels. It is worth noting that, according to projections made by foreign forecasting centres, Poland’s GDP will expand this year by 2.5%-2.8% (projections made by the European Commission and the International Monetary Fund respectively). Polish experts are more optimistic and their projections of a 2.9%-3.1% growth also seem realistic. Despite that, we should remember that the signs of economic revival that we are witnessing – like growth in exports, an improvement in consumer sentiment and a steady increase in consumption – are significantly weakened by the continued difficult situation on the labour market. According to the European Commission, the Polish unemployment rate calculated using the EU methodology may be as high as almost 11% this year and is not expected to drop before 2015. Consequently, even though the economy will accelerate, for many Polish households 2014 will be more of a light at the end of the tunnel than a period of visible improvement in the economic situation. pm

Last year, you said in these columns that in 2012 the Polish banking sector had remained stable, liquid, solvent and profitable. How would you sum up the year 2013? Preliminary results of the Polish banking sector for 2013 allow me to repeat the words I used a year ago and add that the year 2013 is very much likely to turn out to be one of the better periods in Polish banking since 1989 when the post-communist transition began. In the 11 months to the end of November 2013, the banks generated over PLN14 billion in profit, which represented more than 90% of profit for the same period of the record year 2012. Let us remember that it is not only the result that matters - also important is the level of security. The key parameter in this respect is the solvency ratio, which increased from 14.74% at the end of 2012 to 15.78% at the end of November 2013. Another important thing is the quality of the loan portfolio. Despite an economic slowdown, it deteriorated neither for the business nor the household segment. All these data and the results of the regularly conducted stress tests allow us to say that the Polish banking sector was stable last year. But we should never take this for granted. We should constantly monitor the situation for possible symptoms or signs of problems, which may appear in the future. pm

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The Polish Financial Supervision Authority (KNF) has tightened the rules on mortgage loans in its Recommendation S. Since 2014 a person seeking a mortgage loan will have to make a downpayment of at least 5% of the property’s value. In 2017, the percentage will be raised to 20%. And it will not be possible to take a loan for longer than 35 years. But won’t this make taking mortgage loans considerably more difficult?

In the case of mortgage loans granted for a period of several decades, ease in taking them should not be regarded as the main criterion. The experience of the recent crisis shows clearly that the financial sector and the real estate market may witness developments we are unable to predict five years in advance, not to mention 35 years. Considering that a mortgage loan is secured by an apartment or house, indicated most often as the prospective borrower’s most important property, the person should be supported in limiting the risk of losing the property. For this reason, the best practices recommended by the KNF in terms of the minimum downpayment and the maximum period for which loans may be granted should be regarded as well justified. Work is now underway on a new law on macro-prudential supervision in Poland. What does this mean for the Polish financial market? Macro-prudential supervision in Poland, as in the other countries which have already established such institutions, may complement micro-prudential supervision by the KNF. Micro-prudential supervision is focused on the situation of individual members of the financial market while ignoring the impact on the stability of the whole sector of collective decisions taken by individual institutions. An institution responsible for macro-prudential supervision will be tasked with identifying, assessing, monitoring and reducing systemic risk by using macro-prudential instruments, like for example a countercyclical buffer, and issuing warnings for the whole financial market or its parts. As a result, the activity of the new institution will be strengthening the stability of the Polish financial market and reducing the likelihood of a financial crisis in the future. :: pm

Stable growth Poland is the largest market in the IPF Group. Over 826,000 Customers are using our services, and from the last year we also offer loans for micro entrepreneurs.

Solid foundations Our success is based on 130 years of experience in building close and long-term relations with our Customers.

Long-term strategy We believe that our business model, which is based on straightforwardness, responsibility and trust, will enable us to continue the stable growth in Poland.

Our Guest

Poland’s business community can be proud!

Herman Van Rompuy President of the European Council

am delighted to be back in Warsaw, and would like to thank the Business Centre Club for their warm welcome and for this award. And I am very grateful to Premier Buzek for his very kind words. Jerzy and I got to know each other well during the early years of my mandate, when he was President of the European Parliament, and I was a brand new President of the European Council. We were actually on this very same stage together two-and-a-half years ago, to celebrate the first Polish Presidency of the Council of the European Union. Given his role in Poland’s entry into the Union, I know it was a special moment for Premier Buzek. This was in June 2011, and Europe was embarking on what was to become the most difficult summer for the eurozone. With the existential threat over the eurozone now firmly behind us, I am a more relaxed European Council President these days – I wouldn’t say a happy President but a more relaxed President, yes! Receiving such an award in Poland means a lot to me for many reasons. And one is that, even in the worst moments of recession, Poland was always a lighthouse: an “ island of growth”. For Europe, this was another reason for hope, another reason to be confident that our economies will recover, that growth will return and is now returning. And for the Europe-watchers beyond our borders, it was another sign that our economies can be – and are – dynamic. This dynamism for the most part was the result of all the hard work of the people, of

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your companies and start-ups and factories. Poland’s business community can be proud! There is talent and entrepreneurship in Poland, and tonight shows it well. This year, in 2014, we celebrate one decade since Poland joined the European Union. Overall, time well spent – for your country and others too. Hand in hand with Europe, you’ve invested, modernised, moved forward. And we see the results today: despite the crisis, the region has shown resilience. The work of course must carry on, just like in every one of our countries. Around the crisis-meeting table those last years, Poland has also taken an active role. Along with all the other member states, your country put its full weight behind our common strategy for economic recovery. And I will quickly recall its four strands: first, financial stability; second, healthy finances and structural reforms for competitiveness, growth and jobs; third, immediate measures for jobs, especially for young people; and fourth, renovating the eurozone’s architecture, so it can be strong and resilient for the future. I never said that the economic crisis is over, because it is not. Growth is still fragile, uneven. But the worst is behind us. And we have done a lot already. Reforms are happening all over Europe. Together, we’ve laid to rest any existential threats to the eurozone. The currency area is getting the solid foundations it deserves; and today already its architecture is very different from just a few years ago. It is only natural that countries like Poland, which are due one day to join

the euro, should be at the table for big decisions for the eurozone. That principle was even enshrined in our Stability Treaty from two years ago! Right now our biggest priority is to finish building the banking union, an important guarantee for stability, before the end of this parliamentary term. Big changes are in motion across the financial sector, and quite naturally this will shape the eurozone – so it’s important that Poland stays close. And, given the very close ties of Polish banks to eurozone banks, I hope you will support Poland’s accession to the banking union once it becomes operational. All the efforts for financial stability of these last years: all that work was for one goal only – growth, jobs, stronger economies. It was a means to an end. But there is no secret: ultimately, business will be the strongest driver for recovery. That is why, as a Union, we are investing so much in competitiveness. And here I must say Commissioner Lewandowski was pivotal during last year’s budget negotiations, in helping protect future-oriented investments for the rest of the decade. And I can assure you, we were sideby-side on this battle! We are gearing our resources – the majority of our European funds – towards growthrich sectors. For instance innovation, research, education or skills. All this is critical for the whole Union, but also for Poland’s further modernisation. Just like education, which is doing remarkably well here in Poland, those are the kinds of areas that will

Our Guest

help businesses like yours to invest and create jobs in the years and decades to come. There are several areas where we must transform in order to become more competitive, and one of them is energy. I know this is very dear to President Buzek’s heart – he was always the single energy market’s strongest promoter, and rightly so. Because with the energy revolution happening elsewhere in the world, for us Europeans the smartest way to bring down energy prices is to team up and connect. It is important that we keep sight of the bigger picture: our continent is not resourcerich – not at all – so in the long-run, what will determine our energy future is our ability to stay in the lead on renewables and energy efficiency. Poland still has huge potential in energy savings which should be harnessed with the help of EU funds. Investing in modern energy infrastructure would make a huge difference – as part of wider modernisation efforts in Poland. I count on your support towards these goals.

I will bring this issue again to the table of our next European Council meeting in March, along with another crucial question: how to best counter climate change. It is an important fight, and of course we need a good balance to also ensure reliable access to affordable energy. Poland is a strong pro-European partner, as close as can be to the core of European integration. It should have been a member from the start. History decided otherwise. But the Polish people changed the course of history. You are more aware than others that our Union is much more than just an economic project: it is a Union of values and freedoms, based on the legacy of Christianity and humanism. Together, we stand for a certain idea of social fairness, of social bonds, and for universal rights. The turmoil in Ukraine, the aspirations of the Ukrainian people, are a stark reminder of what we can sometimes take for granted. I want to stress our solidarity with the peaceful pro-European movements, and I share

your concerns about the violence that has been unfolding in Kiev. Nobody can prevent the Ukrainian people from seeing their dreams fulfilled one day. The thirst for freedom and fairness cannot be supressed – you in Poland know it more than anyone. For what is Poland in Europe today? Poland is a promise. A promise from the past that is being fulfilled, and a promise for the future. A nation back in its rightful place among the free nations of the world. A confident voice for Central Europe, a pillar of the Visegrad Four. And a country of great dynamism – active in defining what “being European” means today. In the rest of Europe, we want that promise to stay lively and grow. We want Poland to remain in Europe’s core. To keep looking to the future, actively. And I hope, like me, you are confident that, as we design together the solutions our societies all need, Poland can and will remain a strong voice for “More Europe” – helping shape movement from the core. Thank you. Dziękuję. :: ADVERTISEMENT

Miriam Yahil-Wax & Roni A. Einav

“NA ROGU NORDAU I WALL STREET”

1 -2 /2014 :: polish market :: 13

JUŻ DO KUPIENIA NA: MOTYLEKSIAZKOWE.PL

KSIĄŻKĘ POLECA:

Innovation

Going beyond the standard Totalizator Sportowy, Poland’s national lottery company, has operated for 58 years. The owner of the Lotto brand, it is not only one of the most recognizable Polish companies but also one of the most profitable. Its operation on the draw games market is increasingly noticed by other European operators present in the lottery sector.

Jerzy Bojanowicz

hese remarks are confirmed by the company’s recent moves up the league tables run by the “Polityka” weekly and “Rzeczpospolita” daily, and by the prestigious awards it has received: Superbrands 2013, Created in Poland Superbrands and the Pearl of the Polish Economy granted by “Polish Market.” This recognition is mainly due to the results that Totalizator Sportowy achieved in 2012, with its sales and profit having grown up year on year by respectively 15% to PLN3.421 billion and as much as 57% to PLN303 million. In terms of sales growth, Totalizator Sportowy is among the leading lottery and numbers game companies in Europe. The average sales growth recorded by European companies operating in this sector increased by a mere 2% in that period. And what were the origins of the company whose brand recognition among Polish people is so high?

A bit of history Totalizator Sportowy was set up in December 1955 by a government resolution. In 1997, the state-run enterprise was transformed into a limited liability company wholly owned

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by the state. The company’s revenue was to be set aside for the construction and repair of sports facilities. Totalizator Sportowy debuted in 1956 with bets on football matches. A year later, it launched the Toto-Lotek numbers game, which was later known as Duży Lotek and now as Lotto. In autumn 1959, football bets on English league games were added to those for the Polish league. In the 1970s, Totalizator Sportowy launched additional numbers games: Mały Lotek, Express Lotek and Zakłady Specjalne (Special Bets), followed in the next decades by Super Lotek, Multi Lotek, Twój Szczęśliwy Numerek (Your Lucky Number), Multi Lotek Plus, Keno, which was Poland’s first monitor numbers game played on the screen, the Loteriada promotional lottery, the first raffle-style lottery, called Los Milionos and the first scratch-card game, called Zodiak. In 2009, following the example of other European lottery companies, Totalizator Sportowy started rebranding its products, changing their names, making the range of its scratch cards more attractive and launching new numbers games: Joker and Kaskada, and an SMS lottery. At present, the company has Lotto, Multi Multi, Kaskada, Mini Lotto,

Joker, Keno and Zdrapki (Scratch Cards) in its portfolio.

From cinemas

to a modern studio For the first 16 years draws were held with the participation of the public in cinemas, in sports stadiums and culture centres. The first televised draw was in spring 1973. It was shown by public television (TVP). Half a year later, Totalizator Sportowy introduced the first draw machine with a mixing chamber. Millions of TV viewers watched anxiously the balls fall out of the transparent chamber to see their numbers. In the next years, the draw shows were broadcast by Channel Two of public television (TVP2) and the commercial station Polsat. And for four years now the draw shows, called Studio Lotto, are aired by TVP Info. They are held in a modern TV studio especially designed for the programme. The biggest jackpot draws are also shown by other public television channels. The draw shows have a new format, which uses the latest TV techniques. From time to time special guests, like music, film and sports personalities are, invited to take part.

Innovation

Innovation leader “As a company associated with draw games, we are overcoming stereotypes and barriers, going beyond the standard to which our players have got accustomed, which has an impact on our sales,” says President of Totalizator Sportowy Wojciech Szpil. “Our innovation is reflected in a number of various activities, projects and ideas, like for example our constantly developed scratch-card games, self-service terminals where one can buy lottery tickets and an online sales system ready to meet future challenges. We do not fear challenges, we are winning over players and are constantly looking for new ideas. This is a recipe for success.”

Totalizator Sportowy’s success recognized by the lottery sector Totalizator Sportowy is an active member of the largest international organizations of lottery operators: the European State Lotteries and Toto Association (the European Lotteries) and the World Lottery Association. On May 7, 2013, the company received a Responsible Gaming Certificate from the European Lotteries. In June 2013, during the congress celebrating the 30th anniversary of the European Lotteries in Tel Aviv, a representative of Poland was for the first time ever elected a member of the Executive Committee of this very influential organization. “It is a great pleasure to have aboard a member from Poland, a country with a significant history and culture, located in the very centre of Europe and being a part of the EU but also having close relations with Eastern European countries,” Bernadette Lobjois said on the occasion. She added that Totalizator Sportowy was a very active member of the association. “It is represented in almost all events the European Lotteries has organized in recent years.” In 2013, Poland hosted an international conference entitled “Innovation & Tradition. The Best In-Class Management Training.” Held in Cracow as part of the European Lotteries University programme, the conference

Wojciech Szpil President of Totalizator Sportowy

was designed to allow representatives of lottery companies to share experience and present best practices in organizing games and lotteries. There was also a conference on protecting fairness in sports organized in Warsaw by the Institute for International and Strategic Relations (IRIS).

Billions for Polish sports and culture The success of Totalizator Sportowy means in fact benefits for the public. In 1994, the Polish parliament has introduced a 20% surcharge on rates for numbers games to be spent on sports facilities and the promotion of sports among children, young people and the disabled. In 2003, the surcharge was raised to 25%. After the 2009 amendment to the gambling law, the money is now transferred to the Physical Culture Development Fund (77%), Culture Promotion Fund (20%) and Fund for Solving Gambling Problems (3%). Around 3,000 swimming pools, gyms, sports halls, indoor skating rinks, stadiums, sports fields, specialized facilities, including ski jumps, ski paths, kayaking courses, tennis courts and

sports complexes have been built, repaired or modernized thanks to Totalizator Sportowy. In 2012, more than PLN784.72 million (against over PLN690 million in 2011) was allocated to special-purpose funds, with PLN604.23 million awarded to the Physical Culture Development Fund, PLN156.94 million to the Culture Promotion Fund and PLN23.54 million to the Fund for Solving Gambling Problems. Apart from the contributions designed for Polish sports that Totalizator Sportowy makes through the Physical Culture Development Fund, the company also supports selected sporting events of special importance for Polish sports fans. The Polish Olympic Team is among the most important recipients of this funding. The company has worked with the Polish Olympic Committee for many years. Since 1994 it has consistently sponsored the Polish Olympic Team and plans to continue this activity in coming years. The company has supported Polish athletes at the Olympic Games in Lillehamer in 1994, Atlanta in 1996, Salt Lake City in 2002, Athens in 2004, Beijing in 2008, Vancouver in 2010 and London in 2012. Totalizator Sportowy is also the General Sponsor of the Polish Olympic Team for the Sochi Games in 2014. And it will sponsor 1-2 /2014 :: polish market :: 15

Innovation

Polish athletes at the European Games in Baku in 2015 and the Olympic Games in Rio de Janeiro in 2016. In recent years the company has cooperated with outstanding athletes, many of whom have been ambassadors for the Lotto brand. In May 2013 a new format of cooperation with Polish athletes was launched: Lotto Team, or the Lotto Masters’ School. “Krzysztof Hołowczyc trains a young beginner in car racing while Waldemar Marszałek in motorboat racing. Both are successful athletes who share their experience with young ambitious people with an appetite for success in sport, people open to adventures and lessons they can draw by working with authorities,” says Wojciech Szpil to explain the origins of the project. “The master offers advice and supports the pupil, who is at the start of his career, perfecting his skills and learning from the best. We are constantly on the lookout for such pairs and believe that investment in the development of future masters will be expanding.” In October 2013, one of the more important developments in sport was 25-yearold Andrzej Bargiel’s skiing down the

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Shishapangma mountain (8,013 m) in Tibet. Bargiel is the first Pole to have skied down an eight-thousander. It is Lotto that supported the expedition of the three-time Polish champion in ski mountaineering. This activity by Totalizator Sportowy could not go unnoticed. The company was awarded the title of Patron of Polish Sports 2013 at the annual Sports Champions Gala and Ball, which crowned the 79th poll for the best athlete of the year run by the “Przegląd Sportowy” weekly and public television.

Not only sport Since 1971 Totalizator Sportowy has actively supported Polish culture. It took an active part in the project to rebuild the Royal Castle in Warsaw. Many important cultural events were organized thanks to the financial involvement of Lotto, including the celebrations of the 100th anniversary of the Academy of Fine Arts in Warsaw, and the unveiling in the Diocesan Museum in Siedlce of “Saint Francis’ Ecstasy,” the only painting by El Greco in Poland. This masterpiece

of Spanish painting was put on public display thanks to the funding provided by Totalizator Sportowy for the purchase of a security system to protect the painting. The company was also a strategic partner of the film “Warszawa 1935” produced by the Newborn special effects studio. The list of various sports and cultural projects supported by Totalizator Sportowy is long so it comes as no surprise that the company is a European leader in terms of money granted for good causes. In 2011, it spent 101% of its gross gambling revenue (GGR) on sports, culture and healthcare, which was the best result in the European Union.

Summary Totalizator Sportowy will certainly not rest on its laurels. The company is developing, which benefits everyone. Probably the most important thing is that all players are involved in supporting sports and culture. It is thanks to them that the amount of money available for many good causes grows every day. ::

Pearls of the Polish Economy

Snoopy, MetLife Amplico ambassador

1-2 /2014 :: polish market :: 17 www.metlifeamplico.pl

Transport

Intelligent Transport Systemsnew face of Polish transport Prof. Janusz Dyduch, Chairman of the Transport Committee of the Polish Academy of Sciences talks to Ewelina Janczylik- Foryś.

Let’s start with the condition of Polish transport companies. The problem is very complex. Firstly, the ongoing recession in Europe and the world has affected the transport sector as well. In Poland, there was a disparity between expenditure on road and rail transport. This in turn caused the investment crunch to hit the condition of Polish and foreign companies, which carried out projects in Poland. The situation of the road sector is well known. As regards the rail transport, the phenomenon occurred to the same extent, but it was less visible. At some point, EU funds were less absorbed in the rail than in the road sector, and it could not be without affecting the business condition of companies. pm

Will the new EU budget perspective help pull the transport sector out of the crisis? I hope that the new perspective will mitigate the existing situation. pm

In the coming months, a number of road projects will start, and what about the railways?

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Road infrastructure is much more discussed in politics and the media. However, it is noteworthy that on the day of railway men Minister Elżbieta Bieńkowska wore a uniform for the first time. I think it was symbolic, and she herself actually understands the problems of the railways. Signing the founding agreement of the Intelligent Transport Systems Cluster is indicative of how important railway transport is for Minister Bieńkowska. Intermodal transport is impactful too. Yes, but there are many voices saying that intermodal transport does not actually work at all in Poland. It is in its infancy; there is a long way to go. You have to remember that transport issues are not confined to Poland, but the whole Europe is concerned! All transport systems are integrally linked, and therefore Polish infrastructure and rolling stock requirements are consistent with the European standards. Poland is investing less in this sector because such is the repartition of public resources. The European Union recommends the allocation of funds transferred for transport in pm

the proportion of 60 to 40 on road and rail transport respectively. Let’s be honest: that

Transport

has never been the case. But I see that in the new financial perspective much more funds will be transferred to railways. Statements by Minister Bieńkowska are reflected, in the creation of the Intelligent Transport Systems Cluster I mentioned above. Raiways will apparently be given in 2014 the biggest cash injection in 25 years. Yes. Railways have been through a lot... Today, we are at the stage of sustainable development. The only problem is the integration of transport systems. In this connection we put great hopes on the method of intelligent transport systems. pm

Could you then tell us more about the Intelligent Transport Systems Cluster? Of course. The idea of establishing the Cluster stemmed from the need to create a platform for mutual cooperation and sharing knowledge between businesses, research institutions and public authorities as far as Intelligent Transport Systems are concerned, strengthening links between them and their innovation capacity. All the Cluster’s activities are geared towards promoting and supporting the development of Intelligent Transport Systems in Poland. Its objectives include primarily supporting development and innovation in intelligent transport solutions, shaping transport policy, providing intellectual support as regards Intelligent Transport Systems, building knowledge about Intelligent Transport Systems, cooperation with local governments, trade unions, social, economic and state institutions. It is a nationwide Cluster. Most companies are interested in participating in the Cluster and declare cooperation. pm

It is important these days to transfer science to business. Do you also envisage such cooperation in the case of the newly-created Cluster? The essence of our activities in transport is innovation. Innovation, as I understand it, is a new concept, a technology that must be reflected in the production and implementation processes. There can be no talk of innovation if any of these three components is missing. Innovative transport should be based on specific knowledge, and therefore to educate staff. Polish universities provide intellectual background for the needs of different industries including transport. We have the strongest intellectual base not only domestically, but also in Europe. However, pm

there is a problem about the Railway Institute. I see the need for this entity to increase its research and implementation capacities. I would suggest reviewing the activities of the Institute and making necessary changes so as to train highly specialized personnel and ensure a conduct at the European level. I myself, as Chairman of the Transport Committee of the Polish Academy of Sciences, offer help to look through the available programmes and to use our potential and experience in order to develop new ones. Moreover, I should stress that transport in Poland is limited, which means that the introduction of any innovations requires certification. I would also suggest verify the activities of the Office for Railway Transport. I believe that it should stick to its leading role, that is inspiring and stimulating innovation in rail transport. Moreover, it should set the highest technological standards for the modernized and newly built railway lines to avoid restoring anachronistic parameters in the process of modernization. What trends in transport are predicted for 2014? The key for the success of the modernization of rail transport is a systemic approach. In order to create a coherent vision and operational strategy it is necessary to analyze the existing, often chaotic public regulations. Officially called strategies, these are de facto diagnoses, as they lack guidelines characteristic of the vision and strategy. It is also pm

important to adopt a multi-annual plan for infrastructure financing (like for example Germany’s “Die Deutsche Einheit”; in the case of Poland, this may be a multi-annual research programme called “Innkol”) and a template contract for services relating to rail capacity. All investment activities should be based on the vision of a socially and territorially integrated state in which the railway system plays a key role. The project is also noteworthy according to which all connections between the provincial cities and Warsaw would take up to three hours by 2025. Both modernized and newly built railway lines should also meet the requirements relevant to the latest technological solutions. They should be approved outside of PKP PLK so as to avoid any possible accidents in the future. It is precisely the Office of Rail Transport Institution that could be in charge of approving railway lines. Upgrades should be completed of lines such as E-20 (the modernization process of which has been going on for over 20 years) or E-30. The last; but equally important element of the modernization of railways is organizing the system of approvals, taking into account the conditions specific to Poland, as well as setting the necessary additional quality requirements to ensure durability and reliability of infrastructure and the optimal use of resources in the long term (Life Cycle Costs). ::

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Transport

Smart industrial policy – a necessary condition for the effective technological development of Poland Andreas Koszuta, president of Scheidt & Bachmann, and Prof. Jerzy Kisilowski, University of Technology and Humanities in Radom, talk to Ewelina Janczylik- Foryś.

In what way is the creation of the Intelligent Transport Systems Cluster significant for entrepreneurs? Is it important for them to interact with the world of science and local governments ? Prof. Jerzy Kisilowski: I believe that science cannot do in certain applications without the possibility to implement groundbreaking technologies. Scientists are always faced with a dilemma whether to produce applications or to immerse themselves entirely in theoretical considerations. In the past, I decided to devote myself to theoretical considerations and I managed to put together a team that featured high in the world’s rankings several years later. However, there was no chance for what I obtained as a results of my research to be implemented. Creating a cluster-type institution makes it possible to translate theoretical results into practice,that is to specific implementations. It is about asking ourselves whether we will refer to the latest technological advances or we will be somewhat handicapped by limiting ourselves to what we currently have in Poland. My opinion is that we should only fill out the existing technical and technological gaps, leaping certain stages so as to proceed straight away with the most advanced elements without going through anything intermediate. pm

It is clear then: business cannot do without science nor can science exist without

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business. Should therefore all research be commercialized? Please remember that the average number of projects being prepared for application is about one application per ten prepared ones. Saying that every project needs to be implemented is pointless. Can business exist in both ways? Yes and no. Specific industrial policy is needed, and as long as a country does not have one, nothing will come of this. There are three countries in the world -the U.S., Russia and China- that can pursue a comprehensive industrial policy. Poland needs to specialize in specific technologies. Small countries that embarked on such policies have great results today. One of the biggest electronics companies is Nokia. Nokia’s activities were first clearly guided by economic policy and not business. The country’s industrial policy was of paramount importance. Without such a policy a country like Poland is not able to develop everything. So how can we develop in Poland an industrial policy like in Germany, Finland and other Scandinavian countries? You have to convince politicians, no matter where they come from, that it is a necessary condition for the effective technological development of Poland. If this is not feasible, then there will be no such policy and if there is no such policy, then there will be no Polish specialties, and if there are no specialties, pm

then Poland will be a country dealing exclusively with retirees. I think that transport is an area in which Poland should specialize, namely because of its geographical situation. Given Poland’s location at the heart of Europe, should it not have more trade routes? I do not want to criticize it all, but I want to say that shortly high-speed trains between Moscow and Paris will bypass Poland because we are the only country in Europe to have 3 kV DC traction. All the others have long since switched to 25 kV AC. On the other hand, President Andreas Koszuta proves that you can successfully combine business with science. The company has built a-stateof-the-art laboratory at the University of Technology and Humanities in Radom. We will educate students so that wherever they go in the world, they have appropriate technical and technological expertise. pm

So it is your turn, Mr. Koszuta. Should science be commercialized? Andreas Koszuta: For us, manufacturers, it would be good if science could be commercialized so that our products be better represented. Looking at the legal regulations and technical conditions that we have in Poland, it appears that there are very few specific requirements. No politician elected for a 4- year term of office will address the issue the effects of which will only be visible in 10 years. When voters come to assess his pm

Transport

achievements by the end of the term, they will say that he spent huge money for nothing because the term is ending and there are no effects. In science, especially in IT solutions, 4-5 years is not a long period of time, it is an eternity! If scientists do not start to define, or even invent, things that seem utopian today, there will be no new solutions. The future, especially as far as security is concerned, is in training staff and looking boldly ahead in search of the solutions that will be standard ones in 10-15 years . It is my satisfaction that not a single person was killed on any of our rail crossings, and we have been operating in Poland since 1991. What we appreciate most is knowledge and development, which is always the driving force of progress achieved continuously. Lots of documentation that we worked on for many months had to be dumped because it turned out that the development direction that we chose led to nowhere. Thanks to the cooperation with scientists it is much easier to find the right path of development, without moving in a fog, and come to meaningful conclusions. Scheidt & Bachmann has been on the German railway market since 1875. It is a family business. The family sits not only on the Management Board, but also works on the production line, and it is already its fifth generation. The company highly values the expertise and skills of Poles, as evidenced by the fact that there are around 400 of them working with us currently. How come that Scheidt & Bachmann has remained a family company rather than enter a stock exchange to acquire an additional source of finance and expand? In the 1970s, the backbone of our business was railways. Then it came to include also parking systems, transportation charging systems and fuel stations. In 1981-82, German railways turned to various companies, like Siemens and Scheidt & Bachmann, to develop a railway traffic control processor. This processor was officially approved by Germany’s Office of Rail Transport (EBA) in 1985. It was an honour for us to work with such a large company as Siemens. It is noteworthy that it is no longer a simple company, but rather an institution with its own bank. Our interests diverged when we started talking about software – Siemens has a fairly tough policy, whereas we are more flexible. As opposed to other manufacturers, we focus on continuous pm

modernization. If we need a crossing A, and tomorrow B, we do not get rid of A, but we modernize it to the standards of B. This is possible thanks to an open and modular system. You can freely modify the device in terms of the crossing’s size by adding similar elements to it. The use of appropriate modular processor software increases the security of the system. The device is flexible insofar as it tolerates errors that do not affect its basic functions. Today, it is the customer who has access to the software we produce and it is the customer who decides what they need. But the customer – Polish State Railways – has no clearly defined standards. You need to create specific products for each warden in Poland? There are a lot of variable requirements as the crossing is configured. Virtually everyone sets different conditions based on the same rules. Without the requirements and cooperation being clearly defined, without these interfaces that we have developed in the EU, without a strong team of scientists and rail men there will be no genuine standardization. In our devices, there is the same processor in various systems. Only final stages of the system are geared to the customer’s specific needs. And so it is in our devices worldwide. We have 26 locations from America to Japan. The whole world runs on the same processor; pm

only programs differ. The Polish State Railways does not have sufficient funds to hire engineers or at least highly-qualified technicians to ensure maintenance of the transportation systems. When employing engineers in Poland, we are looking for those with a grade point average of at least 4.8. This must be a man with a passion. Such a person learns with us for at least one another year. Only then do I have a feeling that I can send such a man to the crossing and rely on him. As I said, no one was killed on any of our rail crossing and safety has always been and will remain our top priority. Scheidt & Bachmann is still a family company. Normally, shareholders care for profits, and we are focused on solving problems. The first thing we do is to ask: “Am I able to solve it?”, and not “How much will it bring in profits?”. Only then can work be done properly and results be satisfactory. Our best employees are encouraged to pursue doctoral studies. It is our ambition to record significant growth in the longer term thanks to skilled staff and constant cooperation with scientists. I do not look too far ahead – not much time is left for me to retire. I do care about training workforce so that I could retire with a sense of leaving my business in good hands and ... relax travelling in my camper. ::

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Transport

ITS Cluster - a new hope for Polish transport Marcin Haber

he Intelligent Transport Systems Cluster is a team consisting of businesspeople, members of associations, research bodies and public administration. It was officially inaugurated on January 14 with the signing of the Declaration for the Future of Transport at the Ministry of Infrastructure and Development. The Cluster of Intelligent Transport Systems was officially created upon signing of the Declaration for the Future of Transport. Earlier, on September 23, 2013, it was registered. The declaration was signed by Deputy Prime Minister and Minister of Infrastructure and Development Elżbieta Bieńkowska, Bartłomiej Bodio, President of the ITS Cluster and Chairman of the Parliamentary Group for Intelligent Transport and Logistics Systems, and Professor Janusz Dyduch, Chairman of the Transport Committee of the Polish Academy of Sciences. As stated by its creators, the Cluster is meant to create a platform for mutual cooperation and knowledge sharing among businesses, research institutions and public authorities working in the field of Intelligent Transport Systems, as well as to strengthen links between them and their innovation potential. The main objectives of the initiative are to provide ITS intellectual background, support development and innovation of intelligent transport solutions and to foster cooperation between local governments, trade unions, social and economic institutions and state bodies. When inaugurating the Cluster, Professor Janusz Dyduch, said: “The agreement signed today guarantees efficient operation, because it embraces decision-making, scientific development, implementation and production. The ITS Cluster also provides for the integration of politial, scientific and business circles. I am deeply convinced that today’s initiative will significantly contribute to the dynamic development of transport, and therefore also of Poland’s economy.” Professor Dyduch, who is one of the best experts in rail transport and transport innovation in Poland, considers that the establishment of the ITS Cluster is a great opportunity for a wise

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and systematic modernization of the existing transport routes and building new ones. It also argues that innovative transport stands a good chance to become Poland’s specialty in the European Union. “Intelligent Transport Systems are the basis for the existence and efficient operation of today’s transport, but they are also a factor of innovation,” said during the meeting Minister Elżbieta Bieńkowska, the patron of the initiative. She also pointed out that the formation of the Cluster “will strengthen both R&D and innovation of the transport sector, as well as its friendliness to customers using transport in different ways”. The government takes the project very seriously, seeing it as the future of Polish transport. Elżbieta Bieńkowska has already stressed on some other occasions that it will be one of the main priorities she has set herself. An important element she touched upon is financing of the cluster. It will be based mainly on EU funds under the programmes “Infrastructure and Environment”, “Smart Growth” and, to a smaller extent, from the national budget. It

is the first of these programmes that will consume a significant portion of the funds that Poland will receive from the EU in 2014-2020. The initiative like this seems to be beneficial to all parties. The government will gain easier access to scientific analyses and expert opinions, and will get to know the point of view of entrepreneurs who will voice their concerns and barriers that prevent them from investing. Researchers, in turn, will be given a testing ground to apply their solutions, something they consider extremely valuable. However, the ITS Cluster seems to benefit most entrepreneurs insofar as they will gain access to areas that will help them to operate in the market. They will be able to liaise with the local authorities to address their problems and to identify areas where their work is hampered or even impossible. In a nutshell, the Intelligent Transport Systems Cluster stands a good chance of giving a boost to Poland’s economy and reviving the transport sector. ::

Transport

Jastrzębska Spółka Kolejowainnovative and open to changes!

Jastrzębska Spółka Kolejowa Sp. z o.o. (JSK) has been operating on the market since 1998. The Company is a member of the Corporate Group of Jastrzębska Spółka Węglowa S.A.

ursuant to the founding deed, the Company’s main operations cover the management of railway lines, which are systematically modernised and developed on the basis of new technologies and care for the safety of railway traffic. The fulfilment of the requirements associated with railway-traffic safety is confirmed by the Safety Authorisation received under the decision of the President of the Railway Transport Office of 29th December 2010. Furthermore, the Company offers the following:

• the construction and renovation of tracks and railway structures,

• project services and expert evaluations, • shipping services, • the organisation of road transport, • the removal of the effects of mining damage, • training. The implemented and continuously improving Safety Management System and Quality Management System pursuant to the ISO 9001:2009 standard provide our partners with credibility and professionalism in the

field of the services provided by JSK through the process of continuous improvement in railway safety, quality, and cost optimisation. For over 15 years, Jastrzębska Spółka Kolejowa sp. z o.o. has been implementing a strategy, an important element of which is human capital, which facilitates the Company’s continuous development. Throughout all these years, the Company has assembled creative individuals who seek innovative solutions and are open to changes. Their involvement and professionalism made it possible to build and expand of the Company. This is proven by the fact that in its first year of operation, the Company started with a team of only a few people. Today, it provides employment to over 150 people. Other than its main business activity, Jastrzębska Spółka Kolejowa sp. z o.o. is involved in local and regional business and social initiatives. The Company actively supports charities and social campaigns and takes action aimed at commercialising scientific research by collaborating with academic centres. The Company’s assumed orientation of development and high quality of services are confirmed by numerous recommendations,

awards, and honourable mentions, the most important of which are the following: 2004 – The Quality Management Certificate awarded by RW TUV Poland 2005 – An honourable mention in the 11th edition of the Polish Quality Award in the category of small service companies 2005 –The Black Diamond award presented by the Chapter of the Industrial and Commercial Chamber of the Rybnik Industrial Zone 2006 – An honourable mention in the 12th edition of the Polish Quality Award in the category of small service companies 2006 – Leader in Innovation 2007 - The Polish Quality Award in the category of small service companies 2008 – The Laurel of Skill and Competence in the category of successful restructuring 2012 – Market Leader in the category of the best Polish company accessing railway lines 2012 - Euro Leader in the field of accessing railway lines 2014 – The Golden Laurel of Skill and Competence. ::

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Transport

Poland develops its logistics sector The importance of Poland as a regional logistics hub has been increasing. This is due to our country’s excellent geographical location at the intersection of transport routes leading from the north to the south, and especially from the west to the east of Europe. Improved road infrastructure as well as the development of manufacturing facilities and purchasing/supply centres for international companies is also an advantage.

Radosław Szafrański, Director - Southern Poland, Michael Page

number of international companies have decided to locate their warehouses in our country, from which products are dispatched to various destinations across Europe. According to reports published by international commercial property advisor CBRE, there are seven million square metres of modern warehousing space in Poland, of which approx. 0.5 million sq. m. were developed in 2012. In addition, tenants have remained active and the vacancy rate in logistics centres has been systematically falling. Moreover, the period of economic slowdown, felt most acutely by countries in western Europe, proved to be a period of growth for Poland-based production facilities operated by multinationals. A number of such companies decided to move their manufacturing operations to Poland or to expand existing facilities in recent years. It is also worth noting that Poland is becoming a preferred location for regional centres, mainly in the areas of purchasing (direct and indirect), supply and planning, which allows for significant cost optimization over a large geographical area. These are good omens for the future of the logistics industry in Poland, especially in light of the fact that effective logistics services can help a significant number of companies optimise their activities. Ensuring appropriate production volume and efficient distribution

24 :: polish market :: 1-2 /2014

with minimal expenses and maximum customer satisfaction are the challenges faced by the industry today. The Transport, Shipping and Logistics sector is one of the most stable sectors in Poland, and the logistics industry boom was maintained even during the global economic slowdown. How was this possible? The reason is that for many companies, optimisation of operations and maintaining or increasing profits has become a priority. One of the methods for improving a company’s financial performance is process optimisation. More and more companies, especially from the automotive, FMCG and retail sectors, are choosing to outsource supply chain management to specialist operators. For instance, a salty snack manufacturer may decide to outsource warehouse management, logistics and transport services to a third party while focusing on its core business such as production of snacks. A number of logistics companies offering such types of services have recently appeared on the Polish market. At the same time, the demand for outsourcing services from large and medium-sized companies has been increasing steadily. All that, combined with new warehouse construction projects undertaken by several developers, promises further improvement of the situation in the logistics industry. Of particular importance is that the Polish logistics sector has evolved from very simple

services towards more comprehensive activities. As a consequence, expectations for job candidates have changed as qualified and experienced staff members are increasingly in demand. Employees most sought-after are those who combine a business or finance education with technical background, as well as those who understand production processes and the most recent developments in technology. Employers expect not only an excellent knowledge of a particular specialization, but also a deep understanding of business processes and the impact of the managed departments on the business as a whole. Potential candidates should also have a business instinct to help them identify the most cost-effective solutions. As far as employment in Poland’s logistics sector is concerned, figures have remained stable over the past 2 or 3 years, with warehouse managers, directors of logistics and transport specialists as the most desired staff members. As revealed in Michael Page’s Salary Survey, the average monthly salary of a logistics director is now around PLN 22,000 before tax, while distribution and warehouse managers and supply chain managers earn approx. PLN 10,000 and 15,000, respectively. ::

Transport

Delta Trans Group –

25 years of innovative approach to transport

he situation of Polish transport companies depends on the state of the economy. Demand from customers and the supply of means of transport have a decisive impact on the condition of transport companies, apart from macroeconomic indicators. The slight economic revival noticeable in the second half of last year contributed to an increase in orders for domestic and international transport services, which enabled transport companies to utilize their fleets better and reduce the proportion of empty runs. On the international market with loading and unloading in Poland, the number of vehicles is higher relative to the number of transport services ordered by producers. One of the reasons is that there is a significant number of small hauliers on the market who provide their services using a single vehicle. The price is still one of the most important criteria used in selecting a haulier. In many cases, the price is set below a reasonable level. Transport companies are forced to look for savings themselves so as to fit their costs in the prices imposed on them by the market. For the companies which - like Delta Trans Group - have fleets of over 400 vehicles and large warehouse spaces, and offer many add-on services it is much easier to adjust to the changing conditions than it is for smaller firms, which focus on a single area of operations.

In spite of obstacles

The development of transport companies largely depends on their activity and the decisions they take. Policies pursued by the government and local authorities, and excessive bureaucracy may also hinder the development of transport firms. The expansion of an enterprise is directly associated with investment. Meanwhile, a large part of transport firms do not have sufficient financial means to invest. The problem may be additionally exacerbated by increasing delays in getting paid by customers and by fierce price competition caused by a saturated market. The growing road tolls, administrative burdens and fluctuations in

the number of orders may discourage smaller transport firms from investing. A widespread problem is a shortage of well-qualified drivers as a result of costs involved in getting a commercial driving licence being too high.

Optimization thanks to

innovation

Delta Trans Group uses the latest IT solutions, which enable the integration of its key departments and comprehensive management of the fleet, drivers and transport. An additional advantage of the IT system used by Delta Trans Group is maximum control at each stage of the transport process, which allows the company to successfully manage a sudden situation caused by factors being beyond the companies control. Consequently, Delta Trans Group is able to reduce the errors that could occur to a minimum. The optimization of transport flows and distribution, and first of all the operation in line with the JiT concept mean that services offered by Delta Trans Group are of the highest quality. An important advantage of the company is its flexibility because it enhances the efficiency of its operations in a changing environment. The innovations applied by Delta Trans Group enable it to better meet the expectations of customers and provide more efficient services to them.

Quantity and quality

Delta Trans Group has a fleet of 400 vehicles, including semitrailers of standard-, megaand maxi-size, silos for dry bulk transport, and inloaders for the transport of large-size glass panels. As the company focuses on quality, it regularly replaces older vehicles with new ones. The vehicles are equipped with systems which enable monitoring the operations, analysing the travel and solving problems which may appear on the road. The modern fleet is a guarantee of on-time deliveries and high service standards.

Tailor-made services

Companies which work with Delta Trans Group are offered comprehensive services. The range of services provided by Delta Trans Group includes domestic and international transport, general cargo services, warehouse logistics, customs services, production of packaging and steel structures, and co-manufacturing. Many customers decide to use outsourcing services rendered by Delta Trans Group, entrusting most or all of their processes to the company. Offering services in a package results in a higher efficiency of operations and a shorter time needed to process orders, which directly contributes to maximizing customer satisfaction. The services offered by Delta Trans Group are always tailor-made. It is worth noting that a part of the fleet is strictly adjusted to customer specifications. One example is the purchase of semitrailers and trucks with a reduced weight to enable the transport of an additional volume of cargo (large-size glass panels).

25 years on the market Initially, Delta Trans Group dealt only with domestic and international transport. With time, it gradually expanded its activity, adding a number of new services to its line, including niche services. With this decision, the company hit a bull’s eye because it became immune to changing economic conditions and protected itself against loosing financial liquidity. :: 1-2 /2014 :: polish market :: 25

Transport

Kraków Airport leader among Polish regional airports

he Kraków Airport is the largest Polish regional airport. In recent years, it has become a key centre of tourism and business travel in southern Poland. The airport conducts intensive trade policy with the airlines - its main business partners- with a view to continuously improving the flight nerwork.

High quality of service recognized The activity of the Kraków Airport has been recognized by the Business Centre Club. The Kraków Airport and its President of the Board Jan Pamuła are the winners of this year’s Leader of Polish Business award. In the 23rd edition of the competition 107 companies were assessed. The jury considered not only economic indicators – taking into account the competitiveness of the sector and the company’s individual performance – but also the quality and innovation of products, the level of investments, especially those export-oriented and creating new jobs, as well as involvement in charity, commitment to natural environment, and engagement in BCC. The Kraków Airport and Jan Pamuła were nominated for very good economic indicators, excellent quality of services and assistance to those in need.

2013 – a record-beating year in terms of results and investment Another year in a row the Kraków Airport beat a record in passaanger numbers with more than 3.6 million check-ins. This was a 6% increase compared to the previous year. The most important events of 2013 was the

26 :: polish market :: 1-2 /2014

opening of Ryanair’s operational base and the launch of many investment projects. Last year, Kraków operated regular connections to 63 destinations in 22 countries. Carriers launched 8 new scheduled routes and tour operators 4 new charter routes. In addition, several lines increased the frequency of flights, including Airberlin to Berlin - from two to three flights a day, Aeroflot to Moscow from four to seven flights per week, Finnair to Helsinki from two to four flights per week. Traditionally, the largest share in the passenger traffic at Kraków Airport was that generated by low-cost airlines. The latter accounted for 66% of all traffic, while traditional carriers – for 30% and charters – for 3%. In 2013, there were 13 carriers operating in the Kraków Airport – 8 traditional and 5 low-cost. The most popular carriers are Ryanair (low-cost), Lufthansa (traditional) and Enter Air (charters). In spring 2013, major investment projects were launched at the Kraków Airport. Earthworks were completed for a new terminal, the excavation’s walls were secured and its bottom was bolstered. Works are nearing an end on concreting the foundations and construction works are underway in the underground terminal. Works have begun on the first finger tower. Finishing works are also going on at the Hilton Garden Inn located next to the airport. This four-star hotel is expected to be put into service in autumn 2014.

Plans for 2014 In 2014 the airport’s management assumes a 2% increase in the number of passengers to 3.7 million. New connections will be launched in the summer season: to Shannon (Ryanair),

Split (Eurolot) and Barcelona El Prat (Vueling). 22 charters hired by the tour operators will be flying to Bodrum, Catania, Costa Brava/Costa Dorada, Fuerteventura, Lanzarote, Majorca, Split, Tenerife. By the end of the year the Kraków Airport plans to commission a new terminal along with two finger towers and one finger. It is a record investment in the history of the Kraków Airport, amounting to PLN 368.88 million. Shortly after completing the construction of the new terminal, works will begin to upgrade the existing terminal. By the end of 2014, a new internal communication system will be 80% ready. Only a fragment of the road in front of the old terminal will be missing. Following the reconstruction, changes have occurred in traffic organization around the terminal and in multi-level parking lot. Most of the spacers in underground installations have already been made, and so has a part of the foundation and some sections of the pavement. This enabled the transfer of exit traffic from multi-level parking lot directly to the roundabout by the administration building. Inward traffic is also organized on a temporary basis. The construction of the railway station at the back of parking lot is also planned, with its completion scheduled for 2015. Runways are upgraded on an ongoing basis in order to improve the operation of the airport. Four new positions on the apron are being constructed so as the airport be adapted to receive C code aircraft, like Boeing 737. The Kraków Airport has allocated PLN 161.4 million for this project. The works are financed mainly from the EU funds under the Operational Programme Infrastructure and Environment, but also from the Kraków Airport’s own resources. ::

Transport

KRAKÓW AIRPORT

- THE BIGEST POLISH REGIONAL AIRPORT

k ra kowa i r p o r t . p l

1-2 /2014 :: polish market :: 27

Transport

Air transport market in Poland is constantly evolving For many Polish airports the year 2013 was marked by records. The increased interest in air traffic can be seen mainly in the statistics of individual airports. The amount of destinations that can be reached from Poland nonstop also increased.

Marcin Haber

t is not surprising that the Warsaw Chopin Airport remains the leader among Polish airports. That is mainly due to the fact that it is the largest Polish airport able to handle the greatest number of passengers. In 2013 the Warsaw airport further improved its already good results in terms of passenger numbers by 7.2%, that is more than 645,000 people. Throughout the year the airport handled over 10.6 million passengers - its second best result in history. Had there been 3,000 passengers more, the 2007 record would have been beaten. It should be noted that in 2013 the Chopin Airport did not serve customers of Ryanair who moved to the airport in Modlin. Therefore, it can be assumed that had it not been for that change, a record would have easily been beaten. The Kraków Airport can boast almost as large a growth. With a 6% increase in 2013 over the previous year, it handled more than 3.6 million passengers, which gave it a leadership positions among regional airports. The Lech Wałęsa Airport in Gdańsk is also ranked high, but it did not beat the 2012 record. The Gdańsk airport handled over 2.8 million passengers, that is 30 thousand less than in 2012. The next one after Gdańsk is the Katowice Airport in Pyrzowice. Last year, it served over 2.5 million passengers, which gives it a fourth place in Poland. The result was, as in the case of Gdańsk, slightly weaker than in 2012. About 6,000 passengers more and the record would have been beaten.

Smaller airports do not fall behind Among the fastest growing regional airports is Rzeszów’s Jasionka, with a score of 589,000 passengers. The Rzeszów Airport thus aspires

28 :: polish market :: 1-2 /2014

to join the race against the airports in Poznań (with an annual result slightly exceeding 1 million passengers) and Wrocław (the number fluctuates around 2 million passengers).

The downward trend The fact that the number of passengers is either sustained or going down seems somewhat alarming. This may be due to the terminals’ physical capacity, which showed such a trend in 2013. That should not be an excuse though. The Kraków Airport in Balice, despite the construction of a new terminal and modernization works, has significantly beaten its record, so perhaps the problem lies somewhere else. According to data published by individual airports, it appears that three major airports are fast growing: Warsaw Chopin Airport, Kraków Balice Airport and Gdańsk Lech Wałęsa Airport. The remaining airports do not record such spectacular results. The reason for the good results of smaller airports in 2012 could also be increased tourist traffic attributable to the UEFA European Football Championship in Poland and Ukraine.

Traveling across Poland - by plane There has been another interesting trend in the air traffic in recent years. Poles are ever eager to use aircraft within the country, traveling from city to city. Such flights are sometimes much cheaper than covering the same distance by car or by train. The major downside to such a solution is, however, the waiting time at the airport and the need to get from the place of residence to the

airport and later from the airport to the selected location. It is mostly businesspeople that, appreciate and willingly use domestic flights in Poland.

Further development - a path to new records A recipe for success in this industry seems to be easy to identify. Apart from such an obvious factor as location, what matters is a wellthought- out dynamic development. Taking as an example Poland’s two biggest airports the Kraków Balice and the Chopin Airport in Warsaw - at least several investment projects can be cited that have contributed, or will contribute in the near future, to increasing the capacity of these airports. Both airports are almost constantly modernizing their infrastructure. In Kraków a new terminal is being built and upgrades are carried out on strategic runways and the airport’s infrastructure. Additional parking spaces for aircraft of the Boeing 737 type are being constructed. In Warsaw efforts have been taken to modernize the runways and to build new stands for aircraft deicing. Works are also underway on the construction of aprons for cargo aircraft. The air transport market in Poland is constantly evolving and therefore beating records. However, in order to keep up with the biggest players, smaller airports have to start modernizing and improving their infrastructure. This seems in fact to be the best way to increase capacity while providing passengers with comfortable travel conditions. ::

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Transport

Polish roads – the current state and plans for 2014 Cost-wise, the largest investment projects have been planned for the road construction, rail, power and environmental sectors. Appendices 5 and 6 to the National Road Construction Programme alone state a sum of PLN40 billion to be spent in this area in the years 2014-2020 – a promising forecast for road construction businesses. Bogdan Sadecki “Today Poland is a source of pride for Europe. The phrase “Polish roads” no longer denotes failure – it is becoming a synonym for success.” - PM Donald Tusk at the autumn

conference of his party, the Civic Platform

n the years to come, Poland will witness the completion of a multitude of major construction projects. The projected economic uptrends and the need to build new infrastructure and reconstruct its outdated transport, power and environmental components, are expected to breathe fresh life into the broadly-defined construction industry. The national roads belong to the State Treasury, while the provincial, district and commune roads are owned by respective local-government authorities. In 2013, a total of 350 km of new roads were to be opened, with 500 km planned for 2014. Such have been and still are the plans of the General Directorate for National Roads and Motorways (GDDKiA). A pool of as much as EUR12 billion is to be spent by 2020, and the priority here will be the expansion of the expressway network. The GDDKiA had promised that by the end of 2013 the network would be 2759 km in length, including the 350 km opened in that year, as announced by GDDKiA President, Lech Witecki, in the autumn. The road authorities have released data according to which, since 2007, they have opened 2871 km of national roads, with 1695 km of motorways and expressways. In terms of the length of such roads, Poland ranks not only ahead of Portugal, which has 2547 km of fast-traffic roads but the Netherlands’ as well (2274 km). Around early 2017, Poland should also overtake the UK in this respect.

30 :: polish market :: 1-2 /2014

By 10 December 2013, the GDDKiA announced 41 tenders for the construction of 47 roads stretching over 640 km. To date, the road authorities have entered into contracts for the co-financing, under the EU Infrastructure and Environment programme, of investment projects worth more than PLN74 billion, with PLN46 billion of EU contribution. Of the latter sum, 33 billion has already been reimbursed by the European Commission. The plans also included opening the 41-km stretch of the A1 motorway in the KujawskoPomorskie Province (deadline – 20 December), the Radymno-Korczowa section of A4 (23 December), the S19 between the Rzeszów Zachód and Świlcza junctions (13 December), the S8 from Syców to the Walichnowy junction (20-23 December), a 2-km Warsaw section of the Salomea-Wolica S8 (2023 December) and a section of the A4 from the Wierzbna to the Pawłosin junctions (2022 December). Lech Witecki said the GDDKiA would end the year with 50 km of roads more than originally intended. Hoping to receive EUR11-12 billion under the new EU budget for 20142020, the GDDKiA is planning to submit its first project-funding applications as early as in 2014, once this becomes officially possible. By the end of 2020, this Polish road authority wants to build around 1,800 km of modern roads (source: Polish Press Agency).

“The way up and the way down are one and the same.” Heraclitus of Ephesus

Gdańsk The year 2014 will be marked by the continuation of municipal projects in Gdańsk. As resulting from the draft budget for 2014, presented to the city councillors by the Mayor, Paweł Adamowicz, there will be less funding for road maintenance and road - building

investment projects. “But we will still continue many of them. This will be an investment-oriented budget – tight, but under control,” as the Gdańsk authorities described the draft budget for 2014. Over PLN2.675 billion in expenditures and PLN2.661 billion in revenues (compared to the previous year, 71 million more and 62 million less respectively) – this is the scenario for the Gdańsk budget for 2014. Although the city’s debts are bound to grow, half of the 158 million loan to be incurred next year will cover the purchase of bonds issued in previous years to finance road projects. 2014 will be a year of continuation: the biggest funds, nearly PLN360 million, have been secured for the construction of the Słowackiego Route (especially the tunnel under the Martwa Wisła river), PLN43 million for the development of Tristar, an intelligent traffic-management system, and PLN34 million for the restoration of Dolne Miasto and Dolny Wrzeszcz districts. “The main cuts in the Gdańsk budget will hit winter maintenance work and road repairs, for which the city has earmarked PLN25.5 million, that is two thirds of this year’s funds. 2015 will probably bring further revenue reductions,” Paweł Adamowicz revealed, at the same time assuring the councillors that this was a natural cycle, likely to improve in the following years, thanks to the EU 2014-2020 perspective.

Łódź Hanna Zdanowska, the Mayor of Łódź, has presented the draft budget for 2014. She admitted that while the budget was tight and burdened with a quite-severe deficit, it provided for an array of investment projects. Compared to the 2013 budget, the city’s revenues will drop by 11.5% and expenditures by 4.6%. The revenues planned for 2014 will amount to PLN3.239 billion, and expenditures to PLN3.89 billion. The 651 million in deficit

Transport is to be covered by bonds (PLN600 million), a foreign credit (PLN50 million) and a loan from the Provincial Fund for Environmental Protection and Water Management (PLN1 million). Łódź will channel the largest pool of funds into transport and communications – over PLN1 billion, which accounts for 25.9% of the city’s total expenditures. Investment projects will consume over a PLN1 billion, the main part of which will go to transport and roads. Next year, the city plans to devote PLN172 million for the construction of a multimodal node at the Łódź Fabryczna railway station and another PLN17 million for roads around the node. PLN 136 million will be assigned to the Górna Route and PLN 138 million for the W-Z Route, while the modernisation of the tramway system will cost PLN 28 million. The most expensive of the road projects is to be the reconstruction of Inflancka (PLN 31 million), Rojna (PLN 22 million), Targowa (PLN8.5 million), Ustronna and Siostrzana Streets (PLN 8 million). Cycle tracks will cost PLN 18 million. “We have managed to achieve these goals because our revenues are on the increase, while expenditures in many areas have been substantially curbed,” explained Krzysztof Mączkowski, the City Treasurer. “While not generous, this is a realistic and unique budget,” said President Zdanowska. “Its uniqueness stems from the fact that for the first time ever it has been planned by 130 thousand residents of Łódź,” the President was referring to the contribution the residents had made in drawing up this “citizens’ budget”.

Wrocław In the draft budget for 2014, the city has assigned around PLN663 million for investment projects. One of these will involve the construction of a ring road for Wrocław Leśnica. As revealed at a press conference by the Deputy Mayor of Wrocław, Maciej Bluj, under the draft budget the city’s total revenues are planned to be PLN3.67 billion. The plan for 2013 assumed revenues close to PLN3.78 billion. In 2014, expenditures are planned at nearly PLN3.86 billion, PLN 663 million of which will go to investment projects. The city will spend over PLN661 million (i.e. more than 17%) on transport and communication. “Road projects are also very important to us, which is why we have allocated over PLN30 million for this area,” said Marcin Urban, the City Treasurer. The budget of the Dolnośląskie Province for 2014 was adopted by the regional Assembly. The councillors passed a plan for

the province’s incomes and outlays – record funds for investment projects, solid support from foreign funding and a generally low debt level. This year, the revenues to be generated by the province from its own sources are to be the highest ever, reaching PLN1.784 billion. They will be matched, however, by expenditures – an unprecedented total of PLN2.077 billion. To maintain its top position among provinces in terms of the attractiveness of its business infrastructure and active approach towards investors, the Dolnośląskie Province has included in the draft budget for 2014 a record sum of capital expenditures (PLN945 million), i.e. outlays for investment projects, shares and stocks. The major projects to be implemented next year by the Provincial Government: - providing access roads to the bridge over the Odra river in Ciechanów – PLN75.8 million - redeveloping the Wrocław Water Node – PLN68.2 million, - conducting road reconstructions and repairs – PLN100 million, - constructing the Żerniki Wrocławskie – Siechnice provincial road – PLN54.5 million - connecting the bridge in Brzeg Dolny to national road No. 94 and provincial road No. 340 – PLN46.1 million, - redeveloping provincial road No. 384 along the Dzierżoniów – Łagiewniki section – PLN34.1 million. Some of the projects to be completed in 2014: - constructing the Żerniki Wrocławskie – Siechnice provincial road, - redeveloping provincial road No. 384 along the Dzierżoniów – Łagiewniki section, - constructing a ring road for Nowa Ruda along provincial road No. 381 – Stage III, - constructing a small ring road for Świdnica, - improving road infrastructure across Lower Silesia – reconstructing provincial roads within the corridor of the Sudecka road, roads within the A4-S8, A4-A5 agglomeration passages and the Wrocław ring road, and within the Nysa Euroregion and the Copper Industrial Region.

Tarnów Tarnów’s financial plan for 2014 provides for wide-scale road projects. These, in addition to the expansion of the Economic Activity Zone and the construction of car parks and cycle tracks, constitute some of the priorities in the city’s budget. “Drawing up next year’s budget required months of sustained effort. Nevertheless, we can finally present to the residents a well-balanced document, arising from compromise, but securing a durable and stable growth for our city. We have topped up investment

outlays, continuing to cut administrative spending,” said Henryk Słomka-Narożański, Deputy Mayor of Tarnów, adding: “Number one priority to us are roads – a subject relevant to everyone, I believe. In this field, we have focussed not only on major projects, but also on ongoing road repairs to which we wish to devote over PLN7 billion. We will ensure a complete and effective removal of potholes, as there is still much to do here.” Tarnów has assigned around PLN80 million for investment projects in its new budget. “Most of these projects have been planned out in compliance with the Multi-Year Financial Forecast. The city’s revenue and expenditure plan is being optimised in every way,” Sławomir Kolasiński, the City Treasurer, said. With PLN542 million, Tarnów’s revenues will be higher by 13 million in relation to 2013 year. The planned road projects include the construction of a large roundabout at the intersection of Kwiatkowskiego and Witosa Streets (PLN6.7 million) and the extension of Kmiecika, Owocowa, Mickiewicza Streets, along with Solidarności Avenue and Klikowska Street, from Niedomicka Street to the city limits (PLN6.4 million in total). Bandrowskiego Street will undergo redevelopment as well – PLN1 million. Generous funds are to be devoted to the preparation of strategic documentation for road-infrastructure projects. Among these, a concept for extending the SpokojnaElektryczna-Wyszyńskiego-Czysta line of streets, for a total of PLN1 million. “Having filed the required applications, we already know that the city will receive these funds from the Chairman of the Małopolskie Province,” said the Deputy Mayor. Another PLN800,000 has been allotted for the drafting of specifications for the connection between Tuchowska Street and Tarnowskich Avenue. The project entails an overhaul of the rail line and the necessity to relocate the tracks in this area. More funds will also cover ongoing repairs of the city streets and the filling-in of potholes after the winter season. One could ask whether there is a viable chance for a long-term improvement in the broadly-defined construction industry. Yes, there is, but the key factors behind its development will be economic growth, the modernisation of obsolete infrastructure and the availability of EU funds, in addition to public and private financing sources. Another important stimulus for the Polish construction industry might be the opportunity to implement investment projects under public-private partnerships, an option increasingly taken into account by local and central authorities. ::

1-2 /2014 :: polish market :: 31

Construction

Hopes for Polish construction in 2014 The Polish construction market will return to stability. The last year and a half was an extremely unfavourable period for companies operating in the sector. The construction output fell, which - combined with other negative figures - seriously thinned market competition. A number of businesses went bankrupt or were forced to undergo restructuring. The latest data suggest that the situation will stabilize, with prospects for a pick-up in 2015. Bogdan Sadecki

he year 2013 was not easy for construction companies as they had to face a decrease in the number of orders. Essentially all the market players were affected. In these conditions, production volumes had to be slashed, and businesses looked for survival strategies, such as job cuts and mark-up reductions. Consequently, it was difficult to rebound and increase profits. One outcome of the downturn was that competition shrank. Some mismanaged and perishable companies went belly up, but some good and wellestablished were affected too. Despite many failures and financial problems of major players, the potential of the market did not decrease, as the resulting gap was quickly filled by new, often foreign companies that looked forward to growth opportunities in Poland. After these difficult years, a period of recovery is set to come. But given the global economic situation, there is no other way than to get used to operating under a permanent more or less consequential crisis. The in year promises to be quiet, and construction companies can expect an increase in the number of orders. In 2014, construction companies will boost their investment across the EU. Despite a persisting recession, which has had a profound impact on the construction industry over the past five years, the largest construction companies in Europe managed to achieve in 2012 a 7% uptick in their total revenues to EUR 335.5 billion. While 2013 was said to hit a 2.2% decline in construction investment, 2014 is expected to bring a 1.4% increase, reveals “EPoC 2012. European Powers of Construction”, a report by Deloitte. According to forecasts, construction investment in 2014 will cool only in four countries: Spain (-1.8%), Italy (-0.5%), Slovenia (-0.3%), and Cyprus (-10.8%). Outside the eurozone about a 4% growth is predicted for

32 :: polish market :: 1 -2 /2014

Lithuania and Romania. Available forecasts for countries such as Poland, the Czech Republic and the United Kingdom are no less optimistic. Just a few years ago, the Polish construction market was said to be almost an El Dorado. But it turned out it was not. Billions of EU funds invested in Polish infrastructure have not guaranteed the expected growth for the construction industry. The causes are well known, although various aspects are stressed more or less strongly depending on the standpoint. Builders point to flawed law, bad preparation of projects, as well as the lack of cooperation from the government. And the government says that builders have no business prudence, misassess their potential and do not respect the rules to which they have committed themselves by signing contracts. Both sides acknowledge up to a point their fault, but one should not expect that the Polish construction market will significantly change under the new EU budget framework 2014-20.

is a huge supply at a time when tenants rather do not think about increasing the areas they occupy. Developers execute projects in response not to the needs of customers, but to the demand from investment funds. The end result may be a short-term speculative market growth followed by several years of stagnation (like in the housing sector 5 years ago).

Industrial

construction

This year, the Polish construction sector will enter the first stage of changes timetabled until 2021. New regulations to be met by buildings and their location should lead to a systematic improvement of energy efficiency. The industrial construction market in Poland will grow to PLN 27 billion. The forthcoming investment in the power, gas and manufacturing sectors will bring industrial construction, vulnerable in 2009-2010, back on the longterm growth path to the point that it will be able to successfully replace road construction as the engine of the construction industry.

Office space market

Housing

In the current year, significant changes are to be expected in the office space market, which will continue to belong to the construction sector. Last year, there were major developments in this segment (in Warsaw about 290 thousand sqm. of office space - the most since 2000 - were put into use). Over 600 thousand sqm. is under construction, with almost half of the space set to be operational in 2014. Investors are active in other big cities too. Most new office buildings are constructed in Kraków and Wrocław. Office space is being built with an area of almost 350 thousand sqm. that is about 100 thousand sqm. more than a year ago. Warsaw’s developers plan to put on the market more than 600 thousand sqm. of office space in the next two years. It

There are signs that the residential market is bottoming out: the primary market supply is decreasing, prices have stopped falling, investors are returning to the market. 2014 will be a period of stabilization in terms of prices in the housing market. There is no reason to worry about the demand from investors - tangible assets will not lose popularity, which, given the high profitability of the lease, will probably be an additional factor influencing investment decisions. The general improvement of Poland’s economic situation will not be without significance either. Poland remains an attractive country for foreign investors. The better situation of the domestic economy is reflected by an improvement on the labour market. ::

construction

Hotel&Spa Folwarczna

THE BUILDING COMPANY, LEADER OF POLISH DEVELOPERS

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Law & Taxes

Government launches home ownership support scheme for young people Joanna Hamera Legal Counsel BHS Law Firm

n January 2014 the government launched the “Home for the Young” programme aimed at supporting young people when buying their first apartment or house on the primary market. The total pool of funds in the first year of the programme is PLN 600 million. In the following years, the budget earmarked for home ownership support will be rising (and so will hopefully be programme’s popularity). Not everyone will be able to benefit from the state assistance when buying their first home. The programme sets out detailed conditions which must be met by applicants. As suggested by its very name, the programme is intended for young people. The upper age limit is 35 years old as at the date of signing the loan agreement (in the case of marriages, the age of the younger spouse is deciding). In addition, the object of subsidy can only be an apartment purchased on the primary market with an area of up to 75 m2 or a single-family house of up to 100 m2 (up to 85 m2 or 110 m2 respectively if the buyer has at least 3 children) and assuming that at least 50% of the sale price is covered by a mortgage loan for a term of at least 15 years. The programme is designed for people who do not own, and have not yet had, a singlefamily house or an apartment, and to those who do not qualify to be granted a cooperative member’s ownership right. At the same time, the dwelling price cannot exceed the conversion rate - in force in the municipality where the dwelling is located - of the replacement

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cost of 1 m2 of usable space for residential premises, increased by 10%. For example, in the capital city of Warsaw the price of 1 m2 cannot exceed PLN 5,864.65, which makes it difficult to obtain the government’s subsidy. However, in the municipalities adjacent to Warsaw the amount is PLN 4,404.84. The lowest conversion rate of the replacement cost

“Government’s subsidies will help not only young Poles dreaming of their own dwelling. ” - below PLN 3,000.00 per 1 m2 is in Lubuskie Province. According to experts, these rates can be even as much as 30% lower than the average asking prices on the primary market. As a result, in some regions, finding a dwelling that meets the requirements of the programme will not be easy. What is sure is that applicants will not be in short supply. In the case of singles and families without children, the “Home for the Young” programme provides for the possibility of receiving a one-off mortgage subsidy to buy a dwelling in the amount of 10% of its price. A family with at least one child will receive an additional 5%, which brings the subsidy up to 15%. Finally, a family to which a third or subsequent child is born within five

years from the date of signing the mortgage loan agreement may count on further 20%. There will also probably be many banks offering mortgage loans under the government’s programme “Home for the Young”. Currently, 11 largest banks declared their readiness to participate in the programme. Two of them signed agreements with Bank Gospodarstwa Krajowego and started giving loans to those eligible. The updated list of banks to which one can submit a request for subsidy under the programme, as well as detailed information on the conditions of eligibility are available at the website of Bank Gospodarstwa Krajowego (www.bgk.com.pl). Government’s subsidies will help not only young Poles dreaming of their own dwelling. The programme will also indirectly support developers, housing cooperatives and social housing associations (TBSs). The housing market is expected to grow, which means new jobs and economic boost. Enthusiasts also argue that subsidies for new housing premises will contribute to price realignment on the real estate market as per age, quality and standard of the premises offered for sale. Is the new government’s programme “Home for the Young” better than its predecessor “Family on its Own”? The question will probably be the subject of extensive analysis in the first quarter of 2014. For now, it will certainly meet with great interest from young Poles. ::

Investment

Investments in special economic zones in 2013 Special economic zones (SEZ) are an effective tool of foreign investment promotion. In Poland, there are 14 such zones where entrepreneurs can conduct business on preferential terms. Monika Piątkowska Member of the Board of the Polish Information and Foreign Investment Agency

n July 2013, the government made a crucial decision for the zones to extend their lifetime until 2026. According to initial assumptions, they were supposed to stop operating in 2020. Before the new law was adopted, entrepreneurs withheld investment decisions in the zones. The government’s move will surely translate into increasing Poland’s investment attractiveness. Moreover, at the beginning of December 2013, the government presented a draft agenda including measures designed to enhance the zones’ investment attractiveness. The document envisages, lowering the minimum requirements as regards the region’s unemployment rate, investment costs and employment levels when extending the zones to private land. Investors will also be able to start their projects even before the final regulation is issued amending the boundaries of the zone. It is expected that the new provisions will fast track recovery in the zones, especially before 2016 because from 2017 the maximum allowable public aid to SEZs will be lower. The change will lead to the simplification of procedures, which should facilitate the interpretation of provisions.

2013 - a good year for the zones Last year was very fruitful for the special economic zones. According to data gathered by

the Polish Information and Foreign Investment Agency (PAIiIZ), 254 permits to conduct business in the zones were granted in 2013. The total value of these investments exceeds PLN 7 billion, and the number of jobs is 8,089. In terms of invested capital and new jobs created, the leaders are the Katowice SEZ and Wałbrzych SEZ. One of the largest investments started last year is “Manufacturing Poland”, a project by General Motors to produce at the Gliwice plant the latest model of the fifth-generation Opel Astra. The investment is worth EUR 95 million. Belgian Solvay will build an EUR 75 million plant in Włocławek producing silica used in automotive tire production. In terms of employment, the record-beating investment (6 thousand jobs) in 2013 was Amazon’s project to locate its three giant logistics-distribution centres in the vicinity of Poznań and Wrocław.

Business goes briskly in clusters What is characteristic about SEZs is that groups of companies operating in a particular industry get together to create clusters. Many zones have developed their specialties: Legnica and Katowice are dominated by the automotive industry, the Aviation Valley was established in Mielec, an ICT cluster was formed in Pomerania, Wałbrzych is willingly chosen by household appliances

manufacturers, while furniture is produced in the Warmia-Mazury zone. Clustering is a proven system that gives benefits to the companies affiliated and stimulates the development of the entire region.

“The total value of investments exceeds PLN 7 billion, and the number of jobs is 8,089.”

Prospects for 2014 On July 1, 2014 a new regional aid map for 2014-2020 will come into force. This means that for most provinces the maximum level of investment subsidies will be reduced. For example, in Lower Silesia, Wielkopolska and Silesia it will decrease from 40% to 25%. However, more favourable conditions will still apply to investors who will receive a permit to operate in the zones before July 1. Therefore, in the first half of 2014 a dynamic growth is to be expected in investment because businesses will not miss the opportunity to play by the old rules. ::

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Investment

2014 - a year of mild growth The year 2013 abounded with remarkable changes such as the reform of the pension system, but it was also full of smaller, less significant ones. In the current year less spectacular changes are expected. According to economists, it will be a year of moderate growth, the main driving forces being exports and EU funds under the 2014-2020 financial perspective. Marcin Haber

n economic terms last year is assessed rather positively. This is largely thanks to long-term stability of the zloty, as well as inflation and interest rates at their record lows. These are considered important factors necessary for Poland to successfully complete its economic transition and catch up with Western market standards. In the eyes of economists, 2014 appears to be a peaceful continuation of the recovery from the crisis. It is a positive sign that most experts confirm the upward trend. GDP is expected to grow by about 3.1%. According to Professor Stanisław Gomułka, the economy is picking up in Europe and therefore in Poland too. However, “there is a lot of uncertainty in the case of Poland,” he says, forecasting the GDP growth at between 2.5% and 3.5%. This would be better than last year. At the same time, Gomułka points out that the average growth in the past 20 years has been about 4%, so even the most optimistic of his forecasts assuming GDP at 3.5 % is no great success. It would be an improvement, still a result far from satisfactory. The good news is that “in the last 10 years, there has been a threefold increase in exports. Exports together with services account for 40% of GDP, and it is a very high percentage. In this respect, the last 10 years was a really successful period,” he argues.

The Bieńkowska Package 2014 also marks the beginning of a new EU financial perspective. In the years 20142020, Poland will receive EUR 76.8 billion

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for development purposes. These funds will be used under six national operational programmes: Infrastructure and Environment; Smart Growth; Knowledge, Education, Development; Digital Poland; Eastern Poland; Technical Assistance. The largest portion - up EUR 27.5 billion - will be spent on infrastructure and the environment. It is indeed the government’s priority. The remaining funds will be allocated as follows: Smart Growth EUR 8.6 billion; Knowledge, Education, Development - more than EUR 4.4 billion; Digital Poland - EUR 2.25 billion; Eastern Poland - EUR 2.1 billion; Technical Assistance - about EUR 700 million. Subsidies are directly linked to the socalled “Bieńkowska Package” currently discussed by the government. It is a set of regulations of crucial importance for the further development of Poland. The package is supposed to define the manner and pace of spending EU money in the period 2014-2020. Poland will add its own funds to these negotiated as part of the EU budget. The resulting amount is to be spent primarily on research and its commercialization, on motorways, expressways, rail infrastructure, public transport, on entrepreneurship promotion and ensuring broadband Internet access (according to estimates about 16 million Poles will have access to broadband Internet by the end of 2014). The government’s proposal must then be approved by the European Commission. Such negotiations usually take about one year, but Minister Bieńkowska has set itself an ambitious goal to get it completed by the end of June 2014.

Home for the Young Another factor that will have a positive impact on the Polish economy in 2014 is the government’s programme “Home for the Young” that was launched in January. Its main purpose is to enable young Poles to obtain subsidized loans to buy their first apartment or a single-family house. The “main” purpose because there are also secondary aims. First, the scheme is intended to revive the housing market. The government hopes to encourage more young couples to turn to the primary housing market, and therefore to revive this sector. “Home for the Young” has yet another interesting provision: a couple with one child can count on a 10% subsidy, with two children - 15% and with three - 20%. The programme is also meant to motivate young Poles to have more offspring and stay in Poland. It may therefore be a good response to a widely-discussed recent British plan to curb social assistance for immigrants, the large proportion of which are Polish citizens. And so the year 2014 does look bright. The government has a chance to show positive initiatives, and, most importantly, to make good use of huge funds from the European Union. One will also be watching with interest the behaviour of the recently-appointed ministers: Elżbieta Bieńkowska and Mateusz Szczurek. Their portfolios will be vital for the condition of the Polish economy in 2014. ::

Energy

King coal and what next? The Polish power industry is facing enormous challenges. “The government is doing nothing,” the opposition and some experts thunder. “Everything goes according to plan,” says the Ministry of the Economy. Mieczysław T. Starkowski

n theory, no one questions the role of energy in the economy, so apparently everyone understands the seriousness of the situation and realizes that – sooner or later – something needs to be done with it. But environmental organizations accuse the government of having no modern energy strategy. Some experts point to the need for radical changes, while some other call for a revolution. It is about ensuring the country’s energy security. The stakes are as high as tens of billions of zlotys. The problem is both of economic and political nature. Therefore, before the elections, energy issues were dealt with by the most notable public figures. The possibility was even considered of creating a dedicated ministry. “In the near future this will probably not be the case,” says Agata Hinc, Managing Director of demosEUROPA, a think tank. “But this stands a good chance to happen after the next general elections, regardless of who wins. The president of PIS (Law and Justice party) has spoken of it too”. Of course, there can be various visions, and they will affect specific institutional arrangements. Energy portfolio is scattered across five ministries, which deflates importance of this sector of the economy. We are facing historic challenges. Domestic coal mining is getting expensive, so there is a growing demand for coal imports. “As early as 2013 coal imports are likely to reach its export levels”, adds Agata Hinc. “What is more, Poland has outdated production capacities in the energy sector and inefficient transmission infrastructure. We are threatened by blackouts.” Therefore, a strategic decision should be made quickly on how we want to use shale gas. The construction of the LNG terminal in

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Świnoujście has been dragging on for years, and discussions about nuclear energy have been legendary in recent decades. Poland is dependent on coal, and this has not changed for centuries. That said, no one doubts that the role of coal is bound to decrease even though coal mining provides thousands of jobs, which makes it an extremely socially sensitive area. No wonder that politicians refrain from making radical decisions. But one cannot possibly turn back the course of history. Coal will certainly be losing importance, while Poland’s growing economy will demand more and more energy. “Strategic decisions must be made and effectively implemented, which unfortunately is not the case as evidenced by the example of nuclear energy” says Agata Hinc. Theoretically, all the prerequisites for its development have been fulfilled. The National Atomic Energy Agency has been in existence for a long time. The basic institutional framework, including legislation, has been established too. The Prime Minister has appointed the Government Commissioner for Nuclear Energy. Additionally, something that is extremely rare in our country, a separate budget has been allocated for public education, covering a dedicated website www.poznajatom.pl and a TV campaign. And there has been a deafening silence ever since. It is hard to say what will be next. On the occasion of the government reshuffle last November, Prime Minister Donald Tusk spoke about shale gas, promising that this area will finally be provided with an appropriate legal framework. A new environment minister was appointed to this end. “Unfortunately, there has been serious negligence: companies interested in shale gas exploration still do not know where they stand.

That is why some of them have already withdrawn,” says Agata Hinc. Another important issue is the growing importance of renewable energy sources (RES) to which the UN Climate Summit was devoted last November in Warsaw. The whole world strives for greater diversification of energy sources, and Poland should do the same. Taking into account the obligations imposed by the European Union, Poland is expected to reach a 15% share of RES in its energy mix by 2020. But what will happen next remains unclear. This must be stated, let us repeat it, in the government’s new energy strategy. It is precisely international conditions that make it inevitable to develop an energy policy consistent with global trends. “In the spring of 2012, the Strategic Analysis Department of the Prime Minister’s Office drafted its proposal,” says Agata Hinc. The Ministry of the Economy is preparing a transition towards a low-carbon economy. But Poland still does not have its own climate policy. We only succumb to pressures from the European Union. May this situation change in the near future? Let us hope so, but we certainly still have a long way to go. “In any case”, stresses Agata Hinc, “we should not say that Poland has no choice”. We have to decide what solutions are the best in terms of national interest. At the same time, we must be very flexible given uncertainty of several factors, including technological advances, which might provide groundbreaking solutions (such as shale gas has over the last decade). Analyses are underway, but progress is too slow. For now, one thing is certain: we will incur huge costs. The World Bank estimates them at about 1% of GDP per year. After about 15 years, these expenses may be

Energy

already partially amortized. But as usually, we have to begin with expenditure, and tell people that we need to tighten the belt. There will be many losers, but the point is that the economy suffers as little as possible. Undoubtedly, we will be facing a revolution. The entire economy must move towards a new direction. It is therefore necessary to anticipate how deep changes will occur in the job market, to see what to do about lay-offs, what trainings are needed for those made redundant and how much it will cost. Time is running out. The new financial perspective for 20142020 has just been approved by the European Parliament. Enormous resources allocated to Poland need to be made the most of by starting the new growth engines, including in the energy sector. It is a matter of pressing concern. A regulatory framework should be developed quickly. Poland drags behind other EU countries when it comes to implementation of directives. Today, the situation is all the more urgent that the European Commission is preparing a shale gas directive. For obvious reasons, we should guide and set the tone for these advances. Meanwhile, having missed the initial period, we only complain that the directive’s provisions go against us. And it is precisely Poland that should strive to shape European regulations here by imposing certain solutions. In the future, raw materials in the Polish energy industry must be used differently than they are today. Lignite is relatively cheap, but it pollutes the atmosphere even more than coal. It is good that we have large resources, but we should not deplete them totally. Coal will still be a dominant fuel for years. Available studies indicate that by 2030, according to one of the most low-emission scenarios, it will account for approx. 60% of energy output. The rest of Poland’s power demand will be covered by gas, nuclear energy and RES. It is difficult to anticipate a specific energy mix, because it will depend on the strategy adopted by the government. But this will require a political will, and therefore a social consensus, which the public authorities should seek. “It is not true that the government has no strategy,” argues Tomasz Dąbrowski, director of the Energy Department in the Ministry of the Economy. “On the contrary, we pursue a precisely developed energy policy. Unfortunately, the adoption by the government of the Polish Nuclear Power Programme is delaying. The government is now preparing a new comprehensive strategy. The Polish Energy Policy until 2050 should be ready in early 2014. The document considers several scenarios.

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One of them bets primarily on energy derived from renewable resources and gas, both shale and conventional. As regards the energy mix, we still have a lot of unknowns. This is especially true for shale gas. There is a serious uncertainty about the future costs of possible exploitation of unconventional gas deposits. This is all the more important that one needs to take into account the price of CO2 emission allowances, which will have a significant impact on the profitability of producing energy from individual fuels. A possibility was also analyzed of a significant increase in the share of nuclear energy, with a number of power plants of this type. This would involve, however, huge costs difficult to bear in the near future. The most likely scenario is one that assumes sustainable development based on coal, admits Tomasz Dąbrowski. Of course, regardless of the scenario, we must strive to improve energy efficiency. “I would like to take this opportunity to debunk one of the myths,” says Dąbrowski. “It is not true that we have extremely outdated infrastructure. In terms of age, Poland’s transmission system is the European average (for example, it is younger than Switzerland’s)”. The fact remains that changes are necessary. Therefore, various major projects will be launched. First results - relatively small will be visible in 2015, and other, more pronounced, in five-year cycles (2020 and 2025). In 2016 the construction of, a long-awaited electricity connection between Poland and Lithuania will be completed. Investments (on a smaller scale) are also made in northwestern Poland. They are meant to improve the transmission system’s security. “The projected average growth of the economy’s demand for energy will be 0.8-1.5 % per year by 2020,” claims Tomasz Dąbrowski. Additionally, due to the emission standards of SOx and

NOx, approx. 6,600 megawatts will have to be switched off by 2016 . Therefore, new capacities are already being installed in Włocławek, Stalowa Wola, Kozienice, Jaworzno and Opole. Besides, the energy policy embraces also demand management. It is about creating incentives for consumers to try to reduce energy demand during peak periods. “A total abandonment of coal is not an option, because it would result in a massive run-up of costs and in insecurity of supply and, consequently, in serious economic and social difficulties. Therefore, the role of coal will not dramatically decrease in the near future. This is confirmed also by analyzes and forecasts prepared by the International Energy Agency,” argues Dąbrowski. In recent years, the approach to the energy sector has changed all over the world, especially due to the shale revolution in the United States. If we think about repeating such a revolution in Poland, massive investment is needed in exploration. One well – and 300 should be drilled – costs approx. EUR 20 million, which gives the total amount of EUR 6 billion. Accordingly, it is hardly surprising that investors are extremely cautious about the project. It is one of the reasons why we need regulations that would not discourage potential investors. Prime Minister Tusk said that it would be the most important task ahead for the new environment minister as he appointed him in November 2013. As far as shale gas is concerned, much depends on the policy of the European Union. We will attempt to shape it so as to exploit unconventional sources. Not all member states share Poland’s attitude. “A heated debate is also going on in the European Parliament and we will try to make our point at this forum too”, says Tomasz Dąbrowski. ::

Ecology

No breakthrough Patryk Mirecki

o crucial decisions as regards the global climate policy were made at the UN summit in Warsaw last November. This was not its purpose though. In 2014, no new international law provisions will enter into force in connection with the prospective global climate agreement as well with the amendment to the Kyoto Protocol adopted in Doha in December 2012. However, a new agreement is being negotiated in view of the next COP20 summit in Lima, Peru. An important novelty supposed to take effect as of mid-2014 with regard to all the EU countries including Poland will be the introduction of the backloading of CO2 emission allowances. Although 2014 will not bring Poland any groundbreaking changes in environmental policy, it is worth recalling that the country was until recently essentially backward in this respect compared to the rest of Europe. The Ministry of the Environment wrote in an official document (“The National Environmental Policy for 2009-2012 and the 2016 Outlook”) that in the communist era Poland was, along with the Soviet Union and East Germany, the country with the heaviest environmental contamination.

Environment without protection The country’s industrialization and urbanization were done without respect for the principles of environmental protection and nature conservation. The legal provisions were often superficial, and social or economic considerations prevailed over environmental ones. Inspection services were very poorly equipped with control and measuring equipment. There were almost no domestic technological solutions meant to reduce the environmental footprint, and Poland had no convertible

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currency to purchase them abroad. The investment expenditure in the environmental sector ranged between 0.3 and 0.5% of GDP, while the social costs incurred as a result of the environmental pollution are estimated at 5-10% of GDP. The situation changed radically after 1989. A new, more restrictive law has been established since the very beginning of the transformation period.

The EU forces changes However, the most significant changes occurred following Poland’s accession to the European Union. The Accession Treaty provided for serious tasks to be fulfilled by Poland, with the general assumption that after 2015 the country should meet all the EU environmental standards. For example, one of the assumptions of the EU climate package is that the share of so-called green energy in the overall energy consumption will average at 20%. In the case of Poland, the objective has been set at 15%, and the country seeks systematically to achieve it. That said, the task is not easy, given that Poland is 90% coal dependent and has still vast coal resources. It is a challenge for the Polish government because it must reconcile fire and water. On the one hand, some EU countries, supported by ecological organizations, are pushing for imposing further restrictions on coal. On the other hand, Poland cannot drop coal altogether and switch to green energy as it would involve spending millions of zlotys, something that we cannot afford. According to Konrad Szymański, a Polish MEP, our economy needs a more evolutionary approach. Chaotic connecting of renewable sources to the national power system brings dire consequences for the security of supply and for the market players. Renewable energy sources depend on weather conditions;

their instability generates disproportionate costs such as network expansion and additional reliance on more predictable sources. The systemic costs of renewable energy sources are often 20 times higher than in the case of natural gas or coal. Also the highest government officials, such as Deputy Prime Minister Janusz Piechociński, argue that coal should remain the building block of Poland’s energy sector. At a meeting with the miners and boiler manufacturers, last December, he said: “Reducing CO2 emissions does not mean eliminating coal from the power system. (...) Coal forms the basis of our energy mix. It is significant in this context that the world’s biggest polluters, such as the U.S., China and India, do not intend to self-impose major restrictions on the use of traditional energy sources. Therefore, the EU climate policy (the EU accounts for 11% of the global CO2 emissions) cannot produce the desired results.”

Warsaw climate conference On a global scale, however, efforts are taken to reduce the emission of pollutants, especially carbon dioxide, into the atmosphere. The major step was the Kyoto Protocol. World conferences dedicated to the fight against atmospheric pollution are regularly held under the auspices of the United Nations. The main goal of the Warsaw’s Climate Conference COP19/CMP9 in November-December 2012 was setting the framework for a new global climate agreement to be signed in 2015, during the COP21 summit in Paris and become effective in 2020. Its provisions will cover all 194 countries – parties to the Climate Convention, and not, as to date, only the developed countries.

Ecology

Center for Emissions Management (KOBiZE), Poland’s hypothetical savings resulting from the delayed introduction of backloading will be around PLN 1.8-2.4 billion for the period January 2013 – June 2014.

Anti-market game After a period of greater realism in climate policy forced by the economic crisis in Europe, a tendency seems to be setting back to ignore economic realities for the sake of arbitrary and unilateral reduction commitments not shared by the major global CO2 emitters, say experts of the Polish Employers organisation. In their view, backloading is also a European Commission’s vote of no confidence for the cap-and-trade that was supposed to be market-governed. Apparently, it was found that where the market did not work as expected, the rules of the game can be changed through an administrative intervention.

According to the road map adopted in Warsaw, a preliminary version of the new agreement is to be ready for signing in 2014 in Peru, and the parties should submit their proposals as regards the new agreement by March 2015. A decision was made to finance the Green Climate Fund so that it has a budget of USD 100 billion by 2020. It was also agreed that developed countries will allocate an annual minimum of USD 10 billion to combat climate change in developing countries and to further mobilize private resources. The Warsaw conference was an opportunity to showcase Poland’s recent achievements, including a reduction in greenhouse gas emissions. Over the past 20 years, Poland has slashed its GHG emissions by more than 30% (a five-fold surplus compared to its obligations under the Kyoto Protocol), while at the same time doubling its economic growth.

No new international rules The Ministry of the Environment has told “Polish Market” that no new international law provisions will enter into force in 2014 in connection with the prospective global climate agreement, as well with the amendment to the Kyoto Protocol adopted in Doha in December 2012. Additionally, the European Union will step up efforts to work out a common stance on a new global climate

change agreement and the ratification procedure with respect to amendments to the Protocol, including the principles of sharing joint reduction obligations. In 2014, however, no EU legislation is to be anticipated in this area, the Ministry of the Environment said.

Backloading Backloading – a policy of significant interference in the cap-and-trade system – is part of the EU climate and energy policy until 2020, but has no impact on the prospective global climate agreement. The Ministry of the Environment says the EU hopes that backloading will help increase the price of CO2 emission permits (under the emissions trading scheme), which will, in turn, encourage companies to cary out environment-friendly investment projects including new technologies and renewable energy sources. However, the emissions trading scheme has been designed as a market mechanism and should remain as such, the Polish government insists, stating that any administrative interference would be harmful and would only prove that EU climate policy is unpredictable. Poland can find consolation in the fact that backloading was initially intended to enter into force in early 2013, and it will eventually do only in mid-2014. According to the estimates by the Strategy and Analysis Team of the National

Energy three-pack Wojciech Jakóbik from the BiznesAlert.pl portal says one of the challenges ahead for the Polish energy sector in 2014 is the so-called energy three-pack – a package of three laws: on renewable energy sources (RES), natural gas and electricity. According to Jakóbik, the three-pack is a reform of the existing provisions under the dictation of the EU third energy package and other directives of the European Commission. “Initially, it was to be adopted in a single tranche, then the government stated that it would first amend the RES law. That did not happen though. (...) None of the laws was adopted during the whole 2013,” says Jakóbik. The piece of legislation for the renewable sector is under consultations and it is already criticized. “It is unclear what the future of the other elements of the three-pack will be. Only one unfortunate, and probably regretted, statement of the chairman of the parliamentary Committee on Energy, Andrzej Czerwiński, shows the true plans of the government,” Jakóbik says. Let us remind here that Czerwiński estimated in September that the three-pack can actually be adopted at the end of the government’s term of office. ::

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Finance

The leasing industry in 2013 Preliminary data reported by the members of the Polish Leasing Association point to acceleration of the leasing market, clearly visible in subsequent quarters of last year. It appears that in 2013 the leasing sector financed movables and immovables worth approximately PLN 34.6 billion, reaching a cumulative year-on-year 11% growth. Europejski Fundusz Leasingowy (EFL), a pioneer on the Polish leasing market, ended last year with an almost 19% sales increase for a total of over PLN 3.1 billion. Radosław Kuczyński, President of the Board of EFL

he value of movables financed by the whole sector over 12 months of 2013 was PLN 33 billion, while real estate leasing transactions amounted to PLN 1.6 billion. The end of the year was traditionally marked by car leasing. Estimates indicate that it is probably trucks that fueled the leasing market in the last months of 2013. The value of car transactions last year accounted for nearly 61% of all transactions made on the movables market. The second type of transactions in terms of value was machines and equipment (more than one third of all the transactions made). Clearly, good performance of leasing companies was possible primarily thanks to investment in the commercial vehicle segment, which is a driving force of the leasing market. The first three quarters of 2013 brought a more than 13.1% increase in funding on the commercial vehicles market, and the results achieved in the fourth quarter show a 36% surge over the same period of 2012. In total, in 2013 vehicle sales by leasing companies jumped by 19.4% (compared to 2012) to PLN 20.1 billion. In 2013, contracts expired that were concluded in 2010-2011 when the VAT deduction resulted in massive purchasing of passanger cars registered as goods vehicles. The second reason for the surge is the need to change cars, for which a 3-year contract period (years 2004, 2007 and 2010 with significantly higher sales) came to an end in 2013. Other most frequent transactions in 2013 were those of machinery and equipment leasing (Polish entrepreneurs signed machinery and equipment leasing contracts for a total of PLN 11.4 billion), followed by much

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less popular contracts for software and other chattels. The real estate leasing market, after the robust first three quarters (with a 45.9% growth), did clearly slow down in the last quarter (down by 29%), with the sales volume of PLN 1.6 billion (a 9.3% growth) by the end of the year.

Forecasts for 2014 In 2014, market conditions are expected to improve even more and entrepreneurs are likely to make investment decisions. A further pick-up is anticipated on the car market, including trucks. In the truck segment results should substantially increase at the beginning of 2014 due to the so-called “derogation window”, i.e. the full VAT deduction possibility for the purchase of light commercial vehicles (LCV), including passanger cars registered as good vehicles. According to the Ministry of Finance, this particular situation on the market will only last for the first two months of the year, when both leasing and automotive companies expect increased customer interest.

Moody weather for EFL In order to encourage customers to sign LCV lease contracts and take advantage of the full VAT deduction, EFL prepared a special offer. We would like to remind companies of the flexible leasing, which allows to adjust lease payments to differences in seasonal activities and in earned income, by offering our customers installments from PLN 1 per month. Additionally, we offer discounts on fuel (15 g/l) available at Orlen and Bliska stations.

We hope to be able to help our customers deduct 100% of VAT and get off to a good start into 2014. ::

Europejski Fundusz Leasingowy SA (EFL) was established in 1991 as one of the first leasing companies in Poland. From the very beginning, it has actively supported entrepreneurship in Poland. In line with the slogan “More Space for the Enterprising”, it consequently expands the range of business solutions and caters for the needs of its customers by providing the highest quality of service. EFL offers comprehensive financial solutions through a wide array of products - leasing, loans, long-term rental, factoring and other products. EFL provides specific advantages tailored to its customers’ business needs and to the market situation. Since 2001, EFL has been part of the Crédit Agricole Group, which guarantees the company financial stability and security, and gives it access to know-how and experience of a financial institution with a global foothold. For over 20 years, EFL has been working with major producers and suppliers of machinery and equipment, vehicles and other fixed assets. The company has been awarded titles of Customer Friendly Company, High Reputation Company, Financial Brand of the Year, Pearl of the Polish Economy and Best Business Partner. Already 245,000 customers chose EFL as their business partner. More at www.efl.pl. The Crédit Agricole Group debuted on the Polish financial market in 2001. It provides its customers with a wide range of financial solutions in the field of banking, leasing, insurance and factoring. The Group includes among others: Crédit Agricole Bank Polska (formerly Lukas Bank), European Leasing Fund Group (EFL, Carefleet, EFL Finance, EFL Service, Crédit Agricole Commercial Finance Polska SA), Crédit Agricole Corporate, Investment Bank Branch in Poland SA and Crédit Agricole Life Insurance SA. More at www.ca-polska.com.

Harvard Business Review Polska is pleased to invite you to another conference in

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Obowiązujące postaci znaku

MEDIA PATRONS

Ustalenie obowiązującej postaci znaku jest wstępem do standaryzacji systemu identy kacji wizualnej rmy. Standaryzacja ma na celu stworzenie spójnego / jednorodnego wizerunku marki, a co za tym idzie zwiększenie świadomości marki wśród klientów. Wymuszenie stosowania tej samej wersji znaku przez rmę, jak i podmioty współpracujące z rmą np. Agencje reklamowe czy studia reklamy wizualnej. Stosowanie jednego standardu ułatwia rozstrzyganie sytuacji spornych które mogą wyniknąć podczas używania jednego znaku przy współpracy z podmiotami z zewnątrz jak i wewnątrz rmy.

Wersja podstawowa

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Finance

6th European Economic Forum

ozens of meetings and discussions, plenary sessions, trade fairs, 2,200 registered participants, many B2B business meetings and countless conversations establishing cooperation, exchange of experience, new acquaintances. Such was the atmosphere accompanying the two-day 6th European Economic Forum – Łódź 2013. The leading theme of this year’s edition of the Forum was widely understood outsourcing: “Modern business services and their impact on the investment attractiveness of Polish regions.” We had an opportunity to get to know different opinions on the impact of the BPO sector on the Łódź region in aspects such as staff, office space, general development in the global context and operations of the increasingly popular call and contact centres. The dialogue was held by members of the BPO industry not only from Poland, but also from abroad. Among the participants were: Roman Lubaczewski, Stephan Fricke, Armand Angeli, Konstyantyn Yakovchuk-Besarab and Jim Costello. The lively debates proved that the outsourcing industry in the Łódź region is very strong and harbours enormous potential. The 6th European Economic Forum has traditionally been a meeting opportunity for a number of eminent personalities from the world of economy. It was officially inaugurated by the Marshal of the Łódź region, Witold Stępień. Then, the floor was taken by Professor Marek Belka, president of the National Bank of Poland, who discussed the case for

the adoption of the euro in Poland. Another guest of honour was Professor Grzegorz W. Kołodko, whose speech served as an introduction to the session on outsourcing in the world; the professor also signed his latest book “Where is the world heading for?”.

46 :: polish market :: 1-2 /2014

The lecture summarizing the Forum was delivered by Jacek Saryusz Wolski, a member of the European Parliament, who focused on how the EU is acting to minimize the effects of the financial crisis. The host of this year’s Forum was Maciej Orłoś, a popular TV anchor.

the most important centres of entrepreneurship and innovation in Poland, and a cooperation agreement between local governments and the Łódź Agglomeration Railways. The first day of the Forum was crowned with the Gala, traditionally combined with

The Forum organizer – the Enterpreneurship Department of the Marshal’s Office of Łódź – focused on the sectors that are of paramount importance for the region in line with the Regional Innovation Strategy LORIS 2030: innovative textiles and fashion industry, innovative farming and agri-food industry, medicine, pharmacy, cosmetics, energy (including renewable energy sources), IT and advanced construction materials. Dedicated trade fairs were organized that met with great interest among the participants. The 6th European Economic Forum was also a platform for the meetings with foreign delegations, business executives and representatives of business-like institutions from Ukraine, the Czech Republic, Hungary, Georgia, Kazakhstan and other countries. The focal point of these meetings was the economic summit Poland-Romania with the participation of the deputy agriculture ministers of both countries, the Romanian ambassador and business people. A number of significant declarations were made during the Forum, including the agreement between the Polish Agency for Enterprise Development and the Łódź Regional Park of Science and Technology regarding the expansion of the latter so as to create one of

presenting the Łódź Region Economic Awards. The winners of the 10th jubilee edition are: • Fruit and Vegetable Juice Pressing Plant Wiatrowy Sad Grażyna Wiatr in the category of Microenterprise • PPH U Fol-Pol Jacek B orowski in the category of Small Enterprise • Plant Growing Company Strzelce Sp. z o.o. IHAR Group in the category Medium Enterprise -T h read Factor y A r i ad n a SA i n the categor y of Large Enterprise - Agri-Farm of Sylwester Imiołka in the category Family Agricultural Farm - Horticultural Farm of Grzegorz Krasoń in the category Agricultural Enterprise - Ceramika Paradyż Sp. z o.o. in c a t e go r y Green E c o n o my the - Tricomed SA in the category Innovation The Łódź Region Special Awards went to the Independent Public Healthcare Centre of the Ministry of the Interior in Łódź and to Polish Shopping Centres Ptak SA. The final point of this year’s Forum was a fashion show entitled “Talent Łódź Designer”, during which collections were presented by young designers selected by the following design schools: TUL, ASP, WSSiP and ESEDI. ::

Finance

The 4th KPMG Tax and Accounting Congress – the most important changes in the regulations under scrutiny The 4th KPMG Tax and Accounting Congress took place in Warsaw on 14 January 2014. The event featured finance directors and chief accountants of major Polish and foreign companies. Over 600 participants listened to the speeches of KPMG experts on the changes in the fields of taxes and accounting planned for 2014.

PMG’s Tax and Accounting Congress, the fourth edition of which was held this year, is the biggest event of its type in Poland. It traditionally features two thematic blocks – taxes and accounting. The agenda was prepared by KPMG’s partners and directors, who have many years of experience and work as directors of tax and audit teams. The speakers closely examined

the changes to VAT, CIT, and PIT in 2014, and discussed the latest amendments in transferpricing regulations. The accounting section covered the practical aspects of implementing new standards regarding the consolidation of financial statements (IFRS 10) and fair value (IFRS 13). All issues could be followed real-time on KPMG’s official Polish Twitter account (http://www.twitter.com/ KPMGPoland).

The sole organiser and technical advisor of the Congress is the global provider of auditing and advisory services KPMG. The 4th Congress was supported by 23 patrons: ACCA, Puls Biznesu, the Polish Press Agency, Radio Tok Fm, Bank, Forbes, Gazeta Finansowa, Harvard Business Review Polska, Nowy Przemysł, Polish Market, Przegląd Podatkowy, Rachunkowość, Warsaw Business Journal, Wolters Kluwer Polska, Bankier.pl, eGospodarka.pl, gf24.pl, inwestycje.pl, ksiegowosc.org, PIT.pl, rachunkowosc.org, VAT.pl, and wnp.pl. A list of speakers at the congress is presented below.

• Tomasz Grunwald, Tax Advisor, Partner and Head of KPMG VAT services (VAT 2014 – more changes) • Rafał Ciołek, Director, KPMG International Tax Law (What’s new in CIT in 2014 and what changes are to be expected) • Andrzej Marczak, Tax Advisor, Partner and Head of KPMG PIT (PIT – Practice and Theory – 2014) • Jacek Bajger, Tax Advisor, Partner and Head of KPMG Transfer Pricing (Changes in transfer pricing – an evolution or a revolution?) • Mirosław Matusik, Chartered Auditor, FCCA, Partner in KPMG Audits (Consolidation – experiences from implementing IFRS 10)

• Monika Warmbier, Senior Manager, KPMG Accounting Advisory (Consolidation – experiences from implementing IFRS 10) • Tomasz Wiśniewski, FCCA, CBV, Partner and Head of KPMG Valuation and Modelling (Fair value in the light of the new ISRF 2013 – practical aspects) • Marcin Łągiewka, CBV, Director KPMG Valuation and Modelling (Fair value in the light of the new ISRF 2013 – practical aspects) • Bożena Graczyk, Chartered Auditor, Partner and Head of KPMG Accounting Advisory and Financial-Risk Management (The fair value of assets and liabilities in the light of ISRF 2014 – practical aspects) ::

1-2 /2014 :: polish market :: 47

Cultural Monitor

Cultural Monitor – January 2014 In the New Year we will be looking back quite often… But there are lots of memories worth reminiscing!

Worth seeing: “Sammy”,“Układanka” - TVP – DVD

nother two “Kobra” performances by Teatr Telewizji (the Polish Television Theatre) - crime stories from the 1960s and 1970s. At the peak of its popularity, “Kobra” had ratings reaching 90%. Today, the viewers may be surprised that such performances, played by two actors alone, with decorations made of plywood, are often more frightening than recent thrillers. Now, in 2014, the viewers can rediscover the phenomenon of the adored “Kobra”. In my view, in the times of the People’s Republic of Poland - with its omnipresent shortages - arts and entertainment were fuelled by pure Polish inventiveness and talent. The works created during those times are truly outstanding. This is a canon of the Polish art of acting, full of grace, intelligence and humour, which ruthlessly reveals the mediocrity of many current productions coming from Polish Television. 50 years from now it will still be relevant! “Sammy” is a TV Theatre performance from 1962 - a monodrama by Zbigniew Cybulski. The eponymous protagonist, under the threat of revenge, has to give back the borrowed money within a few hours. He is trying to gather the money by calling his friends and acquaintances, and he’s running out of time… The piece was directed by Jerzy Gruza, the master of TV performances. “Układanka (The riddle)” is a theatre performance from 1978, directed by Bogdan Augustyniak. It tells the story of the owner of a private advertising agency, and it keeps the viewers in suspense until the very last scene. The plot goes like this: one day the protagonist wakes up in the morning in his flat with a heavy head and has no idea what happened the night before. He finds his wife’s dead body in the bedroom. All the clues point to him being the murderer… Starring: Henryk Bista, Krzysztof Chamiec and Małgorzata Braunek.

“Inny świat (A different world)” –

Worth hearing: “Live In Gdańsk” – the World Orchestra - Universal Music – CD+DVD

the National Audiovisual Institute (NInA) - DVD

he moving story of the prominent Polish actress Danuta Szaflarska, who shares her memories with the viewers. The interview is carried out by Dorota Kędzierzawska, who is also the director of the film. The economical form of expression and the predominantly black-and-white images filmed by Arthur Reinhart, accompanied by pictures from I N N Y Ś W I A the actress’ archive and with snapshots from the film productions Szaflarska is famous for, “Zakazane piosenki” (Forbidden Songs - like directed by Leonard Buczkowski) or “Pora umierać (Time to Die -directed by Dorota Kędzierzawska)- create the background for a highly digressive story as told by the actress. Szaflarska is an outstanding artist who has been actively contributing to the development of the Polish art of acting for many years. Last year, she received the Złote Berło (the Gold Sceptre) awarded by the Foundation of Polish Culture and Bank Millennium. The jury awarded her this honour “for her many years of superb theatre and television acting mastery, constituting a bridge between generations and traditions of the art of acting and its present character and form.” The 99-year-old actress is known for her reluctance to speak about her personal life. Thus, the first great advantage of this piece is the success in persuading her to reveal her secrets to the camera. Another strong point of the film is the revelation of her sense of humour and attentiveness. Due to a specific combination of the two elements, the creators managed to achieve a truly exceptional film. However, in my opinion, the third and the most important element is the fact that the film is for those who believe in Polish cinema. It provides the viewers with time for consideration, and inconclusive stories which need to be completed by the creative mind of the viewer. There is so much to be listened to in this 97-minute documentary and yet we often have to think of our own ending to the story… Film dokumentalny z Danutą Szaflarską w roli głównej

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A T

two-record album containing material recorded in 2011, during the Solidarity of Arts Festival. The World Orchestra is much more than a project with modern arrangements using rare instruments. It’s a new kind of music inspired by a return to cultural roots, a musical journey through vast space, subtle emotions and magic, a harmonious combination of rich personalities and lively tempers, a dialogue between tradition and modernity, between world musical cultures and the community spirit of the 21st century, between energy and contemplation. The greatest advantage of the project is the mastery of the musicians, their long-standing experience and their obvious joy of playing and being together - which eludes description. These outstanding artists include the Orchestra of the Polish Baltic Philharmonic, the Polish pianist - Marcin Wasilewski, the Norwegian accordion player - Espen Skarpenblad, the Russian multi-instrumentalist - Vladisvar Nadishana, the Dutch guitar player - Bram Stadhouders, the Bulgarian choir - Angelite, and the leader – saxophone player and conductor – Grzech Piotrowski. On the stage and now on the albums, the geographical distance between the artists shrink, allowing them to create one band with many musical dimensions and a multitude of diversified, beautiful sounds.

Maciej Proliński recommends upcoming releases

Cultural Monitor

“Wasowski Odnaleziony. Ktoś zbudził mnie” (Wasowski rediscovered. Someone woke me up) – Sony Music – CD

ast year, we celebrated the 100th birthday of one of the greatest Polish song composers, Jerzy Wasowski (19131984). This album contains Wasowski’s home recordings - with him singing. These are complemented with the fine arrangements made by Krzysztof Herdzin, a splendid Polish jazz musician, and enriched with four female duos (Anna Maria Jopek, Dorota Miśkiewicz, Monika Borzym and Irena Santor). This composer is known in particular for “Kabaret Starszych Panów (Elderly Gentlemen’s Cabaret)”, but this legendary television show is only part of his achievements. These also include songs for children, musicals, radio plays, and theatre performances. Not all of these were properly documented, however; some got lost, others are buried in television or radio archives, and many belong to private family collections. Grzegorz Wasowski, the son of the composer, decided to bring these tapes back to life. Yet, these are not museum exhibits in a contemporary form – the result of the compilation is lively music with clever lyrics (Jeremi Przybora, Ryszard Marek Groński, Anna Borowa). It seems that these songs never lose their relevance. The album is enchanting; it gives all listeners lots of amusement. What’s more, two songs in particular provide an unexpected and brilliant counterpoint to the fun, shaking the listener to the core.

“Matka, Syn, Bóg” (Mother, Son, God) Waglewski Fisz Emade - ART2 Music – CD

his is an endless source of ideas! Yet, nobody should be surprised; when the Waglewski team decides to release another album, enthusiasts of original rock & roll music are in for a treat. The second studio album of the band bears the hallmarks of becoming a rock classic. Wojciech Waglewski and his sons have recently developed a liking for rock with a distinctive blues flavour, and give us clever and melodious songs with a great potential to become hits. The music was mainly composed by Wojciech Waglewski, while lyrics were written by Fisz (voice, bass guitar) and Wojciech Waglewski (voice, guitars). The album was produced by Emade, who also plays percussion in all the songs. “Matka, Syn, Bóg” is a crucial album in all these dimensions – a combination of solid work and individuality. And the mixture of the talents of the three musicians ends up producing a tremendous effect. This album has accompanied me for some time now; I come back to it often and I think it has acquired a permanently important position in the discography of the Waglewski family.

“Delicje z Podwieczorków przy mikrofonie” (The best of Afternoon tea at the microphone) – Irena Santor - Polskie Radio (Polish Radio) – 3 CDs

“

Podwieczorek przy mikrofonie” was an extremely popular radio programme in the second half of the 1950s and in the 196070s. It led the airwaves with its large dose of humour and satire, including music hits and conversations with famous people. “Delicje...” is a collection of 70 songs recorded during the successive editions of the programme in the years 1962-1973, performed by one of the greatest stars of the programme and of Polish song in general: the former soloist of the Mazowsze ensemble, the winner of international singing festivals and the skilled performer of many songs which became hits – Irena Santor. The album includes phenomenal interpretations of the artist’s most famous songs and the beautiful ones which had until now, been completely forgotten – all this in a cosy and inconspicuous café atmosphere. These tunes are definitely worth recalling!

“Pieśni (Songs)” - Michał Jacaszek – the National Centre for Culture – CD

he style of music played by Jacaszek eludes easy definition. Its multidimensional nature leaves the listeners in the dark. “Pieśni”, is on the one hand, a continuation of the search for a new, personal, electro-acoustic form of music, and on the other – something completely new. The artist came up with his own interpretation of Catholic songs. These he describes in the following way, “I’ve known church songs since I was a child; these melodies circulate in my bloodstream. Not all of them are valuable; many religious songs are full of naive clichés. However, there are also many deeply moving, mystical songs of love and longing for God. When compiling the album, I tried to reinforce this metaphysical, touching aspect of church melodies. Thus the decision to abandon the lyrics, despite the fact that they are a beautiful and integral element of liturgical songs.” The listeners are left with the question as to whether the melodies without lyrics add a new dimension to these songs or perhaps restrict their meaning. However, it should be mentioned that this is an album for repeated listening, which seems pure in its intention and performance.

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“Echa czasu” - jedno z wydarzen w warszawskiej operze w minionym sezonie; fot. Ewa Krasucka.

Culture

Partner for the world’s top operas

fot. Łukasz Giersz.

Waldemar Dąbrowski, director of the Grand Theatre-National Opera in Warsaw, the winner of the Special Pearl Award 2013 from “Polish Market,” talks to Maciej Proliński.

Culture is one of the best ways of brand building. Several years ago we even began to treat the words “culture” and “capital” as one. And what is the situation now, in your view? I see it even in broader terms. Building a brand through culture, especially through works of high artistic quality, is quite an pm

50 :: polish market :: 1-2 /2014

obvious thing. But for me the main sense of culture lies in its causative character, something that we call the creation of civilization. If we look at the list of nations that are regular readers, and read things of high value, we will find out quickly that these nations have the highest democratic and development standards, and the most developed economies. One may say that the number and quality of books that individuals and societies have read are translated into the meaning of individual and social life. This thought was at the foundation of the strategy for the development of Polish culture, which I drew up in 2004 when I was minister of culture. The strategy was a sine qua non for making the European Union’s structural funds available for financing Polish culture. One should remember that in the years 2007-2013 Polish culture received over PLN5.3 billion from these EU funds. Thanks to the money, the infrastructure of our culture and art schools changed completely and visibly as did the condition of our cultural heritage. This was an important and indispensable investment.

And what about money from the national budget? If the present rate of growth in spending on culture is maintained the target of 1% of the budget being spent on culture will be achieved as early as 2015. Do you think this is a reason to be proud? If we add the EU funding to the money from the Norwegian mechanisms, local government subsidies, and money from the national budget then this percentage is now much higher than 1%. Generally, there is now much more money for culture than ever before. When I was minister of culture I doubled the ministry’s budget and the present minister has expanded it even further. But I agree that we still do not spend enough money on culture relative to the level of affluence we have achieved, for instance. In 1990, I understood Leszek Balcerowicz, who was then deputy prime minister and minister of finance, when he was saying that the time was not right for subtle mechanisms designed to finance culture or education, that we should repair our currency first, build a solid economic foundation for development so as to make it possible for us to narrow the gaps which had grown over the pm

Culture 50 years between us and developed countries. But 25 years have since passed. We are not affluent yet, but neither are we poor. One can see clearly how our economic and social realities, including culture, are changing, developing and maturing. However, we know well that we have already used up our immediate capacity for development. The future no longer depends on improving any regulations or rules. We need to take another visionary step to stimulate our development. In order to enter the next stage of Poland’s transformation and effectively narrow the gap which is still present between us and the best, we need new social competences, attitudes and behavioural patterns, which constitute a higher culture of operation and new ethos, and consequently a foundation for further development. This means the ability to conduct a constructive dialogue, work together even despite differences of opinion, cope successfully with disputes and conflicts without marginalizing anyone and develop thoughtfulness and the ability to see nuances when assessing social and economic situations and processes. The most painful problem in Poland is insufficient mutual respect, both in interpersonal relations and in the public sphere. It is high time we changed that. And I believe that the change will come very soon. In 2013, “Polish Market” granted you its Special Honorary Pearl award. I wrote on that occasion: “Waldemar Dąbrowski – he excellently combines in one person the idea of all our Honorary Pearls: culture and the economy, knowledge and sensitivity, and patriotism.” Congratulating you again on this distinction, I would like to ask: Do you think that we can speak about the professionalization of the culture managers’ sector in Poland? Yes, definitely. If an institution like the European Krzysztof Penderecki Centre for Music in Lusławice is set up in Poland and is headed by Adam Balas - a man with both formal musical qualifications and managerial skills, proven not only by his university degree, long-term musical and managerial practice, but also fellowship with the Kennedy Center in Washington - the facts speak for themselves. And this is not an isolated case. There are already many specialists in the culture sphere in Poland. There is a whole generation of people who learn exceptionally fast. There is no shortage of people. What we lack is a comprehensive vision for what culture should be for Poland. pm

The year 2013, which was proclaimed the Year of Lutosławski, was meant as a tribute

to our great composer, but also an occasion designed to spur a much broader discussion about Polish music and its great personalities. I think we managed to do so. Maestro Jerzy Maksymiuk said at the “Polish Market” Gala that we have excellent composers while, for example, the Danes and Swedes do not have composers of this standing. When in the mid-1980s I received a scholarship from the American Department of State and left Poland for one month, among the places I visited was the Santa Fe Opera. And there, the legendary, long-time director of the opera, John Crosby, surprised me by saying: “You are a Pole. You have a reason to be proud. Two of the five greatest 20th-century composers are Polish: Witold Lutosławski and Krzysztof Penderecki.” Such moments are unforgettable. We sometimes complain that we do not take enough care to professionally record the work of our great personalities in a way that would serve Polish culture and raise our cultural competences. But it is worth remembering that in 2013 the National Audiovisual Institute (NInA) released an on-line collection – a pioneering undertaking in the world - containing almost all pieces by Witold Lutosławski, Krzysztof Penderecki and Henryk Mikołaj Górecki complete with a wide collection of information in Polish and English language versions about their work and life. The on-line service is a guide through their oeuvre adjusted to the needs and knowledge of both musically educated users and a wide range of people interested in culture. The recordings are provided with descriptions of the origins and circumstances in which the compositions were written. The descriptions put the composers and their work in context, which is very much needed and important. In the near future, the collection is to be expanded by the work of Wojciech Kilar and Andrzej Panufnik. The Year of Lutosławski, has been organized excellently by the Witold Lutosławski Society and the Adam Mickiewicz Institute, which was obviously a big success. The success of the project was also due to Lutosławski’s big impact on the consciousness of the greatest musical personalities from across the world. More than 100 events commemorating this outstanding artist were held in 18 countries – symphony and chamber concerts, recitals, conferences, symposia and new releases of albums with Lutosławski’s music and multimedia material. The jubilee of Krzysztof Penderecki was crowned by two events: a new version of his opera “The Devils of Loudun,” directed by Keith Warner and shown on our stage in

October, and by the Krzysztof Penderecki Festival held in Warsaw in November. The jubilee was a great celebration of the NumberOne Artist of our time. The year 2013 gave us a reason to be proud, but also a reason to consider what could be done to discover the most moving dimensions of music in a broader and deeper way. In recent years the National Opera, with its repertoire and reputation, has become a very attractive place on the map of leading European music theatres. What are the most important challenges you are facing now? We are a desirable and credible partner for the world’s most important operas. It is not a lack of modesty on my part. It is a fact. Coproductions with the greatest opera stages, the presence of outstanding directors, singers and conductors, and a varied repertoire contribute to a feeling that it is worth coming to the Warsaw opera house and become associated with our brand. Our stage makes part of the common creative and production dynamism. Our ambition is to achieve equilibrium between the avant-garde and tradition understood in a modern manner. It seems that everything that is most interesting in European opera now is emerging in this area of interaction. I also believe that a natural responsibility of the National Opera is to promote Polish composers and our contemporary creativity in the area of music, choreography and theatre. And we will be developing this activity. pm

What developments in the opera are you especially looking forward to in 2014? I feel strong emotions in connection with all premieres of the season, but especially with two of them. The first one is a new version of the ballet “Romeo and Juliet” to the music by Sergei Prokofiev, choreographed by Krzysztof Pastor, head of the Polish National Ballet company. The performance is being prepared as a coproduction with the Joffrey Ballet of the United States. The second is a premiere of “Moby Dick,” an opera I commissioned more than 10 years ago from Eugeniusz Knapik, Henryk Mikołaj Górecki’s favourite pupil, a composer, musician and teacher strongly associated with the city of Katowice, which is probably the most interesting music centre in Poland now. The plot is a story of hunting for a white whale. The composer says this adventure story is mixed with Biblical symbolism concerning the fate of man, and their relations with God, Nature and Destiny. The libretto, based on a novel by Herman Melville, has been written by Krzysztof Koehler. :: pm

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Culture

Industrial design –

an opportunity for strong Polish brands! Maciej Proliński talks to Bożena Gargas, president of the Institute of Industrial Design (IWP) in Warsaw.

You have taken over as president of the Institute of Industrial Design with loads of professional experience both as an expert on EU funds, for instance, and as a manager. Do you feel you are shaping a new image of this institution? What is today the most important task ahead for the Institute? My point today is to make the Institute contribute to the systemic introduction of design to the economy. Design has close links with the economy. The ability to skillfully use design in the production process reflects the level of economic development of the country. Design is an important stimulus of industrial development and competitiveness pm

52 :: polish market :: 1-2 /2014

of the economy. Our natural partner is the Ministry of the Economy, and our majority shareholder is the Industrial Development Agency. We have today an urgent need, but also a chance, to take action with a view to developing and strengthening all sectors of the economy. What can serve this purpose is precisely industrial design which draws upon material culture both in public and private sphere. That is why it is so important today to stimulate imagination and raise awareness of what design really is. It is crucial to shape an increasingly widespread understanding of the importance of industrial design for boosting wealth both of businesses and the entire economy. Entrepreneurs who start cooperation with designers, often successful for both sides, come to see its effectiveness. This also leaves room for action to create value-added in communication, advertising or marketing outside the manufacturing process as such. A key word in what I am talking about now is definitely a design process, which is nothing but a very precise business plan, one that can be implemented. Firms wishing to succeed on the market, or to maintain their footholds have to use product innovations. The creation of a new product is inextricably linked with the use of industrial design as part of a strategy. And even though design is not the only component of the process of building a new product, it is absolutely a factor for success. We are trying to talk to our partners about these key issues – What is the design process? What does the final success

involve? Design falls within material culture as such, while it is also the catalyst of development. We need to know that... These are declarations, and what are the facts today? We are committed – and we hope to support these declarations with concrete actions in the near future – to provide entrepreneurs with practical knowledge in terms of conducting the design process and introducing new products. We would like, together with designers, entrepreneurs and all those involved in the process of introducing new products, to familiarize all those interested with the elements of the design process and identify its benefits. pm

When talking to Polish designers in recent years, I have often heard that design cannot be an activity expected only from its creators – designers, and that we should create in Poland an institutional framework regulating and stimulating industrial design. Such a role is going to be assumed by IWP, isn’t it? Definitely yes when it comes to any kind of institutional support for design. In a nutshell, we would like in IWP to get involved in thinking and effective striving to ensure that industrial design becomes an innovation for Polish entrepreneurs in the new EU financial perspective, that funds allocated to entrepreneurs are used to build strong Polish brands. pm

Culture Since 1993, the Institute of Industrial Design has organized the country’s only independent design market monitoring – a “Good Design” contest. What is the punch line of its latest 20th edition? What is Polish design like? How does it look like in concrete products? Do we have good Polish brands, drawing upon an innovative potential of Polish design? The contest is directed at those deciding on Poland’s economic and cultural affairs. It is open for manufacturers, distributors, service providers and design studios whose products and services have been recommended by our experts as meeting the requirements of good design. Our mission is to pick the best items from among those flooding the market. Not designer fireworks, not just exclusive design, but well-designed, modern and innovative products, with prices affordable for an average Pole. In last year’s edition over 99 out of 190 products and services were selected. This is a really good result. One achievement of this contest is that innovation has gradually come to be defined through industrial design. Both the contest and after-the-contest exhibition certainly revealed Poland’s potential – the variety and originality of projects. What was awarded and shown in IWP has one thing in common – it was invented, designed, planned and completed by Polish designers. Every year, we present at the after-the-contest exhibition in IWP the best ones who managed to find common ground with Polish industrialists,that is to translate their ideas into specific applications. There are plenty of good designs... The largest group of designers works with the Polish furniture industry, which enjoys a high position in the world. The second business line that for some time has been routinely hiring designers is the white goods industry. Many small or medium-sized companies producing devices such as fiscal printers, or specialized medical equipment ask designers for advice as well. Companies manufacturing means of transport and taking part in tenders order design services and treat them as a factor increasing competitiveness of their solutions. And it was all tangibly shown by “Good Design 2013”. pm

Tomek Rygalik, one of the most talented designers of the young generation, said in an interview that Poland is today a real El Dorado for design ...

There is a lot of willingness to act in Polish society, which is probably largely due to the fact that it was impossible for many years to fulfill oneself creatively. It is fantastic that the icons of Polish design, such as Tomek Rygalik or Tomasz Rudkiewicz, communicate to the world today that they have decided to work here, in Poland. Young designers, too, feel it somehow instinctively that there is still a large void in the area of design and business relations, and they want to supply it with content. Industrial design is certainly the art of designing things both beautiful and useful, exploring needs of customers, often unconscious and difficult to express, which can be discovered only in direct contact with the future user. Experiment is needed too. In order not to shut oneself away in a variety of design tools, to escape routine, or not to stay with the project only on paper or on the computer, we put a particular emphasis in our research and consulting work in IWP on more and more pronounced relationship between the designer who shapes

the product and its user. And here is again the design process and conscious cooperation between the designer and the manufacturer. Many companies that do not hire designers, claiming it only generates unnecessary costs, limit themselves to an apparent modification of the form of the product,

often without understanding its function or technology. It is unfortunately quite typical in Poland. You cannot consider design to be a “nice decoration”. And this is a great challenge ahead for Polish designers, too. They just need suitable conditions for development. And here, in the design process, the weakest link is still Polish entrepreneurs. Our designers gain more and more recognition abroad. Suffice it to look at the success of “Polished Up. Design From Poland” in Cologne. What do you think we owe it to? The development of Polish design is certainly favoured by the international situation. There are more and more festivals, exhibitions and fairs. Polish designers start to actively participate in these events, and are increasingly successful. We are present on the global market. With schools, students, educated people, it is a natural course of things that we participate in these global cultural phenomena. The recent exhibition “Polished Up. Design From Poland”, which you pm

mentioned and which perfectly depicts the exemplary effects of cooperation between Polish designers with manufacturers, is the best proof that design in Poland has a much better position today than several years ago. You can see that our market is changing, evolving and maturing. What is needed is certainly just another step! ::

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Culture

Shakespeare’s immortal dance In the 2013/2014 season, the Grand Theater in Warsaw will stage as many as four ballet premieres. The Shakespearean repertoire series will be continued, starting with “Midsummer Night’s Dream” by John Neumeier. The series will also feature a new performance of “Romeo and Juliet” choreographed by Krzysztof Pastor and co-produced with the American Joffrey Ballet. It will premiere in Warsaw on March 7 and in Chicago, where the Joffrey Ballet is based, in late April. Maciej Proliński

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Krzysztof Pastor podczas proby fot. Ewa Krasucka

he immortal couple of lovers from the tragedy by William Shakespeare has repeatedly inspired artists. Musical portraits of Romeo and Juliet have been created by composers such as Hector Berlioz and Peter Tchaikovsky. The Warsaw Opera will stage in March perhaps the most famous twentieth-century musical and theatrical setting of Shakespeare’s masterpiece - the ballet “Romeo and Juliet” with the music by Sergei Prokofiev. He (1891-1953) is one of the most imminent composers of the twentieth century. Along with Igor Stravinsky and Dmitri Shostakovich, Prokofiev counts among the greatest Russian composers of the previous century. Initially, he was a representative of the radical avant-garde, also a great pianist, the composer of flagship works of the first decades of the twentieth century, such as “Classical Symphony”. After returning from the West to the Soviet Union, the composer was forced, under pressure from the Socialist Realism style imposed on artist in that country, to simplify the language of sound, although he managed to retain his distinctive style, combining elements of lyricism, grotesque and original melody. “Romeo and Juliet” is a ballet written in the 1930s. Although created in the dark years of the Stalin era, it is full of life and colour, captivating and original both in terms of theme and music. Immortal... The latest performance of the Warsaw Opera will be staged in co-production with Chicago’s Joffrey Ballet. The Grand Theater’s orchestra will be conducted by Łukasz Borowicz. The costumes and set design have been prepared by Tatyana van Walsum. The Polish National Ballet will dance under the guidance of Krzysztof Pastor. “The Polish National Ballet is the largest ballet ensemble in Poland, full of great Polish and foreign dancers guaranteeing performances at the highest level. It

should reflect the nature, energy and aspirations of Polish society. Therefore, in due consideration of our tradition, apart from cultivating classical ballet, we intend to build an attractive and varied repertoire covering significant achievements of Polish and international art of ballet in the twentieth and twenty-first century. I would like the team to be young, dynamic and creative, and its international composition to enrich and inspire the Polish culture, while also guaranteeing our unique national character,” says Krzysztof Pastor. Pastor is the world’s most famous Polish contemporary ballet artist who regularly stages performances in many countries: Bolshoi Ballet in Moscow, Washington Ballet, Dresden Ballet Opera, Royal New Zealand Ballet and Hong Kong Ballet. In the 1980s he joined the Het Nationale Ballet in Amsterdam first as a dancer and since 2003 as a chief choreographer. After years of absence in Poland,

he was invited in 2009 to take over as Grand Theater - National Opera ballet director with the aim to give the ensemble artistic independence and to boost its position by bringing it to the rank of the Polish National Ballet. In his current job in Warsaw since March 18, 2009, Pastor retained his duties as choreographer-in-residence of the Het Nationale Ballet. Since then he has staged at the Warsaw Opera his earlier ballets: “Kurt Weill” (2009), inspired by Weill’s jazz and cabaret works, “In Light and Shadow” (2010) to the music of Johann Sebastian Bach, and created a completely new performance titled “And the Rains Will Pass” (2011), a ballet with the music by one of the greatest contemporary composers who died in 2010 - Henryk Mikołaj Górecki. “Romeo and Juliet” promises to be a great European choreography premiere and an intriguing tribute to the genius of Prokofiev and Shakespeare. ::

Culture

The Castle that rose from the ashes… The entire year 2014 in the Royal Castle in Warsaw will be centred around the 30th anniversary of opening the Castle for public visits. Its permanent exhibition – “The destruction and reconstruction of the Royal Castle in Warsaw” – is proof of the Castle’s fate during World War II and a reminder of the circumstances which resulted in the decision on the reconstruction of the building. You really should see this!

Maciej Proliński

he exhibition is arranged in three rooms located in the Castle basements. The genuine historic appearance of the basements measuring some 350 m2 was used for a multimedia presentation of the scale of the destruction and the significance of the restoration. This multimedia way of presenting the history of the Castle appeared to the event managers to be the best way to show the complex and dramatic social and historic process which was the essence of the reconstruction of the building. The exhibition is addressed primarily to the young generation, who have no memory of there being no Castle on the post-war map of Warsaw. It is also an opportunity to present to foreigners an example of unusual concern for the conservation of the heritage of the past, appreciated by registering the Royal Castle and the Old Town as a UNESCO World Heritage Site. “The aim of the authors of the first exhibition in the history of the Castle with such an exceptional form, an example of using stateof-the-art technologies, is to show respect for the contemporary history of the Castle. What we want is to remind the public who was responsible for the reconstruction, to acquaint people with the works performed at that time, and to hail the scale of social involvement owing to which the project was almost fully financed by the generosity of Polish people living in this country and abroad. We would have not achieved it without the

archive materials of the Castle, carefully collected and stored over the years,” says Bożena Radzio, the curator of the exhibition. The exhibition starts in a room devoted to the history of the place from the 14th Century until the outbreak of World War II. The three combined multimedia screens hanging on the walls present, among other things, the development of the Castle in the reign of the Saxons and then of Stanisław August Poniatowski, and key moments in the history of the site such as the Constitution of 3 May 1791 and the sessions of the reborn Second Polish Republic Government. The second room contains screens showing the destruction of the Royal Castle by the Germans during World War II. The final part of the exhibition describes the reconstruction history of the place starting from clearing the rubble and ruins of the Castle to the first concepts of the reconstruction, ending with the time when the decision was achieved on the reconstruction of the Royal Castle. At present, few people realise that the Castle which we can visit today is a building reconstructed only after World War II. Indeed, voices encouraging the reconstruction of the Royal Castle began appearing after the War ended, but the initiative was not greeted with enthusiasm by the then authorities due to the expected costs, and ideological reasons. The reconstruction of the Castle, in fact its construction from scratch, started in 1971, when Edward Gierek came to power,

and finished in 1981 when he lost it. There was nothing much left from the old Castle after World War II. Only 2% of the materials used for its reconstructions originate from the old Castle. The pictures from 1945 show nothing but insignificant parts of the walls protruding against the background of the sky. The reconstruction was financed mainly from social contributions and donations from the Polish diaspora. The total amount collected for this purpose was PLN 1 billion, over 800 thousand dollars, and many donations in kind for fittings. The building in a finishing state was completed in 1974. In the same year the Old Town, together with the Royal Castle, was registered as a UNESCO World Heritage Site. 30 August 1984 saw the opening ceremony of the Castle; however the finishing works took longer. The final crowning of the reconstruction project was the opening in 2009 of the restored Kubicki Arcades, which were built in the years 18181821 based on the design by Jan Kubicki, an architect of the Neoclassical era, on a slope on the east side of the Royal Castle in Warsaw. The Arcades were an integral part of the royal residence. Even though they survived World War II, they saw no ongoing renovations for many years, and as a consequence fell into ruin. Not until 1995 were construction works and the reinforcement of the escarpment undertaken. ::

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Culture

A unique place with a great patron

Maciej Proliński

n November 23, 2013, Krzysztof Penderecki celebrated his 80th birthday. A special concert, which was the most important event of his jubilee year and crowning the Krzysztof Penderecki Festival, was held that day at the Grand Theatre - National Opera in Warsaw. More than half a year earlier the European Krzysztof Penderecki Centre for Music was inaugurated in Lusławice. This institution, dedicated to artistically talented young people from across Europe, who will hone to perfection their musicianship under the guidance of the most prominent virtuosos, is a beautiful gift from the maestro, but for all those who know that culture means development... Krzysztof Penderecki is one of the most outstanding contemporary composers. He started his international career at the turn of the 1950s and 1960s. Penderecki is visibly interested in new possibilities of voices and instruments, and enthusiastic about great, monumental forms. Religious and humanist contents play a significant role in his works. A turning point in his career as a composer was “St. Luke Passion” written for WDR radio in Cologne. It initiated a series of Penderecki’s oratorios and cantatas increasingly referring to the aesthetics of late Romanticism. Since then, while reaching for universal themes and lyrics fundamental for European culture, Penderecki has been synthesizing the achievements of the 20th century’s music from Mediaeval chant to avantgarde. If I had one word to characterize this work, I would say unpredictability. Perhaps

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that is why his compositions, including these early avant-garde ones, are so popular with a young generation today. It is noteworthy that this multi-threaded and impressive work is turned – just like the tree planted by the maestro in the park in Lusławice – both toward the roots and the sky... We sometimes complain that we are still not ready to open wide the Polish economy to culture. Just look at the case of Wojciech Ciurzyński, CEO of Multibud and president of the Association Krzysztof Penderecki Academy. Established in 2005, the European Krzysztof Penderecki Centre for Music in Lusławice is a state institution and a common cultural institution of the Ministry of Culture and National Heritage and the Krzysztof Penderecki Academy Association. “Culture is the element in which we are born, we grow up, and fulfill our lives. We recognize that life as worthy when we have a sense of some completeness. Without culture such completeness will never be fully achieved. Culture develops mind, sport – muscles... For 14 years I have been the president of the Krzysztof Penderecki Academy Association. It is a great honour for me. From the outset, we set ourselves a goal to build this centre with Prof. Penderecki. There were many difficulties. But today I am glad that the centre was already inaugurated in May 2013. It is an institution dedicated to artistically talented young people from across Europe, who will hone to perfection their musicianship under the guidance of the most prominent virtuosos. Built from scratch within 16 months,

it cost nearly PLN 65 million of which 50 million were EU funds under the Operational Programme Infrastructure and Environment. The rest was contributed, PLN 5 million each, by Małopolska Region, the state budget

and the Krzysztof Penderecki Academy Association. A complex of buildings was constructed with the necessary technical infrastructure. The central point of the project is a modern concert hall with 650 seats that meets the highest international acoustic standards. There are also orchestra rehearsal and ballet halls. Made from natural materials, it is, according to experts, the best concert hall of this size in Poland. Feel free to visit Lusławice throughout the year! It really is a unique place with a great patron,” says Wojciech Ciurzyński. ::

Culture

The fourth one… 29 December 2013 saw the death of Wojciech Kilar, an eminent Polish composer of international renown. The works of this man, including folk-embedded symphonic pieces and religiouslyand patriotically-themed music, as well as movie scores, were unique in capturing the beauty of Polish melody. It was he who earned the first Polish Market Honorary Pearl in the culture category in 2006.

Maciej Proliński

nly a few weeks ago, the www.trzejkompozytorzy.pl website’s launch press conference was held, during which Krzysztof Penderecki claimed it was a great shame that the website did not feature the profile and the output of another great Polish composer, Wojciech Kilar. He added, notably, that this should change fast, given the artist’s poor condition… Kilar, one of the greatest Polish composers, was born on 17 July 1932 in Lwów. He studied piano and composition at the State University of Music (the present day Karol Szymanowski Academy of Music) in Katowice under the tutelage of Bolesław Woytowicz. He graduated with the highest honours in 1955. He had lived and worked in Katowice ever since. By 1974, when he put together his famous symphonic poem “Krzesany”, Kilar was already an acclaimed leading figure in Polish avant-garde music. One of his compositions from 1971, entitled “Upstairs-Downstairs”, featuring two children’s choirs and an orchestra, is a 12-minute-long piece with only two sounds that continue unrelentingly throughout its entire length. Fascinated by “minimal music” at the time, he believed there

wasn’t anything as beautiful as a never-ending sound or a consonance. Looking back, both “Krzesany” and the entire artistic path of Kilar that he would later follow can be traced back to his fascination with what seemed “minimalistic” and imposing at the same time… He gained recognition and popularity through his symphonic poems, the already-mentioned “Krzesany” and the 1976 piece entitled “Kościelec 1909”, in which he drew on Polish folklore, especially that of the Podhale region. The second piece is dedicated to Mieczysław Karłowicz, an outstanding Polish composer who perished in 1909 at the age of 33, hit by an avalanche near the titular Kościelec mountain in the Tatra Mountains. Later on, he put together further “mountain-themed” pieces, most prominently including “Orawa”, which was written in 1986 for a chamber string ensemble. Wojciech Kilar’s profound religious faith and patriotism are reflected in the soprano, mixed choir and symphonic orchestra piece entitled “Angelus” (1982-1984), and also in his lifetime’s achievement – “Missa pro pace”, which he wrote for the soprano, alto, tenor, bass, mixed choir and symphonic orchestra. Bohdan Pociej, a wellknown music critic, put it on a par with the masses by Bach and Beethoven. In the 1960s, Kilar also started to make movie scores. In fact, it was this that earned him his great international renown. He is credited with the soundtracks to almost 150 films, including those directed by Jane

Campion, Francis Ford Coppola, Roman Polański, Andrzej Wajda, Kazimierz Kutz and Krzysztof Zanussi. Bearing in mind what I have written in these columns about Henryk Mikołaj Górecki, I’d like to add that the life and works of such figures as Górecki and Kilar are, for sensitive people, not only an aesthetic experience, but also an inspiration. These works of genius are as powerful and hope-inspiring as ever. And the presence of their creators is permeating… Yesterday, I felt it natural to look at my personal collection. As I did, it wasn’t with much of a surprise that I noticed Kilar’s symphonic pieces standing next to those by Górecki (it is particularly in “Missa pro pace” that I hear the echoes of Górecki’s work). The movie scores, in turn, neighboured those by Krzysztof Komeda. Speaking of Komeda and Kilar, I recently heard the excellent “Kilar” by Kuba Stankewicz, a jazz pianist, and what struck me was his take on Kilar, straightforward and “stripped down”, as Komeda would approach it, and yet keeping in place all the shades of the powerful, absolutely transcendental music of Kilar. Indeed, this art will persist beyond time and death… ::

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Pearls of the Polish Economy Contents

The Grand Awards Gala of the Pearls of the Polish Economy 2013 The Pearls of the Polish Economy Gala was held at the Royal Castle in Warsaw on December 3, 2013. The organizers of the Gala were “Polish Market” and the Institute of Economics of the Polish Academy of Sciences. Distinguished guests representing economy, culture and science graced the Gala. Deputy Prime Minister and Minister of Economy Janusz Piechociński and President of the Polish Academy of Sciences, Prof. Michał Kleiber were the patrons of the Gala.

his year’s Gala of the Pearls of the Polish Economy, like the previous ones, gathered at the Royal Castle in Warsaw the elite of the Polish economy, science, culture, as well as many guests of honour. Secretary of State in the Office of the President of Poland Olgierd Dziekoński, who delivered an opening address on behalf of President Bronisław Komorowski, stressed the importance of the Gala and the merits of its laureates: “On behalf of President Bronisław Komorowski, I would like to extend best wishes to the organizers of the Gala of the Pearls of the Polish Economy and to all those who are today its laureates. I would specifically like to emphasize that influencing by one’s professional activities the shape of the country is always worth noticing and following. At the same time, I would like to congratulate those who have won Honorary Pearls, because what you do is part of what we have experienced for 25 years, of the sense of freedom that you fill in with social content. And I wish to thank you on behalf of President Komorowski for this ability to build the social communities of Honorary Pearls”.

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The second speaker was President and Editor-in-Chief of “Polish Market” Krystyna Woźniak-Trzosek. In her speech she put a particular emphasis on the new way of perceiving the economy. She also appealed to Polish media to point out positive features of the Polish economy and not, as it often happens, focus only on negative news: “This time last year the beautiful halls of the Royal Castle hosted the 10th anniversary of the Pearls of the Polish Economy, and last June we celebrated the 200th edition of the “Polish Market” magazine. We are proud as editors that without a great publishing machine, without large capital, and against the background of an increasingly difficult and competitive market conditions, we have been able, for over 17 years now, to fulfill our mission of building a positive image of Poland in the world by promoting its economy, science and culture. Just as our jubilee issue was released in June, it appeared from the figures of Eurostat that Poles bought most goods and services in that very month. “Polish Market” was one of the few Polish media to convey that economically memorable information to its Polish and foreign readers. I wonder why we are alone in breaking good news about Poland.

Olgierd Dziekoński, Secretary of State in the Office of the President of Poland

Topics that dominate in the media and in the Polish political debate are primarily related to the crisis and growing social discontent. Already six years ago, one economist warned that Poland will have to pay the price for its economic success (remaining on the growth path) by incurring a failure in the field of

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Pearls of the Polish Economy Contents Grand Pearls: social psychology, or even losing public confidence. Today, it seems that this warning is, to some extent, proving true. Some even say that economics ceased to be science to become a new religion. What is economics then? And where does this new religion come from? These questions were asked by the late Vaclav Havel in the preface to the excellent book by Tomáš Sedláček « The Economics of Good and Evil ». Why are we so much dependent on the continued growing of growth?, asks Havel. Why in so many discussions and political debates there is talk of fanaticism and obsession? Maybe - says Havel - this is because economics, which is a science, is often confused with accounting. What would such an economist-accountant do when confronted with a task of optimizing a symphony orchestra performance? Most likely, he would

Janusz Piechociński, deputy Prime Minister and Minister of Economy

eliminate all pauses from Beethoven’s concerts. After all, they are useless as they only slow everything down. And you cannot pay the musicians where there is no play. This is obviously a joke. But seriously, the point is that, in the 21st century, crossing the boundaries of economics, combining it with history, philosophy and even mythology becomes a must when it comes to understanding the world and of course the human being in this complex world. I say this not without reason, because all our rankings and our awards are something more than just schemes or diagrams typical of such compilations. By way of example, the Pearls of the Polish Economy ranking, developed by the economists from the Institute of Economics of the Polish Academy of Sciences, differs from other rankings

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LPP Grupa Kapitałowa S.A. Grupa Kapitałowa Cyfrowy Polsat S.A. Totalizator Sportowy Sp. z o.o.

Large Pearls: Petrax Sp. z o.o. Wawel S.A. Zakłady Automatyki Kombud S.A. Financial sector (banking and insurance): Aviva Towarzystwo Ubezpieczeń na Życie S.A. Krystyna Woźniak-Trzosek, President and Editor-in-Chief of “Polish Market”

insofar as it primarily considers efficiency and the pace of growth. Therefore, a company’s place in the ranking is not directly related to its income volume, but to its overall condition. If a company has its place in this ranking, it means that it meets the strict criteria of efficiency and can be called the Pearl of the Polish Economy. As regards the Honorary Pearls, they are awarded by the Jury to the people who can be called ambassadors of the highest Polish values, the people who are great visionaries in their fields of activity, who have the courage to overcome stereotypes in culture, science, economy, the people whose attitude and actions contribute to the common good, and who build our history and boost our national heritage. For the third time the Pearls of Innovation - Progress have been awarded by “Polish Market” and the Central Council of Research Institutes under the guidance of Prof. Leszek Rafalski. They are called “Progress”, because they are future-oriented. Let me just remind you that innovation is the ability to create a product or a service that gives rise to success. Colin Powell, the U.S. Secretary of State under the George W. Bush administration, said: None of us can change our yesterdays, but all of us can change our tomorrows. I wish you to be able to pursue your tasks and achieve your goals in view of tomorrow and the future”. A speech was also delivered by Deputy Prime Minister and Minister of Economy, Janusz Piechociński. He started with quoting the well-known Polish proverb that perfectly summarizes the Gala of the Pearls of the Polish Economy: “The grass is always greener on the other side of the fence”. He also called for a change of approach in business from recriminations to dialogue and partnership: “The grass is always greener on the other side of the fence. This curse of previous years has to be changed and whatever is Polish must be better known. What is especially obliging is our place, our culture and our past that gave birth to our identity and memory. We are on the eve of three significant overlapping anniversaries: the 25th anniversary of the Polish

Prrovident Polska S.A. Group BZWBK - Aviva Towarzystwo Ubezpieczeń Ogólnych S.A. Infrastructure sector: Grupa Kapitałowa Cyfrowy Polsat S.A. Gdańskie Przedsiębiorstwo Energetyki Cieplnej sp. z o. o. Polish Oil and Gas Company S.A. (PGNiG S.A.) Production and services: LPP Capital Group S.A. Totalizator Sportowy Sp. z o.o. Petrax Sp. z o.o.

Progress Pearls of Innovation The most innovative companies: Neurosoft Sp. z o.o. Zakład Usług Brukarskich Adrog 3M Poland Sp. z o.o. BSH Sprzęt Gospodarstwa Domowego Sp. z o.o.

Progress Pearls of Innovation - Institutes: Foundry Research Institute Children’s Health Memorial Centre Institute

Progress Pearls of Innovation - Inventors: Associate Professor Marek Sciążko, D.Sc., Eng. Professor Jerzy Kątcki, D.Sc., Eng.

Honorary Pearls - Economy: Herbert Wirth Zygmunt Solorz-Żak Jan Kulczyk

Honorary Pearls - Science: Prof. Bogusław Maciejewski Prof. Tomasz Dietl Prof. Stanisław Woś

Honorary Pearls - Culture: Jerzy Maksymiuk Mirosław Bałka Academic Choir of the Adam Mickiewicz University in Poznań

Pearl for the promotion of social values: Jerzy Starak

Pearl for the promotion of patriotic values: Prof. Władysław Bartoszewski György Spiró

Special Honorary Pearl: Waldemar Dąbrowski

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Siemens. The future moving in.

Pearls of the Polish Economy Contents transformation that changed not only the face of Poland, but also that of Europe, the 15th anniversary of the Polish presence in NATO and the 10th anniversary of our membership in the European Union. Not their Union, but our Union, which Pope John Paul II dreamed of so beautifully when writing « Memory and Identity ». The end of this year will mark the 5th anniversary of the collapse of Lehman Brothers, which triggered the global crisis, and it is not only the economic or social crisis, but also a crisis of attitudes. Active, sensible people, able to cooperate, guided by values that they have in them and who cherish them are winning in all aspects. And all those who are indifferent to the need for change and have only claims have already lost. It is important to recognize those who are above mediocrity not only in the Polish economy, to look at other links between what is offered or can be offered by the

Eugeniusz Grzeszczak, deputy Speaker of the Lower Chamber of Polish Parliament

economy, and what is in its backyard - values embedded in the culture, kindness and community-building skills. Therefore, it is time to reward those who rise above mediocrity, it is time once again to point to those who do not tell others go forward, but who boldly say follow me, and who propose a new form of competition - not by fighting , but by interaction. Today, in order to successfully enter new markets, to effectively promote national products, one must be able to trust and be trusted, one has to know how to attract interest, and to build tooling with a view to concluding economic contracts. If we want to fulfill the great commandment that today’s man has to exceed the threshold of hope every day, if we want to find an effective and good response to global uncertainty and challenges, living in a world that is

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speeding up in every aspect, including ideas, then we must look for what we have in common and what is important. It is a precious ability not to shout when we do not agree, but show respect to your partner, say what is acceptable for you and forge a positive scenario. I am glad that during the Gala of the Pearls of the Polish Economy we meet those who are good ambassadors for Poland. The Pearls are not only determinants of success, but they also express humility in success and treat it as a great challenge. The last one to take the floor in the first part of the Gala was a member of the Jury of the Pearls of the Polish Economy, President of the Polish Academy of Sciences Prof. Michał Kleiber. The main body of his speech was devoted to the mechanism of the selection of winners and to the justification of its fairness: Prof. Michał Kleiber, President of the Polish Academy of Science “It gives me great satisfaction that I can once again participate in the celebrations and to take the floor. This is a very significant event. It honours successful companies should be pleased with the results. A great and successful people in a very special way. complement to this ranking is certainly an “Polish Market” – an excellent magazine proattempt to honour eminent personalities moting Poland in the world – came up, more from the world of culture, science, econothan a decade ago, with the idea to use the my - another edition of Honorary Pearls of “Polish Market”, this year also with the prize knowledge of Polish scientists and develop for innovative companies. In short, creativthe most objective ranking of Polish enterity is certainly the element which we should prises. The scientific institution which was asked to cooperate in this matter was the Inassign unifying, synergistic value to, which stitute of Economics, a highly reputable entity within the Polish Academy of Sciences. In the personal dimension, this initiative was lucky to be entrusted to Prof. Jan Macieja who perfected the ranking’s criteria over the years. And today, From left: Adam Szejnfeld, Krystyna Woźniak-Trzosek, Jan Kulczyk (Honorary Pearl it must be emphain the Economy category), Janusz Steinhoff, Zygmunt Solorz-Żak sized that we are (Honorary Pearl in the Economy category), Janusz Piechociński dealing with the ranking which is the most objective way of positioning comwe should all strive for, which we should repanies operating on the Polish market. This ward and be happy about!” The following companies were awardyear we had over two thousand companies ed the Grand Pearl of the Polish Economy: seeking the honour of receiving the title of the Pearl of the Polish Economy. We chose Grupa Kapitałowa LPP S.A., Grupa Kapitałowa less because the ranking is constructed in Cyfrowy Polsat S.A. and Totalizator Sporsuch a way that all its criteria have a certowy Sp. z o.o. tain threshold and in order to get a Pearl, The Large Pearl title went to: Petrax a candidate company needs to fare better in all Sp. z o.o., Wawel S.A. and Zakłady Automatythese criteria than the threshold value. This ki Kombud S.A. In the financial sector (banking and inmeans that there is no predetermined numsurance) the winners were: Aviva Towarzyber of laureates. The more they are, the better mid-term prosperity is, and the more we stwo Ubezpieczeń na Życie S.A., Provident

Pearls of the Polish Economy

Jerzy Maksymiuk receives the Honorary Pearls award from Krystyna Woźniak-Trzosek in the Culture category

Polska S.A. and BZ WBK - Aviva Towarzystwo Ubezpieczeń Ogólnych S.A. Infrastructure industry leaders were: Grupa Kapitałowa Cyfrowy Polsat, Gdańskie Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o. and Polish Oil and Gas Company S.A. (PGNiG S.A.). The best production and service companies were: LPP, Totalizator Sportowy and Petrax Sp. z o.o. During this year’s Gala, Innovation Pearls Progress 2013 were awarded. The Jury in the person of Krystyna Woźniak-Trzosek, Editor-in-Chief of “Polish Market” and Prof. Leszek Rafalski, Chairman of the Main Council of Research Institutes, chose companies, research institutes and inventors which are

Winners of the Large Pearls award

leaders in innovation and are constantly introducing new innovative solutions. The most innovative companies include: 3M, BSH Sprzęt Gospodarstwa Domowego Sp. z o.o., Zakład Usług Brukarskich Adrog Sp.j. and Neurosoft Sp. z o.o. The winning institutes were: the Children’s Health Memorial Centre Institute and the Foundry Research Institute. The inventors-winners were: Associate Prof. Marek Ściążko DSc., Eng. and Prof. Jerzy Kątcki DSc., Eng. During this year’s Gala Honorary Pearls were awarded for the eighth time. In the economy category distinctions went to: Herbert Wirth, Zygmunt Solorz-Żak and Jan Kulczyk; in the category of science: Prof. Bogusław Maciejewski and the Oncology Centre in Gliwice, Prof. Tomasz Dietl from the Institute of Physics of the Polish Academy of Sciences

and Prof. Stanisław Woś, a heart surgeon from Upper Silesian Medical Centre Katowice-Ochojec; in the field of culture: Jerzy Maksymiuk - conductor, Mirosław Balka, sculptor, and the Academic Choir of the Adam Mickiewicz University in Poznań. Jerzy Starak received the Pearl for the promotion of social values, Prof. Władysław Waldemar Dąbrowski receives the Special Honorary Pearls award from Krystyna Woźniak-Trzosek Bartoszewski and György Spiró, a Hungarian novelist, playwright and translator - for promotfor reminding us today that the economy is a religion… and made me realize that I am ing patriotic values. One of the winners of this year’s Honorary so religious”. Pearls was Zygmunt Solorz-Żak, the ChairThe Gala of the Pearls of the Polish Econman of the Supervisory Board of TV Polsat omy was graced by the performance of the Academic Choir of the Adam Mickiewicz UniSp. z o.o. In his speech, he said that part of versity in Poznań, which won the Honorary his success is attributed to random chance, and the rest he achieved through hard work: Pearl in the culture category, by the Parti“The Honorary Pearl in the field of econota Vocal Ensemble and by the winners of the my demonstrates the relevance of the choice Disabled Youth Song Festival supported by many years ago. For 8 years, I lived in Germa- “Polish Market”. ny, and later I travelled there for 10-12 years. I owe my successes to luck, perseverance and the fact that I was in the right place at the right time. I come from a poor family, and no one gave me anything. Success is therefore also the fact that I attained everything, from the beginning, alone. Why the TV industry? I lent money and when the creditor could not give it back , I got... a transmitter . I have repeatedly told myself that it is over, it is time to rest, but, unfortunately still something new pops up. Now the biggest The laureates of the Progress 2013 Pearl of Innovation award in the Enterprise category challenge is to merge Polsat, Cyfrowy Polsat and Polkomtel in one company, which will improve the management, as well as to provide a more attractive offer. I expect the conThe whole ceremony was organized thanks solidation will be effective in April-May 2014. to the sponsors of the Gala: Provident Polska, I am not doing this just to cut off coupons, KGHM Polska Miedź S.A., Siemens, and owbecause money is not the most important ing to the partners: Royal Castle in Warsaw, thing. I work for my own satisfaction , be3M Poland, Polish Ecology Association and cause I could live « under the palm trees » the Association of Polish Butchers and Meat several years ago already”. Processors, Kregliccy Restaurant, as well as The Honorary Pearl in the economy cateApart and Wittchen. gory was picked up by Jan Kulczyk, the owner The media partners of the Gala of Kulczyk Holding, a longtime leader of the were: TVP, TVP Info, PAP, Radio PIN, richest Polish entrepreneurs ranking. QuotHarvard Business Review Polska, Gazeta ing Henry Ford, he argued that in business Bankowa, capital24.tv, Mediarun and egospodarka.pl. :: one has to follow their own intuition: “If I asked people what they wanted, they would reply - fast horses”, said Henry Ford, the founder of Ford Motor Company. Thank God he did not listen to what they told him... I think that the Pearls of the Polish Economy are simply pearls. We primarily act, operate ...we listen too, but not just listen. I wish to thank, Madam President Woźniak-Trzosek 1-2 /2014 :: polish market :: 63

Events

22nd Gala of Ability

and Competence Laurels

Camerata Silesia choir and the gala guests

“

The Gala of Ability and Competence Laurels is an opportunity to say thank you,” stressed Małgorzata Mańka-Szulik, the mayor of the town of Zabrze, summarizing the idea of the distinctions awarded

by the Chamber of Commerce and Industry in Katowice (RIG). The gala was held on January 18 at the House of Music and Dance in Zabrze already for the 22nd time. The principal distinction (Diamond Ability and Competence Laurel) was received by Krzysztof Penderecki. “It is a great honour for me. I looked through the names of those who received the same award: John Paul II, who is to become saint soon, Prime Minister Jerzy Buzek and many other remarkable individuals. I am very pleased that I got this award and I appreciate being among such distinguished laureates,” he said when picking up the Laurel. The jury has awarded this year for the first time the Crystal Laurel with Diamond; its winner is Józef Hen, an eminent writer and columnist. The Laurels also give an opportunity to highlight the essential role of good relations and cooperation between regions. When

Krzysztof Penderecki and Jerzy Buzek

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Tadeusz Donocik, President of the Regional Chamber of Economy in Katowice

receiving the Platinum Laurel, Marek Sowa, the Marshal of the Małopolska province, said: “I regard this award as a call for even greater

Krzysztof Penderecki speaking at the gala

Events deepening of our cooperation. I am sure that we will be able to count on our Silesian friends with whom we have worked closely for many years.” Petr Kužel, President of the Czech Chamber of Commerce expressed himself in a similar way: “I am honoured to be awarded in Poland with such an important and prestigious distinction. What is crucial at work is wisdom and friendship - both have been shared for many years by Czechs and Poles.”

Presenting the Laurels to prominent figures who drive positive changes is also an opportunity to highlight how each of us can affect their immediate surroundings every day. Andrzej Arendarski, President of the Polish Chamber of Commerce, called on Poles to “like each other more, respect each other, and put more trust in each other.” ::

Diamond Laurel of Ability and Competence Krzysztof Penderecki– outstanding composer, world-class conductor

Crystal Laurel with Diamond Józef Hen – outstanding writer, playwright and scriptwriter

Crystal Laurel of Ability and Competence Elżbieta Bieńkowska – Senator, deputy Prime Minister, Minister of Infrastructure and Development Zygmunt Frankiewicz – Mayor of Gliwice Jacek Krywult – Mayor of Bielsko-Biała Paweł Olechnowicz – President of Lotos Group Piotr Uszok – Mayor of Katowice Ryszard Zembaczyński – Mayor of Opole ADVERTISEMENT

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Events

A story about those who still want...

Laureates at the stage (fot.BCC)

The Grand Gala of the Business Centre Club (BCC) was held at the Grand Theater-National Opera in Warsaw, crowning the 23rd edition of the Polish Business Leader competition. On January 25, 2014, president of the top Polish companies were awarded Golden Statuettes of the Polish Business Leader, and the winners from previous years, which maintained their position on the market, were given Diamonds for the Golden Statuette. Special Awards went to outstanding personalities from outside business for contributing to the development of entrepreneurship in Poland. Their winners were: Prof. Michał Kleiber, President of the Polish Academy of Sciences (PAN), and Herman Van Rompuy, President of the European Council. Maciej Proliński

part from entrepreneurs from across Poland - BCC members the Gala was attended by Janusz Piechociński, Deputy Prime Minister and Minister of the Economy, Janusz Lewandowski, EU Commissioner for Budget, and Jerzy Buzek, former Prime Minister and former President of the European Parliament. Marek Goliszewski, President of BCC, welcomed the guests saying: “Andrzej Wajda, an Oscar winner, once said: ‘We need the stories about those who still want, who are on the go’. [Polish] Entrepreneurs are the people who still want. It is a story about those who generate 75% of national income, who for the past 12 years have increased GDP by 130%, who in 2007 led to the highest, 7% rate of, economic growth in the world. And in the crisis years 2008-2013 they reached the EU’s highest 20%

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cumulative growth and a 5% increase in exports. (...) To paraphrase Churchill’s saying about Polish pilots, it is a story about how many owe to so few so many jobs. But it is a story about those who are today at a crossroads. Poland and the European Union both are. The global financial turmoil of 2008-2012 cast many doubts: What should contemporary capitalism that generates inequality be like? State-owned? Private? And how to reconcile it with democracy which is based on equality? What should the balance between the state and the market be? Between the individual and the community? Between universalism and cultural otherness? Between a person - producer and a person - consumer? Between localism and globalization? To answer these questions we need to refer to Benedict XVI who describes profit as something useful insofar as it serves the harmonization

From left: Krzysztof Warski, Janusz Piechociński, Marek Goliszewski, Herman van Rompuy, Jerzy Buzek (fot.BCC)

of the market and society. (...) This year, 44% of Polish entrepreneurs plan to boost investment and employment, and nearly 50% are expected to raise pays. But we demand that

Events

politicians drag Poland out of the excessive deficit, to reduce non-wage labour costs, lower the number of inspections and concessions, and shorten court suits.” Janusz Lewandowski said that Poland had survived the deepest crisis since the creation of the European Union. “Poland went through the most difficult years in the best style among the 28 countries. It was really noticed and appreciated, perhaps the least in our own country,” he said. Janusz Piechociński, while handing in the Golden Statuette of the Polish Business Leader, congratulated the winners: “Being a leader is a big challenge - one must have strength, character, vision, positive emotions.” Special Awards - BCC Golden Statuettes went to: Prof. Michał Kleiber “for his involvement in the development of the Polish economy and building bridges between the worlds of science and business”, and to Herman Van Rompuy “for his contribution to solving EU problems, co-creating the Monetary Union concept, giving new political impulses to the EU, stimulating and raising the rank of entrepreneurship, and for being a friend of Poland.” “In the time of the toughest recession Poland was a green island. Polish entrepreneurs can be proud of themselves. Growth is still uncertain, but the worst is behind us. The most important thing now is the banking union. Funds are directed at innovation, competitiveness and education,” stressed Herman van Rompuy. The laudation in honour of the President of the European Council was delivered by Prof. Jerzy Buzek. “The BCC award has gained a remarkable prestige over the past 20 years. And the reason why I stand today before you touches the heart of my dreams... To make our entrepreneurs see the sense in collaboration with scientists and to make our scientists better recognize the needs of business. Why is it still important for us? 25 years have elapsed since we made groundbreaking changes to our history. I am deeply convinced that the vast majority of Poles have every right to be satisfied with our accomplishments over the last quarter of the century. Today, however, we ask ourselves: What next? What would be our strength in 10 or 20 years’ time? Of course we need many changes. Entrepreneurs rightly demand facilitations in conducting business, and scientists could do with more money. These are the things that we should do, but they do not guarantee success. For this we need wisdom to help find synergy in various activities, in short to coordinate the various activities. What can we say about the Polish energy sector if we do not take into account

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publishers, doctors, soldiers and students. The BCC’s statute commits its members to represent high ethical standards, respect the principles of the commercial code and act in accordance with the idea of corporate social responsibility. In previous years, the BCC Special Award was granded to: Margaret Thatcher (1992), George Bush (1993), Leszek Balcerowicz (1994), Helmut Kohl (1995), Tadeusz Mazowiecki (1999), Jan Nowak Jeziorański(2002), José Manuel Barroso (2006), Lech Wałęsa (2008) Jerzy Buzek (2009) and Tony Blair (2012). ::

WINNERS OF THE 23rd EDITION OF From left: Marek Goliszewski, Jerzy Buzek, Prof. Michał Kleiber (fot.BCC)

the potential of Polish technology? What can we say about anything if you do not take into account the potential, but also shortcomings, of our education system?,” asked Prof. Michał Kleiber. The laudation in honour of the President of the Polish Academy of Sciences was delivered by Krzysztof Pawłowski, Ph.D., President of the School of Business National-Louis University in Nowy Sącz and a member of the Honorary Council of the National Cluster of Innovative Enterprises. During the Gala, Medals of Social Solidarity were also awarded. These are annual awards for those involved socially, helping the needy, promoting the idea of corporate social responsibility and solidarity. This year the medals were presented to: Urszula Gocał, president of Olimpia SA, Donat Król, owner of Imperial sp. z o.o., Joanna Szyman, president of Scanmed Multimedis SA and Stanisław Szyszkowski, owner of PPH GASS sp. z o.o. Medals were handed in by Cardinal Kazimierz Nycz, Metropolitan of Warsaw. The first part of the ceremony was a concert performed by Gwendolyn Bradley and Janusz Wolny together with the Silesian Philharmonic Symphony Orchestra conducted by Janusz Powolny. The Business Centre Club is a prestigious organization of entrepreneurs and Poland’s largest association of employers. BCC has 2500 members (individuals and companies). BCC members, representing nearly 250 cities, sit in 23 regional lodges throughout Poland. BCC includes representatives of all industries, multinational corporations, financial institutions and insurance companies, telecommunications companies, the biggest Polish producers, universities, publishing companies and well-known law firms. Club members are also lawyers, journalists, scientists,

THE POLISH BUSINESS LEADER COMPETITION ADP Popiołek Law Firm Kancelaria Adwokatów i Radców Prawnych Spółka Komandytowa and Partner Wojciech Popiołek Andersia Property Sp. z o.o. and President of the Management Board Adam Trybusz Bolix S.A. and President of the Management Board Maciej Korbasiewicz Grupa Azoty Zakłady Azotowe Puławy S.A. and President of the Management Board Marian Rybak John-Paul II International Airport in Kraków-Balice Sp. z o.o. and President of the Management Board Jan Pamuła Operator Gazociągów Przesyłowych Gaz-System S.A. and President of the Management Board Jan Chadam PGF Urtica Sp. z o.o. and President of the Management Board Tomisław Bensari Przedsiębiorstwo Produkcyjno-Handlowe Rol-Mot Spółka z o.o. and President of the Management Board, Director General Henryk Maziarek Stolzle Częstochowa Sp. z o.o. and President of the Management Board Stanisław Górski Węglokoks S.A. and President of the Management Board Jerzy Podsiadło Zakłady Magnezytowe Ropczyce S.A. and President of the Management Board Józef Siwiec

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Food industry

New Year’s meeting A strong note for the beginning of 2014 The Association of Polish Butchers and Meat Processors (SRW RP) started 2014 on a strong note not only because of ongoing debates and controversial issues in the meat industry. The Management Board of SRW RP sums up the past year and concentrates on implementing programmes and tasks which are important for the Association and the whole sector.

Bożena Skarżyńska

anuary 14 will certainly go down in the Association’s calendar as one of the most important days of 2014. The traditional New Year’s meeting, held at the seat of the Polish Craft Association, gathered more than 150 people in Jan Kiliński hall. Among the invited guests were deputy Minister of Agriculture Zofia Szalczyk, President of the Agricultural Market Agency Radosław Szatkowski, Chief Inspector of the Agricultural and Food Quality Inspectorate Stanisław Kowalczyk, Chief Sanitary Inspector Marek Posobkiewicz, deputy Chief Veterinarian Jarosław Naze, as well as representatives of the meat industry and academia. There were also many members of the Association and companies supporting it. The tradition has it that clergy is also invited to participate in New Year’s meetings.

This year, we hosted,among others, the Auxiliary Bishop of the Diocese of Siedlce Fr. Piotr Sawczuk, Ph.D. as well as butchers and

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delicatessen chaplain Fr. Tadeusz Magas who said a short prayer introducing the unique atmosphere of Christmas. The walls of the seat of the Polish Craft Association have not long heard such a distinguished choir formed by the participants of the meeting and members of the Song and Dance Ensemble “Jawor” from the University of Life Sciences in Lublin. After carols, it was time for the New Year’s greetings that were extended by Zofia Szalczyk and Fr. Piotr Sawczuk as well as Zbigniew Nowak, Janusz Rodziewicz and Kazimierz Stańczyk from SRW RP. Individual greetings and wafer sharing followed. The New Year’s meeting of SRW RP was an excellent opportunity to exchange comments

and opinions on current problems of the meat industry. Newspaper, radio and TV journalists took advantage from the presence of our distinguished guests to conduct interviews with them. The meeting organizers provided a unique spiritual nourishment to the participants, without forgetting that nothing improves mood as much as good food. Delicious dishes of traditional Polish cuisine were prepared by the Polish Ecology Association, a body cooperating with SRW RP. ::

Food industry

Nutricia – a long-established market leader

he year 2014 started for Nutricia Zakłady Produkcyjne Sp. z o.o. with success in two prestigious contests. The baby food producer based in the southern city of Opole received an award from Business Centre Club (BCC) - the Diamond for the Golden Statuette of the Polish Business Leader - while Andrzej Drosik, Nutricia’s member of the Board of Directors who runs the plant in Opole, was honoured with the Platinum Laurel of Ability and Competence. Additionally, owing to its rapid expansion, the company began an investment project involving the construction of a new building with a modern producAndrzej Drosik, the Director of NUTRICIA, tion line. The BCC Diamond that Nutri- was honoured with the Platinum Laurel of Ability and Competence. cia was awarded in January was already its seventh in succession in the annual company’s biggest asset is a team of commitcontest. This means that for seven years, afted specialists who for years have enabled the company to provide products of the highest ter winning the Golden Statuette, the company has managed to maintain its position quality. This year, Andrzej Drosik, a member as market leader. Awards in the Polish Busiof the Board, received the Platinum Laurel of ness Leader contest are granted to compaAbility and Competence 2013 particularly for nies and their bosses. Irrespective of the sechis “commitment in managing a team based tor in which a company operates, the criteria on competence and a code of ethics, and for that the competition jury takes into considbuilding a high organizational culture for the company.” The jury also appreciated the eration include the company’s economic incompany’s efficient management, innovadicators, competitiveness, the quality of the tive solutions, an improvement in its marproducts and how modern they are, and job creation. The jury also assesses commitment ket competitiveness and the social involveto charitable activity and care for the natument of its workers. The awards are not the only success ral environment. “The highest quality for children’s health” achieved by Nutricia. In April, a new facility is the mission statement which has guidwhere the company is to produce modified ed Nutricia in all areas of its operation. The milk in cans will be put into operation. The

modern process line will make it possible for the company to make products according to more than 10 new recipes. It will also enable Nutricia to raise its production capacity by 25%. Nutricia, as a leader in responsible, friendly and safe production, has made sure that the new building and production line meet the highest quality standards and adhere to the occupational health and safety rules in order for its products to satisfy the requirements of the youngest consumers and their parents. The Nutricia production site in Opole, which already is Europe’s biggest plant making food designed for babies and small children, plans to employ around 100 new workers in connection with the expansion. ::

1-2 /2014 :: polish market :: 71

Food industry

Organic chokeberry - black gold Poland is a world leader in the global production of chokeberry, with a 90% share of the market. According to data from the Institute of Agricultural and Food Economics (IERiGŻ), last year’s chokeberry harvest exceeded 50 thousand tonnes. The fruit, in the form of concentrate or frozen foods, goes mainly to Austria and Germany, from where it is exported all over the world. Polish chokeberry is also becoming popular in Japan and Korea. Our second - next to chokeberry - niche market superfruit is blackcurrant. With an annual output of 90-130 thousand tonnes, Poland is also its number one producer in the world. Maciej Bartoń

hokeberry has been called the “Polish Paradox” by professor Iwona Wawer, the author of the book “The Power of Nature” published in the United States. She argues that France has wine, China green tea, and Poland has chokeberry. When fruit juices were compared in terms of antioxidant capacity, it transpired that the leader is not orange juice, but chokeberry juice. The chokeberry syrup has the strongest antioxidant properties too. The comparison of wines is also interesting as it reveals that the best antioxidant is that made from chokeberries - ahead of blackcurrant and blackberries. They were all more active than wine from grapes. The results are no longer surprising when you consider the content of active compounds in fruits. Chokeberry is one of the nature’s richest sources of anthocyanins, with 500 mg per 100 g, which is much more than elderberry or blackcurrant. Thanks to anthocyanins the juice has a beautiful, deep red color, very similar to red wine. Chokeberry also contains large quantities of catechins (over 1.5%), something not found in other berries, which accounts for the chokeberry’s bitter taste. Chokeberry does not accumulate such elements as lead, cadmium, arsenic and tin. It is furthermore the richest source of vitamin P (whose unparalleled content places chokeberry among medicinal plants), vitamins C, B2, B9, E, PP and pro-vitamin A. Black chokeberry has excellent health benefits: it protects against atherosclerosis, heart attacks, strokes, degenerative diseases of the nervous system, and slows the body’s aging processes. Chokeberry fruits, juice and concentrates can be recommended for wide use in the treatment of cardiovascular diseases, various types of

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bleeding, particularly in hypertension, atherosclerosis also radiation poisoning. Already Indians were convinced that the berries are a gift from the Great Spirit and have beneficial health effects. Faith has found a foothold in science, and 50 years ago it was discovered that free radicals cause diseases and step up aging. Only antioxidants inhibit the process of multiplying free radicals. Chokeberry is also desirable in the food industry where it is used to produce jams, preserves, juices and liqueurs. Due to its high content of anthocyanins chokeberry juice can replace artificial colours. Chokeberry concentrate is used to manufacture reconstituted chokeberry juice, but it can also be part of other fruit beverages, soft and alcoholic drinks.

An important idea underlying the Polish organic food market is the formation of producer groups. They provide better and long-term development opportunities. One of the leading producers of organic chokeberry is Korab Garden Sp. z.o.o. from Lublin. The company offers fresh organic fruits with the guarantee of quality and continuity of supply. It has large storage facilities and refrigerated chambers, which ensures product safety. Korab Garden Sp. z o.o., a producer group, is also a member of the National Association of Processors and Producers of Ecological Foods “Polska Ekologia”, which helps promote organic chokeberry through fairs in Poland and around the world. ::

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