Polish Market No. 9-10 (204) / 2013

Polish Market :: 9-10/2013

PU B LISHED SIncE 199 6 No. 9-10 (204)/2013 :: www.polishmarket.com.pl

inside: Agriculture And Food industry Medicine And phArMAcy FinAnce reAl estAte

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More information on the page 63

Contents

9-10/2013

6 7

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

Our Guest

Adamek, CEO of American Heart of Poland company; 34 Katarzyna “Healthy” healthcare Mądrala, PhD, Vice-President of Pracodawcy RP, 36 Andrzej President of the Management Board at Centrum Medyczne MAVIT Sp. z o.o.; Cooperation is very important

8

Janusz Piechociński, Deputy Prime Minister, Minister of Economy; It is time to invest in broadly-defined innovation

10 and Rural Development;

37

Marynika Woroszylska-Sapieha, President of the Management Board of the INFARMAEmployers’ Union of Innovative Pharmaceutical Companies and President Sanofi Group in Poland; A strategy for the pharmaceutical policy

Stanisław Kalemba, Minister of Agriculture To be a world leader!

Agriculture and food industry

Krystyna Siejna, Deputy Mayor of Katowice; Katowice- great example of quantitative and qualitative development

38 40 The 66th Congress of the Association of Polish Surgeons 42 of Warsaw; Looking forward anew

Prof. Marek Krawczyk, Rector of the Medical University

16

Andrzej Gross, President of the Agency for the Restructuring and Modernisation of Agriculture; Does Poland need the EU’s Common Agricultural Policy?

18 From a cappuccino producer, to a global innovator Wojciewski; Agricultural and food products – 20 Jerzy Polish flagship exports 22 Maciej Bartoń; Organic food promoted in Poland 24 Bożena Skarżyńska; Time for Polish beef!

26 The history of gardening in Sandomierz Land Medicine and pharmacy

44

Elżbieta Radzikowska, MD, PhD, specialist in plastic and general surgery, aesthetic medicine, and Medical Director of the La Perla health-clinic chain; The future of medicine as a service to the patient (patient-centred care)

46 Specialist Hospital in Sandomierz Innovation and IT

47 Patryk Mirecki; Modern technology for today and tomorrow 48 International Warsaw Invention Show

Associate Professor Michał Szota, DSc Eng.; IWIS 2013 - 7th

50 Innovation, and once again innovation Wojciech Pomykała, CEO of Exatel;

Real estate

29

Marek Balicki, former Minister of Health in the Leszek Miller and Marek Belka governments; In step with progress

51 Who cares about building green? You should 52 Górski Sp. z o.o. S.K.A,a building company;

Bogdan Górski, President of Przedsiębiorstwo Budowlane

30 Magdalena Jasińska; Do politics plus the economy equal health?

32

Andrzej Sokołowski, President of the National Association of Private Hospitals; Paradox of the Polish system

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What I do makes people happy

56 CBRE in Poland; How to invest in Poland’s

Joanna Mroczek, Head of Consultancy and Research, commercial real estate

Contents

Finance

Investment

58 Prof. Małgorzata Zaleska; Polish cooperative banks

73 “Open to Scandinavia”

in the World Economic Forum’s Global Competitiveness Index 59 Poland 2013-2014 ranking Czarnota Executive Director, Banking, SAS Institute; 60 Jacek Banking of yesterday, today and tomorrow – trends and challenges

62 63

Andrzej Oślizło, President of the Board of Expander Advisors Sp. z o.o. & of Związek Firm Doradztwa Finansowego (The Association of Financial Consulting Firms); Has the Polish real-property market truly recovered from the decline?

Michał Kuchta, Director of the Department for Product and Market Development at Provident Polska; Micro-businesses borrow more and more from Provident

74

Iwona Chojnowska-Haponik, Head of the Foreign Investment Department at the Polish Information and Foreign Investment Agency; Investors are satisfied to invest in Poland

Law Bidziński, Ph.D., Partner at Chmaj & Partners; 76 Mariusz Are private hospitals being discriminated against?

Culture

78 Cultural Monitor Ewart, renowned documentary filmmaker; 80 Ewa KGHM’s success from the human-centred perspective...

64 Agnieszka Kulikowska; Prospects for insurance Kopeć, PhD, Member of the Board of Directors, 65 Alicja Provident Polska; An eye on the market

82 Maciej Proliński; “One cannot trust the devil”…

83 Maciej Proliński; Eastern carpets shine bright Events

Economy

68 Patryk Mirecki; Spa town – politics – business Przybył, President of the Polish Promotional Emblem 70 Krzysztof Foundation; It’s time for Poland to have a new image!

71

Jerzy Wojciewski; The World Council of Credit Unions chaired by a Pole

72

The 3rd European Congress of Small and Medium-Sized Enterprises in Katowice

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Michalak, President of the League of Polish Women; 84 Aldona 100 years of the League of Polish Women 86 Children’s award for Professor Henryk Skarżyński 88 The MSPO Expo – a venue for important meetings

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Editorial

S

uccessive statistical data derived from our economy suggest that it has been emerging from the slowdown with growing confidence. Polish GDP, having had a close call to “zero” growth, will most probably see the end of 2013 with a positive growth rate of 1%. The level of consumption has beaten subsequent historical domestic records. Industrial output has, admittedly, been oversensitive in its reactions to analysts’ estimates, but the gradually-depleting resources indicate that investments will boom “any time soon.” This acceleration of the whole Polish economic machinery has found evidence not only in governmental forecasts (a 1% GDP growth in 2013 and 2.5% in 2014), but also in external estimates, with the latest HSBC forecast for Poland projecting the same levels.

Even though we have managed to escape recession yet again, our future seems rather uncertain. We will reach the acceptable European standard for GDP growth of 2.5-3% per annum, and then what? What the richest and the best-developed global economies consider satisfactory does not guarantee that Poland, as a considerably poorer State, along with a dozen or so other countries at a similar stage of development, will catch up. Neither in terms of its GDP per capita, nor accumulated income, nor – which seems to be everyone’s point – the quality of life. OECD and World Bank economists call this transitory state between a high-income and an advanced state the middle-income trap. To free itself from such a trap, our economy would have to maintain its GDP growth in the long term at a level of more than 4-4.5% per annum. Does Poland have such a potential? The naysayers would claim that it does not stand a chance, and its 4.2% growth in GDP throughout the last dozen or so years was the result of the great momentum created by the accession of Poland to the EU, the opening of European borders for economic migrants from Poland, and labour costs ranked among the European lowest. In the near future, in the light of the well-known demographic gap, none of these momentum-building factors will come into play again. With no Polish gas or oil, and faced with the depletion of coal, we will not become richer in natural resources.

We are terribly poor in financial terms – the assets of banks operating in Poland are ca. 300 times (!) lower compared with Germany or the UK. And – as we have known for years – our social capital level has been more of a roadblock rather than an aid to our development. Also, in terms of innovation, we have reached rock bottom in the European rankings. Is then praying for a miracle all that we are left with?

The Polish weaknesses should also receive more favourable treatment. We are all familiar with Polish individualism and the lack of inclination and ability to cooperate. However, wherever the market offers tangible benefits in return for such cooperation, this incapacity seems to be remedied in no time. It turns out, for instance, that Polish farmers, who have fought against compulsory collectivisation for decades, are able to organise themselves into growers’ associations, which put money into local weather radars and hail cannons. Furthermore, apparently the opportunity to sell Polish-grown apples on a larger scale has sufficed for the “Sandomierz cluster” to emerge in a flash and to organise marketing and logistics for over 700 suppliers. So, things are not so bad with our team spirit, after all, are they?

The argument also holds good for innovation. I believe there is no point in making references to European rankings, which place us at the very end of the list. Neither do I feel competent enough to join in with the statisticians in their disputes, explaining our position in the rankings with the annual changes in their methodologies. What appeals to me more are facts and figures, such as those evidencing that 7 years ago only foreign bidders put forward their

proposals in tenders for rollingstock delivery for high-speed railways, while at present subsequent tenders for German railways are being won hands down by a manufacturer from Bydgoszcz, and a company based in Kraków is designing for China a train travelling at 389 km per hour. I know that Polish /and not only/ shipyards are not able to compete with their Asian counterparts in terms of costs, but I am still impressed by a business from Gdańsk which designed and coordinated the major salvage operations of Costa Concordia. I am also blown away by the fact that the best start-up in Silicon Valley, California, turned out to be a company from Kraków dealing in electronics. I am no less bedazzled, too, by 15-year-old Hania Mokosińska, who attracted millions of views on YouTube by showing a torch powered by the warmth of her own hand. Therefore, this alleged innovation impairment of Poles must be overstated!

In addition, momentous news has recently been announced about an innovative antineoplastic surgical procedure in a newly commissioned high-tech medical clinic in Lublin. Indeed, little do we remember that parallel to the construction of its extensive transport infrastructure, Poland has been under way with the development of a massive R&D network. Hundreds of laboratories have been established, or are currently under construction. Equipped with state-of-the-art machinery, they have facilitated the pursuit of their own ideas by Polish scientists, who can now cooperate shoulder to shoulder with their renowned colleagues worldwide.

Furthermore, new assessment and grant-awarding procedures are being implemented for scientific facilities. Within a year, they have already doubled the number of patents pending at universities and colleges, and also the number of grant applications submitted by consortia made up of academic and industrial centres, which has up to now been a weak spot of innovation in Poland. I hope that these Polish innovations will not be devoured by the “gray area,” as is the case with a large number of these at present. After all, we do have quite a number of research and technology centres operating under the auspices of global corporations with thousands of Polish scientists and engineers already on board. Obviously, they are not paid for doing nothing, but the results of their efforts rarely come to light in their homeland. For sure, they score ranking points for countries much higher up the list.

As regards the Polish public, I do hope that it will play a positive role in this “new economic acceleration.” Even though the latest findings of the Public Opinion Research Centre (CBOS) have looked rather grim, as more than 67% of Poles seem to believe that “the affairs of the State have gone adrift,” a Biblical reference to those who do not know what they are doing, seems to be in place. This is the attitude fostered by the authorities of Wrocław, which, having found its residents completely ignorant of the fact that over a dozen global companies were based there, undertook an educational campaign. And since “Polish Market” has just embarked on the 18th (!) year of carrying out such a mission, we are happy to “welcome them aboard” ::

Krystyna Woźniak-Trzosek Editor-in-Chief President Rynek Polski Publishers Co. Ltd. 9 - 10 /2013 :: polish market :: 5

President

The Kielce Trade Fairs represent the growing potential of Poland

“

The Kielce Trade Fairs show how Poland has been growing in its potential and importance”, said President Bronisław Komorowski, opening the 21st International Defence Industry Exhibition (MSPO) in Kielce.

In his opening speech, President Komorowski acknowledged how impressed he was with the changes the Exhibition had undergone through the 20 years of its existence.

“I remember the first meetings (...) and I can assure you that each subsequent year has strengthened my conviction that bold but sensible decisions, motivated by a sense of being capable of rising to the challenge, can make a difference. I can recall one of the initial meetings, held in a completely different financial climate. And when I look at how far we have come, I can say that the effort has paid off handsomely,” concluded the President.

As stated by Mr Komorowski, the success of the MSPO has also been due to the continuous and consistent efforts on the part of the Polish State to ensure that the prospect of the technological upgrading of the Polish Armed Forces attracted foreign companies. He also added that it was a precondition of the further growth of the Kielce Trade Fairs and the whole defence industry.

This year’s International Defence Industry Exhibition showcased about 400 businesses from 24 countries. As announced by its press office, this edition of the Fairs saw a floor area of nearly 25 thousand square metres, featuring products from 400 companies from locations such as Italy, Spain, Canada, Turkey, Sweden, Belgium, Germany, Norway, Switzerland, the Czech Republic, the USA, Brazil, Israel, Slovakia and Russia. ::

Indonesia important as Poland’s partner

“

Indonesia is an important partner for Poland and I hope that this is so the other way round as well. We value this cooperation, especially due to the role played by Indonesia in Asia and in global international politics, as well as its demographic, political and economic potential,” emphasised President Bronisław Komorowski after a meeting with Susilo Bambang Yudhoyono, the President of Indonesia, during his visit to Poland. Both Presidents advocated further strengthening of cooperation across various fields.

“We wish to seek a political framework for this cooperation,” said Mr Komorowski at a joint press conference. “The visit of the Indonesian President means the intensification of political dialogue and collaboration,” he added.

As put forward by the Polish President, closer cooperation is also being encouraged by the common experience of both countries in terms of their paths to democracy.

Both Presidents also exchanged views on the prospects for increased economic cooperation. Potential areas for partnership, as put forward

by Mr Komorowski, included defence, agriculture, fishery, education and the system of higher education.

Mr Yudhoyono, in turn, stressed that the main objective of his visit to Poland was to reinforce the mutual relationship and partnership between both countries. “The relationship between our countries is at

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a steady level and continues to deepen. However, as we both agreed, it can be further developed in the near future,” he commented. In his opinion, areas with special potential for closer cooperation include investments, commerce, agriculture, food safety, and also production, energy (including renewable energy), education and the tourism sectors. ::

Poland endorses the efforts of Macedonia to join the EU and NATO

“

Poland has continually endorsed the efforts of Macedonia to join the EU and NATO,” said President Bronisław Komorowski during his visit to Skopje. He further emphasised that the stabilisation of the Balkans is not possible without Macedonia.

Mr Komorowski met Gjorge Ivanov, Macedonia’s President. He also received from Mr Ivanov the “September 8” Order, the highest honour awarded in the Republic of Macedonia.

“I wish to thank you for this great honour. I take it not only as a great distinction but also as a token of appreciation of Poland and its citizens for the support we strive to provide to Macedonia to streamline its efforts towards the EU,” said the President of Poland during the ceremony.

As noted by the President, the support from Poland enjoyed by Macedonia in its aspirations to join the EU and NATO is both due to the friendship between the two countries and Poland’s deep conviction that one of the leading principles of its foreign policy, advocating the need to maintain the open character of the EU and NATO, is still valid.

Mr Komorowski expressed his belief that in the bilateral relations between the two countries, despite the very good communication, there is still a lot of room for improvement. According to the President, Polish-Macedonian cooperation will undoubtedly benefit from the accord between their respective departments of science and higher education signed during his visit in Skopje. Mr Ivanov pointed out that Mr Komorowski’s visit marked the 20th anniversary of the establishment of diplomatic relations between Poland and Macedonia.

Macedonia has been an EU candidate country since 2005, but Greece has hindered the membership procedure. An obstacle for Macedonia to join not only the EU but also NATO is, among other things, the argument between Athens and Skopje over the official name of the country. Greece believes that the name Macedonia should be reserved for its historic region. ::

Prime Minister

A meeting between Polish PM Tusk and Latvian PM Valdis Dombrovskis

T

he talks revolved around the bilateral relations between Poland and Latvia, and also regional issues. Other matters included energy cooperation and the Eastern Partnership in the context of the summit in Vilnius. ::

The consolidation of the Polish arms industry

“

A Polish Arms Group is being established containing all the key enterprises working for the Polish arms industry,” said PM Tusk.

The Prime Minister and the Ministers of the Treasury and National Defence said that the consolidation of the arms industry was crucial for the modernisation of the Polish armed forces. Consolidation will also allow better use of the potential and harmonisation of investment activities, bringing synergy and the economies of scale.

The new corporation will increase competitiveness on the open European defence market. One organisation allows the more effective building of the image of the Polish arms industry on the domestic and international markets.

The new Group will cover the shares of Huta Stalowa Wola S.A., the 11 companies of Wojskowe Przedsiębiorstwa Remontowo-Produkcyjne, OBR Centrum Techniki Morskiej S.A. and the companies of Polski Holding Obronny Sp. z o. o.

The Minister of the Treasury announced that the Polish Arms Group would have a total income of PLN 6 billion and employ over 13 thousand people. “In many cases these are also the most successful cases of knowledge transfer to the economy and science commercialisation,” he added. ::

Moldova’s PM in Poland

A

number of agreements we r e signed, including one on reducing roaming rates, and there were talks on energy cooperation and Moldova’s integration with the EU, as PM Tusk met

PM of Moldova Iurie Leancă.

“On the eve of the Eastern Partnership Summit we talked about the prospects of a European Moldova and the steps that need to be taken to make this real,” said Donald Tusk. He also stressed that Moldova

can count on Polish support in the process of EU integration, including in the process of lifting the visa requirements.

PM Tusk also studied the situation in Transnistria. “It feels important that Europe should support Moldova to pursue a peaceful and rational solution to the Transnistria issue,” said the Head of Polish Government.

The Prime Ministers also discussed economic matters and energy cooperation. This visit from Moldova’s Prime Minister was official and also the new PM Iurie Leancă’s first in Poland.

During the visit, the following bilateral documents were signed in the presence of the Prime Ministers: • an Agreement between the Republic of Poland and the Republic of Moldova on social insurance; • an Administrative Agreement on the application of a Contract between the Republic of Poland and the Republic of Moldova on social insurance; • an Agreement regarding a reduction in international roaming rates for telecommunications services between the Ministry of Administration and Digitisation of the Republic of Poland and the Minister of Information, Computer Technologies and Communication of the Republic of Moldova. ::

Nobel Peace Prize Laureate Aung San Suu Kyi in Poland

P

rime Minister Donald Tusk attended the dinner given to honour Aung San Su Kyi, a Burmese opposition leader and Nobel Peace Prize Laureate, during her visit to Poland.

The Nobel Prize winner also met speaker of the Sejm Ewa Kopacz and speaker of the Senate Bogdan Borusewicz. Poland was the first country on her European tour. The Burmese opposition leader was also visiting Prague and Budapest.

“During my visit to Central Europe I would like to learn about the experiences of this region and the effective ways to achieve democracy,” declared Aung San Suu Kyi in the Sejm the lower chamber of the Polish parliament. In 1988, Aung San Suu Kyi had become the leader of the National League for Democracy. In an open letter she made an appeal to the Government to establish a consultative committee, which would make preparations for democratic elections. Between 1989 and 2010, with short interruptions, she was under house arrest. Recently, since the 2012 elections, she has been a Burmese MP. She has received numerous awards in recognition of her activity. In 1991 she became a Nobel Peace Prize Laureate. In 1990 she received the Sakharov Prize awarded by the European Parliament to individuals of extraordinary merit in the fight against intolerance, fanaticism, and persecution. ::

9 - 10 /2013 :: polish market :: 7

Our Guest

It is time to invest in broadlydefined innovation Janusz Piechociński, Deputy Prime Minister, Minister of Economy

I

t is no secret that after a period of phenomenal growth, today is the best time for this generation of Poles to draw on the competitive advantages with which this country acceded to the European Union in the mid- 2000s. Today labour and energy costs and tax considerations are no more the Polish economy’s major advantages.

This makes us wonder what lasting competitive advantages the Polish economy, Poland, and Europe have now. Not only in theory, but also in practice, this should be human capital.

And we are proud to see that Poland excels in this area, especially in next-generation sectors, such as ICT, the so-called Internet industry or Internet economy, that our market attracts major global players, those who are developing cutting-edge technologies, but also render global services, such as outsourcing. So we might venture to say that we have high-quality human capital... Thinking of innovation, we speak about catching up with the times. However, I would like us all to be aware that this global crisis is not confined to the economy and banking, trade, and the emergence of new economic powers, which are building a slightly different system of values and competition based on varying production costs and extremely high exports. In my view, it is a crisis of attitude, of not being ready to keep up with the times, not only on the part of politicians and decision-makers, but also one manifested in the social attitudes

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of the opinion-makers, various communities, and society at large.

We are setting ambitious goals, wanting Poland to become a country of innovative, enterprising, and creative people. Glancing at international classifications, we see that in the category of “entrepreneurship” Poles rank second after the South Koreans. When we look at “human capital,” the impressive number of students and scientists ensures our high position on the list.

It is vital to stimulate cooperation between the actual economy and education, including higher education, and vocational education, which, after so many years of wasting potential and resources, we are now trying to rebuild.

Day-to-day operating costs have increased due to the extension of the infrastructure for science, higher education, and research and development, but the number of patents, industrial designs, and new technologies attracted has remained as before. In this respect, it is very important to reverse the unfavourable trend in the innovative economy, and its related sector of research and development. What is singular about our country is the very high proportion of State expenditure in relation to the very weak contribution from enterprises. If we take a look at more technologically-mature countries, we see that the public impulse is only there to add to the outlays of big businesses. I would also like to draw your attention to yet another area which is very important in building an innovative economy through innovative approaches. What I mean is an altogether-different arsenal of resources and impulses, which the public authorities must direct at small and medium-sized enterprises. I would like to point to the big discussion that took place in the Government regarding special economic zones, about building a cluster policy, about achieving in 2020 a situation in which we can take advantage of the human capital we have developed using EU funds, building this cluster policy in technological parks and special economic zones.

These, in my opinion, are to be the carriers of a new type of Polish entrepreneurship, to be like angels, good spirits, which will guard and guide businesses as they venture into other European markets, promote their products, and also deliberately inspire entrepreneurs to strive for greater integration, so that they can produce added value through cooperation. You should be aware that, although we have this good, or at least fairly good human capital, when compared to Europe, our social capital is relatively the poorest. Mind you, this includes social capital in the R&D community and in cooperation and synergy between businesses, also as regards the results and quality of debates, which top managers can spark, if they want to, by setting tasks and asking questions, which, I hope, will bring about a positive response from politicians. It is becoming a major national task, a civilisational breakthrough of sorts, to find the right answers to these challenges, to this time of unease. Today the Polish economy has healthy roots, and, when compared to other countries, a very high level of stability and predictability. Look also at the great distance between Polish entrepreneurship and Polish capital. In this time of crisis, we need to invest in broadly-defined innovation, which is often unspecified at the level of enterprise, plant, product, or service. Here is a place where not only politicians can be active, where constant calls for improving institutional competence and relations between administration, politics, the economy and the worlds of science and development are not the only thing needed.

We should also pool our efforts, through the decision-makers, not only in the political dimension, to mobilise society to catch up with the times, be open up to technology, and to use it properly without too much spending, to create products, services, and eventually brand Poland that is innovative, inclusive, competitive, and pursues our shared, ambitious objectives. :: Speech at the 4th Innovative Economy Congress

The European Union, through the Agricultural Market Agency “ARR”, supports food producer groups by providing funds for organising information and promotional activities.

The Agricultural Market Agency has signed contracts with 20 beneficiaries for a total amount of PLN6.2 million!

nd ise a ad a n n e yo i ma lski m oted k o c p e l o tar Kie om iak S being pr rt. n j ó Tr po y read o EU sup products l a e ar our ks t than and get y mestic o them on the d ts!

Join d e e mark notic U E and

Detailed information and application forms are available on

www.arr.gov.pl in the “Promocja Żywności” (Food promotion) tab – “Promocja ze środków PROW 2007-2013” (Promotion financed by RDP 2007-2013)

“The European Agricultural Fund for Rural Development: Europe Investing in Rural Areas.”This publication is co-financed by the European Union within the framework of Technical Assistance of the Rural Development Programme 2007-2013, the Managing Authority for the Rural Development Programme 2007-2013, the Minister of Agriculture and Rural Development.

Our Guest

To be a world leader!

Stanisław Kalemba, Minister of Agriculture and Rural Development, talks to “Polish Market”.

How would you evaluate the current condition and achievements of Polish agriculture? What are its strong points and what are its weaknesses?

Agriculture is a specific sector of the economy. Despite the significant technical and pm

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technological progress, which takes place right before our eyes, this sector still is, and certainly will be in the future, largely dependent on weather conditions. Therefore, it should be given special treatment, and it is, namely under the Common Agricultural Policy. Even though it is not perfect, it has allowed rapid modernization of Polish farms. The Polish countryside is undergoing both generational and technological changes. Of course, not everything runs without problems, but the important thing is that it is done on an evolutionary rather than revolutionary basis. Over the past 20 years the number of the smallest farms decreased by about 700,000.

Despite unequal support conditions, Polish agriculture successfully competes on the European and global markets. Thanks to hard work and the effective use of all the available EU and national funds, it was possible to modernize farms and processing plants, which are today among the European and world leaders.

That is the reason why Polish food has conquered the European market. Farming and food processing are the driving forces of Poland’s economy, and I find it a great success.

Unfortunately, the major weakness of Polish agriculture is that farmers are hardly organized. There are far too few horizontal and vertical links; the agricultural sector suffers from poor self-organization. Strong cooperatives and producers’ groups, which are also associated vertically, can effectively improve the management quality. A greater concentration effort, with a view to eliminating a number of trade agents, would increase direct revenues and reduce costs, but it would also boost farmers’ bargaining power with retailers, purchasing or processing companies. Just look at the experience of France, Denmark and Germany. pm

At this year’s harvest festival in Jasna Góra Polish President Bronisław Komorowski

Our Guest

said that “Polish agriculture has made impressive progress over the past two decades; it is not a picture of paradise, but of hard albeit fruitful work”. How would you comment on this remark?

Exactly so. That is what I was saying. I am glad that the head of state is of similar opinion.

Agriculture is a specific activity. Not just because a lot depends on the weather, but also because work is intertwined with home life.

There is no spare time in this job, especially in livestock production. You have to make plans for years ahead, and in fact for generations. That is good that farmers’ efforts were acknowledged at least on the occasion of the harvest festival. Still, that is a pity that farmers do not get much respect in everyday life.

In 2012 Poland marketed abroad agri-food products worth EUR 17.9 billion, generating a EUR 4.3 million trade surplus. What are the main reasons behind this undoubted success?

We have for years achieved very good results in foreign trade in agricultural products, always with a positive balance, and until this year agriculture has been the only such sector of Poland’s economy. It is worth realizing that about one-fourth of our agricultural output are exports. Preliminary data for the first half of this year suggest that it will be even better. The value of food sales at that time amounted to EUR 9,269 million, a 13.8% increase compared to the same period of 2012.

There was also a 56 % surge in trade balance, which expanded to EUR 2,393 million over the period in question. This undoubted success of Polish food exports can be attributed to several factors. First of all, farmers and processors leveraged the opportunities that occurred prior to and after Poland’s accession to the European Union. Owing to unprecedented so far financial support it was possible to carry out modernization of farms and agricultural processing plants, especially in the meat and milk industry. We are able to offer very tasty food at affordable prices namely thanks to a small presence of chemicals in soil, and to the fact that we managed to preserve the natural rural landscape while also using traditional recipes. Moreover, we are increasingly successful on much more distant markets: in the Middle and Far East. Adding to this success are various promotion funds pm

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that make it possible for new consumers to appreciate the quality of Polish food.

A debate on Polish agriculture has been held in the parliament recently. What lessons did the Ministry of Agriculture draw from it?

The most important thing is that farming was discussed at all. A significant drop in cereal prices at the beginning of the harvest season raised interest in agricultural issues.

Poland is not the only country concerned.

A speculative capital’s increasing interference with agricultural trade has been a general irritant over the recent years. It happened that wheat is sold and bought a number of times for speculative purposes, without its place of storage being even changed. At the same time, nothing special - such as a crop failure or a natural disaster - occurred that would impact the market situation. These incidents on the wheat market, as well as on other markets, show that all those responsible for agriculture must seriously consider steps to be taken to ensure that such situations do not repeat themselves in the future. The food markets are particular highly sensitive ones.

The parliamentary debate also revealed a considerable level of demagoguery. Anyone interested in agriculture knows well - we are in the European Union for over nine years already - that there is no market intervention mechanism on the rape market, and on the wheat market the decision is made by the European Commission when the price drops below EUR 101 per tone. Farming experts are also perfectly aware that the sole state entity, which operates in marketplace realities but does not have a decisive share in the market, is not in a position to substantially influence purchase prices. The current state of Polish agriculture is the result of the situation on the European and world markets. I would expect a factual debate to find solutions to improve farmers’ self-organization, to reduce production costs and increase efficiency. pm

From 29 August to 2 September the Ministry of Agriculture organized a study visit for foreign journalists. What is the purpose of this initiative?

Yes. This is already the fourth study visit for foreign journalists. We show the diversity of Polish agriculture, which is able to accommodate both small and large farms. We pm

present our position on the reform of the Common Agricultural Policy, pointing to the results achieved thanks to the farmers’ involvement, a simple payment system and targeting modernization processes. Poland is a major agricultural producer, and therefore a major beneficiary under CAP. After all, it is about the European taxpayers’ hard-earned money, and they have a right to know how it is used. Despite being a relatively young member of the EU, we have repeatedly shown that we can use financial resources even more effectively than more experienced countries of the “old” Europe. Journalists have an opportunity to talk directly to farmers and agrifood entrepreneurs, as well as to make themselves familiar with Polish tourist farms and Poland’s rich culinary heritage. Traditional Polish dishes and regional products are eaten for breakfast, lunch and dinner. Visitors travel to various regions of the country, and the local cuisine specialties are always served.

How to increase the agricultural production using organic methods?

With the increasing population growth rate, and thus the greater demand for food, we must be aware that organic farming will not be able to provide an adequate level of food security. This sector of agriculture is developing well, but it will not become the dominant one. Of course, scientific progress is made all the time, and our knowledge about the potential inherent in the organic methods continues to expand. The focus on ecology and the environment is also visible in the European Commission’s work on a new perspective of the Common Agricultural Policy for the years 2014-2020. It is reflected in a hard compromise that was finally reached. Poland is in a good position here. Our soils are average in quality, but they were not subjected to excessive use of chemicals, as was the case in some other countries. Moreover, we managed to maintain the natural rural landscape, something that does not exist in many other countries any more. I believe that further research into organic methods, as well as the European Commission’s focus on ecology and the environment will enhance farming production. pm

pm

The issue of ritual slaughter has recently sparked controversy in Poland. There is no unity even among the ruling coalition.

Agrol P.P.H. Sp. z o.o. launched its operations in 1996.

Our products are made using specially selected grains of top quality corn. The company’s core operations are based on its own groats-processing plant equipped with state-of- the-arts machinery.

Thanks to the first-rate quality of our products and individual service offered to our trade partners, we have become the leader on the Polish market of cereals, rice, groats, peas and beans. We are also selling fresh fruits and vegetables.

Since 2003, we have enforced the HACCP food safety management system which guarantees high quality of products offered for sale.

We are the laureate, among others, of the Export Leader Award received in 2005 from the Province Business Forum under the patronage of the Mazowieckie province Chairman. We have also won the Polish Food Producer Certificate.

Products offered by AGROL promote healthy lifestyle, are widely used in dietetics and support weight loss.

AGROL

Przedsiębiorstwo Produkcyjno‑Handlowe Spółka z o.o.

09-140 Raciąż, Płocka 53 tel.+48 23 679 10 10, +48 23 679 18 55 tel./fax +48 23 679 11 18 www.agrol.eu sklep.agrol.eu

Our Guest

You are against the ban on slaughter without stunning. How would you explain and motivate your stance?

It is a very difficult and complex issue indeed. I understand animal-rights activists.

I agree that we have no right to inflict pain to animals, but there is no compelling evidence that a properly conducted ritual slaughter causes more pain than other methods. The reality is that these animals would not be killed if people were vegetarians. But this is not the case and will never be. We must also remember that there are people living around who have their own traditions and faith. Their religion requires them to follow specific rules. They have been doing so for thousands of years, and in Poland they are guaranteed the freedom to practice their religion. In my capacity as the Minister of Agriculture I cannot ignore the economic aspect either. Followers of the religions that require special slaughter techniques will not disappear overnight because of the imposition of a ban. The ritually slaughtered meat will be imported from abroad. Thus, all those involved in the production of meat under special requirements will incur financial losses.

The market abhors a vacuum: Polish breeders and processors will be heavily affected, with their place being immediately taken by foreign competitors.

Abroad - even in the neighbouring countries - you can sometimes hear allegations that Polish food is of poor quality. These are largely marketing tricks of foreign competitors, but are they always unfounded?

This is a very complex issue. Let me recall the scandal with horse meat. First, we were hailed as culprits, and in the end, it turned out that there was no fault on our side. Data from an early warning system shows clearly that we do not top the list of defaults, their number being lower than the EU average. It is unacceptable that accusations are thrown and blown up by the media without substantial evidence. I spoke many times with the Czech Minister of Agriculture, and I think we now have a completely different climate.

I strongly believe that the best solution is direct talks and close cooperation between the relevant entities responsible for food safety.

They should first check everything in detail, and the information should be communicated pm

14 :: polish market :: 9 - 10 /2013

to the media only afterwards. Of course, I do not mean to say that everything is perfect. In my view, there should be no tolerance for irresponsible behaviour and dishonest traders should be eliminated from the market. Food, whether premium or mass-produced, must absolutely meet all the requirements prescribed by law.

Polish farmers increasingly tend to form producer groups. Why? The number of producer groups is growing, yet too slowly in my opinion. I understand that mental changes do not come easy, and bad experience from the past takes its toll too. But the world is changing rapidly and we need to keep up with the growing competition. The most important challenge ahead is to develop producer groups and restore a genuine cooperative network. Just look at farmers in Denmark, France or Germany. They team up to reduce costs, to make more efficient use of machinery and equipment, as well as to have easier access to funding for further development. Their cooperatives are powerful global companies. What is characteristic about producer groups and cooperatives are both horizontal and vertical links. As they get together, it is easier for them to tackle market volatility, namely thanks to diversified production covering for example grain and pigs.

Being part of such a group you are not affected that much by fluctuations on one market or another. Trade and processing need to be enhanced too. In Polish realities we have too many agents who take over the money that otherwise could be part of the group’s capital. The role of a strong group or cooperative can hardly be overestimated when dealing with retail chains. Farmers come to understand it better. However, today’s market realities require specialized knowledge. That is why schools supervised by the Ministry of Agriculture and Rural Development create special programmes providing the necessary knowledge about the functioning of producer groups, cooperatives and other forms of joint activity in the agricultural sector. Such steps will probably be taken at the higher education level too, as universities adjust their teaching programmes to the signals coming from the labour market. pm

Does the Polish Minister of Agriculture and Rural Development get on well with the European Union?

In carrying out my statutory duties I regularly participate in the meetings of the EU Council of Ministers for Agriculture and Fisheries. I also attend informal meetings and whenever appropriate to discuss things that are important for Polish agriculture. Let me draw your attention to one particular fact. At the beginning of the year the new financial perspective 2014 – 2020 was debated, which was extremely important from the point of view of agriculture. At the crucial moment of these negotiations, that is when decisions were being made, I was the only agriculture minister involved. This is indicative, on the one hand, of the importance attached by the Polish government to these issues, and on the other hand, of my attitude towards the EU institutions. pm

How much will the EU-U.S. free trade agreement benefit Polish food exporters?

As I already said, we are faring increasingly well on foreign markets. Prior to our accession to the European Union it was anticipated, and even feared, that Poland will be flooded by foreign food. This was not the case. On the contrary, food exports are on the increase, with a continuously positive trade balance. The task of the ministry and its subordinate services is to negotiate the requirements and access conditions to particular markets. Then it is up to producers and exporters to leverage these opportunities.

We have developed a legal framework aimed at promotion. Thus, funding has been secured to conduct advertising and promotional campaigns. These are expensive undertakings. How effectively the resources will be spent depends on the managers’ creativity and skills. Twenty years’ experience in agriculture transformation and in foreign trade in agri-food products prove that there is no grounds to be afraid of the free trade with the U.S, yet European food should be protected. I am confident that Americans will quickly get to like excellent Polish food.

After all, the U.S. is home to many Poles who have already blazed a trail. I do not see why Polish products should not become as popular in the U.S. as they are across the EU. :: pm

Genuine taste

www.lazur.pl

Agriculture and food industry

Does Poland need the EU’s Common Agricultural Policy?

“Polish Market” interviews Andrzej Gross, President of the Agency for the Restructuring and Modernisation of Agriculture (ARiMR), an accredited paying agency. The Agency deals with the implementation of instruments co-financed from the European Union budget and provides aid from national funds.

This is a good moment for such a reflection, as we are drawing close to the end of our second financial perspective in the Union. Maybe it is worthwhile going back to the pre-accession period and remind ourselves of the atmosphere, anxieties and dramatic opinions expressed by many circles – that rural areas would not use European funds at all, that this part of society was unprepared, a complete catastrophe.

Yet, all these catastrophic visions did not materialise in reality. Since accession the image of Polish rural areas has changed drastically. You can see the advances in agricultural technique and technology with your own eyes, as well as a change in the living conditions in rural areas. Hundreds of thousands of pm

16 :: polish market :: 9 - 10 /2013

new machines and devices, buildings, process lines and processing plants make up a potential which has become competitive, not only on the Community market, but also outside the EU. This is corroborated by the balance of foreign trade and the growth in agricultural and food products exports. It seems agriculture has become its driving force. We do not need any vivid descriptions here - economic effects speak for themselves.

The fruit and vegetable market has become very competitive, and we can even speak of a kind of revolution. To create all this processing and warehousing potential and to prepare the goods for sale, Poland has utilised almost 90% of the CAP resources that had been made available in this area to all the Member States.

In the past, Polish farmers used to go to the ”Old Union” to admire modern technologies and devices. Today, farmers from “the fifteen” look with envy at some Polish producer groups, who are equipped with cutting-edge technological solutions, largely purchased in the countries of the Old Union (this is where these funds went back), but who are also creating the potential for Polish agriculture.

Of course, such radical changes did not take place everywhere in the country, and not in all agricultural sectors. There is no programme that would reach everywhere and everybody in less than 10 years. It also did not go unnoticed that the advancement of techniques and technology has borne new problems that we are facing now, such as reduced demand for workers and the necessity to combat unemployment. Therefore, ARiMR has to have its own contribution to creating new jobs, and at the national level we have

managed to facilitate the creation of 35 thousand new posts.

What is the philosophy behind these changes? Within a decade the number of farmsteads has decreased by one fourth, yet the average area of a farm has doubled. Unfortunately, we still cannot say that we have secured a satisfactory level of profitability in this sector. Will the Agency continue stimulating these structural changes?

There is no single model that we will support. This is due to the situation of Polish farmsteads being very diversified. In the north, large farms hold sway, while in the south we can perceive substantial fragmentation. And there are also historical and environmental conditions. Recent years have shown that our support programmes have resulted in both agricultural structure and mentality changes. There has occurred the so-called “land hunger”, questioning the opinion that “agriculture is unprofitable and anti-developmental” – today we are experiencing a record increase in the price of land in most regions. We are seeing the will to develop and enlarge one’s farms, to use the latest technological achievements, to further one’s knowledge and education. This means that Poles, and especially young people, have noticed the need for development in this area of the economy. And it is worth highlighting that we have the largest number of young farmers in the EU. pm

pm

Could this be the biggest success of the CAP in Poland?

Agriculture and food industry

We are recording more such changes in the sphere of social attitudes. Poland has become a serious partner on the international markets of agricultural and food products.

Reaching this position was possible owing to, among other things, our producers, who have understood that they need to work together. In the western European countries, 70-80% of production reaches the market through organised suppliers, while our producers have grown accustomed to individual operation. History has taught them reluctance and even opposition to the forms of association supported by the State. However, the emergence of large purchasers, especially from abroad, has convinced Polish producers that they have to reach an agreement and create an appropriate framework for such a functioning market. Today, for example, the thriving Sandomierz cluster is able to coordinate constant supplies from more than 700 producers, and this is already a higher level of logistical organisation. This means that a genuine market is being created in Poland.

We already have great production and salespreparation potential that can compete with

the world’s best. Yet, in the large concerns, production makes up only 30% of the whole, and the remaining 70% are the services responsible for selling the product. Our producers have just noticed the lack of this sector and are starting to build it.

Obviously, this is not the only challenge in the next financial perspective. The majority of farms in Poland are small, several-hectare farmsteads. Among the 1,360 thousand EU beneficiaries, 800 thousand are small farms, so we still have to answer the question “Who should be supported?” Should we support only those who create the competitiveness of Polish agriculture? And if so, what should we do with the rest, being so numerous? If we do not support some path for development, they will become beneficiaries of social services, and we cannot let this happen. We have already gained experience in supporting various types of micro-enterprises. We know that, in order to succeed, we have to adjust their types and operations to local conditions. Yet this cannot be achieved while sitting behind a desk. This means that our role is to remove the barriers. We will also support initiatives

for launching local production, and sales directly from a farm, and thus the sector which manufactures machines and equipment for micro-producers. All this will be the effect of drawing conclusions from our experience of the passing perspective. I am sure that in the upcoming one we will invest EU funds well. ::

Poland as the EU leader of the Rural Development Programme The Agency for the Restructuring and Modernisation of Agriculture has been implementing the Rural Development Programme for 2007-2013 the fastest among all the EU Member States. PLN47.9 billion from the RDP for 2007-2013 that has been already transferred to the bank accounts of Polish farmers places us, without any doubt, in the EU lead. In Germany, which currently holds second place, approx. PLN 2.8 billion (after converting into zlotys) less was paid out, and in France, the payments were approx. PLN4 billion less generous.

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9 - 10 /2013 :: polish market :: 17

Agriculture and food industry

From a cappuccino producer, to a global innovator The international expansion of the Mokate company demonstrates that analysing the needs of clients makes it possible to create innovative products even in highly competitive sectors.

Adam Mokrysz and Katarzyna Moktysz

Katarzyna Mokrysz, PhD, and Adam Mokrysz, PhD

N

owadays, the word “crisis” appears in all possible contexts.

However, the global sales results achieved by Mokate allow us not to pay attention to the decline in the economic situation. We are continuing to implement our ambitious goals related to increasing our sales and revenues.

18 :: polish market :: 9 - 10 /2013

Today, the Mokate group consists of nine companies based in Poland and abroad– among others, in the Czech Republic, Hungary and Ukraine. The Mokate plants are currently producing over a thousand products, under such brands as Mokate and NYCoffee, and also Minutka and Loyd Tea. The companies making up the Mokate group deliver products to all the continents of the world.

Indeed, since 2009, nearly half of our sales revenues has come from international markets, and the proportion of exports in our revenues have exceeded 50%. Export revenues are also growing substantially. Mokate products can also be found in the Near and Far East, while the East-Central Europe and the European market constitute the company’s main focus area.

Our approach to expansion has, therefore, proven effective and it facilitates our operation within the global marketplace.

Our activities are based on four principles: 1. An innovative product which generates value Mokate was established in the early 1990s as a family enterprise. Cappuccino, at that time a novelty in Poland, was the flagship product in the company’s portfolio. There is an anecdote which survived until the present day that one of the then package suppliers would serve cappuccino to their guests by sprinkling it on a full cup of black Turkish coffee.

It became apparent that Poles did not buy the new product because they didn’t know how to prepare it. The innovative advertisement instructing customers how to prepare cappuccino contributed to establishing a market of substantial value, which is still crucial for the company. However, Mokate took a step further by providing customers with value added involving an emotional experience. In

this way, buying cappuccino not only provided customers with a tasty drink, but also with the possibility of feeling the atmosphere of a cafè at their own homes, as well as experiencing a bit of luxury.

Product innovation and attention to customer experience still constitutes an important element of the company’s strategy. One of the examples is latte, which has become a hit on the market in Poland and in other countries. The innovative product comes with a double sachet, and allows the preparation of a three-layer latte at home. The product can compete in terms of quality with coffee from reputable cafès. The Loyd Tea, which is packed in innovative pyramids, has also enjoyed popularity among Polish and international customers.

The third element adding to the value of the products is the packaging, tailored to the needs of the particular market. The excellent graphic form of the package and the appropriate product description that is consistent with the applicable regulations and customs, comprise a very crucial element of the company’s portfolio. For years, we have struggled to make Mokate products visually attractive – we are aware of the degree to which this element contributes to customer experience.

2. Product strategy: all-round and customer-oriented In the 1990s, Mokate specialised mainly in the sales of convenience products for retail customers in Poland and in South-Eastern European markets. The products were, and still are, manufactured with the use of proprietary food concentrates. However, in 2000, after launching the second module for concentrate production, it turned out that our capacity exceeds our needs.

So we asked ourselves how we can use this capacity. Our solution was that we began

Agriculture and food industry

operating in the B2B sector, providing materials for other producers from the sector, including our competitors. Initially we treated this activity solely as a way to sell the surpluses, but later it became an element of our business model.

This strategy is well-founded. The market in our industry is highly diversified. The Western European market is in fact controlled by several global concerns. Private label brands have a very strong position there, and the consumers are very conservative. In Europe, the breaking through of a new, unknown brand requires enormous expenditures, and the probability of success is low.

The situation within other markets, including the Asian market, is similar. A few years ago, we considered our strong and weak points and developed the product strategy which we also apply today: 1. Retail products sold under the Mokate brand or other proprietary brands are treated with priority. 2. We also supply private label brands, taking the volume of transactions into account, and we deliver our products to large companies which demand high order values. 3. If the sale of our own products is too difficult or expensive, we sell semi-finished items.

This strategy allows us to generate profits due to our presence in every significant sales sector and market, and the comprehensiveness of the company’s portfolio is one of the greatest assets of our business model. Mokate is the only producer offering such a broad range of products and categories which can be purchased from a single source. Our package includes coffees (ground, whole bean and instant), coffee mixes, chocolate coffee, creams and teas offered in a single set and location. The products are available not only in the Czech Republic, Slovakia, Serbia and Hungary, but they are also popular in Lithuania, Latvia, Iceland, Romania and the United Kingdom, as well as in Thailand and the Maldives. Selling our products within various markets constitutes a sort of an insurance policy for our company, as a decline in the economic situation in, for example, Poland, is compensated by other markets. In this way we have created a balanced and stable business model, which so far has been resistant to crisis.

Yet, even a well-founded strategy does not guarantee success; it must be properly implemented in arduous everyday efforts. One of the sources of the company’s success in

retail and semi-finished product sales is tailoring the production and sales processes to customer needs. We are not interested in onthe-spot sales of one batch of products, but in long-term cooperation with selected companies. In Mokate, retail sales and B2B are carried out on the basis of individually developed specifications. Our priority is maintaining the appropriate quality and the parameters of the products. Trust towards the suppliers is a source of added value to the client. This trust is a very crucial factor in our competitive edge, and to this end, we make efforts to strictly follow the arranged delivery schedules - which isn’t always easy.

3. Taking advantage of the synergy between retail sales and B2B A significant factor leading to success in the sales of semi-finished products is providing them with the characteristics of brand products. We offer semi-finished products under the Mokate Ingredients brand. In sodoing, we have been observing the impact of the synergy effect – the fact that Mokate is a retail product seller has helped us in negotiations concerning semi-finished products, especially for deliveries to Asia, where we are treated as a reliable partner. The package under the Mokate Ingredients brand is oriented at the individual needs of customers and ensures quality and security of deliveries, while focussing on long-term cooperation makes customers willing to pay a little more for deliveries than in the case of an ordinary contract.

Close cooperation with customers in the sales of semi-finished products is an additional source of benefits for the company. We learn from our customers. Based on the analysis of market trends, we decided to invest in the so-called Filter Mat, a new technology for manufacturing semi-finished products. We believe that this will enable us not only to sell semi-finished products with a higher degree of processing, but also to develop new, innovative retail products. The synergy effect will make it possible to achieve the return of the invested resources sooner.

4. The sales network based on local staff “Every country has its own customs” – Mokate has found that differences in conducting business are often observed in various countries. In Europe, the major emphasis used to be put on negotiations, and the shift from negotiation to cooperation has only been observed for the last several years. In the rest

of the world it is quite different – what counts are relationships, tradition and cooperation, as this leads to establishing long-standing business relationships.

In some countries, business is a profession, while in others, it is tradition. However, respect, honour and personal relationships are valued universally. The latter dominate, for instance, in Asian countries and in the Near East. Contractors from these areas provide their suppliers with total trust. They say: “I need your product, so complete the delivery according to your own concept.” This necessitates effective solutions applicable to the sales network.

We opt for engaging local staff, as nobody is as efficient in communicating with local customers as a person from the same country. For us, in Mokate, the Czech market functions as a natural back-up facility due to its geographical proximity. Acquiring more companies with their local staff and establishing the Mokate Czech Republic footprint has enabled us to obtain a strong position on the Czech market. In Mokate, the less developed markets are operated by our country managers. In spite of believing that our own sales organisation is the most efficient, we rely to a large extent on local distributors who function as our agents.

The company’s ability to function as a Polish business within international markets is a separate issue. This requires the company’s staff and organisational structure to be able to communicate with various cultures, at least at a basic level, and to display tolerance towards cultural differences, let alone the command of foreign languages.

The above recommendations do not suffice as an answer to the question of how to function within the international market place.

However, it is worth starting with the issue of what customers understand by value added. In practice, this often involves observing the set of traditional values held by being “ a good merchant”. This means selling highquality products, respecting the customers and handling transactions in a reliable, honest and reputable manner. These values are the guiding principles of our everyday activities and constitute the foundations of Mokate’s success. ::

9 - 10 /2013 :: polish market :: 19

Agriculture and food industry

Agricultural and food products – Polish flagship exports More than 30% of the food produced in Poland is sold abroad, mainly to EU countries, but one can also observe a growth in sales to non-European markets. Last year, the value of Polish agricultural and food exports totalled EUR17.9 billion. It is worth highlighting that only this sector of the economy recorded a positive balance of trade with other nations.

Jerzy Wojciewski

A

t the end of August 2013, the conference “Agricultural and Food Products Exports” was held in the Polish parliament. It was attended by Janusz Piechociński, Deputy Prime Minister and Minister of the Economy; Stanisław Kalemba, Minister of Agriculture and Rural Development and the 1st Vice-Chair of the Committee on Agriculture and Rural Development; Jan Bury, Chair of the Polish People’s Party Parliamentary Club; Janusz Związek, Chief Veterinary Officer; and Mieczysław Twaróg, President of the Association of Polish Exporters. The session was presided over

by Marek Sawicki, Vice-Chair of the Parliamentary Committee on Agriculture and Rural Development.

In 2004, Poland sold abroad agricultural and food products to the value of EUR5 billion. In less than 10 years, the value of these exports has more than tripled to reach as much as EUR17.9 billion. This helped the sector gain the status of a key foundation of Polish exports, accounting for 12.33% of their value. What is also important is a continuous sales surplus, which does not occur in

previous year. A decrease was observed only in the sales of potatoes and hard liquours.

Polish foodstuffs are a real hit in the EU, in particular in the United Kingdom and Belgium, where sweets, and also fruit, vegetable and meat preserves are especially-popular commodities. One-day-old, fresh carrot juice, previously not known there, is a true sensation in these countries. What’s more, Spanish strawberries are no match for the Polish ones. And the Irish are literally stuffing themselves with our Prince Polo chocolate wafers!

I have visited Brussels recently and puffed up with pride seeing in how many grocery stores you could find Polish fruit, vegetables, cheese and canned preserves on the shelves and counters.

Polish food is a good brand recognised around the world. What distinguishes it from the rest is its quality, safety and affordable prices. First and foremost Poland sells food to EU countries, with 76% of the exports going there. Germany, the United Kingdom, the Czech Republic, France, Italy, and the Netherlands are the major importers of Polish food products.

On the other hand, the importance of nonEuropean markets has been growing year by year. In 2012, the value of exports to the Commonwealth of Independent States amounted to EUR2 billion, which repFrom left: Minister of Agriculture and Rural Development - Stanisław Kalemba,Minister resented an increase by of Economy -Janusz Piechociński, Vice-president of Agriculture and Rural Development one third when comCommission- Marek Sawicki, president of PSL Parliamentary Club- Jan Bury. pared to the previous year. Among these counother industries. tries, the most important consumer of Polish Last year, crop exports increased by as food is of course Russia, where Poland sold much as 89%, and the sales of fruit doubled. products worth more than EUR1 billion. A Also the sales of oil plants, sugar and nuts substantial increase was also observed in the were much higher when compared with the Arab world. It is also pleasing to see more and

20 :: polish market :: 9 - 10 /2013

more agricultural and food products reaching Asian countries. African markets, characterised by an enormous demand for food, are also of strategic importance to Poland.

There is a chance for Poland to become a leading supplier to such countries as Nigeria and the Republic of South Africa.

According to Stanisław Kalemba, Minister of Agriculture and Rural Development, the success of agricultural and food exports starts with reliable producers, and then there are processing plants, whose management care about high production standards. Many production facilities have been modernised, and now you can often find plants that surpass those in Western Europe in terms of technological advancement. The growing exports figures prove that it is worth investing in plants. Thanks to this development, the economy is becoming more stable and new jobs are being created.

Poland has achieved success in agricultural and food exports and production, but should not take this for granted. One should be aware of this fact in a world where new challenges emerge on a continuous basis. That is why Poland has to pursue innovative solutions in this industry. In this field, one cannot forget the importance of close cooperation between research centres and producers.

Poland should also maintain the good reputation of its products and credibility among customers. We must remember that each deceit, even the smallest one, will be used by our competitors to push us out of the market.

“Modern agriculture is becoming more and more global, which poses new challenges before us. An agreement between the European Union and the United States on a free trade area has created brand-new quality on the agricultural and food market,” said Minister Piechociński during the conference in the parliament. ::

Regional Dairy Cooperative in Koło

www.osmkolo.pl

Today it’s an experienced company, which cultivates the dairy tradition.

• in 2006, started up the most modern butter production line in Poland • in 2008 built the biggest powdered milk in Europe More than 60% of the production is exported all over the word.

Key products include: • skimmed milk powder • skimmed milk powder agglomerated • full cream milk powder • instant full cream milk powder • instant fat filled milk powder • extra butter in blocks In Poland the most distinctive product is a country cheese (cottage cheese).

An excellent opinion among consumers has the extra butter, awarded the title “Buttery Hit”.

The management system of OSM w Kole has been assessed and certified as meeting the requirements of Global Standard for Food Safety (certificate GB/10/81675) and ISO 22000:2005 (certyfikate GB/10/81726.00)

Powdered milk factory

Mr Czesław Cieślak is the President of Regional Dairy Processing Factory since 1992. His activity is based on philosophy “Taste, Health, Ecology”. The processing amount was 64 million liters of milk per a year when Mr Cieślak became the President of Dairy. Nowadays the Dairy is processing over 200 million liters of milk per a year. This fact is measurement of his success.

President Czesław Cieślak

Agriculture and food industry

Organic food promoted in Poland The organic food sector in Poland is constantly growing and gaining visibility in relation to other sectors. The percentage share of organic food in the entire food market is about 0.3%, i.e. about EUR150 million. According to expert estimates, the market for organic food will continue to increase at the previous rate and is set to reach the value of about PLN180 million in 2015. The constant growth in this market is the result of an increasingly good climate on the market for organic foods, higher awareness among consumers and continuous promotion and regular promotional events.

A trend worth noting is the rapidly increasing interest among Poles in organic food provided by small producers at various fairs, trade shows, and markets, which are becoming fixtures in the calendars of Polish cities (including Warsaw, Tri-City, Wrocław, Poznań, Łódź, and Toruń).

Maciej Bartoń

O

ne of the most active advocates of Polish organic farming is the Polska Ekologia (Polish Ecology) Association, which aims at the development and promotion of Polish organic food, also by actively participating in both domestic and international fairs. Producers from all of Poland belong to the Association, showcasing the distinctive assets of each region.

To encourage consumers to buy organic food, the Association is organising food shows and open tasting. In preparing their dishes, chefs from all over Poland use only top-quality organic products. They include the chèf of the Hyatt Regency Warsaw hotel, Mr Marcin Suchenek, who has cooperated with the Association for years now as an active promoter of organic food. Some of the most spectacular promotional events include the bull-roasting show, with tasting for 2 thousand people.

This event was held in Rudawka Rymanowska to promote beef from the Podkarpackie Province and organic food. The Association does not stop at promoting organic farming in Poland – it does so internationally, too. In August, in cooperation with the Ministry of Agriculture and Rural Development, the Association took part in the Agrokomplex trade show in Nitra and “Země živitelka” in České Budějovice, where visitors had the opportunity to taste dishes made from Polish organic food, and participate in food shows. Such events attract tens of thousands of visitors from all over Central and Eastern Europe. It was a perfect opportunity to build the positive image of Polish Food in the Czech Republic and Slovakia.

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The Association also regularly promotes organic food in Poland. Polagra Food 2013 will be organised soon – on 23-26 September 2013 in Poznań. Besides stands featuring the products of Association members, a food show with tasting and organic food promotion has been prepared. The main theme will revolve around organic meats. The chèfs invited by the Association are preparing dishes from organic beef, pork, and capon. Organic meat is still a rarity on the Polish market, although demand for good-quality meat is increasing. Another initiative launched by the Association is the competition for the best store selling organic food in 2013 and the 2013 Best Ecoseller. The conclusion and results of the competition will be announced during the Natura Food 2013 between 11 and 13 October 2013 in Łódź. The winners will receive attractive prizes and also the opportunity to promote and advertise their shops. We hope that such campaigns will help Polish organic farming maintain the current growth rate and that many Polish consumers will understand how much of a treasure our organic food is.

The sales results for the members of the Association are also worth noting. The largest Polish distributor of organic food, the Bio Planet Company, has recorded annual growth of about 50%, and in the second quarter of 2013 its revenue was close to PLN4 million. A 22% growth in the first quarter was achieved by Symbio. All this provides increasingly favourable conditions for the development of organic farming in Poland. ::

THE MOST INNOVATIVE AGRICULTURAL MACHINERY FROM THE PŁOCK PLANT …   

„The Pearl of Polish Economy in 2012”

..

Agriculture and food industry

Time for Polish beef!

The harvest festival is a tradition which dates back to the Middle Ages. It is meant to be a solemn thanksgiving for the yields and a petition for the next year’s harvest to be as successful.

The Presidential Harvest Festival was first held in Spała in 1927, with the official patronage of President Ignacy Mościcki. For the past 10 years, the tradition has been continued by successive presidents of Poland.

Bożena Skarżyńska

T

he Presidential Harvest Festival consists of a series of events, including a mass in the Field Chapel of the Home Army and the traditional harvest procession with the ceremonial of presenting to the hosts - the presidential couple - a symbolic loaf of bread and farm gifts. Individual regions showcase their achievements in the Town of Regions, at many stalls, and as part of the Presidential Tavern, which features the best Polish food products.

“We are proud to talk about the Polish countryside as a source of strength of the Polish people and the Polish economy,” said the President of Poland Bronisław Komorowski during the opening ceremony at the Presidential Harvest Festival in Spała. “The Polish countryside is growing ever more beautiful, its standard of living is getting better and its productivity is increasing. It is not a heaven on earth – it struggles with its problems – but a place where farmers’ hard work brings fruit”.

Minister of Agriculture Stanisław Kalemba pointed out that food produced using traditional methods, including regional specialties and organic products, was growing increasingly popular, namely thanks to its unique and excellent taste. That is also something that the visitors of the Presidential Tavern could feel.

In addition to various food producers, this year’s Tavern was attended by the meat industry organizations : the Association of Polish Butchers and Meat Processors, and the Polish Ecology Association, which, together with the Association of Polish Simmental Cattle Breeders, prepared a special promotion of beef as part of the programmes “Time for Beef” and Polish Świętomięs. The Beef Quality System QMP was presented by the Polish Association of Beef Cattle Producers the at the stand of Association of Polish Butchers

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Presidential Harvest Festival in Spała . Photo: Bożena Skarżyńska

and Meat Processors. This joint promotion was funded from the Beef Promotion Fund.

Edgar Benes, President of the Association of Polish Simmental Cattle Breeders, offered for promotional purposes a 9 -month-old Siemental bull, weighing over 450 kg. The meat was roasted on by professionals from Polish Ecology under the watchful eye of its President Paweł Krajmas and Carlos Gonzales Tejera, a popular cook and beef lover.

It is believed that the best Simmental beef, known for its exceptional delicate and crispy taste, comes from farms around Rudawka Rymanowska. Such was also the origin of the bull whose meat was roasted over cherry wood for several hours. The honour to start tasting this meat rarity was entrusted to President Bronisław Komorowski.

Janusz Rodziewicz and Jacek Marcinkowski from the Association of Polish Butchers

and Meat Processors and Paweł Krajmas from the Polish Ecology Association offered Bronisław Komorowski a silver bolo (a decoration used in place of a tie) featuring the image of a bull’s head, inviting the President to join the group of enthusiasts and promoters of Polish beef.

The line seemed endless of those willing to taste this unique beef dish, garnished with a special sauce and red onion. There was enough roast beef to serve several thousand visitors of the Presidential Tavern. “Time for Beef” will probably sink into the memory of its attendees, especially that many of those savouring tasty meat assured that they would add beef to their home menu on a permanent basis. ::

Agriculture and food industry

Traditions and innovations always come first Maria Czwojdrak, President of Średzka Spółdzielnia Mleczarska „Jana” talks to “Polish Market”.

We’re also glad that we’ve received the distinction of the Presidential Harvest Festival in Spała, where we presented our products at the so-called “Harvest Festival Track” and the Presidential table.

The quality we deliver brings our products and our Cooperative lots of awards, both those related to company development and to its output. The awards garnered by Jana’s products each year are reflected in the number of its products present on the shelves of small local shops, supermarkets, and large chains.

The Jana Dairy Cooperative has extensive experience. You’ve been on the market for over one hundred years. How has the Cooperative changed over the years?

That’s true, we’ve been on the market since 1884. However, in recent years we’ve made a great deal of investments and implemented truly revolutionary changes in the production of raw milk and its processing technology. We’ve begun the process of thorough modernisation at the plant, and have started cutting-edge projects both in the Cooperative itself and at the supplier level. Since the first years of this century, we’ve revamped all our production divisions and equipped them with state-of-the-art processing lines to keep up with the most advanced milk-processing technologies. pm

Your dairy cooperative- Jana, based in the town of Środa Wielkopolska is Polish, but its domestic operations are supplemented by activities abroad. How important is the role of exports in the functioning of the cooperative?

That’s true. In 2002, two years before Poland became part of the European Union, the cooperative obtained the necessary permits to export goods to EU countries. Today our products reach Czech, Slovakian, German, British, Romanian, and Irish customers. This is of crucial importance to us, as it gives us a stronger position on the market, not to mention the competitive edge involved. pm

Are your products also highly valued in Poland?

I think so. Our numerous awards say so.

Since 2004 we’ve been awarded the “Gold Medal” of the “Polagra” International Food Fair in Poznań. What’s more, our products have received the “Quality and Tradition” mark and have been “Q” certified. The Cooperative’s butter has also been recognised with the “Quality and Tradition” mark. pm

You mentioned technology. Do you combine tradition with advancement?

As far as innovation is concerned, the Cooperative is equipped with next-generation devices and machines. I believe that using advanced technologies, upholding a thorough quality-control system for the production process, from raw milk to the final product combined with traditional recipes, all guarantee the high quality of the product. pm

What helps the Cooperative hold on to its position as one of the top producers in the milk industry?

Modern marketing activities and regular participation in major fairs both in Poland and abroad are of great importance to me, as is our participation in numerous competitions and exhibitions. We reach our customers through a variety of channels.

Also, as I’ve already mentioned, we’re doing our best to catch up with the latest solutions, and this enables us to provide products that are well-suited to the requirements of the current market. :: pm

Are you taking advantage of the opportunities provided by the State?

We’ve benefitted from SAPARD preaccession assistance and the sectoral operational programme. Recently, we’ve also participated in the Rural Development Programme for 2007-2013. The Cooperative missed no opportunity created by the State authorities to obtain additional funds for its development and modernisation. In recent years, and particularly before EU accession, the entire plant has been literally “re-armed”. pm

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Agriculture and food industry

The history of gardening in Sandomierz Land Adam Fura

T

he first mentions of agriculture in Sandomierz Land can be found in the Chronicles of Gallus: “(...) the land around here is very fertile and able to yield any kind of grain, which was traded along the Vistula and San rivers. Then, dense forests on both sides of these rivers provided the abundance of material for fire and dwellings, and animals for food. What is more, garden trees give plenty of delicious fruit, while numerous traces of old vineyards in Sandomierz, as well as names of the nearby villages, such as Winiary, show that wine was once produced on a large scale in this region. Finally, Sandomierz has clean and healthy air, and a nice view: from the left side, on the Vistula river and the mountains, and from the right side, on the vast plains of Galicia. All this encouraged the Slavic population to settle around this area. Rightly, therefore, although a little later, namely at the beginning of the 12th century, the oldest Polish chronicler Gallus says that Cracow and Sandomierz Lands were much more and far earlier populated than others.”

A percipient reader may ask when and why gardening started in the area. There are several documented sources. Jan Paweł Piotrowski, our contemporary, writes in his guide “Sandomierz and nearby areas”: “The abbey was founded in 1185 thanks to the efforts of Casimir the Just. The Cistercians were brought from France (...) Cistercian monasteries were mostly located away from human settlements (...) They observed the rule of self-sufficiency. Polish Cistercians were

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also of great merit when it comes to building modern agriculture and industry.”

The diocesan archive in Sandomierz contains materials that characterize the monks’ tasks, functions, and the mode of communication. These documents clearly certify that the groundwork for agricultural production in the region of Sandomierz was laid by Cistercians who “brought with them seedlings of grapevine, apple, apricot and plum.” They set up the first vineyards, apple, plum and apricot orchards. The name Copriunica was reported as early as 1206, and it became the town of Koprzywnica in 1268. The system of streets and squares resembled a town, and small shops and workshops seemed to confirm that the town has an impact on agricultural facilities. In the following centuries the order of Cistercians expanded its holdings owing to donations or the purchase of new villages.

Following the achievements of Cistercians other clerics establish vineyards in churches farms too. Father Melchior Buliński writes: “The town and the church files mention numerous vineyards existing in Sandomierz from the earliest times, and the Sandomierz berries were not tart in taste, and it must be true indeed, as the wine produced out of these was used for the holy sacrifice. There are also many documents in the town files tithe paid by the vineyards to clerics in Sandomierz. Reading the notes of the Dominican convent of St. James, we learn that it held a vineyard since its very arrival in Sandomierz.

The successful model of abbey plantations was later transferred to the estates of

knights, noblemen and finally peasants. It is no wonder that many poets, writers and historians were delighted at the view of the Sandomierz surrounding areas. In his “Describing Poland”, Stanisław Sarnicki, a historian, wrote in 1585: “It is a place of amazingly nice and happy, with a great variety of delicious fruits. Therefore, kings would often come here to breathe clean air and cheer up.

The location is even more enjoyable owing to courtesy of the Sandomierz people and various pastimes. There are accurate medics, musicians, beverages of any kind, cheerful clergy, in addition to innumerable multitude of fish, honey, game, grain and other comforts.”

In his “Gardening in Sandomierz Land” Józef Myjak, the most famous contemporary regionalist, writes: “Historians describing the town of Sandomierz in the 17th century convince that Sandomierz was actually bathed in gardens. In “Monograph of Sandomierz” Feliks Kiryk says that it appears from the surviving town records and other sources, materials, including land and mortgage registers, that almost every resident of Sandomierz cultivated land, gardens, orchards and vineyards and hop fields without avoiding the breeding of domestic animals and birds (...) In the 19th century almost every Sandomierz mansion, even the humblest one, had a garden in the present sense of the term. Usually the mansion was surrounded by a flower garden, ornamental trees and shrubs, and pituitary and vegetable garden. An accessory facility was often built as an outdoor porch that was then glazed to form a small conservatory, which

Energy

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Agriculture and food industry

was used to grow exotic plants, but also cultivate vegetables.”

Then came the “Little Ice Age”, which means that there was a significant climatic cooling that lasted until the mid-19th century. In the meantime, Poland lost its independence for 123 years, being divided between the three powerful neighboring countries.

In each of the partitions there were different legal frameworks, education systems, and particular economic regulations (as to the degree of economic freedom). As a result, gardening languished. In the interwar period, when Poland regained independence, there was practically no tradition of horticultural crops any longer. However, the reconstruction of the education system, including agricultural education, laid the building block for the development of gardening.

After World War II, on 20 January 1954, the State Agricultural Farm (PGR) in Lipowa was put under the helm of the Research Institute of Pomology and Floriculture in Skierniewice. That is how the third institution was created whose contribution to the development and promotion of modern horticulture is priceless. Almost since the beginning of its existence, the Experimental Horticultural Facility in Lipowa has participated in trainings organized jointly with the Fruit and Vegetable Cooperative in Sandomierz, while also carrying out hundreds of competitions for the titles of: Qualified Orchardist and Orchardist Master.

In 1972 Poland underwent an administrative reform. Communal Offices and Communal Agricultural Services were created. However, the list of their tasks did not include horticulture guidance or research in the field of technology recommended in horticultural production.

In 1978 the District Experimental Agriculture Plant in Modliszewice set up its branch in the Mokoszyn PGR, which was responsible mainly for putting agricultural know-how into practice through its Communal Agricultural Services. Four years later, in 1982, District Experimental Agriculture Plants were transformed into Regional Centers of Agricultural Progress. On 1 April 1982 the major part of the staff of the Communal Agricultural Service was taken over by the Regional Centre of Agricultural Progress in Mokoszyn. During that time, out of approx. 300 staff workers employed in 18 districts of the Regional Centre of Agricultural Progress in Mokoszyn only two people were horticultural experts.

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The authorities were outspoken in expressing the opinion that “the most important thing is to have bread and something in addition to bread.” This slogan accurately reflects both the then approach and the place of gardening in the hierarchy of agricultural problems.

It was practically not until 1989 that gardening specialists were employed one per the District Advisory Service. Since then, horticulture not just in Sandomierz, but also across the country has developed at an unprecedented rate.

The process of transition toward the free market economy led to equal access to the market in the whole national economy, including agriculture. In the first period (19891992) State Agricultural Farms and Producer Cooperatives lost state budget subsidies, the existing distribution channels and, consequently, were forced to cut down employment.

Owners of large individual farms searched for outlets. New wholesale stores and markets, as well as super and hypermarkets were created, the supply of which was the object of competition between individual producers of fruits and vegetables.

In 1992, the Horticultural Production Department, employing 11 staff workers, was set up under the Agricultural Advisory Center in Mokoszyn. In the same year, the program “Restructuring of Pomology in the Region of Sandomierz,” whose aim was wide dissemination of intensive orchards with 2000 to 4000 trees per one hectare. Since then, a technological revolution in horticulture has been going on in our

region. The region of Sandomierz is today no doubt one of the most modern fruit-growing areas in Poland and occupies second place in terms of surface. On the domestic market, there is a surplus of about 1 million tons of fruits. Poland is now a member of the European Union, which requires it to adopt all the regulations and standards applicable within the EU’s single market . The region lacks the infrastructure (logistics – sorting center) necessary to meet them.

In the region of Sandomierz, according to the census conducted in 2002, there are about 15,200 ha of apple orchards (in reality about 30% more), 1,400 ha of plum orchards and about 600 ha of apricot, peach and cherry ones. Farms are rather fragmented, as most clearly evidenced by the average size of the farm, which is 4.8 ha, and there are about 6000 farms with orchards. The region is characterized by a specific microclimate with the longest in Poland growing season. In terms of soil conditions the region is divided into the part which lies on the alluvial soils of the Vistula and the one that lies on the loess. ::

Medicine and Pharmacy

In step with progress Marek Balicki, former Minister of Health in the Leszek Miller and Marek Belka governments, talks to Przemysław Rudowski.

Does digitization and electronic document circulation have an impact on the operation of hospitals and help to raise their efficiency?

Digitization will definitely improve the quality of hospitals’ operation. The National Health Fund (NFZ) imposed the requirement of electronic settlement a long time ago and hospitals have to comply with it. In order to do it efficiently, hospitals have to be fully computerized. Remember that there is a statutory deadline by which medical documentation has to become fully digitized. Digitization is only a question of time. pm

Is this feasible in the Polish healthcare sector?

It is not feasible and I stressed that in the course of related work in the Parliamentary Health Committee. It is not only unfeasible but the very concept is wrong. It would be much better to do it in stages and successively digitize individual areas. What the ministry plans to do resembles the fragment of the Bible where God created the world in a single moment. But even God divided the rest among successive days of the week, although he could have done everything in one go. The solution adopted by the Ministry of Health shows that those who proposed it did not have much insight into the situation in the healthcare sector. We can hear that IT companies think the same. It seems to me that the government has recently started to listen to the opinion of people from the sector. pm

So it is important to do it in stages.

Exactly. Digitization should be carried out in individual areas, starting with those which should be streamlined in the first place.

This would indeed offer a chance for eventual success. pm

pm

And from the point of view of the patient – is a digitized healthcare centre managed

in the most efficient way possible? Is this directly translated into good services for the patient?

It depends. Sometimes paper-based documentation may be needed, like for example in emergency care units. We are accustomed to that. The digitized system means that at the beginning the staff and patients have to get used to it and devote a little more time to it. But it is beyond doubt that digitization is conducive to improving the quality of treatment and patient safety because it makes it easier to analyze the treatment process and causes of undesirable developments. Online registration is also beneficial for patients. It is already obligatory for all in-patient clinics.

You are quite critical when speaking about free market and competitiveness in the health service sector. Why? Many of the doctors I meet say that in the healthcare sector it is impossible in most cases to conduct activity based on profit maximization, especially in public-funded establishments. The very essence or character of the service means one must not be guided exclusively by economic considerations. We also know that the market does not work in the case of the healthcare sector because there are many anomalies here: the asymmetry of information and the monopolization of services, like for example when there is only one hospital in a county. And there is one more thing and it concerns every country - medical services are in limited supply. pm

What to do to remedy the healthcare system? What are the model solutions and directions in which we should be going?

We should definitely depart from the strong commercialization in the public-funded sector. The commercial sector is important because it complements the health market. It should develop as Polish people are becoming more and more affluent. But what is funded pm

from public funds should be provided on a non-profit basis. It is only physicians’ private practices that should be allowed to operate in the primary healthcare sector – private practices, but not companies. The first thing we should do is to depart from the concept of commercialization in the public-funded sector. Another thing is the distribution of services. Since medical services are in limited supply, public debate is needed to agree on transparent rationing mechanisms, meaning distributing access to medical services.

This requires debate and public consent. We cannot afford to fund everything. This is why we need transparent mechanisms, which are absent today. At present, a lot of money is wasted and the system itself is very inefficient. The number of services is on the rise as is the number of well-funded procedures.

But at the same time important but poorly funded spheres are neglected. Of course, it is obvious that funding for the public health services should be raised.

Why is it so difficult to carry out a thorough and effective health service reform?

It is because so far the goal of change has been commercialization. Patients are increasingly dissatisfied because more and more services are provided but the budget for them remains the same. At the same time, private medical firms are developing. The goal, that is commercialization, has been achieved but waiting times for services got longer. Private hospitals have contracts with the NFZ and earn money. Meanwhile, the World Health Organization (WHO) says that the objective of the health policy is to improve public health, meet public expectations and distribute financial burdens in a just manner rather than introduce market mechanisms. It is necessary to change the healthcare paradigm before any health service reform can be carried out. :: pm

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Medicine and Pharmacy

Do politics plus the economy equal health?

Politics, the economy, health complaining or switches TV affected the whole economy, and the Perhaps the issue requires more reflection,

care... Hearing these slogans, the average Joe starts channels. The economic downturn has healthcare system in particular. then?

Magdalena Jasińska

T

he state is obliged to provide its citizens with access to health care.

However, the health policy is not only about medical issues, but it also involves social and economic aspects. Why? Because a healthy society, with an easy access to health care, is more likely to produce

social welfare.

By contrast, a sick society cause the government to increase healthcare spending, which in turn adversely impacts the economy and the overall condition of the state.

A major factor in the health policy is demographic change. Population aging is an inevitable process that has become a challenge for the European countries, including Poland.

As anticipated by the Central Statistical Office (GUS), there will be three working persons per two retirees in Poland by 2060. That means smaller contribution to the state budget from taxes and insurance premiums, and at the same time, greater demand for health care and retirement benefits. The state budget is also affected by sickness benefits and hospitalization leaves.

Innovation equals higher GDP

Progress and research on health are primarily aimed to help save people’s lives and improve

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the society’s overall health condition. But this is only one side of the coin. The other one is economic development.

Innovations in medicine help people afford a better quality of life and enhance their activity, thus contributing to the generation of the Gross Domestic Product.

According to the report titled “Population Ageing: A Challenge for the European Economies”, “regular and continuous access to innovative solutions in respect of preventive care, diagnosis and treatment will be crucial so that people remain healthy and fit longer, and thus make a greater contribution to the social and economic development”.

Preventive care, research programmes, technological advances, innovative drugs play a key role in the healthcare system, and thus in the economy. All these affect the quality of treatment, the risk of complications, absence from work, hospitalization costs. Thus, a better preventive care helps achieve savings in public expenditure. For example, late-stage cancer detection results in prolonged treatment, and therefore runs up costs.

A report by the European Federation of Pharmaceutical Industries and Associations (EFPIA) “Pharmaceutical Industry in Figures 2010”, quoted in “Population Ageing:

A Challenge for the European Economies,” reads: “Owing to new discoveries and innovative technologies science offers today the potential to develop new therapies and treatments at an unprecedented scale. Currently, Europeans can expect that they will live up to thirty years more than one hundred years ago. A huge decline in mortality (caused by HIV/AIDS, cancers and cardiovascular diseases) and a significant improvement in the quality of life come as a result of more or less significant progress in biopharmaceutical research”.

Modern non-invasive methods and drugs are often effective and convenient. One of the pharmaceutical companies that contribute to the economic and social development is GSK. It conducts research into innovative medical products. GSK has also launched a research department dedicated exclusively to the development of effective drugs for rare diseases.

Another example of such an innovative company is Adamed Group, which carries out research into innovative therapies, as well as into improving already existing drugs.

Private health care:

an economic driver?

Hospitals based on private funding are designed, on the one hand, to treat patients, helping them get back on track. On the other hand, they hire a lot of people, thus

Medicine and Pharmacy

influencing the local labour market. Private companies keep opening new medical facilities, in addition to supporting previously transformed local hospitals. It is increasingly common that private hospitals are the region’s dominant employer and the medical center where locals can get professional assistance. However, further development of the private healthcare sector is conditioned by various factors. The issue was debated during this year’s Economic Forum in Krynica by: Piotr Gerber, President, EMC Medical Institute, Andrzej Mądrala, President, Mavit Medical Center, Krystyna Siejna, First Deputy Mayor of Katowice.

Private clinics and hospitals offer their patients

efficiency and promptitude, moder n t reatem e nt m e t ho d s, professional staff as well as security.

“Private hospitals should perform exactly the same functions as those public; fit into the needs of local communities; be an integral part of the system, often the carrier of the highest standards in medical care, the incubator of new ideas in respect of treatment and service provision, the example of real integration of out-patient and hospital treatment,” says Paweł Kacprzyk, President of Medicover.

The increasing number of private companies offering medical services has paved the way to the market competition, which applies in particular to attracting new customers, meeting their expectations, and signing contracts with the National Health Fund (NFZ). “To put it short, private hospitals can serve, and often do, as drivers of economic growth. Their outreach is a direct result of the scale of their operations, as well as the level and quality of medical services offered.

Look at the Medicover hospital in Wilanów for example: located in southern Warsaw, it fills the local hospital gap, providing a wide range of services for residents of large districts:

Usynów, Wilanów and surrounding areas.

It offers services under a contract with NFZ, but also directs its services to commercial patients seeking access to high quality care.

It meets various needs,” said the President of Medicover.saw a drop of official fuel sales, but the number of fuel companies and petrol stations rose. Piotr Szpakowski of PKN ORLEN, thinks this is caused by the loophole in regulations. The market must be tightened in a way to eliminate companies conducting illegal activity, from the 8,600 that are active in the sales of liquid fuels.

Polish healthcare system at

a glance

The Constituthe Polish Retion of public guarantees the right to the protection of health and to state-funded healthcare. Specific provisions are laid down in a number of statutes. The system’s main financial pillar is the National Health Fund.

Some services are also financed directly from the state budget. The state-funded health care covers treatment, rescue, improving health, in-kind benefits such as drugs and medical aids and supporting services (accommodation and catering). The insured citizens have the right to free-of-charge health care, and funding comes from health insurance. However, free treatment does not mean that the patient incurs no costs. Some services require him or her to make a financial outlay.

These include, among others, certain ambulance services, specific drugs or aids. Payable (and thus not state-funded) services are not included in the list of guaranteed benefits making part of the Regulation of the Minister of Health.

Health means physical and mental wellbeing, and not merely the absence of a disease. Every human being has a right to health - such is the healthcare policy concept pointed out in the National Health Programme, which constitutes an Annex to the Resolution of the Council of Ministers and aims to protect and improve public health. The programme sets

out the objectives and the lines of action designed to facilitate their implementation. The idea is to reduce the incidence of diseases, to draw attention to harmful effects of tobacco and alcohol use, to healthy diet and physical exercise, to health care of the mother and child, to health problems of young people, as well as to health promotion and improving diagnostics. These objectives provide room for joint action and play an important role in building the health policy.

It is also worth giving consideration to the programmes implemented by the Ministry of Health. These programmes make part of the National Health Programme as strategic objectives. In accordance with the Annex to the Resolution of the Council of Ministers No. 90/2007 of 15 May 2007, these are: • Newborn Screening Programme 2006-2015 • Mental Healthcare Programme 2006-2008 • Program for the Elimination of Iodine Deficiency 2007-2015 • National Programme for the Development of Transplant Medicine (POLGRAFT) 2007-2015 • National Programme for the Preventive Care and Treatment of Cardiovascular Disease (POL KARD) 2007-2015 • National Programme for Fighting Cancer 2007-2015 The issues of heath care and the economy are heavily discussed and therefore emotionally charged. An important factor here is innovations, research and new technologies.

An active role is also played by private clinics and hospitals. Witold P. Kalbarczyk pointed to, during the Economic Forum in Krynica, the importance of the demographic change, medical expenditure and the cost of sickness absence. He also drew attention to preventive measures as far as health care is concerned and named factors of a good health care: coordination, prevention, treatment teams’ building, early detection of diseases. Other panelists highlighted the need for the health policy to be shaped both by doctors and patients. They discussed the coordination of health care and its accessibility.

Experts reflected on the funding schemes of the healthcare system. But perhaps most importantly, they agreed that the health policy and health care as such should be far from violent emotions, but rather the object of a factual and calm debate, and most of all the action! ::

9 - 10 /2013 :: polish market :: 31

Medicine and Pharmacy

Paradox of the Polish system Andrzej Sokołowski, President of the National Association of Private Hospitals (OSSP), talks to Ewelina Janczylik-Foryś.

We all know what the situation of the public health service is like in Poland. We have lost hope that it may be remedied. And what about private hospitals?

For more than 10 years this sector has wrestled with problems – permanent unfriendliness on the part of the main payer, the National Health Fund, and criticism from politicians, who say our sector is to blame for the problems of the Polish health service.

Meanwhile, Poland does not depart from European standards and it is only their implementation that is a question of time. The time for implementation takes on average up to 10 years. This is why I am constantly stressing that it is impossible to stop the changes that are going on consistently in 26 European Union countries. And this is something that politicians cannot understand. It is a misunderstanding to argue that not everyone in Western Europe approves of the changes – we never have a situation where everyone is satisfied. The private sector will to a large extent contribute to the recovery of the Polish health service, or at least will help to improve its condition. Unfortunately, opponents cite strikes in Spain held under the “stop the privatization of hospitals” banner as a counterargument. In Poland, politicians in most cases want to ingratiate themselves with the voters and this is why they put such slogans and examples into circulation. I suggest that parliamentarians should start learning by travelling across Europe and trying to understand how this system operates. When they talk about public health they should know something about it. A few years ago Bulgaria adopted a law allowing the sale of pm

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public hospitals. The law lists hospitals and institutes to which it is not applicable. As a member of the Presidium of the European Union of Private Hospitals, I meet every quarter with my colleagues from 26 countries and always ask my Bulgarian counterpart if any public hospital has been sold in his country.

It turns out that no one wants to buy public hospitals – they are of little value for entrepreneurs operating in the medical sector. It is better to buy land and construct a modern building on the outskirts of a big city - with easy access, a helipad and car parks - than to invest in an old hospital built, say, 30 years ago in the centre of a city. Medical technology is changing. In the past, you only needed an X-ray machine on the ground floor at the admissions office. Today, operating theatres are provided with MRI scanners intended specifically for them. This means that modern operating theatres and diagnostics centres need to have a design different from that in the past. Many hospitals have hybrid diagnostics centres, with heavy diagnostics equipment moved under the ceiling by means of special machines.

I understand that private hospitals contribute to innovation in the healthcare sector.

This is indeed the case in Europe. There are studies showing clearly that innovation is driven by private hospitals because they are subject to competition. Of course, there are excellent public hospitals in Europe, including Poland, with well-educated personnel. Unfortunately, many managers manage property that does not cost them a penny. If pm

the owner, that is the state, does not have money for repairs, innovation or continuous development, hospital directors are reluctant to undertake to solve the problem. Welldeveloped countries replace their hospitals every 30-40 years because the technology is changing and the old hospital buildings are no longer usable for medical purposes. We cannot afford that. Apart from the hospitals of the Medical Universities in Gdańsk and Olsztyn, few new hospitals have been built in Poland in recent decades. We have to look for an alternative. And the alternative is private hospitals. A hospital is a place where public services are provided. And it does not matter whether its owner is the province marshal, governor or a private owner.

There is a widespread belief that private hospitals are only for the rich, which means not everyone has access to them.

This is not true because it is not important who owns the hospital but who pays for the services. Payments made by the National Health Fund (NFZ) for patients referred by physicians under public health insurance account for 92% of the revenue generated by the hospitals which are members of the OSSP. Only a few per cent of our patients pay with their own money. Polish people think they are entitled to everything. But they do not realize that medical treatment is very costly.

Why not introduce an administrative payment designed to prevent the abuse of the healthcare, especially in-patient, system. The press and parliamentarians are constantly pointing to the British system as an example to follow. Meanwhile, it is the French system pm

Medicine and Pharmacy that is still coming out first in global league tables. Money goes after a French patient. The decision is taken by the patient, who chooses a hospital to be treated in, rather than a health service official. In France, there is competition between private and public hospitals. Subsidized public institutes carry out a large part of some scientific research studies. And they are often the best in this narrow field they work in. However, private hospitals are very quick in applying new medical technologies in practice because they want to be the first on the market to use them and be more competitive. Consequently, competition among hospitals in Western Europe results in very high quality. But French people contribute to the payment for the healthcare services they receive. The insurer covers from 60% to 80% of the cost while the patient pays the remaining part – from 40% to 20%. The method applied by the Dutch and Belgians is a very good one. Every physician and hospital in these countries may write an invoice for an amount higher by 20% than the initial price of a medical procedure if the value of the procedure has risen between the valuation and the performance of the procedure.

If the number of such invoices exceeds 20% a commission composed of service providers, payers and patients meets to examine how financial or medical conditions of the procedure have changed and how to adjust the ongoing changes to regulations.

I have the impression that young people are increasingly taking to private healthcare.

The in-patient sector has seen increased activity because Polish people travel and work abroad and Western managers come to Poland.

Initially, this kind of health insurance was popular mainly in Warsaw and with Western companies. Private hospitals operate only in big cities where foreign companies are present. There are no private hospitals in eastern Poland and only a few in the north of the country. A more affluent and better educated society knows what they need. Such patients know what they should expect from a physician – what kind of diagnostic tests and treatment. In many cases, the public healthcare system is unable to provide the patients with what they require. This does not mean that there are no well-managed public hospitals in Poland able to meet any expectation of the patient. pm

pm

The private hospital sector seems to be marginalized if we consider that the NFZ has set aside PLN28 billion for healthcare, with less than PLN2 billion of this amount designated for private hospitals.

Most of the revenue earned by private hospitals comes from the NFZ budget. The money they receive from the NFZ accounts for only 8% of the total NFZ budget for hospital healthcare. Without contracts with the NFZ private hospitals would become unprofitable. This is why this sector is “nice” to the NFZ and this is why the National Association of Private Hospitals has a big role to play.

Our organization is not shrinking. It is gaining in strength.

Is it possible to develop a healthcare system where public and private hospitals would be equal?

From our point of view, the perfect solution would be to imitate the French system.

The patient decides which hospital to choose and knows that their decision involves their money. My answer to the question “what pm

about the poor patients?” is that if the national welfare system is sufficiently developed there will be no problem. People unable to pay 20% of the cost of a medical service as their obligatory contribution should receive support from the welfare system. The same should be the case with homeless people. In Poland, the welfare system is in its infancy compared to Western European countries. The question of what happens with poor people should not be a problem of the healthcare system but of the state. Patients who know best what they want and where they feel well will be contributing their share due for a healthcare service, however only up to a threshold required by law. The rest will be covered by a public or private insurer. Every hospital is public as long as it provides a public service for public money. :: 9 - 10 /2013 :: polish market :: 33

Medicine and Pharmacy

“Healthy” healthcare Katarzyna Adamek, CEO of American Heart of Poland company, Poland’s largest network of clinics offering comprehensive treatment of cardiovascular diseases.

What can be done to improve the state of the health service in Poland? What should the National Health Fund (NFZ) do?

Talking about the condition of the Polish healthcare system the public opinion mainly focuses on its financial problems, artificially dividing the healthcare market into the private and public sectors. But still we rarely speak about the real needs of the patients, for whom the most important things are, after all, the availability and high quality of services, not the source of the capital that stands behind the specific medical facility. In our opinion money should follow the patient who is able to verify the quality of the medical facility best. It’s the quality of the therapy and its effectiveness that should be the main focus of the public discussion.

When it comes to the issue of lack of public money for treatment in Poland, which is basically a topic that does not come down from the headlines, I think that of course there should be more money in the system.

Poland should do everything possible not to be at the tail end of the European countries, but these efforts cannot take place in isolation from the change in the criteria according to which public funds are distributed in the system. The value of the National Health Fund budget in the past decade has increased by 100%, but surely the system is not sufficiently resistant to the misguided and uncontrolled issuing of public funds. We still have a long way to go in improving the allocation of resources. In my opinion money should absolutely follow the patient. pm

34 :: polish market :: 9 -10 /2013

To improve the condition of the Polish healthcare system we also need to change the approach to the costs calculation. It is also very important to look at the cost of support of the patient in the long run. In medicine, the use of new, often expensive technologies translates into lower costs over time, due to fewer complications and hospitalizations.

Well-treated patients quickly return to normal life, do not burden the Polish economy with disability pension, but actively co-create it by paying taxes. That’s why one should not restrict access to modern medicine simply claiming that we can not afford it.

We cannot underestimate the role of large clinical centers as well as professional and safe facilities with private capital, which provide the patients with high quality services, in modernizing healthcare market in Poland. There should be a regulatory environment enabling all these facilities to develop for the benefit of patients. It is necessary not only to stabilize the legislation governing the medical activity in Poland, but also the reasonable requirements for operators of medical services that focus more on their quality.

Publishing medical results of the healthcare institutions in the open literature should become a good practice on the Polish market.

Healthy competition is a stimulator of effectiveness, high quality of services and modern technologies - this is good news both for the payer and for patients.

Is it possible to create a health-protection system, in which public and non-public hospitals are equal?

Absolutely, there are many great public health institutions at the market, whose activities are successfully supplemented by the private institutions. From the patient’s perspective the only thing that counts is the availability of free of charge high quality services, not the origin of the capital that stands behind a given medical facility.

There are many successful private specialized clinics on the market. These entities operate in cooperation with the Polish National Health Fund and the patient is often not even aware of the fact that he is actually using the pm

services of a private medical entity. Cardiology is a good example of that. Half of invasive cardiology units in Poland is privately owned.

Thanks to the private capital that increased the availability of treatment of cardiac diseases outside major cities, Poland is now at the forefront of Europe.

Examples of co-existence of private and public capital can be seen in many places in Poland. It is important that this cooperation is not destroyed by the regulations that support wrong solutions, which can cause more harm than good.

Can private healthcare be the driving force of the Polish economy?

I would say that it’s the well-managed healthcare that is the driving force of the Polish economy. Private investors present on the Polish healthcare market who help create an effective healthcare system have the same part in building a healthy Polish economy as well-managed public hospitals, that are not using grants and debt reduction at the expense of the state budget.

It’s the highest time to end the artificial divisions of the market. Both public and private entities can be a stimulus for the Polish economy. There’s only one condition – they must be an effectively managed. Effectively managed hospital will never lack money for the high quality medical services. It is a great responsibility, not only for the healthcare managers, but also legislators to shape legislation in a way that helps increase efficiency rather than restrict it.

Effectively managed healthcare creates jobs not only for the medical staff, but also for specialists in various fields such as finance, accounting and information technology. It means new investments and development, possibility of use of modern technologies.

It’s easy to see that “healthy” healthcare is an important part of a ”healthy” economy. :: pm

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Medicine and Pharmacy

Cooperation is very important Andrzej Mądrala, PhD, Vice-President of the Polish Employers organization, President of the Management Board at Centrum Medyczne MAVIT Sp. z o.o.

Could private healthcare become the driving force of the Polish economy?

But of course. In fact, it not only could, but it has been for some time now. The 4th Healthcare Forum in Krynica-Zdrój put forward a number of interesting examples to describe a situation where a private medical centre appears and infrastructure booms around it. Another instance to illustrate this case was described by Ms Krystyna Siejna, Deputy Mayor of Katowice. In line with the strategy of Katowice City Hall, the municipal authorities, as the owner of hospitals which found themselves in the red, started to sell them. This way, having won the tender, the MAVIT Medical Centre purchased the building, or actually the dilapidated remnant of it, and we transformed it into a state-of-the-art medical facility. Through major investments and a substantial extension, it currently hosts a 40-bed hospital, is open 24/7 and operates within municipal structures. It has provided employment for several dozen people and has left City Hall with one issue less to solve.

Other public hospitals are said to have shared the same experience. Such examples are in plenty, as there are a lot of private hospitals which once belonged to the local government. Take, for instance, the Nowy Szpital (New Hospital) Group, which manages as many as 12 hospitals, which used to be administered by district authorities. The Group’s management not only proved successful in managing the neglected facilities, but also in ensuring the orderly arrangement of all crucial patient issues.

We are also aware that some private hospitals have emerged in a bizarre fashion, based on renting a single ward or even only a few beds in a public hospital. We believe that a private hospital should be managed by an entity which has its own infrastructure and satisfies all the necessary contractual requirements, as stipulated by the National Health Fund (NFZ). Such private hospitals are becoming more and more popular and we will be happy to support them. According to the pm

36 :: polish market :: 9 -10 /2013

Central Statistical Office, in total there are 853 hospitals open round the clock, with 540 public and 313 non-public.

Still, public facilities substantially outnumber private centres.

Agreed, but the number of private hospitals includes only those that are on call 24 hours a day. When you go to the Ministry of Health’s website, you’ll see that healthcare facilities classified as enterprises amount to more than a thousand. Admittedly, though, the majority of these are one-day or scheduled-procedure services.

and NFZ contracting. This situation is changing, however, and I believe that it is just a matter of time before this approach will change completely.

pm

Nevertheless, there seem to be quite a large proportion of private hospitals...

Indeed, after 1989 conditions for the development of the private service sector improved, as they did within the national healthcare system. The new model for hospital management caught on quickly. Another important issue is the contract with the NFZ. Obviously, if a facility has a contract which provides funds for a day’s work, it has to look for paying patients to keep its head above water. As private hospitals we want to be, and we are, a partner responsible for the outcome quality, which translates into the safety of our patients. We would like to be equal to public hospitals, both in terms of rights and responsibilities. The annual NFZ budget earmarked for hospital treatment amounts to nearly PLN30 billion, but private hospitals are allocated no more than 6% of this sum. pm

Is there any chance whatsoever that NFZ will allocate these funds in an equitable manner?

As you may know, it is the local government that is responsible for healthcare in a given region. Therefore, it should come as no surprise that hospitals managed by the authorities receive preferential treatment in terms of access to public funding. Good private facilities, in turn, can only come second when it comes to support from the authorities pm

In what way does the Polish Employers organization support private hospital owners?

There are two organisations associated with the organization – the National Association of Private Hospitals (OSSP) and Private Medicine Employers (PMP). We strive to ensure that our colleagues are well informed on the current actions of the Ministry of Health, the National Health Fund and other organisations which play an important role in our healthcare system. Mutual cooperation has gained us a number of experts we highly appreciate and value. When managing their hospitals or medical centres, CEOs are unable to get round to everyday matters. Polish Employers have been bringing organisations together since 2006 and I daresay this time was not wasted. pm

Do you think there is a way to make the Ministry of Health recognise all these projects and employers and other organisations representing private hospitals?

Our organization is represented in the Trilateral Team at the Ministry of Health, which gives it right to bring up issues it finds relevant. I admit that from the time when Sławomir Neumann became its Chairman, the Team has become an entity in which matters are not only discussed but also settled in many respects. This facilitates effective communication. We do remember that patients are at the core of our efforts and even when we don’t always see eye-to-eye with our partners from the labour unions, we are usually able to reach an amicable conclusion. Sure enough, our position in this assembly is an honour in itself, but our words do not fall on deaf ears and we can make a difference to the Ministry’s plans concerning the operation of the healthcare sector. :: pm

Medicine and Pharmacy

A strategy for the pharmaceutical policy Marynika Woroszylska-Sapieha, President of the Management Board of the INFARMA- Employers’ Union of Innovative Pharmaceutical Companies and President Sanofi Group in Poland

What is the country’s current pharmaceutical policy, bearing in mind the confusion around the Act on reimbursement for pharmaceutical?

We see a need for creating a long-term strategy for the pharmaceutical policy in Poland - setting priorities, identifying the opportunities for the better use of modern therapies in treating patients within the current system and setting long-term objectives addressing the most pressing public health problems. The state’s pharmaceutical policy should constitute an integral part of Poland’s health policy and should implement its priorities. The main objective of the National Health Programme is to improve health and the related quality of life of Poles, as well as to reduce inequalities in health. The Ministry of Health has made an attempt to improve the system by introducing new legislation, including the new Reimbursement Act. The objective of the new Reimbursement Act was to be to increase access to modern medicines for Polish patients.

And this is still one of the most important challenges facing the healthcare sector in Poland. Outlay needs to be increased on prevention and early detection, as well as increasing awareness and improving access to innovative, modern treatment, which translates into the length and quality of life of patients. The second, equally important challenge is to reduce social inequalities in access to healthcare. This requires a change in the way of thinking: assessment of the effects of decisions made and actions taken in the long term, as well as viewing spending on drugs as an investment and not a cost. And if the pm

Ministry of Health accelerates this process, the prospects will be much better.

go in the opposite direction to the intentions of authors of the law.

The Reimbursement Act had the purpose of improving access to modern therapies.

Has this been achieved in any way? Have we moved closer to this objective?

It is true that the assumptions were that, through planned savings in the National Health Fund’s reimbursement budget, the new Reimbursement Act was supposed to have, among others, increased access for Polish patients to innovative therapies and improved transparency of the reimbursement process. These objectives were consistent with the expectations of the pharmaceutical industry.

So far, we are seeing great difficulties in achieving the objectives defined in this way.

After more than a year and a half of the functioning of the Act, attention should be drawn to its effects. On the one hand, it has brought large “savings” for the National Health Fund, but has not improved the patient’s situation in terms of access to treatment. Many innovative medicines, which are strongly positioned in recommendations of scientific associations, are still not covered by reimbursement. Therefore, many patients are not buying drugs prescribed for them.

The problems, which have appeared at the stage of implementation of the Reimbursement Act, have shown that a good law cannot arise in isolation of the market’s realities. The voice of the players on the market, which operate on it every day and know it well, should be heard and taken into consideration when creating such a law; otherwise, the effects of the new regulations can

Where is the senior policy in Poland heading?

The current demographic changes in Poland, as a result of which we are seeing a strong population-ageing trend, are among the greatest challenges. Comprehensive solutions need to be developed, particularly in the area of health and social policy, which will, on the one hand, give the longest possible life for Poles in a good condition and, in the case of patients, the fastest possible return to health and occupational activity. It is worth noting that financing modern, cost-effective medical technologies should not be seen exclusively as a cost, but as an investment in health, which brings significant benefits to society and the economy. It is worth investing in innovation in prevention, treatment and the organization of the system, because, as a result, we can better address the demographic challenges and more rationally spend limited funds on healthcare. ::

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9 - 10 /2013 :: polish market :: 37

Medicine and Pharmacy

Katowice- great example of quantitative and qualitative development Krystyna Siejna, Deputy Mayor of Katowice, talks to “Polish Market”.

What does the health service look like in Katowice? Does it differ in any way from the health service in the other regions of Poland?

The health service in Katowice operates on the same legal principles, and is founded on the same basic laws, as those pertaining to the health service throughout Poland.

Each clinic, hospital or teaching hospital that wishes to apply for a contract with the National Health Fund (NFZ), and thus to be a contractor of health services, must fulfil identical entry conditions based on the previous Healthcare Institutions Act and now on the Act on Medical Activity, the resolutions of the Minister of Health, especially the sanitary and technical conditions of the healthcare facilities, the regulations regarding the contract terms of the National Health Fund branches, the conditions of the healthcare registry departments of Provincial Offices and National Court Registers, etc.

Each health service provider has its own founding (governing) authority by which it is supervised. In Katowice, where the number healthcar providers is large, there are several governing authorities, namely the commune and province local governments, the Medical University of Silesia, the Ministry of the Interior and Administration, and private institutions. The way in which healthcare institutions function, including their rank and financial condition, depends on the manner in which they are supervised, the supporting possibilities, the development policy, and comprehensive support.

In Katowice, which is the capital of the region, the continuous development, both quantitative and qualitative, of the health service facilities, can be observed. This is largely due to the needs of the residents of the city of Katowice and the neighbouring cities for high-level medical care. pm

pm

Katowice is recognised as a pioneer in the field of healthcare. How did the city earn this title?

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The city of Katowice was the founding authority for 20 clinics and 7 hospitals, whose debts exceeded PLN 50 million. In 2003, a health-service restructuring programme was drawn up, which provided for various forms of restructuring, with a general message to involve a private investor in our health-service institutions at that time. The programme was adopted by the City Council and has become a guideline and a ticket to the implementation of restructuring.

Bearing in mind the good of the patients and the care for the proper quality and availability of the provided health services, the actions taken so far (whose objective was the liquidation of the facilities operating as separate public health-service institutions) have always been connected with transferring the existing medical activity to a medical entity that was obliged to continue it without interruption.

To elaborate on this, the principle was clear: – For the residents - nothing would change; the clinic or hospital would remain on the same site, the doctors and nurses would not change and at least the same service would be provided, - For the investor - we offered furnished fully-equipped medical centres with a base adapted to the current sanitary and technical conditions, with equipment and apparatus for the implementation of the contract (with the possibility of leasing or purchasing the equipment, apparatus and property) and with qualified personnel (doctors with opted-in patients, health visitors with knowledge of the area) and the assignment of the ongoing contract. In addition, we took over the existing debt of the facility. In return, we expected a continuation of the provision of health services standards at least the same as before restructuring, a further adjustment and modernisation of the facility in compliance with the requirements of the Regulations of the Minister of Health and the standards of a modern health service, and

also employment for the entire personnel of the facility. The new entity would start with a balance equalling zero.

- For the city, we maintained access to health services at the previous location, with the new employer. The entire personnel were protected, and we would assume the liabilities calculated as of the transfer date. The investor (instead of the city) would bear the costs of adapting the facilities to high standards, provide new equipment and apparatus, and try to expand its provision of medical services.

The principles for selecting entities which would ensure the continuation of the provision of health services and the development of the facilities were implemented in a way that was truly public and transparent.

The non-public organisations selected by way of public proceedings have taken over and carry out medical activities in all cases of restructuring, continually improving the quality, availability and range of the provided medical services. In addition, the non-public institutions effectively invest in the buildings by modernising the existing resources and extending the building by adding new parts.

The investors manage the facilities they have taken over in a businesslike manner.

At this point, it should be emphasised that the implementation of the restructuring programme required the cooperation of many parties and institutions. Apart from the investor and the personnel of the facility, the National Health Fund, the registry department of the Provincial Office, the National Court Register, the Sanitary Inspector, the Board of Trustees of the Independent Public Health Service Institution, the City Council (unfortunately, under the previous Act on Health Service Institutions, it was necessary to liquidate the legal existence of the Independent Public Health Service Institution and nominate an entity that would continue the provision of services), a Complex of Health Service Institutions, and other bodies. ::

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Medicine and Pharmacy

The 66th Congress of the Association of Polish Surgeons Between 18 and 21 September Warsaw hosted the 66th Congress of the Association of Polish Surgeons (TChP), the main scientific event for medical professionals in Poland, an eventwhich boasts European recognition.

Michał Teperek, Medical University of Warsaw

T

he Congress of the Association of Polish Surgeons brings together medical doctors specialising in various operational fields, including general surgeons, oncologists, proctologists, traumatologists, anaesthesiologists, transplantsurgeons and intensive-care specialists. The Congress served as a vehicle for the exchange of scientific thought and a springboard for debates between different generations of doctors. The three days of scientific deliberations gave participants an opportunity to familiarise themselves with the latest findings reported in Poland and worldwide.

The 66th Congress welcomed about 1,800 surgeons from all across Poland. Speakers included renowned Polish specialists and prominent experts from abroad, such as Prof.

40 :: polish market :: 9 -10 /2013

the initiative of Ludwik Rydygier, one of the most prominent Polish surgeons. Professor Ludwik Rydygier was the Chairman and organiser of 17 such meetings, which had initially been held on an annual basis. In 1921, the conferences gave rise to the Association of Polish Surgeons, which could not be formally set up until Poland regained its independence.

This year’s 66th Congress of the Association of Polish Surgeons was organised by the 43rd President of TChP, Prof. Marek Krawczyk, Michał Teperek, Medical University of Warsaw

Prof. Maria Siemionow

Maria Siemionow, Prof. Joseph Caprini, Prof.

Hans Lippert, and Prof. Hans Joachim Meyer.

The Congress featured 285 talks delivered in 50 separate sessions by 165 Polish and 55 foreign lecturers.

The attendees addressed the following topics: the combined treatment of digestive-system neoplasms, surgical techniques in thoraco-abdominal trauma treatment, issues in bariatric and metabolic surgery, pancreatic and biliary surgery, and duodenohepatic and pancreatic ampulla surgery, as well as minimally-invasive surgery, intra- and post-operative complications in surgery, the treatment of patients with abdominal hernia, and the treatment of perioperative pain in surgery. There was also a session organised by the Young Surgeon Section and a meeting for surgical nurses. The organisers also scheduled a seminar on “Advancements in liver surgery and transplantation” and a Polish-Japanese session. New items on this year’s event agenda included two sessions entitled The State of the Art, which familiarised the attendees with the issues of regenerative medicine and the multi-specialty treatment of patients suffering from oesophageal cancer.

In addition, the Congress organised workshops on general and laparoscopic surgery, targetted especially at young surgical practitioners, who could perfect their manualand mechanical-stitching skills, and the use of laparoscopic techniques, and all this under the guidance of more experienced instructors.

The Congress was organised by the Association of Polish Surgeons, the oldest scientific association in Poland, established in 1889 on

Prof. Marek Krawczyk kisses the standard of the Association of Polish Surgeons (TChP)

in cooperation with Prof. Tadeusz Wróblewski and Mariusz Frączek, Assistant Professor, and the team of the General, Transplantation and Pancreatic Surgery Clinic of the Medical University of Warsaw. ::

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Medicine and Pharmacy

Looking forward anew Prof. Marek Krawczyk, Rector of the Medical University of Warsaw (WUM) and the President of the Association of Polish Surgeons, talks to Przemysław Rudowski.

The Medical University of Warsaw is just beginning another academic year. Did you have this year more candidates from Poland and other countries interested in studying at the university compared to last year? What are now the most important challenges for the university?

As for the number of candidates, we have seen for some time a situation which is present at every Polish higher educational establishment. I mean the impact of the increasingly sharp population decline on the education system, including universities. There is no problem, and I think there will never be a problem, with enrolment for medical, dental, and pharmacy studies. Our university has always been popular with students and we still have on average four candidates per place for pharmacy program, 10 for MD program and 16 for dental studies. But we have noticed a decrease in the number of candidates for the public health, emergency care and dentistry techniques programmes.As regards candidates for the English Division, who want to study medicine and dentistry in English, we have seen that many of them, like for example Norwegians who were always a strong group, have come out worse since we introduced a recruitment process with exams instead of merely the requirement to present a certificate of high school leaving exam. In turn, candidates from Arab countries are prepared well or fairly well. The reason perhaps is that these students come to Poland earlier and study here for the exams.

There are around 120 places for English Division students. We offer two kinds of courses: a six-year programme for high-school leavers, with around 90 places in the first year, and a four-year programme for graduates of colleges, that is schools providing education in pm

42 :: polish market :: 9 -10 /2013

the American-Canadian system, with around 30 places designated for them in the first year.

Our priorities for this academic year are associated with the investment projects we are carrying out. By the end of December we are going to complete the process of building and equipping the Centre for Preclinical Research which is being constructed as part of the big consortium for the Centre for Preclinical Research and Technology project. The project is coordinated by the Medical University of Warsaw. We do not expect any problems, we operate in keeping with the schedule.

The construction of the Paediatric Hospital is the second key undertaking. In this case as well, everything is going according to plan. The third priority is the completion of the building shell for the Sports and Rehabilitation Centre. We are also conducting smaller projects, like for example the repair of the Biostructure Centre. We are about to complete an important project, which is of strategic importance for education in the years to come – the Centre for Medical Simulations.

We have received funding for the project from the Ministry of Health. Now, the project has to be carried out. pm

It will be one of the key education modules when it comes to teaching a future physician. Is that right?

Exactly.

When opening the 66th Congress of Association of Polish Surgeons, you spoke about today’s problems of the health service.

The problems I spoke about are very serious. Firstly, it is clear that we may have a significant shortage of surgeons in the future. The data I have received from the Main Physician’s Chamber show that one fourth of Polish surgeons who are still in work are pm

of retirement age. The fact that people reach retirement age is natural but it is not normal that the medical personnel is not replenished.

As a member of the examination commission, I can see that for the past two or three years the number of young physicians who after six years of training take an exam to become surgeons has been decreasing. On the one hand, this is a result of population decline but on the other the number of new staff is not growing.

I think it is a dangerous situation.

To sum up our discussion, I would like to ask you a question of economic nature.

In recent years we have seen a rise in the number of private hospitals in Poland.

They specialize in narrow fields of procedure. In your view, is this direction of change in the Polish health service good?

Is it irreversible, as this is the general trend in the world these days?

The trend is global. And we are a part of Europe and the world, a part which is important. We cannot escape this and we should not try to. This is a good direction. But it has to be followed by changes to funding by the National Health Fund (NFZ) and in the insurance system. As long as this issue is not regulated, everything will continue to be based exclusively on financing by the NFZ. This means that if the NFZ signs a contract with a private hospital it will have no money for large hospitals. Consequently, the large hospitals will have financial problems. And let us remember that even the simplest procedure may involve complications. In the case of problems, such patients, from these small, very lucrative and comfortable hospitals, are referred to big public establishments, which are prepared for providing difficult procedures and treating complications. :: pm

M U  W   .   .   .  /  

Medicine and Pharmacy

The future of medicine as a service to the patient (patient-centred care) Elżbieta Radzikowska, MD, PhD, specialist in plastic and general surgery, aesthetic medicine, and Medical Director of the La Perla health-clinic chain, talks to Maciej Proliński.

Stem cells have recently unlocked a great potential within the field of medicine. It is even said that their widespread application by 2017 is not unlikely. Where do you stand on this?

The application of stem cells in various therapies has been considered one of the greatest achievements of modern medicine.

Mesenchymal stem cells, or MSC’s, have a unique capacity for self-renewal, and they can differentiate into a variety of specialised cell types. These two characteristics are currently under careful scrutiny by scientists, who have been making determined efforts to find out how and why stem cells differentiate. This area is of particular interest for regenerative medicine and cell therapy, since stem cells constitute a sustainable source of various types of cells, which could find application in therapy. Such cells could be applied in the treatment of multiple genetic and degenerative diseases, which have resisted currently-available treatment methods; also when it comes to the management of persistent wounds or skin diseases. Thanks to their outstanding properties, MSC’s have aroused great hope as to their application. These cells can differentiate into specialised cells that make up tissues and organs. They also secrete various growth factors and cytokines which allow cells present in the damaged area to regenerate or differentiate into a specific type.

MSC’s are generally derived from bone marrow, although it has been proven that they exist in nearly all tissues and organs. For instance, MSC’s can be easily found in adipose tissue, which can be extracted during liposuction. In my opinion, further research is pm

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necessary before MSC-based treatment could be successfully applied.

Many academic centres continue to cooperate with pharmaceutical and biotechnological companies to carry out research into stem cells. Such cooperation is undoubtedly a driving force in the development of new cell-based therapies. Can Poland boast any valuable first-hand experience in exploring the potential of our scientists in this matter?

Yes. Take for instance the Independent Clinical Genetics Laboratory at the Medical University of Lublin, led by Prof. Janusz Kocki, MD, PhD. What’s more, in the La Perla health-clinic chain we have plans to establish cooperation with the University, as partnering with such institutions and the opportunity to constantly make progress in this area are invaluable for any doctor. Last year, medical professionals from Lublin bought stateof-the-art equipment for genetic research.

Such an advanced-device package had yet to come to Poland at the time! This new equipment includes a fluorescence microscope, a concentrator for nucleic-acid drying with a vacuum pump, an incubator for tissue-culture breeding, and a system for protein electrophoresis and blotting, to name but a few.

The purchased equipment has allowed the Lublin Laboratory to conduct research on stem cells and to breed them for the future benefit of patients. The research has already employed unique tools, purchased under an EU project (“The equipment of innovative laboratories conducting research on new medicines used in the treatment of diseases of affluence, and neoplasms” as part of pm

the 2007-2013 Development of Eastern Poland Operating Programme, Priority Axis I, the Modern Economy, Measure I.3 Innovation Support).

What services does the Laboratory have available now?

Among other things, cell-isolation by sorting (a MoFlo XDP BeckmanCoulter fourlaser sorter), cell analysis using flow cytometry (a BeckmanCoulter 10-colour flow cytometer; a FlowSight Amnis flow cytometer), short- and long-term culture breeding under standard conditions and under variable oxygen levels - also for stem cells derived from adipose tissue. pm

Stem cells are the future of medicine - also in aesthetic procedures. What about the current treats The La Perla-health clinic chain has to offer?

What makes us stand out from the competition is undoubtedly the FDA-certified innovations we are constantly bringing out.

Recently, such an innovation has been Liposonix, a non-invasive and safe procedure for fat modelling without surgical intervention and the need to diet or exercise. La Perla has been the first company in Europe to introduce Liposonix. Its high-frequency ultrasound waves (HIFU) permanently remove adipose tissue, while leaving the skin intact and toned. The technology used by the device is based on 10 years of clinical research carried out by renowned new-medical-technology professionals and experts in ultrasound solutions. Just a single procedure can reduce your waistline by 2.5cm. :: pm

Jesteśmy szpitalem z ponad 10 letnią tradycją. Rocznie przeprowadzamy około 1200 zabiegów kardiochirurgicznych w tym około 150 dla dzieci, a nasza wczesna rehabilitacja pomaga w uzyskaniu poprawy sprawności po zawałach i operacjach kardiochirurgicznych.

W naszym szpitalu pacjentom oferujemy pobyt w pokojach 1 i 2 osobowych, z pełnym węzłem sanitarnym oraz z TV.

szpital kardiochirurgicznyDolnośląskie Centrum Chorób Serca „MEDINET” serdecznie zaprasza do naszych specjalistycznych ośrodków:

Szpital Kardiochirurgiczny Oddział we Wrocławiu, ul. Kamieńskiego 73 a Tel. (71) 32 09 416 lub 71 32 09 417

Szpital Kardiochirurgiczny Nowa Sól, ul. Chałubińskiego 7 Tel. (68) 388 21 91 Oddział Kardiochirurgii

Świadczy usługi szpitalne w zakresie: Kardiochirurgii dorosłych i dzieci wykonując: • pomostowania naczyń wieńcowych – by – pass; • korekcji nabytych i wrodzonych wad serca; • operacji tętniaków aorty; • operacji zastawek; • małoinwazyjnych operacji dorosłych i dzieci, Wczesnej rehabilitacji kardiologicznej • gimnastyka rehabilitacyjna • relaks, • trening rowerowy, • lampa bioptron, • masaż, • inhalacje.

Poradnictwo w zakresie: • kardiochirurgii • kardiologii dziecięcej • wad serca u dzieci.

Przychodnia - Dolnośląskie Centrum Diagnostyki i Terapii Kardiologicznej we Wrocławiu przy ul. Piotra Skargi 19 Tel. (71) 780 85 85 lub (71) 780 85 67 Świadczy usługi zdrowotne w zakresie: • kardiologii dorosłych • kardiologii dziecięcej • diabetologii • angiologii (chorób naczyń) • endokrynologii • badań diagnostycznych: • USG serca; • EKG; • testów wysiłkowych na bieżni; • Holtera EKG; Holtera ciśnienia tętniczego • spirometrii.

Wybrane świadczenia zdrowotne udzielane są pacjentom ubezpieczonym bezpłatnie na podstawie podpisanej umowy z NFZ. Posiadamy certyfikat ISO 9001:2008.

Medicine and Pharmacy

Specialist Hospital in Sandomierz Due to the hospital’s precise requirements, it was possible to implement the radiology system, laboratory system, and the systems in clinics and diagnostic offices – all within the span of six months.

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pecialist Hospital in Sandomierz has 500 beds located in 21 hospital wards and 43 places in outpatient wards. Every year, the hospital provides medical care to 95 000 patients, more than 19,000 of whom are hospitalized. The patients also benefit from 26 specialist clinics which are located in the hospital and provide medical services on an outpatient basis.

In 2011, the hospital was assigned funding for the project “Closer to the patient through the creation of a digital system for collecting, processing and archiving the data for the Hospital. ” The project was co-financed from EU funds under the Measure 2.2 “Construction of infrastructure for the information society” and from the hospital own resources.

A comprehensive solution of the HIS (Hospital Information System) class was selected: AMMS (Asseco Medical Management Solutions) is the main system in the hospital in Sandomierz. The following modules were implemented: Patients Traffic (Admissions, Hospital Wards, Medical Statistics), Clinics (Registration, Surgeries, Medical Statistics), Diagnostic Rooms, Treatment Rooms, Hospital Infections, Blood Bank, Pathomorphology, Pharmacy, First Aid Kits, Settlements, Orders, Laboratories and Form Documentation. The AMMS system also provides the functionality known as LIS (Laboratory Information System), i.e. the Laboratory modules and Serology.

The computerization of the hospital in Sandomierz was preceded by an internal audit – its purpose was to examine to what extent the existing IT solutions were viable for future use. Recommendations were formulated regarding future application of good practices and standards in terms of IT environment management, worked out by the

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hospital IT team. The conclusions of the IT audit were complemented by analysis of user needs regarding the functionality of IT solutions used by the hospital.

It was decided that the initial phase would consist of the implementation of those systems that will be the most effective at encouraging users to make use of IT tools during everyday work. The main goal of the subsequent stages of the project was the maximum reduction of business processes. Following these guidelines, the project began with the implementation of the radiologic module, laboratory module, hospital orders, and also registration and handling of patients in specialist clinics – exactly in this order.

The initial stage saw the creation of the Managing Document, which described the organization of the implementation process and determined the schedule for each of the stages. A steering committee was formed, the directors of implementation teams had their roles determined and procedures were established for managing the project in terms of: communication, control, changes, monitoring and reporting of work progress, managing problems and risk. Implementation began from the RIS and LIS class systems as they were necessary to enable electronic orders throughout the entire hospital. This undertaking required much determination on the part of users. Thinking in terms of a processbased organization, framed by an IT system, proved to be a significant challenge. It helped that employees of particular cells have long desired the implementation of systems that would improve work efficiency.

The AMMS solution ensures that the data from the entire hospital arrive automatically to the clearing system and application integration allows access to the patient data in a digital form from any place in the hospital.

Uniformity of the system allows its users to obtain consistent reports from every single hospital unit. The hospital began to collect the data and integrated current solutions in order to exchange information. The hospital is on the right track to launch Electronic Health Records by August 2014 . ::

Robert Kurosz IT Manager Specialist Hospital in Sandomierz The biggest advantage of the AMMS solution is full integration of all modules and the ability to integrate this system with the software used by the hospital. There are quite a few solutions – only within the framework of this project, the following have implemented and launched: RIS (Radiology Information System) , system of archiving and storage of medical images PACS (Picture Archiving and Communication System), system of telemedicine, PIXEL Technology Archiving Referrals Scanning System (deeply integrated with the HIS via HL7 messages) and system of archiving traditional medical documentation and circulation of digital documents.

Innovation and IT

Modern technology for today and tomorrow Among the topics debated during the 23rd Economic Forum in Krynica was modern IT and its potential as a driver of Poland’s economic growth.

Patryk Mirecki

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o provide more information on this subject, a new report by Ernst&Young was presented. In it, the authors made the point that the majority of factors which helped Poland experience the economic wonder of having the highest GDP growth in the EU in 20082012 have already disappeared or will do so very soon. Consequently, Poland will have to tackle new challenges in the years to come to continue catching up with the Western European economies. So, what’s there to be done in the coming years to speed up growth and identify potential growth drivers?

Poland’s economic growth and investment drivers identified by E&Y in its report include a further-enhanced ICT infrastructure, to name but one. This infrastructure will essentially push economic growth by making Polish manufacturers more competitive and enhancing the country’s appeal as a foreign-investment destination. What can also drive manufacturing capacity and economic activity is e-administration. In order for it to be used effectively, however, there must be well-developed and widely-accessible ICT infrastructure in place, including mobile phone and broadband internet networks.

During the report presentation, it was highlighted that Poland ranked 47th out of 190 countries in the UN E-Government Development Index 2012. And while this puts our country above the average in Eastern and Central Europe, we are still nowhere near the leaders, including South Korea, the Netherlands, the UK, Singapore, the USA and the Scandinavian countries. Among the countries that topped Poland in the ranking were also Russia, Hungary and the Czech Republic.

According to the report’s authors, the ICT infrastructure and online services are the areas which have the most room for improvement in Poland. They claim that the further

progress of e-government should facilitate faster and simpler procedures for setting up businesses, securing building permits and settling taxes. These changes will at the same time make Poland more competitive and attractive for foreign investment. They will represent yet another attractor of foreign capital that, together with the previously-mentioned drivers, can improve our chances in catching up with the Western European economies.

In a panel discussion on the development outlook for regional transport, one of the panellists, Lech Witecki, acting President of the General Directorate for Public Roads, pointed to the possibilities of using existing IT solutions to invest in building motorways and national roads in the future. “We have asked ourselves the question of what to do when the EU funds designated for this purpose run out,” said Witecki. As an answer, he stated that the investment in the viaToll toll-collection system for trucks has just paid back after two years of being implemented. “In the years to come, the system will generate billions of zlotys in revenue. When the EU funds have run out, the e-toll, in addition to leasing charges on service points within rest areas, will become a major source of financing the largest road-related projects,” claimed Witecki.

In a debate entitled “The future cities of our dreams – how to unlock the potential,” the point was made about the need to continue developing smart energy networks. “The AMI (Advanced Measurement Infrastructure, such as automatic meter readers) project that is slowly under way will help gain more information about the network and enable users to manage energy more efficiently,” said Robert Stelmaszczyk, President of the Board of RWE Stoen Operator. In his opinion, providing an appropriate legislative framework for so-called infrastructural corridors would facilitate the process of building the urban

infrastructure. And it seems that the awareness of the importance of this issue has significantly grown.

Another report that was presented in Krynica, prepared for Poczta Polska SA by the Homo Homini Institute, addressed the importance of the Internet for the social life of Poles. It reveals that as much as 83% of Poles use the Internet, and a steadily-growing proportion of the public uses it to deal with service providers. Almost half the respondents pay their monthly bills online, with 60% declaring their willingness to do so.

In another discussion, the fact was emphasised that Poland has to catch up in terms of non-cash transactions. “As far as the number of available ATMs and electronic payment terminals are concerned, we are the last in Europe,” said Michał Skowronek, President of MasterCard Europe’s Polish branch. According to Tomasz Bogus, President of Bank Pocztowy, the main reason for Poles making so little use of payment cards are financial and mindset-related barriers. Many people believe they earn too little and that banking services are expensive. What is also of significance here is that people are anxious to use new technologies, but they lack financial knowledge and mistrust banks. “If we don’t make the non-cash payment system develop, the economic consequences can be severe,” said Krzysztof Pietraszkiewicz, President of the Polish Bank Association (ZBP). He added that to change this state of affairs, great effort must be put into helping financial institutions regain their credibility. Also, in addition to attracting foreign banks, they should establish local, well-organised and financially-sound banks. :: (Sources used for the article: www.rp.pl, www.biznes. pl, www.forum-ekonomiczne.pl)

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Innovation and IT

IWIS 2013 - 7th International Warsaw Invention Show Associate Professor Michał Szota, DSc Eng. President of the National Board of the Association of Polish Inventors and Rationalizers (SPWiR)

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ince 1990 the Association of Polish Inventors & Rationalisers (SPWiR) has been actively promoting Polish inventions at international shows, science conferences and innovation trade shows. Since that date it has presented more than 3,000 Polish innovative technical and technological solutions at over a hundred shows across four continents. The innovative solutions were developed by universities, R&D institutes, corporations and individual inventors.

The tangible results of the promotional activities of the SPWiR include medals, distinctions and special awards – but also numerous

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business links established for Polish inventors, which are the first step on the way towards the commecialisation of research results.

Because of its acknowledgement of the attention that Polish corporations devote to innovative solutions presented abroad, and the attention that international organisations of inventors devote to the innovations introduced in Poland, the Association has organised the International Warsaw Invention Show (IWIS) for some years now. This year, from 8 to 10 October, the main building of the Warsaw University of Technology will hold the seventh edition of the Show.

The recent editions of the IWIS show have been organised under the Honorary Patronage of the President of the Republic of Poland.

For two years the co-organisers of the show have been the Polish Patent Office and the Warsaw University of Technology. The Patent Office is additionally organising an accompanying event – a series of seminars on European patents - the Polish Confederation of Private Employers Lewiatan, and Lewiatan Business Angels (LBA) will hold their seminars.

The show will also include the third edition of the World Competition of Chemical Inventions under the auspices of the International Federation of Inventors’ Associations (IFIA).

The IWIS show will host exhibitors from Europe, Asia, North America, Africa and the Middle East, and also various Polish scientific institutions, corporations and individual inventors who will present several hundred innovative solutions.

The best inventions, after assessment by an international jury, will receive gold, silver and bronze medals, cups and special awards.

What is worth emphasising is the fact that the IWIS show has been for many years the

largest exhibition event in Central and Eastern Europe for promoting innovative solutions from Poland and other countries. It is predicted by the Association that the presented solutions and trade partnerships which will be established during the IWIS 2013 Show will greatly contribute to increasing the popu-

International Warsaw Invention Show, IWIS 2012 at Warsaw Uniwersity of Technology.

Photo: Association of Polish Inventors & Rationalisers

larity of the idea of innovation in Poland. It will also increase the number of commercialised innovations, which in turn will directly translate into the economic growth of our country.

I wish successful promotion and commercialisation of the presented innovative solutions to all the participants of the IWIS 2013 Show.

Feel invited to visit the IWIS 2013 Show and to take part in the events associated with it. ::

Innovation and IT

Innovation company

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ETKAMA, a manufacturer of industrial valves and iron castings, has operated continuously for over 60 years now. It is a reliable employer and, at the same time, a rapidly developing company with a global footprint (exports constitute about 70% of the Company’s overall sales). Its efforts have been recognised by the business environment. This year, the Company was again awarded the title of the Ambassador of the Polish Economy as a partner to international companies.

Zetkama also received the Third Diamond to the Polish Business Leader Golden Statuette and the Lower-Silesian Economic Certificate.

For over a decade, Zetkama has been led by its CEO, Mr Leszek Jurasz, a manager highly respected in business and scientific circles.

He is also the President of the Polish Industrial Valves Association (SPAP). In 2005, Jurasz took the company public (at the WSE) and created the ZETKAMA Capital Group he is currently managing. His professional excellence has been appreciated by the public market, rendering ZETKAMA a solid business with a transparent information policy, which publishes its financial forecasts and sees them through. This March, the “Byki I Niedźwiedzie” (“Bulls and Bears”) ranking prepared by the “Parkiet” Stock Exchange Daily, which explores the activities of listed companies, nominated Mr Leszek Jurasz for the CEO of the Year Award, thus shortlisting him, along with four other managers, for their special contributions to their companies and shareholders.

INNOVATION - the Company’s operations are targeted at continued growth and the search for new solutions. The Company is committed to ensuring that its product range is up to date and of highest quality. Presently, Zetkama S.A. is involved in a project cofunded by the National Centre for Research and Development under the INNOTECH Programme. The project is dealing with advanced

automation and industrial-valve control systems (electric propulsion and pneumatic gear, and also high-tech control devices). The project is carrying out work on modernising stop valves. Improvements in structural and technological aspects, achieved with the aid of advanced design instruments, will bring considerable benefits in terms of functionality and the quality of the engineered valves.

The enhanced performance of the valves, especially as regards the internal valve impermeability parameter, combined with their reduced weight and flow resistance, will have a direct impact on the consumption of materials and energy during manufacturing and operations, this way delivering greener solutions, both in-house and on-site. In addition, the adoption of innovative materials, such as composites, in the valve-production process, will help reduce manufacturing costs, while ensuring maintained or even improved operational performance. The project unlocks the potential for reaching new markets and sectors, such as the chemical industry.

The Company’s Research and Development Centre has been an invaluable help in work on R&D projects. It serves as the basis for implementing advanced automated manufacturing technologies in industrial-valve production processes and delivering high-tech measurement and analytical tools, such as 3D measuring machine. These will lead to a gradual reduction in manufacturing costs, while ensuring improved quality. The R&D Centre also carries out a number of innovative projects oriented towards upgrading the available and marketing of new products, such as ASMEcompliant security bellow valves, high-pressure valves, balancing and pressure-reduction valves, valve-control systems and technical consulting. To crown its project-related efforts, Zetkama S.A. plans to enhance its service package with comprehensive solutions for its customers operating in the installation sector, thus marking a step forward

Leszek Jurasz, President of the Board, General Director ZETKAMA

from single products constituting only part of more complex systems.

Zetkama has also developed advanced management systems (based on Lean Manufacturing and Lean Management principles), and implements ISO 14001 and ISO/TS environment management systems. The Company holds and regularly renews certificates confirming the high and world-recognised quality of its products (i.a. ISO 9001:2008).

The expertise and proprietary standards developed by Zetkama are subsequently implemented in the Capital Group.

Since 2008, the Company has been involved in the establishment of the ZETKAMA Capital Group, bringing together businesses from the metal industry and operating within three sections - valves and castings (Zetkama S.A. and Armak Sp. z o.o.), industrial fasteners (Śrubena Unia S.A.), and car components (MCS Sp. z o.o.). The Group provides more than 1000 jobs and in 2012 its revenue reached almost PLN 300 million. With a global footprint, dominated by sales in Western Europe, the Capital Group’s exports account for 60% of its revenue. ::

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Innovation and IT

Innovation, and once again innovation Wojciech Pomykała CEO of Exatel, talks about changes in the ICT sector and infrastructure, and cloud services.

by the need to take a closer look at the IT resources available to hand, since, as it often turns out, current systems fail to meet the present needs. Our company, as an operator cooperating both with corporate giants and grassroots businesses, helps to align ICT solutions with the demands put forward by the digital economy. What I mean is not only the infrastructure itself, but also its corresponding services, which we deliver in cooperation with our partners.

But the development of an infrastructure is vital for the growth in services.

Of course it is, and we’re aware of that.

This is why this year we’re implementing two major infrastructural projects – the construction of a Carrier Ethernet loop and a DWDM connection to Frankfurt.

The former will launch 44 new nods, mainly in the area of the Warsaw metropolitan, which will complement its current cloud-service package with solutions such as anti-DDoS and a new-generation firewall.

Data transmission in this new network will reach 100 Gbps, which is particularly important for our customers operating in finances, for whom even a tiny delay can make a difference.

The latter project, the DWDM connection between Warsaw and Frankfurt, with a bandwidth of 8 Tbps, will allow the transmission of voice and data via the shortest, and thus the fastest, way. pm

Recently, the digital revolution has emerged as a buzz word, with a growing number of businesses engaging in an online fight for the customer. Is this shift reflected in Exatel’s operations?

Indeed, the development of technology and its related services allow companies to unlock new potential for their customers. Take, for example, customer and bank interaction,| where the transition from a visit to the bank to a mobile app in your smartphone was the fastest, I’d say. As a result, we have a whole communications system, where it is the customer who decides what channel to use and when. Each such transition is usually initiated pm

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pm

Let us go back to the services available under the cloud framework. Do you think it is only a fad or rather a new trend that will continue to develop? Customers, and especially corporations, seem to be afraid that their data, when stored in the cloud, are not protected effectively enough against unauthorised access.

The use of cloud computing is definitely something more than just a passing interest in a new technology. This can be supported by the financial gains offered by this mode of operation. To give you an example – nearly each and every large company has implemented or used Contact Centre services. Usually, the launching of a Contact Centre under the traditional model is at a cost of some PLN 500 thousand, involving 30-35 jobs, with equipment, software and security systems all necessary for a start. This is coupled with server maintenance and administration. In turn, in the case of a hosted Contact Centre offered by Exatel, the costs are reduced nearly twofold.

As regards the security of cloud-stored data, this question is often raised in connection with the storage of customers’ personal or financial data. Exatel, as a leading operator, is committed to delivering end-to-end operational satisfaction in cloud services. Normally, an application supplier does not extend its warranty beyond its own Data Centre and any service-quality claims can involve only its computing resources. ICT operators such as Exatel are able to provide a warranty on both Data-Centre and network-infrastructure resources. This is of special significance to customers who look for guaranteed reliability of services.

What changes can we expect in ICT by 2014?

The years in prospect will bring further development of cloud services and progressive outsourcing of ICT services by companies, which will focus on their primary area of activity in order to remain innovative. When it comes to technology in its strict sense, even today ICT operators are announcing their involvement in work on efficient solutions for Big Data. :: pm

Real estate

Who cares about building green?

You should.

Do you own an apartment? Maybe you are dreaming about building your own house or company headquarters? Or you are a modern nomad working on your laptop in various locations… Did you notice how your surroundings have changed during the past few years? How, step by step, we all are using more and more eco-friendly solutions, reading the labels, choosing energy saving devices and cars that consume less gas… Soon you will also be living in sustainable cities, in houses that no longer consume energy from external sources but actually produce a surplus of energy on their own. Imagine homes and offices that are cool in the summer and warm during the winter without any radiators or coolers. So when asked who cares about building green… answer: “I do”!

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he world is rapidly changing, new technologies are being invented and we all are getting more mindful about the environment. According to the EU regulations we will soon all have to switch to green. In six years we will no longer be allowed to build in a traditional way. Poland, however, is still far behind in implementing solutions that in many other European countries have already become a standard.

Being “eco” is no longer a trendy or alternative lifestyle for vegetarian and animal rights activists, hippies and hipsters. Thinking green is no longer a choice – it is a must.

We are obliged to sort our trash and get rid of goods and techs not friendly to the environment. We have noticed that choosing energy saving products – from light bulbs to cars, houses and offices -is just wiser and cheaper in the end. The more we invest in green solutions, the more available they get. We are reaching a point when it becomes the most reasonable choice for everyone – a standard that we expect to be delivered by companies and governments. Tenants and investors all over the world include being and building green into their brands strategies. Prestige is no longer about how big your headquarters is but also about its sustainability and innovation.

According to the EU regulations all countries have to lower energy consumption and modernize all buildings systematically year by year. Moreover, after 2020 the building standards will ban traditional – energy inefficient buildings. Many countries took the effort to reform their construction market earlier to secure smoother reforms. In Poland changes are much more deliberate and many start to fear that the country will not manage to meet the expectations in time. Those aware of the challenge given not only by the upcoming regulations but also by the civilization and technology development will meet at the Future4Build Conference on 6-7 November in Warsaw.

Future4Build presents and gathers modern technologies and ideas of green building in a wide spectrum – from environmental, economic and legal to social issues. “What we need to realize is that those solutions: comfortable homes without radiators or coolers, reality without energy bills, sustainable cities developing and still being a nice and healthy place to live and work, are no longer a distant future. They will become our everyday reality in just a few years,” said Svietlana Robinson, Future4Build organizer. “As a growing business-expert society, we feel that promoting better quality of building and living is our mission. It is no longer a question of

how much it will cost to build but also what will be the cost of upkeep, is it going to be sufficient in a long term perspective or how will it influence the environment and people who use it.”

During the two- day conference and exhibition dozens of international and Polish scientists, architects, innovators, investors, developers and enthusiasts will share their knowledge and experience in order to develop strategies for construction businesses to evolve into more environment- friendly ones. The conference visitors will be able to learn about the newest technologies and solutions which soon will become integral parts of all homes and offices. During over twenty panel discussions, lectures and presentations participants will deliberate on ways to design healthier cities, establish cooperation between business and government, renovate old buildings in a sustainable way, and accommodate various new regulations.

The honourable guest of the conference – Mr. Mark Krawczyński, a Polish-born architect and pianist, one of the reconstructors of the Sydney Opera House, will share how big architectural projects influence national identity. ::

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Real estate

What I do makes people happy

Architectural design – Arch-Deco. A bird’s eye view

Bogdan Górski, President of Przedsiębiorstwo Budowlane Górski Sp. z o.o. S.K.A, a building company, talks to Maciej Proliński.

Making projections for the Polish economy, including for developers operating in Poland, is more difficult at present than in the past years. But now, in the second half of 2013, can we already speak about a revival?

Undoubtedly, there has been a sharp downturn in the residential building sector in recent years. One has to say that the crisis that hit the sector was really big. At present, the market has started to bounce back. The first quarters of the year were already slightly better. Demand is on the rise. Interestingly, demand for homes is growing “by itself,” which means it is not propped up in any significant way by the mortgage market. It is worth adding that for at least a decade there have been many developers operating in Poland, with many new businesses having entered the market. However, for many of them it was the first experience on the residential market. And residential building only seems to be an easy business. Consequently, the economic slowdown of recent years has been a time of reorganization on the Polish market. pm

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Is buying a home still the most important investment for Polish people? And another question: is this a good investment? I once heard a leading Polish developer saying that buying a home means “buying dreams.”

Our goal is to be a modern firm, one attentive to the clients’ needs and providing highstandard and high-quality homes and public buildings. And nothing has changed in this respect for years. Certainly, buying a home is for many Poles the most important investment and it involves huge emotions. We try hard to make sure that these are exclusively positive emotions. Making dreams come true has always been my priority. When choosing my career I decided that my work should not be a value in itself. This is what gave rise to my firm. Now, after 30 years on the Polish market, I know I made the right choice – what I do makes people happy. pm

pm

Your firm has been present on the Polish residential building market since 1981. Its history is made up of building projects. Let

us talk about the flagship ones. Which of the projects make you particularly proud?

Our firm was set up in 1981, focusing mainly on single-family houses ordered by private individuals. Since 1997 our company has carried out its own complex investment projects in the multi-family sector. We are involved in the whole development process – from land acquisition to designing in conjunction with reputable architectural practices to receiving building permits, construction and handing over the finished apartments to clients. It is difficult for me to point to any specific projects that I am particularly proud of. I am attached to each of them. One of the special projects our company has carried out is the courts of justice building in the former Military School complex on 3 Maja Street in the northern Polish city of Gdańsk. A modern 21st-century building has been blended there into a complex of old 19th-century buildings. It is not only well harmonized with them but also enhances the beauty of the old architecture. Another prestigious project, which we are now conducting, is the Gdańsk Brewery project in the historic part of

Real estate

the district of Wrzeszcz. It involves the construction of a complex of shopping facilities, services, offices and residential buildings on the site of an old brewery. By combining the existing old architecture with new modern buildings, it will give the place a new special character. The residential complex will include retail outlets, culture and recreation facilities and a mini-brewery, a unique attraction of the place. Another project we are conducting, a non-residential one, is a conference and training centre with a restaurant and 35 guest rooms located in the Palace Complex in Gdynia on Folwarczna Street.

The project will cost PLN21 million, of which 75% will be financed by a loan granted under the Jessica initiative.

And what about the Galeria Metropolia shopping centre. It seems to be a new chapter in the history of your company and in the history of this shopping complex. You are the strategic investor and the general contractor on this project. What are its advantages?

The four-storey Galeria Metropolia shopping centre in Gdańsk’s district of Wrzeszcz is a new stage in the life of the shopping centre known until recently as Centrum Hevelius. The new name and appearance of the centre was presented at the Shopping Center Forum 2013 in Warsaw in September. It should be stressed that Galeria Metropolia, as an evolution of the Hevelius shopping centre project, will be the most easily accessible retail facility in the region of Pomerania. The Pomeranian Metropolitan Railway which is now under construction, with connections to the Gdańsk airport and the Kashubian region, coupled with direct access to the shopping centre from the platforms of the railway station for SKM, PKP and PKM trains, are the main reasons why the shopping centre has been renamed. The new name corresponds better with the character of the planned project. Galeria Metropolia will have a gross leasable area of 33,000 sq m. The space will be divided into five thematic parts, each performing a different function. The food and drink part will accommodate well-known chain restaurants and cafes. There will also be an entertainment part with a multiplex cinema for 1,059 viewers with five screens, one intended for premiere showings. Apart from the features that can typically be found in any shopping centre, Galeria Metropolia will also provide grade A office space. The last part of Architectural – Arch-Deco.

A bird’s eye view 135 the centre design will be a modern hotel with rooms. We would like Galeria Metropolia to

A bird’s eye view of the old brewery which is now being converted

pm

be a place which the clients not only visit but also spend their time in by doing shopping, going to a cinema, practicing a sport and using services. Expensive investment in nearby buildings and infrastructure, coupled with a convenient connection to the Gdańsk airport and railway lines, is a guarantee of success for tenants and a magnet for tourists from Poland and other countries.

When will Galeria Metropolia be completed?

It is scheduled for completion in 2015. We are in the process of carrying out the first stage of the project – building a railway platform, an overpass for pedestrians over the SKM railway track, an underground tunnel connecting the PKP railway station to the shopping centre and a retention reservoir on the Strzyża river. We already have a building permit for the second stage of the project – the construction of the shopping centre building with the hotel. We are going to begin the construction works this year. The Galdeos s.c. company is responsible for commercializing the project while the architectural design is the work of the Arch-Deco practice. pm

But in recent years Poland has seen a record number of shopping centre openings, with the peak still ahead of us. Despite problems with leasing out retail premises, investors will put on the market 450,000 sq m of space this year, according to the latest research by Cushman & Wakefield.

Experts say the market may not be ready for absorbing such a large amount of new space. And what is your view?

Indeed, the Polish market for shopping centres is in a stage of fast expansion. And pm

one can expect that in the coming years new supply will be equally big. The development of modern shopping space in smaller cities began in 1998, when investors and shopping chains noticed that there was a relative shortage of retail premises on these markets.

And interest in these markets, including from international shopping chains, is still growing. The situation is different in big cities, like Warsaw, where the market is highly saturated. I think that today, to be able to meet the changing expectations of clients and successfully compete on the market, developers pay more and more attention to the concept and quality of their projects. They also choose tenants more carefully so as to make what they offer different from the competition and to reach the target client group.

To sum up, I think the amount of shopping space available in Poland is sufficient to attract new international tenants but the maturity of the Polish market as a whole is still moderate, showing that there is potential for further growth.

What is your company’s strategy for the near future?

Our strategy for this economically uncertain time is to accumulate our disposable financial resources. We have a very large amount of such resources. We will still be trying to win as big a market share as possible. We want to continue to focus on the Tricity market of Gdańsk, Gdynia and Sopot, the market we know best. We are not giving up the residential segment. Thanks to the consistently pursued strategy we have adopted for the time of crisis, our company is very well prepared to effectively exploit a revival on the home sales market. Signals of the revival are pm

9-10 /2013 :: polish market :: 53

Real estate

already visible this year. The present situation on the market is a chance for us to increase our share in individual real estate segments.

We still focus on operations in Gdańsk and its vicinity, a market which is still fluid and affluent and where we can see fundamental demand. We are carefully observing the Polish residential market and, if we notice a major revival, we are ready to put on it almost immediately hundreds of new apartments in projects for which we have secured funding.

You operate mainly in Gdańsk. In you view, is this city particularly friendly to investors?

This is a market with a big potential. This is why for the time being we are not planning to conquer other markets. Over the years, I have worked out the standards and strategy for managing the company. We have a wellestablished position on the market and a good reputation, a brand which is well recognized and highly valued by our clients. pm

Our promotional slogan is: “We Are Building to Make You Happy.” But I have to admit that the other slogan has also accompanied me since the beginning. Przedsiębiorstwo Budowlane Górski is a 100% Polish-owned company. I feel greatly attached to my country.

Through my activity, I have created friendly conditions for cooperation with Polish producers and partners.

This is proven by the numerous awards your company has received: the Golden Statuette of the Polish Business Leader of BCC, the Amber Statuette of BCC, the Polish Success Leader Award, the Pomeranian Businessman of the Year and others.

I have always demanded a lot from myself.

And I demand the same from my employees.

I value professionalism, diligence and solidity. I constantly set myself new goals and tasks. And this has been appreciated and noticed by many. pm

pm pm

What about “Support What Is Yours” could that be another slogan putting your company apart from others?

54 :: polish market :: 9-10 /2013

You have big successes to your credit and plans. To end our conversation, what should I wish you?

My wish is for us not to “move back,” for politicians in Poland to create a good climate and friendly conditions for further work. This would be an encouragement for other entrepreneurs. Everything requires work, effort and consistence – you cannot achieve success easily. Nothing can replace hard work. It is thanks to hard work that I have built my firm.

I worked gradually, successively investing the money I was earning and I have continued to do so. Speaking about success, my biggest success and satisfaction is that I owe everything to my hard work. I know of course that many people are contributing to my success.

I value them highly for their professionalism and commitment. Przedsiębiorstwo Budowlane Górski is also a joint family success – my success, the success of my wife Iwona Górska, who is the vice-president of the Board, and has accompanied me “on the battlefield” for years, and of my brothers, especially Marian. Without their help, support and commitment, it would have been virtually impossible to operate a constantly expanding company. ::

Real estate

How to invest in Poland’s commercial real estate New office locations offer lower operating costs for BPOs. Market intelligence is a crucial requirement for retail property investors. CBRE, the world’s largest commercial real estate services company, has collaborated with PAIiIZ (Polish Information and Foreign Investment Agency), and consulting company PWC on the annual Investing in Poland report which highlights the opportunities and potential the Polish market offers to property investors.

Joanna Mroczek, Head of Consultancy and Research, CBRE in Poland

“

With 6.7 million sq m of modern office space, 7.5 million sq m of logistics and warehouse space and total retail stock of over 9.5 million sq m of leasable space, the Polish market is increasingly mature. Nevertheless, there are still plenty of opportunities for investors looking to enter the Polish market or expand their existing operations. However, to an even greater extent than before, they need to come equipped with a thorough knowledge of the rules governing the Polish commercial real estate market in general and the specific situation on various regional markets.”

The office market and the BPO sector

Warsaw is the largest and the most established office market in the country, but other cities are also achieving demanded levels of quality office space and adjusting to tenant expectations. Following a temporary slowdown, office construction activity has picked up. Currently there is over one million sq m under construction, with 50% being developed in regional cities.

Daniel Bienias, Head of Tenant Representation and BPO Services, CBRE in Poland: “Nominal vacancies do not reflect the real state of affairs, as in practice, the larger tenants have a limited choice of only two to three immediately available offers. Once the projects which are now being built are delivered, vacancy rates are expected to increase

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in most locations, thus allowing large companies to find suitable offices in major cities.

However, they have no choice but to opt for a pre-lease transaction.”

New destinations such as Szczecin, Lublin, Bydgoszcz, Olsztyn or Rzeszów could also turn out to be interesting options for investors. These cities have already attracted some foreign corporations relocating their business processes and are able to offer good quality premises for new entrants. Although it is easier to set up new offices in a city with a significant track record, where universities, local authorities and developers know investors’ expectations, new locations can offer lower operational costs, highly qualified staff at competitive wages and more incentives to investors from local authorities.

Retail market In Poland the total stock of retail space consists of over 9.5 million sq m in 420 projects comprising mainly traditional shopping centres (almost 90%) but also retail parks and outlet centres. The Tri- city of Gdańsk, Gdynia and Sopot has the highest retail space density – over 500 sqm per every thousand inhabitants. The vacancy rate is relatively low and stands between 1.6% in the Katowice conurbation and 4.5% in Krakow.

Warsaw, together with other major Polish cities, is an attractive destination for international retail chains – over the past few years around thirty new brands have been entering the market each year, including GAP, Next, The Body Shop, Jennyfer, Palmers, Spring, Guess by Marciano, Pollini, Cacharel, Ermenegildo Zegna, Hugo Boss, Emporio Armani, Church’s, J.M. Weston, TK Maxx, Desigual. So far, eight new brands have appeared on the Polish market in 2013, with more announcing

their arrival. They include: Hollister (belonging to Abercrombie & Fitch) and & Other Stories (belonging to the H&M group).

Prime rates for the best space located in leading shopping centres are expected to rise while rents in older, less popular centres or in smaller regional cities should remain at present levels or even drop slightly.

Magdalena Frątczak, Director – Retail, CBRE in Poland: „Brands already present in Poland as well as those entering our market need in-depth knowledge regarding the possibilities, opportunities and availability of retail space in various formats. CBRE advises retail chains on whether to choose the high street, department store or traditional shopping centres as the location for their store. We also advise landlords on how to create the perfect tenant mix.”

Magdalena Frątczak added: „For every retail scheme one of the most important considerations is developing the best tenant strategy. This starts with selecting the right location, which will ensure high footfall by aligning the size of the project with the size of the local market, selecting the appropriate architectural concept, designing thoroughfares in the shopping centre as well as links with the rest of the city and defining the catchment area. The final and one of the most important stages of developing a retail project is creating the right tenant mix which will make the whole concept cohesive and will play a deciding role in attracting customers and retaining their loyalty.”

The warehouse market Currently there is 7.5 million sq m of modern industrial space available in Poland. The surge in highway construction over the past

Real estate

few years has boosted the expansion of modern warehouse hubs located mostly next to major road junctions close to the biggest cities such as in the Warsaw area, Central Poland, Silesia, Wrocław and Poznań. Other logistics destinations, e.g. Tri-City, Kraków, Szczecin, Bydgoszcz-Torun and Eastern Poland have recently started to expand along with new road connections.

Despite recently increased tenant activity, developers are shying away from speculative projects. This has resulted in a decline

of vacancy rates in 2013 in most of the regions, taking the overall rate down to 10.3% (in some very popular regions like Silesia or Poznań the vacancy rate is around 4%).

Patrick Kurowski, Head of Industrial and Logistics at CBRE in Poland: “As companies optimized their production outputs and logistics in times of the downturn, their existing stock surpluses fell significantly. With increasing inventories, we expect to see upward demand on the industrial and warehouse real estate market, giving

rise to more leasing and development activity. We also expect that e-commerce will be a trigger for more demand as companies evaluate their strategic implementations in order to prepare for increasing e-commerce activity. There is also a trend for outsourcing logistics activities to third party logistics providers which will shape the market.” ::

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Finance

Polish cooperative banks Cooperative banks are predominant in the Polish banking sector in terms of their numbers. There are above 570 cooperative banks, whereas the number of commercial banks does not exceed 45.

Simultaneously, cooperative banks are very small entities in comparison not only to the largest, but also to the medium-sized commercial banks in Poland. Neither a single cooperative bank nor even the entire sector may therefore be treated as an institution of systemic importance to the stability of the Polish banking industry. The assets of cooperative banks constitute only about 7% of the assets of the domestic banking sector and their share of Poland’s GDP is at the level of around 5.5%.

Prof. Małgorzata Zaleska The author is a member of National Bank of Poland’s Management Board, a Full Professor of the Institute of Banking and Business Insurance of the Warsaw School of Economics, and Vice-President of the Committee on Financial Sciences of the Polish Academy of Sciences.

T

he above-indicated share of Polish cooperative banks in the sector, as measured by balance-sheet values, is also low in comparison to other EU countries. For example, while the share of Polish cooperative banks in the domestic deposit market is less than 10%, it is considerably higher in other EU countries, i.e. the Netherlands (40%), Austria (37%), Italy (34%), Finland (33%) and Germany (19%).

Taking into account the experience in other countries, we can point out that there is demand for the activities of cooperative banks, and thus cooperative banking is not destined for extinction. What is, therefore, the reason behind the fact that Polish cooperative banks are not significantly increasing their market share despite good financial results? It should be emphasised that cooperative banks have been affected to a lesser extent by the current world financial crisis than other banks operating in Poland, due to, among other things, the nature of their activities, size and exclusively Polish character. In the time of crisis (December 2008 to June 2013), the cooperative banks sector increased its own funds by more than PLN 4.3 billion (an increase of almost 85%) without any support from the Polish Government. Moreover, cooperative banks were liquid and highly profitable

58 :: polish market :: 9 - 10 /2013

throughout the entire period of turbulence.

If only they had retained their entire profits for 2012 (in the amount of PLN 968 million), and allocated it solely to credits for small and medium-sized enterprises, while maintaining their existing solvency ratio, they would be able to advance credits worth almost PLN 10 billion. It should be borne in mind that the strength of cooperative banks lies in their cooperation; a single cooperative bank does not have such opportunities to develop or even to advance very high-value credits. The cooperative banks sector should therefore continue to increase the degree of integration within associations and intensify cooperation. Associations should become the basis for creating institutional protection schemes (IPS) that could protect their cooperative banks and, in particular, guarantee their liquidity and solvency. This is going to become a challenge soon, as the provisions of the CRD IV will gradually be coming into force from January 2014 onwards.

Furthermore, strengthening cooperation should enable the intensification of marketing activities and the perception of cooperative banks as one strong, nationwide group, the creation of a comprehensive product portfolio within the group, including credit consortia, and the reduction of the costs not directly

related to banking activities (e.g. with regard to IT or training). It is also necessary for cooperative banks to be open to new customer groups. Attracting young customers, who are both demanding and promising, remains a challenge. This may be aided by modernising the activities and product portfolios of cooperative banks, as modernity is fairly diversified in the cooperative banks sector. Despite the fact that some cooperative banks often implement the latest technologies (e.g. biometric cash machines and mobile applications) faster than the largest commercial banks, there is still a large group of cooperative banks that has to strengthen its electronic banking and product portfolio.

Collective influence should also be improved to make it possible for cooperative banks to formulate common positions and opinions, and then consistently promote them outside; also in the course of legislative work.

Therefore, the development of cooperative banking in Poland will depend on external conditions, including macro-economic and legal ones, but also, to a considerable extent, on the people who are in charge of associations and cooperative banks and represent their interests. ::

Finance

Poland in the World Economic Forum’s Global Competitiveness Index 2013-2014 ranking

The World Economic Forum has published a high-profile competitiveness ranking of national economies. As last year, Switzerland came first. It was followed in ranking order by Singapore, Finland, Germany and the United States. Poland fell by one place to end up in position 42.

Jan Sosna

P

oland’s economy has generally not seen much change since 2005, failing to improve in the four major areas of Institutions, Infrastructure, the Macroeconomic Environment, and Health and Education. Worse yet, innovation in the Polish economy has been on a steady downturn. We are still close to the top, though, when it comes to post-communist countries (Estonia being the only one ahead of us), and this year we have managed to outdo the Czech Republic.

Poland remains in transition from stage 2 to 3 as it struggles to make it to the third, leading group. At the second stage, the development of economies is efficiency-driven, and, by extension, relatively simple to achieve. Here, in order to score better in the ranking, the countries have to improve their higher education, make their labour markets more flexible, develop financial markets and expand internal markets. The third group of countries is mainly innovation-driven.

A GDP per capita threshold equal to USD17,000 is the notional criterion that separates these groups. In 2012, this indicator for Poland was USD12,000.

In a survey conducted by the National Bank of Poland, Polish entrepreneurs, as usual, pointed to tax regulations (which were referred to as volatile and unreliable), restrictive labour regulations and inefficient government bureaucracies as being the major problems stifling competitiveness. Compared to last year’s survey, the most significant deterioration was observed in the quality of government policymaking and communication across different social groups, including business-government relationships.

As far as positive developments are concerned, the most demonstrable improvement was observed in the perception of technologically facilitated communication (from roads and Internet access in schools to social-networking sites), and also in the assessment of financial institutions. What’s more,

a more positive feedback was given on gender equality.

“The report’s authors believe that to enhance its competitiveness, Poland needs to carry out structural reforms, simplify tax regulations, reform the public sector, provide more stable tax laws and, finally, introduce far-reaching changes to the education system to move towards a more innovation-oriented path. And all this requires comprehensive reforms,” said Piotr Boguszewski, PhD, from the Economic Institute of the National Bank of Poland, who was responsible for the Poland-related sections of the report. :: The ranking is based on the Global Competitiveness Index (GCI), which was first compiled in 2004 for the World Economic Forum. It is computed using public and private data across 12 categories, the so-called competitiveness pillars which together make up the full picture of a country’s competitiveness. GCI is especially important for international investors as they screen out potential markets they want to invest in.

9 - 10 /2013 :: polish market :: 59

Finance

Banking of yesterday, today and tomorrow – trends and challenges

Interview with Jacek Czarnota Executive Director, Banking, SAS Institute

You have stood at the helm of SAS Poland’s Banking Unit for many years. Looking back in time, what is your view of the changes that have taken place in the Polish banking sector?

Recent years are times of dynamic changes in the area of risk management in the financial sector, caused by international regulations such as Basel II and Basel III, as well as the new governance regulations and recommendations on local markets. Violent market turbulences we were witnessing a short while ago have focused the attention on issues of financial security and corporate governance, and thus the need to implement effective tools for risk management and detection of undesired situations. Banks must pm

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meet challenges arising out of the necessity to swiftly and efficiently analyse in real time huge volumes of data, such as currency position analyses, client liquidity indicators or profitability indices adjusted for risk exposure level. This encourages the choice of a holistic approach, replacing traditional “siloed” approaches to the risk management processes in organisations.

In other words financial institutions have to analyse more data faster using more complicated and end-to-end models?

Time to deliver accurate and key information became significantly shorter and managers have been given a broad palette of possibilities to efficiently identify and swiftly react to pm

changes in market factors influencing profitability and yield of organisations in line with the defined risk appetites. All these changes result in banks being increasingly interested in analytical solutions offered by SAS Institute, known by the name of high-performance analytics, that may be used not only in the risk management area, but also in marketing, collections or controlling, and also wherever high speed and efficiency of operation of analytical tools are required.

Are banks safe today and ready for possible turbulences on financial markets in the future?

Probably not all, but we are noting a growing trend of advanced preparations and pm

Finance

projects intended to increase the security of financial institutions.

Since acquiring new profitable clients and retaining loyal clients becomes an ever-harder task, banks are attempting to improve the effectiveness of analytical models for evaluation of client creditworthiness. They also make more scrupulous estimates of regulatory and economic capital for covering specific types of risks, to retain as much working capital as possible. Advanced analytical solutions allow real-time monitoring of connections and correlations between individual factors and variables; moreover they support effective prediction of development of risk factors in the future using a forwardlooking approach.

What new challenges must bank risk managers face?

There are many challenges of which some relate purely to regulatory compliance, namely the achievement of certain indicators and thresholds required by supervisory institutions, while others remain purely managerial in nature.

Much has been done on the revenues side, now the challenge moves to finding new ways of influencing profit and loss through analysing and optimising the cost side of business.

For quite some time we have been witnessing growing interest in issues of operating risk management, and the topic we think is moving to the top of the agenda for bankers is effective identification of financial fraud and limitation of related losses. pm

Fraud is something that keeps evolving all the time. Do you think a financial institution is capable of keeping up with the dynamically changing market reality?

There are more and more media reports about cases of identity theft, phishing, payment card cloning, large-scale employee fraud and other kinds of abuse. Every financial institution is exposed to fraud, though some are not even aware they are being targeted by fraudsters. Evidently institutions that remain passive in such circumstances are incurring severe financial losses. As new channels of distribution of services are launched, institutions become exposed to new, yet unknown types of fraud that is difficult to detect and even more difficult to prevent. And the results are, unfortunately, very painful. pm

How can one prevent financial fraud and crime that is yet unknown?

The level of advancement of financial fraud detection methodologies is strongly correlated with the maturity of organisations in pm

management of detected fraud cases, and their willingness to take preventive measures in this respect. Fraud is a global and expensive problem. The results of research published by the Association of Certified Fraud Examiners indicate that a typical organisation loses 5% of its revenues to fraud and abuse.

Cyber crime is a growing threat. It cannot be eliminated, but it can be prevented. Can this be done effectively?

As we are living in times of digitisation and cyber criminals, we have no choice but to effectively prevent yet unknown fraud and financial crime and protect organisations by employing new methods and by using new applications that will allow staying a step ahead of the fraudsters. Of course the defence may be commenced using simple methods, based on business rules developed on the basis of historical data. However, such an approach is easily predictable for criminals and should be supplemented with state of the art analytical techniques that make it possible to generate alerts with higher probability and for larger numbers of transactions. pm

So, besides simple methods, banks may benefit from more refined solutions. I am told that advanced analytical methods are one of the key and most significant elements that differentiate SAS Institute’s offering.

Solutions offered by SAS automate the financial fraud management process. Not only do they support the fraud identification processes, but also allow for a comprehensive, hybrid approach to fraud identification, resulting in a more accurate generation of red alerts. Besides simple business rules, SAS offers advanced predictive models based on decision trees and neural networks, possibility of using text mining for detection of keywords in unstructured data and construction of social networks that clearly show relations between individuals as well as between suspicious transactions. pm

So are these solutions self-learning?

They sure are. SAS solutions leverage the latest achievements in analytics, including advanced self-learning mechanisms that on the basis of historical data of identified financial fraud – which may be many years old or just a few days old – are able to define with very high probability the criteria for suspicious transactions and pinpoint the customers likely to conduct suspicious business, as well as analyse non-standard situations. If these examples of self-learning technologies are supplemented with the pm

ability to identify fraud in real time, you get an advanced mechanism allowing prevention of suspicious transactions before they are completed.

Risk management is a key, albeit not the only, business area supported by tools from SAS. The implementation of advanced analytics in a financial institution may at times be very extensive, encompassing many different types of risk, like credit, market, operating risk and fraud prevention which I have mentioned already. For many years we have very strongly supported the area of marketing. SAS tools are used to build models for sales, client retention, segmentation and many other processes. Collection departments use SAS analytics to support their debt collection processes. SAS provides banks with Management Information Systems, sales control systems, financial reporting systems, both for internal as well as external and supervisory reporting, and also planning and budgeting systems. pm

One SAS fits all?

We offer analytic solutions for all areas requiring speed and efficiency of operations and effective big data processing. Preparation of data for analyses is of paramount importance.

SAS technology “since the beginning of the world” has been used by banks for building data warehouses, data marts and data repositories. Without high quality data acquisition from core systems of a bank, and then its integration and optimisation, the implementation of analytical processes and - in consequence - obtaining information that is key do decision making would not be possible. SAS also “from the very beginning” has delivered reporting platforms used for visual exploration and analyses of huge volumes of data – I am talking about hundreds of millions of records, where distribution of results is possible in the form of various reports, graphs, indicators and management cockpits.

Intuitive and graphically attractive reports allow the management to instantly make sense of the presented data and take the right business decisions in real time. pm

What is the direction business analytics is going in?

Most definitely the future of data processing and analytics will be related to what is increasingly visible in the SAS product offering, namely: in-memory, in-database, real-time processing and big data, for modern banking implies analysing big data in real time. :: pm

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Finance

Has the Polish real-property market truly recovered?

Andrzej Oślizło, President of the Board of Expander Advisors Sp. z o.o. & of Związek Firm Doradztwa Finansowego (The Association of Financial Consulting Firms) talks to Jan Sosna.

For many years, Poland did not have a tradition of or interest in analysing the realproperty market. Today, the developments on the mortgage and housing markets are believed to be major indicators of business-cycle changes. But isn’t it symptomatic of the post-crisis trauma?

I think it is perfectly reasonable that this interest has been sparked. This said, however, one should note that the Polish economy is affected by a number of other equally-important factors. Our economy is well-balanced, so I’m inclined to say there is something different at work when it comes to how the real-property market impacts on macroeconomic developments. In America, much effort is put into thoroughly examining current data on the number of building permits and mortgage-loan applications. This data is juxtaposed with, say, unemployment rates, to make projections about the economic environment and the magnitude of investment decisions. This is becoming common practice in Poland as well.

Keep in mind, however, that in addition to rational factors, such as credit and home prices, the housing market is influenced by consumer confidence. If the market doesn’t provide me with proper incentives, and I’m in precarious employment with unstable wages, and everyone’s going on about prospects being grim, then I’m not going to buy a home or a car.

What this results in for the national economy is lower demand. This is a self-fulfilling prophecy at work. Of course, shaped by credit interest rates and consumer expectations, the business environment on the housing market will impact on the condition of the entire economy, as the building and developer sectors fall into a slump. Luckily, Poland doesn’t depend on the construction industry as much as, say, Spain.

It is important to remember, however, that credit policy has its implications for the condition of households as well. Mind you, over 1.5 million people in Poland have mortgage loans, a substantial proportion of which are pm

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foreign-currency loans. Households who took out Swiss-franc loans at low exchange rates might now find themselves incapable of repaying them, as the exchange rates have grown beyond their initial expectations. So, in addition to being relevant in determining the housing-market situation, credit policy can also cause over-indebtedness and an overestimation of the creditworthiness of borrowers, especially in less-affluent societies. Also, real-property prices and credit interest rates are major factors in the valuation of a property, which can be realised or pledged as collateral.

Does this pattern work both ways? I’m asking this because Expander was one of the first firms to announce that the downward trend in the Polish real-property market had reversed. Admittedly, this market has experienced a somewhat slower decline in volumes, and credit volumes aren’t plummeting as fast as they did. But should we really get optimistic over these numbers?

Our optimistic projections are not founded on the simple assertion that the declines have statistically slowed down, which has been the case for eight quarters, but on the analysis of the entire process that has brought the decline to a halt. We were hit by the problem in 2008, when the Polish mortgage market plummeted in the backlash of the financial crisis after Lehman Brothers had gone bankrupt. The Swiss-franc-credits business was virtually swept from the market.

With the national interest rate as set at that time, however, it proved impossible to sustain a high level of new lending. Banks had to reduce their own margins, which made new lending less profitable.

In effect, some of the banks took this product out of their core portfolios. Large banks, enjoying a steady supply of low-interest deposits, that ensured lower lending costs, and substantial equities, could be content with lower loan margins. This way they’ve outgrown smaller banks on the pm

mortgage market, with the latter having to shift their focus to cash lending. Consequently, the mortgage market shrank dramatically, from PLN 5 billion in the boom period to PLN 2.6 billion towards the end of last year.

The real-property market was also hit, as the “Rodzina na swoim” (“Family at home”) government housing programme for families came to an end. Under this programme, families who took out housing loans received financial support on paying back interest in the initial period. These changes in demand caused the prices of housing properties to further decline, early this year deepening the slump in this segment of the construction industry. So the pessimists who claimed that the programme artificially pegged prices were right.

These trends were reversible only after the National Bank of Poland started (in November last year) to consistently cut the interest rate. It wasn’t until the second quarter of 2013 that the interest rate became low enough for the banks to cover their lending costs while securing a satisfactory margin and offering clients attractive mortgage interest rates, at 4.3-4.5%. Now compared to interest rates on such markets as the USA, which reach 5%, this is a real bargain. Indeed, July 2013 saw monthly mortgage lending grow to PLN 3.4 billion in value. Secondly, housing demand, which began to grow at the turn of the second quarter, was driven higher by cash buyers. This included traditional builders who are additionally encouraged by low interest rates on bank deposits.

Recently, the proportion of cash-loan demand on the housing market has grown exponentially. Now, they make up 30% of total volumes, which is particularly easy to see on the primary market. With higher demand at work, house prices were no longer on a rapid decline. Also, the excessive supply of homes began to be contained. This gives us good reason to hope that the market will soon regain its position as the driving force behind a number of sectors in our economy. ::

Finance

Micro-businesses borrow more and more from Provident Reliable like an entrepreneur

The value of loans Provident Polska has granted to micro-businesses in the five months since it started to sell such loans is PLN4.5 million, according to the company’s data. Provident expanded its product range by loans for people conducting business activity in March. Michał Kuchta, Director of the Department for Product and Market Development at Provident Polska, talks to “Polish Market.”

Why have you decided to expand your product range after so many years of dealing exclusively with retail clients?

The decision to expand our product portfolio was a response to the growing demand from micro-businesses for quick and accessible sources of external funding for their business activity. This is a very big barrier to business development, especially for small businesses, including sole traders. Most people who use our products for micro-businesses are new clients. pm

How is this translated into numbers?

So far we have granted 1,400 such loans and we can see that this is an upward trend.

We expect further growth thanks to the marketing measures we have started. We decided not to conduct a marketing campaign in the initial period of three months so as to observe the market. The average value of loans taken by micro-businesses is PLN3,200. It is two times higher than the average value of consumer loans, which is around PLN1,500. pm

Who can get a micro-business loan?

We offer such loans to people who run a business and employ no more than several persons, that is to individuals conducting business activity. In Poland, this group accounts for as much as 95% of the micro-business segment. Among such entrepreneurs are owners of small stores, flower shops, hairdressing businesses, garages and so on. The client has to present an extract from CEIDG (Central Register and Information on Business Activity). And this is generally the only document we require. pm

For some reason micro-businesses are not a favourite client for banks. It is mainly because of the instability of their earnings and the unpredictability of their business. Banks usually grant loans to businesses which have already been in operation for a few months.

Contrary to widely-held opinion, we have no problem with loan repayment by clients who run their own business. Our long experience and cooperation with more than 3.5 million clients has enabled us to create a unique system of “behavioural scoring.” On its basis and after a meeting with a prospective client we can assess the condition of the business, even if it has been on the market for a short time. In the process of vetting, we also take into account the client’s individual history, his or her earlier career and income.

We offer relatively small amounts to new clients – up to PLN7,000, with up to PLN10,000 granted to clients with an active history of cooperation. This is why our vetting policy is more relaxed than that applied by banks. The level of approval for loan applications is high at Provident, with only one in 10 applications being rejected. As a comparison, the approval rate for this business segment is not higher than 20% at banks. pm

Do you use services provided by Business Information offices (BIG)?

We do. Provident cooperates with BIGs. But even this kind of information cannot replace personal contact with the client where we are able to get familiar with the activity they conduct. pm

Who is the main competitor to Provident in this segment? We already know it is not banks, but perhaps there are other lending firms that compete with you?

I think we have no important competitor in this segment. What we offer is unique and pioneering. Most institutions providing loans to businesses require additional documents or security from prospective clients and set them a number of conditions. Consequently, access to such loans is limited. We have simplified this process and offered our products to the widest group of clients possible. We believe that our products intended for businesses will help us become one of the leaders in supporting the development of small enterprises. :: pm

Michał Kuchta, Director of the Department for Product and Market Development at Provident Polska, has graduated from the Faculty of Law at the University of Białystok. He has worked for many years in the financial sector. He has extensive experience in launching financial products gathered in such institutions as Deutsche Bank PBC SA, Fortis Bank Polska SA, Bank Millennium SA and Bank Inicjatyw Społeczno-Ekonomicznych SA. Before joining Provident Polska, he worked for Deutsche Bank PBC SA as director of the Centre for Credit Products Development. He was responsible for developing the product strategy in the area of consumer loans and bancassurance.

At Provident Polska, he is responsible for applying and developing new products on the basis of meticulous research into markets and client needs.

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Finance

Prospects for insurance Since the early 1990s, more and more international players have entered the developing Polish market, a process that slowed down only recently after the latest wave of mergers. The Polish insurance sector is well regulated and very well prepared for various scenarios of market developments, which is important both for market stability and its appeal to foreign investors. Based on the Solvency II Long Term Guarantees Assessment survey carried out in 2013, Poland achieved the best score in terms of the solvency capital requirements coverage ratio, up to 302% compared to the European average of 77%, in one of the scenarios.

Agnieszka Kulikowska

T

Managing Consultant, Banking & Financial Services in the Warsaw office of Michael Page, the international recruitment consultancy.

he appeal of our country is confirmed by the latest Insurance Europe ranking where Poland ranks 14th – the highest position among CEE countries in terms of insurance market size, outperforming also such countries as Portugal, Ireland and the Czech Republic. Although our market is fiercely competitive, it is not saturated. The potential measured by insurance penetration is currently 3.8% for Poland, while the EU average is 8.2% and over 14% in the Netherlands and in the UK. On the other hand, the present value of the market measured with gross premium written is over PLN62 billion (EUR13.9 billion) – almost 10% more than last year. Sales of optional life insurance products account for 58% of the market, that is more than PLN36 billion, with year-on-year growth of almost 15%. Over half of them are distributed via dynamically growing bancassurance channels – where insurance products are developed and sold jointly with a banking partner using its branch network, including investment products and those tied to banking products. The value of this part of the market has not yet returned to its peak level of 2008, when it was almost PLN40 billion.

Non-life insurance products proved more resistant to worldwide turbulences as some of them are mandatory by law – for example liability insurance. This segment is worth over PLN 26billion and has actually grown steadily every year – last year by almost 4% on the year-on-year basis. It is dominated by motor insurance (PLN14.4 billion at the end of 2012), with liability insurance alone accounting for PLN8.94 billion in insurance premium.

In 2012, the Polish insurance sector reported a general technical profit of PLN4.18 billion, which is 14% more than last year, and

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a financial profit of PLN6.63 billion – over 10% more than in 2011. The growth in profits was due, among others, to a plateau in the value of claims and benefits paid last year (ca.

PLN40 billion).

Although the Polish insurance market is nominally made up of over 80 institutions the majority being subsidiaries or branches of foreign insurers - the market share is concentrated in the hands of just a few companies. After the last wave of mergers and acquisitions in 2012 and 2013, over 60% of the total market share is held by three large financial groups and their subsidiaries: the national giant PZU, the Austrian Vienna Insurance Group and the German Talanx Group.

In terms of insurance classes, the life market is dominated by PZU with just over 25% market share. The other top five companies include Benefia (VIG) with 10%, Open Life (Polish Getin Group) with 9.16%; Warta and Europa (recently acquired by Talanx) have, respectively, a 7.37% and 6.70% share.

In the non-life segment the 5 biggest players account for over 67% of the market. PZU also dominates in this sector with its 32.19% share. It is followed by Warta, which increased its share by over 4 pet. points up to 13.27% thanks to the acquisition of HDI Asekuracja, followed by the Polish company Ergo Hestia with 10.44%, German Allianz with 6.75% and Austrian Uniqa with 4.39%.

The insurance sector in Poland is a major employer, providing jobs to ca. 250,000 people, out of which 27,000 work for insurance companies and 185,000 operate as insurance agents in the so-called traditional sales channel. The modern model of direct sales via a call centre and the Internet was launched on our market several years ago by direct insurers (Link4, Liberty Direct). Nowadays most

insurance companies have at least a team or, more often, a separate company in the group that sells insurance only in that manner. The development of direct sales is accelerating, mainly in compulsory insurance such as motor and property insurance. It is still difficult to sell life insurance in Poland without a personal relationship with the client, the kind that an insurance agent can develop.

Looking at salaries of those employed in the insurance sector as compiled by Michael Page in the latest “Banking, Insurance & Financial Services Salary Survey 2013”, it is clear that, although earnings in this segment are ca. 20% lower than in the banking industry, experienced employees earn much above the Polish average monthly pay of PLN3,808 gross. The most common gross base monthly salary in the Polish head office of an international insurance corporation paid to an expert is ca. PLN7,000, ca. PLN14,000 in case of a manager and about PLN24,000 paid to a director.

In 2012, the insurance market in Poland accounted for ca. 4% of the Polish GDP. Based on observations of the international market, there is a close relation between the level of economic development and the increase in demand for insurance services. That demand grows faster than proportionately to income growth. Also in Poland, as society is becoming more and more affluent, the market is steadily developing and non-mandatory insurance such as life, health and additional pension insurance tends to gain in popularity. So-called regular premium products are estimated to grow at the annual rate of ca. 10% over the next five years. This is a very good prospect for the future of the Polish insurance sector. ::

Finance

An eye on the market Alicja Kopeć, PhD, Member of the Board of Directors, Provident Polska

expectations of borrowers interested in getting small personal loans.

Quick doesn’t mean short-term

T

he consumer finance market in Poland is thriving, and the range of consumer credits and loans is greatly varied. Consumer finance companies have established their presence in this segment and they enjoy growing interest. The estimated value of this market is at least several billion Polish zloty, although there is little reliable data as to the numbers. The increased interest in what consumer finance companies have to offer can be attributed to a number of factors, including toughened lending rules in traditional banks, which find low-income individuals interested in small loans unattractive.

David and Goliath The average cash loan amount borrowed from a bank is approximately PLN 8,000, while the average cash loan amount extended by Provident is approximately PLN 1,500. This comparison well illustrates the range of financial needs the customers of these two types of financial institutions have. This is why one can hardly speak of competition on this market. Rather, the services offered complement one another. Our company aims to meet the

Unlike the so- called payday advances, i.e. quick short-term cash loans with payment due in up to 30 days, Provident offers loans with a 30 to 90 week repayment period. This business strategy allows for potential troubles with debt repayment. They are always analysed on an individual basis without the customer incurring any default fees. For us, debt collection is the absolute last resort, while many other companies from this sector have a business model based on revenue generated from processing defaulted loans. In my opinion, the key to success is flexibility and direct personal relationships, as well as transparentcy and ethical approach to customers, who appreciate comprehensible communication and being clear about the cost of credit.

Secure and up to the standard

The fundamental principle of the lending business should be a responsible approach of both parties to the loan agreement. The borrower should realistically evaluate their financial situation and their ability to repay the loan, and the lender should accurately verify the borrower’s credit rating making use of their right to access databases collected by credit reference agencies. In our case, account managers are an important part of the process because they make personal contact with the customer and explain in great detail all the issues related to taking out a loan.

In a way, by teaching the basics, we enhance

the financial security of both the debtor and the creditor.

To be on the safe side, it is always a good idea to check if the consumer finance company is properly registered. It is great if the lender is a commercial company or partnership, because this gives the customer the opportunity to get information about the members of the board and analyse the company’s financial statements. Membership of business organizations, compliance with codes of best practice and possibly also being quoted on a stock exchange adds to the reliability of a company and increases the security of the transaction for the borrower.

In order to take the burden off consumer finance companies, it is necessary to bring order to the market by creating a register of companies which provide this type of financial services and determining the capital requirements that would guarantee their honest and transparent operation on the financial market. We need a system of standards that would regulate this type of services in order to make the market better organised and more civilised to the benefit of the customer. ::

Alicja Kopeć, Phd Member of the Management Board. Joined the company in 2003. She is responsible for Legal and Corporate Governace Department. She started her career as a member of academic staff at the Jagiellonian University. She then moved to the position at Commercial Union, Zurich Financial Services and Linklaters, an international law company.

9 - 10 /2013 :: polish market :: 65

Economy

Spa town – politics – business The 23rd Economic Forum held this year in the spa town of Krynica Zdrój in southern Poland attracted more than 2,600 participants – the highest number ever. They could choose among five plenary sessions and over 160 panel discussions and special events. As in previous years, the economic topics, suggested by the Forum’s name, were overshadowed from time to time by politics and politicians.

Patryk Mirecki

From left: Dariusz Lubera, President of Tauron Polska Energia, Janusz Piechociński, Minister of Economy and Krzysztof Kilian, President of PGE

A

t the official inaugural session, Prime Minister Donald Tusk proclaimed that the crisis had ended in Poland, suggesting this was due to the policy pursued by his government. In his speech, he pointed out that over the five years since the beginning of the crisis in Europe Poland’s cumulative GDP growth reached almost 20%, the average gross monthly wage rose from PLN2,700 to PLN3,800, while the value of exports grew by 38% to reach EUR146 billion in 2012. The prime minister added that in 2017 Poland’s GDP would exceed PLN2 trillion, an amount two times higher than 10 years before. Simplifying the tax system is a part of the government’s post-crisis policy. “If we fail to improve the system we will not exploit all the opportunities,” the prime minister said.

“We can expect to enter the year 2016 with new simpler conditions for doing business.”

Economists did not share his optimism.

Janusz Jankowiak, the chief economist of the Polish Business Roundtable (PRB) association, said the German economy was expected to drive Europe out of the crisis. However,

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according to the long-term forecasts made by OECD, by 2060 the German economy will be growing at an average rate of 1.2% annually.

“This is very little so I would not call Germany an engine able to help Europe come out of this situation, “ Janusz Jankowiak said. “Peripheral countries have a big potential for growth but they lack the political will to carry out structural reforms,” he added.

The Economic Forum was attended this year by a large number of Polish opposition politicians. Jarosław Kaczyński, the leader of the Law and Justice (PIS) party, outlined his party’s economic programme. Saying that the Polish economy was still in crisis, he proposed a few emergency measures, including new tax regulations, which would make it possible to effectively fight the crisis. The regulations would be aimed at raising national budget revenue and business investment. Jarosław Kaczyński said that a 39% personal income tax (PIT) should be imposed for five years on people with the highest incomes, while allowing them to deduct investment spending from the taxable amount, which would compensate them to a significant extent for the higher fiscal burdens. The PiS leader also proposed the introduction for

Panel discussion

five years of a 0.5-1% tax on financial transactions and a 1% sales tax to be paid by large shopping chains. Additionally, the PiS party would like to raise corporate income tax (CIT) and wages, including the minimum wage.

Zygmunt Berdychowski, the organizer of the Economic Forum and chairman of its Programme Council, said government officials and opposition politicians both take part in the Forum because they have something important to communicate to the participants. “There is no other place in Central Europe where the government and opposition would deem it necessary to be present to convey an important message to the participants,” he said.

Wilhelm Molterer, vice-president of the European Investment Bank, said the crisis was still not over, although some of the statistics released by Eurostat, the European Union’s statistical office, are optimistic. In the view of Pedro Pereira da Silva of Jeronimo Martins Group, the owner of the Biedronka shopping chain in Poland, it is uncertain when the crisis, especially in the real economy, will come to an end. But he stressed that Jeronimo Martins did not feel the crisis.

He added that more confidence on the part of consumers and businesses was needed to overcome the crisis and that the EU should have a long-term vision of how to ensure good conditions for economic growth. President of Lotos Group Paweł Olechnowicz, another participant in the debate “From Recession to Prosperity. How to Stimulate Economic Growth in Europe,” said changes to the financial systems of many EU countries were needed. Some countries are showing clear signs of improvement but in other countries,

Economy

especially those in southern Europe, the economic situation is bad. Janusz Lewandowski, EU budget and financial programming commissioner, said Europe needed a new Marshall Plan. Under this Plan, the United States granted European countries USD13.5 billion in aid to support their economic recovery after the Second World War. In recent years Greece has received EUR340 billion in aid, an amount bigger than the country’s GDP, but the country is still in deep crisis, Janusz Lewandowski said. “In Europe, we need structural reforms to improve competitiveness and ensure labour market growth,” he added. “The European Union was constructed for ‘good weather’. We need to build a European economic system for ‘bad weather’ as well.”

According to Wilhelm Molterer, the EU has to continue its tax consolidation and strengthen its common market while the EU budget should be designed to increase employment. Mario Baldassarri, former Italian deputy minister of economy, said it was Europe that had been affected by the crisis while the global economy was in a better shape. He also said he expected the European economy to bounce back next year.

The EU-US free trade area is one of the ways to stimulate economic growth in Europe. Elena Bryan, the senior trade representative at the US mission to the European Union, quoted data showing that USD2.5 billion is invested every day between Europe and the United States. But talks held by the EU and the United States about the free trade area have not produced any concrete results yet and may last as long as 10 years. “We need new investment,” Paweł Olechnowicz said.

“Poland has reduced its unemployment a little but foreign trade also needs a boost, both in Poland and in Europe.” He added that the fuel and energy industry was enjoying a golden age of shale gas and Poland should attract European partners for this kind of projects.

“We should adopt regulations attractive for investors to enable them to generate sufficient profits and to produce benefits for our country in the form of lower gas prices and independence from gas supplies from Russia,” he said. He also quoted statistics showing that Europe produces 7.5 tonnes of carbon dioxide per head while the United States 17 tonnes. “Europe is too ambitious in its fight to reduce carbon dioxide emissions,” he said.

Participants in another panel discussion, “Post-Crisis Europe: Conclusions and Forecasts,” were agreed that one should not yet announce the end of the crisis because many countries have a long way to go to come out

The award Company of the Year went to Bank Zachodni WBK S.A. It was handed over to Mateusz Morawiecki, President of Bank Zachodni WBK S. A.

of recession. “The most important lesson we have learned during the crisis is that there are differences among European countries,” said Prof. Dariusz Filar, member of the Prime Minister’s Economic Council. He observed that before the crisis Europe pressed towards unification, convergence and uniform policies. “Now, we can see that each country’s situation and reaction to the crisis is different,” he added.

Mirosław Gronicki, former finance minister, pointed to disparities within the European Union, especially its banking sector.

“On the one hand, we have 16 large banks in the European Union and they control over 50% of all assets. On the other hand, there are 600 smaller banks and additionally more than 2,000 European banks outside the euro zone,” he said. “The 16 leaders of the sector do not have the same problems as small banks in the peripheries,” the former finance minister said. In his view, these differences should be taken into account when creating a new order for the financial sector in Europe. The participants in the panel discussion were agreed that the banking system should be deleveraged – its debt level should be reduced.

Dariusz Filar said all countries’ politicians would like to control the banking sector. “I think this is the main obstacle to new solutions and uniform supervision. Instead of using simple measures, politicians complicate matters. And nothing can help the banking sector more than a new approach to regulation,” Dariusz Filar said.

The Forum was also a place for political parties to present their healthcare ideas. “If we win the elections we will stop the commercialization of hospitals. And we will be trying to introduce a system for healthcare financing from the national budget,” said Tomasz Latos of PiS, chairman of the parliamentary health committee. He added that hospitals commercialized before the elections would not be renationalized. “We will be continuing our policy, we do not want to stop the commercialization, we want to keep in the healthcare sector as many free-market elements as possible,” said Beata MałeckaLibera of the ruling Civic Platform (PO) party.

“We think that a [free] market and competition contribute to raising healthcare quality.

What is more, this is a recipe for having as little politics in healthcare as possible.”

Participants in the Healthcare Forum also talked about healthcare coordination, which – in the opinion of experts – will contribute to improving the quality of health services and their availability. The speakers stressed the importance of the healthcare sector, which accounts for around 10% of the economy.

Economists present at the Forum considered how to provide the healthcare system with additional funding.

“Politicians and economists say that Europe knows what to do to accelerate economic growth but does not know yet how to do that.

And big conferences, like the Economic Forum in Krynica help us solve this problem,” Zygmunt Berdychowski said. ::

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Economy

It’s time for Poland to have a new image!

Krzysztof Przybył, President of the Polish Promotional Emblem Foundation, which organises the “Poland: Now” contest, talks to Maciej Proliński.

What about the recognition of Poland and Polish brands abroad?

Poland still does not receive sufficient recognition internationally, despite the fact that EU membership from 2004, our Presidency of the EU in 2011, and the euro 2012 football tournament have undoubtedly enhanced international perception of our country. Certain industries have developed in our economy in which we are specialised professionals – I mean here in particular window-productions, the furniture industry and the agricultural and food industries. We are also leaders on niche markets such as the production of yachts and computer games. We are especially successful in building the image of Poland through culture – theatre, opera and graphic art – this domain, together with sports, is the most effective tool promoting the country.

We still haven’t developed a coherent strategy for promoting Poland, but sectoral measures are of high standard and they only need to be properly correlated. pm

Mr President, the “Poland: Now” contest is as relevant as ever. So, first I would like to ask you for your assessment: are we effective enough in spreading information about Poland around the world? It is hard to imagine that anyone but ourselves can describe our country in a better way – its history, economy, culture…

From the beginnings of the contest, the “Now: Poland” slogan has grown in strength and popularity. Twenty years ago it was slightly over the top, but now, after Poland’s accession to the EU, it couldn’t be more up to date, and we all are aware that it is still worth believing in Poland. We are a robust country, coping quite well with the world economic and financial crisis and skilfully avoiding recession. The 24 years of the Third Republic of Poland cannot be evaluated in a definitive way. It’s true that not everything we did turned out a success, but we certainly haven’t experienced total failure. We should remember where we started and what we’ve gone through. How can others appreciate the prestige of Poland brand when we ourselves question its value? Today “Poland: Now” means that it’s time for the young, dynamic, modern and innovative Poland, boldly aspiring to leadership roles (e.g. the leader of Central and Eastern Europe). pm

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Do the 21 years of the “Poland: Now” Polish Promotional Emblem Foundation represent a sufficiently strong message promoting the Polish economy?

The range of high-quality products and services is constantly growing. The “Poland: Now” emblem is the most readily-recognised symbol promoting what is best about the Polish economy. At the beginning of the 1990s the purpose of the contest was to support entrepreneurship by presenting achievements in this field. Since then the contest has evolved, and so has the quality of the award-winning products and services. In recent years the format of the contest has been extended to include a selection of the best municipalities, local products and innovative projects.

The contest is open to all enterprises operating and registered in an EU Member State for at least 12 months, with products and/or services present on the Polish market for at least six months. “Join the best” – this is our invitation for all those willing to participate in the contest. “You will be among the best!” is a guarantee for the winners. The leading pm

position of the “Poland: Now” emblem among Polish economic awards is still unrivalled.

How would you conclude the 23rd edition of the contest?

This day, which is the most important day of the year for the Polish Promotional Emblem Foundation, is already behind us. On 3 June 2013, during the “Poland: Now” Gala in Wielki Theatre – Polish National Opera in Warsaw, the winners of the 23rd edition of the contest were announced. The event gathered the top producers, service providers, municipalities, and also companies, whose contribution to innovation in Poland cannot be overestimated. In this year’s edition of the contest the industry with the highest number of representatives was the green-technology sector. As every year, there was a high level of submissions in food products, construction products and financial services. I would also like to emphasise that with each year the awardwinning products and services are becoming more up to date, reliable and innovative, due to the fact that Polish enterprises regularly improve their technologies and management systems. It is important to add that the “Poland: Now” emblem is a quality prize awarded by the Chapter presided over by Professor Michał Kleiber, President of the Polish Academy of Sciences. The Chapter’s decisions are based on expert assessments by 31 industry committees, consisting of representatives of research institutes and higher-education institutions. These assessments are aimed at identifying high-quality products and services, and nominations by industry committees are a pass to the “Poland: Now” award. The red and white logo used by the winners has two roles, both of equal importance. First, the logo guarantees the quality of a given product or service, and second, it creates awareness among our consumers that in making their choices it is worth treating Polish products and services with priority. The quality of the brand guaranteed by the winners of the contest is a perfect way to promote Poland both in this country and abroad. :: pm

Economy

The World Council of Credit Unions chaired by a Pole This has been an exceptional achievement by Poland –our fellow citizen Grzegorz Bierecki, President of the Supervisory Board of the National Credit and Savings Union (in Polish: Spółdzielcza Kasa Oszczędnościowo-Kredytowa, SKOK) and Senator, has just been appointed chair of the largest global organisation of credit unions. During an international conference held in mid-July 2013 in the capital city of Canada, Ottawa, the Board of Directors of the World Council of Credit Unions unanimously elected Grzegorz Bierecki to lead this large international organisation.

Jerzy Wojciewski

G

rzegorz Bierecki, the founder of the national credit and savings union in Poland, commonly referred to as SKOK, has gained an over-20-year experience on the financial markets in Poland. SKOK is a huge financial institution, uniting more than 2.6 million households, with the assets amounting to PLN 18 billion. The financial cooperative movement initiated in the second half of the 19th Century was dedicated to fighting against unfair money lenders, and to providing protection against financial exclusion.

Today this social mission is being continued by credit unions that constitute an alternative to banking and shadow banking systems. The World Council of Credit Unions is the structure which brings together credit unions worldwide.

Grzegorz Bierecki was born on 28 September 1963 in Gdynia. While pursuing his academic studies, he was a member of the Independent Students’ Association and a co-organiser of the anti-communist strikes in Gdańsk. He participated in the Roundtable Session. He was an activist and employee of the Solidarity trade union. However, it was the establishing and maintaining of SKOK that has earned him recognition and fame. In 1990-2011 he presided over the Polish Credit Union Foundation.

He was the creator of the Polish credit and savings union development programme, endorsed by the U.S. Government, the European Community, the United Nations, and many national credit-union organisations, like those from the USA, Canada and Ireland.

Grzegorz Bierecki has made a contribution to establishing and promoting the founding provisions of the national credit and savings unions. In 1992-2012 he presided over the Management Board of the national SKOK.

Since October 2012 he has acted as President of the Supervisory Board of the National Credit and Savings Union.

Grzegorz Bierecki considers his appointment to the position of President of one of the largest global cooperative associations of financial institutions as the crowning of his career in the financial industry, as this is the most prestigious position in the entire credit-union sector. His appointment also results from deep involvement in developing the credit-union movement in Central and Eastern Europe, including especially his contribution to the dynamic growth of SKOK in Poland.

In one of the interviews, Grzegorz Bierecki stressed that the World Council of Credit Unions is an organisation whose major role is to represent credit unions before global institutions. He cited the example of cooperation with the G8 Group, which is an organisation setting the major global development directions. The meetings of the G8 and G20 groups translate themselves into various activities of international and intergovernmental organisations which, in turn, have a strong regulatory influence.

The most important battle in Grzegorz Bierecki’s life, which he fought against cancer located in his forehead, has luckily ended in success!

Having recovered, Grzegorz Bierecki came back to this country and, to express his gratitude, set up the Sanitas Foundation, and then a clinic in the Zaspa District of Gdańsk, to make the effective treatment method which had saved him available to his fellow citizens.

This was the most wonderful culmination of the life struggle of this renowned cooperative worker. ”Neither for profit, nor for charity, but to serve others”- Grzegorz Bierecki saw these

words 24 years ago on a building wall in Kansas. Later, he quoted them in Ottawa while taking the position of President of the World Council of Credit Unions. He said that serving society would be his priority, as the credit union’s mission is to provide ordinary people with free access to financial services. Credit unions, whose services are addressed to people neglected by commercial banks, constitute an alternative to commercial organisation which are fully oriented towards profit maximisation.

During the official appointment ceremony, Grzegorz Bierecki said “We are very different from other financial institutions because we attract special, sensitive people who not only engage in the activity aimed at their local communities, but also respond to the cry for help from the most distant corners of the world... The fact that we provide assistance ennobles us – if we are asked for it, it means we are worthy.”

In 2010 credit unions aided Haiti residents who had suffered tremendous losses in the earthquake.

The World Council of Credit Unions, with its HQ in Madison, the capital city of the State of Wisconsin (USA), has been operative since 1 January 1971, and to this day it has remained the most important institution to act on behalf of financial cooperatives. The World Council issues opinions on the draft provisions of the major global organisations, such as the Basel Committee on Banking Supervision, the Special Group on Counter-Money Laundering, G20, and the Bank for International Settlements.

Credit unions currently function in 101 countries worldwide. They unite over 200 million people comprising over 56 thousand unions, with assets totalling 1 trillion 600 billion dollars. :: 9 - 10 /2013 :: polish market :: 71

Economy

The 3rd European Congress of Small and Medium-Sized Enterprises in Katowice

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n 16-18 September 2013 the 3rd European Congress of Small and Medium-Sized Enterprises was held in Katowice. The congress opened with a speech

by Professor Jerzy Buzek, who welcomed the guests, among others President of the Republic of Poland Bronisław Komorowski, VicePresident of the European Commission and EU Commissioner for Industry and Entrepreneurship Antonio Tajani, and Deputy Prime Minister and Minister of the Economy Janusz Piechociński.

President Bronisław Komorowski in his speech pointed to the problem of law enforcement in Poland and announced initiatives to improve the functioning of courts, the public prosecution service and the tax authorities. The President emphasised his determination to support changes in the law, including labour legislation, which would enhance the activities of small and mediumsized enterprises.

Tadeusz Donocik, President of the Regional Chamber of Commerce in Katowice, the organiser of the Congress, also spoke during the inauguration, “Over 3000 entrepreneurs from 35 countries, 47 panel sessions, 37 MPs, 3 off-site meetings of Parliamentary Committees, a strong presence of chambers

From left: Tadeusz Donocik, President of the Regional Chamber of Commerce in Katowice, Janusz Piechociński, Deputy Prime Minister and Minister of the Economy and Professor Jerzy Buzek

of commerce and the economic and social committee, representatives of the world of science and local-government bodies, make

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the Congress one of the most important economic conferences in Europe.”

Antonio Tajani, Vice-President of the European Commission and EU Commissioner for Industry and Entrepreneurship, pointed out that the European Union would not overcome the current crisis and would not be able to compete with China, Russia and the United States, without the contribution of small and medium-sized enterprises.

“Small and medium-sized enterprises account for 99% of enterprises in Europe and employ two thirds of the workforce, and in the last decade created around 85% of new jobs. SMEs are also responsible for over 50% of value added contributing to GDP,” said Jerzy Buzek, former prime minister and former President of the European Parliament.

“We’re meeting today in Katowice to make a strong statement about making Europe the way we want it to be,” stated Janusz Piechociński, Deputy Prime Minister and Minister of the Economy, He also emphasised how important reducing the number of regulations and increasing economic freedom are for entrepreneurs, just as is improving the chances of regular entrepreneurs against civil servants in contentious issues.

“A proper environment for the law is the key to economic order for SMEs. Poland’s rank fell from 41st to 42nd in the global competitiveness report – this is not a dramatic decline but let’s hope it doesn’t become a trend.

All countries in times of crisis must introduce reforms and boost their competitiveness,” Bronisław Komorowski concluded.

The Congress participants considered, among other things, the role of women in the European economy, including the changes which would allow them to play a more crucial role in enterprises.

The discussed issues also included changes in legislation, the financing of investment development, EU support for Polish entrepreneurs, and the role of competitiveness and new technologies in the SME sector.

It is worth stressing that, within the Congress, off-site meetings of the following Parliamentary Committees were organised: the Innovation and Modern Technologies

Professor Jerzy Buzek welcomes the guests

Committee, the Local Government and Regional Policy Committee, and the Innovative Economy and SME Development Subcommittee. The issue of increasing the innovation in the Polish economy was also considered by members of the Parliamentary Standing Subcommittee for the Innovative Economy and SME Development. The focal point of the meeting, which was enthusiastically received by the audience, was establishing cooperation between SMEs and higher-education institutions. The presented Entrepreneurship Development Programme focuses on three major aspects: expenditures on innovation, improving the conditions for competition and facilitating the activities of small and medium-sized enterprises.

The meeting of the Local Government and Regional Policy Committee featured a presentation of the report by the Minister of the Economy on the utilisation of grants from the European Regional Development Programme 2007-2013 by the SME sector. The report indicates that as at 8 September 2013 nearly 29 thousand EU grant agreements had been signed for a total amount of PLN23 billion. The funds guaranteed for SMEs account for 9.3% of all the implemented ventures. The SME projects of the highest value are being carried out in the Mazowieckie, Dolnośląskie and Śląskie provinces. ::

Investment

“Open to Scandinavia” The Government of the Warmińsko- Mazurskie Province in northern Poland is on the lookout for business partners in Scandinavia.

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Scandinavian companies wish to do business in Poland, aiming chiefly at the nearby Warmia and Mazuria region (Warmińsko- Mazurskie province) located in the heart of Europe. They find here low production costs, skilled manpower, an ever-expanding sales market, and growing demand,” said Carsten Nilsen, President of the Scandinavian-Polish Chamber of Commerce (SPCC) during a conference entitled “Open to Scandinavia”, which was yet another stage in the region’s promotional efforts aimed at Swedish, Finnish, Norwegian, and Danish businesses.

The event was attended by about 40 representatives of Scandinavian business and journalists, who, besides getting to know Warmia and Mazuria better, discussed opportunities for international economic cooperation.

Jacek Protas, the province marshal, said: “We are continuing to promote our region in Scandinavia. Last year, the ‘Nordic Business Talks’ meeting brought us closer to the needs and expectations of Scandinavian companies.

Since that time we have done our homework,

Walk on the Golflinks

proving that we can listen, and have prepared a business package specifically tailored for these countries.”

The Provincial authorities offered a coherent vision of local investment opportunities, including export assistance, which was presented by Aleksandra Summers, an export

specialist from the Investor and Exporter Assistance Centre at the Marshal’s Office.

Guests at the meeting on collaboration between Warmia and Mazuria and Scandinavia also included delegates from Scandinavian companies and diplomatic posts, the Association of Business Service Leaders in Poland (ABSL), and Professor Andrzej Buszko, an economist from the University of Warmia and Mazury.

“Foreign direct investments have become global, and nowadays constitute the major factor in economic growth. Regrettably, however, most of them involve the wealthiest countries, despite the availability of cheap labour in the developing regions. The most sluggish economies attract only 2% of FDI. Substantial potential here lies in international trade,” said Prof. Buszko. “ The fair size of the Polish market, while advantageous, poses a sort of risk, as it attracts many foreign investors. For this reason, decisions need to be made fast, which in turn raises concerns regarding the level of investment and the risk of its being overvalued.”

In terms of FDI value in Poland, Scandinavia ranks 5th, having so far invested nearly PLN 9.5 billion. Around 2 thousand of their companies trade here in products of the furniture, telecommunications, automotive and other industries. On the other hand, although Poland is one of the ten countries where Scandinavians do business, their investments reach a mere 0.4%. This shows that we still have much to offer. Fortunately, our potential has been noticed not only by Western, but Northern Europe as well. How can Poland promote its qualities to draw the interest of Scandinavian capital?

The President of SPCC, Carsten Nilsen, gives the following advice: “Scandinavian entrepreneurs are being increasingly attracted to Poland as a place for investing in, and are looking for trustworthy partners keen on long-term cooperation. They value skilled manpower and adopt innovative solutions

Jacek Protas, Marshal of the Warmińsko- Mazurskie Province

and new technologies. At the same time, of course, many barriers are still there, like for example cultural differences.”

Arguments in favour of international cooperation with the Scandinavians, as certainly profitable, came from Piotr Zwolak, President of the Board at Border Yachts Sp. z o.o., a producer of cruise and sports boats and yachts from Gołdap (the Suwałki Special Economic Zone), and member of the international X-Yachts group based in Denmark.

What do Warmia and Mazuria and Scandinavia have in common? Quite a lot, as it turns out – geographical proximity, pristine nature, and investors who have already enjoyed success in Poland. As an investment destination, what the province can offer is, above all, highly-qualified employees, technological potential, low labour costs, and tax exemptions and grants, coupled with convenient access to the Russian market in the Kaliningrad District. ::

9 - 10 /2013 :: polish market :: 73

Investment

Investors are satisfied to invest in Poland Iwona Chojnowska-Haponik, Head of the Foreign Investment Department at the Polish Information and Foreign Investment Agency (PAIiIZ) talks to Ewelina Janczylik-Foryś.

What exactly makes Poland attractive?

Let’s divide the competitive advantages making Poland investment-attractive into three groups. The first one involves the undoubtedly privileged location in the heart of Europe, combined with economic stability, which nowadays is a scarce commodity. The second one refers to human capital, and the third to investment incentives. Coming back to the first point, many companies from outside the European Union are eager to establish their branches in Poland, from where they can supply their products and services to the huge EU market, comprising approximately 500 million inhabitants. The privilege of being the eastern border of the European Union makes Poland the gateway to the eastern markets, which seem very promising to the Western European companies. This role of Poland is strengthened by its long-standing experience in cooperating with Eastern European countries, and by the availability of the labour force conversant with Eastern languages. One should also note the recent surge in the number of companies willing to invest in Poland because of the growing potential of our internal market, with nearly 40 million potential consumers rapidly growing richer. Poland is rated 21st on the list of the leading global economies compiled by the International Monetary Fund. Experts forecast that our country may soon join the prestigious G20. The economic results achieved by Poland in recent years, and in particular between 2008 and 2012, confirm its economic stability. While the economy of the entire European Union (in current prices) has grown by 4% in the reference period, Poland has seen pm

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an over 22% growth, which implies that the growth rate has been over five times higher compared to the EU. In consecutive years of the financial crisis, Polish economic growth was not inhibited. Even in the most difficult year, 2009, with the shrinking economies of all EU countries, Polish GDP recorded a 1.6% increase, which earned Poland “the green island” name. It is important to emphasise that this growth was even faster in the subsequent years, exceeding 3%, which is a result even the well-established Western European economies can be jealous of. The current year undoubtedly marks a turning point for the Polish economy, due to the expiry of the seven-year EU budget plan, with Poland as the major beneficiary. The structural funds earmarked for Poland, in the amount of nearly EUR 90 billion, have been nearly 90% used up. The EU resources within the new financial perspective will not be unlocked until mid-2014, which means that any new tenders for public and private projects will be suspended until then.

The economic stability of Poland finds confirmation in all macroeconomic indicators.

Though I have mentioned that Polish society is rapidly growing richer, it should be borne in mind that our starting point was much lower as compared to our Western neighbours.

In many regions, GDP per capita has still not exceeded 60% of the EU average, which still indicates huge growth potential. In Poland, the middle class did not start to develop until the economic transformation period had come to an end. Today it comprises around 6 million residents, and this number is growing at high speed.

I have reiterated on several occasions my deep belief that human capital is our jewel in the crown. Virtually every investor to whom I have spoken acknowledges that, although the macroeconomic conditions were the initial reason for investing in Poland, it is the quality of human capital that acted as the real incentive to pursue further investment activity in our country. Polish society is relatively young and willing to learn, which is reflected in the number of students, amounting to nearly 2 million. Approximately 500 thousand graduates from higher-education institutions a year constitute a huge potential. Compared to countries with much larger populations, such as the United Kingdom and France, we come off extremely well. While in these two countries the current number of students is estimated at 2.4 million and 2.3 million respectively, in Poland it is only slightly lower, reaching approximately 2.1 million (based on the Eurostat data for 2011). This shows that Polish people perceive education as a chance to improve their quality of life – attaining higher education gives an opportunity to find an interesting job. Do they have the right conditions to do so? Since transformation, the educational opportunities offered by higher-education institutions have proliferated.

In Poland there are over 460 institutions of this kind, 130 of which are state-owned, providing a very high quality of education. While it is true that our schools have not been rated highly in the global ranking lists, there are more and more outstanding examples, such as the Koźmiński University which has been rated 28th in the top business schools ranking by the “Financial Times”. Let me stress

Investment

that more and more foreign students, not only from the neighbouring countries, are coming to Poland. In annual terms, over 24 thousand young people from around the world are choosing to study in Poland. This number has been growing considerably in recent years, due both to European scholarship programmes and the improving quality of life in Polish cities. Graduating from Polish universities opens the doors to inspiring jobs in the international environment.

Investment incentives constitute the third factor contributing to the competitive edge of Poland. Firstly, Poland may count on the highest available levels in the EU in terms of the regional assistance to new projects, as its GDP per-capita level is slightly lower than the European average. Secondly, the Government has developed a diversified and attractive investment incentives system, in order to meet the emerging entrepreneurs’ expectations. In consequence, Poland may offer two types of incentives to prospective entrepreneurs. The first includes tax reliefs, such as CIT exemptions in special economic zones and property-tax exemptions at the regional level, while the second comprises subsidies financed either from structural funds or directly from the State budget as part of the Programme for Supporting Projects of Major Importance to the Polish Economy for 20112020. The efficiency of the business-support instruments manifests itself, in the performance of the special economic zones (SEZ’s).

The accumulated value of all projects implemented in SEZs in the period from their establishing (in 1995-1997) to the end of the 1st quarter of 2013 reached PLN 87 billion, with nearly 200 thousand new jobs being created.

Early this year, PAIiIZ President Majman announced that PAIiIZ had planned to handle approximately 155 investment projects. As more than six months have already passed, please tell me, to what extent this assumption has turned out to match the reality?

155 was the number of active projects handled by the Agency early this year. Now the number has grown to 163. If all the projects located in Poland were successfully implemented, their total value would soar to nearly EUR 5 billion, with the projected employment exceeding 31 thousand new jobs. However, we still have to wait for the final investment decisions. It has to be borne in mind that handling a project (especially production projects) may pm

take as long as 2 and a half years from the moment of expressing the investment interest in our country to selecting the exact project location. Since the outset of 2013, 35 companies served by PAIiIZ have decided to invest in Poland. In the coming years, these projects will generate over 9,600 new jobs, and the investment outlays will exceed EUR 700 million. I think we may expect that around 50 projects will be completed this year. This will come close to the results achieved in the recent years – in 2011 and 2012 it was 53 each, and the year before 50.

True, but these are new projects, while reinvestments are equally important. I remember participating in a conference last year during which reports provided by the Polish-German Chamber of Commerce were presented. They revealed that 94% of German entrepreneurs would be willing to re-enter the Polish market. We have also recently met the American Chamber, the members of which also expressed such an intent. I have read that the Polish average exceeds the European average by three times, and I wonder why. Is it only because of the investment appeal?

Firstly, a certain trend has been observed globally, as reflected in the 2011 data. While developed economies still attract over 50% of all flows of foreign direct investments (FDI), only 22% of these are in fact reinvestments.

Developing countries, including Poland, attracted 39% of FDI in 2011, 31% of which comprised reinvestments. Last year’s reinvestment level in Poland reached 36% while the corresponding EU indicator was much lower, amounting to an average of 12%. This testifies to a huge success among developing countries.

They still offer lower costs of conducting business, including relatively lower labour costs compared to much more developed economies. Secondly, these countries, like for example Poland, ensure the supply of, and fairly unlimited access to, well-qualified employees. Moreover, one can hardly neglect the attractive investor’s incentive systems available in these countries. In my opinion, these are the major three arguments which contribute to the proportion of reinvestments in FDI in the developing countries being much higher than in the developed ones. pm

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Early this year, the Ministry of the Economy announced the five most prospective markets, including Kazakhstan, Canada,

Algeria, Brazil and Turkey. I have also read that you attended the recent fairs in Turkey. I gather this entails specific promotional activities by PAIiIZ. Yes, of course. We seek to resonate with all ideas and initiatives undertaken by the Ministry of the Economy, oriented towards the economic promotion of Poland. Last year the Agency participated in the 1st PolishCanadian Economic Summit in Toronto, organised by the Employers of the Republic of Poland jointly with the Canadian Employers Council. The summit was held on the occasion of the formal visit of the Polish Government delegation led by Minister Ilona Antoniszyn-Klik, Undersecretary of State in the Ministry of the Economy. The visit was intended to strengthen economic cooperation between the two countries. It was one of the events aimed at promoting Polish enterprises on the Canadian market, and attracting Canadian investors to Poland, in line with the idea to promote investments both ways. In supporting Polish enterprises willing to pursue foreign investments, the Agency is also involved in a wide array of actions initiated by the Ministry of the Economy. PAIiIZ has recently won a tender for promoting Poland in Turkey, organised as part of the systemic project entitled Promoting the Polish Economy on International Markets (sub-measure 6.5.2 of the Innovative Economy Operational Programme). The project mainly entails information and publicity activities concerning the Polish economy and exported products.

Furthermore, representatives of the Agency, together with representatives of Polish business, attend a number of targetted fairs, presenting the potential of Polish entrepreneurs from various sectors. Other programme events will be held soon, including economic missions of entrepreneurs operating, in the food, ICT and other industries. Other programmes designed to promote Polish companies abroad, with the active participation of the Agency, include Go China and Go Africa.

Supporting the investments of Polish companies on international markets is a relatively new domain of activity, which the Agency intends to develop gradually. We can already take pride in the first success story: in June 2013 a Wrocław-based joint-stock IT company, SMT Software S.A., opened its third overseas branch office in London, focussed mainly on business development and project management. ::

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Law

Are private hospitals being discriminated against?

The ongoing dispute concerning the reform of the healthcare system is worth analysing in terms of a certain dualism among the entities providing medical services and in terms of their functioning within the sector of medical services.

Mariusz Bidziński, PhD., Partner at Chmaj & Partners

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he first group comprises Independent Public Healthcare Centres (public hospitals, SPZOZ) that have been established by the Minister or a central government body, a province governor, a local government unit, a state medical university or a state university operating as an educational and research institution in the field of medical sciences.

The second group comprises private facilities providing medical services under the Act of 27 August 2004 on state-funded healthcare services (Polish Journal of Laws of 2008, No. 164, item 1027, consolidated text). These are usually established by private entities, and their important feature is their commercial activity, in which they resemble regular enterprises.

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There has been a progressive increase in the number of private hospitals in Poland since 1990. The data as at 2010 indicated that in terms of the number of hospital beds the sector of private hospitals had a 5-6% share of the Polish market. However, there is a clearly noticeable growth trend, albeit slow – the number of private hospitals, and at the same time of inpatients for whom they could provide their services – has been growing every year, thus reducing the disproportion in their share in the market for medical services. Among the 16 countries forming the National Association of Private Hospitals, the share of private hospitals ranges between 20 and 50%. Despite the continuing increase, Poland is still far from such a high score. It may be worth asking what the cause of this situation might be, taking into consideration the fact that private healthcare facilities often provide better quality medical services, in better conditions and in a shorter time than their public counterparts.

In the first place, our attention should be directed towards the relationship between private hospitals and the National Health Fund (NFZ) along with the Ministry of Health, which are responsible for the financial make or break of public and private hospitals. For example, depending on the geographical region of Poland, at the time of signing contracts for 2011, the National Health Fund offered private hospitals contracts that were worth 10 to 30 % less than the contracts they

had signed for 2010. Such dramatic decreases in the contract amounts, introduced without any prior notice, and without the possibility of negotiations (in some facilities the drafts were presented on the day immediately preceding the signing of the contracts), make it impossible to reasonably manage any enterprise in the long or short run.

The functioning of a private facility is often to a considerable extent contingent on whether or not the National Health Fund signs a contract for the provision of medical services with such an institution. Moreover, the NFZ blames private hospitals for the poor condition of public hospitals, which has no grounds in actual reality whatsoever, since it is owing to the operation of private facilities that the public hospitals are able to provide better quality services, even if they are on a smaller scale.

Another area of discrimination in favour of public hospitals is the situation from the beginning of this year, when a proposal for the reform of the Act concerning the functioning of the NFZ was submitted for public consultations. The Act provided the rules for the functioning of Councils that would be responsible for the allocation of public funds within healthcare. A controversial element of the proposal was that it entirely failed to include the representatives of the private sector in terms of participation in the activities of the Council, despite the fact that such functions were offered to representatives of

CEO After Hours

province governors, district governors, the National Institute of Hygiene, the Statistical Office, Provincial Health Funds and the Ministry of Health.

The general conclusions that can be drawn after the 3rd Conference of Private Hospitals held on 10 May 2013 in Warsaw are also not altogether optimistic. The participants came to the general conclusion that the vast majority of private hospitals were treated as second-class entities. Professor Paweł Buszman, Chairman of the Supervisory Board, American Heart of Poland, said that this partiality concerning public and private hospitals could be traced back to the stage of defining the requirements concerning tenders for medical services which are favourable to public hospitals providing healthcare for hundreds of inpatients simultaneously. Due to the limited finances of private investors, starting activities from the level of “hundreds of beds” is unlikely. What’s more, in the opinion of the Conference participants, tender requirements were stipulated by people employed in SPZOZ centres which did not necessarily have to foster objectivity in the evaluation of the entities in terms of their usefulness to the Polish healthcare system. Moreover, the participants indicated cases where hospitals signed long-term (5-6-year) contracts without carrying out any tender procedures.

So as not to be accused of calumny, a mention has to be made of the fact that the proposal for the reform of the Act on medical activities stipulates the renewal of the currently-applicable contracts for the provision of medical services to 2015. This will trigger, among other consequences, the impossibility of the formation of new private entities that would be in the position to receive funding from the NFZ and have the possibility to treat patients as part of contracts. It is also extremely bad news for the already-existing hospitals that have invested in the development of their facilities, as they will be unable to use these investments in full, since the contracts concluded to date will remain at the same level. Investors’ opinions are unanimous as to the fact that subordinating the award of contracts, and consequently of funds, to the centralised State machine, makes it very difficult to operate in this sector.

To sum up, the division between, and the unfair treatment of, the types of entities providing medical services, is rather evident. It is also evident that a line has been drawn along the division between hospitals into public and private institutions. The alarming fact is that competition for public funding should be lost by facilities that are better managed, more profitable, better equipped and employ better-qualified personnel, but do not have their representatives in bodies responsible for the signing and the value of contracts. ::

Cycling – my passion Eyal Litwin, Adgar Country Manager, Poland

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eing active is my philosophy for living. Sport has been a part of my life ever since I can remember, but cycling is my real passion.

I started mountain biking exactly 15 years ago, thanks to a friend of mine, whose enthusiasm for his hobby got me hooked too. It gives me not only the opportunity for developing my physical skills, but also a lot of excitement too. I started road biking in 2009. This year I also decided to take up cyclo-cross, which takes place on very difficult types of terrain that includes all sorts of obstacles, so you also have to get off your bike and carry it.

I try to cycle six times a week, sometimes with friends, but also with my semi-professional road cycling team in Israel. It gives me a lot of satisfaction to be able to combine my passion with my professional life. I get up at 4.30 a.m. every day, but the fact that this sport gives me a huge boost of energy, maintains my physical and mental health, and additionally gives me so much pleasure, is 100% compensation for this early wakeup call.

I train and try to test my skills on all sorts of routes and in different kinds of conditions. When I am in Poland, in Warsaw, I cycle in the Góra Kalwaria or Kabaty areas. When I am in Israel, I cycle both in Jerusalem and in the desert. It is obvious that proper training cannot be done without the proper equipment, and it makes cycling not only more pleasant but also safer. In order to get the best enjoyment out of the different kinds of cycling, I use 4 different kinds of bicycles: a 29’’ with gears, a 29’’ single speed, a road bike, and a cyclo-cross bike. And

of course I always have my GPS with me – a Garmin 810 – which is very useful, especially in the desert.

I know from my own experience how important the right training equipment and the advice of a professional instructor are when training, and also how vital the help of an experienced consultant is when purchasing equipment and gear. It also matters to have a place where you know you can go to meet, talk and share experiences with other people who are passionate about the same sports as you. I am very excited that we are going to create an innovative sports retail and recreation centre at the office complex at 181 Jerozolimskie Avenue in Warsaw, which the Adgar Group recently purchased, where all these things will be available in one place.

Apart from training, I also like to put my abilities to the test in various kinds of cycling competitions in Israel. I’m going to take part in a cycling marathon in one week’s time, in a three-day tour in one month’s time, and in the Veolia Desert Challenge race two months from now.

Eyal’s advice for people who are just starting their adventure with cycling: first, buy a basic bicycle and then find someone to lead you into the world of cycling – preferably someone you enjoy spending time with. ::

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Cultural Monitor

September 2013: Events recommended by Maciej Proliński.

The 48th Wratislavia Cantans International Festival is scheduled for 6-15 September.

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his festival has been “without borders” since its inception. The event features oratorio-cantata, symphonic, and chamber music concerts, opera and ballet performances, instrumental recitals, various religions’ sacral music concerts, and also fine-arts exhibitions from all eras, styles and cultural circles, in the most charming places in Wrocław and its vicinity. This year the Wrocław audience will have an opportunity to see, e.g. the female vocal choir Le Mystère des Voix Bulgares, accompanied by Bulgarian folk music, and Giovanni Sollima, Italian composer and cellist, inspired by minimalism.

At the finale concert conducted by Ed Spanjard, who will lead the Symphony Orchestra of the Wrocław Philharmonic, and The Swingle Singers, the audience will hear “Sinfonia, for 8 amplified voices and orchestra” by Luciono Berio and “Folktales, for cello and orchestra” by Giovanni Solima.

“Pamiętnik Pani Hanki” (“Hanka’s Diary”) composers of Polish songs

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013 is the 100th anniversary of the birth of Jerzy Wasowski, who was one of the greatest composers of Polish songs. On 9 and 16 September the TVP TV Theatre will stage the premiere of a new, special rendition of “Pamiętnik Pani Hanki” (“Hanka’s Diary”) (according to Tadeusz Dołęga-Mostowicz)

by Antoni Marianowicz, featuring Jerzy Wasowski’s songs, directed by Borys Lankosz The musical was written in 1979. This is a comedy musical with a hint of the whodunit in two acts. It satirically depicts Polish high life of the 1930s. The delicious, swing-jazz, new arrangements of Marianowicz and Wasowski’s songs were prepared by the well-known jazz musician and arranger, Grzegorz Piotrowski, who is in charge of a group of 17 illustrious musicians (an extended wind sections and a string quartet). Universal Music Polska is the publisher of an album featuring all the songs from this musical by, among others, Joanna Kulig, Ewa Konstancja Bułhak, Kamilla Baar, Grzegorz Małecki, and Wiktor Zborowski. It will hit the shelves just as the performance airs on TV.

The National Museum in Warsaw is hosting an exhibition of works by Guercino – one of the most prominent Italian Baroque painters – from 21 September 2013 to 2 February 2014

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mong the showcased canvasses you will find the most famous compositions from Italian collections – from Pinacotheca, and also from churches and palaces in Cento, the painter’s home town, and the famed Barberini Gallery in Rome. The audience will have a unique opportunity to admire “Et in Arcadia ego” from the Barberini collection, a painting rarely exhibited outside Rome, and one of the most intriguing works in the history of contemporary painting. This retrospective exhibition in the National Museum in Warsaw is the first in Europe to display such a large number of pieces by this artist outside Italy. The modern layout of the exhibition has been designed by a superb designer and set designer associated with Teatr Wielki – Polish National Opera in Warsaw – Boris Kudlička. The exhibition’s set is based on a clear staging concept: it is a reserved, modern interpretation of what is most important in Ba78 :: polish market of:: perspective, 5-6 /2013 roque – an illusion mirage, colour, and contrast between light and darkness…

The 11th Festival of Polish Composers’ Songs is to start on 7 September at the Royal Castle in Warsaw.

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his means 13 monographic concerts devoted to the vocal lyric poetry of Polish composers of all kinds – those of old and contemporary times, those forgotten, and those most renowned. As part of the event, songs by Cyprian Bazylik, Fryderyk Chopin, Stanisław Moniuszko, Mieczysław Karłowicz, Karol Szymanowski, and Maciej Małecki will be performed.

The eponymous concerts will take place on Saturdays and Sundays, 7 September to 6 October 2013 at the Royal Castle in Warsaw, Łazienki Park and the Wilanów Palace. This festival is organised by the Romuald Traugutt Philharmonic, and you can enter it free of charge.

The 56th International Festival of Contemporary Music “Warszawska Jesień” is to be held on 20-28 September.

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his is the largest contemporary music festival in Poland and one of the largest events of its kind in Europe. It has been organised since 1956 and is now perceived as a creative event of tremendous legacy and prestige. In 2013, the festival will resound with Polish canonical works such as the Piano Concerto and the Third Symphony by Witold Lutosławski, String Quartets by Henryk Mikołaj Górecki, and Passion according to St Luke by Krzysztof Penderecki. Other noteworthy performances include Lutosławki’s Piano Concerto played by Krystian Zimerman – just as 25 years ago – for whom the author wrote the piece. Another exceptional event will be a concert organised to commemorate Andrzej Chłopecki, musicologist, critic, musical-life manager and prominent expert in contemporary music – a Member of Warszawska Jesień Programme Committee – who passed away last year. The festival’s programme will also include compositions by Onutė Narbutaitė, Martin Smolka, Marcin Bortnowski, Paweł Szymański, and Paweł Mykietyn.

Cultural Monitor

The Warsaw Uprising Museum publishes an interesting map of the Vistula areas “WISŁA WAW”

by Marek Ostrowski, PhD.

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here are 60 points that have been marked and described on the map, and some even feature archival and contemporary photographs. They all concern the history of the monuments and buildings scattered along the Vistula River, and also events relevant to the history of Poland, but, at the same time, highlight areas worth visiting. “WISŁA WAW” is a multi-stage project aimed at acquainting Warsaw residents and tourists with the Vistula in Warsaw and with areas spreading along the river that are key to the development of the capital. To make the experience more appealing to foreign visitors, the map is also available in English. What’s more, it has been printed using TYVEK fabric, thanks to which it is tear and water resistant.

The long-awaited new film by Andrzej Wajda – “Wałęsa. Man of Hope” is to air in Polish cinemas on 4 October. ITI Cinema is to act as its distributor.

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he screenplay was written by Janusz Głowacki, the cinematography created by Paweł Edelman, and the film itself stars illustrious Polish actors, such as Robert Więckiewicz and Agnieszka Grochowska, who play the main roles. In his latest film, Andrzej Wajda combines epoch-making events with what is private, and even intimate. He depicts the history of great transformations which took place not only at party meetings, rallies, and the Polish Round Table Talks, but also in an apartment located in a Gdańsk housing estate encompassing large-panel blocks of flats. While peeping into the family life of the famous trade union leader, the director is trying to capture the phenomenon of this transformation from a simple, down-to-earth man into a charismatic leader. After “Man of Marble” and “Man of Iron”, this film concludes the triptych, in the centre of which there is a man tackling injustice...

Sex Mob, an American music group and one of the most important New York jazz bands, will introduce itself to the public at a concert in Poland. The band will appear on 7 October in Palladium in Warsaw as part of the allyear-round “Era Jazzu” (The Jazz Era) cycle.

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ob is a band that is deeply entrenched in the present-day culture. In their postmodern music, waltzes niftily develop into effective free jazz and merry film music hits. Maybe that is why their concerts are so spectacular and encouraging to the audience to join in the fun. Steven Bernstein, a slidetrumpet virtuoso, composer, arranger and leader of many bands and artistic projects that go beyond musical conventions, acts as the boss of this quartet.

The latest album of the band is entitled “Circus, Cinema and Spaghetti – Sex Mob plays Fellini: The Music of Nino Rota.” The material on the disc comprises leitmotifs from such movies of this legendary composer as, “Amarcord”, “La Dolce Vita”, “I Vitelloni” and “La Strada”. The “Era Jazzu” concert will also see the premiere of this album.

The Warsaw International Film Festival has been held every year since 1985.

On 11-20 October its 29th edition is to take place.

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ith 12 other festivals from all over the world, the Festival is among the elite in the “international competitive festivals” category, as defined by the International Federation of Film Producers’ Associations (FIAPF) – the category also includes such festivals as Cannes and Venice. This year’s edition will feature screenings in two cinemas, Kinoteka and Multikino Złote Tarasy. The festival gives you an opportunity to see films that would otherwise have a hard time reaching Polish screens. Every year there is also a poll among the audience to identify the most popular films. The programme features five competition categories of varied profiles. The presented films are judged by five jury groups composed of professionals including The Warsaw Competition – an international competition of feature films, produced to be screened in the cinemas, which is focussed not only on the independent cinema, but also on films that attract a wide audience; the European Short Film Competition; the Documentary Competition.

A new season in the Studio Theatre in Warsaw promises to be very interesting and diverse.

The playbill features such individuals as Różewicz, Chekhov, and Masłowska.

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he end of 2013 will see a December premiere of Chekhov’s “The Cherry Orchard” , directed by Agnieszka Glińska, and as early as in January 2014, theatre lovers will have a chance to admire Łukasz Simlat in “Odnovremenno” by Yevgeni Grishkovets. The performance will be directed by Łukasz Garlicki. For February, the theatre plans the Second Grand Carnival Ball for Children. During the first edition, the Studio Theatre welcomed nearly 500 little ones.

The second half of the season will bring even more titles.

Among them there is a performance for the youngest audience – a tale by Dorota Masłowska, written at the special request of the Studio. Wojciech Waglewski has been commissioned to write the music for this performance. The event of the season will be a grand exhibition of Piotr Potworowski’s painting scheduled for October 2013.

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Culture

KGHM’s success from the human-centred perspective...

Renowned documentary filmmaker Ewa Ewart talks to Maciej Proliński.

Stills from “Miedź czy nie mieć” directed by Ewa Ewart; Source: TBA KOMUNIKACJA MARKETINGOWA.

The jury for the 70th Venice Film Festival recently awarded the Golden Lion to “Sacro Gra” - an Italian documentary by Gianfranco Rosi. It was the first triumph of a documentary, not a feature film, in the history of this festival. Isn’t it compelling evidence that documentary films are still going strong?

Yes, it is. The documentary genre has lived through many of its own “funerals”. True, documentaries suffer from chronic under financing, and yet every declaration of their “demise” turns out to be premature. As a person devoted to making documentaries, I’m really glad about this fact. pm

What would you describe as the essential function of the documentary today?

I can speak about current-affairs documentaries, dealing with socio-political issues, as this is the type of film I make. Their primary role is to reveal the broad picture of what normally reaches audiences as no more than a one-minute-long piece of news. I’ve had 20 years of experience at the BBC. Although my adventure with television started with newscasts in the early 1990s and I spent 3 years in the Moscow branch of the American pm

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CBS channel, one day I decided that I’d had enough. I resolved to stop reporting “what happened” and tell audiences “why it happened.” My initial idealism, which made me believe that my films would make the world better, was short-lived. Then it became important to me that my films should help individual people. Make it just one person, or a few, as in the case of “The Children of Beslan”, and I’m contented. I believe it’s the only approach that can help you understand and grasp reality. It makes you bow your head before the inscrutable. It helps you believe.

The central character is always vital to me and I think that the audience can only relate to a documentary approached from the human-centred perspective. As a result, all this can appeal to the viewer, even when it’s about economics. pm

Exactly... In your documentaries you usually touch on difficult socio-political issues. During the last Economic Forum in Krynica we could see your film “Miedź albo nie mieć” with very different characters, about KGHM Polska Miedź, one of the most highly-capitalised Polish companies,

which successfully conquers foreign markets. Who initiated this project?

In contrast to other methods, this one is very affordable, while also convenient and durable – with no time limits. Furthermore, it is environment-friendly and simple to apply, as well as it builds an anti-humidity barrier with mineral products made in Poland and from Polish materials. Also worth noting is its absolute harmlessness to humans and buildings. Now it might seem obvious, but then, hearing about all those toxic epidemics around, we considered this as a major advantage of the injection method.

Where can we see your work?

The inside story of the biggest transaction in the history of the Polish economy – the purchase by KGHM of the Canadian company Quadra FNX... you’re right, it’s really difficult to imagine a subject more different from what I had dealt with before. Difficult subjects are indeed my specialty. However, taking up a certain subject I never wonder whether it’s difficult or easy, this only occurs to me when I’m doing the film. What’s the most important is my first response – if I see the shape of something, if I “see that subject” pm

Culture

At this point we could ask if we are effective enough in demonstrating to the world what Poland is? We shouldn’t expect that somebody would tell the story of us and our country – its economy or culture – better than we can...

I’m a Pole who has spent most of her life abroad. This lets me look at this country from a different angle and from a critical distance.

I believe too little is being said and we’re definitely not getting across. We’re not good at selling ourselves! When making the film I talked to Canadians who participated in the Quadra transaction. They visited Poland a few times and they were delighted by our country and people. They were impressed when they first went down to the copper mine in Lubin. One of them speaks about it in a film.

At the same time, they were asking why Poland mainly brings to mind John Paul II, Lech Wałęsa, and “Solidarność”. Of course we should be glad that we have great Poles and that Poland has contributed to the development of contemporary history. But why is so little said today about the rapid growth of this country, which has been doing quite fine in the times of the global economic and financial crisis, avoiding recession. Even though not all our actions lead to great success, we have certainly not failed. We mustn’t forget where we started and that we’ve come such a long way since 1989. How could others believe in the prestige of the brand named Poland, if we are the ones questioning its reliability? When travelling across Poland, I’m pm

delighted to see how much this country has changed since I left it.

human-centred perspective. I’m very pleased with these remarks.

And “Poland, Go Global!”? Doesn’t it sound a bit over the top, even in the context of your latest film?

Why not? Another Canadian in the film said that it’s high time Poland started establishing global companies that will provide opportunities for Poles all over the world. Polish companies need new outlets, for some of them Poland is becoming too small. There are Polish companies which carry out the strategy of going global, which requires them to start expanding abroad. Engaging in foreign direct investments is often more profitable and better than exporting. KGHM, after taking over the Canadian company Quadra FNX, possesses a lot of valuable experience in this field, which it wants to share with others. The transaction which made the Polish company a global player was very well received by the market. My film shows that its success was not sealed from the beginning.

On more than one occasion it hung by a thread. Today, the copper powerhouse has become a model and point of reference for other Polish companies. At some point in my film, Herbert Wirth, President of KGHM, also invites people to create groups with common interests in countries where KGHM has already invested. What I think is very important as the message of “Miedź albo nie mieć” is definitely the fact that this Polish company is a success for all Poles and the Polish economy.

It’s also worth adding that the film is also very interesting visually...

In its visual aspect, it was something of a pushover. The landscapes of Sierra Gorda in the Chilean desert of Atacama, where a mine is currently being constructed, resemble those of an alien planet. The Robinson openpit mine in Nevada made a similar impression on me, but at this point I must stress that this film is the product of the whole crew. My thanks first go to Mateusz Kruszelnicki, Director of Photography, and my long-time collaborator. The second person who was key to the final formal shape of this film was Robert Ciodyk, an absolute master of video editing, with whom I’ve also worked on numerous occasions. ::

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What was the prerequisite for you to take up this subject at all?

I had absolute freedom when it came to carrying out my concept of the film. There were no suggestions from the producer, let alone from KGHM. I had to rely on normal consultations with the industry insiders. Today I can, for example, tell copper ore from copper concentrate and I know what a billet is... Nobody tried to interfere with my idea of what this film should look like. People were kind and opened all doors for me – in Poland, Canada, and Chile. I didn’t feel, even for a moment, that I was somebody’s unwanted visitor. Remember that I had to invite all the decision-makers in the transaction, on the both Polish and Canadian sides. Taking advantage of my tricks, which had proven useful more than once before, I made these people open up in front of the video camera.

After a screening of the film during the Economic Forum in Krynica, one of the guests said that you could see it had been made by a woman and that the film was told from a

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Photo: Piotr Bławicki /DDTVN/ EAST NEWS.

– then I just start doing it. It’s the passion and preparation that decide whether a film is finally made. It’s impossible to create without this passion. Making a film about KGHM wasn’t my idea. It came from Przemysław Hauser – the owner of TBA Komunikacja Marketingowa – a Poznań-based company specialising in the production of films, both for its own purposes and also those commissioned by media companies. I must admit that before I began working on this film I knew very little about the subject, or about the fact that this Polish company was making this transaction at all. I didn’t know much about KGHM itself – the company’s history, evolution, region in which it operates, and finally its people. It’s worth noting that at a very early stage in my research I saw the great success of Poland as a country. I thought that Poland had achieved something really big whereas few people are actually talking about. If they are, this can be found in trade magazines. I became convinced that it’s really a great untold story.

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Ewa Ewart Journalist and documentary filmmaker, director.

She graduated in Spanish and Portuguese studies from the University of Warsaw. Since 1993 she has cooperated with the BBC. She is the winner of the most prestigious awards for documentaries, including three times winner of the Royal Television Society award. For the film “Children of Beslan” she received the American Peabody Award, which is widely regarded as the Pulitzer of television. She specialises in extreme subjects, getting to places no one has ever reached. She revealed the existence of death camps in North Korea and talked to the leaders of Colombian drug cartels, and the chiefs of the ETA Basque separatists. She is the only reporter to have interviewed Mikhail Gorbachev the day after the failed August Putsch. In Poland she collaborates with the TVN24 channel.

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Culture

“One cannot trust the devil”…

It is the only opera by Krzysztof Penderecki enjoying a continuous presence on the stages around the world. Today, 40 years after its premiere in Hamburg, it provides interesting material for the modern theatre. The subject matter, based on historical events, can be really stirring for many a spectator. The new Polish stage adaptation of the opera by Krzysztof Penderecki, “The Devils of Loudun”, directed by UK director Keith Warner, with scenic design by Boris Kudlička, will be staged at Teatr Wielki – Polish National Opera in Warsaw, from 2 October 2013. The premiere is part of the celebrations related to the 80th birthday of the Polish composer, who created a new version of the music for this opera especially for this occasion.

Maciej Proliński

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rzysztof Penderecki is one of the most prominent modern composers in Europe. The international reach of his music began as early as at the turn of the 1960s. His works reveal an interest in new possibilities of voice and instrumental tunes and the love of grand, monumental forms.

The expression of religious and humanistic content is of considerable importance in his oeuvre. “St. Luke’s Passion”, composed for WDR Radio in Cologne, marked a turning point in his career as a composer, and also in the aesthetics of his music. It starts a series of oratorio-and-cantata compositions with increasingly audible references to late Romantic aesthetics. From that moment on, Penderecki would become an artist who synthesises all achievements in twentieth-century music by his use of universal themes and texts fundamental to European culture, from mediaeval chants to avant-garde music.

“The Devils of Loudun” is a story of possession, the madness of fanaticism and political aspirations, and also the desire for independence and the rejection of an oppressive system. Some of the opera’s interpretations are comments on the political situation in Poland during communist rule. “The Devils of Loudun” was composed in 1968-69 based on a dramatisation of the novel by Aldous Huxley.

The title refers to historical events that took place in the French town of Loudun where a trial was carried out involving a priest accused of dealings with the devil.

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The underlying reason for sentencing the priest and burning him at the stake was probably his liking for worldly pleasures, and also his weakness for the fair sex, which exposed him to the ill will of some prominent figures; in this context there are some mentions of, among others, Cardinal Richelieu...

The opera was performed for the first time in Hamburg in 1969 with Konrad Swinarski as its director. Despite the controversy it provoked, the work earned international fame for its composer. The world premiere of the new version of the opera, which was at the same time the first joint production by Teatr Wielki – Polish National Opera in Warsaw and the Royal Danish Opera in Copenhagen, was made available to audiences from 12 February to 26 March 2013 in the opera house in Copenhagen.

“The enthusiastic ovation with which the Copenhagen audience honoured Krzysztof Penderecki after he entered the stage was well deserved. For it was the music that was the main protagonist of the production directed by UK director Keith Warner (slightly more than two years ago audiences could see in Warsaw Mozart’s “The Marriage of Figaro” directed by Warner), with stage design prepared by Boris Kudlička, a Slovak scenographer with a Polish soul. It was handled with great sensitivity and with care for every detail and plan by Lionel Friend from the UK.”, commented Tomasz Cyz (Gazeta Wyborcza; Feb.20,2013) after the premiere of the new version of “The Devils...”

The audiences can see on the stage a ramshackle house placed on a tree trunk as if on a hen’s foot, spinning around its axis – as if as a result of some natural disaster, but caused by internal, not external factors. Thus, the audience will not find in Penderecki’s and Warner’s adaptation none of the critique of the Church as an institution, a stance really fashionable nowadays in some circles. The artists are more concentrated on transcending the boundaries between good and evil, laying it on the line.

“One cannot trust the devil, even if he is telling the truth” – it has to be borne in mind that these are the very words, borrowed from St. John Chrysostom, which are inscribed on the sheet music.

“I went to the premiere of the new “Devils of Loudun” at the Copenhagen opera and it was for the first time that I had witnessed such a “standing ovation” by a truly moved audience following a twentieth-century opera. “The Devils of Loudun” was rated as a masterpiece. This enthusiastic welcome was a very encouraging experience for me. I hope that this will also be the case in Poland – especially bearing in mind that this premiere will open the celebrations connected with Krzysztof Penderecki’s 80th birthday”, said Waldemar Dąbrowski, General Director of the Polish National Opera. The solos will feature Louis Otey and Tina Kiberg. The Orchestra of Teatr Wielki – Polish National Opera will be conducted by Lionel Friend, as it was in Copenhagen. ::

Culture

Eastern carpets shine bright

The Royal Castle in Warsaw invites you to visit the Copper-Roof Palace, where, in its renovated interiors, you can admire the exhibition of eastern carpets from the Teresa Sahakian Foundation.

This exhibition displays part of a collection that currently includes more than 600 carpets and other oriental works of art, as well as a set of antiques of European decorative art bequeathed to the Castle.

This collection was created by Teresa Sahakian (1915-2007), a Pole who lived in Brussels.

Maciej Proliński

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he collection was arriving at the Royal Castle in shipments, starting in 1989. It helped Warsaw achieve the status of a global museum leader in the area of eastern carpets. The Copper-Roof Palace has become the place of the collection’s storage, where it has been exhibited since 1990.

The present exhibition is yet another display of this collection. Its abundance made it possible to create a new exhibition, which on the one hand builds on the previous displays, and on the other hand is a brand-new selection of antiques, displayed with a new décor. The exhibition features a set of items selected from four leading carpet-weaving art centres from the East: Persian, Anatolian, Central-Asian, and, the most frequently displayed, Caucasian.

One of the rooms is devoted to a collection of European decorative artworks.

Teresa Sahakian was born on 11 April 1915 in Warsaw, and died on 19 December 2007 in Brussels. In 1938, she married George Sahakian, an Armenian with a Persian passport, an expert in eastern cultures and oriental carpets who was running an antique shop with eastern carpets on Boduena Street in Warsaw. In

1939, the couple moved to Vienna, to finally settle in Belgium in 1948. Together with her husband, Teresa managed to collect more than 600 precious carpets and other valuable art collections.

After her husband’s death, in 1963, Teresa Sahakian continued the work they were together committed to and collected works of art, often making sacrifices for the sake of it.

Her fortitude and extraordinary commitment enabled her to create an impressive collection of eastern carpets and a substantial collection of European decorative artworks. In 1973, she was recognised as an expert by La Chambre des Antiquaires de Belgique and La Chambre Belge des Experts en Ouvres d’Art. She visited Poland in mid-1970s. During this visit, she donated her pieces of European decorative art to the Royal Castle in Warsaw. Since then she was desirous of handing other antiques over to the Castle and she declared her willingness to donate her unique collection of eastern carpets.

After many years, she finally succeeded in making her dreams come true. In July 1989, the first part of the collection arrived in Warsaw, and 1991 saw the arrival of subsequent antiques.

On 4 February 1993, she established the Teresa Sahakian Foundation, whose main goal was to organise and maintain the eastern carpet exhibition. The most numerous set in the collection comprises 628 eastern carpets and oriental fabrics spanning from the eighteenth to the twentieth century, 400 of them being Caucasian carpets.

In 2008, the permanent exhibition of the Teresa Sahakian Foundation’s collection in the renovated Copper-Roof Palace became available to the public once again. As the employees of the Royal Castle recall, the donor was involved in the affairs of the collection, to which she devoted a considerable part of her life, till the very last days. She also kept in touch with the Castle. Her indefatigable energy, zest, and desire to be part of what was going on around the collection were truly impressive. She was also interested in the progress of redecoration works in the Palace, the new exhibition arrangement, and plans for the future.

In her testament, she bequeathed her whole property to Poland. ::

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Events

100 years of the League of Polish Women Aldona Michalak, President of the League of Polish Women, talks to Ewelina Janczylik-Foryś.

The League of Polish Women is celebrating its 100th anniversary. In its early years, the League fought for the right to vote; its members were suffragettes.

The acquisition of voting rights was the natural course of things, because Polish women fought for the right to vote, and deserved it, by fostering national progress and supporting any initiatives leading to regaining independence by Poland. The League was established in 1913, when women from the Congress Kingdom of Poland organized themselves to take civil action amid mounting unrest before the outbreak of the First World War. They were supported by Józef Piłsudski, Poland’s future chief of state. The founding mother of the League was an outstanding educational and social activist Izabela MoszczyńskaRzepecka, born in Rzeczyca, Kujawy, into a landowning family. In her busy life Izabela Moszczyńska (1864-1941) was a committed member of the Circle of Women’s Work and the Museum of Industry and Commerce in Warsaw, where she focused on women’s working conditions in factories. She also chaired the Women’s Reading Facility, where she delivered lectures about women’s emancipation. At that time, illiteracy, alcoholism and prostitution among girls and young women were not uncommon.

The League dealt with all these problems, aided by Aleksandra Piłsudska and Zofia Moraczewska (who also chaired the League), the wife of Jędrzej Moraczewski, the first Prime Minister of independent Polish government. Women showed that they can organize themselves. The League’s activists appealed to the idea of female emancipation, which had already been defined by writers Maria Konopnicka, Eliza Orzeszkowa, and later also by Maria Dąbrowska and Zofia Nałkowska, adding new content to patriotic attitudes. Granting voting rights to women pm

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was supposed to bring significant changes to their lives. Women’s awareness was rising, and those educated began to recognize the existing disparity between the property and the rights of men and women in marriage. The struggle for suffrage was to serve the specific cause. As we know, few women won seats in the Polish parliament in the first elections, but they were able to communicate very well.

Women forged unity across party lines and voted together to adopt a constitution.

Considerable progress has been made ever since as regards female representation in the Polish Parliament. Still, organizations fighting for women’s rights demand equal opportunities for men and women in public, political and economic life, with a 50/50 gender split.

Yes, in the first lower chamber of the parliament, the Sejm, in 1919 women won only six seats, and in the Senate two seats. Currently, there are 110 women in the lower chamber (24%), and 13 women (13%) in the Senate. The largest proportion of women - 34% - is in the Civic Platform. Also, for the first time in the history of Polish parliamentarism, a woman, Ewa Kopacz, is the Speaker of the Sejm. Chinese women, whose delegation was hosted by the League of Polish Women in 2012, understand it perfectly, perhaps because twenty years ago they started, too, from a very low level, which is now, as we can all see, growing rapidly. They have already obtained a 10% parity, which is prescribed by law and respected in most parts of the country. Polish women are fighting for a 30% parity, which happens to be applied on the electoral lists of certain parties. If it were implemented, the comfort of cooperation would be palpable and economic outcomes for the country much greater. In fact, pm

research shows that there is no sense of unity among women below this threshold.

I am wondering if there is women’s solidarity despite partisan divisions.

In the Sejm political identity prevails.

This applies both to women and men. Perhaps it is because women are loyal to those whom they owe something, for example a job?

Women, who are entrusted by men with executive responsibilities, often feel uncertain in these jobs. They seek to be loyal to those whom they owe promotion. Not only do they not care about the interests of women, but they also regard other women as rivals. The sense of community strengthens selfesteem and confidence.

However, this sense of community is only possible with a 30% threshold. pm

Other women’s organizations advocate 50% parities and the so-called sliderule law. Do you agree with that?

It is very important that women fight for their rights in general, and it is a very valuable initiative. For example, in Sweden there was a statute ensuring a 50% parity for women, which - once abolished - became common law. Therefore, it is crucial to pass a similar statute. I cannot tell you, though, to what pm

Events

extent this initiative will be supported, including by men.

What are the League’s activities based on exactly?

We bet on intergenerational cooperation, on leveraging the intellectual, professional and emotional potential of Polish women for the sake of others and themselves. We want to ensure the succession of knowledge, skills and values. We also do some educational work in the field of health care, especially among the elderly, some social work in the sphere of culture. Briefly speaking, we are committed to helping women. It is women who bring up children, educate them, teach to read and write, make bandages. Childcare, assistance to the disabled and the sick, helping out families, psychological and legal aid - that is what we do. The League is the only place where young women can meet their older peers, a place in which generation gap is erased. Working groups that make part of the League are diverse - in terms of age, experience, education - so that we can complement each other and develop. This kind of business requires a humanistic approach and positive energy that emanates from women. If we live in harmony, then we will build together something good. We need to listen to and respect each other.

The League of Polish Women is determined and works hard to acquire resources necessary to run its various activities. pm

We do not receive money from the national budget, we live on membership fees and donations, which are small.

We receive grants-in-aid for the implementation of specific projects from the local authorities and other institutions, i.e. the State Fund for Rehabilitation of Persons with Disabilities. Therapy workshops work very well in Bydgoszcz. We support hospices in Szczecinek and Łódź. In these cities, as well as in Elbląg and Świdnica, there are psychologists and lawyers who offer their services free of charge. The project is carried out with the support of the Ministry of Labour and Social Policy. Several departments of the League run clubs for children. We prefer such low-profile modest initiatives rather than publicized one-off events. The media do not follow what we do, because our work is not attractive to them, members of the League being not celebrities. Providing home or meals to a single mother, textbooks and school accessories to her children is not of interest to journalists.

Media try to outstrip each other in the pursuit of sensations that people often yearn for.

You do the kind of work that is extremely necessary and useful, but unfortunately the League is hardly spoken of as an organization...

It is, but locally, that is where women actually work. pm

A systemic approach is needed, and I think that an organization like ours does a great grassroots work, covering for the

state in a number of areas. We are currently preparing a programme activating the League of Polish Women, which I will be happy to elaborate more on after the 100th anniversary jubilee celebrations.

What about cooperation with organizations in other countries that have similar statutory objectives?

This year, on the occasion of the International Women’s Day, we hosted a 16-person delegation from Sweden, and we were invited to pay them a visit too. We are still waiting to learn the outcome of the projects that involve cooperation with women in Finland, Spain and Italy. Last year, we welcomed a delegation of the All-China Women’s League from Shanghai and we signed a letter of intent on cooperation. Now we are looking forward to receiving women from the All-China Women’s League from Beijing in October. We are also expecting a visit from the Association of Russian Women. 2015 has been declared the year of Polish culture in Russia and Russian culture in Poland, and we are planning a joint action with Russians in this connection. pm

What are the plans of the League of Polish Women for the near future?

In October, we are going to organize celebrations of the 100th anniversary under the patronage of the Speaker of the Sejm, Ewa Kopacz, to be held in the parliament’s Column Hall. All the activities of our members supporting the General Board - and please remember that these women often work professionally and devote their spare time to social work in the League - are now focused on this upcoming event. The Polish Television gave us its media patronage. The General Board sets the programmatic directions for the League. In 2012, we launched the programme “Women’s health - from maturity to youth” by which we intend to raise awareness of preventive health care among women both young and older. Various cities declare their willingness to join us in organizing conferences. We have also held a series of meetings “Between Generations”, which bring together seniors and young people. We have many ideas for the near future not only here in Poland, as we want to collaborate with women from other countries. We have the potential, experience, commitment, and we hope we will be able to raise funds for the implementation of the projects supporting public policies, integrating generations, and activating ordinary people so that we all have better lives. :: pm

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Events

Children’s award for Professor Henryk Skarżyński John Paul II, Tenzin Gyatso (the Tibetan Buddhist Dalai Lama), Mother Teresa of Calcutta, Tove Jansson (the creator of the Moomins), Astrid Lindgren (the inventor of the character of Pippi Longstocking), Queen Silvia of Sweden, Jolanta Kwaśniewska (the wife of the former President of Poland), and Ewa SzelburgZarembina (the writer).

Marek Michalak, Chancellor of the International Chapter of the Order P rofe s sor Hen r yk of the Smile and the Ombudsman for Children and Skarżyński joined this Ms Anna Maria Wesołowska Member of the International honourable company beChapter of the Order present the Order of the Smile th cause, as inscribed in his prof. Henryk Skarżyński. laudation: “We, the kids Photos: IFiPS gathered here, would simply like to thank you the I promise to be cheerful and bring joy best way we can. Our parents say that hearing is the cornerstone of communication but to children,” Prof. Henryk Skarżyński thanked the young patients and their most of us don’t really know what this means. parents, who attended the decorating But we are happy to be able to talk with our ceremony at the World Hearing Centeachers at school, play with our friends or tre in Kajetany, where he was awarded the sing songs. It is great to hear a dog barking or watch your favourite film without having Laureate of the Order of the Smile title. On to read the subtitles. It is your work and ef22 September 2013, this unique award, givfort that helped us learn foreign languages en by children only, was presented to Prof.

Skarżyński by Marek Michalak, Chanceland get on with playing various musical inlor of the International Chapter of the Order struments, instead of getting on our carers’ of the Smile and the Ombudsman for Chilnerves. You made it possible for us to hear dren. To add splendour to the ceremony, it the whole world and this is why we are so was attended by the Laureate of the Order, grateful to you, Mr Professor. (...) We wish to Ms Henryka Krzywonos, Member of the Inthank you for all the cochleae in our ears and ternational Chapter of the Order Ms Anna hours on end you devoted to help us get well.

Maria Wesołowska, and Secretary of the InYou’re the coolest ear doctor, Mr Professor!!!” ternational Chapter of the Order, Ms Bar“Children are so vulnerable, and at the bara Kolago. same time they can be so naturally grateSo far children have granted awards to ful. This is why out of all my awards and disover 900 adults from more than 40 countinctions, and there’s been more than two tries worldwide. Laureates of the Order of hundred of them already, it is the Order of the Smile include such personages as Pope the Smile that I value the most,” said Prof.

“

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Skarżyński during the ceremony. “I have always tried to make the Institute of Physiology and Pathology of Hearing, where - as in any other hospital - we sometimes need to carry out some unpleasant procedures or tests, a friendly place for our young Patients. I’ve attempted to appear not a stranger in a white uniform, but a doctor that always welcomes them with a smile. Now, I’m tremendously happy to see these children smiling back at me by nominating me for the Order. I’m deeply grateful to them as this way they’ve also supported our great efforts to treat hearing disorders,” added Prof. Skarżyński.

The idea of awarding the Order was conceived in 1968 by the editorial staff of “Kurier Polski”, and was inspired by an interview with Wanda Chotomska, carried out to commemorate the 5th anniversary of the goodnight cartoon for children entitled “Jacek and Agatka”, in which the author told the story of a boy treated at a rehabilitation hospital near Warsaw, who wished there were a distinction that children could award. The journalists believed the initiative could be led by children themselves to award the good work of adults. This way an international contest was announced for devising the distinction.

The awarding ceremony for Professor Skarżyński was accompanied by a family picnic, with a number of attractions for the youngest guests, such as physical and chemical experiments, old craft shows, stands exhibiting police, fire-fighting and military vehicles and equipment, sports games, and competitions and quizzes with prizes. Musical entertainment was provided by a concert by Majka Jeżowska, who is also a Laureate of the Order, and by the “Gawęda” band. The convivial atmosphere of the event was not spoiled even by the autumn weather. ::

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Events

The MSPO Expo – a venue for important meetings

President of Poland Bronisław Komorowski during International Defence Industry (MSPO) Exhibition in Kielce

A

t this year’s 21st International Defence Industry (MSPO) Exhibition in Kielce, some 25,000 square metres of exhibition space was the showcase for 400 companies from 23 countries, including Italy, Spain, Canada, Turkey, Sweden, Belgium, Germany, Norway, Switzerland, the Czech Republic and USA. Visitors could see a digital battlefield, the soldier of the future, the MG-20 driving simulator equipped with the Barko night vision system, as well as a wide array of technological novelties.

Over the twenty years of its existence (it was first held in 1993) the International Defence Industry Exhibition has acquired and confirmed the status of Central Europe’s most important event of this kind, and the continent’s third largest military show. MSPO is a global-scale expo as it brings together guests from all over the world.

For the third time in its history, the International Defence Industry Exhibition was inaugurated by the President of Poland Bronisław Komorowski, who also honoured the Expo with his official patronage. “Congratulations on the progress you

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have made, on your determination and achievements,” said President Bronisław Komorowski at the MSPO’s opening ceremony. “I do remember the first show and I compare the way we all have gone along. In my opinion it is a success of Poland’s defence industry, of the State of Poland and of international cooperation,” he added.

The 21st defence industry show was also attended by the Minister of Treasury Włodzimierz Karpiński and the Minister of National Defence Tomasz Siemoniak. At the meeting with journalists, the ministers told them about plans to consolidate the Polish defence industry, covering all the stateowned military sector companies. The idea behind the consolidation is to cluster the assets managed by the Minister of Treasury, so as the companies would work for the benefit of broadly defined Poland’s defence.

For a number of years the Expo has been accompanied with National Exhibitions, which have become an indispensable part of the MSPO’s tradition. This year Turkey put on display its military potentials. Turkish presence at the MSPO marked the 90th anniversary of establishment of diplomatic relations between the Republic of Poland and the Republic of Turkey, as well as the 2014’s 600th jubilee of diplomatic relations development between our country and the Ottoman Empire. The concert of the Company of Mehteran, the oldest Turkish military band, in conjunction with Polish Armed Forces Representative Band was the highlight of this year’s Exhibition’s opening ceremony.

The MSPO Expo is a venue for important meetings. The Polski Holding Obronny (PHO) group of Polish defence companies hosted the defence industry representatives’ summit of the Weimar Triangle and the Visegrad

Group countries 4+. Another important event was the signing of a contract between Mesko, a company from Skarżysko Kamienna, and the American giant Lockheed Martin regarding cooperation within the framework of the HOMAR rocket programme. The scheme is aimed to provide a 70 to 350 kilometre rocket protection system for Poland; it is also of pivotal importance for Poland’s defence system.

The Expo was visited by Ukraine’s Deputy Minister of Defence, Artur Babenko. In addition to expressing his admiration for the exhibition, he also highlighted Ukraine’s willingness to share experience in the field of defence and national security. “The International Defence Industry Exhibition showcases the defence industry’s most important products, with everything, from land to air forces, being displayed in one place,” Babenko said.

“I wish to express my gratitude for the people in Poland who advocate for Ukraine’s integration with the European Union,” he added.

Following the previous years’ example, the prize and distinction awarding ceremony was held on the last day of the Expo.

This year’s President of Poland’s Award has been presented to the consortium of Military Mechanical Works S.A. from Siemianowice Śląskie; Autocomp Management from Szczecin; Trinity Interactive from Warsaw for TASZNIK Simulator – a training tool for KTO ROSOMAK gun crew and crew commander. The jury panel of the MSPO granted the Defenders award– the prestigious accolades for the defence industry sector entrepreneurs. Statuettes and distinctions of the Minister of National Defence were presented by General Waldemar Skrzypczak, Undersecretary of State for Armament and Modernisation at the Ministry of National Defence. ::

POZNAJ AMBASADORÓW POLSKIEJ INNOWACYJNOŚCI 3 GRUDNIA 2013 R., ZAMEK KRÓLEWSKI W WARSZAWIE

PERŁY INNOWACJI

PROGRESS 2013

KONTAKT:

PERLYINNOWACJI@POLISHMARKET.COM.PL