Polish Market No. 1 (185) 2012 by Polish Market

Polish Market :: 1/2012

PUBLISHED since 1996 No. 1 (185) 2012 :: www.polishmarket.com.pl

Inside:

Jarosław

zagórowski

President of the Management Board of JSW S.A.

Contents

1/2012

From The President’s Press Office # 6

From The Government Information Centre # 7

Statement by the Ministry of the Economy on the European Commission’s Energy Roadmap 2050 # 24

Our Guest

Olgierd Dziekoński, Minister in the Chancellery of the President of the Republic of Poland: The dilemmas of sustainable construction industry # 26

Prof Jerzy Buzek, President of the European Parliament: Priorities in the energy sector # 8

regions

Waldemar Pawlak, Deputy Prime Minister, Minister of the Economy: 2012 to bring changes to the energy sector # 10

Bogdan Sadecki: Investments? Only in Silesia # 30

Lower Silesia friendly to business # 34

infrastructure

Janusz Żbik, Deputy Minister, the Ministry of Transport, Construction, and Maritime Economy: Making life easier for investors # 12

economy

Faster to Berlin by the A2 # 36

Patryk Mirecki: Tournament will end, motorways will remain # 38

Leszek Rafalski, Director of the Road and Bridge Research Institute: Road and Bridge Research Institute for safe and modern roads # 40

Economic forecast for 2012. Poland’s economic situation # 14

energy & mining

Edward Szlęk, President of Koksownia Przyjaźń Sp. z o.o.: A responsible partner in business # 15 Jarosław Zagórowski, President of JSW S.A.: We are thinking comprehensively about expansion # 16

opinion

international relations

Henryk Majchrzak, President of the board of PSE Operator S.A.: Balance of power # 22

2 :: polish market :: 1/2012

Małgorzata Zaleska: A climate of affluence and saving # 41

Behind the Great Wall # 42

Contents

invest in poland # 44

Business services

Thermographic inspection of windows # 46

Patryk Mirecki: In the crisis, as in a mirror # 48

Anna Kwiatkowska, an Associate, Office Department, Cushman & Wakefield: Office Market # 52

Green Square Meters # 54

Made in Poland... used globally # 58

law & taxes

Maja Sujkowska: What investors looking for land for development should know # 62 Make law not war # 63

finance

janusz diemko, Managing Director of First Data Polska SA and Regional Director for Poland, Germany and Austria at First Data Corporation: New payments methods. Poland – a global leader in adopting contactless technology # 70 Sandra Wierzbicka: An industry in the making # 72

Cultural Monitor

In brief # 74

Maciej Proliński: Towards the light # 76

A cultural investment! # 77

Through seas and tempests... # 78

events

ecology

Franchising on the business services market # 66

green buildings

Cezary Tomasz Szyjko: The challenges of the Polish market in the post-carbon era # 64

Polish Market :: 1/2012

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

PUBLISHED SINCE 1996 No. 1 (185) 2012 :: www.polishmarket.com.pl

President: Krystyna Woźniak-Trzosek inside:

Vice-Presidents: Błażej Grabowski, Grażyna Jaskuła Address: ul. Elektoralna 13, 00-137 Warsaw, Poland Phone (+48 22) 620 31 42, 652 95 77 Fax (+48 22) 620 31 37 E-mail: info@polishmarket.com.pl Editor-in-Chief: Tomasz Ćwiok t.cwiok@polishmarket.com.pl

Jarosław



president of the management board of Jsw s.a.

4 :: polish market :: 1/2012

Managing Editor: Ewelina Janczylik-Foryś redakcja@polishmarket.com.pl Editorial board: Jerzy Bojanowicz, Janusz Korzeń, Maciej Proliński, Jan Sosna, Janusz Turakiewicz

Rough Riders # 82

A successful debut of the “Sports Ambassador” statuette # 84

Contributors: Magdalena Szwed, Elżbieta Wojnicka, Bogdan Sadecki, Patryk Mirecki, Sandra Wierzbicka Translators: Maciej Bańkowski Proofreading: Sylwia Wesołowska-Betkier Photographers: Jan Balana, Łukasz Giersz Polish Market Online Editor-in-Chief: Wiktoria Grabowska Sales: Phone (+48 22) 620 38 34, 654 95 77 Natalia Suhoveeva natalia.s@polishmarket.com.pl Ewelina Surma e.surma@polishmarket.com.pl Marek Ślugaj m.slugaj@polishmarket.com.pl Public Relations: Joanna Fijałkowska j_fijalkowska@polishmarket.com.pl

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Editorial

What will 2012 be like? It will be good, contrary to all fears. On December 2011 the Purchasing Managers’ Index (PMI) for Poland was the lowest since October 2009. But it doesn’t matter. “For quite some time the readings of this indicator for Poland have been at odds with hard economic data. In November the PMI fell, while industrial production and retail sales sharply increased,” commented Jacek Adamski, PhD, Director of the Economic Department of PKPP Lewiatan. “Business people complain, but only officially, as in private conversations the same people are all smiles,” said Professor Andrzej Barczak, Vice-Chancellor of the Silesian School of Management in Katowice. Labour market studies show that 72% of Poles surveyed are convinced that finding some employment is possible, while two out of three respondents are satisfied with their current jobs. Who to believe? I believe that it’s best to look at the results of the real economy. The end of 2011 was already the sixth consecutive quarter of Polish GDP growth staying above 4%. President of the Central Statistical Office (GUS) Prof. Janusz Witkowski says that, besides the best succession of indicators in the EU, it is important what is behind it. The driving force behind the Polish economy is internal demand (retail sales grow 10-11% monthly) and investments made by enterprises. That’s the secret of Poland’s “crisis-proof economy” – it has enough vitality of its own. What’s more, there’s also the record level of deposits by enterprises and the record results of the banking sector – we have resources for further development and an appetite for taking advantage of it. And the crisis? It’s upon us too, though hidden behind the currency exchange rate and growing exports. Poles are paying an increasingly high price for the global crisis, working longer hours for each tonne of imported oil and each cubic metre of imported gas. The global market is forcing on us the measures expected of the “endangered” States of Euroland. The global market has ranked the Polish currency below its real value – the situation in our economy is slowly becoming similar to that of the Chinese. For them, it is yet another incentive to develop. It can be the same for us. That is why I’m wishing you a Happy New Year with a broad smile. May this year be Polish!

Krystyna Woźniak-Trzosek President Rynek Polski Publishers Co. Ltd.

In December Poland showed that it is a high-flier in the EU politics and an emerging player globally. First, the Polish Presidency of the Council of the European Union, showed an unprecedented determination in arguing for a bold action to save the eurozone and supporting a further European integration. In a powerful speech in Berlin in December, Polish Minister of Foreign Affairs, Radosław Sikorski, acknowledged Germany’s role in the EU by calling it Europe’s “indispensable nation” and such that had to provide leadership. Sikorski also rebuked French ideas to divide the EU into two zones of more and less integrated member states and expressed his concern about the UK’s reservations toward a more tight integration of the union. In turn, summarizing the Polish Presidency of the Council of the European Union, Prime Minister Donald Tusk said the issue of a further European integration will determine the EU future for the years to come. “We have to answer the question of whether we will walk the community road, or the road of national selfishness. Either we fight for the future of Europe now, or cry for Europe tomorrow.” (More about PM’s speech on page 7.) In turn, in mid-December Poland’s President Bronisław Komorowski, accompanied by a massive train of business people, went to China where he and the Chinese President Hu Jintao extended bilateral relations to the level of strategic partnership, a status only seven other EU countries have. Among the provisions of the partnership there are many that embrace economic cooperation. China expects to expand imports from Poland and encourages Chinese enterprises to take part in Polish infrastructure construction and the country’s privatization transformation, while the Polish side vows to provide support and convenience for Chinese enterprises stepping into both the Polish and European markets. (Read more about the visit on page 42). So December was good for Poland. While on the EU front Poland proved it has enough zeal to think strategically for the benefit of the union, a strategic partnership with the world’s second-largest economy will, hopefully, materialize in Poland’s climbing up the ladder of nations with the fastest-developing economies.

Tomasz Ćwiok Editor-in-Chief

1 /2012 :: polish market :: 5

President on the conclusion of the EU – Ukraine talks “A major success” was what President Bronisław Komorowski called the conclusion of negotiations between the EU and Ukraine on the Treaty of Accession, adding that Poland would like the process of Ukraine’s integration with the Community to progress more rapidly. The end of negotiations between the EU and Ukraine on the Treaty of Accession was announced during the Ukraine-EU summit in Kiev by President of the European Council Herman Van Rompuy. “This is major progress, until recently even unimaginable, in the integration of Ukraine with the Western world,” said the Polish President. “Of course we would like more, a prompt prospect of Ukraine’s membership in the EU would be best, but (...) this work mainly has to be carried out by Ukraine,” he added, affirming that Kiev will be supported in its actions by Warsaw. Bronisław Komorowski also drew attention to the fact that the conclusion of EU-Ukraine negotiations was “a result of consistent and years-long

actions by Poland.” “The issue of supporting Ukraine on its difficult path towards western structures is consistently being implemented by successive political teams in Poland,” said the President. In his opinion this is “one of a few examples of the existence of an unwritten consensus in Polish politics, not only limited to the Government coalition, but also among the rightwing and left-wing opposition”. “We all have a reason for satisfaction, (...) to continue our efforts, so that Ukraine, with Poland’s aid, is able to acquire the fastest possible pace as far as initialling and then signing the Treaty of Accession is concerned,” he said. In accordance with the expectations the Treaty of Accession was not initialled during the summit in Kiev. This is a result of the EU’s disconcert, caused by the politicising of the Ukrainian judicature, the symbol of which was the sentencing of the former Prime Minister Yulia Tymoshenko to seven years in prison. ::

President at the European Development Days “A constant social development, supported with an appropriate policy, is inseparably connected with democracy, freedom and human rights”, said President Bronisław Komorowski at the inauguration of the 6th European Development Days (EDD) at the Copernicus Science Centre in Warsaw. “It’s hard to imagine constant social development without acknowledging human freedom as one of the fundamental values, without respect for civil liberties, or without respect and esteem for another human being,” said the President, encouraging discussion and setting directions for support given by the wealthier countries to the developing countries. Pointing out that in the world there are still areas of poverty, he expressed the conviction that “the feeling of solidarity makes us think of those most in need and does not let us leave them without aid.” He emphasised that in assuming constant self-realisation, development policy refers to countries and societies, but most of all to individual people and citizens. Approximately 500 guests participated in the conference organised within the framework of the Polish Presidency, including Nobel Prize winners, heads of state, heads of government and ministers, representatives of the European institutions and organisations engaged in development policy. The aim of the two-day conference is to promote development cooperation and increase the social awareness of supporting the development of countries in need of aid. ::

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1 /2012

President receives BusinessEurope representatives President Bronisław Komorowski received representatives of the Council of Presidents of the BusinessEurope organisation. “Poland and its citizens believe in free market, European integration and strengthening the European economy through a deeper integration in many areas,” said Bronisław Komorowski during the meeting. According to the President, in the ongoing debate on the future of European integration, the more prominent voice should be that of practitioners – business people and economic environments. “In my belief today this voice is too feeble, not audible enough, too rarely playing the role of an important source of reflection on the situation of the European Union and its future,” said the President to the heads of employers’ organisations from all of Europe. The President emphasised that the visit of the heads of organisations assembled in BusinessEurope falls in a difficult and singular period of the economic crisis. “In Poland the results of the debt crisis are being experienced only to a limited extent. This is not only a result of the reforms of the 1990s, but also of a rational policy in recent years, which has protected us from the negative phenomena occurring in other European countries,” he said. Bronisław Komorowski emphasised that everyone agrees that Europe as a whole must have the ability to compete efficiently with the economies of the new centres of economic development in the world. “This is why we as a country are betting on the deepening of European integration, as well as acquiring the capability of efficient competition,” he said. BusinessEurope is a European confederation of employers which brings together 41 leading national business organisations from 35 European countries. The organisation plays a significant role in representing the interests of 20 million European companies and participates in making important economic and social decisions at the European level. Poland is represented in the BusinessEurope organisation by the Polish Confederation of Private Employers Lewiatan (PKPP Lewiatan). ::

Finish PM Jurki Katainen meets with Polish PM Donald Tusk Prime Ministers Donald Tusk and Jyrki Katainen discussed the anti-crisis measures in the European Union, the Multiannual Financial Framework 2014-2020 and improvement in bilateral cooperation. This was the first bilateral working visit of Prime Minister Jyrki Katainen to Poland. The head of the Finnish Government had visited Warsaw before for the Eastern Partnership Summit. The talks of both Prime Ministers were dominated by issues related to the European Union. Donald Tusk and Jyrki Katainen, discussed the current anti-crisis measures in the EU and the euro area, negotiations on the Multiannual Financial Framework and the future of the Eastern Partnership. “Poland and Finland share many common views on the future of Europe,” said Prime Minister Donald Tusk. The head of the Polish Government drew attention to the convergence of standpoints of both countries on the issue of the inter-Governmental agreement after the last summit of the European Council, as well as, the Multiannual Financial Framework. “We are convinced that the crisis does not allow a substantial increase in the European budget, but at the same time we are convinced that the European budget, like the other forms of cooperation in Europe and other European institutions, needs protection, especially at a time of crisis, when some question the sense of the European community,” said the head of the Polish Government. “What is common to our region is the belief that in crisis one can cope thanks to certain special values, which characterise the societies living in this region,” emphasised Prime Minister Tusk.

“I would like to thank you for a good Presidency,” said Prime Minister Jyrki Katainen. “I can say with full conviction that the Polish Presidency was very well implemented, and some of the very important issues acquired a whole new dimension. The approach to the Presidency was very good and strong. Not only the content, but also the way and style in which the European Union was led,” the Finnish head of Government stressed. “Poland and Finland share their approach to the European Union. This should be a Union based on principles and regulations. A Union with strong institutions, especially the Commission, thus a coherent Union, more closely integrated, strongly based on principles, which concentrates on competitiveness and common market,” he added. “The obvious key fields of common interest are the economy, energy, ICT, the environment, security, education and the Eastern neighbourhood of the EU,” reads the joint communication. ::

PM Tusk sums up Polish Presidency of the EU Council “We need to start a serious discussion on better political efficiency in Europe,” stated the head of the Polish Government in the European Parliament, summarising the Polish Presidency of the Council of the European Union. He also emphasised that today Europe is standing before a major challenge, one which will determine its future. The Prime Minister summarised in the European Parliament the six months of the Polish Presidency of the Council of the European Union. “We accepted the tasks, aware of our own capabilities. In all areas we managed to bring our commitments to the final stage,” he said. He added that the Polish leadership was a leadership of people who really treat Europe as a community. “People who, in spite of the crisis – or shall I put it in other words – actually due to the crisis upon us,

also a crisis of trust, wished to show that the obligations and engagement of Europeans should be even more explicit and determined, especially at such a time,” he stressed. The head of the Polish Government emphasised, though, that despite the satisfaction from the work performed he cannot state today that Europe at the end of 2011 is more united than before. “I am convinced that you have similar reflections and a similar need to call what is happening in Europe at the moment by its proper name,” he addressed the MEPs. According to the Polish Prime Minister, the European Union today stands before a serious choice concerning its future. “We are standing at a crossroads; before us there is a very serious choice, whether in this time of crisis to take the community path, or the path of national and state egoisms, egoistically seeking rescue for each one individually, treating the community as a burden, and not the best method to deal with the crisis for Europeans,” he emphasised. During the debate in the EP the Prime Minister wished the best of luck to the future Danish Presidency. “We are at your disposal, as well as at the disposal of all who wish to strengthen Europe,” stressed Donald Tusk. According to the President of the European Commission José Manuel Barroso, the Polish Presidency has met expectations and maintained the spirit of partnership in European institutions and the EU Member States. “The Polish Presidency worked with excellent professionalism and enthusiasm. 30 years after the introduction of martial law, Poland exhibited its commitment to Europe, democracy and our common values,” emphasised the President of the EC. :: 1 /2012 :: polish market :: 7

Our Guest

Priorities in the energy sector The climate change summit in Durban last year made it clear that the climate policy is not going to change any time soon. But that does not mean that Poland should postpone the reforms of the power sector

Prof. Jerzy Buzek, President of the European Parliament 8 :: polish market ::

1 /2012

First is energy saving. A mantra that needs to be constantly repeated to the citizens of Poland, Europe and the whole globe is: “Every single action in this matter is pivotal. It can save us. Efficiency in energy generation and conversion, and of course efficiency in energy use are both important.” The second issue, which is crucial for Poland, is a thorough reconstruction of our power industry based on fossil fuels. Please note that I am not speaking here of energy based on coal, since perhaps in 10-15 years or so there will be abundant shale gas in Poland and it could be our great source of energy. Thus, we need to discuss fossil fuels and change the power industry based on them. Of additional concern are new technologies of CO2 capture, transport and storage, because the critical reconstruction of Polish power industry, today based on coal, and, generally in the next decades, on fossil fuels, is an absolute must. The third problem – of the utmost importance – is the bridge between renewable energy and nuclear energy. We have decided to invest in both of these types and sources of energy in Poland. Such an approach is quite unique in Europe – some countries are choosing to invest in nuclear energy, while others in renewable energy. Maybe their decisions do not gravitate towards one option or another, but they are still unbending. There is no such situation in Poland – we have to share our efforts and sources, and we have to do it rationally. And finally the fourth point – rarely mentioned – how to combine it all. How to save energy without smart power networks? How to develop renewable energy without a properly-dispersed network enabling us to manage it? How could nuclear energy be developed in northern Poland, if there is no means of transportation to users of the gigawatts generated there? How can we speak of the future development of Poland, if in many households outside of large cities, which should all have the same opportunities, the voltage is 170V? Thus, the fourth element – considered by some as the most significant – is power networks. ::

Our Guest

2012 to bring changes to the energy sector

Waldemar Pawlak, Deputy Prime Minister, Minister of the Economy The year 2012 is looking immensely interesting for the Polish energy sector. The Ministry of the Economy has just completed work on a package of new regulations for the sector, which includes solutions good for both consumers and producers. The new law will also support investments in renewable energy sources. 2012 will certainly be another year marked by searching for shale gas. The new energy law will protect vulnerable energy users by reducing their expenditure on electrical energy by making lump sum costs. An energy seller who issues such a bill will receive compensation from the State budget. Similar protection will also be extended over vulnerable gas users, and the prices of natural gas for households will remain under tariff regulations. This will be enabled by changes in the gas law. On the other hand, the system will mobilise consumers to more efficiently use electricity. Energy will be supplied to households only on the basis of a comprehensive agreement and suppliers will charge based on actual consumption. To this end, they will be installing so-called smart meters. The regulations will also improve energy security at the end-user level. Should supply be interrupted, the so-called emergency sale will be launched. It will be conducted by energy distribution systems operators. Those users

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whose sellers have stopped selling them energy, for reasons not attributable to the users, will benefit from this. We will also appoint a Customer Ombudsman, who will watch over the exercise of rights and responsibilities of both consumers and producers. In extreme cases it will be possible to obtain help from the Energy Regulatory Office President’s permanent arbitral courts. We have also remembered about energy producers. New regulations will contain precise calculations of the bases for return on capital employed in activities connected with the generation, transmission, and distribution of electrical energy and heat. We are also extending support for highly-efficient electrical energy cogeneration and are planning to correlate it with a system of CO2 emission allowances trading. In 2012 we also intend to create a uniform and clear system of support for green-energy producers. It should work as an investment incentive to build new generating capacity of this type. To this end we have proposed amendments to the Act on renewable energy sources (RES). The new regulations concern in particular support for distributed energy generation. We want micro-sources that generate electrical energy from local resources to develop more dynamically. We are also preparing additional

incentives to generate green energy for own use and for the producers of heat from RES. The Ministry of the Economy has decided to eliminate licences on electrical energy generation in micro-sources and introduce preferences in connecting them to the network. The new regulations provide an opportunity to obtain a guarantee of the green-energy origin. 2012 will also see a change in the system of supporting entrepreneurs in the biofuel sector. Pursuant to the amendment to the Act on biofuel components and biofuels, the amount of support over the calendar year will be at a maximum of 1.5% of the motor fuel excise tax profits planned in the previous year. The State budget for 2012 has nearly PLN400 million earmarked for this purpose. Support may be provided, to new investments in biofuel generation, bio-fuelled public transport, scientific research, and educational programmes. In addition to the above, owing to the amendment to the Act on the system of biofuel quality monitoring and control adopted by the Sejm on 27 May 2011, the admissible level of biofuel components in diesel fuel will rise from 5 to 7%. Gas stations will display thorough information on the content of biofuel components in the fuel sold. These solutions provide an opportunity to stimulate the development of rural areas and create new jobs in the sector producing of raw materials for biofuel components production. Moreover, they alleviate the rise in fuel prices, while facilitating the obligatory fulfilment of the National Index Target by entrepreneurs. 2012 will also definitely be important for the national gas sector. We will continue searching for and identifying natural gas from unconventional sources, particular shale gas and tight gas. This is one of the priority energy diversification projects being implemented by the Ministry. To date, we have issued nearly 100 licences for shale gas exploration, 30 of them owned by Polish companies. Despite the prospective search for shale gas in Poland, energy security is still guaranteed by the national coal resources. That is why I am glad that the regulations providing excise tax exemptions for coal and coke are now in place, a matter that I personally pursued. Had it not been for the new regulations, those resources would be subject to taxation in line with general principles. The simplification of the procedure of collecting excise tax on coal and coke has made its way into the Act on reducing certain obligations on individuals and entrepreneurs, which came into force from the beginning of 2012. ::

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Our Guest

Making life easier for investors

Janusz Żbik, Deputy Minister, the Ministry of Transport, Constriction, and Maritime Economy The Ministry of Transport, Construction and Maritime Economy is working on the draft construction law which is designed to shorten the time needed to obtain a building permit, as promised by the prime minister in his policy speech. Under the Long-Term Development Strategy Poland 2030, the government pursues a policy for an efficient state. In the area of economic law and regulations governing investment in construction, we want to remove the excessive administrative procedures which hinder the process of preparing and implementing construction projects and extend the time involved. The new regulations will introduce investor-friendly

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procedures for situating buildings and structures but will adhere to the constitutional principle of law and order, and respect for ownership and public interest. The government will continue to support residential building, especially for people on incomes insufficient to meet housing needs on one’s own. Under “The Main Problems, Goals and Directions of the Programme to Support the Development of Residential Building Until 2020,” the priority of the housing policy will be to increase the availability of homes by supporting council and affordable housing. The government will also be supporting the construction of homes built to

rent with an option for the tenants to gradually become the full owners. The road, railway and airport projects associated with preparations for the UEFA Euro 2012 football tournament and projects funded from EU sources available until 2015 are another priority for the ministry. Concern for spatial governance, respect for relationships between buildings and the environment, and care for public space and landscape are necessary on these projects. While planning living space and environment for people we have to be aware of cultural and sociological phenomena and have respect for the natural environment. ::

Economy

Economic forecast for 2012

Poland’s economic situation The Polish economy will slow down but not so much as other European economies. GDP: According to the OECD, Poland’s GDP will grow by 2.5% both in 2012 and 2013. In turn, the IMF puts the growth number at 2.97% for 2012. In November last year, the Polish Central Bank (NBP) estimated the GDP growth at 3.1% in 2012 and 2.8% in 2013. Inflation: The OECD estimates the inflation growth in Poland at 2.3% in 2012 and 2.6% in 2013. According to the NBP, it will rise to 3.1%, but JPMorgan, a bank, expects the inflation growth to reach 3.5%.

Optimistic views “The numbers can turn out much better than the official government forecast,” said deputy prime minister Waldemar Pawlak in late 2011. In his view, the weakening złoty may have a positive impact on Polish exports. Mr Pawlak said that such a scenario may come true only when there are no economic disturbances within the euro zone. Finance minister Jacek Rostow ski shares that view. “If there is no breakup of the euro zone, even with the zero percent GDP growth in Western Europe, Poland can crank out between 3-4% GDP growth at the same time,” Mr Rostowski said in a press

GDP and inflation growth forecast for 2012 and 2013 from different institutions GDP growth

Double digit growth of exports

Inflation growth

2012

2013

2012

2013

OECD

2.50%

2.30%

2.60%

IMF

2.97%

3.36%

2.82%

2.50%

NBP

3.10%

2.80%

3.10%

2.80%

Polish government

2.50%

2.80% Source: Sedlak & Sedlak

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interview for the Polish edition of Newsweek. According to president of Poland’s Central Statistical Office Prof. Janusz Witkowski, the Polish economy has been on a growth path. In 2012 it reached GDP growth of over 4% and “the economy is doing much better than in most of the EU countries,” he said. Mr Witkowski noted that the structure of growth-generating factors has changed with investment playing an increasingly important role and a good foreign trade results. “In addition, such sectors as construction but also such pro-export industries as automotive, furniture and food, are all strong,” Mr Witkowski said. He noted that the financial situation for companies has improved visa-vis 2010. “Companies do not invest to the maximum of their ability, but they have been saving a lot and when the conditions for market expansion are prime they will be in a position to fast-track their expansion,” Mr Witkowski said. He stressed that Polish entrepreneurs are used to crisis management and are generally optimistic about the future. The optimistic outlook for the future, Mr Witkowski said, is best underlined by consumer spending in Poland, which has been growing at 7-8% month-by-month. According to Prof. Zbigniew Hockuba, Poland’s representative at the European Bank for Reconstruction and Development (EBRD), Poland’s GDP growth will exceed 2.7% in 2012. “It is true that the EBRD forecast puts Poland’s GDP growth for 2012 at a much lower level, but I’m convinced that the NBP forecast of 3-3.1% GDP growth is realistic,” Mr Hockuba said. “The growth of 4% Poland had in 2011 will not be repeated in 2012 but the slowdown will not be dramatic.” According to Mr Hockuba, such forecasts may come true only when the euro zone crisis is solved.

Export Credit Insurance Corporation (KUKE) estimates that in 2011 the value of Poland’s exports reached EUR 137 billion, a 10.2% growth year-onyear, and in 2012 it will reach nearly EUR 154 billion, a 11.5% year-onyear growth. ::

Energy / Mining

A responsible partner in business Edward Szlęk, President of Koksownia Przyjaźń Sp. z o.o.

distinction for Koksownia. We came in third in the Grand Pearls of the Polish Economy category and second in the Pearls of the Manufacturing and Services Sector. Both distinctions, awarded by a group of outstanding economists, are a confirmation and approval of our company’s policy, which has been based on consistency, long-standing experience, and resistance to temporary trends and turbulence. I perceive these awards as recognition of our modern form of activity and status on the European market of coke producers. We strive to produce the best, world-quality coke, while providing good conditions to our employees, constant growth and social involvement. We are glad that all this has been recognised by the Jury.

What can Koksownia Przyjaźń give its contracting parties, and why is the company attractive to investors? Edward Szlęk: Koksownia Przyjaźń is one of the leading producers of coke in Europe. We export as much as 90% of our production, which is received by ironworks, steelworks, and chemical plants around the world. Our major export destinations are Germany, France, the Czech Republic, Austria, Finland, Hungary, and other European countries. Our production also reaches more distant locations such as the USA, Brazil, and India. The company’s priorities include investing in continuous development, following the most advanced standards of management and social involvement, which makes us a stable and responsible partner in business. For several years, despite the global economic crisis, we have been consistently implementing a thorough redevelopment programme of Koksownia Przyjaźń. The implemented developmental strategy allow our company to keep its status as the producer and supplier of coke and carbon derivatives in Poland as well as globally. What influenced in the company’s success in the “Pearls of the Polish Economy” ranking? The two awards we received at this year’s “Pearls of the Polish Economy” are a true

How does Koksownia protect the environment? The issue of environmental protection is of particular importance to us. Our coking plant meets all standards and requirements set from national regulations and those imposed by the European Union. Production is constantly monitored with special environmental inspectors controlling the validity of technological processes, air, water, effluents, and solid waste. With maximum environmental protection in mind, we are constantly modernising the plant’s infrastructure and introducing cutting-edge technologies. All Koksownia’s activities reflect the principles of the company’s environmental policy and provisions of the ISO 14001 Environmental Management Standard. A fact worth emphasising that makes us stand out from other enterprises is that Koksownia is completely independent in terms of energy. Since 2007 it has its own cogeneration plant powered by gas from coke production. We were the first Polish company to implement the ISO 50001 Energy Management System. What is the company’s approach to corporate social responsibility (CSR)? We approach CSR practices seriously and carefully. It is an important element and integral part of the company’s policy, an obligation arising from its responsibility to its employees, business partners, and the most immediate environment. We firmly believe that corporate social responsibility exerts influence both on the sustainable development

of local communities and the growth of the company itself. Koksownia’s CSR activities are not limited to environmental measures, but also the ethical principles of doing business. That is why we constantly strive to increase the level of health and safety at work, the well being and comfort of our employees, ensuring the proper level of protection against risks and the high technological quality of the coking plant, as well as our involvement in the local communities. What are the plans for the future of Koksownia Przyjaźń, one of the largest coking plants in Poland? The long-term investment policy of the coking plant involves plans for the modernisation of coke oven batteries, the optimisation of the production processes, and actions aimed at reducing the impact of Koksownia’s production on the environment. Koksownia’s development plans are also linked with our main shareholder – Jastrzębska Spółka Węglowa (JSW). Within the framework of JSW, by the end of December 2011, I received a nomination for President of Kombinat Koksochemiczny Zabrze, which also belongs to JSW. A personal union of both coking plants aims to introduce uniform standards, optimising investment processes and consolidating the management processes in coking plants, while my own task was to create an effective model of managing coking plants in the JSW Group. You are the President of a large company in terms of both its production levels and employment. What management concept do you prefer and how will you implement this under such conditions? Managing Koksownia is indeed a great challenge, but at the same time a source of genuine satisfaction. The specificity of the industry requires effective management of resources, not only human but also technological. My responsibility is also to run a transparent communication policy of the company alongside the users of our products and the public, particularly local communities. A great role in managing the coking plant is played by paying particular attention to the safety and comfort of our employees, as well as respecting environmental aspects. As a socially responsible company we support various social initiatives and respond to the needs of the residents of Dąbrowa Górnicza, Zabrze, and the neighbourhood of coke oven batteries in the JSW Capital Group. :: 1 /2012 :: polish market :: 15

Energy/Mining

We are thinking comprehensively about expansion Jarosław Zagórowski, President of JSW S.A., talks to Ewelina Janczylik.

economy should be given and specific emissions reduction targets should be defined only after the impact of these decisions on the economic situation of EU countries has been taken into consideration The development of a lowcarbon economy should be preceded by a detailed and comprehensive analysis of the capabilities of individual EU economies and consequences for them.

The recently-published report “Energy Mix 2050. Analysis of Scenarios for Poland” sums up the results of projections for the future structure of energy generation in Poland. What, in your view, will be the main sources of energy in 20 years’ time? Will this energy mix ensure energy security to Poland? I hope that coal will be one of the sources in Poland’s energy mix 20 years from now. But the energy mix will most probably be different from what it is now. There will certainly be more energy from renewable sources. And I hope that nuclear energy will also appear in Poland. The way in which coal is used will have to change - no one has any doubts about that. But we, as a mining sector, support the use of coal. We are opposed to the European Union’s decarbonisation policy in its existing shape. We say that coal should be present in the energy mix but should be used in an environment-friendly manner. How to do that? One way

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is the introduction of improved, more efficient combustion technologies. The example of Germany, where the efficiency of existing coal-based installations has been raised significantly, shows this is a good way. Europe has to take wise decisions about its energy and environmental protection regulations. The Central Europe Energy Partners (CEEP) association, of which JSW SA is a member, has on many occasions pointed out why the EU economy is losing its competitiveness and becoming dependent on external energy sources. At a time of economic crisis in Europe and just before the start of the EU’s next budget period (2013-2020), these ambitious environmental plans should take into account economic and social costs. Consequently, one should not impose the same climate obligations on all countries in our region. We do not question the need of transition to a low-carbon economy. But we take the view that support to the development of a low-carbon

Do alternative energy sources have a chance to develop? We often enthuse over alternative energy sources. But practice shows that there is a long way from a concept to the actual use of these sources. Many of these technologies have recently been put into practice and that’s all right. But we have to remember that these technologies involve some problems. I mean problems associated with wind turbines, biomass, the potential risk of disturbing the equilibrium on the market for oil-bearing plants and so on. I think the use of any new alternative energy source will always have some side effects. Therefore, the notion of energy mix and its promotion is a very good solution. The simultaneous promotion of dispersed generation sources is the right step because energy generation based on a single energy carrier always leads to disequilibrium. Transition to new energy sources is a costly process. If we have decided that we should be seeking alternatives to conventional power resources, then we have to realise that there are costs involved. We should also take economic processes into account. If energy prices go up too much the European Union’s competitive edge may be eroded relative to other economies. We would all like the restrictions that we are imposing on ourselves in the area of environmental protection to apply across the world - in that case, our competitive position would not be undermined. But now the situation is that the European

Energy/Mining Union is imposing restrictions on itself while China, Russia and the United States are not. I hope, however, that the state of public awareness in these countries will change and that we will all start thinking about energy policy in terms of environmental friendliness. At present, 90% of energy produced in Poland is based on coal, including lignite. We know well that coal combustion is harmful to the natural environment. JSW has taken measures to raise the efficiency of the methane drainage process. Why have you taken these steps? Do they provide benefits? It is our concept for energy generation, a concept which matches our company’s capabilities and the energy sources we have. Our strategy aimed at reducing the negative environmental impact takes into account our own energy sources and envisages the maximum use of our by-products. One of them is methane. It is a harmful gas and miners would like not to have to do with it in mines. But it is also an energy source. That is why we have applied a technology which enables us to fully use the methane recovered in our mines in the drainage process. The methane is used in highly efficient triple generation systems, which produce electricity, heat and cold. Our second major by-product and energy source is coke-oven gas, which is produced in the coke-making process. The gas is used to generate electricity for the needs of our group of companies. The third energy source is low-quality coal. It is a by-product obtained in the process of preparing high-quality commercial coal grades. It is not profitable to transport this low-quality coal anywhere because the cost of transport is too high relative to the price of the coal. But the coal may be converted into electricity, which is then transmitted to consumers. This philosophy, adopted and applied by JSW, already enables us to meet 70% of our energy needs from our own sources. In 2016 we will be self-sufficient in terms of energy supply after a new generating unit with a fluidised-bed boiler has been installed on the premises of our subsidiary company Koksownia Przyjaźń. A little later, we will be able to start selling surplus electricity to external consumers. Today, the use of the by-products enables us to significantly reduce

production costs across our group of companies. At the same time, it provides major environmental benefits. One of them is that we do not discharge methane into the atmosphere. And one should remember that methane is 20 times more harmful to the ozone layer than carbon dioxide. We utilise cokeoven gas and do not dump low-quality coal in colliery tips. What does it mean that JSW Group is to become self-sufficient in terms of energy supply? Let me say it again. All the solutions and technologies we have put into practice so far enable us to meet as much as 70% of the group’s own energy needs. It is important because we are still improving the process of energy recovery and production so as to generate a surplus to be sold to external consumers and augment our revenue. Through our activities aimed at utilising by-products, we show that energy generation based on hard coal and on technologies of high quality and efficiency is not harmful to the natural environment. Just the contrary, it contributes to its proper management. Today, we provide our companies with electricity at below market costs, which means an economic benefit for the group. The environmental benefit is that we convert by-products into electricity. And there is also a social benefit – by expanding the energy-generation business within the group, we ensure employment stability to our workers.

It is a very important thing in a region where we are the largest employer. We are also considering expanding our energy business to become a major source of revenue for the group and play a stabilising role at times of downturn on the coking coal market. But this is still a distant future. I wish to stress that we produce energy in compliance with all European Union requirements and norms that are in force in this field of activity. The president of the Office of Competition and Consumer Protection (UOKiK) has allowed Spółka Energetyczna Jastrzębie SA, a member of JSW Group, to take control over Przedsiębiorstwo Energetyki Cieplnej SA, a company which generates and distributes heat in the town of Jastrzębie Zdrój. What are the benefits from the deal to JSW Group and its business partners? It is another stage in the expansion of our energy business. These days, a modern and professionally managed group has to think comprehensively about expansion and take advantage of technological and production opportunities in related spheres of activity. This gives it a strong market position and helps it to cope better if the economic situation deteriorates. By taking over the heat distribution system with around 0.5 million consumers in the region, we have tied it with our generating units to achieve synergy and gain a new market. ::

1 /2012 :: polish market :: 17

 JSW Group is the European Union’s largest producer of high-quality coking coal of type 35 (hard) and major producer of coke. Most of the coking coal provided by JSW Group is used to produce coke, which – apart from iron ore – is a basic material for the steel industry. The coking plants owned by JSW Group turn around 40% of its coking coal output into coke. This enables the group to offer a highly processed product of top quality. JSW Group also produces coal for power generation. It is sold mainly to power stations and heat and power generating plants.  The holding company, Jastrzębska Spółka Węglowa SA (JSW SA), debuted on the Warsaw Stock Exchange on July 6, 2011. With its value exceeding PLN5.3 billion, it was the largest IPO in Poland in 2011. Since September 19, 2011 JSW SA stock has been traded in the WIG20 blue-chip index of the 20 largest and most liquid companies listed on Warsaw Stock Exchange.  JSW SA owns five coal mines – Borynia-Zofiówka, Budryk, Jas-Mos, Krupiński and Pniówek – where it extracts coking coal and coal for power generation. JSW Group also has five coking plants owned by subsidiary companies: Kombinat Koksochemiczny Zabrze SA, Koksownia Przyjaźń Sp. z o.o. and Wałbrzyskie Zakłady Koksownicze Victoria SA. Among the largest companies in JSW Group are also Spółka Energetyczna Jastrzębie SA, Jastrzębskie Zakłady Remontowe Sp. z o.o., Jastrzębska Spółka Kolejowa Sp. z o.o. and Polski Koks SA.  JSW Group wants to strengthen its position as a leading producer of coking coal and leading supplier of coke on the European market, a producer setting development trends for the whole sector. JSW SA has consistently pursued its strategy designed to strengthen its position on the coke market. By acquiring Wałbrzyskie Zakłady Koksownicze Victoria SA at the end of 2011, one of Europe’s four leading producers of foundry coke, JSW SA increased the volume of coking coal it turns into a high-margin product while gaining more financial credibility and easier access to capital at the same time. JSW SA is

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also consistently strengthening its position on the energy market. It produces energy from waste materials – methane, coke-oven gas and non-commercial low-quality coal – in small distributed generating plants. The energy generated from these sources is sufficient to meet around 70% of the group’s consumption needs. And after 2016 the group is expected to become selfsufficient. In order to raise the economic efficiency of the electricity generating facilities, in December 2011 the group took control over Przedsiębiorstwo Energetyki Cieplnej SA, which generates and distributes heat in the town of Jastrzębie Zdrój. The aim of the consolidation process is to achieve a vertically integrated group of companies which would use synergy to generate electricity and to efficiently function on local heat markets.  The company’s budget is expected to rise in 2012. After the third quarter of 2011, which was very good and in which the company earned PLN590.1 million in net profit and PLN2,500.6 million in revenue, the JWS SA Management Board wants to achieve a further increase in revenue in 2012. In order to do so, the company is going to raise its output to offset the decline in coal prices. In 2012 the output is to increase to 13.3 million tonnes from the over 12.6 million tonnes in 2011. At the same time, overall costs are to stay at the 2011 level.  In 2012 the Management Board plans to introduce new work rules and a new remuneration system, in which pay would depend on performance. The new work rules would replace eight regulation systems applied in individual JWS SA subsidiaries. And the new remuneration system will motivate workers to earn more by increasing their work efficiency and the efficiency of the mines. The company plans no acquisitions in 2012 but its budget allows for taking advantage of investment opportunities. At present, JSW SA is reorganising the assets it acquired after its stock market debut. Despite an economic slowdown, no major drop in demand is expected. Neither is there a need to make provisions in the 2012 budget for the risk that a new mineral tax will be levied on the company because no specific details have been presented on this issue as yet. ::

Energy/Mining

A breakthrough deal KGHM Polska Miedź SA, one of the world’s largest copper and silver producers, is going to acquire Quadra FNX Mining Ltd, a company listed on the Toronto Stock Exchange. The process of friendly takeover has started as a result of the acquisition agreement signed on December 6, 2011. Consequently, KGHM is to acquire world-class copper deposits and mines in Canada, the United States and Chile. The total value of the deal is around 2.87 billion Canadian dollars, or USD2.83 billion. KGHM is to finance the acquisition from its own resources.

KGHM is a company with 50 years’ experience on the market, an attractive portfolio of projects and funding secured to carry them out. It exploits the world’s second largest copper deposit, with enough ores to be extracted for another 40 years. The company produces base and noble metals – copper, molybdenum, nickel, gold, silver, palladium, platinum, lead and rhenium. Thanks to the acquisition of Quadra FNX, the mined copper output of KGHM Group will increase by around 25%, or over 101,000 tonnes, next year and ultimately by almost 50%. KGHM’s total copper reserves will increase by 28%, or over 8 million tonnes, putting it in fourth place in the world. KGHM will also expand the production of other metals, like for example nickel and molybdenum. Likewise, the production of gold and other noble metals will rise significantly. Due to the acquisition of the attractive mining projects, average production costs at KGHM Group will drop considerably within several years. The acquisition will strengthen the position of KGHM on the copper market and will enable the company, in keeping with its strategy, to expand in the mining sector. “This investment is the result of KGHM’s strategy to increase shareholder value and pursue its development priorities,” says Herbert Wirth, president of KGHM Polska Miedź SA. “It is a very well-considered deal, for which we have prepared for many months. We are convinced that the acquisition of Quadra FNX will benefit the company and its shareholders in

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both the short and long run. We are investing in this project to make KGHM more competitive and at the same time more immune to price drops on the cyclical copper market. The process of the friendly takeover started with the agreement signed by KHGM and the Board of Directors of Quadra FNX. The process, carried out in compliance with Canadian law, enables buying all shares in the company after receiving consent from the shareholders and court approval. Two thirds of shareholder votes have to be in favour of the deal. The acquisition transaction is to be finalised by the end of the first quarter of 2012. Quadra FNX is a medium-sized producer of copper and the owner of confirmed copper reserves of over 8 million tonnes as well as significant reserves of other metals, like for example gold and molybdenum. It operates in Canada, the United States and Chile, that is in regions with low political and technical risk. The company has a total of six mines in these countries. Its major copper projects are carried out in well-established mining regions. Among Quadra FNX’s key assets is the world-class Sierra Gorda project in Chile. A joint venture company with Sumitomo Metal Mining Co. was set up on May 16, 2011 to develop and exploit the deposit. The Japanese partner has a 45% stake in the venture. Located in the Atacama Desert, the deposit contains 1.3 billion tonnes of ore rich in copper, gold and molybdenum. The ore will be extracted from an opencast mine. The exploitation of the deposit

is to begin in 2014. The annual output is expected to reach 220,000 tonnes of copper, 3 tonnes of gold and 11,000 tonnes of molybdenum. It is worth adding that such well-known companies as BHP Billiton and Codelco also operate in the region. An important, cost-effective mining project is Victoria in Sudbury Basin, Canada. It is a large polymetallic project in a region with a well-established mining tradition. The underground mine has been operated for over 20 years to extract nickel, copper, gold and platinum. Their reserves are larger than elsewhere in Sudbury Basin – 12.5 million tonnes, of which copper accounts for 2.3%. A contract has been signed for the sale of 50% of the copper concentrate – it is processed by the Brazilian company Vale. Nickel accounts for 2.2% and each tonne contains 8.5 grams of noble metals. The opencast Robinson mine in Nevada, United States, and the underground Morrison & Levack mine in Sudbury are the main assets of Quadra FNX. Copper, gold and molybdenum are extracted from the first one. The reserves of copper and gold in this deposit are estimated at 2.14 million tonnes and 96 tonnes respectively. In 2011 the volume of copper produced by the mine reached 44,000 tonnes. Robinson has a 45% share in the copper output of Quadra FNX. Copper, nickel, gold, platinum and palladium are extracted from the latter mine. Its 2011 output of copper and nickel was respectively 16,000 tonnes and 3,000 tonnes, with the reserves estimated at 146,000 tonnes and 131,000 tonnes. The Franke mine in Chile, McCreedy and Podolsky mines in Sudbury and Carlota mine in Arizona are the remaining assets. But Podolsky is suspending production while Carlota is to be closed down. Quadra FNX has a strong financial standing. It has over USD1 billion in cash and in 2010 generated USD172 million in profit, which enables it to invest in existing mines and plan the development of mining projects. The company employs managerial staff experienced in surface and sub-surface mining, which will add to KGHM’s know-how. “The deal is in keeping with the consistently pursued strategy to increase the company’s value,” says

Energy/Mining Herbert Wirth. “It secures future profits for KGHM and will enable the group to maintain profitability in the long run. The investment in Quadra FNX is a milestone for KGHM, one which opens new horizons for the company’s development.” In the process of preparing the deal, KGHM used services provided by reputable companies: BNP Paribas and Rothschild were responsible for financial advisory services, Davies Ward Phillips & Vineberg LPP and Gide Loyrette Nouel for legal services, Ernst & Young for tax advisory services and AMC Consultants and KGHM Cuprum for technical advisory services. The deal will not have any impact on KGHM’s employment and output in Poland or the company’s investment spending, which is supposed to reach around PLN20 billion by 2018. It means a rise in shareholder value and will allow the company to pursue its strategy – increase its ore reserves and expand to become a leading global producer of copper, with diversified activities and a strong financial position. On the other hand, with worldclass projects in stable countries, the acquisition offers a large potential for growth in shareholder value, stronger immunity to changes in copper prices on global commodity markets and a reduction in average production costs. KGHM’s operating costs will be cut by over 20% thanks to the launch of project with much lower production costs. At present, KGHM exploits only high-cost underground mines. Considering that prospects for the copper market are very good, it is important that KGHM will be able to combine the complementary experience of its subsidiaries in surface and sub-surface mining, in conducting mining projects and exploiting deposits, and in expansion through mergers and acquisitions. The effects from the synergy to be achieved by KGHM will include creating a platform for further expansion based on mining projects in North and South America, sustainable growth based on a stable financial position, mines in operation and a diversified portfolio of projects ensuring stable production levels in the long term, a stable financial position and ability to finance mining projects from KGHM’s own resources, combined managerial skills in mergers and acquisitions,

Major mining projects acquired by KPMG and the company’s present investment sites

Germany

Canada

• Weisswasser

• Afton Ajax (Cu, Au)

Poland

• Polkowice -Sieroszowice (Cu, Ag) • Lubin (Cu, Ag) • Rudna (Cu, Ag) • Głogów – steelworks • Legnica – steelworks • area of exploration

Greenland

Canada

• Malmbjerg (Mo)

• McCreedy (Cu, Ni, TPM) • Morrison (Cu, Ni, TPM) • Podolsky (Cu, Ni, TPM) • Victoria (Cu, Ni, TPM)

SYMBOLS KGHM projects FNX Quadra Project KGHM mines FNX Quadra mines

USA

• Robinson (Cu, Au, Mo) • Carlota (Cu)

The Americas

experience in surface and sub-surface mining, and the diversification of activity to include more countries with a low political risk and a larger number of metals and currencies. In 2010 KGHM’s deposits contained 29.3 million tonnes of copper. Its commercial reserves of copper ore amounted to 1.44 billion tonnes, with the average content of copper at 2.01% and the average content of silver at 57 gram per tonne. The Quadra FNX deposits contained 8.1 million tonnes of copper. After the acquisition, KGHM will move up from seventh to fourth place in the world in terms of copper reserves, behind Codelco, Southern Copper and Freeport. In 2010 KGHM was the world’s 10th largest copper producer, with the output of 425,000 tonnes. After the acquisition, KGHM will move up to eight place, with the estimated output of 526,000 tonnes, and in 2018 to seventh place - behind Codelco, Freeport, BHP Billiton, Xstrata, Rio Tinto and Anglo American - with the output of 635,000 tonnes. KHGM, which employs over 18,000 people and is listed on the Warsaw Stock Exchange, is the largest producer of copper in Europe and the world’s 10th largest producer of copper and third largest producer of silver. It is the largest company in Poland in terms of profit and one of the top five

Chile

• Franke (Cu) • Sierra Gorda (Cu, Mo, Au)

Europe

RESOURCES Cu – copper, Ag – silver, Mo – molibden, Au – gold, Ni – nickel, TPM – precious metals

in terms of revenue. It is a fully integrated producer conducting technologically advanced mining and metallurgical operations. Due to its location in the centre of Europe, it has a competitive advantage in sales. KGHM has the deepest mines in Europe: Polkowice-Sieroszowice (8001,000 metres), Rudna (950-1,250 metres) and Lubin (610-850 metres), with 29 shafts in total. It also has three smelting plants, which produced 547,000 tonnes of electrolytic copper, 1,161 tonnes of silver and 776 kilograms of gold. The acquisition of Quadra FNX will not be KGHM’s first foreign projects. On June 22, 2010 the shareholders of Abacus Mining & Exploration Corporation in Canada approved establishing a joint venture company in which KGHM will initially buy a 51% stake for USD37 million, with an option to buy additional 29% for no more than USD35 million at a later time. The joint venture company is to extract copper and gold from the Afton-Ajax deposit located in British Columbia, Canada. The feasibility study conducted in 2009 shows that, after production is launched in 2013, KGHM and Abacus will be producing around 50,000 tonnes of copper and over 3 tonnes of gold annually. The mine is expected to operate for 23 years. :: 1 /2012 :: polish market :: 21

Energy/Mining

Balance of power Dr. Henryk Majchrzak, President of the Board of PSE Operator S.A., a national power grid operator, talks with Polish Market about the company’s investment projects and future challenges.

aspects of the Company’s operations. They include developing the national transmission system (including the construction of transborder connections), applying the new Smart Grid technologies, ensuring access to intervention reserves, implementing a new model of the electrical energy market, and developing the European market.

What did 2011 bring for the operator of the national power grid, a significant entity in the group of companies wholly owned by the Treasury with strategic meaning for the country’s operations? For the PSE Operator and its subsidiaries, 2011 was a year of changes. The process of restructuring the Capital Group was consistently implemented. The work also continued on reforming the electrical energy market and creating a new model for the energy sector, within the scope of the special group founded by the Minister of the Economy. The past year was also associated with the continuation of work on the implementation of the most important objective – the new Company Strategy until the year 2020, the main goal of which is to ensure national energy security. The strategy includes 46 projects and subprojects, which involve various

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These are currently the most important tasks facing PSE Operator. Which task do you consider the most difficult? The most difficult task is the implementation of investments under the present formal and legal conditions, particularly in areas covered by the NATURA 2000 programme, and those near large agglomerations. In this field, we are implementing a strategic project which covers the recognition of network investments in the National Spatial Development Concept and Provincial Spatial Development Plans, as well as the creation of legal solutions in the field of eliminating barriers to the implementation of investment operations, plus the connection and balancing of renewable energy sources. I should also add that despite the aforementioned difficulties we have completed an ambitious plan of material investments for 2011 in the amount of PLN650 million. We are also implementing a difficult project related to the construction of a new electrical energy market model and several projects in the area of applying new Smart Grid technologies. In order to increase management effectiveness in various parts of the Company, we are implementing several projects which include a new model of managing the investment process, a new model of utilising network property, and projects in the field of information and communication technology organisation.

You listed the development of the national electrical energy system among the most important objectives. What are the most significant priorities in this case? The priority of the Transmission System Operator (TSO) is the stability and reliability of electrical energy supply through the transmission network to all regions in the country. Furthermore, due to the necessity of preserving energy security, this system requires continuous and harmonious development. In June, the URE President negotiated the basic planning element developed in the company, the “Update of the transmission network development plan for the years 2010– 2025,” which contains detailed information on the planned investment projects during the years 2012–2016. The investment projects of the company included in the plan amount to approximately PLN8.2 billion. Due to the continuous interest of investors planning connection to the transmission network, in 2011 PSE Operator defined the connection conditions for manufacturers to amount to a total power of over 2,600 MW, including over 550 MW from renewable energy sources (RES), and concluded contracts for network connections with a total power of approximately 1,700 MW, including over 850 MW for RES. In compliance with the issued connection conditions and the concluded connection contracts, there are plans to connect to the transmission network investments with a total power of over 24,000 MW, including over 6,400 MW in RES. We have already described the role of PSE Operator in the European Network of Transmission System Operators for Electricity. What new events occurred on the international level in 2011? I should say that the Polish system is part of the connected electrical energy systems of continental Europe, which operate synchronically. The PSE Operator is a member of ENTSO-E, the only organisation representing all European transmission system operators. Considering the strength of votes, we have the sixth highest place in the General Assembly of this organisation. We are active in its operational structures. We are also active in the regional structures, the range of which covers the

Energy/Mining connected systems of continental Europe, as well as the regional structures of Central and Eastern Europe and the Baltic Sea Region. This has currently reached significant meaning in the face of the need to ensure the cohesion of the obligations met by ENTSO-E resulting from EU legislation, i.e. the European Ten Year Network Development Plan with new EC initiatives in regions in the field of network infrastructure development. The next key task is active cooperation in the creation of Network Codes, including those regulating the issues associated with the target model of the energy market, the completion of which is planned prior to the end of 2014. In 2011, we also embarked on cooperation in the east, i.e. with Ukraine and Belarus. The end of September saw the start of the tender for the transmission capacities of the 220 kV connection with Ukraine: Zamość–Dobrotvir, which (since halfway through October) has resulted in energy supplies to Poland. Also, since September, in cooperation with our Ukrainian

colleagues, we have been analysing the possibilities of activating the 750 kV Rzeszów-Khmelnytskyi connection, which has been inactive since 1993. We are analysing several operational options, covering various power levels (600, 1200 MW), voltage levels (750, 400 kV), the locations of insertions (Poland and Ukraine) as well as connection systems. We are also considering the reconstruction of the 220 kV connection with Belarus (Białystok-Ross), which will cover the change of voltage to 400 kV and the insertion of the Polish line end to the Narew station. During the period of April-September 2011, we conducted Preliminary Market Research, which indicated interest exceeding the level of the import and export capacities defined by us. What can we wish the TSO in the new year 2012? What would the company like to achieve during this period? Mainly the efficient implementation of strategic projects and

investments, as well as operational stability through the introduction of multiyear tariffs. Considering the challenges facing the TSO, the PSE Operator conducted operations aimed at implementing the mechanism of forming the PSE Operator tariffs for a period of several years. This work led to an initial agreement on the mechanism by the URE President, and the methodology was applied in the PSE Operator Tariffs for 2012, validated by the URE President on 16 December 2011. The official negotiation of the aforementioned methodology with the URE President for the period until 2015 is expected at the beginning of 2012. On the one hand, the forming of the tariffs for a period of several years will improve the predictability of the level of revenue collected by the TSO in subsequent years (allowing the implementation of longterm effectiveness programmes), and on the other hand will create stability in fees submitted by market users for the transmission services provided. :: ADVERTISEMENT

Energy/Mining

Statement by the Ministry of the Economy on the European Commission’s Energy Roadmap 2050 Janusz Pilitowski, Director of the Energy Department at the Ministry of the Economy

Today, the European Union is facing serious challenges: the euro area crisis, economic slowdown and soaring unemployment. Member States have adopted targets for greenhouse gas emissions and energy consumption reductions, and targets for developing renewable energy sources. At the same time, the EU is becoming more and more dependent on oil and natural gas imports. Due to the said factors, it is expected that there will be an increase within the EU in energy production from low-emission sources, particularly based on new technologies and renewable sources, and an intensification of energy saving powered by innovative solutions. Sustainable energy policy should take into account three equally important goals: competitiveness, sustainable development, and security of supply. One goal should not be implemented at the expense of others. Pursuing ambitious objectives such as climate targets must not leave a mark on the competitiveness of the economy or the security of energy supply. To cope with the challenges ahead, it is essential to change the current approach of the European Union to follow a new view of strategic planning in relation to the European electricity transmission infrastructure, and to provide conditions for the effective implementation of key projects. Furthermore, enormous expenditure will have to be borne. The extension and redevelopment of the current transmission infrastructure will require about EUR1 trillion to be spent by 2020, half of which will be consumed by investments in the transmission and distribution of electrical energy and gas, storage, and intelligent networks. Issues concerning emissions reduction should be approached on a global scale. The impacts of the introduced solutions should also be seen through the prism of participation by the most important non-EU partners – China, India, the USA, and Brazil. Setting high reduction targets is not a valid answer, if analyses show that meeting those targets will place a significant burden on the economies

24 :: polish market ::

1 /2012

of EU Member States, while having little effect on the implementation of climate targets. It should be stressed that we are part of the global economic system and all our policies should include an element of competitiveness. We should also remember that Europe is going through an economic crisis, and we need to adapt our targets and instruments accordingly. Member States now have radically different priorities from those 5 years ago. That is why it is necessary to perform indepth analyses of the impact of implemented policies, particularly, the costs to be borne by the economies of Member States. In connection with that it is also necessary for the European Commission to prepare and present assessments of the impact of proposed solutions at the level of individual countries. Only this approach can make it possible to properly assess the suggested measures. It is also worth emphasising that Member States are free to shape the structure of their economies, including their energy mix. With each successive policy agreed on at EU level, they are losing this freedom, in particular when a climate and energy package is adopted. The Polish economy, with regard to the European obligations to reduce greenhouse gas emissions and to improve energy efficiency, has a rather weak starting point. It is characterised by increased capital - and energy intensity in obtaining fuel, considerable losses in the course of their processing into final energy, and high energy-intensity in transport. This increases the scale of measures that need to be taken and effectively multiplies their necessary intensity. The proportion of coal in the energy mix is a defining factor for Poland against the background of the other EU Member States. It is a positive aspect that our own resources of this fuel constitute a stabiliser for energy security, not just for Poland, but for the entire EU. It should be stated clearly that pollution reduction costs are considerably higher in Poland than in other Member States. The Polish energy sector will also be burdened by new EU regulations on environmental protection. The

entering into force of the EU Emissions Trading Directive will impose the implementation of the next stage of the emissions trading system (ETS) and cause a rapid increase in CO2 emissions fees from 2013, despite the derogations granted to Poland, which allow a gradual transition to full fees. As for the Directive on industrial emissions, a programme of modernisation or the construction of completely new units will be needed. Cogeneration sources would be particularly beneficial, allowing the fulfilment of new emissions standards. Poland’s energy mix will find space for various technologies. Coal will remain the foundation of our energy system, while energy generation from renewable sources will increase, as will the use of natural gas (especially if the good prospects for shale gas are confirmed), and nuclear energy will come into play. Another opportunity is the use of distributed energy. The promotion and support of so-called prosumers, who also produce electrical energy, constitutes a great potential within the Polish energy sector. Still, the real decision-makers with regard to the structure of the future energy mix will be the entrepreneurs investing in energy sources, taking into account the economic aspect of such projects. Financing transformation into a low-emission economy, including low-emission energy, is to be conducted with the use of instruments prepared by the European Commission under the EU budget – the structural funds, the Cohesion Fund, funds for research development under the Seventh Framework Programme, and other initiatives in the field of innovation and development – also for the construction of European networks and routes. An important support here will be loans from EIB and the World Bank. Proceeds from the Emission Trading Scheme until 2013 are also expected to constitute a substantial source of funds for environmental undertakings. However, the costs of transformation will mainly be borne by the economies of EU Member States and energy consumers, because these resources will not be sufficient.

Energy/Mining Energy efficiency has been indicated as the least expensive solution to reduce emissions and to improve energy security. Technologies which contribute to the enhancing of efficiency along the entire energy chain include intelligent networks, the means of demand management, cogeneration, central heating and cooling, decentralised energy generation, and the popularisation of electric vehicles. For this reason, we should aim at the earliest possible adoption of the new directive on energy efficiency, which will offer a wide array of support instruments. CCS technology is important in terms of reducing emissions, but it hasn’t been analysed enough yet, and is not ready to be implemented on a broad scale. Further support for demonstration facilities is needed. If we manage to test this technology in them, this will prove beneficial not only for the whole of Europe, but also for third countries, perhaps offering answers to numerous doubts in this area. Despite the tragic events in Japan, nuclear energy remains an attractive alternative for many EU Member States, so it should still be included among energy technologies to be used.

At the moment, the Polish economy is facing a serious challenge related to the process of the implementation of EU Regulations and long-term recommendations in the area of climate protection. This challenge is being further intensified by the specific conditions of the fuel structure in the Polish economy. Furthermore, Poland is a country with a low GDP per capita as compared with the average EU level, and will follow a path of fast economic growth for the next several decades to eventually overcome these inequalities. This tendency will result in an increased demand for primary energy, estimated by MAE at ca. 20% until 2030. All these conditions, combined with the lack of technological potential, will greatly impede Poland’s efforts to further limit emissions by the year 2020. Nevertheless, Poland is not going to stand passive in a situation where, in order to remain competitive, one has to introduce specific measures in favour of innovative, clean technologies, increased efficiency of energy generation, and the diversification of the fuel portfolio, by developing renewable energy sources and nuclear energy. It is these measures that have formed

the basis of the strategic document entitled “Polish Energy Policy until 2030”, adopted by the Government in 2009 and currently being implemented. Given the previous, present, and future climate-oriented activities of our country, it should be stressed that Poland, in relation to the reference year from the Kyoto Protocol, has reduced the emissions of greenhouse gases by nearly 25%. Another fact worth noting is that during this time our GDP level has risen by almost 70%. Moreover, in 2010, electricity produced from renewable sources increased its share of national energy consumption to 7%, and the growth is continuing. Poland is an example of a country which is sustaining economic growth while reducing emissions. Measures which are to limit the discharge of greenhouse gases enforce greater energy efficiency and improved management of natural resources and energy, so they should constitute key elements of a strategy for overcoming the crisis. It is necessary to balance the activities undertaken at the global, Community, and national levels in such a manner as to make them beneficial for both the economy and the natural environment. ::

We need to talk about this The transition to a low-emission economy will be the primary civilisational challenge for Poland in the next decades. Treating it as a task in the field of the economy is a complete misunderstanding. Prof. Michał Kleiber The author is President of the Polish Academy of Sciences, Vice-President of the Social Council of the National Emissions Reduction Programme

It is the social element, meaning support for change that is key here. It seems that it may at some point determine whether we succeed or fail. The sooner we start the public discussion, the better. There is no shortcut here. In a democratic state under the rule of law there is no way to make fundamental political decisions if they have no clear social support. And the domestic awareness concerning environmental protection and related issues, as well as the weakness of the public debate itself, determines that many decisions – some of which will definitely be of a very unpopular nature – may not be made at all. One element of our mission should therefore be talks conducted in various forums. Public media – in my opinion – do not play the role they should. How can we convince us all to a better means of communication?

There are positive examples, as in the case of the meeting of the Social Council of the National Emissions Reduction Programme, attended via the Internet by 45 thousand people. Another condition for success is the legal environment, both on the EU and global scale, such as the need for climate solutions on the global scale, and on the national scale as well. Example: there is no way to develop – although we all agree upon this – one of the keys for our success – namely a dispersed prosumer energy network – if there are no appropriate legal instruments. Such issues, which demand immediate consideration of the legal instruments, are very numerous. There is also the issue of financing essential projects. We call it “The Second Marshall Plan,” due to the scale of the necessary outlays. This is

a neglected issue, and we are not fully aware of how this financial engineering might be conducted. Such possibilities are available. They are certainly very complicated and the more often and more in detail we think about this, the better. There are numerous threats, but at the same time some opportunities are taking shape, such as scientific research. We will never achieve what we dream about if we are not able to implement the technologies being developed in Poland. There are possibilities. Polish science also has good, advanced fields which may be used and which may prove competitive on the international scale. There are people who claim that the issue of climate change has been fabricated so that as many innovations as possible could be introduced to economic life. I will not go into whether this theory is true, but I believe that introducing innovations onto the market is absolutely a necessary condition for us to be at least moderately satisfied with the developments of the coming years. :: 1 /2012 :: polish market :: 25

Energy/Mining

Energy efficiency: goals and reality Presidential minister Olgierd Dziekoński talks about the room for improvement in efficient use of energy across different segments of the Polish economy

about an issue which is a challenge both for Poland and other European countries - that the consumption standard, amounting to 90-120 kWh/m 2 a year in newly-constructed buildings, is in practice applicable to just a fraction of the housing stock. In recent years in Poland, we have been building 130-160 thousand homes annually, which is 1% of the whole housing stock, of 16 million homes. This shows that the policy for increasing energy efficiency in the construction industry needs to be associated primarily with the modernisation of the existing stock, which is not possible by merely introducing standards for new buildings, regardless of their strictness. This does not of course mean we should give up on these standards – on the contrary, they have to be improved, following, for example, Sweden, where they are twice as strict as in Poland.

W hat might Poland’s energy future look like, taking into consideration the consumption of energy in the housing sector, which currently accounts for 40% of the entire national consumption? Buildings built in Poland before 1985 use 2/3 more energy than buildings built in Sweden and Germany today. Higher standards introduced in Poland in 1998 also suggest that, despite approaching the threshold observed in Germany, we still consume 15-20% more energy. At the same time, we often tend to forget

26 :: polish market ::

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W hat conditions should we consider then, in terms of improving energy efficiency in Poland? What options do we have to lower the consumption of energy? First – energy efficiency, second – distributed renewable energy resources, third – nuclear energy, and fourth – shale gas. These options constitute the field for making decisions. What factors affect costs and benefits? The first one is the EU regulations arising from the 3x20 Package, which, in fact, further increase costs in the conventional power industry, especially its branch based on coal and large power units. Secondly, the relatively high prices for liquid fuels and gas, even taking into consideration their possible lowering caused by the extraction of shale gas and the introduction of a uniform gas market in Europe. Thirdly, the drop in the extraction potential of the Polish coal mining industry, as indicated by the 16 million tonnes of coal

imported this year, despite the high (27%) profitability of mines. Speaking of energy efficiency, we should also remember that the State’s capabilities are very limited when it comes to financing large projects in the area of energy generation. This, of course, results not only from the situation of the Polish State, but from the circumstances in other public sectors and the public budgets both in the EU and globally. The current discussion on the necessity to eliminate the deficits in the public sector suggests that the potential to invest in the energy sources of all European and OECD countries will be severely limited, even more so, as there are other investment needs, connected with transportation systems and other elements of the infrastructure. Against this background, can we expect capital markets to provide financing possibilities? The answer is simple – it is us, the consumers of energy, who will have to cover these costs, using equity instruments. Such a model would be an obvious option; however, with individual consumers and investors, and the emerging technological opportunities for shaping the so-called prosumer market, the latter becomes a viable, alternative solution compared to the traditional model of power generation. This cannot be ignored, especially when we look at the historical structure of the energy market and the periods when it was dominated by energy successively obtained from wood, coal, fuel oil, and, as projected, from gas. Furthermore, historical data contradict the very popular thesis that an increase in GDP is always connected with higher energy consumption. The U.S. economy recorded the peak of energy consumption per GDP unit in the 1920s, and the Chinese economy in the 1980s. The peaks were followed by a dramatic drop. Both economies provide

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offers a complex projects and construction of cogeneration systems based on gas engines fueled by natural gas, biogas, landfill gas, mine gas or sewage gas. We perform general overhaul, maintenance, spare parts supply.

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Energy/Mining evidence that the efficiency of energy use is a great source for growth for the GDP. The increase in the efficiency of energy use cannot be discussed in isolation from the issue of policy and regulations. The issue of regulations is related to the Act on energy performance, which refers to the standards and obligations for the energy companies, as well as the role of Local Government Units in respect of the local energy markets, in particular in relation to cogenerated and distributed energy from renewable sources. The European Commission, due to the situation on the energy market, is considering imposing legal obligations on the Member States to save energy, passing certain normative levels on to them. The analysis which the EC wishes to perform in 2014 may in the end mean that obligatory energy efficiency targets in individual

countries may cause an additional normative saving obligation for Poland. We already have that requirement implemented in the directive on the energy performance certification of buildings. The standards outlined for so-called public-access buildings from 1 January 2019, and all buildings from 1 January 2021, say that we have to achieve “near-zero” energy consumption to meet them. This means a dramatic change in relation to the currently-binding standards, which allow usage at the level of 120 kWh/ m2 annually. This “near-zero” use also means that we have to implement renewable energy in the consumption of energy for housing. This results from the fact that for technological reasons it is very hard – if not impossible, and economically unjustified – to lower energy consumption in buildings through various methods to below 50 kWh/m 2 annually. The European Commission, in the directive on the energy performance certification

of buildings, stated that the “standard is calculated by deducting the energy which is produced from renewable sources” and then it is indeed easier to achieve an annual consumption of less than 50-60 kWh/m 2. This means that for every one of those 150-160 thousand newly-built homes and other erected buildings we have to use approximately 40 kWh/m 2 energy annually from renewable sources, or else we will not be able to meet those requirements. Finally – if we wish to make a real change in current energy consumption, we have to introduce an energy audit mechanism for cities to enable the implementation of a cohesive energy policy in those cities in respect of public services, systems and methods of supplying energy, as well as in relation to the current housing stock through the transformation of current energy sources and cogeneration sources and through the conversion of energy systems. ::

The substitution of energy carriers will be the most difficult The emissions reduction programme is one of the greatest challenges to the Polish economy in the next 10-15 years. One needs to be aware of the serious consequences of the obligations contained in the EU Climate and Energy Package, not only for the electricity and heat sector, but also for the entire energy-intensive industry sector. Janusz Steinhoff The author is Vice-President of the Social Council of the National Emissions Reduction Programme, former Deputy Prime Minister and Minister of the Economy

Often and on many occasions we have deplored the fact that no agreement has been reached at the conference in Copenhagen. The conference in Durban has not resulted in major achievements either. At various times we have emphasised that the question of air protection is a global issue, not a regional one, and that it should be dealt with globally. The European Union made a decision to march in the vanguard – I only regret that no one has followed behind this vanguard, as disregarding the principles of competitiveness may have very far-reaching consequences for the Polish economy.

28 :: polish market ::

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One also needs to be aware that at least two areas of the Package are easier to implement in Poland. I mean a reduction in energy consumption by industry, which is closely correlated with the economy, and raising the share of energy from renewable sources to 15%. With the latter, one needs to be aware that for now the energy from renewable sources has appeared in the energy mix as a result of activities of a regulative and administrative nature, not economic. The most difficult issue is the inevitable substitution of energy carriers in the heat and electricity sector. The provision of the “Energy

Policy” of the State that part of this energy will still be produced in nuclear power plants and that gas power plants will be created is rational. The prospects for extracting shale gas will be the factor to accelerate the reduction in coal consumption. The extraction of hard coal in Poland is decreasing, and nothing indicates that it will increase significantly in the near future, as investments in the underground mining – and Polish mines have increasingly difficult geological conditions – are very costly, and significant investments should rather be expected in the extraction of brown coal. The implementation of the Climate and Energy Package is one of the greatest challenges, for one must keep in mind the loss of competitiveness by the European – including Polish – energyintensive industry. Therefore, in the future (for example within the framework of WTO) methods and means to at least partly compensate for that loss need to be developed. ::

Regions

Investments? Only in Silesia The rapidly-developing Upper Silesia region has become the most attractive region for investors. This has resulted from several factors, including this being the largest industrial area in the country, with a wealth of natural resources at its disposal, its high accessibility allowing the easy supply of raw materials for production, the absorptive power of the market, access to highly-qualified professionals and investment tax credits.

The spatial range of the report covers Poland in its division into 16 provinces, 54 subregions. Formally there were 66, but for the purposes of this report subregions - large cities, such as Katowice, Kraków, Łódź, Poznań, Szczecin, Tri-City, Warsaw, are Wrocław were combined with the surrounding units functionally linked with those cities.

Bogdan Sadecki Silesia is one of the most industrialised regions in Europe. For a long time it has been associated mainly with heavy industry (60 mines, 18 ironworks and steelworks). It is still the case, but other industries are dynamically developing, particularly automotive. The region has the densest network of express roads, which is currently an indicator of its great potential and attractiveness. The proximity of the Western border and an airport (Pyrzowice) is also an advantage. Śląskie Province, composed of the eastern part of Upper Silesia and the western part of the Małopolska region, is considered one of the country’s most attractive regions for investments, next to Mazowieckie and Wielkopolskie provinces. Foreign companies have invested approx. USD14 billion here over the last seven years. In terms of foreign trade Silesia is second in Poland and has the highest positive balance of trade. Tourism is also developing well in this region. The potential for active tourism, both in the winter and in the summer, is focussed in the Silesian Beskids and Żywiec Beskids mountain ranges and the area of the KrakówCzęstochowa Upland. Silesia is leading the way among the regions highly attractive to investments, which is confirmed by the report “The investment attractiveness of the provinces and subregions of Poland” published by the Gdańsk Institute for Market Economics. It takes up the issue of the territorial disparities among Polish regions in terms of attractiveness to foreign investors. The report by the Institute for Market Economics, prepared in cooperation

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The report uses quantitative data coming mainly from the public statistics system, supplemented by data and information coming from other sources. The primary method for assessing investment attractiveness remained unchanged. A pseudo-single-feature classification procedure was used. This

with the Konrad Adenauer Foundation – the Poland Office – is already in its seventh edition. Its goal is to specify the differences in the investment attractiveness of provinces and subregions.

The attractiveness of the subregions for investment in industrial activities in 2011 (the numbers indicate the positions in the ranking)

trójmiejs ki s łups ki

s uwals ki

kos zalińs ki

9 s zczecińs ki

ełcki

s tarogardzki

ols ztyńs ki

elbląs ki

grudziądzki s targardzki

białos tocki

bydgos ko-toruńs ki 6

pils ki

ciechanows ko-płocki

włocławs ki

os trołęcko-s iedlecki

gorzows ki poznańs ki 7

koniński s kierniewicki

les zczyńs ki

wars zaws ki

zielonogórs ki

bials ki

łódzki 3

kalis ki

legnicko-głogows ki

s ieradzki

radoms ki lubels ki

piotrkows ki jeleniogórs ki 11

wrocławs ki 4

kielecki

puławs ki

częs tochows ki

wałbrzys ki

chełms ko-zamojs ki

opols ki nys ki

The Highest High Average Low

łomżyńs ki

katowicki 1 rybnicki 2

s andomiers kojędrzejows ki tarnobrzes ki

krakows ki oś więcims ki 10 8

biels ki 5

rzes zows ki

przemys ki

tarnows ki

nowos ądecki

kroś nieńs ki

The Lowest

Source: Report “The investment attractiveness of the provinces and subregions of Poland,” The Gdańsk Institute for Market Economics

Regions

Industrial activities, Katowice subregion Strengths Labour supply

Very high number of highly-qualified specialists, graduates and high unemployment

Economic infrastructure

Great potential for investing in areas covered by the Special Economic Zone (SEZ). Strong activity of investors in the SEZ

Accessibility

Large transport hub, high density of road infrastructure, better than average accessibility to the Western border, well-developed transport and logistics sector

Economic development level

Large number of companies with a share of foreign capital and a favourable structure of the economy

Environmental protection level

Low proportion of protected areas of nature conservation

made the assessment relative. The reference point is the average value for a set of provinces or subregions. A composite assessment of the investment attractiveness of provinces and subregions was performed in the report. Śląskie Province clearly leads the way in this respect. The primary reasons are the following: :: its location in the centre of Europe, :: a developed network of transport and communication infrastructure, :: a large number of academic centres, :: a substantial supply of qualified workers :: a large and absorptive ready market, of nearly 4.7 million residents :: significant opportunities for companies to collaborate in the region.

available market, the level of development of the economic infrastructure, the level of development of the social infrastructure and the level of public safety.

Source: Report “The investment attractiveness of the provinces and subregions of Poland,” The Gdańsk Institute for Market Economics

Regions with long-standing industrial traditions, which are naturally paired with well-developed production enterprises and a specialist labour market, turned out to be the

most attractive for investments. These criteria are met by the subregions in Southern Poland, which came out at the top. This area is characterised by strong industrialisation. High accessibility, provided by the A-4 motorway, is highly significant. The attractiveness for highest investment in services and advanced technologies characterised metropolitan subregions. The centres of those areas are the largest Polish cities, which have at their disposal an extended base of academic centres. They are also rich in highly-qualified personnel. Another advantage is their absorptive market, high accessibility and a well-developed economic infrastructure. The Gdańsk Institute for Market Economics understands investment attractiveness as the capacity to attract investors by providing a combination

The attractiveness of the subregions for investment in services in 2011 (the numbers indicate the positions in the ranking)

4 trójmiejs ki s łups ki

As was the case last year, this edition puts Śląskie Province as the leader in attractiveness. Average positions were taken by Kujawsko-Pomorskie, Łódzkie, Lubuskie, and Opolskie. The least attractive are Podkarpackie, Świętokrzyskie, and WarmińskoMazurskie, with Lubelskie and Podlaskie at the very bottom of the ranking. “The strong are the most attractive and this propels their attractiveness. The weak are the least attractive, and that’s one of their most important development problems,” said Mr. Tarkowski of the Institute of Market Economics, commenting on the report’s results. Investment attractiveness is largely a consequence of economic development in individual regions.

kos zalińs ki

s zczecińs ki

ols ztyńs ki

elbląs ki

grudziądzki s targardzki

białos tocki

bydgos ko-toruńs ki 8

pils ki

ciechanows ko-płocki

włocławs ki

os trołęcko-s iedlecki

gorzows ki poznańs ki 6

s kierniewicki

wars zaws ki 1

zielonogórs ki

bials ki

łódzki 2

kalis ki

legnicko-głogows ki

s ieradzki

radoms ki lubels ki

piotrkows ki jeleniogórs ki

wrocławs ki 7

kielecki

puławs ki

częs tochows ki

wałbrzys ki

chełms ko-zamojs ki

opols ki nys ki

The Highest

Average Low

łomżyńs ki

konińs ki

les zczyńs ki

High

The assessment of the investment attractiveness of provinces was performed on the basis of an analysis of seven selected groups of specific criteria: resources and labour costs, the activity of provinces towards investors, accessibility, the volume of the

s uwals ki ełcki

s tarogardzki

katowicki

s andomiers kojędrzejows ki tarnobrzes ki

3 rybnicki 10

oś więcims ki biels ki 9

krakows ki 5

tarnows ki

nowos ądecki

rzes zows ki przemys ki 11

kroś nieńs ki

The Lowest

Source: Report “The investment attractiveness of the provinces and subregions of Poland,” The Gdańsk Institute for Market Economics

1 /2012 :: polish market :: 31

Regions Services, Katowice Subregion Strengths Market absorptive power

Very high purchasing power of households and companies

Labour supply and quality

Very high number of highly-qualified specialists, people with secondary school education and university students

Accessibility

Very good transport accessibility: an important transport hub of trans-regional significance and an important airport

Economic development level

Very favourable economic structure. A very large number of companies with a share of foreign capital

Weaknesses Labour costs

Very high pay levels

Public safety level

Very high crime rate and very low crime detection rate

Natural environment quality

Very high level of pollution, low proportion of protected areas

Source: Report “The investment attractiveness of the provinces and subregions of Poland,” The Gdańsk Institute for Market Economics

Technologically-advanced activities, Katowice Subregion Strengths Quality of labour supply

Large number of students and graduates of higher schools

Accessibility

Very good transport accessibility. An important transport hub of national significance with access to an international airport

Economic infrastructure

Very high potential to invest in the SEZ, very good results of activities in the SEZ

Economic development level

Favourable economic structure

Weaknesses Public safety level

High crime rate and low crime detection rate

Natural environment quality

Very high level of atmospheric pollution, a low proportion of protected areas

The attractiveness of the subregions for investment in technologically-advanced activities in 2011 (the numbers indicate the positions in the ranking)

5 trójmiejs ki s łups ki

s uwals ki

kos zalińs ki

s zczecińs ki

ełcki

s tarogardzki

elbląski

ols ztyńs ki

9 grudziądzki s targardzki

białos tocki

bydgos ko -toruńs ki 8

pils ki

ciechanows ko-płocki

włocławs ki

os trołęcko-s iedlecki

gorzows ki poznańs ki 3

konińs ki s kierniewicki

les zczyńs ki zielonogórs ki

wars zaws ki 1 bials ki

łódzki 4

kalis ki

legnicko-głogows ki

s ieradzki

radomski

wrocławs ki 6

kielecki

puławs ki

częs tochows ki

wałbrzys ki

chełms ko-zamojs ki

opols ki nys ki

The Highest

katowicki

s andomiers kojędrzejows ki tarnobrzes ki

7 rybnicki

High

oś więcims ki

Average

biels ki 10

Low

krakows ki 2 tarnows ki

nowos ądecki

rzes zows ki przemys ki 11

kroś nieńs ki

The Lowest

Source: Report “The investment attractiveness of the provinces and subregions of Poland,” The Gdańsk Institute for Market Economics

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of location benefits that can be achieved in the course of economic activities. The areas providing an optimum combination of location factors also create the best conditions for business operations, through which they draw investors. Several dozen variables were analysed to pick the most attractive provinces and subregions. The examined elements included the already-mentioned accessibility, labour costs, labour supply and quality, the absorptive power of the market, the level of development of economic and social infrastructure, the level of economic development, and the level of public safety. Depending on the type of economic activity, they were given various weights (source: The Gdańsk Institute for Market Economics).

lubels ki

piotrkows ki jeleniogórs ki

łomżyńs ki

Source: Report “The investment attractiveness of the provinces and subregions of Poland,” The Gdańsk Institute for Market Economics

“This ranking is not about the positions that change each year, climbing or going down the ranks. It is about being aware of our strengths and weaknesses, even for those who are at the very bottom of the list, to build a relatively attractive investment package,” said Marcin Nowicki of the Gdańsk Institute for Market Economics, when presenting the report results. The results should not be treated as the results of a typical ranking, but as a guideline for the Polish regions. ::

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Regions

In the past several years Lower Silesia (Dolnośląskie province) has won a reputation as a place inhabited by active, enterprising and hard-working people. Despite the crisis, their contribution to the local economy is a factor determining its further expansion. The province government spares no effort to meet the expectation of entrepreneurs halfway. Businesses operating in the province can count on assistance and support from the authorities, like for example assistance in acquiring funding for development from the European Union. Lower Silesia is one of the leading Polish provinces in terms of business start-ups and the number of businesses registered per 10,000 working-age population. Over the past nine years the latter indicator increased in Lower Silesia by 13% while the total number of businesses registered rose by 57%. This potential must not be wasted. Special attention is devoted to the development of the small and medium enterprise (SME) sector because the condition of the economy increasingly depends on this group of businesses. This is why it is so important to support the SME sector in acquiring EU funding. Lower Silesia’s Intermediate Body (DIP) plays a special role in this respect. It helps business owners to get money needed to modernise their businesses. DIP regularly runs competitions for funding for small businesses. A network of points providing information on how EU funding is to be acquired for starting up a business has been developed throughout the province. The most important among them are information points for European funds and information points for the Regional Operational Programme. The province government also supports large-scale business initiatives. These include the initiative to set up technology parks supporting innovation in the province, like for example the Lower Silesian Technology Park T-Park, and the Technology Park KGHM Letia. The technology parks offer businesses not only attractive locations and space for business activity but also access to laboratories and professional services, for example legal and accounting ones. Industry clusters, which bring together several economic sectors, offer another opportunity for the development of Lower Silesian business. There are now 15 clusters in the province. They are focused on Biotechnology (NutriBioMed cluster), renewable energy sources (Lower Silesian Renewable Energy Cluster), ceramics production (Ceramika Bolesławiecka) and other spheres of activity. In the future, measures are planned to support

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Archives of the Regional Parliament of Lower Silesia

Lower Silesia friendly to business

the development of clusters in the province. The goal will be to encourage the SME sector to cooperate with scientific research units by providing funding for the research projects which may make the application of innovative solutions easier. Businesses can also rely on support from the province government in terms of advice and training. Given the changing conditions on the labour market, the province government is pursuing a “quick response” programme to support entrepreneurs and their workers in the adjustment process. Under the programme, the office of the province chairman provides retraining courses and advice on choosing a new occupation, including individual action plans and assistance in choosing a suitable workplace. The policy pursued by the province government is designed to protect the Lower Silesian labour market. In 2009 alone the province government transferred PLN69.8 million to County Employment Agencies for measures aimed at raising economic activity rates among the unemployed. The agencies also receive special funding for supporting enterprise. In the near future entrepreneurs, especially SMEs, will be encouraged to use risk capital instruments, which may be especially helpful in implementing innovative solutions. This is where the idea of the JEREMIE (Joint European Resources for Micro to Medium Enterprises) initiative comes from. JEREMIE is a trust fund, which is to attract external capital and then use it to ensure micro-credit, risk capital and other innovative forms of investment to the SME sector. The Dolnośląski Fundusz Gospodarczy (DFG) company has been set up

on the initiative of the province government to offer small and medium businesses guarantees on bank loans for the expansion of their operations. DFG also helps businesses to access external sources of funding. The Regional Credit Guarantee Fund has been established for the same purpose. In 2010 it provided 1,300 guarantees worth PLN142 million to Lower Silesian businesses. Every year the province government increases spending on public projects. The recently adopted budget for 2012 sets aside the largest amount of money ever for such projects - PLN764 million, or PLN137 million more than in 2011. The province government has earmarked PLN91 million for the construction of a bridge on the Odra river in the city of Brzeg Dolny, PLN38 million for the construction of the expressway from Żerniki to Siechnice as part of the eastern section of the ring road of the province’s capital city Wrocław, PLN20 million for the provincial hospital under construction in Stabłowice, PLN5 million for the programme of building football pitches for children and young people, PLN14 million for the modernisation of the Four Domes pavilion, and PLN12 million for the expansion of the Wrocław Opera House. These large outlays for infrastructure projects offer a chance for the development of construction and manufacturing businesses, not only large companies but also SMEs as sub-suppliers and sub-contractors. Prestigious rankings and the steady inflow of new foreign investment, which offers a chance for the development of local businesses, confirm that the province is an attractive business location. ::

Natural flow of energy

Effective and safe gas provisions through a network in south east Poland.

Infrastructure

Faster to Berlin by the A2 Poland’s President Bronisław Komorowski officially opened November 30, 2011 the 105.9-kilometre stretch of the A2 motorway from Nowy Tomyśl to Świecko on the Polish-German border. Among those present at the ceremony were former Polish Presidents Lech Wałęsa and Aleksander Kwaśniewski, businessman Jan Kulczyk, former Minister of Infrastructure Cezary Grabarczyk, who had been in the office when construction works began on the project, and Minister-President of Brandenburg Matthias Platzeck. One after another, they touched and lit large blocks symbolising individual stages in the construction of the motorway.

The motorway project, the largest one in Poland carried out in the public-private partnership system, was executed by Autostrada Wielkopolska SA, the company set up for this purpose in 1993. The Minister of Infrastructure, on behalf of the Polish government, is the party to the concession contract while the institution responsible for its execution is the General Directorate for National Roads and Motorways (GDDKiA). In 1995, in a two-stage international tender, Autostrada Wielkopolska SA was awarded the contract for the construction and operation of the A2 motorway from Świecko on the Polish-German border to Stryków in central Poland as a toll road. Under the concession contract, signed in 1997, the company was to build and then operate the 255-kilometre

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stretch of the A2 from Świecko to Konin, excluding the 13.3-kilometre section which was to become part of the Poznań ring road. The project was divided into two stages: the construction of the 149.4-kilometre stretch from Konin to Nowy Tomyśl and the 105.9-kilometre stretch from Nowy Tomyśl to Świecko. The 47.7-kilometre section from Konin to Września was opened to traffic in December 2002. This was followed by the opening of the 37.5-kilometre section from Września to Poznań in November 2003 and the 50.4-kilometre section from Poznań to Nowy Tomyśl in October 2004. After the completion of the first stage of the project, negotiations started concerning the stretch from Świecko to Nowy Tomyśl. Construction works were suspended for

Infrastructure

two years as no agreement could be reached with the PiS government. Only after Poland had been awarded the right to host the UEFA Euro 2012 football tournament, did the attitude of the ruling camp change. On August 30, 2008, after several months of negotiations, the company and the Ministry of Infrastructure signed commercial conditions for the construction and operation of this stretch of the motorway. As required by the government, a special-purpose company - Autostrada Wielkopolska II SA, was set up for this purpose. Construction works began in July 2009. The general contractor was A2 Strada, a company established by Kulczyk Holding and Strabag AG of Austria. The project cost almost 1.3 billion euros, or 12.2 million euros per kilometre. It was financed from a loan from the European Investment Bank, loans from 11 international commercial banks and own contributions made by Autostrada Wielkopolska shareholders. The section from Świecko to Nowy Tomyśl is the first long motorway section in Poland with a concrete surface, which is more durable and is expected to last around 30 years. Under the contract, additional works – however, outside the carriageways - may be conducted until May 20, 2012, including finishing works at toll collection points, plantings, and alterations on animal crossings and drainage systems. This is why toll collection on this stretch of the motorway will not start until May 20, 2012. The project was carried out in compliance with all the norms and standards for road and motorway construction in the European Union. As much as 25% of the total budget was spent on environmental protection measures because 85% of this stretch of the A2 runs across forests, including Natura 2000 protected areas. Apart from the over 80 bridges and flyovers, and six interchanges built along the stretch, there are also almost 200 overpasses for large, medium-sized and small animals. They are from 20 to 30 metres wide, because they have to be friendly to animals, and made of reinforced concrete covered with wood. Special landscaping features have been used to encourage animals to move towards a crossing. The high fences on both

sides of the overpass reduce vehicle noise and prevent animals from being blinded by headlights. It comes as no surprise that a single overpass cost around PLN20 million, an equivalent of the annual budget of an average-sized municipality in Poland. One should also mention underpasses for amphibians, noise barriers, protection walls for bats, plantings, drainage systems complete with ponds, separators and sewage treatment plans, and 232 kilometres of fencing. These have made the A2 the largest environmental project in Europe at present. Autostrada Wielkopolska SA is not the owner of the A2 but will be executing the concession contract for 40

years, that is until 2037. The land on which the motorway is built is owned by the state and the company pays an annual rent on it of over PLN7 million. Autostrada Eksploatacja SA, a subsidiary of Autostrada Wielkopolska SA, is responsible for operating the new motorway stretch and collecting toll. Under a contract with the concession holder – Autostrada Wielkopolska SA – the subsidiary has been operating the stretch from Konin to Września since December 20, 2002. According to NaviExpert, the time of travel from the Polish cities of Poznań and Łodź to Berlin has been shortened by more than 1 hour thanks to the motorway. ::

3×©autostrada-a2.pl

1 /2012 :: polish market :: 37

Infrastructure

Tournament will end, motorways will remain Apart from railway projects, stadiums built for the UEFA Euro 2012 football tournament and other large infrastructure undertakings funded from European Union sources, road building is now the most important type of projects carried out by Polish construction companies. Among the most spectacular tasks completed in recent months are motorway and expressway stretches opened successively to traffic. Almost all of Poland’s largest road-building companies have been involved. Some of them are in the process of executing motorway construction contracts worth billions of zlotys. Patryk Mirecki Looking at the implementation of motorway construction projects in Poland, the first conclusion is that the process is too slow and that its scale is insufficient relative to needs. And the needs are huge considering that the number of vehicles, both passenger cars and lorries, on Polish roads has increased several times in the past two decades. To overcome the shortage of good roads, one needs to build them. The problem of financing these expensive projects has been partly solved through access to multi-billion EU funds. It is largely thanks to this money that the construction of motorways and expressways has accelerated in recent months. It is already clear that not all of the planned road projects will be completed by the time of the UEFA Euro football tournament. But Poland’s three main motorways and important expressways should be opened to traffic if not by the end of 2012 then in 2013.

More money for motorways At the end of 2011 the General Directorate of National Roads and Motorways (GDDKiA) announced that in 2012 it would raise funding for the construction of motorways and expressways to PLN29.3 billion from PLN26.4 billion in 2011, although the latter has been the highest annual amount so far ever spent on road building in Poland. The Polish motorway network is to be extended from almost 1,100 kilometres at the end of 2011 to 1,500

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kilometres a year later. In the same period the length of expressways is to be extended to around 2,000 kilometres. GDDKiA promised that by the end of 2012 it will be possible to drive along the A1 motorway from the coastal city of Gdańsk in the north up to the town of Stryków, near Łódź, in central Poland. At present, the motorway ends in the northern city of Toruń. The A2 motorway from the Polish-German border to Warsaw should be passable by the time of the UEFA Euro tournament, though not fully completed. At present, the motorway runs from the border to Stryków.

205 kilometres of motorways According to GDDKiA, 267.7 kilometres of new roads for fast traffic – 205.5 kilometres of motorways and 62.2 kilometres of expressways - were opened to traffic in 2011. The 62-kilometre stretch of the A1 motorway from Grudziądz to Toruń in northern Poland was executed by Gdańsk Transport Company (GTC). The contractor on the project was a consortium with Skanska Polska. The 105.9-kilometre stretch of the A2 motorway from Nowy Tomyśl to Świecko on the Polish-German border was executed by Autostrada Wielkopolska SA and the contractor was a Strabag consortium. Construction work was resumed on sections A and C of the A2 stretch from Stryków to Konotopa near Warsaw after the Chinese company Covec had withdrawn

from the contract to build the stretch. GDDKiA says builders are now working there round the clock seven days a week, which means that by mid2012 it will be possible to travel along the A2 from the Polish-German border to Warsaw. GDDKiA Vice-President Tomasz Rudnicki has told the Rzeczpospolita daily that work on individual sections of the A2 stretch from Stryków to Konotopa was from 40% to 85% completed. The fastest progress is on the section closest to Warsaw built by Budimex; the slowest (40%) is on the section taken over from the Chinese by the Polish-Czech consortium DSS-Bogl a Krysl.

Crisis bites The international financial crisis has brought down the amount of funding available for new projects under the programme for the construction of national roads, although the impact has been relatively slight. GDDKiA has calculated that in February 2011 it was necessary to cancel 15 tenders held under the programme, including 12 tenders for construction works. Among the affected road stretches was the over 70-kilometre section of the A18 from Olszyna to Golnice, the 41.5-kilometre section of the S7 from Koszwały to Elbląg and the over 20-kilometre section of the S7 from Jędrzejów to the border of Świętokrzyskie province. As a result, in 2011 GDDKiA failed to sign contracts for the planned construction of 226.4 kilometres of roads, including 70.9 kilometres of motorways and 155.5 kilometres of expressways. It is already clear that it will not be possible to make the Kowal-Czerniewice stretch of the A1 and the Tarnów-Kor czowa and Bochnia-Wierzchosławice stretches of the A4 fully passable by June 2012, that is by the time of the UEFA Euro tournament. And there is the risk that the Kowal-Stryków and Świerklany-Gorzyczki stretches of the A1 and the WierzchosławiceKrzyż of the A4 will also remain impassable. The remaining stretches are being build according to schedule.

Infrastructure

At the end of 2011 a total of 1,323 kilometres of national roads were being built or modernised. Work was underway on the construction of 580 kilometres of motorways, and 743 kilometres of expressway and ring roads, and the modernisation of 615 kilometres of existing roads.

Motorway builders Budimex is one of the largest companies which are now executing motorway construction contracts. At present, Budimex is carrying out three motorway construction projects worth over PLN3 billion including VAT in total. The contract for the construction of the 33-kilometre stretch of the A4 from Dębica to Rzeszów, signed in May 2010, is worth over PLN1.4 billion. Under the contract, the stretch was to be completed within two years since the start of construction works. The contract for the design and construction of the 25-kilometre stretch of the A4 from Jarosław to Radymno, worth PLN794.4 million, was signed in October 2009. April 2012 was the deadline for the completion of the project. Meanwhile, during construction works archaeologists have found there artefacts of great historical value. Construction works had to be suspended on almost 30% of the motorway stretch to enable archaeological excavations. In November 2011 the project was 70% completed. Budimex is also responsible for the execution of a 7-kilometre section of the 91-kilometre A2 stretch between Łódź and Warsaw. The PLN348.8-million contract for the design and construction of the section - section E – was signed in September 2009. The section will have three lanes plus a hard shoulder in each direction and two intersections: Pruszków and Konotopa. In November last year 95% of the earthworks on the section’s main run was completed.

Skanska’s contract worth billions A consortium of Skanska and NDI started construction works on the A1 motorway under a contract with Gdańsk Transport Company in 2006. The first stage of the project, the 90-kilometre motorway section from Rusocin to Nowe Marze, was completed in 2008. Another 62 kilometres

of the road were opened to traffic in October 2011. The two sections have a combined length of 152 kilometres. As much as 33 million cubic metres of earth was moved, and 434,000 cubic metres of concrete and 2,900 cubic metres of asphalt was produced on the two stages of the project. The total value of the project was 1.25 billion euros, or over PLN5 billion. During the three construction seasons, up to 4,500 people worked on the construction site at periods of peak activity, including 1,100 workers employed directly by the Skanska-NDI consortium.

Between Stryków and the German border In the years 1997-2011 Strabag built eight motorway stretches, including the A4 section from Krzyżowa to Zgo rzelec and the A2 section from Konin to Koło. At the end of 2011 the company completed its biggest motorway project in Poland – the over 105-kilometre stretch of the A2 motorway from Nowy Tomyśl to Świecko on the Polish-German border. As much as 11 million tonnes of materials was used to build the stretch. Construction works, carried out by 2,500 workers, lasted 9 million hours. It was also the first project in Poland on which Strabag used pebbled concrete pavement. Thanks to the completion of the stretch, the time of travel from the Polish mid-western city of Poznań to Berlin was shortened by two hours. Since December 1, 2011 it has been possible to travel by motorway from the Polish-German border to Stryków near Łódź.

Contracts with other companies Pol Aqua and its partner Dragados signed in October a contract for the construction of sections 6 and 7 of the S8 expressway with a total length of 12 kilometres in the vicinity of Łódź. The contract is worth almost PLN550 million including VAT and is to be carried out within 27 months. Pol Aqua has a 51% share in the consortium. A consortium of Warbud and Eurovia Polska is building section A between Stryków and Łyszkowice of the A2 motorway stretch running from Stryków to Konotopa. The section has over 29 kilometres. Section A is one of the sections of the A2 abandoned by the Chinese company Covec. The

project, worth PLN989 million, was started in August 2011 and is to be completed by October 2012. Under the contract, Warbud and Eurovia had to complete 60% of the project by the end of 2011. The section is to be passable, though not fully completed, by the time of the UEFA Euro tournament. In mid-2010 Bilfinger Berger Budownictwo, as the leader of a consortium, signed a contract for the construction of the southern part of Warsaw’s ring road – the section of S2 expressway from the Konotopa interchange to the Airport interchange. The project, worth PLN908 million, includes the construction of two three-lane carriageways with controlled access, a railway tunnel, 13 flyovers, two overpasses for pedestrians and 18 noise protection walls. The completion of the project is scheduled for August 2012 but the road will be opened to traffic in May 2012, before the start of the UEFA Euro tournament. The Polish subsidiary of the Portuguese company Mota Engil started in July 2011 the construction of the S3 expressway stretch from Go rzów Wielkopolski to Międzyrzecz. The road is to be opened to traffic in mid-2014. The stretch is divided into two sections of 19.1 kilometres and 18.5 kilometres. A consortium of companies led by Mota Engil Central Europe will build the section from Gorzów Wielkopolski to Skwierzyna. The project is worth PLN336 million.

Unclear future According to Tomasz Elżbieciak, writing on the wnp.pl portal, Poland is now one of the largest construction sites in Europe, mainly thanks to its infrastructure projects. But not many new contracts will be signed in the present EU budget period and it is still unclear how much money will be set aside for Polish infrastructure in the EU budget for the years 2014-2020. Elżbieciak writes, however, that producers of cement and aggregates, who are among the biggest beneficiaries of the road-building boom, can assess next year’s prospects optimistically. In 2011 they recorded the highest ever volumes of production and in 2012 their output may be at similar levels. :: 1 /2012 :: polish market :: 39

Infrastructure

Road and Bridge Research Institute for safe and modern roads Statistics on fatalities on Polish roads in 2011 are not optimistic - the number of road deaths increased. Is the Road and Bridge Research Institute taking measures to improve road traffic safety? Of course. The institute has a lot to offer in this respect. Through our scientific research work, solutions applied and expert opinions, we support road building, modernisation and repair projects. We are also helping to introduce road network management systems. All these activities contribute directly or indirectly to raising road traffic safety. In recent years the institute has developed several outstanding innovative solutions. One example is the Intelligent System of Complex Vehicle Identification - ISKIP, which enables the automatic identification of vehicles by simultaneously recognising such features as colour, make, type and registration number. The system relies on a complex neural network algorithm, analytical software and a database of around 500,000 pictures of vehicles. It is a unique solution in Europe and globally. An additional advantage of the system is the capability to integrate it with other elements of Intelligent Transport Systems, like for example speed measurement systems and weight-in-motion systems. It should be noted that removing overloaded vehicles from traffic is one of the measures that improve road safety by preventing damage to road surface. The Intelligent System of Complex Vehicle Identification, which has found recognition at foreign invention exhibitions and won a gold medal at a fair in Nuremberg, is already being implemented on Polish roads. I hope that this innovative system will in the future make its way to the European market as well. Active Intelligent Road and Bridge Restraint Systems - AIBDiM is another important project carried out by the institute. It may significantly improve road traffic safety. An important element of the system is a modern road

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Infrastructure Diagnosis - SPID - is a mobile laboratory which enables precise measurements of road surface deflections. The laser equipment of this ultramodern laboratory, one of two facilities of this kind in Europe, makes it possible to examine the state of road surface in a non-destructive way and, importantly, without disturbing road traffic.

Prof. Leszek Rafalski, Director of the Road and Bridge Research Institute

barriere, which restraint system is a modern device, which actively reacts to a vehicle crashing against it and adjusts the crash energy absorption level to the vehicle’s weight. Thanks to its unique design features, it also regulates the level of energy dissipation to reduce the forces acting on the passengers. After the crash, the system directs the vehicle back to the right course and calls emergency services. The road restraint systems should be deployed in especially dangerous places. Safe road traffic is impossible without modern road diagnostic testing. It is very important to take the right decision and at the right time about how a road should be repaired or modernised. Especially important is examining the road surface features which influence road traffic safety, such as roughness and evenness. The latest system acquired by the institute - System for Pavement

How do you see the problem of road surface maintenance? Does it concern only old roads, which have been used for years? Temperature changes and the growing number of heavy vehicles are the factors which have the greatest impact on road surface durability. It is necessary to make regular investments in road maintenance so as to enable the longterm and undisturbed operation of Polish roads. But the maintenance problem does not concern only old roads. It is important to take appropriate measures as early as the moment of designing new surfaces. They should be able, for instance, to meet the growing road operation requirements. The operation of roads is a very important sphere of road engineering. Unfortunately, it is often neglected in terms of funding and education. “The Operation of Roads,” a collective book published by the institute at the end of 2011, shows how important these problems are. Written by 15 authors under my guidance, it presents complex problems associated with the operation of roads. The problems are related to road traffic engineering, road surface diagnostic testing methods, road repair technologies, road maintenance in winter, and road signs and facilities. The book is a compendium of knowledge for individuals and institutions dealing with road design, construction, maintenance and testing, and for college and university students. I hope that the comprehensive approach to the operation of roads we have taken in our publication will make the readers aware of the huge impact it has on comfortable and safe road travel. ::

Opinion

A climate of affluence and saving The title of the breakthrough work by Adam Smith, that is ”An Inquiry into the Nature and Causes of the Wealth of Nations”, although more than 200 years have passed since its publication, still remains valid. Prof. Małgorzata Zaleska

The author is a Member of the Management Board of the National Bank of Poland, Associate Professor in the Department of Banking of the Warsaw School of Economics, a Member of the Presidium of The Committee on Financial Sciences of the Polish Academy of Sciences.

From the perspective of the analysis of wealth, the key element is to determine its size. Therefore, a number of questions arise, i.a., should the indicators and data aggregated at the level of the State (such as GDP) be used in such a study, or should it be assumed that the State’s wealth is the aggregated wealth of particular citizens? Furthermore, an unanswered question is what units should be used when measuring wealth? Can it be only money, or is the measurement of a State’s wealth to be understood as an amount of free time possessed while having a certain quality of life? Can it also be the extent of satisfaction? Following on from the above, a significant issue remains, namely: What does the wealth of the Polish State in the year 2011 look like, on the basis of the dimensions mentioned and, for the sake of contrast, how vast is the size of poverty among the Polish people?

The meaning of growing affluence In the times of the market economy, Polish people have grown richer, and at the same time, the increased stratification of society has occurred. Over the course of the last 15 years, percapita GDP has grown from 43% to 62% of the EU average. Simultaneously, in the 21st Century, the savings of many Poles have doubled. While households’ deposits accumulated in banks amounted to less than PLN 200 billion in 2000, now they exceed PLN 440 billionn. Nearly 20% of the households holding savings say their savings are higher than their 6 months’ income. In September 2011 alone, the value of deposits of retail clients increased

by nearly PLN 8 billion. The uncertain situation on the financial markets, including the stock market, favours the transfer of resources to the banking sector, into deposit accounts, perceived to be a safer form of saving. What is also worth noting is the record-breaking value of resources retained in the form of cash outside the Polish banking system, recorded in June 2011 (over PLN 95 billion). Furthermore, it is also worth emphasising that call deposits of households still constitute the majority of the resources accumulated in banks. Keeping savings in the form of cash or having them on short-term deposit accounts is a frequent practice in times of uncertainty. However, when analysed from the perspective of the economy and the banking sector, fixed-term savings should be replaced by increasingly significant long-term deposit accounts. The increase in middle and longterm savings carries certain benefits for the economy and the stability of the banking sector. Savings meet the demand for money, are used to finance investment projects, and are a much safer form of financing the borrowing needs of the State than an external debt.

influence the size and structure of savings. The comparison of the saving situation with its complete absence demonstrates disproportions in the distribution of wealth. The Giny coefficient, also known as the measure of social dispersion, may assume a value from 0 to 1 (0 means perfect equality). This coefficient, in the case of Poland, was growing until 2005, then it started to fall, and currently it is at the level of 0.3.

Saving in turbulent times What the climate for Polish society’s growing rich, and the growth of savings, will be, time will tell. Nevertheless, the factors influencing the above will include, the depth and course of the current crisis. Turbulence on financial markets influences the affluence of societies and may affect their preferences with regard to the forms of saving. The crisis is the time, which on the one hand increases awareness of risk and the safety of savings, but on the other may be unfavourable to the growth of a society’s wealth. ::

A room for improvement At the same time, it should be emphasised, that over 60% of Polish households do not have any savings whatsoever. Such groups include most often the residents of rural areas and elderly people (nearly half the 35-year olds and younger people have savings). This shows that a vast area of activity still remains for banks and financial institutions in Poland, which, by way of their policy, may effectively

The increase in middle and longterm savings carries certain benefits for the economy and the stability of the banking sector. Savings meet the demand for money, are used to finance investment projects, and are a much safer form of financing the borrowing needs of the State than an external debt. 1 /2012 :: polish market :: 41

International Relations

Behind the Great Wall The December visit by President Bronisław Komorowski in China marks a new chapter in Polish-Chinese bilateral relations.

Bronisław Komorkowski, Hu Jintao

“We can share with China our practical experience in transforming the State, which was extremely far from having democratic standards, into a state of law”, stressed President of Poland Bronisław Komorowski during a Christmas Eve interview for Polsat News. The President, who on 22 December 2011 returned from several days’ visit to China, said that the last visit of the President of Poland to China had taken place 14 years ago. “Since that time the world has changed, China has changed, Poland has changed, and also Polish-Chinese relations should change”, he added. He explained that his visit was a chance to sign with the Chinese a declaration on strategic partnership. “A number of countries around the world have such contracts signed, 7 in the European Union, so it’s not any exceptional distinction, but it means that we have just joined those countries in Europe which have such special relations with China, relations which give them political and economic benefits”, he said. Bronisław Komorowski stressed that his task was to “make the Chinese aware that Poland is the twentieth economy in the world, and sixth

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or seventh in Europe, depending on the method of counting.” “We made it happen. The most important people in China, and also a significant sector of the business environment and experienced persons in the economic life in China, thanks to economic forums with the participation of representatives of Polish business, could hear that Poland has a developing economy and that we have defended our country from the European financial crisis and that we have much to offer each other”, said Bronisław Komorowski. The President, asked about the potential areas of interest in China for Poland, said that now “China is entering the new phase of investment outside China with massive savings and deposits in banks.” “Therefore, the declarations of the most important people in China that aspirations to invest part of that money in Poland will be supported by the Chinese political bodies have become especially crucial. This is conclusive in this scenario”, he noted. At the same time President Komorowski stressed that there were also declarations that the political bodies in China would support efforts to balance trade between Poland and China. He added that Poland had a large deficit in its trade with China, that is to say we import much more than we export. Bronisław Komorowski added that two forums - economic, and investment one in Shanghai and Beijing were attended by about 100 people from the Polish business community and the economy, some of whom have already entered into contracts with China. “The most spectacular is the contract signed by KGHM for the delivery of Polish copper worth billions of zlotys”, he said.

Meeting with Chinese PM President of Poland Bronisław Komorowski on the last day of the official

visit to China met Chinese Prime Minister Wen Jiabao and Chairman of National People’s Congress Wu Bangguo. Ending the visit, the President concluded that it had helped to open up new vistas of cooperation between the two countries. The President participated in the Polish-Chinese Economic Forum, during which PLL LOT and Air China signed a letter of intent on direct Warsaw-Beijing connections. As from June 2012, regular connections on that route should be available. Bronisław Komorowski expressed his satisfaction with the signing of the letter. “It has been promised that from the first days of June there will be a permanent connection between Warsaw and Beijing, and we all know that regular flight connections is a condition of good cooperation, both in the economic area and all others”, the President said. Bronisław Komorowski also talked with President of KGHM Polska Miedź Herbert Wirth and his Chinese partner from China Minmetals, Zhou Zhongshu. The President addressed the subject of a framework agreement for the years 2012-2016, concluded the day before, with a total value of about USD3.5 billion. KGHM is going to sell its main product to China, which is cathode copper, in the amount of 100 thousand tonnes per year. Owing to this the company will generate USD700 million in revenue annually. KGHM and China Minmetals also signed an agreement on organising business forums. Bronisław Komorowski expressed his satisfaction with the signing of many important economic agreements by Poland and China. At a press conference after the inauguration of the economic forum in the Chinese capital, the President noted with real pleasure that as a result of the agreement signed on 20 December 2011 with President Hu Jintao we had managed to improve Polish-Chinese relations to the level of strategic partnership. According to Bronisław Komorowski, the good results of Poland and China give encouragement to strengthen cooperation in the future. “This has been proved by the two forums - investment forum in Shanghai and economic one - here in Beijing”, said the President.

International Relations

Strategic partnership President Bronisław Komorowski met in Beijing Chinese President Hu Jintao. The heads of state signed a joint declaration on strategic partnership between the two countries. “I believe that the current visit will contribute significantly to the cooperation in various areas between our two countries and raise bilateral relations to a new level”, said Hu Jintao, greeting the Polish delegation. Bronisław Komorowski thanked him for his welcome in China. “This is my first visit to China. I wish to say that, according to a Chinese saying, “it is better to see once than to hear a hundred times”, I see China as a country of tremendous growth”, said Bronisław Komorow ski. “Today, Poland is the holder of the Presidency of the European Union, and China is the world’s second economy, a country contributing to the great global policy. So, I think that it is in the interests of all to promote the Polish-Chinese relations to a higher level”, he stressed.

The Investment Forum At the Investment Forum in Shanghai, President Bronisław Komorowski encouraged Chinese businessmen to invest in Poland by advertising our country as one of the fastest growing in the European Union in the current economic crisis.

At a meeting with the Chinese business, which is - in the opinion of the President - an important area of change, including that between Poland and China, Bronisław Komorowski presented seven reasons why it is worth being interested in Poland. “Just like the EU is the first partner for China, Poland among the 27 EU countries is its 6th largest economy”, stressed the President in a statement to the press. “Poland in itself is a big market, and from the European perspective, a very big market. It also commands a strong position in political and economic terms. Poland should be seen as a gateway to the 500-million strong pan-European market”, underscored President Komorowski. “Second, Poland is a good brand when it comes to good external investment - we have very good reports, ranking Poland in the top positions in terms of investing in our country”, said the President. “Third, Poland is a leader in economic growth in Europe, as China is in this region of the world”, said Bronisław Komorowski, noting that economic growth in Poland has been undisturbed for more than 20 years, which puts the country apart from all other EU countries. “Economic growth in the past year will be at the level of 4%, which in European terms is a great result”, he stressed. As a fourth reason, President Komorowski mentioned the activities of Local Governments, which have already put a lot of effort to attract outside investors, including those from China. “Fifth, Poland has a stable financial and banking sector, proven in the situation of the financial crisis in Europe”, noted Bronisław Komorowski. “Sixth, the Poles are energetic by nature. This applies to different areas, including science and higher education, but it also has its source in the quality, which the Chinese certainly understand - hard work, putting in serious effort”, he added. At the end, the President encouraged Chinese business people to buy Polish Treasury bonds. “One reason why Chinese investors and also Chinese markets should try to better tap the important opportunity in store, that is Polish Government bonds, is that we are now approaching the end

of our privatisation process”, pointed out the President. “Another reason being that Polish Treasury bonds are founded on a sound economy and a sound system of public finance”, added the President. In addition, during the Forum Academic Incubators of Entrepreneurship (AIP) and Co-Way International Technology Transfer Centre, an agreement was signed on the Poland China Business Link project. The AIP’s Business Link project is an initiative that will provide assistance in the development of start-ups by establishing economic relationships with key global startup centres in foreign markets. Signing this agreement is the launch of the first of the six agencies promoting Polish entrepreneurship in the world’s largest business centres. Other agencies will be launched in the U.S. and Korea. ::

Bronisław Komorowski at the Polish-Chinese Economic Forum

First Lady and President Komorowski testing a bit of Chinese culture

Photos: Wojciech Grzedzinski

“It is important that the course of these Polish-Chinese forums is fully accepted by the (Chinese) political authorities”, he noted. He pointed out that the Wednesday’s forum was attended by the Chinese Deputy Prime Minister Li Keqiang. Bronislaw Komorowski met him earlier that day. At the end, the President emphasised that the existence - as he put it – “of a number of contracts and letters of intent is the evidence of intensive economic cooperation and the potential options for the future”. The documents were signed on 21st December by Poland and China, and earlier during the investment and academic forums. Directly from the forum the President left for a meeting with Chairman of the Chinese Parliament (National People’s Congress) Wu Bangguo, and thereafter, with Prime Minister Wen Jiabao.

1 /2012 :: polish market :: 43

The Polish Information and Foreign Investment Agency (PAIiIZ) is currently running 156 investment projects with a total value of EUR5.72 billion, that could create 40,710 new jobs The majority are American projects (42) with a total value of EUR1.09 billion, to create 8,563 jobs. Second place belongs to British projects (16), bringing EUR373 million to Poland and creating 5,802 new jobs. Germany is third with 15 projects valued at EUR489 million and 4,522 new positions. Among the most popular sectors, the automotive industry is particularly worth considering, with 33 completed projects (total value EUR2.1 billion, 12,622 planned jobs), and shared services, with 11 active projects (EUR657 million, 2,946 jobs). By mid-December 2011, PAIiIZ has completed 52 investment projects with a total value of EUR1,170 million. The projects will create 10,184 new jobs. The vast majority of them are American (13). Next comes Japan, with 5 completed projects, then China, France, and South Korea (4 each). The biggest employer among them is China (the said 4 projects are to create 2,853 jobs), and the largest investor is Japan (this year’s Japanese investments total EUR176 million). Of the foreign investors who started their activities in Poland this year, 16 represent the BPO and R&D sectors, 8 the automotive industry, and 5 the food industry. Investments in the services sector are not the ones with the highest outlays – the leader is the automotive industry (EUR595.4 million this year) - but they are creating the largest number of jobs (2,490). The projects completed by PAIiIZ include such international companies as PwC, Nordea, BNP Paribas, Credit Suisse, 3M, TRW Automotive, Pilkington, and Gedia (PAIiIZ). According to data from the National Bank of Poland, after the first 10 months of 2011 the inflow of foreign direct investments amounted to EUR9.05 billion. These data show a 34% growth in FDIs in comparison with the whole of 2010.

makes Poland stand out against other EU countries is also a good reputation in respect of foreign investment, stable economic growth that has been uninterrupted for more than 20 years, and stable financial and banking sectors. Bronisław Komorowski also encouraged Chinese entrepreneurs to purchase Polish Treasury bonds, emphasising that they are grounded in a sound economy and a healthy system of public finance. The forum featured the ceremony of signing the agreements on cooperation between Sany Heavy Industry and PAIiIZ, as well as between the Shanghai Trade Commission and PAIiIZ. The presentations by PAIiIZ, the Polish Agency for Enterprise Development (PARP), and invited speakers from the Ministries of Finance and Treasury, showed Poland to Chinese partners as a country with high economic and investment potential. On 21 December 2011, during the official visit of Bronisław Komorowski to the People’s Republic of China, representatives of PAIiIZ took part in an economic forum in Beijing, at which the Director of the Foreign Investment Department of PAIiIZ, Iwona Chojnowska-Haponik, and the Head of the Poland - China Skills Centre at PAIiIZ, Yu Yang, presented the “Investment Climate in Poland: Investment Opportunities for Chinese Entrepreneurs.” The President of the PAIiIZ Board, Sławomir Majman took the role of moderator of the panel discussion. During the forum PAIiIZ signed cooperation agreements with the China Development Bank and the Industrial Overseas Development & Planning Association. ::

Investment Forum in Shanghai On 19 December 2011 Shanghai hosted the Poland-China Investment Forum, organised by PAIiIZ during the official visit to China by the President of the Republic of Poland, Bronisław Komorowski. At the meeting with representatives of the largest Chinese companies, with over 600 attendees from Poland and China, Bronisław Komorowski presented the reasons for which Poland is worth considering. “As the EU is the first partner for China, Poland is the sixth largest economy among its 27 Member States.” Some of the most important advantages mentioned by the President included a relatively large market, when considered in European terms, and a strong political and economic position. What

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Up to mid-December, PAIiIZ completed 52 investment projects of the total value EUR 1,170 million. Thirteen projects come from the U.S. followed by Japan (5), China, France and South Korea (4 each). In terms of new jobs creation the the biggest investor is China with 4 project that will all create over 2,850 new jobs.

International Relations

Touch the sky with LOT Polish national air-carrier improves its client related services and is set to reach behind the Great Wall

As Polish-Chinese business relations have entered a new era following the visit to Beijing by Polish President in December last year, the Polish national air carrier LOT Polish Airlines (LOT) displayed strong commitment to facilitate them by providing regular flights between the capital cities of the two countries. This visit to China has been among the most fruitful recently,” said Marcin Piróg, CEO of LOT. “I am pleased that our relations with the Chinese national air carrier are so positive and I believe that the promises concerning the proper slots in Beijing will be fulfilled by January 2012,” he added. The arrangements made at the economic forum in the Chinese capital are among the most essential in the question of initiating direct connections on the Warsaw – Beijing route, which the national carrier plans to put in to operation in June 2012. LOT flights to Beijing will be entered into the carrier’s reservation system after the slots are received.

I am pleased that our relations with the Chinese national air carrier are so positive and I believe that the promises concerning the proper slots in Beijing will be fulfilled by January 2012.

New flying fleet The new connections will be served by Boeing 767 aircraft, and beginning at the end of 2012, by the Boeing 787 Dreamliner. According to the trade press the aircraft will be configured with 18 business class seats, 21 seats in premium economy class and 213 seats in economy class. The look of the new aircraft will also differ a bit from what LOT frequent fliers are accustomed to. The large “LOT” lettering and the sign of a bird will remain but the blue horizontal line running down the windows will disappear.LOT is set to be the first European airline to receive the 787 Dreamliner, starting in summer of 2012. LOT has now eight Boeing 787 Dreamliners on order.

Great look and feel Having recently unveiled its latest livery, transformed its marketing communications platform, created a LOT channel on YouTube, honed its Facebook profile and given Kaleidoscope, its in-flight magazine, an a new layout, the company now plans to welcome 2012 by introducing new touches to the LOT cabin crew uniform. Beginning this year, LOT in-flight personnel wear elegantly designed

pillbox hats adorned with a metal badge displaying the wings of the LOT, while the stewards will wear the same badge pinned to their uniform jackets.“The hats received their first showing during the ceremony marking Ethiopian Airlines’ joining of the Star Alliance,” said Leszek Chorzewski, LOT’s press officer. “The stewardesses representing the LOT cabin crew looked elegant and professional, something emphasized by a number of representatives of the Star Alliance member airlines present at the ceremony.”

Business traveller LOT always aims to be at the forefront of the world’s airlines. The company thus continually works to improve the quality of its services. In December LOT submitted new plans for the minimum connection times at Chopin Airport in Warsaw to the International Air Transport Association (IATA). The changes to the airline’s schedule are set to be implemented in time for the 2012 high season. This, coupled with new flight destinations, client communications platform, make LOT a rising star in the Star Alliance group. :: 1 /2012 :: polish market :: 45

Green Buildings

Thermographic inspection of windows This method enables contactless temperature measurement and provides the ability to observe temperature values simultaneously at each point of the section examined. Włodzimierz Adamczewski, Termo-Pomiar Identifying temperature fields is the first and, in many cases, basic step in determining the condition of a building or its thermal insulation properties. But the thermal images obtained are not the final result that is sought in thermal imaging surveys. Information about surface temperature patterns is of little use if it is not coupled with information about the structure of the examined building, its operating conditions and the building’s environment. Demand for energy for the needs of space and tap water heating accounts for a major share – around 35% - of total energy consumption in Poland. Thermal imaging surveys, carried out both outside and inside buildings, allow detecting cold bridges and thermal anomalies in walls, evaluate the quality of insulation and air tightness of windows and doors, locate places of air infiltration from the outside, assess heat losses through the roofs, detect damp and hidden moisture, and so on. Thermal imaging can be used to inspect buildings in all forms of construction. But there are some limitations. The surveys have to be made when the weather is cold and the heaters are on to provide the best temperature contrast. This means that a thermal imaging survey has to be planned in advance if the building is to undergo thermal improvements. Designers and builders should study the findings of thermographic inspections more often because a thermogram, which clearly demonstrates design and construction faults, is what appeals best to people’s imagination. Some of the faults are unavoidable

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in the form of construction chosen by the designer. But if the designer sees the faults he or she can choose a different form of construction in the future. The same is the case with thermal insulation - thermographic surveys conducted after thermal improvements to buildings will demonstrate the weak points of individual methods applied and will enable avoiding mistakes in the future.

are not balanced neither temporarily nor totally because of convective air flows between layers, for example behind cladding.

Capabilities and findings of thermog raphic inspections of windows

Building surveys The objective of thermographic surveys of buildings is to determine the condition of thermal insulation of curtain walls and other important building envelope components. The objective is reached by identifying temperature fields on the outside wall surfaces through thermal imaging and by correlating them with the structure of the wall and environmental conditions existing at the time of the survey and earlier. Because of the high thermal inertia of walls, the environmental conditions existing several hours before the survey are an important factor which should be taken into consideration when interpreting the thermograms obtained. The conditions include insolation, precipitation, temperature as a function of time, wind direction and speed, humidity and fog. Building surveys are carried out at night and in stable environmental conditions. They involve producing thermograms of entire wall surfaces. It should be noted that there is a danger associated with the popular practice of building composite walls. In this method, a situation may easily occur when heat streams entering and emitted from the building

Graph 1. Shows the temperature field typical of draughts from poorly fitting windows. “Tongues” are visible on the surface of the window recess, with the coldest place being at the junction with the frame

In spaces intended for human occupancy, the ratio of window surface to floor surface should be at least 1:8 because of the need to ensure sufficient sunlight. The thermal performance of windows is several times poorer than that of walls. As a result, even if window surface is minimal the heat loss is comparable with losses through the walls, hence efforts to improve the thermal performance of windows as much as possible. Heat escapes through insulated glass units, window frames, linear thermal bridges between individual window components, and due to air infiltration through window seals, and infiltration and heat transfer through the

°C

IR05

li01 -

nieszczelność

rama

16 14 12 21,0°C 20

10 8

15 10

6 Line li01

Min 5,4°C

Max ... 15,7°

6 6,0°C

Green Buildings

Window evaluated

Reference window of good quality 20,0°C 20

T. ramy skrzydła: 17,8°C

T. szyby: 20,0°C

Reference window of medium quality

22,0°C 22

18,0°C 18

14 14,0°C

10 10,0°C

T. ramy skrzydła: 19,3°C

T. szyby: 18°C

14 T. wnęki przy narożn.: 19,1°C T. wnęki przy narożn.: 21,0°C

12 12,0°C °C 20

IR01 li01 li02 -

°C 22

IR05 li01 li02 -

°C 18

14 Line li01 li02

Min 12,4°C -

Max ... 12,4°C -

li01 li02 -

IR02

10 Line li01 li02

Min 17,8°C -

Max ... 20,9°C -

Line li01 li02

Min 9,5°C -

Max ... 15,3°C -

Graph 2. Shows thermograms of three windows of different quality. The surveys were conducted from the inside

junction of the wall and the window frame. All the above problems can be detected and evaluated during a thermal imaging survey. Above are thermograms obtained through typical thermal imaging surveys conducted from the inside under normal home-use conditions, with no pre-arrangements.

Thermogram on the left (window evaluated) It has a very strong linear bridge at the junction of the insulated glass unit and the window frame. In this place, temperature is by almost 6K lower than the temperature of the pane surface at a distance of 10-15 centimetres. The temperature of the window frame in stable environmental conditions is the same as the temperature of the pane, which means that their thermal performance is similar. The junction of the wall and the window frame shows a temperature difference smaller than 2K. At the time when the thermogram was recorded, the temperature difference between the inside and outside of the building was relatively small – 17K.

Thermogram in the middle (reference window of good quality) The temperature profile shows two temperature drops. One of them corresponds with the linear bridge along

the edge of the insulated glass unit at its junction with the window frame. The other corresponds with the junction of the wall and the window frame. The temperature drops relative to the temperature of the pane are around 2K each. The structure of the frame is not uniform – the righthand part of the frame (further from the glass unit) is by around 1K colder. The drops in temperature at the junction of the wall and the window frame are similar – around 2K. In both cases, the temperature of the pane is by around 1K lower than the temperature of the window recess at the corner.

Thermogram on the right (reference window of medium quality) The thermogram has been recorded in a cold apartment after a long absence of the owners. However, the temperature inside had been raised for a few hours before the thermagram was produced. This explains why the temperature of the pane, which has a low thermal inertia, is similar to the temperature of the wall, which has a high thermal inertia. As in the first thermogram, a sharp temperature drop is visible along the junction of the glass unit and the window frame. There is also a drop by around 3K at the junction of the wall and the window frame

compared to less than 2K in the other two examples.

Summary The examples presented above indicate that the quality of windows and their fitting can be evaluated by means of thermal imaging. To make the evaluation more objective, it would be advisable to control environmental conditions. This mainly concerns temperature inside the room, with the purpose of achieving a repeatable and stable temperature difference. It is necessary for the evaluation of such window elements as the glass unit, linear bridge between the pane and the window frame, and thermal insulation properties of frames. In order to detect and evaluate draughts, one needs to control the difference in air pressure between the inside and outside of the building and remove the effect of sudden gusts of wind and the height (floor) at which the window examined is located. In tall buildings, the air pressure difference between the lower and upper storeys produced by chimney draught may reach up to 200Pa (for example in a 40-storey building). As a comparison, European standards for air tightness surveys of buildings, not only windows, require that the pressure difference is not higher than 5Pa to 20Pa. :: 1 /2012 :: polish market :: 47

Green Buildings

In the crisis, as in a mirror In terms of new supply, 2011 on the commercial construction market turned out to be a period of stagnation, and at a relatively low level. As it is also affecting Poland, the financial crisis could not pass without leaving its mark on this segment of the economy. The past year has demonstrated how few construction projects for new offices, shopping centres, and warehouses were started at the end of the crisis-marked 2008 and in 2009. We should not forget that in construction, also in commercial construction, the average time needed to carry out a projct is at least two years. In late 2011 and early 2012 it is noticeable that some developers are still delaying the implementation of previously-designed projects, awaiting better times. Patryk Mirecki Various forecasts show that the current, unfavourable, trend will not reverse until at least mid-2012. Except that, as the last months of 2011 showed, the international financial crisis has entered a new phase, which is likely to have a negative impact on the Polish office, retail, warehouse, and hotel markets. In this last segment, the Euro tournament in mid-2012 will be an opportunity for revival – and more so than the Polish Presidency of the European Union in the second half of 2011 was. However, when the tournament comes to a close, the situation is expected to fall back to what it was.

Offices – a visible impact of the slowdown Without complete data on the market (which will only be known in spring 2012), it can already be seen that the early-2011 forecast by the Knight Frank consulting company is proving correct. According to KF’s specialists, the impact of the economic slowdown on the supply of new office space was to be more noticeable in 2011 when the few projects started during the crisis were scheduled for completion. According to KF’s forecasts, in 2011 the largest office markets in Poland were to be replenished by only 196 thousand sq m of new offices, i.e. about 35% less than in 2010, and as much as 60% less than in 2009. The improvement in the supply situation on the office space market expected by KF is set to occur as late as in the second half of 2012. It will be a result of newly-launched construction

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projects on the majority of office markets from two years before, i.e. 2010. That year saw the launch of 28 office building projects, providing about 407 thousand sq m of offices for rent (while the whole of 2009 featured the construction of 16 such buildings with a total area of 89 thousand sq m). The largest proportion of new office space, as at the turn of 2010/2011, is being created in Warsaw (about 330 thousand sq m) and Kraków (about 52 thousand sq m). In early 2011, Knight Frank also identified seven projects with a total area of nearly 100 thousand sq m, which are currently suspended, awaiting commencement until the key lessee is found, while developers claim that their construction can start immediately after the signing of pre-let agreements.

The banks are proceeding with caution Despite the improved situation in financing new office projects as compared to 2009, it is still difficult to persuade banks to invest in new undertakings. According to KF’s specialists “the projects that stand any real chance, are almost only the well-prepared ones by recognised developers, the majority of which have been pre-let to well-established lessees. The requirement to present a certain level of pre-let, even though it is a significant barrier to market development, is currently the most important element minimising the risk to financing institutions – a sign of the acceptance of the project, its standard and location by the market.”

Rates are going down National Bank of Poland (NBP) specialists estimate that investment in commercial real property in the first three quarters of 2011 almost reached the level for the whole of 2010. At the same time, capitalisation rates in all sectors continued a slightly downward trend. In the case of office property, this was happening at stable or slightly-rising rents, which reflects the increasing prices of real property. In general, the situation on the office property market experienced no significant change over 2011. Rents in Warsaw – the largest office market in Poland – outside the Central Business District (CBD), showed a slight increase, while other markets remained stable. The entire year 2011 in Warsaw was probably characterised by a lower new supply than 2010, with a continuing fall in the vacancy rate. The OberHaus company estimated that over 2011 the supply of office facilities would rise by 140 thousand sq m. “Such a small rise is a consequence of problems found at the source of financing new projects in the previous years,” commented specialists from Ober-Haus.

Supply at its lowest in six years Another company, Jones Lang LaSalle, has a similar view on the office market. In its opinion, the volume of the new supply of office buildings in Warsaw in 2011 will be the lowest in six years. It is supposed to be only 130 thousand sq m. The reason for this is the low number of construction projects launched in 2008, and particularly in 2009. The largest new undertakings of 2011 include the first stage of Mokotów Nova (25 thousand sq m), and Equator II (21.3 thousand sq m). Handed over in the city centre were the Lipiński Passage (3.5 thousand sq m), the Prosta Tower office building (5.4 thousand sq m), the virtually completely rebuilt (officialy “revalorised”) Mokotowska Square (10 thousand sq m), the New Jabłkowski House (2.8 thousand sq m), and the Młodziejowski Palace (nearly 5 thousand sq m). Major office projects handed over outside the Capital City by the end of 2011 include Olivia Business Centre in Gdańsk (Olivia Gate building, 15.9 thousand sq m), Teofile Business Park I (8.6 thousand sq m) in Łódź, and Malta Office F (6.5 thousand sq m) in

Green Buildings Poznań. JLLS emphasises, however, that recently the implementation of several speculative project has started, and the situation in supply should improve soon.

Shopping centres are back in big cities In the past several years the retail segment witnessed the expansion of modern shopping centres into next-generation multifunctional facilities (with entertainment, services, office, and hotel sections), and the expansion of developers onto the markets of increasingly small cities of up to 100 thousand residents. The change was triggered by the crisis. Recent months have seen the development of smaller convenience centres and shopping parks on the outskirts of large cities and factory outlets specialising in the sale of designer clothes and footwear at reduced prices. Developers have also refrained from the implementation of some shopping facilities in smaller cities. The expansion of the largest grocery chains is now less frequently propelled by building new facilities – more often by acquiring the competition. Examples include the acquisitions in late 2011 of some Marcpol and Zatoka shops by Biedronka. On the other hand, the crisis has slowed down the spectacular expansion plans that the popular German Aldi and American Wal-Mart chains had for Poland.

Mateusz Polkowski Senior research analyst, Market Research and Consultancy, Jones Lang LaSalle By the end of 2011 Q3 the Polish market gained only 154 thousand sq. m of new office space. It is a small volume in comparison with previous years, which is why we can speak of an output gap this year. The low supply entering the market is connected with the low number of new construction projects started in the time of the economic downturn of 2009. Problems with accessing bank financing and the uncertain situation on the market did not encourage developers to launch new projects back then. The results can be seen both in Warsaw and in regional cities, such as Wrocław. The situation of new supply is already expected to change in the coming year, when half a million sq m of modern office space is expected to hit the market. We estimate that 2012 may be as good in terms of demand for office space as 2011, which will probably be a record period in this respect. The high demand will be reflected in rent rates, which will rise in locations where lessees will be most active. This is the case in Warsaw, Wrocław and Kraków. The fact that Polish office buildings are becoming greener is also important. Over 50% of supply planned for 2012 in Warsaw will hold LEED or BREEAM certificates. In comparison, in Prague and Bucharest this will be only 35% and 28%, respectively. ::

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15 % more than in 2010 The estimates of Colliers International show that in 2011 there were 15% more retail facilities handed over in Poland than in 2010, i.e. 550 thousand sq m. In 2011 Q3 in Warsaw no new facilities opened on the modern retail market. The Wolf Bracka centre of 10,000 sq m owned by the Likus family opened in 2011 Q4. In this exclusive shopping centre, aimed at the wealthiest clients, renowned and prestigious brands have opened their stores. The shopping section of the New Jabłkowski House (featuring a Plus store) was also launched. JLLS claims that Warsaw is still considered one of the most attractive locations, not just in Poland, but also in the entire CEE region. The increasing market potential also comes from the development of new city districts, the significant purchasing power of residents and the improvement in the road infrastructure related to the construction of the Łopuszańska Junction in Aleje Jerozolimskie, the North Bridge, the express ring road, and the redevelopment of the Toruńska Route. At the turn of 2011/2012 only the Plac Unii City Mall is under construction (16,250 sq. m), located where a demolished Supersam stood. JLLS estimates that many projects are currently at the planning stage, and after they are handed over they may have a considerable influence on the functioning of the already-existing shopping facilities. Active players on the Warsaw market include GTC (two centres), Atrium, Neinver, and Tesco. The face of the main shopping routes is changing considerably, as JLLS points out. Luxury brands, such as Escada and MarcCain, have moved to the new office building on Mokotowska Square. The opening of the flagship H&M shop on Nowy Świat St. has improved the attractiveness of this area, just as has the launch of a boutique of the new German brand Rena Lange in Trzech Krzyży Square. Marszałkowska Street has seen the opening of a Peacocks shop. In the second half of 2011 the first shops on the Polish market of such brands as Desigual, Groovy Kids, Jogen Fruz, Redberry, and GAP were opened. The Cinnabon market appeared in Katowice’s Silesia Centre. Furthermore, the Swedish chain, Jula, will also enter the Polish market soon. Its first shops will be located in the shopping parks in Targówek and Janki. In early 2012 work will start on several facilities: Tesco

Kabaty, and Galeria Wilanów (GTC, Polnord), as well as Wola Park (AEW Europe), and Promenada (Atrium). Mokotowska Street will grow in importance, as next to the boutiques of domestic designers it will attract famous brands that have not yet been present in the city, says JLLS. The construction of Factory Annopol (14 thousand sq m) in Białołęka is also expected to start soon, with its developer, Neinver, receiving the BREEAM certificate. According to Colliers International, one of the largest shopping projects outside Warsaw in 2011 will be the expansion of Galeria Echo in Kielce (to 70 thousand sq m). One of the largest centres constructed in 2011 is Galeria Kaskada in Szczecin (43 thousand sq m). In late 2011 and early 2012 developers plan to supply the Polish market with 215 thousand sq m of retail space in Kraków, Toruń, Kalisz, and Gorzów Wielkopolski.

Stagnation in warehouses By the end of 2011 the entire country had about 6.8 million sq m of warehouse area, 2.5 million of which was in Warsaw and its vicinity. More than half this area is managed by two international developers: Prologis and Panattoni. In the first three quarters of 2011, according to data from Colliers International, a total of 255 thousand sq m of warehouses was handed over. The crisis is also visible in the situation in this segment of commercial real property. The vacancy rate in this type of facilities is – according to data from JLLS – about 12%, including almost 6% in Upper Silesia, and over 18% in the Warsaw region (in Błonie alone, which is 30 km away from the city, over 180 thousand sq m of warehouses is vacant). No wonder near Warsaw at the end of 2011 there was only 20 thousand sq m of such space under construction (in Poznań – 63 thousand, and in Upper Silesia – 87 thousand). According to the CB Richard Ellis research agency, one of the largest build-to-suite (BTS) facilities is the warehouse constructed by Goodman in Krapkowice near Opole for Metsa Tissue (27 thousand sq m), while the largest projects of this kind handed over in 2011 was Point Park Poznań, implemented by Pinnaclein for PF Concept (23 thousand sq m). According to CBRE, in a situation of limited potential to construct speculative facilities (without guaranteed lessees), it is the BTS warehouses that are becoming the driving force on the market. ::

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Green Buildings

Office Market Anna Kwiatkowska

strict lending policies. By the end of September 2011, 88,000 sq.m of office space came onto the market and the gross take-up (lease volume) remained at the stable level of 440,000 sq.m at the end of the third quarter of 2011. This was comparable to the figure for the corresponding period of the previous year and is evidence that businesses adopted a wait-andsee position. Pre-lets became an increasingly important factor, because construction of most new developments was made conditional on securing external sources of financing and signing pre-lets for a considerable amount of space, as reflected by the data for the third quarter of 2011. In that period 21% of the demand was generated by such leases. The major pre-lets in the office market in 2011 included the lease of space at Eurocentrum in Warsaw by Imtech and at Green Horizon in Łódź by Infosys.

Outlook for 2012

2011 highlights The author is Associate, Office Department, Cushman & Wakefield

Due to the prevailing uncertainty about the future of financial markets, in 2011 companies and institutions adopted a conservative approach to expansion plans and strategic decisions. The Warsaw Research Forum has not provided detailed data for the fourth quarter of 2011 yet (the article was drafted at the beginning of January), and therefore it is difficult to present an accurate picture of 2011 and a forecast for 2012. However, the office market performance for the first three quarters of last year shows that the supply of office space in Warsaw declined considerably in 2011 and is likely to remain relatively low until banks ease their

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In 2012 developers will continue to face strict lending conditions, which will diversify the market further and strengthen the position of the strongest and most experienced developers who have their own resources or easier access to external financing. This will enhance the development of the pre-let market. Developers who are able to launch new developments provided that they sign pre-lets will seek tenants by offering attractive lease terms. As a result of the prevailing uncertainty in financial markets most tenants will continue to focus on minimizing overheads. Despite the considerable imbalance between the supply and demand, effective rents are expected to remain stable.

Green building – a trend in 2012 Ecological solutions are becoming increasingly common in the Polish construction industry. This results not only from the rising environmental awareness, but also the implementation of the standards set forth in the European Commission’s

GreenBuilding Programme, which aims at improving the energy efficiency and expanding the integration of renewable energies. Green buildings should be energy-efficient, consume small quantities of water and produce little pollution. Environmentally friendly materials such as cooling agents in air-conditioning systems and, wherever possible, recyclable materials should be used in construction. Apart from the effective design, good lighting and external green areas, it should also offer “green” common areas. A truly green office building constitutes an added value to the tenant, because its energy-efficient features make it cheaper to maintain, it produces less pollution and is convenient for its users. Certified buildings are already present in the Polish market. Their environmental sustainability can be evidenced by certificates of relevant organisations, including certificates based on LEED criteria granted by the U.S. Green Building Council and BREEAM criteria granted by The British Research Establishment (BRE), as well as GreenBuilding certificates granted under the European Commission’s programme. Tenants find green and sustainable features, i.e. durability, energy efficiency and environmental care, so important that new green business parks and office buildings are currently breaking ground. Developers are well aware of eco construction benefits such as lower maintenance costs, which make the space leased more attractive and increase the property’s value. Eco construction is not only a fashionable trend, but a profitable investment in the future. This will certainly be reflected in the number of green buildings coming on the market. ::

Green Buildings

Green square metres

BMS

In this day and age, when the Internet reigns, when we cannot even imagine our lives without mobile phones, and with the boundless presence of electronic appliances in the private and professional spheres of our lives, the lack of modern solutions in newly-constructed buildings, both residential and commercial, would be unthinkable. In fact, the cost, which is higher than that of standard buildings, constitutes the only limitation on introducing more and more “intelligent” buildings onto the market. However, this is so only at the time of their construction, and not during their further lifetime. In Poland, it has been several years since such buildings, mostly commercial facilities, appeared. A lot of these have already been granted, or have applied for, special certificates, including the most significant ones, i.e. the American LEED, the EU GREENBUILDING, and the British BREEAM. Patryk Mirecki It is the market which forces the development of “green” office buildings, where the most innovative technological solutions are applied, and which are in harmony with the environment, by enabling energy saving, and ensuring safety and user-friendliness at the same time. Office workers, and employees of huge corporations and smaller enterprises, do not want to spend their every working day in rooms that are cramped, poorly lit, with inappropriate temperature or

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humidity levels, or rooms with limited access to the Internet, etc. Currently, it is as early as at the stage of designing new office buildings, shopping and entertainment centres, warehousing and logistics complexes, hotels, and other commercial projects, that appropriate technological solutions are planned. Such solutions guarantee all amenities for their users, which still remain in conformity with the newest “intelligent” technology.

The first systems of this kind installed in buildings were designed at the end of 1970s in the United States. Currently, they are referred to as BMS - Building Management Systems. On the one hand, such a system ensures comfort and safety to its users, on the other, it is at one with energy-saving principles. Wikipedia enumerates several areas of functioning of buildings that BMS deals with, including heating control, alarm and video surveillance systems, fire protection systems, access control systems, weather systems, and a complex personalisation system. The actual functioning of BMS could be seen in the luxurious residence from the movie “Trespass” with Nicholas Cage and Nicole Kidman. However, putting up such buildings on a big scale in Poland is still relatively remote. Therefore, “intelligent management” may be found only in commercial buildings, erected by private developers, most often by Western organisations. In one of the biggest business directories, the addresses of over two hundred enterprises which install BMS in buildings, which already exist or which are in construction, can be found.

Economical utilisation In the case of one of such enterprises (BMS Telecom), the BMS system controls all aspects of the building’s functioning, e.g. air conditioning, ventilation, and lighting. These systems do not need to operate continuously at the same efficiency level in all parts of the building. The start-up of equipment may depend on a number of factors, including the season of the year, the building’s zones, the day of the week and so forth. The appropriate configuration enables savings of from a few to several thousand zlotys a day, which means millions worth of savings in a year. The company gives the following example of using their system – provided that the cost of 1 kWh of electrical energy is PLN0.46 net, then in just one building, where the BMS system has been installed, daily savings amount to PLN3,976.17 on refrigeration units alone. Three refrigeration units systems with a total power of 785.51 kW operate in the building. When running continuously for 24 hours a day, refrigeration units use up 18,859.32 kWh of energy (cost PLN8,675.29). Thanks

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Green Buildings to BMS control, the operating time is reduced to 13 hours per day, which translates into the use of 10,215.47 kWh (cost PLN4,699.11). Therefore, the savings amount to PLN3,976.17 daily, and PLN119,285.22 monthly. Additionally, the refrigeration units are also switched off, when fan coil units do not need cooling in offices. Such control is possible owing to the monitoring of all fan coil units installed in a building. Therefore, even more can be saved. The cost of cooling without BMS amounts to PLN8,675, and with BMS PLN4,699.

For hotels, office buildings, and sports halls Another system (Homatic) has been designed for commercial buildings, such as hotels, office buildings, shopping centres, sports halls etc. However, a significant feature of the system is its scalability, that is its ability to apply solutions both in large office buildings and in private houses. All installations, such as central heating, air conditioning, lighting, ventilation, telephone and computer systems, selected reception points and sockets, and access control systems, communicate with each other within the framework of the system. Due to the integration of independent systems into one, the efficiency of particular elements of the

Waiting for their turn for LEED and other certificates The Polish buildings applying for LEED, BREEAM, and EU GREENBUILDING certificates are the Eurocentrum Office Complex – (Capital Park developer), Warsaw; Green Horizon - (Skanska Property Poland), Łódź; Poleczki Business Park – sections B1, C1 - (UBM CA Immo), Warsaw; Green Corner (Skanska Property Poland), Warsaw; Green Towers - (Skanska Property Poland), Wrocław; ALLCON@park 3 - (Allcon Investment), Gdańsk; Park Postępu – sections A, B, C - (Echo Development), Warsaw; Enterprise Park - (Avestus), Kraków; GPP Business Park - (GPP), Katowice; Konstruktorska Business Centre - (HB Reavis), Warsaw; Mokotów Nova - (Ghelamco Poland), Warsaw; Mokotowska Square - (Yareal), Warsaw; Pointpark Poznań - (PointPark Properties), Poznań; Prologis Park Wrocław V DC11 - (Prologis), Wrocław; Wola Park /extension/ - (AEW Europe), Warsaw; Olivia Gate - (TPS), Gdańsk; Plac Unii - (Liebrecht & Wood), Warsaw; Mazowiecka 2/4 (Hochtief Polska), Warsaw; Miasteczko Orange - (Bouygues Immobilier Polska), Warsaw; 3 Stawy Shopping Centre - (Union Investment), Katowice; Manufaktura - (Apsys Polska), Łódź; Crown Square - (Ghelamco Poland), Warsaw; Katowice Business Point - (Ghelamco Poland), Katowice; Trinity Park III (Ghelamco Poland), Warsaw.

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system increases, and consequently reduces losses. Additionally, the system is combined with a receiving programme, which allows the continuous on-line monitoring of particular installations and the devices operating in the building. The hotel guests are offered an opportunity to define the individual settings of conditions in their rooms. The display showns icons which control, temperature, humidity, lighting, music volume and so forth. The system also collects and processes all information from the network of sensors and detectors monitoring the operation of appliances and of the whole system in the building. If a room is opened, the air-conditioning stops working, or its operation falls to the previously-specified level. The situation is similar in the case of electric sockets and lighting, which may be switched off if the room is empty.

Alarms Bosch has developed a building management system which creates a base for connecting numerous systems, such as fire systems, intrusion alarm systems, video surveillance, access control systems, and amplification-emergency systems, all within a single modular platform. In the event of an emergency, the system displays alarms on the basis of location maps, as well as the remaining documentation of alarms. An animated symbol of the detector and a sound signal indicate the source of the alarm immediately. Also the behaviour scenarios may be defined in order to ensure an immediate and proper reaction.

Certificates As the Polish Green Building Council states, currently the procedure for being awarded a green certificate for a particular building in Poland may be carried out under BREEAM International Bespoke and LEED systems. They are administered in Great Britain and the USA respectively. Until now, none of the Polish buildings registered with the BREEAM system has been certified. Six Polish buildings have been awarded LEED certificates. More than 20 are now seeking LEED or BREAM certification, and some of them already possess the so-called pre-certificates, that are granted to buildings under construction. Among the six buildings which

have been granted the LEED certificates are two branches of Deutsche Bank PBC in Warsaw, on Jana Pawła II Avenue (Green Branch Warsaw), and DB Green Branch Trio; the BorgWarner factory in Rzeszów; the Rondo 1 office building in Warsaw, Skanska Property Poland, and the Zebra Tower office building in Warsaw.

The Green Branch As specialists from Deutsche Bank PBC explain, the concept of a “Green Branch” aims to save electrical energy at the level of as much as 40% in relation to other facilities similar in size. Among other things, it aims to do so due to the appropriate level of insolation in the rooms (daylight on more than 90% of the area used for work), modern lighting control systems, automatic switch-off when empty, LED lights, and lighting adjusted individually for each workstation. Smaller energy consumption is possible owing to a CO2 detector control, which enables the regulation of the ventilation level, as well as the separation of heating administration in each room, and using “green IT,” energy-efficient computer equipment. For the finishing works of the building, high-quality materials, i.e. paints, glues, and flooring, which are characterised by low emission of gasses, were used. Lower air pollution has been achieved, also due to airconditioning systems, in which the working medium is an eco-friendly R410A instead of the popular R22. What is more, smoking is banned in the whole building. In Green Branch, it is possible to save water to a substantial extent, owing to installing taps with motion detectors, enabling a reduction in water use by almost a half, and diphase toilet cisterns, ensuring the saving of 60% of water at one flushing. Also, the amount of raw materials used has been reduced there, through reducing the amount of construction waste and recycling half of it, equipping offices with second-hand furniture and introducing waste sorting containers instead of single litter bins. Deutsche Bank PBC chose the building designed and constructed by the Skanska company to create the very first Green Branch there, bearing in mind that it meets the Energy Saving criteria specified by the European Commission. ::

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Green Buildings

Made in Poland, used globally

Poland is one of Europe’s leading producers of windows and doors, and its largest exporter. According to Centrum Analiz Branżowych (Industry Analyses Centre), the crisis did not undermine Poland’s position in the industry. The value of construction joinery (windows and doors) exports in 2011 is likely to have been by EUR25 million higher than in the previous year, amounting to EUR890 million, with nearly half of this amount generated by PVC window and door exports. Patryk Mirecki Several million purchasers deciding to replace their windows each year face difficult choices: wood or PVC, or aluminium perhaps; what should be their so-called heat transfer coefficient, are they to be more or less airtight?

The largest Polish producers of windows and doors in 2010 in terms of revenue (PLN thousand): 1. Grupa Fakro (roof windows) 1,080,000 2. NB Polska - Grupa Velux (roof windows) 570,000 3. Grupa Mercor (fire doors) 380,000 4. Drutex (PVC windows) 325,000 5. Dobroplast (PVC windows) 310,000 6. Porta KMI (wooden doors) 295,000 7. Oknoplast (PVC windows) 285,000 8. Classen-Pol (wooden doors) 235,000 9. Rationel (wooden windows and doors) 220,000 10. Grupa Roto Frank (roof windows) 175,000 11. Petecki (PVC windows) 160,000 12. Velfac (wooden windows) 150,000 13. Pol-Skone (wooden windows and doors) 145,000 14. DRE (wooden doors) 135,000 15. Okna Rąbień (PVC windows) 130,000 Source: Industry Analyses Centre

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Before making a decision, it is worth knowing that in construction there is a use for each of them – wooden, PVC, aluminium, and steel. Each has its advantages, and when used in the right place may turn out to be the optimal solution for the investor, or the user. Aluminium windows are a perfect fit for office buildings and shop displays; steel windows are excellent for industrial facilities and interior glass, and PVC windows are suited to rooms with higher humidity, whereas wooden windows make for a good choice in residential flats, luxury hotels, and historic buildings.

PVC, wood, or aluminium? Traditionally, the products of the industry were divided into PVC, wood, and aluminium. Before the political transformation, wooden windows dominated the Polish market – they were usually of a poor quality and failed to stand the test of time. Prone to distortion and with latches that broke all too soon, they were not even remotely

airtight, making rooms cold in the winter and hot in the summer. This was a major reason for the relatively high cost of heating. Specialists estimate that about 5% of the total cost of a newly-constructed building is the average value of the windows installed. Their quality and technical specification influence more than just the overall look of the building - they also have an impact on maintenance costs. The wood used to produce windows in Poland usually comes from coniferous trees (mostly pine). It is characterised by good mechanical and thermal insulation characteristics. Until the end of the 1980s windows in Poland were produced almost exclusively of wood (primarily in Stolbud plants). In the 1990s the free market took over, bringing massive imports of windows and doors from Western countries, particularly Germany. It was then that PVC and aluminium windows were introduced. The latter are mostly installed in public-utility buildings. Combined-material windows are also available on the market, such as aluminium-wooden. There are also roof windows – with their major producer, Fakro from Nowy Sącz, leading the Polish window production market in 2010.

Wood in new, plastic in old Between 1980 and 1992, along with the overall number of flats handed over annually, the production of windows, doors, hatches, skylights, etc. fell. In the 1980s it was about 8 million sq m on average, whereas in the early 1990s

Green Buildings The major markets for Polish windows and doors in 2010 (EUR million) Germany

190

Denmark

105

100

Czech Republic

Slovakia

France

Belgium

Italy

Sweden

Norway

Source: Industry Analyses Centre (own study and data from Eurostat, CAAC and GUS)

it decreased twofold: in 1992 to slightly above 3.8 million sq m. Since 1994 a rising trend has been observed – by more than 5 million sq m. In the last decade the production of windows and doors has at least doubled, increasing it to the level of more than a dozen million sq m a year. According to Prof. Zofia Bolkowska’s estimates, the modernisation of windows in the existing residential stock generates demand mainly for PVC windows, while newly-constructed houses and flats are usually equipped with wooden windows. The latest GUS data for January – November 2011 shows that over 11.5 million sq m of windows and doors alone (including door frames and thresholds) were produced in that period. Windows and doors (though GUS does not make further distinctions here) take up the vast majority of this category. What is known is that the above value amounts to 97.1% of production for January – November 2010, which means it was lower by nearly 3%.

The crisis is not so bad (yet)... According to the estimates by ASM – the Market Research and Analysis Centre – 680 thousand Polish flats will have their windows replaced in

2011-2012. There will be 4.4 new windows per flat on average. In the same period, 738 thousand homes will install new doors (1 exterior door and 3 interior). As a result, despite the raging crisis, the demand for construction joinery remains high. At the same time, according to the Centrum Analiz Rynkowych (CAR) (the Market Research Centre) in 2010 there were 20 million pieces of windows and doors produced in Poland with a total value of PLN9.2 billion. It follows from the above GUS data that 2011 may bring the first symptoms of the downturn. It means that the next few months may already show whether all producers manage to stay on the market. Estimates published two years ago by the Polish Windows and Doors Association show that the entire industry employs about 100 thousand people. Currently Poland has 3 thousand window and door producers – a few dozen large and several hundred mediumsized enterprises. All the rest is made up of small enterprises of several employees. It is the last of these that may feel the downturn in the whole economy the most. As the crisis phenomena are primarily leaving their mark on foreign markets, it is to be expected that the downturn will also hit exporters of windows and doors. This will be in 2012, but 2011, according to CAR estimates, will bring an increase in exports as compared to 2010.

Exports – the Polish forte Poland has for years been the largest exporter of wooden windows in the European Union. In 2010 about 1.1 million pieces were exported (over 30% of national production), mainly owing to the largest companies, including Fakro, Drutex, Oknoplast, Dobroplast, Petecki, and Okna Rąbień, and the VKR (Velfac and Rationel) group. The sales structure for windows produced in 2010, according to

CAR, was 30% exports, 12% new construction (including: 9.5% residential, 2.5% non-residential). The remaining 58% went to window replacement in existing buildings, mostly residential. According to CAR Polska’s estimates, Poland is the fifth biggest producer of windows and doors in Europe (after Germany, the UK, Denmark, and France). Since accession to the EU in 2004 our exports of windows and doors have increased almost threefold - from EUR315 million to about EUR890 million in 2011 (CAR estimate). The performance was particularly spectacular in the exports of PVC joinery. In 2004 the value of exports was only EUR65 million, while in 2011 it was as much as 425 million, more than 6.5 times more. The largest market for Polish windows and doors exporters is Germany (annual exports of nearly EUR200 million), and also Denmark, the UK, the Czech Republic, Slovakia, and France.

Will PVC replace wood? An analysis by the Trigon Brokerage House shows that in 2011 there was a continuation of the period of stagnation on the domestic market for wooden window joinery that was being replaced, from one direction, by less expensive PVC windows, and from another, by more expensive, but increasingly popular, aluminium windows (in 2007-2010 the production of wooden windows fell by 35%, while the production of PVC and aluminium windows rose by 0.2% and 70% respectively). Additionally, the downturn on the market, which was a factor increasing the competitive struggle and eroding the producers’ margins, put into question the profitability of production for many small joiner establishments. Difficult market conditions have less impact on the premium segment. High-class wooden doors remain the first choice. ::

Resolution of the 8th National Forum of Construction Joinery (extract) (Stryków, 19 October 2011) Polish construction joinery producers form a powerful market for wood in Poland, ensuring its high sales figures. A significant proportion of windows and doors produced from wood is exported abroad, especially to Germany. The boom in wood and our central location in Europe are also encouraging Western companies to invest and build their production facilities here. (...) We see (...) opportunities for our products – wooden windows and doors – to be sold to foreign markets at higher prices and in greater numbers. They need to be properly promoted, however, to support the establishment of a strong position for Polish producers. This requires sufficient expenditure, though, which is not attainable for enterprises in our industry. We appeal to the Minister of the Economy and to the State Forests Directorate to allocate part of the revenues from State Forests to measures to promote Polish windows and doors made of wood on foreign markets, particularly in Germany, which is our largest market. (...) We believe that as a result of consistent promotional activities (...) the demand (...) for the products of Polish producers of wooden windows and doors will increase, leading to higher exports. ::

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building trust over years

STABILATOR Spółka z o.o. is a company with a tradition. Established in 1995, and initially based in Gdynia, it originated from the Stabilator AB Group, owned by the Swedish company SKANSKA. Today, STABILATOR operates as a Polish private entity with its registered office in Gdańsk. STABILATOR Sp. z o.o. provides comprehensive specialist building services in the following fields of the construction market – the preservation of monuments of culture, and foundation, and hydraulic and sanitary engineering. These services are generally provided through the company’s own capabilities, its qualified and experienced engineers, and the use of innovative and green technologies. Our services are comprehensive – concept and design prepa ration, contracting – all compliant with quality, environmental and health and safety standards.

In 2010 the Company completed the construction of a complex of facilities composed of: the Company’s headquarters, a laboratory with a testing ground and an equipment base. The headquarters is a “model intelligent” building. It was equipped with four operational systems – fire-fighting, intelligent monitoring, ICT, and energy-heating. The new headquarters also introduced a new opportunity to cooperate with Stabilator Sp. z o.o. Office and warehouse space will be designated for rent (600 sq.m.), particularly for enterprises that complement the Company’s range of services. Stabilator would also like to cooperate with foreign entities in the field of energy-saving technologies and innovative construction technologies. You are invited to cooperate!

www.stabilator.com.pl

Law & Taxes

What investors looking for land for development should know Poland still has a lot of attractive undeveloped land. Business investors and private individuals wishing to carry out projects for their private purposes should know that their basic and most important task is to check the designation and legal status of the property they want to buy. Choosing a site with an unsettled legal status or one where it is impossible to carry out the project planned by the investor may have dramatic consequences. Additionally, if the price is attractive buyers often forget about the rules of land development policy pursued by local and central government units, and about the risk of encumbrance on the property. Maja Sujkowska

The author is the owner of the European Centre for Legal Consultations

To assess a chosen property, one should first check about its neighbourhood. The local development plan, if adopted, is available for inspection at the respective municipal office. The document – the council’s resolution and the related map – should be carefully examined because it provides information about the designation of the area where the site is located and the rules of its development. For example, the area may be designated exclusively for single-family houses and it may turn out that this does not meet the needs of the buyer. It is also important to know the rules for the protection of the natural environment and cultural landscape in the area as well as requirements concerning the shaping of its public space. The latter may become a major obstacle to large commercial projects. However, the most important information for the buyer may be the development rules and ratios described by the local development plan, that is such parameters as the maximum and minimum intensity of development relative to the area of the plot, the minimum percentage share of soft landscaped area, the maximum building height, the minimum number of parking spaces, building setbacks and building size. Any local development plan has to include the above parameters. It may also include additional information, like for example boundaries of areas designated for retail premises and areas designated for public projects of local and supralocal importance – for example a national, provincial or county road,

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railway line or airport – boundaries of areas zoned for recreation, areas designated for organising mass events, extermination sites plus their protection zones with restrictions on business activity, colours of building facades, roofs and the type of roofing, rules and conditions on constructing fences and placing billboards and advertising facilities. But some municipalities have failed to adopt a local development plan. In this situation, the prospective buyer will not know about the site’s neighbourhood or what kind of building they may construct there. In this case, the buyer should seek a decision on building and land development conditions issued by the town mayor or rural district administrator. The decision substitutes for provisions of the non-existent local development plan and has to be obtained if the buyer wants to receive a building permit in the future. A draft of the decision on building and land development conditions is prepared by a person selected from a list of registered town planners or architects. The decision may be issued to more than one applicant. It does not create any right to the area or infringe on any right to the property or other rights of third parties. Its only drawback is the need for the applicant to cover the cost of its preparation and wait for its issuance. It may also turn out that a decision for the given area cannot be issued. In this case, the prospective buyer should stop thinking seriously about purchasing the property.

Another step in efforts to find out whether the property is free of legal flaws and whether it is suitable for the project planned by the investor is checking its Land Registry and the Register of Land and Buildings complete with computer databases. Land Registries are kept by District Courts relevant to the area where the property is located. Land Registries provide information about the owner or owners of the property, whether or not the property is encumbered with third parties’ rights, for example a mortgage, and whether or not a third party has the right of pre-emption or redemption. If there are any court proceedings involving the property the Land Registry will contain the information. The Register of Land and Buildings is kept by the county administrator and contains data regarding the location, boundaries and area of individual plots, types of land and soil grades; and the location, designation, usable function and general technical data for buildings and individual units inside the buildings. The prospective buyer will also learn from the Register of Land and Buildings whether or not the property has been included in the register of historical buildings and about its estimated value. The prospective buyer will be able to check whether the data included in the public registers agree with the actual state. Only after checking the status of the property in the way described above is the investor able to take a safe decision to buy. ::

Law & Taxes

Make law not war Lawmaking process in Poland is prone to errors and political bias Ewelina Janczylik In Poland a bill submitted to the lower chamber of the Parliament, the Sejm, goes through three drafts before it gets the final form. The first draft is usually discussed by members of a parliamentary committee that have competences over the market or subject matter the law in question embraces. As a rule, proponents of the law and experts take part in that discussion. Since, guided by their party interests, personal convictions or lobbying efforts, the members of such commissions may change the provi-

bill is processed by the upper chamber, the Senate. If the Senate okays it, the bill has to be ratified by the President before it becomes law.

Unpredictable outcomes Technically speaking, whoever submits a draft of a law to the parliament has to take into account that it the proposal will be scrutinized by parliamentarians, experts, lobbyists, not to mention members of the press corps. However, in this group it is MPs who have the biggest say in what gets fi-

of a lobbying bill in 2010, which were ignored in their bulk in the parliament.Drafting new laws may often lack enough legal expertise and as a result the output is unconstitutional. The Act of 23 April 2009 amending the Construction Law and related laws, passed by the Parliament, was then challenged by a trade group and two years later found unconstitutional by Constitutional Tribunal.

Political bias Sometimes new laws are sponsored by ministries whose goal is to have their way regardless of how the new law may affect other laws. Legal inconsistencies arise in the normative system which leads to a havoc for lawyers who then are summoned to review the problems and find solutions. Before they do, the damage is done nevertheless. Often laws are adopted in a hurry, and after a short time of being in force, they are amended or enacted anew. In 2010, the Parliament passed 232 bills, 179 of which were amendments and 53 new legal acts.

Legislative watchdog

The Sejm in session

sions of the bill in an arbitrary manner at any step, the final drat may fundamentally differ from the original motion submitted to the Parliament. When the first draft is agreed upon the commission sends it to the Sejm speaker, who orders when the second reading of the draft takes place. If no amendments are proposed at this stage, the draft does not need to return to the commission which reviewed and amended the original draft, and it goes to the next phase—the so called third reading by the Sejm, after which the

nally drafted and oftentimes they get away with major changes not intended by either the authors of the draft submitted to the parliament nor other stakeholders.

Stakeholders not welcome Another important problem is the lack of wide public consultations and the practice of ignoring objections signaled by stakeholders. An excellent example could be the proposals submitted by Business Center Club, a business organization, to the draft

Constitutional Tribunal exercises control over the compliance of normative acts with the country’s constitution. This control may take a dual character. The first instance, preventive, is often used by the nation’s president, whose has to ratify acts before they become law. The president asks the tribunal to review the law in question as of its compliance with the constitution. The tribunal may also extend its power over acts that have become laws. This, however, takes time and is not perfect either. Tribunal needs time to come up with its rulings. In addition, sometimes, an act may be found unconstitutional, but nevertheless, upheld as law by the tribunal owing to specific social or other reasons. In 2010 the Constitutional Tribunal issued 68 decisions. It found 37 new laws unconstitutional. :: 1 /2012 :: polish market :: 63

Ecology

The challenges of the Polish market in the post-carbon era Poland stands at the threshold of the post-carbon era. Not only due to depleting fossil fuels, but, primarily, because of EU commitments. Dynamic industrial progress, particularly in the production and combustion of fossil fuels, as well as changes in land-use patterns, have continuously resulted in increased emissions of pollutants (mainly greenhouse gases - GHGs) and advanced the greenhouse effect, which might in consequence lead to irreversible global climate change. In 1988, to monitor those adverse changes in the natural environment, the Inter-Governmental Panel on Climate Change (IPCC) was established, as well as the United Nations Framework Convention on Climate Change (UNFCCC), within the framework of which the famous Kyoto Protocol was adopted. Cezary Tomasz Szyjko, PhD, lecturer at the J. Kochanowski University in Kielce Fighting climate change The basis for EU climate policy is the European Climate Change Programme (ECCP), initiated in 2000, which is a combination of voluntary measures, good practices, market mechanisms and information programmes. One of the most important EU policy instruments in the field of climate protection is the EU Emissions Trading System (EU ETS), which covers most GHG emitters conducting activities referred to in the Integrated Pollution Prevention and Control (IPPC) Directive, and other activities. With hindsight, we might say that emissions trading has become an important and durable instrument in fighting climate change. This system was formed by the regulations of Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003, establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC, which was launched in early 2005. Poland has prepared draft lists for installations covered by EU ETS for the years 2013–2020, i.e. the so-called third settlement period. The propositions await approval from the European Commission. The necessity to prepare such lists of installations along, with the initial extent of free emission allowances issued from 2013, results from: :: Art. 21 of the Polish Act of 28 April 2011 on the greenhouse gas emission allowances trading system; :: Art. 10a and Art. 10c of Directive 2003/87/ EC of the European Parliament and of the Council of 13 October 2003 amended by Directive 2009/29/EC of 23 April 2009 (referred to as EU ETS);

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:: Decision No. 2009/406/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020 (non-ETS decision).

The 88/10/2 rule The amended Directive requires the specification by the EC of the upper limit of allowances for the entire EU for the respective years of the third settlement period. The limit is to be binding on the Member States. In the third settlement period the annual number of allowances issued is to be reduced in a linear way, using a linear reduction factor of 1.74%. The base point is the average annual number of allowances issued by Member States in accordance with the EC decisions regarding their national plans for allowances allocation for the years 2008-2012. Starting from 2013, allowances are to be sold by Member States at auctions, excluding allowances allocated free of charge pursuant to Art. 10a or 10c of the Directive. The total number of allowances that are to be auctioned will be allocated among Member States according to the 88/10/2 rule: :: 88% - the percentage of allowances allocated on the basis of the share of emissions by individual Member States within the verified emissions within the framework of the Community Programme for 2005, or in average emissions in 20052007, depending on which of these values is higher; :: 10% - the percentage of allowances allocated on the basis of GDP per capita, i.e.

in the interests of solidarity and ensuring growth in the Community, pursuant to the values specified in Annex IIa to the Directive expressed as the increase in percentage share of the basic pool for a given country (for Poland this growth was determined as 39%); :: 2% - the percentage of allowances split between only those Member States in which greenhouse gas emissions in 2005 were at least 20% lower than the same emissions for the base year adopted for these determinations on the basis of the Kyoto Protocol (27% of this pool goes to Poland, in accordance with Annex IIb to the Directive). The free allocation pursuant to Art. 10a in 2013 for installations in sectors not exposed to significant risk of carbon leakage amounts to 80% of the number of allowances. Next, the number of free allowances will be reduced annually by the same number, until it reaches the level of 30% in 2020, leading up to 0% free allocation in 2027. Installations in sectors exposed to significant risk of carbon leakage are to receive, on the basis of Art. 10a, 100% allowances free of charge in 2013-2020. The list of sectors considered as exposed to significant risk of carbon leakage was determined by the EC decision of 24 December 2009. This list is to be updated by the EC every five years.

In search of the carbon footprint Analysing the current policy of the European Commission it may be concluded that the subject of emission reductions is unlikely to be dropped. With this in mind, we

Ecology

need to prepare for the worsening economic condition of CO2-emitting enterprises. The circumstances described above make it extremely difficult to develop an optimal model. The situation is further complicated by the economic crisis, which, on the one hand, reduces demand for energy, causing a decrease in energy and emission allowance prices, in connection with the lack of necessity to purchase them, and on the other, leads to limiting industrial production in some sectors. Poland has a “special” reason to be satisfied with EU decisions. If from 2013 all power plants had to purchase 100% allowances on CO2 emissions, as was assumed in the previous model, Poland would have to spend about PLN60 billion on modernising the electrical energy sector, a price that would be borne by end users. What is more we have negotiated the EU’s permission to create a special solidarity fund to finance the modernisation of the coal-fired power plants causing the most environmental risks. According to Government experts, the sale in 2013 to Polish and foreign companies of additional allowances for CO2 emissions may increase the State budget by nearly PLN60 billion in seven years. Profits from the sale of additional allowances could be allocated to “social goals,” environmental projects and energy-sector modernisation. Today there is a pressing need to start work on defining the need for emission allowances in the period 2013-2020 in the industrial and electrical energy sectors. The fact of issuing most allowances free of charge reduces the cost of meeting EU ETS requirements, but still creates the need to purchase as much as a dozen or so percent of allowances on the market. The missing allowances may be purchased at auctions, on the secondary market, as units from Kyoto Protocol mechanisms, or carried over from the 2008-2012 period. The situation will also be affected by future global relations. The international community expects a new agreement to replace the Kyoto Protocol. This is not likely to happen before 2015, which means that we are facing a gap period. Also, we are still waiting for EU Directives on monitoring and reporting and on the verification and accreditation of verifiers. The European Commission is also working on an amendment to Decision 2011/278/EU (known as the “benchmarking” decision) and Decision 2010/2/EU (on a list of sectors and sub-sectors subject to significant risk of carbon leakage). The basis for the published draft decision is Art. 10a par. 13

of the ETS Directive, pursuant to which the European Commission may add new items to the list of sectors and sub-sectors subject to significant risk of carbon leakage each year. As regards national law, it is already at the moment the Act comes into force that the amendment to the Act on greenhouse gas emission allowances trading system will be necessary. The EU ETS Directive was implemented in the Act on the trading system only partly, as :: it is not written that auctioning will be the main system after 2013 (auctions currently involve only allowances from unused reserves); :: the allocation of free allowances from Art. 10 a and c (so-called benchmarks and derogations) has not been implemented; :: a new Regulation by the Council of Ministers should be issued in relation to the Commission Decision of 19 April 2010 concerning the national allocation plan for the allocation of greenhouse gas emission allowances notified by Poland on 8 April 2010 (the EC accepted adding a reserve of 13 million allowances for planned JI projects to the Polish national allocation plan).

The Decision, however, is not directly applicable and must be implemented by a Regulation. Currently applicable is the Regulation of the Council of Ministers of 1 July 2008 on adopting the National Allocation Plan for the allocation of greenhouse gas emission allowances for 2008-2012 within the Community emission allowances trading system (Journal of Laws No. 202, item 1248), which is outdated on the issue of the new reserve for JIs. Furthermore, we are facing a number of challenges connected with the implementation of the carbon tax to provide more equally-distributed competitiveness across various energy products. Taxation on energy in the EU is to depend on the amount of CO2 emissions to move from the taxation system based only on the amount of energy consumed to a system that depends on energy contained in products (heating values of fuels) and CO2 emissions. The EC has announced a proposition to amend the Directive of 2003 on energy taxation, perceiving taxation as a measure to save energy and reduce emissions. By paying taxes which depend on the amount of CO2 emissions and fuel performance (and not just amounts), consumers begin to pay for the pollution that they cause. :: 1 /2012 :: polish market :: 65

Business services

Franchising on the business services market Many firms offering business services have already become giants on the international market thanks to franchising. In Poland, the sector is still dominated by independent businesses. But the steadily expanding franchise chains, of which there are now more than 20, prove that more and more firms operating on this market are aware of the importance of the trademark, standards and synergy.

A special feature of the business services sector is that it is often difficult to compare firms put into this category as the services they are specialized in are of very different kinds. Consequently, franchisees starting franchise relationships with individual chains differ among each other. What puts them apart are their specific skills, predispositions, knowledge and experience. One factor is common to them – the main customer, meaning other businesses. Outsourcing is still less popular in Poland than in Western countries. But it will certainly be gaining in importance because of the savings it generates. In Poland, the business services sector is dominated by independent firms. The market share of firms belonging to a franchise chain is still below 1%. Most franchisors in the business services sector have started their operations only recently and have managed to attract only several franchisees. The decision to expand through franchising results from efforts to consolidate the market. Most firms say they prefer to have businesses already operating on the market as their franchisees. This is directly associated with the need for franchisees to have proper experience, which makes it much easier to achieve success on this market. At present, 24 firms whose main customers are other businesses offer franchising in Poland. The franchisors have so far managed to attract around 280 franchisees. This is

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not a large number. But foreign examples show what a huge potential the market offers. Cartridge World based in Australia has around 1,650 printer cartridge refilling outlets across the world while Mail Boxes Etc. based in the United States has around 6,500 outlets providing mailbox, courier, printing, postal and office services.

Training services Let us begin the analysis of franchising opportunities on the business services market with firms whose core business is training. There are three such firms in Poland, of which only one has a Polish background. The other two are members of international chains and operate in Poland as master franchisees. The fee for joining each of the chains is around PLN50,000. Each offers quite a wide range of training programmes, with some kind of specialisation. Leadership Management International (LMI) specialises in training managerial personnel and key staff members in management and leadership skills. Sandler Training specialises in sales training. And Lauren Peso offers training in both soft skills – communication, sales, customer service, management and so on – and hard skills, including language, law and accounting courses as well as vocational courses for manual workers. Lauren Peso is the only Polish firm among the three. It has been developing a franchise chain since mid2009 but has already achieved much

success. At the end of 2009, apart from its own establishment in the city of Chorzów, Lauren Peso had two franchise locations. Last year it managed to sign another 10 agreements. This success may be at least partly due to its stock market debut. Since April 2011 Lauren Peso has been listed on NewConnect, the alternative market of the Warsaw Stock Exchange, which means it has to disclose its results every quarter. And the company’s results have been improving fast. In the first three quarters of 2010 its revenues were by 60% higher than a year earlier. Lauren Peso has only a few more franchise licences to sell in Poland because it wants to have only 16 establishments – one in each province. Initially, the company planned to reach this target by the end of 2012 but since interest from franchisees is high the target will probably be achieved this year. The firm is still looking for franchisees for the provinces of Zachodniopomorskie, Pomorskie, KujawskoPomorskie and Podlaskie. Later, it plans to start expansion onto foreign markets, starting with the Czech Republic. The other two training firms developing their franchise chains in Poland have their roots in the United States. Both have systems tried out by hundreds franchisees in dozens of countries. Sandler Training and LMI have already attracted a group of franchisees in Poland. Sandler Training, former Sandler Sales Institute, has been present in Poland since 2005. Since 2007 its master franchisee for Poland has been actively seeking franchisees. There are now six franchise establishments operating in the country in the Sandler Training chain: in the cities of Częstochowa, Kraków, Wrocław, Warsaw, Poznań and Gdańsk. The expansion has not been as rapid as the master franchisee initially expected. In 2007, the firm said in the “Rzeczpospolita” daily that it planned

Business services

to launch 40 establishments within four years. Sandler does not require prospective franchisees to have experience in training. But they have to be experienced in developing a team as sellers, sales managers and so on. They also need to have from around PLN60,000 to 110,000 to invest in the business. The third franchise system in the training sector in Poland is LMI. Set up in the United States in 1966, the company has been present in Poland since 2004. The main cost involved in joining the chain is the price of the franchise licence - PLN50,000 plus VAT. According to the Polish master franchisee, the annual income to be generated by the owner of an LMI establishment, after he or she has gained experience in the business, is likely to exceed PLN250,000. The income of the best franchisees may be twice as high. The firm, however, stresses that one needs some time to get the business going and that revenue may be expected in the fifth or sixth month after operations have been started. LMI establishments already operate in nine Polish cities, with training courses conducted by more than 10 franchise partners.

Advisory services Among the firms operating in this segment are businesses providing accounting services, offering legal advice and advice on how to cut costs or acquire funding for investment projects. There are 10 firms this kind expanding through franchise chains in Poland: Blue Tax Group, 3e Developpement, Centrum Wspierania Projektów Europejskich, DGE Bruxelles, Servicios Normativos, Krislex, Kancelarie Prawne Omega, Kancelarie Prawne WEC, Kancelarie PrawnoPodatkowe Paragraf and Expense Reduction Analysts. As is the case with franchise chains in the training sector, foreign companies have a large share in this group as well. The Spanish firm DGE Bruxelles, which are specialized in acquiring EU funding, is the most successful among them. It now has 25 establishments in Poland. Another two franchise chains - 3e Developpement of France and Centrum Wspierania Projektów Europejskich have a similar business profile.

Expense Reduction Analysts and Servicios Normativos have no equivalents among other franchise chains present on the Polish market. Expense Reduction Analysts are specialized in reducing overhead costs for businesses. They usually look for cuts in expenses not associated with the customer’s core business, like for example expenses on mail, insurance and office supplies. There are already nine franchisees in this chain in Poland. The company attracted them all in one year, which is a big success considering that the licence price was EUR 35,000. Franchisees had to pay a similar amount - PLN130,000 – for a licence to join the Servicios Normativos chain. The core business of this Spanish firm is advising on quality, environmental and occupational health and safety management systems. Servicios Normativos helps businesses implement specific standards and acquire quality certificates. The company’s first establishment has operated in Poland for only a year. Recently, Servicios Normativos has attracted its first franchisees, with offices in Wrocław and Warsaw to be launched soon. Franchisees have to invest around PLN150,000-200,000 but, as Servicios Normativos says, the costs may be recouped in a year. Krislex Kancelarie Doradców Prawnych has the largest chain in this group. The chain has been developed for seven years now. Krislex is a franchising pioneer in the Polish advisory sector. There are now 24 establishments in this chain. The second largest chain is that of Kancelarie Prawne Omega, with 18 establishments. The two remaining chains, which are specialized in legal services, are much smaller. Kancelarie PrawnoPodatkowe Paragraf have five establishments – one managed by the franchiser and four by franchisees. Last year the number of establishments was the same but two were managed by the franchiser and three by franchisees. The firm is in the process of finalising three new agreements. In 2011 it plans to open at least four establishments, one in each quarter. It hopes particularly for interest from existing accounting firms, which will have an opportunity to expand their

service line in this way. Kancelaria Doradztwa Prawnego i Windykacji WEC is a recent entrant onto the franchise market. It started to develop a franchise chain in 2010. The chain is to specialise in debt collection and management. Blue Tax Group specialises in advisory services, including accounting services. It started to develop a franchise chain in 2008 and in the same year debuted on the NewConnect market. The company offered franchise agreements to businesses conducting similar activities – accounting firms, tax advisers and so on. Blue Tax has introduced three franchise models: Expert, Express and Partner, with the licence prices at respectively PLN4,000, PLN14,000 and PLN50,000. As the licence price goes up so do the rights awarded to the franchisee, the scope of training provided by the franchiser and commissions on services ordered. However, the cheapest licence is the most popular – it has already been bought by 15 firms. Two firms bought the Blue Tax Express franchise licence and one chose the most expensive Partner licence. Blue Tax is not satisfied with the number of its franchisees. The franchise chain was supposed to be the main channel for Blue Tax for acquiring orders for advisory and financial services. But the company soon had to revise these plans. Owing to the economic slowdown, interest in the licences is not as high as expected. Blue Tax is still looking for franchisees but operation in a group of advisory firms recommending each other’s services is to become a second strong leg of its strategy. Franchising in the accounting services segment of the market has so far failed to catch on. Blue Tax has not achieved its targets while another company specialized in accounting services and listed on the NewConnect market, Auxilium, has abandoned the idea to develop through franchising. It has no franchisees now and is building its distribution chain through partnership agreements. As a result, it is not included in our table. Centrum Wspierania Projektów Europejskich (CWPE), another company listed on the NewConnect market, has also decided to develop its 1 /2012 :: polish market :: 67

Business services

Firms developing through franchising on the business services market Firm

Core services

Lauren Peso

Cost of opening an establishment

Estimated payback period

training in management, marketing, sales, customer 1 own establishment services, communication, law and accounting, and + 12 franchise establishments language courses

PLN50,000 plus VAT (licence) + costs of opening and maintaining an office (at least 25 sq. m.)

8-11 months

Leadership Management International LMI

training in leadership, management, sales and personal development

2 own establishments + 12 franchise establishments

PLN50,000 plus VAT (licence)

na; first revenue after 5-6 months, average income once the business has taken off – PLN250,000 annually

Sandler Training

training in sales and sales management

1 own establishment + 5 franchise establishments

PLN58,000-110,000

1-1.5 years

DGE Bruxelles

advice on the acquisition of EU funding

1 own establishment + 24 franchise establishments

PLN50,000 plus VAT (initial payment; may be divided into instalments) + PLN10,000 plus VAT (annual fee) + costs of opening an office

1.5 years

Centrum Wspierania Projektów Europejskich

advice on the acquisition of EU funding, training, acquisition of financing

1 own establishment + 3 franchise establishments

The firm plans further development through partnership establishments (ca. 80 by the end of Q3 2011) rather than franchising

3e Developpement

advice on the acquisition of EU funding

2 franchise establishments

EUR5,000 (licence) + EUR300 (for being added to the website; access to the database)

Blue Tax Group

tax, legal and financial services, accounting, HR and payroll services

2 own establishments + 18 franchise establishments

PLN4,000, PLN14,000 or PLN50,000 plus VAT 12-16 months for firms (licence) + business premises (required only in entering the market; the last two cases) several months for firms already present on the market

Expense Reduction Analysts

advice on cutting overhead expenses

9 franchise establishments

EUR35,000 (licence)

Servicios Normativos

advice on quality, environmental and occupational health and safety management systems

1 own establishment + 2 franchise establishments

PLN150,000-200,000

1 year

Krislex

legal advice

24 franchise establishments

Kancelarie Prawne Omega

legal advice, debt collection and compensation

4 own establishments + 14 franchise establishments

PLN6,000-12,000 (licence) + PLN5,00015,000 (office)

na; profitability after ca. 6 months; then, average income of PLN3,00015,000 a month

Kancelarie Prawno – Podatkowe Paragraf

legal advice, accounting services

1 own establishment + 4 franchise establishments

PLN6,000 plus VAT (licence) + cost of opening an office

Kancelaria Doradztwa Prawnego i Windykacji WEC

debt collection and management, factoring, legal advice

1 own establishment + 1 franchise establishment

from PLN9,000

ca. 6 months

Office 1

self-service stores with office products and 21 franchise establishments supplies, office electronics and service; minor office services, including photocopying and stamp making

PLN30,000-40,000 (cost of opening a store) + ca. PLN30,000 for the purchase of merchandise (supplier’s credit possible)

ca. 2 years

Mail Boxes Etc.

minor office services, including packing and shipping, mailbox services, printing, and faxing services

1 own establishment + 12 franchise establishments

PLN110,000-130,000

1.5 years

Dokumenta

document storage, archiving and shredding services

1 own establishment + 6 franchise establishments

ca. PLN200,000

Print Terminal

printing services, advertising signs, website templates

1 own establishment + 45 franchise establishments

PLN5,300-PLN11,700 plus VAT + computer with software

6-12 months

Cartridge World

cartridge refilling

7 own establishments + 11 franchise establishments

ca. PLN50,000-70,000

6-12 months

Printeria.pl

cartridge refilling

3 own establishments + 6 franchise establishments

from PLN15,000 plus VAT

several months

Printmania

cartridge refilling

2 own establishments + 7 franchise establishments

ca. PLN30,000

several months

S-Printer

sales of printer supplies, printing services, stamp making

1 own establishment + 14 franchise establishments

ca. PLN10,000

several months

ILS Agencja Tłumaczeń

translation services

2 own establishments + 28 franchise establishments

PLN2,000-6,000 (licence) + ca. PLN10,000 for premises (if ILS is not an expansion of existing operations)

several months

Coffee News

publication of entertainment newsletters with advertisements distributed in eateries

1 own establishment + 16 franchise establishments

ca. PLN10,000

Promstar.pl

sales of vehicles and other movable assets owned by businesses and state institutions through auction

1 own establishment

PLN15,000-25,000

several months

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1 /2012

Number of establishments December 2010

Business services

chain in this way and give up franchising. The company is specialized in acquiring EU funding and in training services. CWPE now has three franchisees – in Elbląg, Lublin and Kielce. On its stock market debut in September 2010, the company announced it would not continue development through franchising. By the end of the third quarter of 2011 CWPE wants to attract around 80 trade partners, who are now supposed to ensure an optimum distribution chain for the company.

Minor office services There are eight chains in this category, including Mail Boxes Etc. (MBE), Office 1 and Cartridge World, which are known across the world, and chains which have originated in Poland: Printeria.pl, Print Terminal, SPrinter, Printmania and Dokumenta. MBE provides the widest range of services. Apart from the chain’s traditional mailbox, packing and shipping, printing, postal and office services, its customers are also offered a number of additional services. And the company is constantly trying new opportunities, like for example InPostu postal, legal, financial advisory and accounting services or the sale of tickets for cultural events. The MBE concept was created in the United States in 1980. In Poland, there are now 13 MBE establishments but the master franchisee has much more ambitious plans and sees room for such outlets in around 80 locations – all cities with a population of over 100,000 and more than 10,000 businesses. The master franchisee wants to achieve this level within a few years. The target for 2011 is 20 establishments. Office 1, a franchise retail store chain which sells office products and supplies including office furniture and electronics, has also originated in the United States. It is now present in around 40 countries. At the end of 2010 there were 21 stores in the Office 1 chain in Poland, a similar amount as a year earlier. A few new establishments opened last year but at the same time a few closed down. In order to speed up expansion, the franchiser has recently started to offer solutions which make it possible to reduce the cost of investment in a franchise establishment. The initial

expenses needed to furnish a store may be cut from around PLN40,000 to PLN24,000 by taking out a lease on some equipment. One needs around PLN30,000 to buy merchandise but the franchisee may receive supplier credit. Another recent proposal is the shop-in-shop business model. The opening of an Office 1 stand in an existing establishment would cost less than PLN20,000 including the purchase of merchandise. Chains specialized in the sale of supplies for printers and cartridge refilling also make part of the minor office services sector. It is the most competitive segment of the market. The business is considered to be especially profitable because of high margins.

Specialist services Chains built by firms providing translation services, selling real estate and publishing advertising newsletters also expand through franchising. These are the cheapest franchising opportunities on the market. One needs around PLN10,000 to open a Coffee News or ILS Agencja Tłumaczeń establishment and around PLN15,00025,000 to open a Promstar.pl establishment. The ILS Agencja Tłumaczeń, which provides translation services, is the second largest chain in the business services sector after Print Terminal. It has around 30 establishments. The youngest and least developed firm in this group is Promstar.pl. Set up in Kraków last year, it deals with selling through auction vehicles and other business and state-owned movable property. It is specialized in selling vehicles, machines, telecom devices and office equipment for firms and state institutions. Promstar.pl hoped to attract its first franchisees in 2010 but at the end of the year it still had only one establishment – its own. The expansion of Coffee News on the Polish market has been much faster. Established in 1988 in Canada, the chain is already made up of over 1,000 franchisees throughout the world. Coffee News acquired its master franchisee for Poland only last year but the Polish chain already has around 10 franchise establishments. Coffee News is a weekly entertainment newsletter containing only good news. It is delivered to eateries and the readership are

their clients. The franchisees generate revenue from the advertisements they sell to local businesses.

Expected Demand In a long-run perspective, the Polish business services market has a large potential for growth. It suffered as a result of the global crisis less than other sectors, although some firms did not cope as well as others. The training sector had the most difficult time in 2009. The Polish Training Firms’ Chamber has estimated that revenues in this sector dropped by 30% in that year. The reason was that many businesses, especially small and medium ones, started to look for savings, with cuts on training expenses being one of the measures they took. A slight revival on the market was projected for 2010. But a year as good as 2008, when the 2,500 training firms operating in Poland recorded combined sales in the order of PLN2.5 billion, will not come any time soon. The activity of firms providing accounting, tax and financial advisory services is much more stable. Their revenue remains relatively stable throughout the year. On condition, of course, that they manage to retain their customers. This may be quite a challenge because competition on the market is very high. According to data from the Central Statistical Office (GUS), there are around 40,000 firms offering accounting services in Poland. As a result, prices for these services are falling. In order to meet the customer’s expectations halfway, the firms are adding more and more services to their line. And franchising may be helpful in this respect. For example, an accounting firm which has no staff member specialised in economic law, audits or the acquisition of EU funding may offer such services to its customers thanks to cooperation with a firm which specialises in these services. In most cases, a newly established firm in the business services sector does not immediately become profitable. Five or six months of hard work are usually required to build a customer base. But once the first profits appear, they usually grow rapidly from month to month offering a quick payback. In no other sector can one find as many systems where the payback period is estimated at one year or less. :: 1 /2012 :: polish market :: 69

Finance

New payments methods

Poland – a global leader in adopting contactless technology Janusz Diemko, Managing Director of First Data Polska SA (owner of Polcard brand) and Regional Director for Poland, Germany and Austria at First Data Corporation, talks to “Polish Market.”

that our customers trust us, and it is also the most valuable sign of recognition for us. This is confirmed by the numerous awards granted to the company. In 2011 alone, we received the Pearl of the Polish Economy for the third time and the Investor in Human Capital Emblem. First Data is also a global leader on the electronic payments market - it provides services in 66 countries. In 2007, after First Data acquisition, Polcard gained access to the worldwide know-how and experience of a corporation providing services to over 6 million card acceptors, thousands of card issuers and millions of consumers worldwide over the last 40 years.

What role does your company play in the development of the contactless payments market? Our role is to provide infrastructure necessary for the development of the most modern forms of payment. What sets us apart from others is that we combine tradition and modernity. On the one hand, there is our well- established brand Polcard, which has been present on the market for 20 years and has become synonymous with card payments for Polish people. At present in Poland, we operate more than 100,000 payment terminals, of which over 6,000 are equipped with contactless technology. On the other hand, we offer innovative payment solutions based on the expertise and experience of an international corporation. Polish banks can count on our well-tried solutions, such us 3D Secure service for on-line transactions and a real-time fraud monitoring system (PRM). One in two Polish merchant use our terminals. An overwhelming majority of banks, which outsource card issuance and ATM processing, choose First Data as their partner. This is proof

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In what direction is the Polish payments market developing? The pace at which our country is adopting NFC (Near Field Communication) technology is impressive. One month ago we had one contactless transaction per Polcard terminal per day. Today, this number has exceeded two. At the same time, we are issuing contactless cards to the banks with which we cooperate, like Raiffeisen Bank, DnB Nord and Alior Bank. I would like to see a similar pace of growth in Austria and Germany. To this end, we want to transfer the Polish experience to these markets. We will be popularizing contactless technologies in any place where transaction speed and convenience matters, not only in stores but also public transport and motorways. In England 16 million contactless cards have been issued. But English people seemed more traditionalist. They can see no reason why they should use their gold credit cards for contactless payments if they were told for years that it was safer to use the PIN password to verify transactions. In the future, we will also focus on developing the payments market based on mobile phones and m-commerce.

Polcard terminals equipped with NFC technology enable payments via a mobile phone also. In the United States, we are running a pilot program for mobile payments in stores with the use of the Google Wallet technology. What does the wallet of a Pole look like compared to the wallets of his neighbours in Western European countries, like Germany and Austria? Do we have a reason to be proud or worried? Despite the growing number of debit and credit cards, cash is still the most popular form of payment in Poland, with cashless transactions accounting for less than 10% of all monetary transactions. Contactless payments are a natural alternative to cash. They are eagerly embraced by Polish consumers. In this respect, our market is the European leader by numbers of contactless transactions. This is confirmed by research conducted by First Data on selected markets - “Payment Methods: What International Consumers Want, Need and Expect.” In Poland, the percentage of consumers interested in the implementation of NFC products exceeds 57% while in Britain the percentage is 26% and in Germany it is only slightly higher - 31%. Official statistics show Poland as a “green island,” largely thanks to domestic demand. How true is this picture? Indeed, looking at data provided by the European Central Bank we can see that the average value of credit and debit card transactions increased in Poland by 12% on average between 2009 and 2010. The increase is more than two times higher than in Germany. If we add to this that Polish consumers are open to new services and products, we get a picture of a country with great opportunities and investment potential. ::

Selected Publications of The Polish Economic Society (PTE) Zdzisław Sadowski Through

interesting times (Przez ciekawe czasy)

In these times when the recent past quickly becomes “archaeology” and when reflections on the future are unable to compete with the pressure of current developments, publications which successfully combine these three time dimensions deserve special attention as they confirm the old saying that “history rarely repeats itself but it often rhymes” and that new developments are to a large extent in keeping with well-known scenarios. They encourage comparative analyses and deep reflections on the future. Zdzisław Sadowski’s book has all these advantages.

Elżbieta Mączyńska, President of the Polish Economic Society (PTE)

edited by E. Mączyńska Poland’s

Transition and its Future

This volume is the outcome of debate during the 8th Congress of Polish Economists in 2007. This congresses have been held every few years for the past 120 years. They have been events of great importance dealing with crucial issues concerning the Polish economy and economics. The book contains a collection of papers assessing Poland’s transition, providing some recommendations on economic policy, and presenting development prospects, including Poland’s accession to the Eurozone.

Elżbieta Mączyńska, President of the Polish Economic Society (PTE)

John Kenneth Galbraith

The Good Society. The Humane Agenda (Godne społeczeństwo) John Galbraith, one of the most outstanding contemporary economists, tended to avoid narrow “economism”, and took instead a general view of economic, social and political forces that shape the life of human societies. The book is a “frontal attack” on the issue of giving a socio-economic system the features which would enable calling it really good, one providing people with freedom, prosperity, freedom from racial and ethnic discrimination, and the ability of self-fulfilment.

Zdzisław Sadowski, Honorary President of the Polish Economic Society (PTE)

John Kenneth Galbraith

Money: Whence It Came, Where It Went

(Pieniądz)

“The studies of money are, to a greater extent than all the other fields of the economy, an area in which complexity is used to obfuscate or avoid the truth, rather than reveal it. The majority of things in life – for example cars, lovers, cancer – are only important to those, who have them. In contrast to that, money is equally important to those who have it and to those who do not. Both the former and the latter are interested in the understanding of its secrets. Both the former and the latter should be fully convinced that they can do it.”

(an extract from the book)

A full offer of PTE publications is available in the Society’s on-line bookshop: w w w.k si a z k ie konom ic z ne .pl Books can be ordered by Internet, in scientific booksellers and in the Polish Economic Society’s bureau at 49 Nowy Świat Str., 00-042 Warsaw, tel. (+48 22) 55 15 401, e-mail: zk@pte.pl

Finance

An industry in the making In the developed countries the sector of financial services and wealth management caters to the rich, in Poland to rich wannabes Sandra Wierzbicka What never fails to inspire in the Polish financial advisory market is the story of how it all began. The idea of brokering financial services was brought to Poland by four men, who had worked in international consulting firms. In 2000 Adam Niewiński, Tomasz Marszałł, Jarosław Augustyniak, and Maurycy Kuhn established FinFin S.A. a company, which authored a brokering portal for mortgages Expander.pl. But since the portal generated loss rather than profit, its founders decided to open a network of traditional offices. The first financial advisory in Poland became reality.

Market growth Four years later Niewiński became moved on to become President of Xelion Doradcy Finansowi, a wealth management firm which was a subsidiary of Bank PekaoS.A. Marszałł joined it soon after. Augustyniak and Kuhn, together with Leszek Czarnecki, one of the richest Poles today, established their own wealth management company Open Finance. New market players appeared as well and by 2009 when the economic crisis hit the market there were 20 firms brokering financial services. Financial advisory spread its wings particularly thanks to the boom on the real property market, which was bolstered by the greater leniency of banks in selling mortgages. The competition in the market made the banks cooperate with brokers as well. In 2001 loans granted through financial advisers amounted to PLN 15 million, in 2004 to PLN 1.1 billion, in 2008 to PLN 12.3 billion, and in 2009 to PLN 11.3 billion. In other words, in 2004 less than one loan in ten was facilitated by a financial adviser, and in 2009—the boom period—as many as one in three.

A budding industry Since 2005 financial advisory companies, along with brokerage of mortgage

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loans, offer investment products as well. Now, the standard range of services includes various loans, insurance products, deposits, savings plans, investment funds, structured products, and sometimes the purchase of liabilities, debt collection, and leasing. The financial advisory model based on mortgage advisory, the most popular, both in Poland and in other countries of Central and Eastern Europe, is rapidly shifting toward an investment and insurance model.While in theory this is the way to go for a maturing market, the problem is that competent advisers are few and far between. The industry is primarily filled with sales people whose objective is to fulfill sales goals rather than offer a good piece of advice to their clients. Sales are almost never accompanied by any elements of education and reliable financial analysis performed for the client. It usually boils down to getting the client to buy what he or she does not need, or cannot even afford.Another problem is the lack of industry standards. There are no licensing systems (the European Academy of Financial Planning and the Warsaw Institute of Banking offer some certification services), no regulations nor supervision and no system for clients to verify the credibility of individual companies.

Reality check Poles do not earn enough yet to be interested in investment. They are mostly trying to make the two ends meet and put some money aside for the rainy day. They know little if anything about financial products. Those who do seek some advice, however, are confronted by “advisers” who often lack in education, experience, and objectivity but who are guided by their own interest and the interest of banks which products they recommend. This obviously goes against the code of ethics imposed by the Markets in Financial Instrument Directive, in force in Poland since 2010. It should be stressed, however, that the very appearance of financial advisory companies in Poland drew the attention of the public opinion and made it stretch its brains about finance and wealth management. However, as notes Krzysztof Waliszewski in his book Financial Advisory Services in Poland, the prospects for the market are good, due to the increasing awareness of Poles regarding the need to manage their own finances, their growing savings, and their willingness to save for retirement. Waliszewski also notes that in this formative time for the industry a professional model of the financial adviser is being established. ::

Value of mortgage loans paid out in Q2 2011, in PLN millions No.

Company name

1 Open Finance 2 Expander 3 Home Broker 4 Aspiro S.A. 5 Money Expert 6 Powszechny Dom Kredytowy S.A. 7 Doradcy24 8 Gold Finance 9 Grupa A-Z Finanse S.A. 10 Credit House 11 Real Finance Total:

Q1 2011

Q2 2011

1812

1808

Q1+Q2 2011 3620

520

687

1207

447.415

535.472

982.887

340

426

766

252.3

324.71

577.01

257.24

274.249

531.489

148.5

177.3

325.8

82.619

108.47

191.089

91.5

96.1

187.6

47.74

41.3

89.04

4016.31

4499.601

8515.915

Source: ZFDF, Money Expert

Finance

Accounting and the EU integration Małgorzata Szczepańska

prof. Zbigniew Messner

Interpretations to provide a basis for official accounting regulations included into the Official Journal of EU. In practice, Poland’s integration with the EU means opening to other European countries, thus creating an international platform for discussion and experience-sharing. First discussion panel, entitled “The European perspective for accounting integration” was moderated by Prof. Jerzy Gierusz from the University of Gdańsk. Panelists included Henri Fortin, the Head of the World Bank Vienna Centre for Financial Reporting Reform; Elke Koenig, member of the International Accounting Standards Board; Francoise Flores, head of the European Financial Reporting Advisory Group, Agnieszka Stachniak, Deputy Director of the Accounting Department at the Ministry of Finance; and Frederico Diomeda, CEO of the European Federation of Accountants and Auditors for SMEs. Second discussion panel, entitled “Accounting in times of change and crisis” was moderated by Prof. Zbigniew Luty. Panelists included Prof. Aldona Kamela-Sowińska, member of SKwP Main Board; Prof. Stanisława From left: prof. Jerzy Gierusz, Elke Koenig, Francoise Flores, Agnieszka Stachniak, Federico Diomeda

Surdykowska, member of SKwP Research Council; Prof. Elżbieta Mączyńska, PTE President; and Danuta Krzywda, Deputy President of the National Council of Statutory Auditors. The third session, “Contribution of Polish organizations to EU integration” was opened by Teresa Cebrowska, PhD, from the Wrocław University of Economics (Deputy Chairman of SKwP Main Board), with a speech entitled “Certification of professional accountants as a way towards ensuring professionalism at work”. Prof. Anna Karmańska, Vice-Chancellor of the Main School of Commerce in Warsaw, Deputy Chair of SKwP Research Council,

prof. Zbigniew Luty

discussed “Code of Professional Ethics in Accounting, its Signatories, and ethical dilemmas”. Joanna Dadacz, Accounting Department Director at the Ministry of Finance,Chair of the Accounting Standards Committee, presented the role of the Committee. Antoni Kwasiborski, member of SKwP and the National Council of Statutory Auditors explained the importance of standardizing audit services. The last panelist was Zbigniew Żurek (Vice President of Business Centre Club and President of SKwP Employers Council), who presented benefits for business resulting from SKwP system of certification for professional accountants. The conference was an important event for both the accounting profession in Poland, their European counterparts and employers. It allowed for the exchange of views, and greater integration within the accounting profession both nationally, and worldwide. The synopsis of the conference findings will be passed to the representatives of the Danish Presidency in the EU Council, i.e. Polish Presidency successors. :: 1 /2012 :: polish market :: 73

Photos: Jacek Gołąbiewski

The integration of accounting standards across the EU countries and the future of the integration process were discussed at a conference held in November by the Accountants’ Association in Poland (SKwP) under the honorary auspices of Polish President, Bronisław Komorowski. The conference was prepared in collaboration with the Ministry of Finance Accounting Standards Committee, the National Chamber of Statutory Auditors, and the Polish Economic Society (PTE). Media partners were the daily Rzeczpospolita and the accounting magazine Rachunkowość. The conference was attended by over 300 guests, including representatives of international financial and accounting institutions. The conference was chaired by Prof. Zbigniew Luty from the Wrocław University of Economics who is also SKwP Chairman for the Lower Silesia region. In his welcome speech he said that owing to its importance, the conference constitutes an essential part of the agenda during the Polish Presidency in the European Council. In turn, Prof. Zbigniew Messner, President of the SKwP Main Board, presented SKwP proEU-integration agenda which the organization outlined long time before Poland’s accession to the EU in 2004. Prof. Messner noted that SKwP joined the International Federation of Accountants (IFAC) in 1989, which by default, granted the organization membership in the International Accounting Standards Committee (IASC). In 1999 SKwP published the first standardized translation of the International Accounting Standards, followed by updates in 2001 and 2004. Pursuant to an agreement between SKwP, International Accounting Standards Board (IASB), and the European Integration Committee Office, in 2004 SKwP submitted Standards and

Cultural Monitor

Compiled by Maciej Proliński

The Year of Korczak The Polish Sejm has pronounced 2012 the Year of Janusz Korczak. Korczak was a doctor, an educator and a writer – the author of many books for children, including “King Matt the First.” In 1912 he set up a Jewish Orphans’ Home in Warsaw, and then an orphanage for Polish children, called “Our Home.” Korczak was murdered by the Germans in August 1942 at the extermination camp in Treblinka, together with his pupils, whom he accompanied on their way to their deaths. An interesting way to commemorate this special year is offered by the Podlasie Opera and Philharmonic, which has purchased a two-year licence to stage the British musical entitled “Korczak.” The Polish tour and the premiere in Białystok will take place in the second half of 2012. The opening night of the musical took place on 31 August 2011 in London’s West End. The script was written by Nick Stimson. The preparatory work lasted nearly 14 years, and the idea of this performance originated during the first visit of the author to Poland, in the 1990s. The patronage over this undertaking was assumed by the Youth Music Theatre, one of the most prominent British organisations supporting the music theatre for young people. ::

“Marie Skłodowska-Curie. Photobiography” At the end of the Year of Marie Skłodowska-Curie we recommend you to become acquainted with her “Photobiography.” This is a rich collection of photographs, documenting the entire history of the life of the Polish Nobel Prize winner, which for many years were left forsaken in various museum drawers. These magnificent images were supplemented with fragments of Marie’s letters, notes and famous quotations, carefully chosen by Małgorzata SobieszczakMarciniak, Director of the Marie Skłodowska-Curie Museum in Warsaw. The content is available in three language versions, namely in French, English and Polish. The whole “Photobiography” is truly touching, as it clearly demonstrates the value of love, family, work, and then... great inventions. “We wanted to create such a form of publication that would appeal both to those acquainted with the life of Marie Skłodowska-Curie and to young people who often lack such information. We opted for images that always raise interest in readers, irrespective of age. After the book concept was ready, we realised that, due to the diversity of pictures collected, it had the chance to reach those people who usually have no time for books,” says Maciej Sadowski, the concept and graphic design author. ::

The Noble Radiomen! At the end of 2011 Polskie Radio SA released an outstanding verbal and musical collection, entitled “The Radio Cabarets of Old Men.” The entire project comprises as many as 13 CDs. These include previously-unknown recordings of the Polskie Radio auditions attended by Jeremi Przybora and Jerzy Wasowski, the founders of the renowned “Cabaret of Old Men,” broadcast on Polish TV in 1958-1970. Their sketches performed, among others, by Kalina Jędrusik, Barbara Krafftówna, Irena Kwiatkowska, Wiesław Gołas and Wiesław Michnikowski, in the times of the Polish People’s Republic, created a kind of springboard, making people laugh and giving them the finest mixture of emotions. Until now hardly anyone has remembered that the said Cabaret has its radio version, equally charming and extraordinarily distant from literalness. We recommend this collection, as it comprises stories and songs that never seem outdated! ::

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Female insights The opening night of the monodrama entitled “My Dear B.,” based on the collection of feature articles by Krystyna Janda, published under the same title, will take place on 26 January 2012 in the Polonia Theatre in Warsaw. The whole plot is based on a set of letters written to a friend, Ms. B., which talk about virtually everything – observations, dreams, fears, moods, and griefs, as well as complaints about the world and people. It talks about the author and other women, about the world, and children, young people and anxiety, as well as sleeplessness. The reference articles were made into a theatre performance by a “special” male director, who takes a clear and watchful, but also ironic, though friendly, look at reality – one of the major Polish film directors – Marek Koterski. The performance stars Małgorzata Bogdańska. ::

Cultural Monitor The rose that pricks a lot… The latest movie by Wojtek Smarzowski, entitled “Róża” (English: Rose), will be released in Polish cinemas on 3 February 2012.

The first-rate guitar and bass in the Congress Hall On 5 February 2012, the Warsaw Congress Hall will feature a performance by Chris

It tells a story of Tadeusz, a Home Army soldier, who finds his way to the house of a widow of a deceased German soldier in Masuria, in the summer of 1945. Initially, the widow treats her guest with aversion, but soon a strong affection develops between these two... The movie shows a dramatic fate of Masuria residents who are viewed by the new State authorities as “second-class” people, not worthy to be involved in creating the new reality. Through the eyes of a Polish officer of the Home Army (AK), we can watch the struggle for life and honour of the nation condemned to destruction by two national systems. The leading actors are Agata Kulesza and Marcin Dorociński. This is already the fourth movie by Smarzowski, following “Małżowina” (English: The Shell) in 1998, “Wesele” (English: The Wedding) in 2004 and “Dom zły” (English: The Dark House) in 2009. “Róża” was awarded the Golden Klakier Audience Award during the Polish Film Festival 2011 in Gdynia, and Marcin Dorociński was granted the Golden Lions award for the best leading actor. The movie by Smarzowski also won the major competition during the 27th Warsaw Film Festival. ::

Rea. On 15 and 16 February, it will house two concerts by Sting! Over 30 years Chris Rea has composed a number of remarkable songs, whose moving melodies and meaningful lyrics have earned recognition. This year Rea will visit Poland as part of his tour promoting the new album entitled “Santo Spirito.” (“Holy Spirit”) In turn, the concerts by Sting form part of the “Back to Bass” tour. So far, it has received excellent reviews in South America, while in Europe it is planned to begin on 5 February 2012 in the Sage Gateshead, Newcastle. During his concerts, the artist plays his greatest hits, released on a triple album entitled “Sting: 25 Years,” to commemorate the 25th Anniversary of his career. Sting is accompanied by the guitarist Dominic Miller, the drummer Vinnie Colaiuta and the violinist Peter Tickell. ::

The salt of Europe The Kraków Saltworks Museum of Wieliczka would like to invite everybody to the international event entitled “The Colours of European Salt.” It will comprise a photography contest, an exhibition and a coffee-table book. Its aim is to show the beauty, richness and diversity of various kinds of salt that are extracted in Poland and in the EU countries. The Museum invites the residents and visitors of various Polish and European locations connected with salt, including salt mines, salt-works, salt gardens and museums, to take part in creating a special photographic map of those places, as a way to promote them. Every participant in the photography contest will become “a salt ambassador” for his/her native country, or any other country whose salt he/she finds outstanding. The photos will be presented at an exhibition until 31 March 2012 in the Kraków Saltworks Museum of Wieliczka, on the 3rd level. The exhibition, apart from the contest works, will feature a brief photographic and descriptive presentation of various salt-related spots. ::

The world-famous star of Jazz Era The spring programme of the prestigious cycle entitled the Jazz Era, will feature three concerts by the shining jazz star Al Di Meola. This exceptional guitarist will perform in Warsaw (12 March), Poznań (13 March) and Łódź (14 March). “If we were to measure the degree of adoration and popularity by the number of Al Di Meola’s visits to Poland,” says Dionizy Piątkowski, Director of Jazz Era, “he would undoubtedly be considered one of the most famous jazz musicians in our country. He performs in Poland at the invitation of both the most prestigious festivals, and small clubs, or events.” His jubilee 25th studio album, entitled “The Pursuit Of Radical Rapsody,” is a comeback to the stylisation of the World Sinfonia, the Warsaw formation which has been the setting for the musical creation of the American guitarist for over two decades. This is exactly the sound that will be heard during his concerts in Poland. ::

Polish pop-art At the beginning of March 2012, as part of the “Kraków Graphics Artists” cycle, the National Museum in Kraków will open a monographic exhibition devoted to the work of Lucjan Mianowski (19332009) – one of the most fascinating creative individuals of the Polish graphic world in the second half of the 20th Century. The artist graduated from the Academy of Fine Arts, where he studied poster design, artistic graphics and painting. He also received a scholarship from the French Government, as part of which he studied at Ecole Nationale Superieure des Beaux-Arts in Paris, in the lithography workshop supervised by Prof. Pierre Clarin. Mass culture was always his artistic fascination, and in the 1960s he became a master of colourful lithography. He was at that time one of the most prominent Polish artists, participating Lucjan Mianowski “Moon Landscape,” 1991 in the most prestigious international exhibitions. He is considered one of the first designers who adopted certain elements of pop-art and introduced them into Polish art. His works can be found in the Museum of Modern Art in New York, in the Museum de Arte Moderna in Sao Paolo, in the Museum of Contemporary Art in Tokyo, in the Museum of Modern Art in Stockholm, and in the Library of Congress in Washington, to name but a few. The exhibition is meant to summarise his artistic dealings. It will feature an exceptional selection of graphic designs, drawings, paintings, collages, memorabilia, archive records and the artist’s workshop. :: 1/2012 :: polish market :: 75

Cultural Monitor

Towards the light... In January 2012, Polish cinemas welcomed the latest film by Agnieszka Holland – “In Darkness.” It tells the story of Leopold Socha, a Pole who during World War II, gave shelter in the city sewers to Jews from the Lviv ghetto. The role was played by one of the most talented Polish actors, Robert Więckiewicz. Holland who has lived and worked in Western Europe and the USA since 1981, and recently in Poland, is one of the most important and busy global ambassadors for Polish art. For years, she has authored weighty and bold cinema, frequently called “beneficially painful and provocative...” This time, however, she simply made a great film. Maciek Proliński takes on the topic of the “light in darkness” - moving and perfectly captured by the camera.

Language Film, will be a selected nominee or perhaps even awarded the statuette. “In Darkness” should not create divisions between us here in Poland – the viewers, the critic, and Poles - because it is a production which shows the difference between good and evil in a moving and multidimensional manner.

Reviews in “Wall Street Journal,” “The Hollywood Reporter,” “Variety,” and “New York Times” are proof that the world has already appreciated and fully understood this work of art. So it seems of secondary importance, whether the Polish Oscar-candidate in the category of Best Foreign

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Before the war, Leopold Socha spent many years in prison for theft, brawls, and fencing. His criminal record kept by the Lviv police department was very thick. By helping Jews, he wanted to compensate for his guilt. During the German occupation of Lviv, Socha found employment in the city’s cleaning company where he worked with Stefan Wróblewski. Their duties included the maintenance of sewers in the ghetto. On the night of 30 May 1943, the Germans began the liquidation of the Lviv ghetto. A group of 21 people hid in the sewers. Ten of them survived, having spent 14 months underground. Socha and Wróblewski delivered them food and clothes, which at first were bought for the money received from the Jews, and later from their own means. Leopold also brought them a prayer book found in the ruins of the ghetto. When one of the Jewish women gave birth in the severs to a child who died soon afterward, Leopold organised the burial. On 27 July 1944 Lviv was liberated by the Russian army.

The survivors celebrated the end of the war together with the Socha and Wróblewski families. Soon after, Leopold Socha left for Gliwice. It is there where he died on 13 May 1945, having been run over by a Russian truck. This caused great grief to those who owed their life to him. Agnieszka Holland, with a skill adequate to a master, contemplates on that savage time but one needs to add immediately that “In Darkness” was superb team work. With the brilliant main creation by Robert Więckiewicz and excellent international cast including the Berlin IFF’s Silver Bear award-winner Maria Schrader, Benno Fürmann, Agnieszka Grochowska, Kinga Preis, Krzysztof Skonieczny, Marcin Bosak, Julia Kijowska and Michał Żurawski. Jolanta Dylewska is the cinematographer, awarded the Grand Prix of the 2011 International Film Festival of the Art of Cinematography CAMERIMAGE – Golden Frog. The author of music is Antoni Komasa – Łazarkiewicz. The picture was produced by the Studio Filmowe Zebra in co-production with Germany and Canada and made its way to the distribution of the reputable American company, Sony Pictures Classics. The screenplay written by David F. Shamoon was based on the book “In the Sewers of Lvov” by Robert Marshall. It was inspired by the remembrances of one of the saved – Krystyna Chiger, described in a book titled “The Girl in the Green Sweater.” In this film, there are no unnecessary scenes, many of which are “played” ingeniously for example the prayer of Jews in the sewer and the First Holy Communion in the church located above the sewer. However, efforts to indicate the greatest asset of this film, are doomed to failure… for the tremendous asset of this film is the entire film – from the first scene to the credits. “I am always trying to show people in their totality. Human beings are complex; there are very few who are pure angelic. However, there exists the blackmail of a tragedy – in the moment we show victims in film, we wish to sublimate them somehow. This exists in many cultures, among others in Christian culture, but not limited to it, that the deceased are not spoken about in bad terms. Those who died tragically are

Cultural Monitor shown as great people. This collapses the image of truth about that person. Art and film are meant rather to overcome stereotypes and rectify the image of the human being, showing its entire complexity, not forcefully sublimating it and changing into an oleograph,” Agnieszka Holland emphasises. “It is precisely due to the complexity, the human dimension of the characters, that I became fascinated with this story; I saw in it, the true potential for a film, taking the viewers on a trip they have never experienced before. The greatest and most exciting challenge for me

as a filmmaker was darkness. They live in darkness, stench, dampness and isolation for more than a year. We knew that in order to present that, we would need to explore that underground world in a unique way - realistic, human and intimate. We wanted the audience to really relate and feel they are there with them. The dynamic of the film is based on the coexistence and clash of two worlds: darkness and light, sewers and the city, Socha and the Jews. This clash causes real tension, which – I hope – we managed to express,” adds the director. ::

A cultural investment! “The artistic events that took place in Poland and abroad during the Polish Presidency of the Council of the European Union are a long-term investment,” says Minister of Culture Bogdan Zdrojewski, summarising the year 2011 in Polish culture. The National Audiovisual Institute managed the National Cultural Programme of the Presidency, while the Foreign Cultural Programme was implemented by the Adam Mickiewicz Institute. Poland hosted about 1,000 projects, and 400 events were organised abroad!

In Zdrojewski’s opinion, Poland achieved success in many dimensions during its Presidency of the Council of the European Union. Referring to the Polish cultural propositions during the Presidency, Minister Zdrojewski emphasises that both at formal and informal meetings they were highly spoken of. “Culture has left a very positive mark of quality on our Presidency, and the compliments we are receiving today are partly a pleasant surprise, but undoubtedly well-earned,” says Minister Zdrojewski. Among the most important achievements of the Polish cultural programme, the Minister of Culture sees the projects that contributed to building diversity. On 1 July 2011, during the official inauguration, Karol Szymanowski’s “King Roger”, directed by David Pountney, was presented at the Teatr Wielki – Polish National Opera, and the closing concert of the Presidency took place on 17 December in the Witold Lutosławski Studio of Polskie Radio in Warsaw, with Paweł Mykietyn’s “The Third Symphony.” It is important that some musical projects started in the national programme will

be continued. The joint concert of Krzysztof Penderecki and Jonny Greenwood, which took place in Wrocław in September, will be organised again on 22 March in the London Barbican Centre. The programme will also continue in the premiere performance of Krzysztof Penderecki’s “The Passion According to St. Luke,” which is to be adapted to the theatrical stage by Grzegorz Jarzyna. The premiere is scheduled for 31 March at the Alwernia Studios. The Minister of Culture also sees the successful work on legislative projects as an achievement of the Polish Presidency. Zdrojewski mentions the preparation of the directive on “orphan works” as one of the most important advancements. The “I, Culture” project, the “Planet Lem” performances directed by Paweł Szkotak, and the promotion of Karol Szymanowski’s and Czesław Miłosz’s works, are only a few of the flagship cultural projects organised globally during the Polish Presidency. The foreign programme also featured the following projects: “Czesław Miłosz’s Audiobook” – the poet’s works read in

more than ten languages by the stars of world cinema, and the series of Polish documentaries “A Guide to the Poles.” ::

Inauguration of the Presidency, “Here, Warsaw” concert photo by Marcin Oliva Soto

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Cultural Monitor

Through seas and tempests... “The Flying Dutchman” is one of the most staged of Richard Wagner’s operas. He wrote the libretto adapting Heinrich Heine’s story about an accursed mariner doomed to wander the seas until he finds a woman who will love him until death do them part... In the Warsaw opera, the new staging of this masterpiece will be produced by the recognised and admired duo Mariusz Treliński (director) and Boris Kudlička (stage designer), for whom, after a series of fascinating adaptations of Italian, Russian, and Polish works, this is the first staging of a German opera. Premiere – 16 March 2012! Maciej Proliński The opera tells the story of a Dutch ship captain, who, trying to sail round a certain cape, got caught in bad weather and adverse winds. He was so stubborn that he continued to pursue his objective under those conditions and he resolved to do so until Judgement Day comes, as he said, “I’ll do it spite of Heaven and Hell.” Lucifer took him at his word and condemned him to sail the sea forever... Yet he let the Dutchman call at a port every seven years to seek a woman who would wish to love him and be faithful to him until death. This was the only way he could release himself from the curse. This version of the legend was the subject of a play once performed in Amsterdam, of which Wagner read in one of Heine’s articles. Salvation through love – a subject worthy of the greatest of artists. This romantic legend made an impression on Wagner, all the more so because he himself had survived a raging storm in the North Sea as he was journeying to London in 1839. It is said that it was then that the artistic concept of “The Flying Dutchman” was conceived.

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“Wagner had been off the stage for years, which is why we decided to start the return to the oeuvre of this composer with his first mature work. I hope that it will be an intriguing and modern spectacle, and I will be back to my earlier musical fascinations, as Wagner was my pass to the opera,” said Mariusz Treliński. A true masterpiece in the hands of Treliński is the promise of a great opera spectacle. Treliński, the Artistic Director of the Warsaw Opera, is one of the most gifted theatrical, operatic, and sometimes film, directors. He became famous after his productions at the National Opera, where, jointly with stage designer Boris Kudlička, he formed an artistic duo, creating musical performances that shake up the classical form of the operatic spectacle. The most popular of these were Puccini’s “Madame Butterfly” and “Turandot,” Szymanowski’s “King Roger,” and Tchaikovsky’s “Eugene Onegin” and “The Queen of Spades.” He describes his work in opera: “I want the operatic theatre to be like other disciplines of art. A conversation between humans. My

cooperation with Boris is based on continuous exchange. We have an influence on each other. He has a lot to say in directing, I – in stage design. The cooperation with Waldemar Dąbrowski looks similar. Although I’m the one responsible for the artistic programme it’s conceived in our discussions.” Kudlička also speaks in this spirit: “Puccini’s ‘Madame Butterfly’ was surely the birth of a certain shared style... We have jointly worked on the vision of this performance for several months. I think that the artistic relationship with Mariusz has shaped us both. Our cooperation has always been based on discussion. The entire concept and staging was born and is born in our discussions, about everything – art, not only opera, about life.” In Warsaw, the main roles in the “Flying Dutchman” will be sung by Johannes von Duisburg (Dutchman), Lise Lindstrom (Senta), Aleksander Teliga (Daland), Charles Workman (Erik), and Anna Lubańska (Mary). The Orchestra and Choir of Teatr Wielki – Polish National Opera will be led by the excellent Israeli conductor Rani Calderon. ::

Richard Wagner

THE FLYING DUTCHMAN CALDERoN / TRELIńskI / kUDLIčkA PREMIERE 16/03/2012 NEXT PERFoRMANCEs 18, 20/03; 25, 27, 29/04/2012

Without making a lot of fuss about it… The Honorary Pearls of Polish Market are awarded to the most outstanding institutions in the fields of economics, science, culture and fostering patriotic and social values. People whose experience, ethics, and personal values make them worthy of being the ambassadors of the highest Polish values. In the 2011 edition’s “fostering social values” category the Pearl was awarded to Janusz Sobieraj, President of Korporacja Radex SA.

Korporacja Radex is a recognised Warsaw-based company with 23 years’ experience, whose activities focus on the broadly-defined investment and real property services industry. The specialisation profile of the company largely includes the coordination of investment processes, supervision over the implementation of investments and performing the duties of managing investor, no matter how large or complex a project, from business concept to operation in the guarantee and warranty period. The main shareholder and President of the Board of Korporacja Radex is Janusz Sobieraj, construction engineer, a graduate of the Faculty of Civil

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Engineering of the Warsaw University of Technology and with several majors in postgraduate studies, including at the Warsaw School of Economics and the University of Warsaw. From the very beginning of its existence, the company has attempted to actively implement social activity objectives. All actions in this field are implemented in Radex following the adopted corporate social responsibility strategy. The company’s CSR strategy is based on providing financial and material support, sponsoring culture and sports, developing business plans in accordance with the needs of the local community, cooperating with NGO’s, and also (thanks to many years’ experience in the construction industry) on supporting investors at every stage of the construction process. Janusz Sobieraj headed the team of consultants at the Foundation for the Construction of the Temple of Divine Providence. Along with Archbishop Sławoj Leszek Głódź – Metropolitan of Gdańsk (formerly Bishop of WarsawPraga) he also co-founded and chaired the Praga Monument Foundation. Korporacja Radex was also one of the major donators to the “Praga Backyard Band” – the first sculpture in Europe to play music. The monument by Andrzej Renes is located in Warsaw at the crossing of Floriańska and Kłopotowskiego Streets, in the Praga Północ district. At night, the band is lit by colourful lights, and after sending a text message, tourists and residents may listen to one of the 100 songs it “plays.” Korporacja Radex also provides financial support to another

beautifully-playing Polish phenomenon – the Great Orchestra of Christmas Charity –, and to various social initiatives in Warsaw’s districts: Bemowo, Ursynów, Białołęka, and Zielonka. It contributed to funding the monument to the victims of Katyń and the Smoleńsk tragedy. It financed the construction of the “Miracle on the Vistula” Our Lady of Victory National Sanctuary in Ossów. It cooperates with the Centre for Humanitarian Aid - Monar Markot. Janusz Sobieraj has often been acknowledged for his pro-publico-bono activities by such figures as His Excellency the Primate of Poland Cardinal Józef Glemp, His Excellency Archbishop Sławoj Leszek Głódź, the Foundation for Children “Help on Time,” Krystyna Janda’s Foundation for Culture and the “Radość i Nadzieja” Association. In 2011, for “fostering social values,” Janusz Sobieraj was awarded the Honorary Pearl of Polish Market. “Each award of this kind is very nice in itself. My social activity and helping people was not aimed at bringing me any awards. At my age, quite a bit of this social activity has accrued, starting, in fact, from primary school, to Local Government, and finally to my own company. I just think that if the Lord has let me have a financial standing that, let’s say, exceeds the national average salary, then it simply has to be shared with others. The Polish Market’s Pearl brings me and my team huge satisfaction. It surely acts as a stimulus to keep us going and to expand our activities. And this is such tangible material. Together with my wife, we have recently set up the Radex for Children Foundation. We receive a lot of letters, in which we read about a lot of people’s misfortunes. But you have to bear in mind that a lot of things are dealt with secretly. Why? Because the poorer the man, the greater his dignity, as if inversely proportionate to his financial status. Therefore, this help needs to be handled in an exceptionally subtle, gentle manner...without making a lot of fuss about it...” stresses Janusz Sobieraj. ::

Natalia Gold: beauty through work

“This year we were invited by the Warsaw Chamber of Entrepreneurs to compete in the Wiktoria Entrepreneurs Quality Symbol, this year’s edition of which is nationwide and is meant for business entities headquartered in the area of the Republic of Poland. Therefore the organisers invite the previous winners to seek the prestigious status of the Ambassador of Wiktoria. In 2003, 2005 and 2006 our company was awarded the main prize, The Leader’s Chair Masovian Quality Symbol, in 2007 The Leader of Leaders, in 2008 the honourable title of the Merchant of the Year, in 2009 the WIKTORIA MZJ (Mazovian Quality Symbol), in 2010 the Diamond Distinction, and in 2011 the Ambassador of Wiktoria Entrepreneurs Quality

Symbol. The task of an Ambassador of WIKTORIA is to publicise the code of ethics and the reliable performance of our economic activity, and to support entrepreneurship and economic initiatives,” says Józef Czerniejewski. Recently, the head of NATALIA GOLD has restricted its participation in various kinds of competitions, particularly those of an economic nature, especially the commercial ones. Over a span of many years and a lot of experience acquired, Czerniejewski takes many of the competitions with a pinch of salt, in particular in respect of the organisers. “The principal motto and assessment of quality of and demand for our jewellery products have always been, is and will be, the client, whose interests translate into the constantly-increasing number of products sold,” he emphasises. Many Polish jewellers, artists-artisans, inherited their profession from their father

“I come from a poor family with many children. There were five of us at home. Together with my siblings I was raised in very poor conditions. I will not conceal that I had a difficult time. However, I never envied other people, this is the worst quality...jealousy, avarice and voracity – these characteristics can be particularly blunted in a family with many children. One moment I felt that I want to prove to everyone that, regardless of circumstances, everyone is ”the architect of his own fortune.” Much of this profession I learnt from the famous Master J. Grondalski from Wrocław, also including the fact that each person needs to be evaluated individually…and this I found to be very useful in running my own company. The proof is the success of the entire Natalia Gold Company – in my team there is a repairer who has been engaged with the company for a long time, has been working with me for 32 years. Many others for 8, 10 years,” emphasises Józef Czerniejewski. When I asked what he would like me to wish to him and the company in the New Year, he replies, ”health - everything else I have already received and achieved through hard work.” ::

Natalia Gold Józef Czerniejewski was established in 1979 in Piaseczno. Natalia Gold deals in the design, production and sales of art jewellery, but at the same time it does not forget about the less wealthy clients. The owner of the company, Józef Czerniejewski, Master of Handicrafts, belongs to the group of the most titled artists-artisans in Poland in the jewellery trade. He has received more than 130 prestigious awards, certificates and distinctions for his artistic and economic merits. Among them were the very prestigious Economic Award of the President of the Republic of Poland, the Gold Fair Play Certificate, and the Cent for Future – a prestigious distinction of the Polish Market magazine. Mr. Czerniejewski also treasures the title of the Master of Handicraft awarded by the Minister of Culture. “Certainly, such distinctions build the prestige of the company, shape its image, and emphasise its significance. They are a clear signal for the client that we are a reliable enterprise, and our merchandise is valued by specialists. But I also distance myself from many awards,” he emphasises.

or grandfather. How was it in case of Mr. Czerniejewski? What was his ”road to Natalia?”

w w w. n a t a l i a g o l d . p l

Events

Rough Riders On 7 January 2012 Kliczków Castle was the venue of The 10th Carnival Ball Equestrian Gala, a regular event aimed at integrating horse-riding circles, but also a Carnival Ball for all horse lovers who like having a good time until the small hours.

“For 10 years, the worlds of horse lovers, breeders, artists, competitors, activists, and politicians have met during the Equestrian Gala in Kliczków Castle. The event integrates groups, not only from Lower Silesia, but also from the whole of Poland and abroad (Germany, the Czech Republic, Slovakia). Each year the Equestrian Gala welcomes distinguished guests, ministers, outstanding athletes, and world championships and Olympic Games participants. Such events are teeming with people associated with horse riding, new contacts are established, and concepts and ideas for the development of horse-riding tourism are born. After all, it is here that the first proper horse-riding trail – KliczkówBogumiłów - was marked out. “For me it is a special event also because of my friendship with Mr. and Mrs. Ludwin that has lasted over 30 years, since the time of the Academic Equestrian Association. As a breeder, official, and activist I consider the Equestrian Gala a top-class event. Excellent music, magnificent food, perfect company and an interesting event programme bring me here every year,” says Henryk Geringer de Oedenberg, who has been associated with the Equestrian Gala from the very beginning. Anna and Artur Bober, the founders of Agencja Jeździecka A. A. Bober, have always actively participated in the organisation of the Equestrian Gala. They had a share in the very idea of organising the Gala, and it is jointly with them that Kliczków Castle organises vernissages of artists, whose work was inspired by equestrian subject matter. “Together with my husband we are among the people behind the idea of the Equestrian Gala in Kliczków,” recounts Anna Bober. “Naturally, our memories and feelings connected with

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Historic cavalry

Fireworks show over Kliczków

Ballroom dancing

this event are special and full of so many fascinating stories that it’s difficult to choose the most interesting of them. During the first Gala, as the clock struck midnight, Professor Henryk Geringer de Oedenberg, the cofounder of the Academic Equestrian Club in Wrocław (1965), following the old equestrian tradition, raised a toast ‘to the Horse’s Health’ and intoned ‘Amaranths...’ Before that the orchestra had had ‘a crash course’ on the proper melody. The toast, as tradition required, was raised by the Gala participants with their left feet on the Kliczków’s snowwhite tablecloths and raised glasses in their right hands. Since then it has been regular element of each Gala. One Gala was honoured by the presence of the President of the Polish Equestrian Association, Roman Jagieliński. At 6 o’clock all Gala participants had already come to the cafe near the front desk to await the vernissage, but the President was nowhere to be seen! All castle services were put on their toes, transmitters and mobile phones were red hot, but the President was not around! The only person who maintained composure was the President’s wife, and, 10 minutes late, the President arrived at the vernissage, appearing at the reception door and saying that he had not expected that Kliczków had such a maze of corridors. The Nestor of Polish dressage, Ms. Wanda Wąsowska, visited the Gala twice. She was popular for always being the last to step off the dance floor, and that the only condition of her arrival in Kliczków was being allowed a room with a bathtub. Since that time many of the Gala’s participants ask: Will Ms. Wanda be there? The 10-year history of the Equestrian Gala has seen representatives of various equestrian disciplines from the whole of Poland. The editorial board of the ‘Konie i Rumaki’ magazine presented the awards to the winners of a plebiscite of readers for the most popular rider of the year in the following categories: dressage, show jumping, carriage, horseback riding, cross-country races, western. The Polish Equestrian Foundation founded the Silver Steed award for ‘the Sports Achievement of the Year.’ As a result, each Gala was attended by representatives of all equestrian disciplines and

Events horse racers, by the Polish and European Championships medal winners, by the organisers of horse races in Warsaw, Wrocław and Pardubice (Wielka Pardubicka), as well as by representatives of the Polish Sports Totaliser and the Polish Equestrian Association. Listing all the names would take pages and would seem unnecessary as the ‘horse world’ knows them very well. The first nine Galas opened with an exhibition of works devoted to horse riding, including paintings by Stanisław Chomiczewski, Michał Siemiński, Weronika Kobylińska, Sławek Zwierz and Tadeusz Gałda, prints by Jerzy Pawłowicz, photos by Zenon Kisza and Jarosław Zalewski, and sculptures by Jerzy Bokrzycki. Although I’m not easily surprised with ‘the horse riding fantasy,’” says Ms. Anna Bober, “I must admit that here, in Kliczków, it happened twice, and it involved the revival of traditions. Near Kliczków Castle there is a cemetery for castle horses and dogs (unique on the European scale). Until these days only two tombstones have survived, including one devoted to Juno, which represented the prewar colours of the castle owners on the race tracks in Germany. Its racing career and colours were depicted by Mr. Jerzy Budny, former President of the Polish Horse Racing Club, based on the horse racing chronicles.

In 2010 a new tombstone appeared in the cemetery to commemorate the Kliczków knights’ mare, Zacateca. The continuation of this unique tradition is especially pleasing as Zacateca once belonged to us, and our son, Marcin, rode it in a number of competitions. Then it was sold ‘into good hands,’ to Kliczków.” The Equestrian Gala 2012 opened with the award ceremony in recognition of the contribution to promoting horse riding and its exceptional traditions, as well as to creating the conditions suitable for equestrian tourism. The awards were distributed by Mrs. Magdalena Piasecka-Ludwin, President of the Board of Kliczków Castle. The winners included Mr. and Mrs. Artur and Anna Bober, Professor Henryk Geringer de Odenberg, Mr. Jerzy Pokój, Lieutenant-Colonel Czesław Goleń and Mr. Andrzej Potaczek. At midnight, a ceremonial toast to “the Horse’s Health” was proposed, and the song entitled “Barwny Strój,” that is “Amaranths” about the Chevau-légers charge, led by Ko zietulski at Somosierra, was sung by all attendees. As Professor Henryk Geringer de Odenberg explains, “the song has over 50 years of history and it dates back to the origins of the Academic Equestrian Club in Wrocław.” While the song was being sung, two riders entered the restaurant hall

– a Chevau-léger from the 3rd regiment of Jan Kozietulski and a hussar from the 7th regiment of the Napoleon’s private guards. These prominent roles were played by Mr. Aleksander Jurkowski and Mr. Andrzej Mroziński, and the horses were dressed in the Napoleonic style. “It has always been my dream to see lancers riding into the ballroom during the Equestrian Gala in the Kliczków Castle,” says Magdalena Piasecka-Ludwin. “Last year I shared this thought with Mr. Aleksander Jurkowski from Ogrodzieniec. When I got his phone message 10 days ago, saying ‘Magdalena, we’re ready,’ I knew there was no better way to mark the 10th anniversary of this event...” The event was crowned with a fireworks show, which the guests watched from the castle’s bailey. Many guests come each year exclusively to attend this party, valuing it for its uniqueness and wonderful food, great music, and cosy accommodation in the castle’s chambers. The choice of the place for this kind of meetings is not accidental. Horses have been bred in the Kliczków Castle for several centuries and the Kliczków forest, rich in game, was a location for hunting trips popular with the greatest of Prussian families and Emperor Wilhelm II himself. A video report is soon to be published on www.kliczkow.com.pl ::

Kliczków Castle

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Events

A successful debut of the “Sports Ambassador” statuette

Przemysław Babiarz, Paula Stamm, Andrzej Supron

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Photo by /AFL/

The “Warsaw Olympic Evenings” Gala is an event organised annually by the Feliks Stamm Foundation aimed at integrating the worlds of business and sports, promoting young talent and encouraging entrepreneurs to invest in the Foundation’s sports facilities.

This year, the event was held under the auspices of the Ministry of Sport and Tourism, the Polish Olympic Committee, the Office of the Capital City of Warsaw and the Business Centre Club. The evening can definitely be regarded as a success for the young organisation managed by Paula Stamm, granddaughter of Feliks Stamm – the Lubomirski Palace was bursting at the seams. Among the invited were Apoloniusz Tajner, Robert Korzeniowski, Jerzy

Photo by /Profi Lab/

Winners of the “Sports Ambassador” statuette

Events

Photo by /Profi Lab/

Paula Stamm hands over the “Sports Ambassador” statuette to Włodzimierz Szaranowicz

Guests at the Grand Gala in the English Hall in the Lubomirski Palace

Photo by /Profi Lab/

Engel, businessmen, cultural circles, and many other excellent guests. The Gala featured a special attraction – the debut of the “Sports Ambassador” statuette which is to honour those who in a transparent, active and compassionate way, support the strengthening of the power of sports as well as engage in the Foundations activities for young sports talents. The statuette, a sculpture made of bronze, symbolises the maxim which is the guiding principle and the direction followed by the Foundation of “Papa” Stamm in its efforts – “sports in good hands.” An honorable mention was granted to Włodzimierz Szaranowicz – a media partner, Andrzej Kraśnicki – a sports activist, Andrzej Supron – in the “Athletes” category, Marek Goliszewski – in the “Business Partner” category, and business leaders, i.e. socially responsible companies providing support to the Foundation. During the event a charity auction took place with attractive and unique souvenirs given by sports celebrities. Funds from the auction will support young and talented athletes. Especially popular was the special medal coined to commemorate the retirement of Adam Małysz and a tennis lesson with the legendary Wojciech Fibak. Guests also eagerly bid on boxing gloves autographed by Tomasz Adamek and three champions from the Olympics in Tokyo – Jerzy Kulej, Józef Grudzień, and Ma rian Kasprzyk. Exclusive to the Gala guests, a special vernissage took place with prints by Andrzej Wajda, famous Polish director and Academy Award winner. Art connoisseurs could enjoy the unique collection as part of an exhibition prepared by the Abbey House Auction Agency. The official part masterfully hosted by Przemysław Babiarz and Andrzej Supron, was followed by a concert by Paweł Stasiak with his band, Papa D. A 100-kilo layer cake presented to guests by Marta Grycan, a confectioner was a great supplement to a fine evening. The wonderful atmosphere was conducive to informal conversations and making friends. Looking ahead, “Polish Market” and the Stamm Foundation invites everyone to the Gala in 2012 – a year of great sports events – UEFA Euro 2012 and the 30th Olympic Games in London. ::

Photo by /Profi Lab/

Robert Korzeniowski, Apoloniusz Tajner, Włodzimierz Szaranowicz

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Biofuturo Ecology, experience and the future

Czesław Meus

Although the “futuro” part of the name of the company indicates the future, in this case we are dealing with the oldest Polish producer and distributor of organic food. I remember when, in the late 1980’s, the representatives of the organic food sector, still cutting its teeth in Germany, asked me to study the market in Poland and establish contact with potential suppliers. The first, apart from those of the farmers, was the name of Czesław Meus. I remember well the visit to Kraków with a representative of a Berlin-based company, Immergruen. In a plain office, we were welcomed by a young entrepreneur, bursting with humour and energy. He was totally at odds with the bleak and dull country where communism and apathy ruled. In the times when almost everything was owned by the State, Meus was not only a private entrepreneur, but in addition his company had acquired the status of an Innovation and Implementation Enterprise. What’s more, he operated in the health-food sector. There were no ecological certificates then and the commonly-used name was “health food”. In a country where the State system could not provide people with basic food products, this young company started dealing in innovative products in the sector of food we nowadays call “organic”. Then it could have seemed to be against the stream. From the beginning of the foundation of the “Biofuturo” brand there was not only a craving for profit, but also a true passion for creating products of the highest quality. This passion was visible in the face of Czesław Meus when he treated us to Makrowit, the first wholemeal wheat bread with herbs in communist

Poland, and cookies named Makrowitki. Die ter Kapischke, the owner of the Immergruen company from Berlin, said after his return from Poland that Czesław Meus, with his energy and concentration on “health food”, would succeed. Therefore there is no doubt that the company was a predecessor of organic food processing in Poland. But Meus as an entrepreneur did extremely well both in that hostile environment and in the modern times of the liberal economy which began to rule after the fall of the Berlin Wall. Today the “Biofuturo Trade” company owned by Czesław Meus not only has vast experience, but also is a modern enterprise with more than 3000 organic products in its product range. The company’s specialty is not only its own innovative production, but also the introduction of worldbrands onto the Polish market and their service, ranging from marketing to distribution on the shelves. Meus gained the trust of wellknown world names, including Alinor, Biolinie, Natur Compagnie, Bruno Fischer, Martin Evers, Granovita, Davert, Horizon, Meybona, Vivani, Simon Levelt, Eden, Urtekram, Natracare, Isola Bio and Alma Win. The product range of Biofuturo therefore includes a full assortment of organic products, including such brands of Polish leaders of the trade as Biofood, JK Jasiołka, Runoland, OSM Nowy Sącz, OSM Jasienica Rosielna, Magda, Primavika, Tłocznia Maurer, Eko Mega, Figa, Symbio and Rolmięs. The company’s products have many times been honoured with gold medals at the Polagra International Fair in Poznań and the Health Food Fair in Tarnów. The company received the Prof. Julian Aleksandrowicz Honorary Medal (1989) and the Assistant Prof. Wiesław Chorąży Medal (1998). The products of companies promoted by Biofuturo have been recommended by dieticians and many times they have formed the supplement to diets applied during many mountaineering expeditions, including the greatest Polish expeditions to the Himalayas, organised by Jerzy Kukuczka, Wanda Rutkiewicz, and Krzysztof Wielicki. The current product range of Biofuturo Trade covers almost all segments of the market, and the company’s distribution of its products is nationwide. The rich and comprehensive

product range is covered in a branded catalogue, and the products are also available from a clear and well-organised online store on www.naturo.pl. The spirit of creative thinking, which originated in pioneering times and clearly radiates from the personnel, creating a unique company culture, is one of the qualities that has endured in Biofuturo. This is to what Biofuturo owes, regardless of its established position on the market, its attitude towards seeking new products and continuously launching new distribution channels, systematically expanding the sales market. The other characteristic feature of the owner of the company, which has endured and has a positive effect on the activities of the enterprise, is energy! It is visible in every move and bursts from each sentence spoken by Czesław Meus. This is why an incessant process of product optimisation in terms of nutrition, taste, and price continues at the company. A feature of this culture is also the creation of new trends in nutrition, supported by cooperation with top European producers. And there is something else: consistency! One can be certain that the company would not have achieved its current position on the market if it hadn’t been for its consistent building of good relations with its clients over many years. “The products coming from organic farming are becoming increasingly popular among our compatriots. Consumers appreciate their unique taste and are becoming convinced about new things much faster than years ago,” says Czesław Meus, the President of Biofuturo Trade. “Biofuturo, which not only has the most extensive product range, but also offers a comprehensive service, intends to maintain its position as a leader in the field of the distribution of organic products, and, most of all, to set new standards on the Polish market.” Knowing Biofuturo, I can only wish for the creative potential developed in the long history of the company to contribute to sustainable development also in the future and continue to serve the health of people and nature. ::

Name of the company: Biofuturo Trade Sp. z o. o. Brand: Biofuturo “Biofuturo” Website address: w w w.biofuturo.pl

Contact: LOGISTICS CENTRE Biofuturo Trade Sp. zo.o. ul. Półłanki 18, 30-740 Kraków tel.: +48 12 397 34 00 • fax.: +48 12 397 34 01 Biofuturo CENTRE Wholesale Warehouse and Offices ul. Półłanki 18, 30-740 Kraków tel.: +48 12 397 34 00

90 years of the Association of Polish Butchers and Producers of Processed Meat The Association of Polish Butchers and Producers of Processed Meat (SRW RP) is one of the oldest trade associations in Poland. It was established in 1922 and, with some interruptions, has operated ever since, gathering over 300 members and supporting companies. The recent years have been particularly busy on the national and international scales. SRW RP has prepared two projects for promoting meat and processed meat products in third countries (Ukraine, Russia, China, Singapore, Thailand). The first of these, “Meat in Europe” (completed in 2009), and the second, “European Table – Tradition, Modernity, Quality” (which finishes in February 2012) were approved, well-received, and co-financed by the European Union. Bożena Skarżyńska

Photo by Magdalena Zadnieprowska

SRW RP organized a mixer during a New Year’s meeting at the Lech Walesa Institute

Celebrations all year round! The “European Table” programme will end with a trip to the ProdExpo fair in Moscow. Positive ratings and prizes won at international trade fairs for the innovative way of presenting products and promoting the European and Polish meat industry have become an incentive to work on further projects, including domestic ones. One of them, financed from Meat Promotion Funds, is “Świętomięs Polski” (Polish meat festival) – an open-air event first organised in September 2011 in Poznań’s Old Market Square. The interesting formula of coming into contact with the meat industry and the immense interest among Wielkopolska’s residents were decisive in continuing the programme. This year “Świętomięs Polski,” also in

September, is visiting Katowice, featuring Upper Silesian processed meat producers. Świętomięs is only one of the great many events prepared for 2012 by the Board of SRW RP. All events planned by this organisation – training sessions and thematic conferences, contests, and occasional meetings, as well as participation in fairs and trade shows in this country and abroad – will be under the banner of the 90th anniversary. SRW RP’s anniversary year was preceded by participation in... the official Gala for the 15th Anniversary of the “Polish Market” magazine. In the lounge of Teatr Wielki – Polish National Opera in Warsaw, the Association of Polish Butchers and Producers of Processed Meat, in collaboration with the Polska

Ekologia Association (with which it has cooperated for several years) organised a banquet for 1,500 guests. The companies that prepared the event included ZM Jasiołka, Bracia Rudziks, ZM Skiba, ZPM Łukosz, Rzeźnia Sztum, Food Service, and the Polish Horse Breeders Association. Cured meat and meat dishes were served by the best Polish cooks – Marcin Suchenek, Ernest Jagodziński, Maciej Fabisiak, and Maciej Rudziks, recognised – through promotional programmes in which they prepare meat dishes – also in Russia, Ukraine, China, and Thailand. The companies representing SRW RP were also invited to prepare a banquet during the New Year’s Meeting in the Lech Wałęsa Institute Foundation. This display of culinary art from our producers and cooks was yet another success. There will certainly be no shortage of such great occasions to promote Polish meat and processed meat this year, although the Board of SRW RP will focus on organising important industry and trade meetings. One of them will be the traditional SRW RP’s New Year’s Meeting with members of the Association, as well as representatives of the Government, Government agencies, and organisations cooperating with SRW RP. In February, besides participation in Prod Expo in Moscow, another important event will be a two-day off-site conference under the banner “Effective cost management in meat processing plants.” The meeting enjoys great popularity due to the subject, which is vital in the current economic situation in Europe, Poland, and the Polish meat industry. Traditional events organised by SRW RP include the Easter Meeting as part of the cycle “Easter – Meat Holidays – Polish Tradition,” with a gala of nationwide processed meat contests. Producers of meat products and dishes also compete during the PolAgra Food - International Trade Fair for Food. At this fair, to be held in October, SRW RP will present the 18th Forum of Butchers and Cured Meat Manufacturers. The Association will also be the organiser of the meat industry stand and the promotion programme. This presentation will be financed from Meat Promotion Funds. The climax of the anniversary celebrations will be the occasional meeting of SRW RP members, planned for 23 June. It will take place in Częstochowa, and will be preceded by an anniversary Holy Mass in the Chapel of the Black Madonna of Częstochowa and an official dinner in the refectory. ::

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