Polish Market (196) 1-2/2013

Polish Market :: 1-2/2013

PUBLISHED since 1996 No. 1–2 (196) 2013 :: www.polishmarket.com.pl

INNOVATION

GREEN ENERGY

RESPONSIBLE BUSINESS

INSIDE:

ENERGY AND GAS INNOVATION FINANCE

Contents

1-2/2013 chemical industry

Jan Sosna, Consolidation of chemical industry to materialise soon # 38

innovation

From The President’s Press Office # 6

From The Government Information Centre # 7

Prof. Leszek Rafalski, director of the Road and Bridge Research Institute (IBDiM); Innovations for safer roads # 40

finance

Our Guest

Janusz Piechociński, Deputy Prime Minister and Minister of Economy; To make economy grow # 8

Kazimierz Małecki, President of the Management Board of Krajowa Izba Rozliczeniowa S.A.; Driving the change # 44

Marcin Korolec, Minister of the Environment; From Doha to... Warsaw. # 10

Prof. Małgorzata Zaleska, a Board member of the National Bank of Poland, Professor at the Department of Banking Warsaw School of Economics, and Vice President of the Committee on Financial Services Polish Academy of Sciences; The turn of 2012/2013 in banking # 46

industry

Household appliances market growing in strength # 14

economy

energy and gas

Jerzy Bojanowicz; Gas market in Poland

Jerzy Bojanowicz; Waiting for liberalization

Adam Szejnfeld, Member of Parliament; A civilizational challenge # 48

# 18 # 24

Jacek Janiszewski; founder and chairman of the Integration and Cooperation Association Programme Committee, organizer of the Economic Forum in Toruń; Polish people really count # 50

Robert Gwiazdowski; President of the Adam Smith Centre, To forecast or not to forecast? # 52

Ireneusz Łazor, The President of the Polish Power Exchange; Creating gas trading exchange # 25

Henryk Majchrzak, President of PSE SA; Will investment make Polish regions more attractive? # 26

global market

Poland and the European Energy and Climate Policy # 30

Cezary Tomasz Szyjko, Poland on the European Energy Market in 2013 # 32

Roman Łój, President of the Board at Katowicki Holding Węglowy SA (KHW), If not coal, then what? # 34

Investment boom at Głogów smelter

2 :: polish market :: 1-2/2013

# 36

Ewelina Janczylik- Foryś, Economic patriotism salvation from the crisis? # 54 Janusz Urbanik, founder and President of the Board of Ventor Sp. z o.o. Public administration has to support Polish business # 56

invest in poland

Jan Sosna; Looking for an investment location?

Special Economic Zones issue new licences to investors # 59

# 58

Contents infrastructure

“Poland under construction” - a moment for consideration # 60

Events calendar or... Not to be missed at the National Museum in Kraków! # 75

Jerzy Stuhr, Possibly the last spurt of honesty # 76

Maryla Rodowicz, A joke, a thought and a piece of truth at the same time – a song… # 79

commercial real estate

Aleksander Loster; an associate, Capital Markets Group, Cushman & Wakefield; What is the value of a retail scheme? # 63

international relations Bartosz Komasa, Relations with China – current state and prospects # 64

Bogdan Sadecki; The prospects for the Polish IT market in 2013 # 66

Patryk Mirecki; It’s cheaper outside

events

Maciej Proliński; Verdi for the New Year!

# 82

Maciej Proliński, Sensitivity, soul, heart and a God-given gift – a voice # 84

IT

# 68

Michał Paprocki, lawyer, partner at Kancelaria Radcowska Chmaj i Wspólnicy; A sea of possibilities # 70 Amber Toga 2012

# 71

Cultural Monitor

# 72

A reverence for history and new challenges

# 86

Maciej Proliński, The 2012 Friendly Insurance Company # 87

Maciej Proliński, Leaders still believe in a successful year… # 88

The Laurels of Skills and Competences 2012

law

The Castle that vanished for years…

# 94

human capital on polish market # 98

Culture

food industry Bożena Skarżyńska Best wishes with the white wafer # 100

Carlos Gonzalez-Tejera, Stalgast – over 20 years of experience # 102

# 74

Publisher: Oficyna Wydawnicza RYNEK POLSKI Sp. z o.o.

(RYNEK POLSKI Publishers Co. Ltd.)

Contributors: Magdalena Szwed, Bogdan Sadecki, Agnieszka Turakiewicz

President: Krystyna Woźniak-Trzosek

Columnists: Małgorzata Zaleska, Maja Sujkowska, Chałas & Partners

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: Krystyna Woźniak-Trzosek Deputy Editor-in-Chief: Ewelina Janczylik-Foryś redakcja@polishmarket.com.pl Writers/Editors: Maciej Proliński, Jan Sosna, Sylwia WesołowskaBetkier, Grażyna Śleszyńska, Janusz Korzeń, Jerzy Bojanowicz, Janusz Turakiewicz

4 :: polish market :: 1-2/2013

Photographers: Jan Balana, Łukasz Giersz, Rafał Nowak 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 Anna Tywonek anna.tywonek@polishmarket.com.pl Public Relations: Joanna Fijałkowska j_fijalkowska@polishmarket.com.pl

Cover Page Design: Lili Project Design and DTP: Foxrabbit Designers Printing: Zakłady Graficzne TAURUS – Roszkowscy Sp. z o. o., www.drukarniataurus.pl Circulation: 8,000 Oficyna Wydawnicza RYNEK POLSKI Sp. z o.o.

Nr KRS 0000080385, Sąd Rejonowy dla m.st.

Warszawy XII Wydział Gospodarczy Kapitał zakładowy 80.000,- zł.

REGON 011915685, NIP 526-11-62-572 Published articles represent the authors’ personal views only. The Editor and Publisher disclaim any responsibility or liability for their contents. Unsolicited material will not be returned. The editors reserve the right to edit the material for length and content. The editors accept no responsibility whatsoever for the content of advertising material. Reproduction of any material from this magazine requires prior written permission from the Publisher.

Editorial

At the beginning of each year, economic analysts and journal­ ists outbid each other to come up with the most original but also the most accurate forecasts. We have got used to taking them serious­ ly, especially those issued by ma­ jor institutions such as IMF, OECD, the European Commission, cen­ tral banks, multinational finan­ cial corporations, but also those by freelancers who have proved on a number of occasions that what makes a good prediction is not only computing power and so­ phisticated mathematical models, but also years of attentive ob­ servation of business processes, individual talent and intuition.

Confidence in forecasts decreased sharply in 2008, since the collapse of Lehman Brothers, which triggered off the global finan­ cial crisis. Subsequent shock waves and changes in key economic indicators, especially on the financial markets, fuelled uncertain­ ty among investors. A saying was then coined that the weak point of forecasts is that they are about the future. When interviewed by journalists on the Polish zloty exchange rate expected by the end of the year, Marek Belka, President of Poland’s central bank (NBP), put it bluntly: “If you have such questions only, you could as well put a chimpanzee in front of the camera”. Marek Borows­ ki, a senator and a former Deputy Prime Minister and Minister of Finance, had for 11 years run and published the annual rankings of macroeconomic forecasts for Poland that proved most accu­ rate (NB our colleague from the editorial team, the late Marek Mi­ siak, had often taken the lead in these rankings). In 2010 Borows­ ki gave up his hobby, claiming that such rankings - perhaps apart from those compiled by international institutions - lost much of their impartiality and credibility. Such a reserve towards mac­ roeconomic forecasts, justified amidst the crisis-fuelled increas­ ing uncertainty factor, seems, however, a very local, Polish, phe­ nomenon. It is largely due to the tabloidization of public debate, imposed by most of the media (including Polish editions of major international magazines) and practised by some economic jour­ nalists. And this leaves the door open for scaring people with all possible disasters and calamities, for exaggerating threats and catastrophic predictions.

How does this align with reality? Opinion polls conducted by CBOS, a pollster, at the end of 2012 bring out surprising findings.

67% of respondents feel that “things are going bad” in Poland, 41% think that the economic outlook is grim, and only 15% say it is good. At the same time, 48% of respondents consider their living standard as average, 39% as good and a mere 13% as bad. As many as 37% of those interviewed anticipate that the economic situation will go worse in 2013, and only 10% expect it to improve. When it comes to the assessment of their job situation, only 20% remain pessimistic and 16% think it will get better. Respondents seem ever more optimistic when asked about their personal prospects.

26% of them find that their families will have to tighten belts in 2013, 14% is of opposite opinion, and as much as 61% see their job situation as stable and is not afraid of losing it. According to sur­ veys carried out by Gallup International, only 6% of Poles reck­ on that 2013 will be better in economic terms than the previous year. This gives us the 50th place in the list of 54 countries polled based on the so-called optimism index, but again, opinions on the respondents’ personal economic prospects and the econom­ ic condition of the country were strangely divergent. In terms of personal happiness, Polish optimists outweigh pessimists by 18%.

Similarly surprising are the results of a survey conducted among Polish entrepreneurs. European study (53 thousand respondents from 26 countries) coordinated by Eurochambres, in which Pol­ ish Chamber of Commerce polled 1380 Polish companies, despite having achieved in 2012 significantly better-than-average re­ sults, Polish entrepreneurs feel pessimistic about the conditions which they will be up against in 2013. Poland was ranked among the top five countries with the deepest level of pessimism in re­ spect of the prospects for doing business in 2013. What is, then, an average Pole supposed to think? Since its inception, that is for 16 years, “Polish Market” has never joined the choir of pessi­ mists. Even when we were accused of being excessively enthusi­ astic about the potential of Poland’s economy, subsequent events proved us right. Therefore, we are not afraid of the future. After a decade of an uninterrupted growth with no equals in Europe, there has been a slowdown. True, but it is only a temporary slump and our economy will pick up again within one or two quarters.

Poland will continue to be a good economic partner, an increas­ ingly attractive market, and - according to the latest analyses by UNCTAD and the OECD - one of world’s five best investment lo­ cations. As a Polish song goes: A land is beautiful, where every­ thing still seems bad to all. :: Krystyna Woźniak-Trzosek Editor-in-Chief President Rynek Polski Publishers Co. Ltd.

1-2 /2013 :: polish market :: 5

Economic seminar with former Slovak deputy prime minister The Chancellery of the President of the Repub­ lic of Poland has organised an economic seminar, along with former Deputy Prime Minister, Min­ ister of Finance in Slovakia, and National Coun­ cil Member, Ivan Mikloš, entitled “The Econom­ ic Development Options for a Small, Open EU Economy Inside and Outside the Eurozone. Ol­ gierd Dziekoński, Secretary of State in the Chan­ cellery of the President of the Republic of Poland, presided over the meeting.

Ivan Mikloš presented the keynote address, con­ cerning reforms and the conditions for the com­ petitive economic growth of the EU’s member states, both in - and outside the Eurozone - based on Slovakia’s experience. The discussion held among economists and experts swirled around the development of member states’ competitiveness

– including Poland – and the possibilities for eco­ nomic growth of small, open economies in the EU. The former Deputy Prime Minister of Slova­ kia highlighted that when faced with intensi­ fying global competitiveness, the most crucial factors behind long-term growth would be re­ forms which ensure stable and efficient public financing, effective state institutions and ad­ ministrations (the best-possible for running businesses), and also the knowledge-based de­ velopment of society. As Mr Mikloš underlined, meeting these requirements by an EU’s member state would make membership of the economic and monetary union the right way to follow for the small and open economies among the EU’s member states, provided that the Eurozone un­ dergoes optimal reforms. ::

Work and courage yield results in Podhale “Here, in the Podhale, it is clearly visible that work and courage yield positive results,” said Pres­ ident Komorowski in Bukowina Tatrzańska. Prieviously, in Białka Tatrzańska, he said that Poland could be able to organise The Winter Olympics in 2022, but together with Slovakia.

The President announced that he was to meet the Presidents of the Czech Republic and Slovakia in the near future, in Wisła, where he would discuss the 2022 Winter Olympics. “I am certain that the Presidents of both countries will be more than eager to support the organisation of the Winter Olympic Games in the Tatra region, should their Governments undertake the appropriate meas­ ures,” said President Komorowski.

When asked about the Olympics, the organisation of which Kraków is competing with Zakopane and other towns in the Podhale region, the President said that striving for the organisation of such an event would require devoting certain funds at that time.

“This is a kind of an entry fee, a deposit we have to pay ourselves, being deeply convinced that or­ ganisation is within our reach. I think that this has to be a Governmental decision, but this also requires some partial, Local-Government decisions, which would prepare the Podhale region, and even, the Silesian one for instance, to bear this great responsibility,” said the President.

In his opinion to compete for the organisation of the Olympics would require coordination and creating a scaffolding for cooperation. “We need to be wise in competing against, and also in co­ operating with, our Slovakian neighbours, without whom it would be impossible to organise such an event, as our mountains are not as big and broad as the Slovakian Tatras,” said the President. ::

6 :: polish market :: 1-2/2013

We have to work together to restore faith in the future of Europe Bronisław Komorowski has met the diplomatic corps in the Presidential Palace. Anna Komorowska, the First Lady, also took part in the meeting The President said that Poland wished to enter the Eurozone as soon as pos­ sible. He also highlighted that this year, the tenth, anniversary of the European Union membership refer­ endum – which had decided on the Polish presence within the EU – was a good opportunity to recall “the im­ portance of European unity, Europe’s achievements on the winding road to unity, and also about the importance of the single currency, which we wish to adopt as soon as possible.”

The President also expressed his joy over the fact that, recently, it had been possible to make a series of de­ cisions to bolster the euro’s position as a factor in the EU’s economic growth and stability.

“As we look at the experiences of re­ cent years, we can assume that, with every likelihood, further Europe­ an integration will go on around the recovering Eurozone,” said President Komorowski.

He warned, however, that “the ef­ forts undertaken to heal the Euro­ zone should not contradict the politi­ cal and institutional Union’s integrity and the principles of cohesion and solidarity of the European integra­ tion structure”. ::

Photos: Maciej Śmiarowski/KPRM

PM talks with Daul about the EU budget for 2014-2020

Prime Minister Donald Tusk met Joseph Daul, head of the European People’s Party in the European Parliament. The primary sub­ ject of discussion was the EU budget for the years 2014-2020.

In addition to the negotiations regarding another Multiannual Financial Framework, the conversation concerned the state of the economic and monetary union.

The issues of the EU budget for the years 2014-2020 are to be talked over at the summit in Brussels scheduled for 7 and 8 February.

The previous year’s EU budget summit in November 2012 ended without agreement, as the budget proposal presented by the Presi­ dent of the European Council did not receive the support of EU leaders.

It assumed a cutback of EUR 75 billion in relation to the initial project of the Euro­ pean Commission, the value of which was around EUR 1 trillion. The President planned an expenditure of nearly EUR 972 billion (in the so-called commitments) within sev­ en years. In November, the British and the

Germans demanded a further reduction of EUR 30 billion, including on expenditure for administration.

In mid-January, Herman Van Rompuy said in Dublin that he was “optimistic” about agreement on the budget being effected in February. Although it is known unofficial­ ly that the head of the European Council is working on a new compromise draft, he made it clear that the November proposals were still valid. Van Rompuy admitted that they would still have to be slightly adjusted and corrected. He believed that at the November summit “enough arrangements were made to say that an agreement was possible”. ::

Visit of the President of Mongolia Prime Minister Donald Tusk met the President of Mongolia, Tsakhiagiin Elbegdorj.

The visit was an opportunity for sustaining and continuing economic rela­ tions, and for discussing bilateral relations. The President of Mongolia took part in the Poland-Mongolia Economic Forum. This is the second official visit of the President to Poland.

The conversations covered opportunities for the development of economic co­ operation. Prime Minister Tusk assured the President of Mongolia of support for Mongolia’s cooperation with the EU and NATO. In 2011, Polish exports to Mongolia consisted of food industry products (42%), plastics (24%) and equipment and machinery (23%). ::

Meeting with the President of France “France and Poland are acting jointly to­ wards a realistic, but possibly large, Euro­ pean budget,” stressed Prime Minister Don­ ald Tusk. The head of the Polish Government met the French President, François Hollande in Paris. The topic of their conversation was also the mission in Mali, where Poland will send 20 instructors.

Prime Minister Tusk pointed out that both countries recognise good mechanisms for counteracting the crisis in the Common Ag­ ricultural Policy and the Cohesion Policy. He also stated that Poland and France hope that the debate at the February meeting of the

European Council in Brussels would mean the maintenance of a possibly high level of these policies. “Any potential changes, as we will all jointly seek a compromise, should not be made at the expense of the Cohesion Policy or the Common Agricultural Policy,” he said.

Prime Minister Donald Tusk announced that on the summit of the Visegrád Group States will take place 6 March in Poland and will be attended by the French President, Fran­ çois Hollande and the German Chancellor, An­ gela Merkel. The meeting will be dedicated to “the future of Europe and the joint actions for its defences”. :: 1-2 /2012 :: polish market :: 7

Our Guest

To make economy grow Janusz Piechociński, Deputy Prime Minister and Minister of the Economy, talks to “Polish Market.”

O ver a month ago, President Bronisław Komorowski appointed you as Deputy Prime Minister and Minister of the Economy. This is a huge challenge. What aims did you set yourself to improve Poland’s economic performance?

The mission of the Ministry of the Economy and mine as its head is to create the best conditions in Europe to do business. To this end, I will first of all take steps to improve the legal framework of doing business in Po­ land. An important element of support

for our companies is investment in­ centives such as special economic zones, which is why we want to ex­ tend their lifetime.

A vital part of the ​​ economy is ener­ gy. In this sector, too, legal regulations need to be adjusted to the changing market conditions and the EU require­ ments. The Ministry has prepared a package of energy bills that are be­ ing examined by the government. Af­ ter that, they will be going through a long legislative procedure.

The energy market is an important sector of the Polish economy as far as it has a huge impact on building Poland’s position in the world. How do you see the direction in which it will develop?

The Polish energy sector is grow­ ing all the time. New power units are being constructed, and the old ones are undergoing major overhauls. We are aware of the fact that the demand for electricity is increasing. What we need is a balanced energy mix that will guarantee Poland’s energy security as well as a stability of supplies to cus­ tomers. To achieve this, we must take decisive steps, keeping in mind, how­ ever, that the future energy mix will in fact be decided by the companies in­ vesting in power generation sources.

We should also remember about the substantial resources of Polish coal, which will continue to serve as an important stabilizer of the coun­ try’s energy security. In the face of the

8 :: polish market ::

1-2 /2013

climate-related challenges and further requirements of the EU, we want to step up the development of clean coal technologies, as this will allow us to effectively use our domestic resources.

We are also going to modify our energy mix so as to increase the share of renewable energy sources. Accord­ ing to EU guidelines, we are supposed to reach by 2020 a 15% share of ener­ gy from renewable sources and a 10% share of biofuels in the transport fuel market.

How to make Polish mining industry efficient and cost-effective again? How to return to the days when we were the world’s largest coal exporter, and not importer?

Judging by the performance of coal companies, last year was a very good one for the mining industry in Po­ land. According to our estimates, the 2012 output reached nearly 80 million tonnes, which means an increase by approx. 3.5 million tonnes over the previous year.

That said, when making sum­ maries and forecasts for the coming years, we cannot ignore the global economic developments, which do significantly affect the Polish econ­ omy, including mining. Coal sales decreased following a drop in de­ mand from both energy producers and households. It is also difficult to predict how the future will unfold in this respect. I hope that the governing bodies of mining companies will ad­ just their production volumes to the current needs of the market, and that they will boost efficiency by reducing excessive costs. As a result, Polish coal will be able to compete effectively on foreign markets.

Our Guest

It is also very important to work out appropriate long-term strategies, geared to the needs of the industry and its customers. Polish energy pol­ icy should focus on strengthening the competitiveness of the sector, its sus­ tainability and the security of supply.

That is why we are switching from a “low-carbon economy” to “low-emis­ sions economy”, while using our basic energy resource, which is coal.

Will there be enough funds to restore the mining base (machinery, equipment, and new pits) in 2013?

I would like to stress that the pri­ ority for the coal mining sector is a widely understood investment. It is worth noting that, despite the re­ cession, its volume increases every year. Since 2008, the annual invest­ ment expenditure is over PLN 2 bil­ lion. In 2011, it amounted to approx.

PLN 3.3 billion, while in 2012 it is es­ timated to have achieved the level of PLN 4.2 billion.

Optimistic forecasts with respect to financial results give us reason to hope that the number of investment projects in restoring the mining base will further increase. Currently, they account for approx. 75% of the over­ all expenditure and are primarily di­ rected at the maintenance of mining pits and the purchase of machinery and equipment.

The government is not allowed to subsidize such projects, so coal com­ panies rely on their own resources (approx. 83%) and on finance leas­ es (approx. 17%). It should also be re­ membered that each company has its specific situation and its own fund­ ing strategy. Some of them pursue investment programmes using their

own resources, while others have re­ course to financial instruments such as bond issuance.

The euro zone has recently been an object of a heated debate. Does it make sense to consider Poland’s accession to the euro zone if there is already talk of its meltdown?

When joining the European Union, we made a commitment to adopt the euro with no time frame being spec­ ified though. If you look at it from the economic point of view, entering the euro area could be beneficial un­ der certain conditions. I believe that the primary benefit of being a mem­ ber of the Economic and Monetary Union (EMU) is that it would enable to reduce transaction costs and ex­ change rate risk, and therefore to curb business operating expenses. Anoth­ er positive aftermath would be boost­ ing domestic and foreign investment.

Before making the decision to ac­ cede to the EMU, we should, howev­ er, consider any potential threats. I believe that joining the euro area Po­ land will, unfortunately, run a risk of losing its economic competitive­ ness when the ECB’s monetary policy proves pro-cyclical that is not tailored to the real market situation. Portugal, Spain and Greece were among those affected.

At this point, I would like to draw attention to the fact that the recent global economic crisis has highlight­ ed the advantages and the signifi­ cance of the floating exchange rate.

It serves as a sort of an automatic sta­ bilizer, making the economy quickly adjust to adverse external conditions and mitigate a negative impact on ex­ ports. That is why, my opinion is that

adopting the euro at a rate other than that implied by the long-term balance would create yet another threat for Poland’s economic competitiveness.

We should also keep in mind that even if there are arguments in favour of the euro, this does not mean that we are ready and we can adopt it. The measure of EMU readiness are objec­ tive parameters, the so-called Maas­ tricht criteria.

Special Economic Zones were created to exist until 2020, that is for 7 years from now on, but there are opinions that it is worth considering their lifetime. What do you think of it?

I believe that special econom­ ic zones should continue to exist, as they proved to be an effective instru­ ment of stimulating investment and job creation. According to the data from the third quarter of 2012, over PLN 83.8 billion were invested and 186 thousand new jobs were created in special economic zones.

All governments provide assis­ tance to entrepreneurs. Poland cannot afford to deprive itself of this meas­ ure, especially that it has no other support instruments to replace it. EU funds for investment promotion and job creation have been virtually ex­ hausted, and those under new opera­ tional programmes(2014-2020), prob­ ably less opulent, will be available no sooner than by the end of 2014. There­ fore, together with the Ministry of Fi­ nance, we will develop criteria for the operation of special economic zones in the regions affected by structural unemployment. We will also analyze the instruments and rules of provid­ ing assistance to investors. :: 1-2 /2013 :: polish market :: 9

Our Guest

From Doha to... Warsaw “It is extremely important for Poland to participate in key discussions on climate policy, because the solutions proposed there can create opportunities, like for example emissions trading, but also risks, like certain elements of the climate and energy package. That is why we have to be a serious partner during such meetings both in Europe and worldwide,” Marcin Korolec, Minister of the Environment, tells Jerzy Bojanowicz.

How do you assess the 18th session of the Conference of the Parties (COP 18) to the UN Framework Convention on Climate Change (that the UN climate summit), held in Doha, Qatar, from November 26 to December 7, 2012?

The summit was the first oppor­ tunity to sum up the results of the strategy agreed upon in the previous year in Durban. It marked the end of the first Kyoto commitment period and inaugurated the second commit­ ment period that will continue un­ til the end of 2020. The next summit, COP 19, is expected to make progress towards reaching a new global agree­ ment. The negotiations are due to be

10 :: polish market ::

1-2 /2013

concluded by 2015 and the new agree­ ment will come into force in 2020 at the latest. These decisions are in my opinion an unquestionable achieve­ ment of this summit.

When it comes to Polish demands and challenges in connection with the Doha conference, I definitely need to point to our achievements of the first Kyoto period, as we have ful­ filled our commitments with a large 5-fold surplus. We maintained all the rights connected with CO2 emission allowances (the so-called Assigned Amount Units), which will not only remain valid in the second commit­ ment period, but should also be dis­ posable after 2020.

Another success is that Poland’s proposal to hold the next Confer­ ence of the Parties in Warsaw was unanimously acclaimed. The COP is a United Nations conference, there­ fore geographical balance is respected when distributing various functions.

In 2013 it will be the turn of the coun­ tries of Central and Eastern Europe to host the summit. Apart from Poland, none of them was willing to organize the COP 19. The fact that five years af­ ter the conference was held in Poznań (COP 14), Poland is again entrust­ ed with the task is an expression of confidence in the organizational ca­ pacity of our country. Already when Warsaw’s candidacy was presented a week earlier, the delegations of other countries gave it a positive reaction.

How big is the AAU surplus?

About 500 million allowances.

How much are they worth?

Their market value is difficult to assess because we conclude contracts of different value. It depends on the size of the transaction and on the specific conditions that are negoti­ ated with individual partners. Pro­ ceeds from the transactions carried out in 2012 amounted to nearly EUR 62 million.

Our Guest In 2008 Poznań hosted more than 10 thousand people: representatives of NGOs and delegates from almost 190 United Nations member states.

And what can we expect the COP 19 will be like?

The summit in Warsaw (Novem­ ber 11-22, 2013) will be the first one almost entirely devoted to negotiat­ ing a new global climate agreement.

We are now working on a schedule of preparations, and especially on how to prepare for the conference in order to achieve its objectives.

The important thing is that the be­ ginning and the end of the negotiations will be handled by the European Un­ ion: Poland’s Presidency and France’s Presidency, COP Presidency. We have already held meetings with the French administration, and we will contin­ ue to discuss a suitable model of co­ operation so that the negotiations are successful. I believe that during these discussions we will define the specific objectives of the conference in Warsaw.

On December 15, 2011 the European Commission published the Energy Roadmap 2050 (ERM2050). Half a year later, on June 15, 2012, at a meeting of the EU Council of Ministers for Transport, Telecommunications and Energy, Poland vetoed the project of the EU Council’s conclusions. I wonder what will happen next considering that Connie Hedegaard, European Commissioner for Climate Action, said that the Polish veto would not stop Europe from switching to a low carbon economy, and declared that she would find a way to go round it!

I have the impression that talking about climate policy smacks of war narrative in Poland! But to answer your question, I think that in the coming months there will be a number of very serious discussions on climate policy.

One of them will be devoted to legis­ lative changes in the European Emis­ sions Trading System (ETS), which have already been formally announced by the European Commission. It is about the so-called backloading, i.e. the ad­ ministrative control of the amount of allowances to be auctioned. The Euro­ pean Commission wants to delay the sale of some part of allowances by im­ plementing a mechanism that will re­ duce the market supply of allowanc­ es in the short term, thus raising their

12 :: polish market ::

1-2 /2013

prices. There are also countries call­ ing for higher CO2 reduction targets to be discussed.

In general, we believe, and that is our standing, that the pace of Europe­ an policy (in terms of setting new goals) should be aligned with the world pol­ icy. This means that any new targets, such the European Union’s commit­ ment, included in the “Energy Road­ map 2050”, to reduce CO2 emissions by 40% in 2030 (compared to 1990), by 60% in 2040, and by 80% in 2050 should be fixed once the world con­ sensus is reached.

The Doha amendments to the Kyoto Protocol, including the annex setting out the reduction targets in the second commitment period, must be ratified.

We are getting involved in a global pro­ cess, because global problems can only be solved using global mechanisms.

Countries that pursue an active poli­ cy to reduce CO2 emissions and adopt emission reduction targets in the sec­ ond commitment period of the Kyoto Protocol are responsible for a 15% of world emissions! The existing model does not simply meet the needs of re­ ality. That is why I believe that the cli­ mate conference in Durban in 2011 was extremely successful, during which Poland played a unique role as far as it held the Presidency of the EU Council.

It is common knowledge that the best possible solutions emerge as a re­ sult of a consensus, not a confrontation.

Therefore, it is so important for Poland to get involved in such discussions al­ ready now. Organizing a conference in Warsaw gives Poland additional ben­ efits due to the fact of holding the COP Presidency from November 2013 to De­ cember 2014, making it officially one of the most important global actors, having a decisive impact on one of the most important multilateral political processes in the UN system. That is one of the reasons why we strived to host this conference in Warsaw. The open­ ing of negotiations in November and their end two years later is worth such an involvement on our side.

Why Warsaw?

17-20 thousand participants are expected to arrive and, if only for this reason, it is easier to organize the sum­ mit in Warsaw than in another city. We already know that the sessions will be held at the National Stadium, which for this purpose will be specially adapted.

L et’s stay on the domestic front.

What is your view on the controversy over the Environmental Protection Act, and specifically the section on the protection against noise (I mean protests against putting acoustic screens along rivers)?

Saying that the Ministry of the En­ vironment is to be credited with the acoustic screens installation in Po­ land is not true, but such opinions have appeared in the media. Howev­ er, it is true that we have taken rad­ ical steps to amend the regulation, although it did not provide for the obligation to put up acoustic screens.

Instead, other measures could be ap­ plied to reduce noise: building em­ bankments or planting shrubs along roads or railways.

What about the Act on Hydrocarbons, the lack of which worries the companies prospecting for shale gas in Poland?

The guidelines of the Act were adopted in October 2012. Its provi­ sions are being proofread now. I do understand the concern of investors, because operating a business requires a relevant legal framework. Therefore, even though the Act is a large and fairly complicated project, I want it to be put forward for public consul­ tation in the nearest future.

Has the Ministry of the Environment contributed to the Act on Renewable Energy Sources that is being prepared by the Ministry of Economy? I am talking about the amount of so-called correction factors applied with respect to green certificates for particular RES, for example photovoltaic systems with a capacity exceeding 100 kW are supposed to receive 2.85 green certificates, hydroelectric power plants with a capacity of over 20 MW - 2.3, while for biomass co-firing plants this ratio is to be significantly reduced to 0.3, and for those put into use in 2017 - to 0.15, and in 2020 support will be withdrawn altogether.

The draft Act on RSE is still under discussion and has not been approved by the Council of Ministers yet. Interministerial consultations are under­ way. Personally, I think that there is no point in supporting the photovol­ taic industry in Poland. ::

Industry

Household appliances market growing in strength

The production of household appliances has a long tradition in Poland.

Everyone in the country remembers Frania, the legendary washing machine which was squeezed out from the market only by automatic washing machines.

Konrad Pokutycki, president of BSH

In keeping with BSH’s business culture, we respect and appreciate the contribution of all our employees to the long-term development of the company

Much has also changed in the pro­ cess of home appliances production.

Additionally, consumers are increas­ ingly conscious in choosing household appliances, which are now more and more advanced technologically. Few people know that Poland ranks sec­ ond, after Germany and ahead of It­ aly, in the production of white goods (refrigerators and washing machines).

In the nine months to the end of Sep­ tember 2012, Polish producers made 1.675 million refrigerators and freez­ ers, which represented a rise of 17.5% compared to a year earlier, 3.618 mil­ lion automatic washing machines (up by 21.3%) and 2.378 million dishwash­ ers (up by 8%). More than 90% of TV sets and household appliances manu­ factured in Poland was exported. The value of appliances exported from Po­ land in this period reached around EUR2.5 billion. Konrad Pokutycki, president of BSH Sprzęt Gospodarst­ wa Domowego (BSH Polska), a mem­ ber of BSH Group, says: “In 2011, BSH Sprzęt Gospodarstwa Domowego re­ corded a significant increase in sales,

14 :: polish market ::

1-2 /2013

of which exports accounted for two thirds.”

In terms of sales, the top three man­ ufacturers on the market were Ami­ ca, Electrolux Group and BSH. The last company kept its position as the lead­ er of the market in terms of sales. “De­ spite the difficult economic situation, 2012 was a very good year for us,” Kon­ rad Pokutycki says. “We strengthened our position on the Polish household appliances market and created new jobs. The sales of our ultra-energy-ef­ ficient home appliances were expand­ ing even faster than we had expected.

Also in this area, we kept our leading position on the market and recorded a rise in sales.”

How is it that the household appli­ ances market is growing in strength in the times of a global crisis? Let us look at the example of BSH Polska, the market leader.

BSH Sprzęt Gospodarstwa Domowego (BSH Polska) is a Polish subsidiary of BSH Bosch und Siemens Hausgeräte, the Munich-based Ger­ man company which is the leader of

the European household appliances market. The group operates worldwide and has annual sales of EUR9.6 billion, which gives it a very strong position on the global household appliances mar­ ket. In Poland, BSH distributes Bosch, Siemens and Gaggenau appliances, and manufactures washing machines, dish­ washers and clothes dryers in its three plants in the central city of Łódź.

BSH Polska is also expanding thanks to investment projects. Among the most important ones is the Research and Development Centre for Clothes Dryers, IT Services Centre and Busi­ ness Services Centre – Shopping. Ac­ cording to BSH data, the value of in­ vestments the group made in Poland by 2012 reached around EUR300 million.

Innovation The success of BSH Group is based on top product quality. Since customers are increasingly conscious, a new way of thinking is needed as is the intro­ duction of new technologies. The con­ sumer ever more often chooses elec­ tricity- and water-efficient appliances.

Environmental and social considera­ tions are becoming the most impor­ tant criteria for the new group of buy­ ers called LOHAS (Lifestyles of Health and Sustainability) consumers, who believe in a healthy lifestyle and sus­ tainable development. Statistics show that 90% of the burden on the natural environment resulting from the use of

Industry a product is caused by the consump­ tion of energy, water and detergents by households. BSH meets such expecta­ tions halfway by regularly introduc­ ing innovative solutions. This is prov­ en by its 931 patent applications in 2011.

“Interest in ultra-energy-effi­ cient appliances is also driven by a steady growth in electricity prices,” Konrad Pokutycki says. “However, no one expected that the sales of BSH products from this segment will be at such a high level. Today, the sales vol­ ume in Europe significantly exceeds 3 million appliances.” Energy-efficient appliances manufactured in the BSH plants in Łódź are exported to markets throughout Europe. Łódź is not only situated in the centre of Poland but is also well connected with other parts of Europe. The favourable location makes it easier to export products. “From the perspective of costs and the environ­ ment, we combine various modes of transport and try to ship more and more by rail,” Konrad Pokutycki says.

“Three times a week, we send from Poland to Germany a train full of our appliances, an equivalent of 110 ship­ ments in lorries. We also import in this way manufacturing inputs. The share of deliveries in containers to European countries, such as Britain, Spain, Tur­ key and Greece, is on the rise.”

In 2011, BSH opened in Łódź a Lo­ gistics Centre covering 14,000 sq m to handle the company’s logistics

Home Inspiration Centre – Gaggenau’s exhibition

Home Inspiration Centre

1-2 /2013 :: polish market :: 15

Industry operation on the domestic and for­ eign markets. This single project was worth PLN25 million. The logistics centre can accommodate 56,000 ap­ pliances. Thanks to its own railway siding and locomotive, trains can be driven into the building. This shows that innovation is applied not only in production, but also in transport.

Attractive employer?

It is estimated that the household ap­ pliances sector provides employment to around 20,000 people, which ac­ counts for 150% of all jobs in the ra­ dio and television sector. BSH employs more than 2,000 people in Poland and is the largest employer in the Łódź re­ gion. Several dozen engineers work at the Research and Development Centre for Clothes Dryers. The knowledge and skills of Polish specialists are used in designing and manufacturing techno­ logically advanced appliances export­ ed throughout the world.

BSH Group is also committed to training young personnel. BSH has assumed patronage over two second­ ary schools in Łódź where students are educated to become mechatronics technicians. The Research and Devel­ opment Centre cooperates on a regu­ lar basis with the Łódź University of Technology in order to encourage en­ gineers to stay in Łódź. As part of this project, BSH offers training to the uni­ versity’s students. Joint scientific re­ search is also conducted and students write their MSc theses associated with the research projects. The company supports the development of its em­ ployees by enabling them to acquire higher qualifications. BSH Academy is the organization which has pro­ vided training courses to employees

Bosch Home Professional series washing machine

16 :: polish market ::

1-2 /2013

for several years now. In 2011 alone, 1,524 Polish workers took part in the courses provided by BSH Academy.

The Top Employer Poland 2012 cer­ tificate awarded to BSH in the ranking produced by the independent institute CRF proves BSH’s strong position as an attractive employer. “In keeping with BSH’s business culture, we respect and appreciate the contribution of all our employees to the long-term develop­ ment of the company,” says Konrad Pokutycki. “The Top Employer 2012 certificate is another proof that we are going the right way in terms of human resources policy. Stable employment guarantees and many opportunities for professional development within the organization create a trust-based relationship between the employer and the employee. This is enormously important at the time of rapid change on the contemporary labour market.”

Siemens dishwasher

Care for the environment BSH has undertaken numerous en­ vironmental activities to protect the natural environment. The campaign to plant oak trees along the Oak Av­ enue is a symbol of its environmen­ tal policy. The trees symbolize the millions of appliances manufactured

by BSH. Companies, including BSH, which are producers and importers of electrical and electronic equipment have the obligation to safely process and recycle the worn-out products.

BSH Polska is one of the found­ ers of ElektroEko, the most experi­ enced recovery organization on the Polish market. Since its inception in 2006 ElektroEko has collected over 230,000 tonnes of electrical waste, which accounts for almost 60% of the total waste of this kind collect­ ed in Poland. In 2011 alone, Elektro­ Eko collected and processed nearly

Bosch clothes dryer

70,000 tonnes of worn-out electrical and electronic equipment. On behalf of BSH and other companies, the or­ ganization conducts nation-wide ed­ ucational activities, contributing to improving public awareness in the area of responsible management of worn-out electrical and electronic equipment.

The Polish home appliance sector is gradually contributing to the coun­ try’s competitive edge in the interna­ tional arena. Projections made by PKPP Lewiatan for 2013 show that manufac­ turing is one of the sectors contribut­ ing to economic growth. Companies recording high profitability, like BSH Polska, help Poland improve its posi­ tion relative to other countries. A vi­ sion and the ability to predict is key to BSH’s success. BSH Polska relies on in­ novation, which these days is a basis for growth. The constant technologi­ cal improvement and the adoption of the latest technologies proves that BSH understands the needs of today’s mar­ ket. What is more, BSH Polska is open to the environmental activities which contribute to environmental protec­ tion on a global scale. The right man­ agement is a very important factor in BSH’s success. By basing its success on the managerial staff and improv­ ing their qualifications, the company has managed to fully achieve its goals.

Flexibility seems to be another priority in the activity of BSH Pols­ ka. It is definitely one of the few com­ panies which bases its knowledge on its experience gathered over many years, adjusts itself to the present needs of the market and, while an­ alyzing forecasts for the future, tries to build the best possible strategy for coming years. ::

Grupa Azoty Many companies One aim: WIG 20

Siła Tworzenia

A new, powerful brand on the European chemicals market.

It encompasses complementary companies with a variety of traditions and specializations in order to use their potential in implementing a common strategy.

This is how we have created Poland’s biggest, and one of Europe’s largest, chemical consortium.

The new structure guarantees us a strong market position both domestically and abroad. We have become Poland’s largest and Europe’s second producer of artificial fertilizers and our products are delivered to over fifty countries worldwide. This growth in sales and market diversification would not have been possible without the modern logistics infrastructure created within the Group.

Thanks to the Group’s well-considered architecture, we are able to offer our clients a diversified product portfolio – from mineral fertilizers and construction plastics to OXO alcohols, plasticizers and pigments.

Many of them are recognized brand names with a long history of reputability. The certificates, attestations and numerous industry awards we have received serve as evidence of their high quality. Our own research, development and service facilities also allow the Group to conduct servicing activities.

Our mission is to continue making the Group’s market position stronger, extending its global reach and harmonious development of its companies – our most valuable assets. However, since we know that success comes with responsibility, our new strategy includes not only economic aims and indicators – the principles of sustainable development, meaning care for the environment and local communities are its important part. We are a brand of the highest standards – in every dimension of our operations.

grupaazoty.com

Energy and gas

Gas market in Poland From January 1, 2013 bills paid by households for natural gas will be lower by 10% on average than in previous years while bills paid by industrial customers will be lower by 3.3% on average. The drop is due to a cut in prices of gas imported from Russia under the Yamal contract renegotiated by the Polish Oil and Gas Company (PGNiG) and to the company’s restructuring. Prices of gas supplied by PGNiG will be lower by around EUR0.5 per MWh than prices on wholesale gas markets for take-or-pay contracts.

Jerzy Bojanowicz This represents a significant price re­ duction, which will be noticeable by both households and the industrial plants where the price of final product largely depends on the gas they consume. In 2011, the total con­ sumption of natural gas amounted to 14.38 billion cubic metres. Most of the gas, 10.92 billion cubic metres, was imported – 85% from Russia under the long-term contract signed in 1996, and the rest from Germany and the Czech Republic. Less than 30%, or 4.33 billion cubic metres, came from indig­ enous sources.

The policy to diversify gas sources and build storage facilities resulted in the first three quarters of 2012 in a major change to the structure of gas imports. Thanks to the use of the Moravia interconnector and the extend­ ed connection in Lasów, which is a virtual reverse line on the Yamal pipeline, Poland imported 1.4 billion cubic metres of gas from the western and southern direction, twice as much as in the first three quarters of 2011.

In the first three quarters of 2012, around 10.5 billion cubic metres of gas was sold on the Polish market, compared to 10.1 billion cubic metres a year earlier. Volumes of gas bought by each group of consumers were higher by 3-5% than in January-September 2011. How­ ever, despite the increase in gas sales in the first three quarters of 2012, PGNiG recorded a drop in net profit by nearly PLN1.3 billion.

There are transmission, distribution, sales, storage, exploration and extrac­ tion companies operating on the Polish gas market. However, the market is dominat­ ed by PGNiG Group, which conducts all these kinds of activity, either directly or through subsidiary companies, and is pre­ sent on 98% of the market. This is why gas

18 :: polish market ::

1-2 /2013

prices are approved by the president of the Energy Regulatory Office (URE).

Transmission Under the URE president’s decision of Oc­ tober 2010, the Gaz-System SA company, as the transmission system operator for gas, is responsible until December 31, 2030 for transporting gas through high-pressure pipelines. The Polish gas transmission sys­ tem is composed of around 9,853 kilometres of transmission pipelines (gas trunklines), 14 gas compressor stations, 56 gate stations, and 974 gas pressure reduction and meter­ ing stations. The National Gas Dispatch De­ partment and Regional Gas Dispatch De­ partments supervise the operation of the gas transmission system.

By 2014 Gaz-System is to build over 1,000 kil­ ometres of new transmission pipelines, in­ cluding lines linking Świnoujście and Szc­ zecin, Szcze­cin and Lwówek, Szczecin and Gdańsk, Gustorzyn and Odolanów, and Rem­ belszczyzna and Gusto­rzyn. The extended gas pipeline system may become an important part of the North-South Gas Corridor link­ ing the LNG terminal in Świnoujście and the planned LNG terminal in Croatia through the transmission infrastructure of Central European countries. Projects carried out in 2011, coupled with the virtual reverse pipe­ line on the Yamal gas pipeline, created tech­ nical conditions needed to import to Poland over 3.3 billion cubic metres of gas annual­ ly from new sources.

Additionally, by the decision of the URE president of November 2010, Gaz-System SA became until December 31, 2025 the operator of the Polish section of the transmission sys­ tem transporting gas from the Yamal Penin­ sula to Western Europe (683.9 kilometres).

The transmission system is used to transport gas to Germany and to supply gas to Poland through delivery points in Włocławek and Lwówek. The owner of the Polish section of the Yamal-Western Europe gas pipeline is SGT EuRoPol Gaz SA, the Warsaw-based operator of transit gas pipelines.

“The seven contracts which our subsidiary Izostal SA signed in 2011 and 2012 with GazSystem for the delivery of steel pipes with a corrosion resistant coating for the construc­ tion of gas pipelines were a big success. The largest contract, worth almost PLN84 mil­ lion, is for the Rembelsz­czyzna-Gustorzyn pipeline stretch,” said Henryk Orczykows­ ki, vice-president of the Board at Stalpro­ fil SA. “Additionally, the company signed a contract with PGNiG for the delivery of steel pipes with an outer three-layer corro­ sion resistance coating and an inner coat­ ing. They will be used to build a gas pipe­ line running to the nitrogen removal plant in Grodzisk. The net value of the contract is PLN19.9 million The combined net value of contracts signed with PGNiG and its sub­ sidiaries in 2012 exceeded PLN71 million.

And by 2014 Gaz-System will build more than 1,000 kilometres of new transmission gas pipelines.”

Distribution and sales To implement the provisions of Energy Law, on July 1, 2007, PGNiG Group split its activ­ ity in organizational and legal terms, that is separated gas transmission from its sales.

At present, PGNiG has six regional gas com­ panies dealing with gas distribution, with 23 local gas distributors and over 300 cus­ tomer service offices throughout Poland.

The companies are responsible for the deliv­ ery of natural gas to households, industrial plants and wholesalers and for the opera­ tion, repair and extension of gas pipelines.

Natural gas is delivered, via the distribu­ tion system operated by the regional gas companies, to around 6.7 million household and business consumers across Poland. The distribution system has a length of around 119,000 kilometres.

The report “Consumption of Fuels and En­ ergy Vectors in 2011” published by the Cen­ tral Statistical Office (GUS) in December 2012 shows that the provinces which consumed the largest amounts of gas were Mazowieck­ ie (3.10 billion cubic metres), Lubelskie (1.49 billion cubic metres), Śląskie (1.35 billion cu­ bic metres), Małopolskie (1.23 billion cubic metres) and Wielkopolskie (1.05 billion cubic metres). Meanwhile, Warmińsko-Mazurskie and Podlaskie provinces consumed only

Energy and gas 0.18 billion and 0.11 billion cubic metres respectively.

These significant differences result from the fact that industrial consumers bought the largest amount of natural gas (61.52%). Most of these consumers were companies oper­ ating in the fuel sector, including refineries and petrochemical companies, and chemi­ cal producers. Industrial power stations and heat and power generating plants consumed 1.31 billion cubic metres of gas, the industrial and construction sector consumed 6.88 bil­ lion cubic metres and small consumers con­ sumed 3.33 billion cubic metres. It is worth adding that households were the largest group of consumers, accounting for 96.94% of all consumers. Households consumed 3.61 bil­ lion square metres of gas and generated 25% of total demand.

Apart from PGNiG, there are also several in­ dependent companies. The largest of them are CP Energia, EWE Energia and G.EN Gaz Ener­ gia. But the structure of the retail market has for years been influenced by the high concen­ tration of the Polish gas market, with PGNiG Group selling 96.38% of natural gas. The rest is sold by several dozen businesses, the largest

of which in 2011 were EWE Energia, Handen, G.EN Gaz Energia, Enesta and KRI. They usu­ ally combine distribution and sales, selling natural gas bought from PGNiG. They con­ duct activity in areas where PGNiG does not operate and use their own distribution lines.

The Natural Gas Exchange, launched in De­ cember 2012, is a major step towards liber­ alizing the Polish natural gas market. For many consumers, it offers a chance for a market share and transparent gas sales. “I am very glad that the Natural Gas Exchange has started to operate in Poland as in other European countries,” said Ireneusz Łazor, president of the Polish Power Exchange (TGE), at the opening of the Gas Exchange.

“This is a historic moment in the process of liberalizing the gas market.” And Presi­ dent of the Warsaw Stock Exchange Ludwik Sobolewski said: “The launching of the Gas Exchange is a very significant change in the operation of the Warsaw Stock Exchange – not only as an organizer of sales but also as an institution introducing again a new qual­ ity to the Polish market.”

The TGE and the Warsaw Commodity Clear­ ing House (IRGiT), members of Warsaw

Stock Exchange Group, were fully respon­ sible for organizing the Gas Exchange. Gas is supplied to consumers by OGP Gaz-System, which on January 1, 2013 started to provide supplies ordered by the TGE for transactions on the Natural Gas Exchange. “The Gas Ex­ change, coupled with measures to increase the technical capabilities of the national transmission system through the construc­ tion of new gas pipelines, will enable us to develop a competitive gas market and flex­ ible gas sales shaped by the rules of supply and demand,” said Jan Chadam, president of the Board of Gaz-System SA. The launch of the spot market was another step in the functioning of the gas exchange in Poland. For the time being, conducting and settling transactions on the Gas Ex­ change is only possible through broker­ age houses which are members of the TGE and IRGiT. The gas traded is group E meth­ ane-rich natural gas which meets the qual­ ity requirements set by the TGE Board. The price of each contract is expressed in PLN per MWh. Dom Maklerski BOŚ, Noble Se­ curities and Trigon Dom Maklerski are the first brokerage houses to have signed agree­ ments with the Gas Exchange.

ADVERTISEMENT

19-20 March 2013 InterContinental Hotel, Warsaw Conference and Exhibition

Partner and Cocktail Reception Host

Associate Sponsor

InternationalProjectFinance Association

Official Partner

Official Media Partner

ets rk

Financing future energy

merging t in e ma en m

CEE Energy

ge intelli nt inve st

.

Ltd nts Eve

9th Edition

eelevents.co.uk +44 207 275 8020

Through feature case study presentations from leading experts and interactive panel discussions with industry stakeholders, our 9th CEE Energy Conference will provide an in-depth analysis of the market discussing future trends, regulation and legislation, bankability of energy projects, financing options and more.

This event will unite senior level representatives from incumbent and private utilities; international investors and financiers; consultants and advisors; leading law firms and many more industry experts who are looking to the unfolding opportunities in CEE in order to assess whether the potential can be realised?

Key speakers include:

Gregory Spanoudakis, President of EMEA Operations, Canadian Solar, Canada Ireneusz Łazor, President of the Management Board, Polish Power Exchange S.A., Poland Pierre Dechamps, Adviser for Energy, Climate Change & the Environment, European Commission Rodney Kincaid, CEO, Balmoral Capital Holdings Inc., United States of America Sergey Boyarkin, Programme Director, Rosatom, Russia

Register your seat now and save £200 (book before 18 February 2013) Exhibition and sponsorship positions available 1-2 /2013 speakers :: polish market :: 19 For more event information, including and registration visit www.eelevents.co.uk/cee_energy_2013

Energy and gas IRGiT is responsible for clearing and settling gas market transactions. The risk manage­ ment system used by IRGiT guarantees secu­ rity to every member of the Clearing House if individual members of the market be­ come insolvent.

Storage PGNiG has six underground storage facilities with a combined storage capacity of around 1.6 billion cubic metres. Natural gas can be stored above ground and underground – in rock formations. Underground storage fa­ cilities have been gaining in importance in recent years. They are located in bedded salt deposits and salt domes. Gas is stored in caverns formed by dissolving salt with water. The caverns enable performing many gas injection and withdrawal cycles a year and have very high capacity, which means they enable a very fast injection and with­ drawal of very large amounts of natural gas.

Investgas, a company owned by PGNiG, has designed, built and operated cavern-type storage facilities in Poland since 1993. The first two salt caverns were leached in the Mogil­ no II domed salt deposit and put into oper­ ation in 1997. Investgas operates the storage facility and continues to expand it. There are now 11 storage caverns with a combined stor­ age capacity of 586 million cubic metres and another three are being leached.

The construction of the Kosakowo storage fa­ cility, with a maximum withdrawal capacity of 9.6 million cubic metres per hour, began in the Puck Bay area in 2009. Ten caverns with a combined storage capacity of around 300 million cubic metres, will be built in the first stage. In September 2010, Investgas started to leach the first two caverns, which will be filled with natural gas in 2013 and put into operation. The remaining caverns will be completed successively until 2022.

A few innovative solutions have been used for the first time in Poland while constructing the Kosakowo storage facility. They largely contributed to minimizing the negative envi­ ronmental impact of the project and reducing its cost. “After nearly 20 years of Investgas’ activity in designing, building and operating cavern-type underground gas storage facili­ ties in salt deposits we have developed build­ ing techniques which take into account en­ vironmental and economic considerations.

The expertise and experience we have gath­ ered enable us to carry out such projects in Poland and abroad,” said Teresa Laskows­ ka, president of Investgas, for which she has worked since 1993.

20 :: polish market ::

1-2 /2013

PGNiG plans to spend PLN3.5 billion to in­ crease the storage capacity of its underground gas storage facilities from the present 1.8 bil­ lion cubic metres to over 3 billion cubic me­ tres by 2015. In the coming years, PGNiG will expand nine underground facilities, of which four will be built with the use of EU fund­ ing, which will account for 25%-30% of the total cost. The largest project, worth almost PLN2 billion, is the expansion of the Wier­ zchowice storage facility. It started in 2007.

After the completion of the project this year, the storage capacity will rise from 0.58 bil­ lion to 1.2 billion cubic metres.

On November 14, 2012, the European Com­ mission approved funding for the project – PLN497 million - under the Infrastructure and Environment Programme. “It is the largest gas storage facility supported [by the EU] in the energy sector under the Infra­ structure and Environment Programme,” said Adam Ździebło, deputy minister for regional development.

Exploration and extraction The companies Petrobaltic, EuroGas Pols­ ka, FX Energy Poland, RWE Dea Polska Oil, CalEnergy Gas Polska, and Energia Zach­ ód conduct gas extraction activity in Po­ land apart from PGNiG. Petrobaltic has an exclusive licence for hydrocarbon explora­ tion and extraction in the Polish sea area covering around 30,000 square kilometres.

On December 31, 2012 PGNiG began oil and gas extraction from the Skarv deposit on the Norwegian continental shelf, becoming the first Polish company to extract significant amounts of oil and gas under an internation­ al project. It is also PGNiG’s first off-shore extraction project. Through its subsidiary, PGNiG Norway, set up in 2007, PGNiG has a 11.92% share in the deposit and its opera­ tor is BP, with a 23.84% share. The remain­ ing partners are Statoil Petroleum (36.17%) and E.ON E&P Norge ON (28.08%). This year, PGNiG plans to extract in Norway around 370,000 tonnes of crude oil and around 0.3 billion cubic metres of gas. In 2014, the out­ put is to be larger because the company will devote the first quarter of this year to pre­ paring for extraction and putting succes­ sive wells into operation.

“Raising the volume of natural gas and crude oil extracted from our own deposits is one of PGNiG’s strategic goals,” said Grażyna Piotrowska-Oliwa, president of PGNiG. “Starting production from the Skarv de­ posit is of special importance for us. First­ ly, Norway is a priority area for our foreign

expansion. Secondly, thanks to the Skarv deposit, the volume of oil extracted will rise considerably and the company’s prof­ itability will grow as a result. This is good news for shareholders.” And Geir Kvael, managing director of PGNiG Norway, said: “With the present market prices, the rev­ enue planned for the next three years will amount to around USD400-500 million an­ nually. One should also add that the revenue will be generated with relatively low prime costs and with tax exemptions in the first years of production.”

The extractable resources of the Skarv de­ posit, discovered in 1998, are estimated at 13 million tonnes of oil and 5.7 million tonnes of NGL (Natural Gas Liquids). The depos­ it is composed of molecules heavier than methane – ethane, propane, butane, isob­ utene and so on – and 43 billion cubic me­ tres of gas. It is located in the Norwegian Sea, around 210 kilometres to the west of Norway’s coast and around 300 kilome­ tres to the north-west of Trondheim. The development of the Skarv deposit is one of the largest investment projects in Norway in recent years. Oil and gas are extracted using an advanced geostationary platform – floating production, storage and offload­ ing (FPSO) unit – which may be operated for 25 years. It is the world’s largest FPSO unit, with a length of 295 metres, width of 51 me­ tres, a superstructure/hull/tower weighing 74,000 tonnes, and with 100 single cabins. It can operate in difficult weather conditions.

Natural gas from FPSO – from 17 wells, with the daily output of 19 million cubic metres – will be transported directly to the Euro­ pean market through the existing system of undersea gas pipelines. It can also be of­ floaded onto a tanker.

PGNiG Norway has shares in 10 explorato­ ry and extraction licences on the Norwe­ gian shelf and is the operator on one of them.

The company’s main asset is the share in the Skarv deposit. PGNiG bought it in 2007 from ExxonMobil. The total reserves held by PGNiG Norway amount to 68.8 million barrels of oil equivalent. So far PGNiG Norway has invest­ ed around USD1.1 billion in the Skarv pro­ ject, including the purchase price. The money was contributed by PGNiG and banks, in­ cluding USD 400 million in a reserve-based loan (RBL).

As regards gas exploration in Poland, PGNiG has adhered to its strategic goal of raising the annual output of natural gas to 6.2 billion cubic metres by 2015 and has intensified ex­ ploratory activities on around 80 licences.

Energy and gas LNG terminal The diversification of fuel supplies will en­ sure energy security for Poland. In June 2009, PGNiG signed a 20-year agreement with Qatargas for the delivery of 1 million tonnes (around 1.5 billion cubic metres) of liquefied natural gas (LNG) annually to the LNG terminal in Świnoujście. The terminal is being built under a government resolution of August 19, 2008, which calls it a project of strategic importance for Poland’s inter­ ests. The decision to build the terminal is in keeping with plans to diversify the sources and ways of gas supply and to ensure ener­ gy security for Poland because the termi­ nal will make it possible to receive liquefied natural gas from any place in the world and then turn it again into gaseous form.

There are over 80 LNG terminals in the world, the largest number in Japan (24) and in Europe (21). The construction of around 40 terminals to liquefy natural gas and over 60 terminals to convert LNG into gaseous form is planned across the world. The first terminal of this kind in Central and Eastern Europe has been designed by a consortium led by a Canadian company. The project has been carried out by Polskie LNG, a company

set up by PGNiG in 2007, Gaz-System, Mar­ itime Office in Szczecin, and Szczecin and Świnoujście Seaports’ Authority. Polskie LNG is responsible for the construction of the LNG terminal, Gaz-System for the con­ struction of a gas pipeline from Świnoujście to Szczecin, linking the terminal with the gas transmission system, Maritime Office for the construction of infrastructure pro­ viding access to the outer port, and the Sea­ ports’ Authority for the construction of port infrastructure.

The terminal is being built on a site designat­ ed for the expansion of the port on the right bank of the Świna river. The terminal will be able to receive up to 5 billion cubic metres of natural gas annually and it will be possi­ ble to expand its capacity to 7.5 billion cu­ bic metres. It is being built by a consortium of several companies: Saipem (Italy), Saipem (France), Techint Compagnia Technica In­ ternazionale (Italy), Snamprogetti Canada, and Polish companies PGB and PGB Export.

In June 2012, the court declared PBG’s bank­ ruptcy open to arrangements. A consortium of Atkins Polska and Atkins Ltd. represents the investor on the project. The terminal is to be put into operation by June 30, 2014.

After being offloaded from tankers, LNG will be collected in two tanks, each with a standard capacity of 160,000 cubic metres.

Then, it will be converted into gaseous form.

The project includes the construction of a port covering 150 hectares, Europe’s long­ est breakwater of around 3 kilometres, an 80-kilometre transmission gas pipeline and a reloading terminal.

The amount of funding to be provided un­ der the Operational Programme Infrastruc­ ture and Environment has been raised from PLN456 million to PLN551.8 million. In 2011, the European Commission set the maximum amount of state aid for the LNG terminal at PLN925 million. “The additional EU funding granted for the construction of the terminal is very good news both for us, as the investor, and for future users of the Świnoujście infra­ structure,” said Rafał Wardziński, president of Polskie LNG. “Firstly, it is confirmation that we are spending the funding granted to us so far in an honest manner. Secondly, the fund­ ing from the Operational Programme Infra­ structure and Environment will contribute to price cuts, which means that services provid­ ed by the terminal during its operation will be cheaper for our prospective customers.”

ADVERTISEMENT

polishshalegas.pl

a reliable source of information about shale gas in Poland up-to date information transparent form detailed descriptions facts and myths

Website operated under the auspices of the Minister of State Treasury 1-2 /2013 :: polish market :: 21

To find out more, visit www.polishshalegas.pl

Energy and gas The expansion of the terminal will depend on demand from the market. This is why in November 2012 Pols­k ie LNG began market screening to find out whether the expan­ sion of the LNG terminal in Świnoujście and additional services will be needed. “We want our business decisions to respond to the needs of the market,” Rafał Wardziński said. “In October we asked the largest ad­ visory companies to explore the potential for expanding the functionality of the LNG terminal. Now, time has come to ask the market what services it expects from us. I pin my great hopes on the market screen­ ing process. Its results will have a very sig­ nificant impact on future business decisions because the possible expansion of the termi­ nal has to meet the expectations - expressed through market screening, for instance - of potential customers. By knowing the needs of the market on the one hand and the tech­ nical feasibility of the terminal’s expansion on the other, we will be able to take rational decisions, which will be translated into in­ creased utilization of the facility and con­ sequently will enable recouping the costs invested in the construction of the infra­ structure earlier.”

More than 10 Polish and foreign energy and chemical companies have already stated their interest in using the LNG terminal in Świnoujście. There are also many companies interested in transporting LNG in tanker lorries to smaller facilities converting LNG into gaseous form. They would be located in regions where there are no gas pipelines, like for example north-eastern Poland.

Shale gas “Poland is an undisputed European leader in terms of the pace of shale gas explora­ tion and environmental monitoring. Anal­ yses conducted so far at EU level show that Poland has a good environmental law and, if it is observed, significant profits may be generated for the Polish economy and low­ er gas prices offered to households without damage to the natural environment,” said Piotr Woźniak, deputy environmental min­ ister and Poland’s chief geologist.

From 2007 to January 16, 2013 the minis­ ter of the environment granted 113 licenc­ es worth up to PLN40 billion for oil and gas exploration. The licences cover 90,000 square kilometres, or 29% of Poland’s ter­ ritory, in 13 provinces and around 900 ru­ ral districts. Seven licences are located off the Baltic coast. By 2021 licence holders are to drill 309 wells: 128 obligatory and 181 op­ tional ones. In a report published in March,

22 :: polish market ::

1-2 /2013

the Polish Geological Institute – National Research Institute (PIG-PIB) estimates Po­ land’s extractable shale gas reserves at 346768 billion cubic metres, assuming a mod­ erate level of extractability. However, Prof.

Jerzy Nawrocki, director of PIG-PIB, said: “Until we come to know how much of shale gas is extractable, and this can be done only through exploratory activity within individ­ ual licences and on the basis of production tests and by examining fracturing efficien­ cy, our calculations will be just projections.”

Meanwhile, PGNiG, which has received 15 licences, plans to start shale gas extraction as early as late 2014 or early 2015. The com­ pany will concentrate its activity in the re­ gion of Pomerania in northern Poland and in the Lublin region in the east. PGNiG has given priority to the Wejherowo licence, in­ cluding the Lubocin and Opalino wells in the north, and the Lubycza Królewska well in the Tomaszów Lubelski licence in the east.

The company did not change its plans after the publication of the PIG-PIB report. “We base our estimates on identified convention­ al deposits in Poland - 94 billion cubic me­ tres of natural gas. It is a point of reference for us. Anything in addition to that, that is between 350 billion and 760 billion cubic metres of extractable gas as estimated by PIG, is still a huge amount given the annual consumption of 14.5 billion cubic metres of gas,” said Grażyna Piotrowska-Oliwa. “We have conducted our own seismic surveys and we are drilling wells in our licences on their basis. We have the Wej­herowo well where work is now very advanced. On our second licence, Tomaszów Mazowiecki, another well will be drilled in Lubycza Królewska, also on the basis of our surveys.”

When it comes to shale gas exploration, it is important to mention the cooperation “imposed” by Treasury Minister Mikołaj Budzanowski on the Polish companies PGNiG, Enea, KGHM Polska Miedź, PGE and Tauron Polska Energia. The July 4, 2012 agreement they signed will enable the com­ panies to accelerate their shale gas explor­ atory activity. It is estimated that PGNiG will spend PLN1.72 billion on exploration, investigation and extraction of gas in the part of the Wejherowo licence it owns - on the Kocha­nowo, Częstkowo and Tępcz (KCT project) pads covering around 160 square kilometres.

“We will not achieve success in this very complex investment process if we do not combine forces on this project; if we do not create a strong team composed of the

strongest organizations of the Polish econ­ omy,” Mikołaj Budzanowski said. “Today, the team which is initialling the first such agreement - among a fuel company, the energy sector and the extraction sector – proves that this kind of agreement is pos­ sible and will be based on a specific busi­ ness project.” During his visit in July 2012 to the Lubocino shale gas well, where PGNiG is conducting work designed to launch Po­ land’s first commercial shale gas extrac­ tion site, he said that three mines on shale gas deposits will start operations by 2015.

Market competition “A number of decisions have been taken to create a regulatory environment enhancing economic freedom on the gas and electric­ ity market. They contributed to the devel­ opment of these markets,” said Jan Wosz­ czyk, president of URE, to sum up the year 2012. One of the results was the launch of the Natural Gas Exchange. In 2013, URE plans to take further measures to fully liberalize the gas market. The measures include the pro­ gramme called “Roadmap for Freeing Natu­ ral Gas Prices,” which will bring about pro­ gress in the development of a transparent wholesale gas market and mechanisms ena­ bling retail consumers to change a supplier.

“We can expect further changes, including a departure from regulating gas prices for industrial consumers,” said Izabela Albry­ cht, president of the Kościuszko Institute, in the analysis “Gas Market on the Threshold of Liberalization. Gas Scenarios” published in December 2012. “It is in these measures that energy-intensive sectors should see the benefits they expect because it seems that hopes for enhanced competition on the gas sales market, and consequently perhaps a further drop in prices, should be pinned on the liberalization of the market rather than one-off price cuts by PGNiG.” “The driving force behind the liberaliza­ tion process is the European Commission, which monitors the implementation of the third liberalization package. An addition­ al factor is economic pressure associated with the need to reduce gas prices and en­ hance the competitive edge of enterprises. (…) Another factor important for the shape of the gas market in Poland may be activi­ ties undertaken to pursue the energy secu­ rity doctrine, diversify supply sources and open the Polish market to international ex­ ploratory and extraction companies in con­ nection with the development of the shale gas sector. Ultimately, apart from reducing the cost of gas thanks to the diversification

Energy and gas of supply sources, reducing imports of ex­ pensive fuel and increasing the output from indigenous resources, we also expect a rise in supply because of an increased share of gas-fired electricity generation in the en­ ergy mix.”

New combined-cycle units Under the EU climate and energy package, Poland is obliged to reduce its carbon di­ oxide emissions. One of the ways to do so is replacing coal with other fuels for power stations and heat and electricity generating stations. The corner stone for Poland’s larg­ est gas-fired heat and electricity generating plant, located in Stalowa Wola, was laid on December 3, 2012. It is a joint project of Tau­ ron Polska Energia and PGNiG. The plant’s 450MWe combined-cycle unit is to be put into operation in mid-2015. It will be gen­ erating around 3,500GWh of electricity an­ nually while consuming 600 million cubic metres of gas. The plant will be managed by a special-purpose company, EC Stalowa Wola, in which PGNiG and Tauron Polska Energia have a 50% stake each. The pro­ ject, worth PLN1.6 billion, is financed from the partners’ own resources (around 25%) and from external sources – loans from the

European Investment Bank (EIB) and the European Bank for Reconstruction and De­ velopment (EBRD). The Abener company, a member of Abengoa Group, is the main con­ tractor on the project.

Group’s Value by 2014.” Its objective is to prepare PGNiG for operation on a liberal­ ized gas market. PGNiG Group wants to keep its position as the leader on the explorato­ ry and extraction market and the main sup­ plier of natural gas who also offers heat and electricity. By 2020 PGNiG wants to gener­ ate a cumulative net profit of PLN15 billion.

“The heat and electricity generating plant in Stalowa Wola is an element in the com­ plete energy strategy that we have consist­ ently pursued, a strategy based on modern, efficient and well-thought-out energy pro­ jects,” said Mikołaj Budzanowski, minis­ ter of the Treasury. “This project not only strengthens the energy sector, but also con­ tributes to modernizing the Polish pow­ er industry up to 21st-century standards.”

And Grażyna Piotrowska-Oliwa, president of PGNiG, said that PGNiG would be build­ ing new generating units basing on the ex­ perience gathered and solutions worked out while cooperating with Tauron Group on the Stalowa Wola project. On December 19, 2012, the two companies signed a letter of intent concerning the construction of a cogeneration gas-fired unit with a capaci­ ty of around 400MW on the premises of the Łagisza power station owned by Tauron.

A day earlier, the PGNiG Board adopted the “Short-Term Strategy for Building the

“In two years’ time we want to become a modern multi-energy company, coping ex­ cellently in a new market environment,” said Grażyna Piotrowska-Oliwa. This year PGNiG Group plans to spend PLN5 billion on investment projects and PLN3 billion to buy the Vattenfall Heat Poland company, the owner of heat and electricity generat­ ing plants in Warsaw. ::

When writing the article, the author used information from the CIRE.pl energy market portal owned by the Energy Market Agency, and the websites of PGNiG, URE and Polskie LNG, the Ministry of Treasury.

ADVERTISEMENT

“One-stop-shop” solutions in energy from biogas and cogeneration The solutions’ aim is to generate sustainable electric and thermal energy using the energetic properties of methane which is naturally formed in waste and organic materials during storage, neutralisation (municipal and municipal-like mechanical and biological waste treatment plans) and manufacture for energy purposes (agricultural biogas plants). These types of energy can be generated using other natural sources of methane such as mines and hard-coal-deposit exploratory boreholes.

The ENERG Group implements investments all around the world. ENER-G Polska Sp. z o.o., its daughter company, operates in Poland and Lithuania.

ENER-G Poland also functions in the field of cogeneration, with the design, production, installation and maintenance of cogeneration systems throughout Europe. Currently, the Group is a leading supplier of cogeneration systems in the power range 33 kW to 10 MW.

With over 20 years of operations and a customer base from all over the world, ENER-G has substantial experience in the implementation of international-scale projects. At present, operational projects are being carried out in the United Kingdom, Poland and Lithuania (ENERG Polska Sp. z o.o) and in Spain. Moreover, new projects are being developed in South Africa, Mexico and Hungary, which emphasises its involvement in providing solutions for renewable energy on a global scale.

As far as figures are concerned, our experience covers more than 80 developed projects which are under implementation, including 15 on the territory of Poland, with more than 110 MW of

installed power and around 4 million tonnes of CO2 reduced each year.

Our “one-stop-shop” solution includes the following services: Theoretical studies, Design and planning, Building permissions and legal contracts, Settling the conditions for connecting to networks, Delivery and installation of equipment, Long-term operation and maintenance, Financing of up to 100% of the investment according to customer needs, Electric-energy purchase and distribution agreements, Obtaining manufacturers’ licences from the Energy Regulatory Office (URE) and the Certification process. ::

ENER-G POLAND SP. Z O.O 7 Bitwy Warszawskiej 1920 Str., 02-366 Warsaw Phone: +48 (0) 22 395 66 00 E-mail: recepcja@energ.pl EKO CERTYFIKAT www.energ.pl

NAGRODA ZA SPEŁNIANIE NORM ŚRODOWISKOWYCH

Energy and gas

Waiting for liberalization The authors of the report “The Four Freedoms of the Natural Gas Market. Liberalisation Initiatives on the Polish Gas Market,” published in September 2012 by PricewaterhouseCoopers (PwC), say the most important thing is to ensure freedom in terms of infrastructure, meaning equal access to infrastructure, freedom of trading on a gas exchange (free access to a liquid gas exchange), contract freedom (freedom to choose a gas supplier), and sales freedom (freedom to decide what to do with one’s own natural gas). And a strong regulator – the Energy Regulatory Office (URE) – should guard these freedoms.

Jerzy Bojanowicz In the present market and infrastructure environment, measures on the supply side are needed to create liquidity on the mar­ ket: launching a programme to free up natu­ ral gas and to ensure freedom of trading on a gas exchange, that is a wide access to the ex­ change for the interested parties. PGNiG was to sell gas through auctions organized with the support from a commodity exchange.

Initially, the programme assumed the re­ lease of around 70% of the total volume of gas consumed in Poland. This represents the total amount of gas consumed by industrial customers. “My goal is to free up prices for this segment of consumers. In this connec­ tion, turnover on the public market should be correlated with gas consumption by in­ dustry,” Marek Woszczyk, president of the URE, said in an interview for WNP.pl of Au­ gust 3, 2012. “If, for some reason, it would be necessary to reach the 70% level only grad­ ually I think it is absolutely a must to create a market trading at least around 30% of the total volume of gas consumed in Poland. Oth­ erwise, price indices created on this market will not be reliable.”

In June 2012, parliamentarians drafted amendments to the Energy Law. This was due to a lack of agreement in protracted negotia­ tions on conditions of the PGNiG-proposed voluntary programme of freeing up the gas market and a real threat that fines would be imposed on Poland for delays in the process of opening the Polish gas market. The draft assumed a much lower volume and – instead of previously proposed obligation to offer gas through auctions - imposed an obligation on companies which in a given year have the right to over 10% of the total volume put into the na­ tional transmission system to sell on the stock market 15% of the gas they have put into the

24 :: polish market ::

1-2 /2013

system that year. This would represent around 2 billion cubic metres of gas annually.

The goal of the programme to free up the Polish gas market, as stated by the URE presi­ dent, is to create a wholesale market and ena­ ble competition on the gas market. As a result, it will be possible to remove tariffs and make the European Commission’s accusations that Poland has failed to deregulate prices on the gas market no longer valid. First, prices should be freed up for institutional consumers with tariffs maintained for households to protect them against possible price hikes. Prices for the latter group of consumers would be freed up in 2015 at the earliest. The actual date will depend on the pace and development of freemarket mechanisms.

The authors of the report rightly say that the goal should be to remove all practices which constrain the freedom to decide what to do with one’s own natural gas. If the prac­ tices continue to persist binding decisions should be issued by authorities to declare the practices legally void. Gas consumers expect this issue to be solved because it will be of key importance for their participation in trading on the gas exchange.

In the course of introducing key changes aimed at liberalizing the Polish gas market, the regulator should have appropriate tools ena­ bling efficient supervision over participants in the market and the ability to take adequate ac­ tion. It is advisable to significantly strength­ en the role of the URE president as a body su­ pervising the development of the market by giving the president appropriate powers. It is also necessary to fully implement the provi­ sions of the third gas directive.

Giving the URE president new powers un­ der the Gas Law, such as those proposed in article 97 of the December 2011 draft, would

significantly smooth the liberalization process.

Better regulatory supervision over companies providing gas supplies should contribute to strengthening confidence in the market from the remaining entities present on the market and consequently increase the liquidity of the market and contribute to a rise in the number of its participants.

But work on the draft amendments to the Energy Law proposed by deputies stalled. Its objective is to fully implement EU legislation in the area of promoting renewable energy sourc­ es and to complete the implementation of EU regulations on common rules of the internal electricity and gas market. The draft propos­ es separating electricity and gas transmission and distribution operations from the produc­ tion and sales of natural gas and electricity.

The draft was submitted to the parliament on June 26, 2012. However, after the first read­ ing on July 24-27, 2012, the draft was with­ drawn by those who had filed it. The reason perhaps is that on July 24 the parliamenta­ ry speaker received the government’s stand­ point on the matter. The government said that the draft did not propose a proper implemen­ tation of the directives of the European Par­ liament and Council on promoting renewa­ ble energy sources and on common rules of the internal electricity and gas market. The government motioned for discontinuing the work on the draft until it submits a draft for a comprehensive regulation to the parliament.

In this situation, on October 18, 2012, an­ other deputies’ draft for amendments to the Energy Law was filed with the parliament.

The draft concerns ensuring the full imple­ mentation of the provisions of the directive of the European Parliament and Council on promoting the use of renewable energy sourc­ es and completing and implementing the di­ rectives on common rules of the internal elec­ tricity and gas market. The draft also makes it much easier to connect micro-generation fa­ cilities to the grid and speaks about unbun­ dling, that is separating distribution activity from other activities.

At the parliamentary meeting on December 11, the first reading of the draft was not com­ pleted. Three days later a motion was tabled to reject the draft in the first reading. However, it was put to vote and then turned down. The draft was sent to the parliamentary commit­ tee for the economy, which on January 3, 2013 set up an extraordinary subcommittee to ex­ amine it. Articles 1 and 2 of the draft were dis­ cussed at a meeting on January 10 and11. ::

Energy and gas

Creating gas trading exchange “The launching of the gas trading exchange in Poland is just the first of several steps on the path to the full liberalisation of the market,” Ireneusz Łazor, the Polish Power Exchange (POLPX) President, tells Polish Market.

Based on our experience with the electrici­ ty market, we can expect that the first phase of the development of gas trading exchange in Poland will end in about one year. We as­ sume that, as in the case of the energy market, the wholesale gas trade on the exchange will increase the transparency and availability of this fuel. This will allow market participants to sign better contracts which are consistent with the existing market practices in the EU. Companies have recognised the advantages of energy trading on the exchange and now

more than 80% of wholesale trading in this commodity in Poland is done on the POLPX. Two gas-trading options have been launched for the interested gas market par­ ticipants, including the forward market and the spot market trading. With the Commodi­ ty Forward Instruments Market with Physical Delivery (CFIM) we have enabled the conclu­ sion of monthly, quarterly and annual con­ tracts with the option of starting deliveries from January 1, 2013. The Day-Ahead Market (DAM) participants have been able to enter

into transactions since December 31. The DAM is designed for companies that wish to com­ plete their buying or selling portfolios of gas on an ongoing basis. Within the DAM, gas supplies are made on the day after conclud­ ing the transaction.

The launching of gas trading exchange in Poland, however, is the first of several steps on the way to the full liberalisation of the market.

For the present, it is difficult to expect active interest from the gas-trading companies in the POLPX. In order to change this, it is necessary to introduce a statutory exchange obligation which would require power companies to in­ itially sell at least 30% of their commodity on the power exchange. The ultimate target in this respect would be 70%. The legislators should also allow the stakeholders to operate direct­ ly on the gas-exchange market, as in the case of the energy market, this way letting them act as market makers. Under the existing law, gas trading on the exchange can be done only through brokerage firms and commodity bro­ kerage firms that are members of the POLPX and members of the Exchange Clearing House operated by the Warsaw Commodity Clearing House. Changes in this area, allowing direct participation in the gas market, would defi­ nitely promote its faster development.

For the development of the demand for gas offer on the exchange, it is necessary to ensure freedom of contract, and thus the actual choice of gas suppliers. It is also necessary to provide market participants with the freedom to trade, in that they can distribute energy through its purchase/ sale on the Exchange. Another im­ portant issue is to provide them with free ac­ cess to the industrial infrastructure, as well as the development of the latter.

Achieving a satisfactory trading flow on the POLPX that would allow the setting of a ref­ erence price will only be possible if all these demands are met. Of course, the whole pro­ cess of liberalisation should be monitored by a powerful watchdog. ::

1-2 /2013 :: polish market :: 25

Energy and gas

Will investment make Polish regions more attractive?

Henryk Majchrzak, President of PSE SA, in an interview with Polish Market.

km of upgraded 220 kV circuit con­ nections. Several dozens of tasks will also be carried out involving the con­ struction and development of pow­ er stations. This is a huge challenge.

Is Poland the only country that has to increase investment in transmission networks so radically in view of, but not limited to, the single European electricity market project?

In terms of the average age of transmission lines, Poland does not differ fundamentally from other Eu­ ropean countries, but investment in construction and development of the transmission networks is necessary, especially in the face of the need to improve Poland’s energy security, to secure continuity of transmission ser­ vices, and to allow connection of new power generation capacities both re­ newable and conventional.

Not only Poland needs to increase expenditure on transmission net­ work, but virtually every EU mem­ ber state does, namely due to the cli­ mate protection goals adopted under the so-called “3x20” package. For ex­ ample, Germany is testing the new

26 :: polish market ::

1-2 /2013

energy strategy whose key idea is to expand the transmission network to allow reliable distribution of RESgenerated electricity. However, this kind of investment encounters eco­ nomic and legal problems in Germa­ ny, which results in a very slow pace of implementation.

The development plan of Polish transmission network for the years 2010-2025, which provides for the transmission network being modern­ ized and extended, which requires an outlay of approx. PLN 23 billion. A to­ tal investment expenditure planned for 2013-2017 will amount to approx.

PLN 10 billion. The result of the im­ plementation of all investment pro­ jects planned by PSE until 2017 (to­ gether with those ending after 2017) will be: more than 4 500 km of new 400 kV circuit connections, about 800 km of upgraded 400 kV circuit con­ nections, over 260 km of new 220 kV circuit connections and almost 1 200

How far is the PSE investment program meant as an adaptation to changes in Poland’s economic geography both those that occurred in the past 20 years and those only planned? How will it influence the investment attractiveness of Polish regions? Will it open up new technological opportunities for Polish power sector, such as greater use of renewable and distributed energy sources?

The development and moderni­ zation of the transmission network within the National Power System is primarily designed to secure the sup­ ply of electricity to customers and to allow the connection of new genera­ tion capacities conventional and re­ newable alike. It is also important to ensure that NPS is an active partic­ ipant in the EU internal market and that it improves its ability to exchange electricity with neighboring systems.

To this end, we plan to increase the number and transmission capacity of cross-border connections. For ex­ ample, we are building an intercon­ nection with Lithuania; we have also entered into an agreement with the German operator, which provides for the construction of the third intercon­ nection with our western neighbor.

It should be stressed that the con­ struction of new cross-border connec­ tions requires the strengthening of do­ mestic networks to allow the increased exchange, especially imports, of power and transmission capacities. Therefore, a total of 12 major investments will be carried out until the end of 2015 as part of the first stage of the so-called ener­ gy bridge with Lithuania, including not

PSE S.A.

PSE is a power transmission system operator in Poland and is a company of crucial importance to the national economy, which has been entered into the register of enterprises of special significance for the economy and defense.

>>

242 lines of the total length of 13,396 km, including: >> 1 line with a voltage of 750 kV, with a length of 114 km, >> 74 lines with a voltage of 400 kV, with a total length

of 5,340 km, lines with a voltage of 220 kV, with a total length of 7,942 km, >> 100 extra-high voltage (EHV) substations, located on the real estate of the total surface of 5,936,467 sq m, >> an under-sea of 450 kV DC connection between Poland and Sweden.

Mission

Transmission grid

PSE perform the duties of the transmission system operator using its own transmission grid of the highest voltage, which consists of:

In accordance with the principles of sustainable development, we provide reliable and efficient operation of the Polish Power System, create conditions for the development of renewable energy sources and provide our employees with the opportunities for professional development.

Vision

The core business activity of the Company involves the provision of services of electricity transmission network in accordance with the required criteria for secure operation of the Polish Power System and abiding to objective and transparent principles that ensure equal treatment of parties, as well as with due respect to the natural environment.

Giving priority to the secure operation of the Polish Power System, we contribute to the European electricity market, actively develop partnerships with other transmission system operators in compliance with the rules of transparency and equal treatment of market participants.

>> 167

ood hands g n i y g Ener r gy Ene

nds a h ood g n i

ands h d o o g n Energy i

Polskie Sieci Elektroenergetyczne S.A. ul. Warszawska 165, 05-520 Konstancin-Jeziorna, Poland phone: +48 22 242 26 00, fax: +48 22 242 22 33 http://www.pse.pl

Energy and gas

only direct cross-border connections, but also development of the transmis­ sion network in the central and northeastern Poland. These investments will significantly increase the country’s energy security while improving the quality and reliability of power supply in this region at the same time. They will also add to the investment attrac­ tiveness of Warmia and Mazury, Pod­ lasie and Mazovia.

The transmission network in northern Poland is also due to under­ go significant upgrades to be able to accommodate new renewable and con­ ventional capacities. In fact, it comes as a result of a “geography of production” that was decided by NPS. An extensive transmission network in northern Po­ land will be used to serve the central part of the country. This will largely increase the potential to absorb pow­ er from renewable sources. Of course, in other Polish regions, i.e. in the War­ saw agglomeration or in Lower Silesia, we will realize significant investment projects, too.

The development plan of Polish transmission network for the years 2010-2025, which provides for the transmission network being modernized and extended, which requires an outlay of approx. PLN 23 billion. A total investment expenditure planned for 2013- 2017 will amount to approx. PLN 10 billion.

28 :: polish market ::

1-2 /2013

Do you think that PSE has a sufficient potential, both in terms of financial and human resources, to carry out all necessary network investments in the power sector? To what extent should we (or will we be forced to) seek foreign assistance?

Given the size of the investment projects planned, and notwithstand­ ing the ongoing investment projects, it is for more than two years that PSE has been preparing for their effective implementation. As a result, specif­ ic guidelines have been laid down to be followed in the preparation and implementation of the project. These will allow in particular to: :: standardize and streamline prep­ arations by creating within a short time a major planning and design office, having highly skilled de­ signers and providing services of the highest quality; :: form a skills management hub with the special consideration be­ ing given to the Project’s Engineer function and investor’s supervi­ sion of the quality and timeliness of the ongoing investments; :: continuously improve the process of planning, preparing and imple­ menting investments carried out by the PSE Capital Group; :: introduce a harmonized model of governance and supervision of

all investments by the PSE Capi­ tal Group in order to enhance the quality and effectiveness of the company’s performance.

A professional planning and de­ sign entity has been formed under the PSE Capital Group to deals with pre­ paring documentation (localization studies, concepts, decision papers, functional and operational programs, etc.) necessary to launch proceedings aimed at selecting contractors, This allows to proceed with tenders and enter into investment contracts on incomparably more efficiently than it was before 2010.

PSE is financing investment pro­ jects from its own funds, but, if nec­ essary, it will look for external sourc­ es. In some cases, such as the energy bridge between Poland and Lithua­ nia, the company also benefits from EU funds.

In conclusion, I would like to say that PSE is well-prepared to implement long-term investments in terms of organizational, technological, human and financial resources. That said, we look forward to the so-called corridor law being enacted, as it will help us through formal and legal issues that are particularly important in the con­ struction of new power transmission lines. ::

Energy and gas

Poland and the European Energy and Climate Policy Prof. Krzysztof Żmijewski, secretary general of the Social Council for the Development of Low-Emissions Economy.

Successive waves of the global crisis, the eurozone troubles and the global response to the Fukushima disaster have brought the need for many Euro­ pean countries to redefine their ener­ gy policies. The COP 18 Conference in Doha showed how illusory are the Eu­ ropean Commission’s claims to glob­ al leadership on climate and energy issues. In this situation, Poland can formulate its standpoint quite clearly.

Polish plans, or the National Programme for the Development of a Low-Emissions Economy

Poland’s achievement As a country, we have the right to speak about the European Energy and Climate Policy without inhibi­ tions. In the past 25 years, we have reduced our greenhouse emissions by 30%, five times more than it was re­ quired of us under the Kyoto Proto­ col. Belittling this by saying that “it happened by itself because you have changed the system” means ridicul­ ing the effort made by Polish socie­ ty and the state. This is not fair, es­ pecially if the remarks are made by those who have increased their emis­ sions in this period. Since 1990 we have doubled our energy efficiency, which was four times lower that the EU average. In 2010, we cut our percapita carbon dioxide emissions down to the European average.

We have started to launch our na­ tional support systems – a system of green certificates for renewable ener­ gy sources since 2007, a system of red certificates for the cogeneration of heat and power since 2007, and a system for supporting energy-efficient and pas­ sive buildings since 2012. At present, we are introducing support systems for energy-efficient city lighting and low-emission transport. In 2013, we are going to launch a system of white

30 :: polish market ::

1-2 /2013

them at all. The cost of these rights, combined with the cost of investment projects which need to be carried out, will push energy prices up. Even if the cost of the rights is not high the cost of the investment projects will certain­ ly be. As a result, Poland may lose its competitiveness while its industry, not only energy-intensive producers, may relocate (carbon leakage).

certificates designed to improve ener­ gy efficiency and a system to support prosumer energy generation.

Polish problems Poland’s problem is that its infra­ structure is worn out (75% on aver­ age), its grid topology is inadequate and it lacks creditworthiness and sources of funding. There is an “in­ vestment versus environmental pro­ tection” conflict and we have a prob­ lem with coping with regulations, like for example those related to Natura 2000. Our legislation hampers wise investment, by for example not al­ lowing to submit variant projects in public tenders. Additionally, from 2016 we will have a shortage of elec­ tricity because of the need to close down more than 5,000MW of power generating units which do not meet the requirements of the LCP (Large Combustion Plants) directive.

A rise in power generation costs is a major threat in coming years. Under the ETS mechanism (EU Emissions Trading System), the Polish power generation sector has to buy abroad around 33% of carbon dioxide emis­ sions rights - if it is possible to buy

Prof. Krzysztof Żmijewski – expert in strategic management and infrastructure with 20 year’s experience in public administration and business; at present, secretary general of the Social Council for the Development of Low-Emissions Economy, member of the Team for the National Security System at the National Security Bureau.

The national programme is com­ posed of several hundred specific pro­ grammes of measures to be taken in 11 sectors: construction, power gen­ eration, transport, industry, trade and services, households, forestry, agriculture, fishery, waste manage­ ment, public administration, social dialogue and education. More than 300 programmes have already been worked out, of which 40% is the work done for free by members and ex­ perts of the Social Council. The rest has been contributed by state work­ ers. Over 600 such programmes are to be worked out, after which they will be organized. This is an exceptional undertaking on national and Europe­ an scale and it contains an important element: dialogue, compromise and social approval, without which the programme will not be carried out.

What should be done quickly? We should improve our energy efficiency to make up for the loss of 2,000MW in the national power system. We should enable acquiring additional 2,000MW of power from abroad. We should en­ able the development of the prosumer energy sector and acquire from it ad­ ditional power of around 2,000MW as soon as possible. We should build peak power units enabling the wide use of photovoltaic sources and wind tur­ bines. Another measure that can be quickly put into practice is turning heat generating plants into combined

Energy and gas heat and power plants. We have a large number of heat generating plants that can be turned into plants producing both heat and electricity by making use of what is now called “waste heat.”

Other measures include thermal im­ provements to buildings, near-zeroenergy buildings, low-emission trans­ port and energy-efficient lighting.

The last measure has already received financial support from the National Fund for Environmental Protection and Water Management (NFOŚiGW) under the Modena and Sowa finan­ cial support programmes.

What do we need to do so? We need the right legislation, technology, removal of obstacles, and first of all the devel­ opment of the national generating po­ tential, and installation and service fa­ cilities. We also need information and education, one which will make Pol­ ish people change their lifestyle, will make it possible to improve efficiency, boost competitiveness, modernize in­ frastructure, diversify supply sources, and reduce energy consumption and emissions, also on global scale.

Can the European Union helps us in these efforts and does it want to?

Does the EU understand our prob­ lems? Does it engage in dialogue with us? What is the scale of this support?

Is it on a par with that granted to the governments and states which have run excessive deficits? Do we under­ stand the EU’s intentions?

We understand that the overriding goal should be to contribute effectively and globally to climate protection. Ef­ fectiveness on local scale will resolve neither the problem of climate change nor the problem of the world’s dwin­ dling resources. We warn that mak­ ing the ETS mechanism tougher may have an effect opposite to the one in­ tended because of emissions flight to countries outside Europe. An example is what has happened in Britain. The country has reduced its carbon diox­ ide emissions by 11%, according to re­ search by British specialist Prof. Dieter Helm of Oxford University, by import­ ing Chinese products with an emis­ sions equivalent of 19%. This kind of emissions reductions will not save the world. Neither does it have anything to do with sustainable development.

If the European Commission initiates a review of the climate policy to make it attractive for the whole world Po­ land will take an active part in this process. Poland has proposed a num­ ber of solutions, which may improve the functioning of the emissions trad­ ing system. First of all, the main focus should be shifted from assessing the emissions intensity of production to emissions intensity of consumption.

This is a challenge. But Europe has to meet the challenge if it wants to hold dialogue with the rest of the world.

The “rest of the world” produces to meet Europe’s needs. Europe con­ sumes what has been produced and then … blames the producers for car­ bon dioxide emissions.

It is also worth noting that at pre­ sent what is called economic growth is based on a special way of con­ sumption, like for example the con­ sumption of single-use products. This notion was unknown to earlier civ­ ilizations. Actually, the only singleuse product was food. All other prod­ ucts were used many times and their lifespan determined the perception of their quality. Today, the number of single-use products is on the rise and this is increasingly true not only of gadgets of little usefulness, which are disposed of although they are not worn out. This has nothing to do with sustainable development provisions, but the European Commission has not yet adopted any directive to deal with this problem.

Replacing ETS sectoral benchmarks with fuel benchmarks is another is­ sue. It is very sensitive, but it should be discussed. We also propose that the emissions trading system should be broadened to include countries neighbouring on the European Un­ ion in order to help to prevent car­ bon leakage and stabilize the system.

And there are matters which make us doubtful about the true intentions of the European Commission, like for example the decision concerning der­ ogation applications where the Com­ mission said that the construction of gas-fired power stations in Poland cannot be regarded as the diversifi­ cation of the power generation sector in terms of fuels used. This is a bizarre decision but the EU procedure does

Social Council for the Development of LowEmissions Economy attached to the Ministry of the Economy is tasked with working out proposals and concepts for systemic solutions contributing to the development of a low-emissions economy in Poland. The Council is made up of a Presidium and 46 independent experts. The Presidium is composed of Prof. Jerzy Buzek, former president of the European Parliament and former prime minister, who is president of the Council, two vice-presidents: Prof. Michał Kleiber, president of the Polish Academy of Sciences (PAN), Janusz Steinhoff, PhD, former deputy prime minister, former minister of the economy, and Prof. Krzysztof Żmijewski, secretary general of the Council. The National Programme for the Development of a Low-Emissions Economy is to be ready by the end of the year. ::

not allow any protest in this case. The question of article 24a of the ETS di­ rective arouses similar feelings. The article has been “frozen” by a per­ sonal decision of EU commissioner Connie Haadegard. The point is the failure to adopt implementing leg­ islation for domestic offset projects.

The legislation would give the right to the Bełchatów power station, for instance, to supply heat to the city of Łódź and increase its pool of rights by at least part of the carbon diox­ ide emissions saved by the city. This measure will certainly not contrib­ ute to carbon leakage and will defi­ nitely be beneficial for climate and for everyone, except exchanges trading in emissions rights. If the goal of the EU climate policy is to push up this price and energy costs rather than protect climate then we should real­ ly think it over.

Poland puts forward detailed propos­ als because we do not think that noth­ ing can be done. It can be done but we have to start dialogue, including in­ ternational one. Most of these pro­ posals can be put into practice. And we also propose cooperation in the area of prosumer energy sector, co­ generation, micro-generation, biocogeneration, passive building, soft­ ware and hardware for intelligent networks, low-emission transport on a mass scale, electric cars, intelli­ gent lighting, Baltic rail, cross-border connections – interconnectors, gas storage facilities, joint R&D projects, joint investment projects, and coop­ eration in the UNFCCC (post-Kyoto) forum. We can do it all together, but both sides have to want to do it. :: 1-2 /2013 :: polish market :: 31

Energy and gas

Poland on the European Energy Market in 2013 Cezary Tomasz Szyjko, PhD The current economic crisis is slow­ ing down infrastructure investment in the European power industry. From 2015 no EU Member State may be iso­ lated from the European gas and energy network. Poland has paid a high price for its obsolete energy infrastructure, comprising poor-quality inter-sys­ tem connections (specially-construct­ ed sections facilitating raw materials transport between the gas supply net­ works of various countries – editor’s note). In January 2013, the applica­ tion of the solutions aimed at eliminat­ ing gas supply interruptions in East­ ern Europe was hindered by the lack of a reversible gas flow option and by the inappropriate inter-system con­ nections and storage infrastructure.

A rapid development in energy pro­ duction by offshore wind plants in the North and Baltic Sea region was ham­ pered by insufficient offshore and land network connections. The development of the huge renewable energy poten­ tial of Southern Europe and Northern Africa will be impossible unless addi­ tional inter-system connections are es­ tablished within the EU and with the neighbouring countries. The risk and costs of disrupted supplies, along with the resultant losses, will increase con­ siderably unless the EU makes a prompt investment in intelligent, efficient and competitive power supply networks, and unless it exploits the potential of improving its energy efficiency. These aims cannot be achieved in the absence of adequate legislative initiatives.

Reconstructing the infrastructure The European Commission has been active in the field of energy law. It has promptly adopted the Energy Infra­ structure Package, entitled “Energy Infrastructure Priorities for 2020 and Beyond – a Blueprint for an Integrated European Energy Network”1. Effective 1. COM(2010) 677 final version, Brussels, 2010.

32 :: polish market ::

1-2 /2013

energy law is crucial to stabilising the EU economy. The objectives of the EU energy policy and the economic goals of the “Europe 2020” strategy2 can­ not be achieved without a thorough reconstruction of the European ener­ gy system, in line with the low-emis­ sion technologies of the future. This is not only the duty of the energy sec­ tor. It is indispensable to ensure sen­ sible legislative projects, innovative technical improvements, a more effi­ cient social education, an infrastruc­ ture resistant to climate change, and added flexibility in transmission net­ works. This task cannot be fulfilled by one Member State within its own means. It requires a common Europe­ an strategy supported by a set of rel­ evant documents and by adequate fi­ nancial resources.

Let us recall that the energy policy for Europe, as already adopted by the Council of Europe by 20073, defines the underlying objectives of the EU sectoral policy, based on competitive­ ness, stability and reliable supplies. The next budget perspective for 2014-2020 must take into account the actual needs of the internal energy market, and by 2020 the share of renewable energy sources in final energy consumption must be 20%. Greenhouse gas emissions must be by 20% lower, and the ener­ gy efficiency benefits must ensure 20% energy savings. In the face of growing international competitiveness regard­ ing global resources, the EU must se­ cure reliable supplies at competitive prices to 500 million of its citizens. The relative significance of energy sourc­ es is subject to change. As regards fos­ sil fuels, including especially gas and crude oil, it seems that the EU will be more and more dependent on imports.

2. Consultations regarding the future “Europe 2020” strategy, COM(2009)647, final version, Brussels, 2009.

3. The Presidency Conclusions

The Energy 2020 Communication from the Commission, dated 10 No­ vember 2012, calls for a transformed mode of planning, constructing and exploiting our energy infrastructure and supply networks. The energy in­ frastructure is also of primary impor­ tance in another document, referred to as the flagship initiative entitled “Resource-Efficient Europe”. To en­ sure appropriate, integrated and re­ liable energy networks is not only the underlying condition of the achieve­ ment of the EU’s energy objectives, but also the condition of the imple­ mentation of the EU economic strat­ egy. Through the development of a modern energy infrastructure, the EU will not only be able to ensure a properly-functioning internal energy market, but it will also increase the reliability of supply4, allow for inte­ grating renewable energy sources, increase energy efficiency and pro­ vide consumers with certain bene­ fits flowing from the application of modern technologies and from in­ telligent energy use.

The activities oriented towards the new energy strategy for the Euro­ pean Union have received full sup­ port from the heads of the Europe­ an countries and Governments. In March 2009, the Council of Europe called for conducting a detailed re­ vision of the trans-European energy networks (TEN-E)5. The above-men­ tioned Communication contains the action plan outline, aimed at deter­ mining a long-term EU vision of the needs related to the efficiency of the Pan-European networks. It presents a new strategic planning method, with a view to illustrating the necessary infrastructure, defining the elements which comprise the best interests of Europe, based on clear and transpar­ ent methodologies, as well as devel­ oping certain tools aimed at timely realisation, including the means of a more prompt approval, and more ef­ ficient cost allocation and financial targetting to encourage private in­ vestments. The TEN-E review must be 4. The Regulation on the Reliability of Energy Supply 994/2010 became effective on 2 December 2012.

5. Guidelines for the TEN-E framework and the financial regulation of TEN. See the report on the implementation of the TEN-E framework for 2007-2009, COM(2010)203.

Energy and gas done through adjustment to both the aforementioned energy needs and the new requirements imposed on the EU under Article 194 of the Lisbon Treaty.

The Polish perspective The European Union needs a fullyfunctioning, combined and inte­ grated internal market in the energy field. In accordance with the provi­ sions adopted by the European En­ ergy Summit in 2012, the construc­ tion of an internal EU energy market is to be completed by 2015. The mar­ ket will ensure the free flows of gas and electricity between countries so as to eliminate the isolated-energy islands, such as the Baltic countries or Malta.6 This was the first meeting of the heads of state and government of the European Union so much de­ voted to the energy issues. Consider­ ing the growing demand for imported raw materials, the EU has developed common energy policies in order to avoid such crises as those that hap­ pened in previous years as a result of the disputes with Russia and Ukraine.

Since 2015 no country may be isolated from the European gas and electric­ ity supply network and its security may not be put at risk because of the lack of the appropriate connections.

Under the European legislation, an appropriate infrastructure, i.e. new transmission routes and intercon­ nectors between countries, and also seeking alternative raw materials, sources and supply routes, shall con­ stitute the basis for the EU energy se­ curity and solidarity between Mem­ ber States in the event of a crisis. The Commission has estimated the invest­ ment needs related to the EU trans­ mission network at EUR 200 billion by 2020. The highest expenditure burden will be borne by energy companies, as was expressly stated in the docu­ ment cited. Additional costs may be covered, through increased gas sup­ ply rates.7 Let us recall that Poland made ineffective efforts to strike out 6. Conclusions on energy, European Council on Feb. 4, 2011, PCE 026/11, full text available on: http://ec.europa.eu/energy/time_to_act_ en.htm (access of Jan. 5, 2013.)

7. Regulation of the European Parliament and Council (EU) No. 994/2010 of 20 October 2010 concerning measures to safeguard the security of gas supplies and repealing Council Directive 2004/67/EC.

this provision out of concern for enduser energy prices.

Conclusions The currently-projected energy in­ frastructure must be compliant with long-term policy decisions. A new EU policy on energy infrastructure is in­ dispensable to coordinate and opti­ mise network development conti­ nent-wide. It will enable the EU to fully enjoy the benefits flowing from an integrated European network, considerably exceeding the value of its individual elements. The Europe­ an strategy on a fully-integrated en­ ergy infrastructure, based on intel­ ligent and low-emission technologies through economies of scale, will re­ sult in lower costs of converting into low-emission economies, to be borne by individual Member States.

The European market, fully equipped with inter-system connections, will both increase the reliability of supply and help to stabilise consumer prices, safeguarding electricity and gas sup­ plies wherever needed. The European networks covering the neighbouring countries, if necessary, will also fos­ ter competition on a uniform EU en­ ergy market, encouraging solidarity between Member States. In partic­ ular, an integrated European infra­ structure will provide European cit­ izens and enterprises with access to energy sources at fair prices. This in turn will exert a positive impact on attaining the 2020 objective of EU policy, which assumes the provision of a strong, diversified and competi­ tive industrial base in Europe.

and payments, which stem from net­ work restraints. However, under the current regulatory frameworks, the necessary investments may not be implemented at all, or as fast as they are needed. This mainly results from non-commercial positive conditions or the added value of projects on a re­ gional or European scale, whose di­ rect benefits on a national or local scale are limited.

The economic slump and the non-im­ plementation of EU law at the nation­ al level creates an additional inhibi­ tion on infrastructural investments.

A limited public and private financ­ ing capacity in the ensuing years should not be viewed as an excuse to postpone infrastructure construc­ tion and investments implementa­ tion. The present investments are the actual prerequisite to the existence of future European generations. ::

The two specific issues to be dealt with in 2013 are adequate legislative solu­ tions and approval for project financ­ ing. It is undoubtedly necessary to increase the efficiency and transpar­ ency of the permits granting process and cross-border cooperation, which will breed wider public acceptance and prompt investments. It is essen­ tial to seek adequate financial solu­ tions to satisfy the investment needs which, according to an estimate for the following decades, will amount to EUR1 billion euro, half of which will be consumed by the energy net­ work itself. It seems that the major part of these investments will have to be covered through regulated prices 1-2 /2013 :: polish market :: 33

Energy and gas

If not coal, then what?

Roman Łój, President of the Board at Katowicki Holding Węglowy SA (KHW), talks to “Polish Market.”

The year 2012 was probably the shocking one for the whole coal mining industry in Poland. Over 15 million tonnes of coal piled idly in mines and power plants - if that doesn’t beat all. And that is when Katowicki Holding Węglowy SA (KHW), a group of coal mining companies failed to achieve its target plan. It did register fairly good financial results, yet it seems the situation can hardly be considered normal.

Any discussion on mining should start with reversing the problem and asking the question: if not coal, then what? Over twenty years ago, the Pol­ ish mining industry went under re­ structuring with mines being closed,

34 :: polish market ::

1-2 /2013

vocational education scaled down, and miners laid off. It was a political deci­ sion, the effects of which are still pain­ fully felt. If one or two nuclear power plants had been commissioned since then, things would probably be differ­ ent now. But it did not happen. And so we have come to the point where coalbased energy is heavily taxed, and en­ ergy from alternative sources is lavishly subsidized. The result is that the lat­ ter is only 2.5 to 3 times more expen­ sive than the coal-generated power.

In Upper Silesia shallow coal de­ posits became depleted long ago, so we have to go down deeper and deeper, which generates higher costs. Econom­ ic changes increase pressure for wage growth; equipment is getting more

expensive. Therefore, the question aris­ es whether, given these costs, it would not be better to import coal or even en­ ergy if it comes cheaper. It would be logical were it not for the fact that im­ ports cost money. Building shopping malls, entertainment centres, water parks will not provide sufficient re­ sources. Coal, its extraction and use, should be regarded as part of the na­ tional economic policy. Coal produc­ ers are often accused of defending the interests of the industry. That is true, but why would they be advocating the interests of the gas retailers, nuclear reactor suppliers or wind turbine and photovoltaic system providers?

We can well close down mines claiming that their maintenance is on the verge of profitability. But even leaving aside the issue of over 100,000 miners and at least as many people em­ ployed in companies co-operating with the mining industry, there is the ques­ tion of where to get money to pay for coal, gas and power imports. Alterna­ tive energy sources are worth interest, but they will not meet Poland’s demand for heat and electricity in the near­ est future. To put it briefly, as long as there is no clearly defined mining pol­ icy, those who think electricity comes from a wall socket, and heat from a ra­ diator will keep asking why mines do not bring billions in profits, and the sit­ uation in the industry is still described as far from normal.

How do you think things will develop in 2013? Does KHW have to change anything in its strategy?

First of all, we must remain calm.

The mining sector does not work in a year-to-year system. It takes two, three, or five years before any invest­ ment can bring tangible profits. In or­ der to be able to extract coal in the dec­ ades to come - and there is still such a perspective - we need to invest eve­ ry year at least a few hundred million zloty. Sometimes a little more, some­ times a little less, but these are colossal amounts. Anyway, it has always been so. And we are always left with the feeling that if there were more funds, we could do much more.

We do not need to change our strat­ egy. Its main points remain the same, while we are constantly looking for ways to achieve our objectives more efficiently and less costly. Whether we succeed depends not only on ourselves,

Energy and gas but also some factors that are beyond our control. Indeed, the Polish mining industry is no longer a global market leader, and it must adapt to its stand­ ards.

In recent years the issue has been widely discussed of Polish coal competitiveness on the Polish market. Is it just a matter of price, and if so, what are the chances for a significant cost reduction by Polish mines?

We constantly strive to cut costs.

This can be achieved by changing the organization of work towards increas­ ing its efficiency. Modern air-condi­ tioning systems allow to extend the actual work time underground. Trans­ porting workers to their place of work instead of making them reach it by foot serves the same purpose. A casual ac­ cident underground costs an average of several thousand zloty. Therefore, we need to do every effort to prevent such accidents.

Every discussion on mining re­ volves around costs, the ways to im­ prove proportions between them and coal output and sales volumes. In gen­ eral, we have not had problems with sales so far thanks to the quality of our coal, valued by our customers. We do our best so they get the best prod­ uct at the lowest possible price, which means that we have to constantly cal­ culate costs. The term “cost reduction” is not the right one. It is rather about streamlining costs as far as possible if we want to remain competitive.

There has been recently much talk mines which were privatized and sold to foreign owners became more efficient. Do such opinions correspond with reality?

As a rule, we do not comment on what others are doing. Each mine op­ erates in different natural conditions and has a different financial stand­ ing. Let each one speak for themselves.

I can only say that we work in condi­ tions that are difficult.

KHM plans to diversify operations into electricity generation for instance. Are such projects likely to take a significant place of the company’s activity?

I would say complementary, since it allows to make use of waste mate­ rials, or unused plots of land. Coal is

mined together with a certain amount of gangue, intermediate products, and mules. These are used in processing coal before it is sold to customers, but there is so much of it that it is worth considering the construction of our own power units. It is about firing the type of product which cannot be sold itself. For now, it is only an idea. By the end of the second and third quar­ ter of 2013, we will start preparing a draft project to evaluate the cost of the investment, terms of its performance, and the ROI timeline. The aim is not so much to make money from selling energy, but to make use of the prod­ uct that has so far been a kind of waste.

It is pretty much the same with the construction of a photovoltaic farm.

We have a certain amount of waste­ land that can be used in this way. We are making efforts to discern the sit­ uation, hoping that the transition to the stage of preparation and execu­ tion will pay off.

What about coal gasification tests?

Do they give hope for this technology being implemented on an economically significant scale? How do you assess cooperation with R&D institutions and universities?

Gasification tests are still ahead of us. One direction involves degassing coal beds from the surface. In the com­ ing months, boreholes will be drilled in “Mysłowice-Wesoła” mine to try to remove methane from coal beds. If the attempt proves successful, we will use methane so captured to fuel engines of a power plant that already operates in the mine. A similar solution can be used in “Murcki-Staszic” mine, and ultimately also in “Wujek” – “Ruch Śląsk” mine. We cooperate with Kato­ wice Heat Engineering Plant in respect of methane firing. Another direction is underground coal gasification, that is underground processing of coal and deriving energy from it. The subject is very delicate. KHW, the universities involved, and the Central Mining In­ stitute, we all take it very cautious­ ly. We hope that the first attempt will be made in “Wieczorek” mine in the third quarter of 2013. However, even if, or rather when successful, it will take at least a few more years for this technique to be implemented.

We are looking for a variety of possible solutions that will allow to better use not coal as such but

energy embedded in coal. Certain­ ly, we would like that things be mov­ ing forward faster. But these are new topics, and on taking a sensible risk to launch them, we cannot treat them like a candy bar machine…

There is one more question I would like to raise, namely the redevelopment of post-mining land.

We usually try to make land suit­ able for further use. In the case of ar­ eas for development it is necessary to fill post-mining voids by pump­ ing thousands of cubic meters of a grout mixture of cement, fly ash and water. Two good examples of rede­ velopment are the Silesia City Cen­ tre, a shopping mall built on the site of the former “Gottwald” mine, and the new premises of the Silesia Muse­ um that are being constructed on the plot of land that once belonged to “Ka­ towice” mine. In Mysłowice there is a former mining site virtually in the city centre and no one knows what to do with it. It is not enough to have an idea, you should always calculate how much it will cost to reclaim the land and then to maintain facilities. It is best done when these become selfsustaining. As regards green areas, we can boast having reclaimed the waste rock landfills in Kostuchna by plant­ ing grass and several thousand shrubs.

That is how a recreation hill that fits with the landscape appeared next to the mine and the residential estate.

How do you feel about the Platinum Laurel of Skills and Competence that you have been awarded by the Katowice Chamber of Commerce and Industry? It is a prestigious award not limited to a regional scale.

I am very pleased. But I see it as a recognition of the company’s accom­ plishments, rather than my own. KHW operates in a particular environment of cities that were established around mines and flourished thanks to mines.

Times have changed, the coal industry in Poland lost momentum, but we are still here. The important thing is that we continue to have a good relation­ ship with the local community, and that, even when faced with difficult is­ sues, mines and municipalities do not see each other as opponents. I think it is precisely what the Katowice Cham­ ber of Commerce appreciated. :: 1-2 /2013 :: polish market :: 35

Photos: KGHM

Energy and gas

Investment boom at Głogów smelter The Huta Miedzi Głogów copper smelting division of the KGHM Polska Miedź SA conglomerate is Europe’s largest copper smelter and the world’s largest producer of silver. It is also one of the most environment-friendly copper smelters in the world. The quality of products offered by Huta Miedzi Głogów proves that it is a reliable producer able to meet any kind of requirements. Thanks to introducing modern technologies and observing environmental protection standards, the smelter has been able to reduce its environmental impact to a minimum. Investment projects carried out at the smelter are among the factors which have contributed to its technological achievement.

The implementation of the invest­ ment project Replacement of the Sul­ phuric Acid Plant started in March 2010. The new facility is designed to be able to work with both converter and flash furnaces. The second stage of the project will be carried out in con­ nection with changing the production process in the Głogów I smelting plant to oxygen flash smelting. This will in­ volve putting in place processes and fa­ cilities needed to manage flue gas from the flash furnace.

The production capacity of the Lead Plant was insufficient to process

36 :: polish market ::

1-2 /2013

lead-bearing charge material on a current basis, which resulted in a gradual increase in its stock. As a result, in August 2009 the Board of KGHM Polska Miedź SA decided to launch the investment project de­ signed to reduce waste from the Głogów smelter by building anoth­ er furnace. The project received fi­ nancial support from the National Fund for Environmental Protection and Water Management.

The implementation of another project – the construction of a copper concentrate storage house – started in

July 2011. The storage house will be able to hold up to 60,000Mg of con­ centrate. So far an excess of concen­ trate has been stored outdoors, which caused uncontrolled concentration, especially in unfavourable weather conditions.

A new plant for the recovery of crude nickel sulphate, a by-product obtained in the process of electrolyt­ ic copper refining, was built in the Głogów smelter in 2011. The process, designed by the Chematur Ecoplan­ ning OY company, consists in recov­ ering sulphates from the electrolyte left after the removal of copper by concentrating electrolyte acid in an evaporator. The use of the new nick­ el sulphate recovery process prevents the emissions of nitrogen oxides, car­ bon oxide and dioxide, and sulphur dioxide, that is pollutants emitted from the previously used plant based on gas-fired submerged burners.

Taking care of the workforce The modernization of the office build­ ing at the Głogów II smelting plant, including bathrooms and changing rooms for workers, began in 2010.

As a result of the modernization, workers now have separate changing rooms for clean and dirty clothes with

Energy and gas Changing the production process at the Electrolytic Refining Plant will be another stage in modernizing the smelter. Decision will soon be taken to introduce the modern electrolyt­ ic copper production process which is used by almost all important cop­ per producers.

All the investment projects carried out and planned at the smelter will contribute to raising its production capacity, improving working condi­ tions and reducing its environmental impact. The harmful emissions, efflu­ ents and production waste generat­ ed by the Polish copper industry have been reduced to levels achieved by

bathrooms situated between them.

After coming to work, the work­ ers leave their clothes in the clean changing room and then put on their working clothes in the dirty chang­ ing room. After finishing their work, they take off their working clothes in the dirty room, take a shower and then put on their clean clothes in the clean room.

Programme for Modernizing the Pyrometallurgical Process The Programme for Modernizing the Pyrometallurgical Process has been launched after many years of planning. A team responsible for the design of a new Głogów I smelting plant is working intensively. It is an­ other turning point in the history of the Głogów smelter. At the same time, work is underway to increase the capacity of the flash furnace at the Głogów II smelting plant. After the required parameters have been achieved the two furnaces will be able to process all of the concentrate ex­ tracted from KGHM mines. Modern­ izing the pyrometallurgical process and replacing the production pro­ cess based on the shaft furnace with the flash smelting process is a huge challenge for the smelter.

Work on the flash furnace project is well advanced, with detailed de­ signs made for new infrastructure, generators and furnaces. At the same time, the smelter began to purchase equipment for the new process line.

The on-site construction works have been carried out at a fast pace since spring last year, especially in terms of energy and transport infrastructure.

The first stage of the Programme for Modernizing the Pyrometallurgi­ cal Process was completed in 2009. It mainly involved the modernization of the flash furnace. Another stage in the process of modernizing generators at the Głogów II smelting plant is to be carried out in 2013. The goal is to in­ crease output generated by the smelt­ ing plant while at the same time re­ ducing operating costs.

the most developed countries. Con­ sequently, the Głogów smelter has become one of the cleanest copper smelters in the world. The projects have been undertaken to protect the natural environment and ensure the best working conditions to the work­ force. The Głogów smelter meets envi­ ronmental protection requirements, complying with both Polish and Eu­ ropean standards. It continues to im­ prove its environmental protection standards and modernize its equip­ ment. :: 1-2 /2013 :: polish market :: 37

Chemical industry successful fusion encouraged the com­ pany in Tarnów to engage in adopting a more active role in the consolidation of the domestic chemical industry and to take steps towards the establishment of a Polish Chemical Consortium. In 2011 – having obtained the blessing of the Ministry of Treasury – the compa­ ny expanded its group by taking over the Zakłady Chemiczne in Police and the Zakłady Azotowe in KędzierzynKoźle (along with their subsidiaries), which were experiencing a drastic eco­ nomic slowdown at the time. A simi­ lar policy was introduced by Zakłady Azotowe in Puławy, which welcomed Azoty-Adipol, based in Chorzów, and Fosfory (phosphorus fertilisers plant) from Gdańsk during the last few years.

Consolidation of chemical industry to materialise soon The establishment of a Polish chemical conglomerate operating on a worldwide scale is becoming a reality.

Jan Sosna The idea of consolidating the larg­ est Polish ccompanies operating in the heavy chemical industry has been growing for over 15 years. Nafta Pols­ ka, a company established some time ago by the State Treasury with a view to putting the idea into practice, did not manage, however, to work out a framework that would be approved by all the parties. After years of failed at­ tempts, it seemed that the paths of the potential partners have diverged, nev­ er to meet again. Some of them strayed towards relations with various strate­ gic investors, while others headed for commercialisation and stock-market capitalisation, both with varying re­ sults. Neither of these paths has prov­ en to be better than the other. Indeed, both the growth of Anwil SA, taken under the wing of the Orlen Group, and the solo stock-exchange career of ZA Puławy, can be deemed successful outcomes. It must be noted, however, that several businesses have fallen by

38 :: polish market ::

1-2 /2013

the wayside and have become absent from the Polish chemical industry.

Never say never The turning point came along with the times of the global crisis that set in after 2009. The chemical industry, dependent on the monopolised im­ portation of its primary raw materi­ al – natural gas – and fluctuations in the global prices of chemical fertilis­ ers and semi-finished products used in the production of plastic, turned out to be the Achilles heel of the Pol­ ish “green island”.

But this was not an isolated case in the European context. In fact, 2009 marked the bankruptcy of a reputa­ ble producer of fabrics and plastics, Unylon Polymers, established in Gu­ ben, Germany. It was revived again as ATT Polymers GmbH by the Azo­ ty Tarnów chemical company, which bought out 100% of the shares. This

However, the Puławy and Tarnów groups were acting independently.

One may even say that they competed against one another. It was no earlier than in mid-2012 that an unexpected turnaround took place. Private com­ panies expressed interest in acquir­ ing their shares. In the case of Azoty Tarnów it was Acron, based in Russia, and in the case of Zakłady Azotowe in Puławy, Synthos, with its offic­ es in Poland. The Ministry of Treas­ ury and both groups responded im­ mediately. A mutual share exchange was arranged, allowing for the possi­ bility of a merger under the mantle of Azoty Tarnów to secure the compa­ nies from a “hostile takeover”.

The whole situation cannot obviously be put down to this single decision. As listed companies, they are obliged to conform to certain procedures, both in terms of ownership relations and respecting the domestic market (su­ pervised by the Office of Competition and Consumer Protection - UOKiK) and the foreign markets (supervised by the EC DG COMP) regulations.

However, these obligations are no meaningless red tape. The merger of the Puławy and Tarnów groups would mean the appearance of a dominant player on the Polish chemical-ferti­ liser market, holding c.a. 80% of the national production. Not surprisingly, other operators are protesting against this transaction. From a wider per­ spective, though, the situation is not so straightforward. If we were to assume that an alternative version of the story

Chemical industry ends in a takeover by a Russian inves­ tor, the Polish market would have to face a much larger operator, which, in addition, receives subsidies for natural gas supplies. On the other hand, from the European viewpoint, the PuławyTarnów conglomerate would form the second largest fertiliser producer in the EU. Acquisitions made by the sec­ tor’s leading company – the Norwe­ gian Yara – were accepted by the Euro­ pean Commission. It is therefore hard to put forward any arguments against the Polish initiative. Up to now, con­ secutive deadlines for the submission of potential reservations by the regu­ lators have expired one after another.

Azoty Tarnów are expecting the au­ thorisation from the European Com­ mission for the takeover of Zakłady Azotowe Puławy S.A. to be issued by 18 January 2013.

Bound to succeed?

production – rests on several factors over which it has no influence. The first is global demand, which is in fact de­ termined by decisions on agricultural subsidies made by the Governments of countries such as China and India.

Another factor is the price of natural gas – the basic raw material needed for production. The costs experienced by Polish producers are among the high­ est and this gap cannot be removed by any technological edge. To protect the market against the subsidised fertilis­ ers from Russia, the EU has introduced an anti-dumping duty. This is about to end, however, since the liquidation of fertiliser-gas subsidies was one of the prerequisites for accepting Russia into the WTO. Nevertheless, Polish produc­ ers are afraid that this commitment will not be honoured, and the procedure for re-introducing the duty by the author­ ities in Brussels may fail when a quick response is needed.

This Polish chemical giant is not neces­ sarily bound to succeed on the market.

This is so because the profitability of its most crucial component – fertiliser

The evaluation of “the second off­ shoot” of the Polish chemical indus­ try, - i.e. mass semi-finished products

for plastics and pigments - is much more complex. Here, too, an important role is played by the economic condi­ tions on large chemical products mar­ kets such as Germany, China and the Far East. Still, in the long term the op­ portunities for the development of the “top-shelf” chemical processing sector in this country must be seized. Its sci­ entific and R&D potential is highly val­ ued. In global rankings, Polish chem­ ical professionals are ranked 12th – an unrivalled result among other domes­ tic branches of knowledge. The consol­ idation of the Polish chemical industry entails a chance for consolidation in funds and R&D operations. Companies under the Puławy and Tarnów groups have already become involved in a se­ ries of interesting and long-term pro­ jects. The new desulphurisation plant in Puławy might serve as an example, as it produces ammonium sulphate, a ready-for-sale fertiliser, instead of the gypsum commonly produced world­ wide. Maybe the dream of many Poles about “the Polish Nokia” stands some chance of coming true after all! :: ADVERTISEMENT

1-2 /2013 :: polish market :: 39

Innovation

Innovations for safer roads Prof. Leszek Rafalski, director of the Road and Bridge Research Institute (IBDiM), talks to Dorota Jarocka.

DJ Congratulations

1)

nd Bridge ch Institute

dge ute

received a gold medal and a commen­ dation at the INNOVA international fair in Brussels in 2012.

DJ Poland

has the highest number of casualties of road accidents per million residents among all the countries in the European Union. This alarming statistic has mobilised the Polish Government to initiate the National Road Safety Programme. The main purpose of this programme, announced on 9 January, 2013 is to reduce the number of casualties resulting from accidents on Polish roads.

The National Road Safety Pro­ gramme is crucial from the point of view of its benefits to the public – in the aspect of people’s lives and health, as well as financially – taking into ac­ count the costs of road accidents. I was personally involved in the evaluation of this programme. I believe that the goals it specifies are realistic. The effec­ tive implementation of this programme will cause a decrease in the number of road accidents.

2)

3)

DJ Director, what measures are being

taken by the Road and Bridge Research Institute (IBDiM) to improve road safety?

40 :: polish market ::

1-2 /2013

The institute, under my supervi­ sion, has a lot to offer in this regard. By this I mean a situation where engineer­ ing and advanced technologies serve to protect people’s lives and well-being.

IBDiM conducts research and develop­ ment, most of which has a direct or in­ direct effect on road safety.

Over the last few years the Institute has created several noteworthy, inno­ vative solutions. One example of this is the Intelligent Comprehensive Vehicle Identification System (ISKIP), which allows the automatic identification of a vehicle by the simultaneous identi­ fication of such characteristics as: col­ our, make, type and registration num­ ber. The project is based on a complex algorithm of neural networks, analyt­ ical software and a database of approx­ imately 500,000 pictures of vehicles.

It is a unique solution on both the Eu­ ropean and global scale. An addition­ al feature of the system is the possibil­ ity to integrate it with other elements in the Intelligent Transport Systems, such as the measurement of the pass­ ing-through speed and the Weigh-inMotion systems. It is also worth point­ ing out, that delaying the destruction of road surfaces through the elimina­ tion of overloaded vehicles from traffic also benefits road safety.

DJ News concerning numerous awards

received by this innovative project have echoed thought the Polish media.

Yes, we are very pleased by the fact that our work is being noticed and ap­ preciated. ISKIP has been awarded, among others, the Teraz Polska (Po­ land Now) promotional emblem and the gold medal at the iENA Internation­ al Trade Fair in Nuremberg. The system has been implemented both nationally and internationally. It effectively helps road transport inspectors do their job.

Another project carried out at the Institute – Active Intelligent Road and Bridge Restrain Systems (AIBDiM) – also

on your success!

Professor, could you explain what makes this achievement so innovative?

An “intelligent” barrier is a modern device that actively reacts to the im­ pacting vehicle and adjusts the absorp­ tion level of the energy resulting from the impact of the vehicle to its mass.

It employs the appropriate electronic circuits and modern construction so­ lutions. It is capable of effectively stop­ ping both a bus weighing 13 tonnes and moving at a speed of 70 km/h as well as a vehicle weighing 900kg and moving at a speed of 100 km/h. Due to unique construction elements it regulates the level of energy dissipation, which de­ creases the g-force acting on the pas­ sengers. The new barriers should be im­ plemented on particularly-dangerous stretches of roads.

DJ Road safety is also conditional on the

quality of the infrastructure – road roughness, lack of wheel-ruts. How does the Institute answer the needs of modern road diagnostics?

Yes, that is true. Modern road di­ agnostics are necessary to assess road safety. It is particularly important to examine surface characteristics such as roughness and evenness. The newest acquisition of the Institute – the System for Pavement Infrastructure Diagnosis (SPID), a mobile laboratory – allows precise and non-invasive measurement of various road surface characteristics.

Apart from roughness and evenness, this modern research equipment al­ lows us to gather information concern­ ing the surface carrying capacity, noise disturbance, and the thickness of con­ struction layers and their composition.

DJ Director, a lot is being said about the

construction of new roads – their quality, but we must not forget about the problems concerning the maintenance of those already existing.

Of course. The operation of roads is a very important branch of road engineer­ ing. However, it is often being neglected

Innovation in financial and educational aspects. It is necessary to systematically accrue funds for maintenance, which will al­ low the long-term utilisation of Polish roads. When it comes to the method of repair or reconstruction of roads it is very important to make the right de­ cisions at the right time. Nonetheless, the problem of maintenance does not only concern the old transport routes.

It is crucial to take the proper actions, even when designing new surfaces, for instance by adapting them to the evergrowing operational needs.

DJ Director, how would you assess the

impact of research conducted at IBDiM on the improvement of the quality of Polish roads?

I am convinced that the Institute is playing a big part in that process. Apart from research and development entered into the statutory activities, ­IBDiM also adapts the results of scientific research and development works for the purpos­ es of practical use by formulating guide­ lines, instructions, expert opinions and procedures. Through such work we sup­ port investments, renovations and the modernisation of roads and also help implement road network management systems. All these actions directly or in­ directly influence road safety. We have accredited research laboratories and next-generation diagnostic equipment at our disposal. We also certify products used in transport infrastructure engi­ neering. I should also mention that the Institute operates the Road Safety Mon­ itoring Centre, which cooperates with the Ministry of Infrastructure, the Gen­ eral Directorate of National Roads and Motorways (GDDKiA), the Road Trans­ port Inspectorate (ITD), the National Road Safety Council (KRBRD) and the Directorate for Road Safety of the Na­ tional Police Headquarters. The Centre conducts, among other things, research in the area of road safety and provides opinions concerning new engineering and technological solutions affecting the improvement of road safety. The results of the research and experiences of the Institute are used by both the State ad­ ministration and companies construct­ ing and maintaining roads. ::

ISKIP - Intelligent Comprehensive Vehicle Identification System Gates with cameras installed

AIBDiM – Active Intelligent Road and Bridge Restrain Systems Test of the road barrier on a testing site

SPID - System for Pavement Infrastructure Diagnosis Mobile laboratory for the measurement of road infrastructure

1-2 /2013 :: polish market :: 41

Innovation

This November Polskie Centrum Badań i Certyfikacji S.A. (The Polish Centre for Testing and Certification, PCBC) will be celebrating its 55th anniversary. Its original goal was to coordinate the national system for the classification of goods with the Q and 1 quality marks, which improved the competitiveness of Polish goods on both the domestic and international markets. Since then, a number of legal regulations have changed.

The breakthrough came in 1989 with the new need brought in by the political transformation – adjusting PCBC’s activities to European standards. This was completed successfully.

The current main tasks of PCBC S.A. include:

Photo: MaxMedia

Dr Wojciech Henrykowski, President of PCBC

42 :: polish market ::

1-2 /2013

:: the certification of management systems :: the certification and testing of goods, :: the organisation of training, :: the certification of individuals, including EOQ managers and auditors.

Although a number of other domestic and foreign certification bodies have appeared in this field, PCBC S.A. has maintained its leading position. The further extension of these activities seems very important for the benefit of Polish enterprises, and primarily the central and local authorities.

After Poland’s accession to the EU, conformity assessment procedures came into force, regulating the placement on some goods of the “CE” marking, which confirms compliance with the fundamental requirements specified in EC directives.

Adjusting itself to the new circumstances, PCBC S.A. obtained the licence of a notified body registered with the European Commission under No. 1434 as to ten Directives. PCBC S.A. has adapted its labs and certification teams to the duties of a notified body.

An entirely-new field of operation is the conformity assessment of medical devices, for which notification was obtained in May 2004. Since that time the company has been authorised to perform the assessment of those devices.

PCBC S.A. uses a PN-EN ISO 9001:2009 quality-management system, which greatly facilitates management.

As to the certification of management systems, PCBC S.A., within the framework of the IQNet international certification network, is authorised to issue certificates of compliance by evaluated organisations with certain requirements. Certificates confirm the implementation and application of management systems (including integrated systems), compliant with the following standards: ISO 9001:2008, ISO 14001, PN-N-18001:2004 / OHSAS 18001, ISO 22000, PN-N-19001 / WSK, ISO 13485, ISO/IEC 27001, EN 15038, and SPZK, SA 8000.

A cooperation agreement has been signed with representatives of the European Spas Association and EuropeSpa med & wellness GmbH in the field of facilities assessment.

In particular, this relates to: :: EuropeSpa med for health resorts and medical spas, :: EuropeSpa wellness for spa & wellness, including thermal spa, day spa, and hotel spa.

PCBS SA has obtained a three-year exclusive certification licence, with potential extension for more years.

The presentation of the first certificate - for the “Pod Tężniami” sanatorium in Ciechocinek - took place on 8 November 2012 during the Polish Quality Day held in the Copernicus Science Centre in Warsaw.

In terms of international cooperation, the Polish Centre for Testing and Certification is a recognised organisation both in Europe and overseas. It is a fully-fledged member of such organisations as the European Foundation for Quality Management (EFQM), the European Organisation for Quality (EOQ), the Cenelec Certification Agreement (CCA), the International Electrotechnical Commission – the System for Conformity Testing and Certification of Electrotechnical Equipment and Components, and the Committee of Testing Laboratories (IECEE CB and CTL), the International Certification Network (IQNet), the British Retail Consortium (BRC), and the EuropeSpa Association. PCBC S.A. has signed a number of bilateral and multilateral agreements with European and overseas certifying bodies. PCBC S.A. is

Innovation

The PCBC is a Notified Body no. 1434. and offers services in the scope of eleven New Approach Directives (regulations of proper ministries): :: 2006/95/EC – Electrical equipment designed for use in certain voltage limits, :: 2004/108/EC – Electromagnetic compatibility, :: 2009/48/EC – Safety of toys, :: 89/106/EEC – Construction products, :: 2006/42/EC – Machinery, :: 94/25/EC – Recreational craft, :: 90/385/EEC – Active implantable medical devices, :: 93/42/EEC – Medical devices, :: 98/79/EC – In vitro diagnostic medical devices, :: 96/57/EC – Energy efficiency requirements for household electric refrigerators, freezers and combinations thereof, :: 99/5/EC – Radio equipment and telecommunications terminal equipment.

The main activities of the PCBC included: :: Certification of management systems :: Certification and testing of products :: Organization of training :: Certification of persons :: Conformity assessment of products and management systems according to notifications.

In 2007 the PCBC was authorized by BRC to perform assessment and issue BRC certificates for food, packaging and consumer products and by HDE to issue IFS certificates.

The PCBC actively co-operates with the European and international organizations within its membership, among others with: CCA; IECEE(CB) and IECEE(CTL) (electrical and electrotechnical products); EOQ (training of auditors); EFQM (creating of the European Quality Awards and prizes). Bilateral cooperation was also developed. ::

a body providing services domestically, in the EU and in third countries, with regard both to regulated (compulsory) and voluntary aspects.

The certificates issued to confirm the implementation of management systems, and also to confirm the conformity with specific requirements by goods, are recognised in the European Union, and also at the international level, which greatly facilitates the exports of Polish goods and fosters international cooperation.

By 2012, the Polish Centre for Testing and Certification had issued more than 5,000 certificates in the field of management systems.

The institutions and companies that have relied on our services include the Chancellery of the Prime Minister, the Ministry of Foreign Affairs, the Ministry of the Economy, the Ministry of Justice, the U.S. Embassy, the National Headquarters of the State Fire Service, the Marshal’s Offices of the Mazowieckie and Małopolskie Provinces, the Warsaw Tramway, the Warsaw Metro, Fiat Auto Poland, General Motors Manufacturing Poland, the Lotos Group, Bumar, Comarch, DHL, Alcatel-Lucent, Hewlett-Packard, and many other healthcare facilities, business organisations and institutions at various levels. :: ADVERTISEMENT

The Polish Centre for Testing and Certification (PCBC),

the EXCLUSIVE PARTNER of the European Certification Programme EuropeSpa med & wellness GmbH under the auspices of the European Spas Association INVITES YOU TO COOPERATE

EuropeSpa medical

The seal of quality for sanatoriums and medical resorts based on a catalogue of about 1,000 criteria The main assessment criteria apply to - the curative and rehabilitative infrastructure - curative and rehabilitative equipment quality and safety - general accommodation and stay conditions - board and hygiene

EuropeSpa wellness

the seal of quality for wellness hotels and hotels providing SPA services based on a catalogue of about 1,300 criteria The main assessment criteria apply to Contact: - spa and wellness areas - the hotel infrastructure Polskie Centrum Badań i Certyfikacji S.A. - treatment quality and safety 2013 :: polish market :: 43 ul. Kłobucka1-2 /23A, 02-699 Warsaw - board and hygiene tel: +48 22 46 45 227; +48 22 46 45 473 Certified quality

Finance

Driving the change Kazimierz Małecki, President of the Management Board of Krajowa Izba Rozliczeniowa S.A. talks to Ewelina JanczylikForyś.

investments. On the contrary, this year we are planning to introduce new so­ lutions into the market that will make entrepreneurs’ activities easier, even in the times of an economic weakening.

Mr President, the prognoses for the new year say that the economic situation is not going to improve. How do you evaluate this considering the activities of the KIR S.A. (National Clearing House)? And is it not so that a crisis is always the natural selection process? Don’t powerful entities remain strong while the weak are eliminated from the market?

We live in the times of the market economy, in which the attractiveness, quality and innovativeness of a partic­ ular company’s product range are as­ sessed by the market itself, and conse­ quently it is that which makes business decisions. The market eliminates the weaker players regardless of the busi­ ness outlook. We are being tested for entrepreneurship all the time. The crisis is more of a test of a company’s organi­ sational, financial and HR efficiency – an indicator which shows its flexibil­ ity in adapting to new circumstances and customers’ expectations.

There is a lot of talk in the media about the crisis, but in my opinion this term does not aptly describe the cur­ rent state of the economy. If compa­ nies until recently developed at the rate of 4-5% per year, and now 1%, it means that we are dealing more with an economic slowdown than a recession.

The prognoses for the next few years for the entire Eurozone, including the Polish economy, are rather good; this is why the KIR S.A. is not suspending

44 :: polish market ::

1-2 /2013

Twenty years ago, when the KIR S.A. began its operations, banking and settlement systems, commercial banking and electronic settlement were all abstractions. Now, when these are popular, what are the new challenges ahead of the KIR S.A.?

In fact, when looking at the Poland of the early 1990s and at the current one, it is difficult to believe that it is the same country. During the past two dec­ ades, we have come a long way — from the creation of a secure banking basis to the building of a modern banking system, which can today compete with the best and safest solutions in Europe.

Providing a secure and efficient flow of electronic money is and will remain a priority for us. Last year, we provid­ ed Polish banks and their customers with an entirely new settlement sys­ tem, Express ELIXIR, which allows us the transfer of funds between accounts in different banks in real time while re­ taining the strictest level of security. It will be developed and successively im­ plemented in banks.

We would also like to focus on the development of products for compa­ nies. A big challenge not only for us, but also for Poland in general, will be to convince Polish entrepreneurs as well as the public to make use of the opportunities offered by the electronic exchange of information. I mean, first of all, e-invoices, whose popularisa­ tion in Poland is very slow. Of course, on that point, the role of the State is vital, as is the introduction of trans­ parent rules encouraging their use.

Education and presenting the oppor­ tunities offered by modern solutions are equally important. Only in this way

can we popularise non-cash transac­ tions and the electronic flow of infor­ mation, which in practice means a leap forward and a reduction in costs.

Then why in your opinion is this happening?

As we are dealing with quite a com­ plex phenomenon, a lot of reasons can certainly be found. These may be re­ lated to social, psychological and eco­ nomic determinants or the legal and cultural context, but there is one aspect I would especially like to pay attention to — the active role of the State in de­ fining the standards for new solutions.

Here I will quote the example of the Scandinavian countries. In the 1990s, it was decided that e-invoices would be obligatory for public administration transactions and in respect of its rela­ tions with the Government and the en­ vironment. Due to that fact, today, for instance in Sweden, the electronic flow of invoices dominates. Similarly, this is taking place in other countries, which we look upon with envy today. There­ fore, I believe that in Poland the State may be the causative agent of change.

We should not be afraid of such an ac­ tivity on its part.

And I thought it also stems a bit from our mentality.

Probably the mentality does play a role here to some extent. Howev­ er, the Scandinavians’ mentality in the 1990s resembled ours. At that time, as is now the case in Poland, paper flow dominated. Let me use the following example. When taking up the issue of electronic flow and, at the same time, attempting to employ the best mod­ els, we invited the representatives of the Scandinavian equivalent of the KIR S.A. to a meeting - also attended by di­ verse communities interested in elec­ tronic flow - to share their experienc­ es in carrying out changes in this area.

What happened? The most important,

Finance

in their opinion, was to initiate these changes. Unfortunately, at the moment it is still inconceivable in our coun­ try that the Government would de­ cide to make electronic invoices in the flow obligatory, beginning even with­ in public administration. Perhaps the citizens of Scandinavia are more sus­ ceptible to change. But since the intro­ duction of electronic flow was success­ ful, I am convinced that there will come a moment when it is also possible here.

I understand why KIR S.A. has joined the ‘Wybieram e-fakturę’ (‘I choose the e-invoice’) coalition, set up by the Polish Confederation of Private Employers Lewiatan. In Poland, only a small percentage of companies use e-invoices.

In Poland, approximately 1.5 million invoices are issued annually, of which only 8-11% are in electronic form. This is very little, considering the fact that the e-invoice means much lower costs, and better payment management and environmental protection, which is not without significance in the face worsening of the condition of the en­ vironment.

Participation in the coalition’s ac­ tions is a natural consequence of the policy of creating among our custom­ ers an awareness of the advantages of the e-invoice as a document equal in terms of legal consequences to a pa­ per one. Together we wish to inform and educate the market in this area, and also work on the introduction of systemic changes, including primar­ ily changes in the law, so that the use of e-invoices in Poland is encouraged.

But your services -such as ­PayByNet, the first Polish system of direct and guaranteed online payment, or invoobill, which consolidates bills of sale and invoices from many suppliers of mass-scale services (TV and telephone licence fees) with the ‘pay with one-click’ function - do work.

Each of the services offered by the KIR S.A. has some unique feature relat­ ing to specific benefits for the individ­ uals and entities using it. The PayByNet system is a fast and secure payment tool for online transactions. It is the only online transfer system that allows the transfer of money between the custom­ er and the shop - without the partici­ pation of an intermediary settling the

transaction. As the only online pay­ ment system, it allows transactions to be made also on weekends, and also to pay administrative fees to offices.

Invoobill, in turn, is the perfect tool for easy budget management. Especially appreciated by those who wish to have control over payments which result from recurring liabilities on an ongoing basis and, at the same time, have access to e-invoices, without having to store their paper versions. By using this ap­ proach, we ensure the receiving of the bills on time with the full control of the account’s balance, as the payments are subject to the customer’s acceptance.

The solution is simple, friendly and safe.

Why is the banking sector able to keep track of all transactions made by customers and these solutions do not exist in other areas, such as, for example, healthcare services?

The banking community has made sure that transactions are transparent, and therefore safe. Such knowledge is essential for the proper functioning of banks, while allowing them to cus­ tomise offers for customers’ needs. This knowledge on their expectations should also be available in other areas, such as healthcare. A system through which the complete history of a patient’s dis­ ease would be available, with guaran­ teed data security, would certainly im­ prove and facilitate the functioning of the Polish healthcare system. Of course, a very important aspect is adequate in­ formation security, but today, in the age of electronic signatures and other so­ lutions, this is not a problem.

I admit that I do not understand why such systems are not introduced in other areas with equal success as in the banking sector. An introduction of this type of facility does not at all re­ quire enormous amounts of money. It seems that we are doing a bit too little with respect to the place in which Po­ land is, taking into account its poten­ tial and the distance that separates us from other countries.

In December, KIR S.A. carried out an advertising campaign on a new service, Express ELIXIR, the instant transfers that are completed within the banking system without intermediaries.

As already mentioned, the Pol­ ish settlement system is considered

as one of the most modern in Europe.

The ELIXIR® that functions in Poland is speedy because the transfer of funds between accounts in different banks takes place within 24 hours in most cases, which is not a European stand­ ard. The Express ELIXIR, however, is the first professional settlement sys­ tem in Poland, and the second in the world after the United Kingdom, ena­ bling the direct implementation of in­ stant transfers between accounts held at different banks. The transfer’s re­ cipient’s account is recognised with­ in a few seconds after placing the or­ der, 24 hours a day, 7 days a week. An important advantage of the Express ELIXIR is the single transaction lim­ it, set at PLN 100,000. This is impor­ tant especially in the case of institu­ tional customers.

Are many banks interested in this system?

At present, the system operation­ ally functions in 6 banks. Another 15 banks, including 9 of the 15 largest banks in Poland, have signed imple­ mentation agreements with us. This is a very good result, given the relatively short market placement of the solution and the fact that it is innovative on a European scale. Polish banks adapt to instant payment systems faster than those in the UK did, and the UK was the first country in Europe to intro­ duce such a solution.

Recently, the topic of Poland’s accession to the Eurozone appears more and more often in the public debate. Will KIR S.A. also be prepared for settlements in Euros at the time of Poland’s accession?

In practical terms since Poland’s joining the European Union, KIR S.A. has been preparing for the possibili­ ty of entering the Eurozone. Our set­ tlement systems are at the highest global level; we are successfully im­ plementing a strategy assuming an extension of the KIR’s participation in the European settlement market.

In my view, the KIR S.A., present in the European settlement infrastruc­ ture from the beginning, possess­ es solutions that ensure its smooth functioning after Poland’s joining the Eurozone. So, if accession is de­ cided, we will then certainly be well prepared. :: 1-2 /2013 :: polish market :: 45

Finance

The turn of 2012/2013 in banking The turn of the year is traditionally a period when past achievements are evaluated and prospects for the future are defined. The year 2012 was not particularly eventful for the Polish banking sector, but it was not boring either. This should also be true about the current year, though it will obviously differ from the previous one.

Prof. Małgorzata Zaleska Polish perspective

The author is a member of the Board of the National Bank of Poland, a professor at the Banking Department of the Warsaw School of Economics (SGH), and a Vice-President of the Finance Committee at the Polish Academy of Sciences (PAN).

In 2012, the Polish banking sector remained stable, liquid, solvent and profitable. The current year should be so too, while it is natural that the banking sector will be affected by the economic slowdown leading, among other things, to a deterioration in the quality of the loan portfolio. When it comes to the structure and competi­ tiveness of the Polish banking sector, important consolidation processes occurred that had their roots main­ ly abroad. It is worth mentioning the mergers between BZ WBK SA and Kredyt Bank SA and between Raiffeis­ en SA and Polbank SA. The first one led to the creation of the thirdlarg­ est bank in Poland, after PKO BP SA and Pekao SA, with assets amount­ ing to over EUR 25 billion. In 2012, an important debate also stated on changing the national supervisory guidelines with respect to consumer and mortgage loans. The idea behind this is to liberalize the credit poli­ cy in order to boost lending in times of economic slowdown. The changes should include: :: introduction of a simplified cred­ itworthiness assessment, :: extension of the maximum peri­ od assumed in the process of as­ sessing creditworthiness, :: self-determination by a bank of the DtI ratio (customer’s debt lev­ el relative to their income).

However, these recommendations do not apply to business lending (investment and working-capital loans), while these particular loans may have a significant impact on eco­ nomic growth. In 2013, we can also expect a special stabilization fund to be formed under the Bank Guar­ antee Fund for the sake of a possi­ ble restructuring of banks. Further discussion is also expected on the

46 :: polish market ::

1-2 /2013

establishment of macro-prudential supervision in Poland to address sys­ temic risk and economic imbalances.

And this means changes in the Polish financial safty net.

European perspective Last year, the EU continued reflection on changes to the prudential regu­ lations (including the implementa­ tion of Basel III to EU legislation) and stepped up work on the concept and implementation of the banking union.

These efforts will certainly be pur­ sued in 2013. Since this is a new and complicated issue, it is worth giving it more attention.

The banking union is made up of three interlocking elements: the Europe­ an banking supervision, the Europe­ an deposit guarantee scheme and the European banking resolution fund. In December 2012, EU leaders forged a framework for the European banking supervision, while the other element of the banking union have not taken final shape yet. It should be pointed out that the mere European banking supervision, without those remain­ ing elements, is not an ideal solution, as it does not provide for bank rescue mechanisms and costs of such meas­ ures will continue to be borne by in­ dividual countries.

The European banking supervision will cover major eurozone banks (ap­ proximately 150 banks) as well as banks from the countries outside the eurozone that will establish “close cooperation”. Regardless of wheth­ er Poland will establish such coop­ eration or not, a significant part of banks operating in Poland will be indirectly covered by the Europe­ an banking supervision anyway, for they have foreign owners. Moreo­ ver, even if “close cooperation” is

established, banks operating in Po­ land will not have access to EU bail­ out measures and instruments of the European Central Bank.

The concept of the European banking supervision also implies the transfer of some national powers to the EU level, which means further integra­ tion. It is common knowledge that the European Union in its current shape suffers deficiencies, and there are two opposite lines of action, either further integration or disintegration. So far, further integration using the small steps method has prevailed.

In addition to the banking union, we will certainly witness in Poland a lively public debate on the advantag­ es and disadvantages of Poland’s ac­ cession to the eurozone. The subject is not a new one and only returns un­ der the changed circumstances (the eurozone crisis and a strong aversion of the Polish society to adopting the euro). European and global develop­ ments will therefore still have a sig­ nificant impact on the Polish bank­ ing sector and the wider economy.

The current year will also mark an­ niversaries of important internation­ al events related to the banking sec­ tor, such as: :: 15 years since the creation of the European Central Bank, :: 5 years since the bankruptcy of Lehman Brothers, which symbol­ ically triggered off the global cri­ sis.

Obviously, the list of past and future events discussed above is not exhaus­ tive. Some unexpected things will also occur in 2013 that will go down in history and will be remembered in the future. Such a risk is an integral part of the world of finance. ::

Economy

A civilizational challenge Adam Szejnfeld, Member of Parliament, talks to Ewelina Janczylik- Foryś about economic slowdown and “Plan for Poland.”

48 :: polish market ::

1-2 /2013

The government has recently been promoting its programme “Plan for Poland”. Could you tell us more about this project?

The EU financial perspective for 2014-2020 will be fundamentally im­ portant when it comes to the future of Poland not only over the next few years, but decades. Given its impact on our socio-economic situation in the future and on our position in Europe and in the world, I would even com­ pare it to the effects of the Marshall Plan for Western Europe. How we will use opportunities created by the cur­ rent and the following financial per­ spective will, in my opinion, deter­ mine whether Poland will be a future leader of the European Union, or one of many other EU countries, growing but not leading.

We do, of course, aspire to the title of the leader, which is why the “Plan for Poland” is essential. It is a pro­ gramme which provides for taking specific actions in priority areas, which are expected to enable Poland a leap­ frog development and this, needless to say, in a very unfavorable business climate. We have to remember that the world has not recovered from the painful 2008-2011 economic crisis, and we are already feeling the effects of the political and economic crisis that hit Western and Southern Europe and has a substantial influence on other coun­ tries of our continent and the world.

Unfortunately, the “external” crisis is beyond our control. It is therefore all the more important for the “Plan for Poland” to be given clear priori­ ties today and to be ensured a smooth and effective implementation in the future. It is because we want to have a say in what will depend on ourselves.

The “Plan for Poland” set out not only concepts, but even specific pro­ jects, tasks to be implemented. Some of them were launched immediately, such as legislative changes regarding deregulation or legal and financial in­ struments supporting entrepreneurs.

Other are underway, such as the estab­ lishment of special purpose vehicles as part of the “Polish Investments” staterun programme or recapitalization of the Bank Gospodarstwa Krajowego

Economy (BGK), which is poised to be one of the main operators of aid and support system for businesses and local gov­ ernments.

The plan comprises three pillars: in­ vestments, labour market and house­ holds. Each of them covers major so­ cial risks. These include a low rate of economic activity of Poles, including women, and a low rate of population growth, which, coupled with the ag­ ing of society, will result in the future in a shortage of manpower and the eco­ nomic downturn with a drop in GDP. By taking such measures, the govern­ ment aims to reverse, or at least slow down, this negative trend.

The “Plan” contains some other in­ struments than those used so far. Like­ wise, some new support instruments will be put in place. For example, fam­ ilies will be offered not only tax breaks and family allowances, for money is not crucial here. In order to grow and have children, families must have a place to live and to entrust the care of their chil­ dren: first a nursery school and then a kindergarten. That is why we intro­ duced an extended - annual - mater­ nity leave, in addition to the “MdM” (apartments for the young) programme.

We will also allocate 80% subsidies for local communities to build nursery schools and cheaper kindergartens.

As far as entrepreneurs are con­ cerned, we are planning certain legal changes in labour law. Already last De­ cember, I submitted to the Parliament a draft amendment to the Labour Code aimed at enabling flexible employ­ ment. In addition, programmes will be created to give people access to cheap loans and to provide businesses with loan guarantees. It is worth mention­ ing that we have already introduced a new legal solution, the so-called “cred­ it for return”. It means that entrepre­ neurs have the possibility to take out quick, easy and very cheap loans for a VAT refund.

It should be noted, however, that the “Plan for Poland” provides tools directed not only at micro, small and medium-sized enterprises, but also at large companies and investment pro­ jects. One of them is “Polish Invest­ ments” programme, which provides for the creation of a state-run compa­ ny to deal with strategic investments, including in the field of energy (elec­ tricity & gas) and transport (road & railway) infrastructure.

Of course, all the three pillars in question are linked to each other, be­ cause while families need adequate fi­ nancial resources, these can only be secured by an effective labour mar­ ket, which in turn requires an appro­ priate level of investment. Here the cir­ cle closes. Investments are to be made mainly in the public sphere, but also in the private sphere, namely due to the use in many cases of the Public-Pri­ vate Partnerships.

But entrepreneurs complain above all about the lack of long-term policies.

It is true that investments are slow­ ing down while companies accumulate capital. It is natural for a country that is developing, but also under the influ­ ence of the foreign slowdown. Concerns about the future are the biggest barrier to business activity. We are also facing employment restrictions due to reduced exports. This in turn affects consum­ er confidence and domestic demand.

The year 2013 will be very difficult, be­ cause EU funds are running out and it is not easy to maintain a high level of investment from the state budget only.

We have to remember that there will be a funding gap between the current EU financial perspective and the next one, I mean the years 2014-2015. That is why, the “Plan for Poland” is meant long-term. It includes solutions for the coming years, but also for the next 1015 years. Overall, we want to spend approximately PLN 700-800 million to propel development. Never before have such resources been pumped into the economy, infrastructure and hu­ man development, including educa­ tion, and R&D. In doing so, we com­ ply with the need and the expectation of long-term planning.

The plan taken aside, what can we do to best defend ourselves from the crisis?

First of all, you cannot let yourself be scared by the crisis. Optimism is the best way to stimulate development, while pessimism always and inevitably leads to destruction. You have to fight defeatism, keep up optimism and, at the same time, prepare and implement appropriate support measures. Such is the aim of the “Plan for Poland”.

Is the crisis only a threat or can it be an opportunity too? How can a

dismal outlook for 2013 be translated into success despite the slowing economy?

It should be emphasized that every­ thing depends on the condition of par­ ticular sectors, industries and even in­ dividual companies. Personally, I meet entrepreneurs who often do not feel the crisis, on the contrary, they de­ velop more dynamically than before.

The current situation is in fact a seri­ ous threat, but also a great opportu­ nity for businesses. A danger for those who operate in continuous defensive and an opportunity for those who are optimistic and have the courage to ex­ pand globally. Such a situation is very important for two forms of activity. The first one, more common, relies on in­ creasing competitiveness through in­ novation and improving the quality of goods or services. The second one regards mainly large companies and consists in going beyond the bounda­ ries of one market or one country with new proposals, including the acquisi­ tion of other companies or their assets.

The time of crisis is a perfect moment for such moves. A chance may not come again to buy other companies so easi­ ly and cheaply. This is one of the meth­ ods to raise capital, but also to increase one’s competitiveness by acquiring or eliminating competition.

Some time ago, you took part in a conference “Female Entrepreneurship Ambassadors as a chance for the development of businesses run by women”. Why do you support women?

There are great opportunities ahead for Poland not only economic, but also social. But to be able to use them our society needs to change, and luckily it is changing. Old, often harmful stereo­ types disappear, but those concerning the roles of men and women in various aspects of life are unfortunately still deeply rooted. The process of change is too slow compared to the pace of the race we are in. This compromises the development of our country and suc­ cessful competition with modern civ­ ilized countries of the world. There­ fore, I support women in their efforts to have equal rights and opportunities.

This is a civilizational challenge that we should meet. I have been involved in economy, entrepreneurship, poli­ tics for years, and I feel strongly about women’s success in those fields. :: 1-2 /2013 :: polish market :: 49

Economy

Polish people really count Jacek Janiszewski, founder and chairman of the Integration and Cooperation Association Programme Committee, organizer of the Economic Forum in Toruń, talks to “Polish Market.”

What are our country’s economic chances in the international arena?

These are observable already. Po­ land has made an incredible leap forward, judging not only from the political point of view, because we changed the political system, but also from the one of the economy, as we are conquering almost the en­ tire world. Therefore, in the Econom­ ic Forum the topic of South America and the question of the Middle and Far East have been developed inten­ sively over many years. In fact, there are very many points which show that Poles have achieved a lot in the economy in the international arena.

For example, they are already on the boards of most of the major interna­ tional corporations.

Should Polish entrepreneurs go for economic patriotism?

Economic patriotism is one of the most important things in the 21st century. The 18th, 19th and 20th cen­ turies were times when people fought with bayonets, and then, in the great wars. That was patriotism expressed by fighting for your country. Today, when the world is globalised and it is difficult to talk about nationalities in individual states from the economic point of view, it is the time when it would be good to remember what the point of making money is and what the world is being conquered for in the financial sense. I think time has come to return to patriotism. Perhaps this is no longer patriotism in the bat­ tlefield, and that I would have nev­ er wished, but economic patriotism, where a person, both as an individ­ ual and a personality, as the subject for the citizens of the world, will be the most important.

How can we support Polish entrepreneurs wisely in foreign expansion?

First of all, do not disturb them.

Here I mean various kinds of secret service, who believe that a success­ ful Polish entrepreneur is primar­ ily either a thief or some kind of a schemer. Entrepreneurs need to be

50 :: polish market ::

1-2 /2013

Economy supported and assisted. Diplomat­ ic missions around the world should be available to them and our servic­ es should protect them from the point of view of a potential economic at­ tack in other countries. This is ex­ tremely important. Generally, the state as a social and economic struc­ ture is meant to help people not only at home, but also in the internation­ al arena. However, even not interfer­ ing is doing a lot.

The main challenges that the Polish economy is facing include....

The most important thing is to re­ alise that the big corporations which created a huge number of jobs con­ stitute a declining element. Unfor­ tunately, a very bad thing to do was to let so-called heavy industry be re­ moved from Europe, including Po­ land. It provided a considerable num­ ber of jobs, but as this has happened already, we have to educate people and prepare them for the fact that the services sectors will gain in strength and more and more jobs will be in ser­ vices. What is most important, and for me non-disputable, is to support mi­ cro- and small enterprises. It is them that generate the largest percentage of GDP in each country, also in Po­ land. They form the so-called mid­ dle class, which is the most important element of economic development of each country. Moreover, they create new and sustainable jobs.

How do you improve innovation in Polish businesses? And do we need to do it or should we perhaps learn innovative thinking anew instead?

Poles are one of those nations that are able to think innovatively also from the economic point of view. That they can do it from the social perspec­ tive we already know. The point is that we need to break stereotypes, to show them that they can do it and provide support through excellent higher ed­ ucational institutions, with very good professional training, through the construction and care of the centres that create an integrative and high­ ly-innovative approach to building a new economy and technology. If we put the emphasis on education, per­ severance and innovation, there are no obstacles to Poles receiving many more Nobel prizes within the next 50 years.

There is much discussion about energy security. Do you also discuss this? What could ensure Poland’s energy security? Diversification perhaps?

This is so obvious. Of course, from the point of view of the state’s ener­ gy security we have to look at diver­ sification, which means that the en­ ergy should be derived from a variety of sources and from different coun­ tries. This political and economic pro­ cess has been taking place for many years. Fortunately, now it is beyond the political nature, hence shale gas and acquiring gas from Norway, and Qatar, building modern handling ter­ minals and looking very carefully for renewable energy. The so-called re­ newable energy sources are abso­ lutely the right direction, positive and beyond any discussion from the point of view of the energy stability of the state. This is why we are talk­ ing about this.

The 20th anniversary edition of the Forum is taking place this year. In what way have previous debates influenced Polish economic reality?

First of all, we have joined the Eu­ ropean Union. Let me remind you that the first of our topics included Po­ land’s integration with the European Union. It took place in Międzyzdroje and each year a different aspect was brought up - agriculture, economy...

So I think that we, as the Integration and Cooperation Association, have had a big impact on the fact that a number of elements of socio-econom­ ic life in Poland were better prepared for an event of the sort that joining the European Union was. Later, in Ciechocinek, we discussed the is­ sue of Poland’s being almost in the European Union and then, when we joined it I also believe that our Asso­ ciation had a huge impact on impor­ tant MEPs such as the late Professor Geremek or Professor Buzek. Many other people worked out their stances during our meetings from the point of view of Poland’s attitude in the Eu­ ropean Union.

We pulled them out or support­ ed them so that they did not need to feel in any way inferior in Europe, but rather as the ones who made Po­ land stronger and built and shaped its place in Europe at that time. And

Jacek Janiszewski, Doctor of Sociology, lecturer at the University of Economics in Bydgoszcz and at Cardinal Stefan Wyszyński University, founder and chairman of the Integration and Cooperation Association Programme Committee. The association was founded in 2000 in Toruń. Its purpose is to organise business conferences, initiated by the Association Forum Polska-Zachód (Poland-West Forum), which in the years 1996 – 2000 were held in Międzyzdroje. Since 2001, these meetings of people from the worlds of economics, politics, science and culture were organised in Ciechocinek. The goals set by the participants in the Economic Forum are supported by the organiser of this event. He is a proponent of the exchange of political, economic and scientific opinions during the meetings, attracting new investors through the creation of favourable conditions for investments in the region, which he wants to achieve together with the Marshal of the Kujawsko-Pomorskie Province and the Mayor of Toruń.

Additionally, the organisation of the Economic Forum implements the goals of the Association related to promoting the European integration process and overcoming social exclusion. ::

finally, the Forum’s venue was moved to Toruń, where we showed that Po­ land is a powerful constituent of Eu­ rope. Today, there is no denying that we are the 5th or 6th - largest econo­ my in Europe, and this means that we are facing a new challenge and new tasks. The Integration and Cooper­ ation Association has just set them out; these include the Middle and Far East and South America, which only very few people are concerned with.

And finally, a very important issue for me, the approach to the fact that the policy, power, money, economy, axiology, that is the person, society and patriotism (which we discussed earlier) are all important. All this is of great importance from the point of view of the challenges of the 21st Century. Poland and Poles, if they are not following some nonsense herd instinct of hatred, if they can escape it, are capable of that. The Integra­ tion and Cooperation Association and our Economic Forum serves precise­ ly to enable them to let their thoughts wander, to believe in themselves, to feel that being a Pole is really impor­ tant. ::

What is most important, and for me non-disputable, is to support micro- and small enterprises. It is them that generate the largest percentage of GDP in each country, also in Poland.

1-2 /2013 :: polish market :: 51

Economy

To forecast or not to forecast?

Prof. Robert Gwiazdowski The author is president of the Adam Smith Centre and a lecturer at the Łazarski University in Warsaw.

What is the difference between God and an economist? God does not con­ sider himself an economist. There are also other versions of this joke about lawyers and physicians - but it is economists that have featured in the joke most frequently in recent years.

Why? Although “forecasting is very risky, especially when it concerns the future,” all economists make fore­ casts. And they are usually wrong if they are specific in their forecasts.

This is why they try to be as unspecif­ ic as possible. An overwhelming ma­ jority of forecasters say that in 2013 Poland will have an economic growth rate of 1-2%. How could this possibly be a forecast?! The difference between one and two seems to be small. But this represents a 100% difference!!!

The same is the case with a differ­ ence between the numbers 100 and 200, 1,000 and 2,000, and 1 million and 2 million.

On the one hand, investors who risk their own money expect simple hints.

In his book “Fooled by Randomness,” which came out in Poland in 2006, two years after it had been published in the United States, a book which created a sensation only after the out­ break of the financial crisis in 2008, Nassim Taleb says that we ineptly try to substitute limitations of our knowledge with rational models and like to present conjectures as truths.

On the other hand, various scientists and analysts try to complicate even simple matters. After all, could they be considered as experts if they gave simple advice and spoke a language understandable by others? Richard Armey says ironically that econom­ ics is a science which discusses the matters we know about very well us­ ing a language we are unable to un­ derstand. Economists pretend that they have some secret knowledge, which enables them to influence the economy. They cannot speak a sim­ ple language understandable to eve­ ryone because people could come to the conclusion that economists are

52 :: polish market ::

1-2 /2013

redundant. Consequently, economists have to beguile their audience. In the past, tribal shamans used to put on ritual attire, said prayers in a lan­ guage that the people could not un­ derstand and pretended that they can bring live-giving rain. Today’s “sha­ mans” also pretend they can bring “rain” - a rain of money. They driv­ el about “quantitative easing” while this simply means “money printing.”

Roman Frydman and Michael Gold­ berg start their book “Imperfect Knowledge Economics” with a quote from Friedrich Hayek, who said that our ability to forecast will be limit­ ed to general characteristics of the events which we can expect – it does not include the ability to predict spe­ cific developments. In their book, the authors of “Imperfect Knowledge Economics” cite Hayek several times, stressing that the blunders of contem­ porary economists have resulted from ignoring Hayek’s theses and adopting the assumption that it is possible to create a determined model of individ­ ual behaviour. Meanwhile, as Hayek writes, the special character of the rational economic order means that the knowledge we have to use never exists in a concentrated or integrat­ ed form; it only exists in a dispersed, incomplete and often contradicto­ ry form in the minds of individuals.

This was proven by the specific scien­ tific research conducted since the end of the 1980s by Philip Tetlock. In the course of around 15 years, he asked 284 political experts with very differ­ ent views 28,000 more or less detailed questions about the future. The sum­ mary was included in his book “Ex­ pert Political Judgment: How Good Is It? How Can We Know?”

Unfortunately, further research showed that this rule applies not only to political scientists who fill in anonymous questionnaires. Var­ ious economists and analysts writ­ ing for “The Wall Street Journal,”

whose projections made in the years 2003-2005 were analysed by Chris­ tina Fang, were wrong as often as the political scientists.

Steven Levitt, the author of “Frea­ conomics,” says that the experts we respect the most are those who have gone against the tide and predicted something that others did not ex­ pect. We think that they have to know better. It comes as no surprise then that an economist who has predict­ ed something unexpected, like for example the outbreak of the crisis of 2008, has an interest in making sure that the whole world learns about his “accurate shot.” He walks and repeats: “I was right, I was right.”

Meanwhile, one can present a long list of predictions made by this very economist that did not come true.

There is an anecdote which says that there are economists who have pre­ dicted seven of the three recent eco­ nomic crashes. Perhaps we should try not to overdo forecasting. ::

An overwhelming majority of forecasters say that in 2013 Poland will have an economic growth rate of 1-2%. How could this possibly be a forecast?! The difference between one and two seems to be small. But this represents a 100% difference!!!

The same is the case with a difference between the numbers 100 and 200, 1,000 and 2,000, and 1 million and 2 million.

Invest in Katowice Special Economic Zone The Katowice Special Economic Zone (KSEZ) provides unique conditions for industrial and BPO/ R&D investors. Located in Poland’s most investment-attractive southern region Silesia, KSEZ offers investors public aid in the form of CIT reliefs equaling 40-70% of investment costs or 2 years of labour costs. The tax reliefs granted to KSEZ investors are in keeping with EU law.

KSEZ is the leader among Poland’s 14 special economic zones with almost 200 investors on its territory. Jointly the zone’s operators have invested EUR 4,8 billion, providing around 50 thousand jobs.

UJAZD

Sites offered to investors: • • • •

1 ,000 hectares of land Plots from 0.5 to 200 hectares Plots adaptable to investor needs Close to main national and European transport routes, convenient access; water, power and gas supply, as well as sewage disposal • Class A office building in Katowice

KSEZ closed last year with a good result – twenty six new investment projects to the tune of EUR 375 million, which will offer around eight hundred new jobs.

In 2012 the Katowice Special Economic Zone was placed by the Business Financial Times FDI best economic zone ranking in second place in Europe and eleventh worldwide.

Among the zone’s investors are GM Opel, Isuzu Motors, TRW Polska, Roca, Guardian, NGK Ceramics, Capgemini and Steria.

ZABRZE

TUCZNAWA

KSEZ also offers a unique opportunity — plots exceeding 100 hectares: • Ujazd – over 200 hectares on the border between the Śląskie and Opolskie provinces, adjacent to the A4 motorway.

• Zabrze – 100 hectares, 4 kilometres from the A1 motorway.

• Tucznawa – over 100 hectares close to Dąbrowa Górnicza, 6 kilometres from the DK1 trunk road, 24 kilometres from the A4 motorway.

For more details: www.ksse.com.pl

Katowice Special Economic Zone Co. Poland 40-026 Katowice, 42 Wojewódzka St. tel. +48 32 251 07 36 ksse@ksse.com.pl • www.ksse.com.pl

Global market

Economic patriotism – salvation from the crisis?

On the premises of the Ministry of Economy, Janusz Piechociński, Deputy Prime Minister and Minister of Economy, inaugurated a new project called the “Global Company - a Strategy to Promote Exports and International Expansion of Polish Companies”.

Ewelina Janczylik- Foryś The “Global Company” is a pro­ gramme designed to create a platform for discussion on how to effectively promote Polish exports and expan­ sion of Polish companies worldwide.

How much is needed to support the program for entrepreneurs Polish exports?

Krzysztof Krystowski president of Bumar

The survey “Global Horizon of Polish Companies. Opportunities and Lim­ itations” conducted by THINKTANK shows that 81% of companies polled are doing well in an international en­ vironment, but could be more expan­ sive if supported by the government.

At the same time, 75% of companies said that Polish public administration is not adequately prepared to support businesses abroad, and even afraid of working directly with entrepreneurs.

While the public administration ac­ knowledges the importance of eco­ nomic relations, it does not accept the fact that one of its tasks is to promote

trade and investment. It is an important signal for the institutions supposed to support the expansion of Polish busi­ nesses. That is probably why Minister Janusz Piechociński decided to hold regular debates.

The leading theme of the meeting was economic patriotism in the era of globalization. The inaugural lecture on global trends and challenges related to a commonly applied economic patriotism was delivered by Krzysztof Domarecki, the founder of Selena SA, one of the few Polish companies with global presence.

He said that a modern economic pat­ riotism is about supporting domestic companies, including those interna­ tionally-oriented. “The present-day world provides ever more surprising answers to the question about modern patriotism. The phenomenon of patri­ otism has very strong foundations as­ sociated with the laws of nature, socie­ ty and economy. It is hard to create any value higher than the nation. Europe­ ans do their best to mark their exist­ ence, while Africans or Asians do not even try to.

Global patriotism cannot be replaced by national patriotism.

There is no chance of this expression of national patriotism being promot­ ed to the continental level let alone be­ ing brought under the common flag of humanity. Economy is the backbone of modern patriotism. The leaders of the modern economic patriotism include the United States, France, Germany, the United Kingdom, Russia, India, China, Japan, South Korea, Turkey and a cou­ ple of other countries. In other words, most of the G20 members. Big players bet on economic patriotism and do it

54 :: polish market ::

1-2 /2013

on a large scale in line with their am­ bitions. All of these countries have de­ veloped multi-level policies to propel economic growth and national inter­ est. They also use various measures to protect domestic capital and support foreign expansion. One of the world’s leaders of economic patriotism is Ger­ many. Its effectiveness in this regard is evidenced by the fact that until 2011 the country was the largest exporter in the world,” says Krzysztof Domarecki.

What does modern patriotism consist in?

Domarecki goes on: “It involves in par­ ticular efforts towards strengthening one’s region and country. Building the country’s economic and social poten­ tial takes the place of military power.

The understanding of new challenges and the ability to address them allow to assess the effectiveness of such a patri­ otism. Some of the naive who believed in the so-called European identity in place of the national identity, some of those who repeated that capital has no nationality were surprised to realize that things are different in the prac­ tice of the European Union. The first seven years of Poland’s membership in the EU has shown that the slogans on the opening of the market, liberal­ ization of the economy and privatiza­ tion contain no new ideas, but rather old and tough interests of the strong­ er, i.e. those who have been Europeans long before we started to learn Euro­ peanism. The result is that the peo­ ples of Central Europe are more or less frustrated. What is the main source of this frustration? I will quote here what prof. Leszek Balcerowicz said in an in­ terview with Germany’s “Die Weld” newspaper: The EU internal market is not ready yet. The Directive on services has been diluted in the European Par­ liament, largely due to pressure from Germany and France. In Central and Eastern Europe we have thrown our markets wide open to western servic­ es. We even let in Deutsche Bank, while the “Polish plumber” was feared like a

Global market devil in Western Europe. The free mar­ ket must be fully achieved. “Indeed, from a business point of view, the deal was bad from the very beginning. We will sell you banks, cement and sug­ ar plants cheaply, and you allow us to work in your countries. On top of that, it turned out that we were scammed in this already unfavourable transac­ tion. We gave away our banks, and our employees are discriminated against in Germany. This is a large-scale phe­ nomenon that also affects Hungarians, Czechs, Romanians and Bulgarians”.

Why then should we bet on economic patriotism?

Krzysztof Domarecki says that econom­ ic patriotism is aimed to increase the share of domestic capital in the coun­ try’s economic structure. This would result in a greater tax base and would help achieve the stability of employ­ ment. Consequently, the country would get much stronger economically and politically, as it would have a viable ba­ sis to be considered an important Eu­ ropean and global player. Such a goal is worth a bipartisan consensus.

It is hard to disagree with the found­ er of Selena SA. Janusz Piechociński, Deputy Prime Minister and Minister of Economy, expressed a similar opinion when inaugurating the “Global Compa­ ny” programme. “Economic patriotism, as we understand it, involves protect­ ing our companies abroad, supporting their business strategies, but also at­ tracting foreign investors. It can just as well manifest itself in choosing Polish products and supporting the chains of Polish producers to ensure demand for Poland-made goods. Further develop­ ment and internationalization of Polish companies is and will be an essential is­ sue for the government and the Minis­ try of Economy,” declared Piechociński.

Olgierd Dziekoński, Secretary of State at the Chancellery of the President of Poland, read out a letter addressed

by President Bronisław Komorowski to the participants of the conference. The letter reads: “23 years after the transi­ tion, a period that was a lesson of the free market economy, we should now develop in Poland new economic solu­ tions for competitiveness and innova­ tion. We need to build companies that will become Poland’s showcase in the world, competitive in terms of quality and identified with our values. We need to look for export opportunities on the

new growth poles through marking our presence on the promising emerg­ ing markets”.

The discussion on the challenges facing Polish businesses was attend­ ed by a number of eminent personal­ ities. In addition to government offi­ cials, these were business executives and representatives of economic insti­ tutions, including Ryszard Florek (Fak­ ro), Adam Mokrysz (Mokate), Krzysz­ tof Krystowski (Bumar), Adam Sawicki (KGHM), Janusz Dedo (HSBC) and Da­ riusz Fabiszewski (Cisco). They point­ ed to the necessity to adjust the tools of support to the real needs of businesses, as well as to the importance of a strong­ er political commitment to promoting business expansion. Many companies are able to conquer foreign markets, but exports and expansion are not priorities of Polish economic policy, and without the government’s support their situa­ tion is often worse than their compet­ itors’. The declarations made by Min­ ister Piechociński and support offered

by President Komorowski will hope­ fully change the public administra­ tion’s attitude to business.

France’s Tales rather than under its own one. Unfortunately, the admin­ istration works the same way as we all do - for some reason, we prefer to purchase foreign equipment because we think it is technologically better than Polish. But as far as it owns a lot of companies, the state can consoli­ date us and build Polish champions, the whole groups, for which it will be easier to deal with competition on the international market”. ::

The conference attracted great interest and was the first in a series of discussion meetings.

The “Global Company” programme benefits from the patronage of the Minister of Economy.

How can the government support Polish exports?

“The government should give Poland the face! It should work out a brand Po­ land strategy and a strategy to commu­ nicate this brand. This kind of reflection was abandoned at the government level some 10 years ago. Poland must be asso­ ciated with something,” said Paweł Po­ toroczyn, Director of the Adam Mick­ iewicz Institute.

The President of Bumar Group, Krzysz­tof Krystowski, has brought up another very important issue: “We must ourselves believe in our Polish products, technologies and services.

Exports begin in Poland. Poland, also in my sector, becomes today an in­ tegral part of the global market. The groundwork is to be laid here in Poland so that we have exports clout. There are sectors in which the government can promote Polish products, and there are industries, like mine, where the state can simply buy Polish products.

If we want to conquer foreign mar­ kets, we have to first believe in our­ selves in Poland. The Bumar Group is a manufacturer of the best radar anten­ nas based on the identification friendor-foe (IFF) system in Europe. How­ ever, it sells under the brand name of

Małgorzata Bonikowska and Paweł Rabiej ( THINKTANK) and Janusz Piechociński (Deputy Prime Minister and Minister of Economy)

Krzysztof Domarecki (Selena SA) during his speech

Janusz Piechociński Deputy Prime Minister and Minister of Economy

1-2 /2013 :: polish market :: 55

Global market

Public administration has to support Polish business Janusz Urbanik, founder and President of the Board of Ventor Sp. z o.o., talks to Ewelina Janczyk-Foryś about supporting businesses on the global market, and administrative barriers.

Ventor’s niche is in ventilation systems – it manufactures industrial insulation, including broadly-defined industrial construction services.

At the very start of its operations, Ventor dealt with ventilation systems. At present, however, our focus is on the industrial-con­ struction sector. We provide all types of re­ furbishment services, including repairs in shipyards and fuel terminals. Our main mar­ ket is in Norway, but occasionally we do some work for Polish shipyards and power plants.

So all the projects you implement in Norway are dealt with by Ventor Construction AS, which is fully owned by its mother company Ventor Sp. z o.o.?

Correct. In November 2010, the socioeconomic situation forced us to establish our Norwegian subsidiary in Stavenger. Since then, the new company, Ventor Construc­ tion AS, has handled all the projects we im­ plement in Norway.

What was the reason behind venturing into Scandinavian market?

As a young man I was looking for a place where I could settle down. At some point, I had a job in Norway. Back in the 1980s, if you had a job abroad, you had a better chance to realise your potential. My employer there offered me an interesting solution. And so I bought from him some used machinery, which I would use back in Poland to manufacture ventilation fittings. Then I would sell them to my for­ mer employer. This way, in 1992, Ventor came into being. Our initial business focus would be on industrial installations and ventilation systems. As well as exporting the ventilation fittings, we would assemble them.

We further expanded our business into in­ dustrial insulations, steel structures and scaf­ folding systems. Our present range of services includes comprehensive industrial construc­ tion. We are involved in both the manufacture of ventilation and air-conditioning systems

56 :: polish market ::

1-2 /2013

(we have our own machinery park) and the implementation of EPC projects.

And so, from a small business of a few peo­ ple, it has grown into a major company with a staff of more than 800 people.

Tell me, is the Polish market comparable with the Norwegian?

I don’t think so. In Norway, even though there is a substantial shortage of qualified la­ bour, the market is still demanding. Norwe­ gians value quality above all, and they take pride in this quality. As expensive as they are, Norwegian companies work for many fuel companies across the world. So you see why this market is different in its nature. It often happens that also our business does jobs for Norwegian companies in, say, Spain or Vietnam.

Are you planning to expand your business somewhere else, say, to the East?

At this moment, we have a number of in­ vestments on the way in Norway. Our plan is to satisfy the demand of this market in the long term. This is why our company is involved in educating and training people, as there’s so much work. We have 800 people on our staff, but our needs are way bigger, so we are plan­ ning to focus on this area as well to meet the demands of the Norwegian market.

Eastern markets may be “in” these days, but they still carry substantial risk. And as Polish companies go international they can’t be completely sure whether their services will catch on for good, or if they will be proper­ ly settled. Our several dozen years of work in Norway, which has involved brand man­ agement as well, have made us more inclined to be more “Norwegian” and to provide ser­ vices to Norwegians. As demanding as they are, Scandinavians are very reliable as far as being square with you after the work is done. Business ethics in Norway are as solid as they get, and it is in many respects that we can envy Norwegian business. I hope that we will manage to cope with all the challenges we face in Norway.

You said that you have a number of investments on the way in Norway. So it seems that despite the widespread panic related to the economic crisis, you can still keep your business running smoothly and be prosperous. Has the crisis bypassed Norway?

In Norway, the entire public administra­ tion is dedicated to serve business, to help create jobs, essentially to serve the country.

The State agencies help businesses develop.

Whereas in Poland, I get the impression that it is, sadly, the other way round – I know from my own sad experience that officials are often there not to help businessmen, but to make it difficult for them to operate. You can’t imag­ ine something like this taking place in Nor­ way, as it would generate a massive public backlash. Up there, they understand the es­ sence of social co-existence. You can see that the individual administrative units are coop­ erating towards a common goal which is to make the lives of Norwegians better. Trade un­ ions in this country see to it that the foreign­ ers are employed in those trades and periods where and when there is demand for labour.

This means that the Norwegian system is de­ signed to support domestic business and in­ spire development. Scandinavian State agen­ cies were quick to understand that in order to avoid the crisis, you have to lend your hand to those who actually generate the capital. This, I believe, is their recipe for success. However, many institutions in Poland tend to be obliv­ ious to this insight.

Global market They rely on economic nationalism.

Precisely. What’s more, however, Norwe­ gians are not ashamed of this and openly ad­ mit it. For them, it’s something to be proud of.

As opposed to Poland, where it is often the case that domestic business is pushed to the brink of bankruptcy while foreign capital is given special treatment. There is solidarity among Norwegians. I wonder why Poles can’t work jointly for the good of their country? And it is this fact that Norwegians often point out to us Poles, in that they emphasise that while we are indeed able to show solidarity, it is only “once in a blue moon.”

And, to some extent, they’re right. What caught my attention is what you said about the collaboration of State agencies and business. Norwegians are not afraid of this collaboration and they admit it. Why can’t we have such collaboration in Poland?

We should follow their good example. Be­ cause of the sad history of our country we are not used to cooperation between the Stateowned and private business. The officials seem to be mentally stuck in the Communist times when the work in the public sector was only seemingly done for the public benefit, where­ as in reality it paved way for the exploitation of those who “dared” to earn more. Officials should serve the public, as it is for our com­ mon good that they took up their public po­ sitions. What you experience in Poland is the bureaucratic insolence to interpret regulations in an arbitrary way. In extreme cases we deal with outright recklessness and lawlessness.

This is a major problem indeed.

Your company operates on a global scale, on foreign markets. What can you do to support Polish companies on the global market in a way that is well thought out?

How can we help the entrepreneurs?

Polish entrepreneurs have proven their capacity to compete with other businesses in Europe and internationally. And, if it only weren’t for the obstructionism of our pub­ lic administration and tax agencies, busi­ ness would probably grow further. The best example of this is the case of Roman Kluska, an entrepreneur and the founder of the Op­ timus S.A. joint stock-company, who had to close his business because of the misin­ terpretation of the law by the bureaucrat­ ic apparatus. And there are more – just ask the hosts of the annual Economic Forum in Krynica – the press often presents them as those who still have a lot to offer to the Pol­ ish economy, but are forced to move their as­ sets abroad, because in Poland they have their hands tied. Polish companies have potential and outstanding personnel with high regard

for the labour culture! We have many assets, yes, but there is one fundamental drawback – too much bureaucracy and officials whose ac­ tions hinder Polish business. Many companies from the Podkarpackie province have a tra­ dition spanning some dozen years. And they have proven to be able to achieve high, Euro­ pean, business standards. Just as the staff of the company tell you what a company is like, so do public officials tell you about what the State is like. Norwegians know that each of­ ficial, in fulfilling his duties, represents the country. Whereas in Poland, this idea seems to be largely ignored, and the officials often see the public sector as a space where they are free to take care of their own affairs and give vent to their personal beliefs and prejudices.

So you claim that by improving public administration you can help Polish business?

What else can be done to support companies? What about pumping capital into businesses or promoting Poland across the world or providing political backup.

What is very important is to secure ac­ cess to cheap investment loans, since, in or­ der to expand, business needs additional cap­ ital. It would be good if entrepreneurs knew they have the State’s backing, even politi­ cal, when they are involved in major pro­ jects. There are many companies who are not ashamed to admit their liaison with politics.

There is one condition though. These liaisons have to be transparent, upright and serving something more than the particular inter­ ests of those involved. In many cases it is in the first place the State that should probe into the market to see the whole and detailed pic­ ture, which is unavailable to every man on the street, since only the State has the necessary tools to do it. Next, drawing from the expe­ rience and knowledge of people who are ac­ tively involved on the market, it should help build a kind of a business, financial and set­ tlement framework that will provide busi­ nesses with safe conditions for investment and development.

You mentioned that your hard work in Norway helped you build the brand of your company. Can you tell us about the perception of Poles abroad? Was it hard to build up a positive brand perception?

Scandinavians can be very loyal to their trading partners, but it takes some time for them to develop this loyalty. And it’s not only the case with Poles, but with all foreign­ ers. They need time to accept somebody and to make sure he or she is reliable. A positive rapport between the individual companies is of great importance. The principal rule they adhere to is simple –“live and earn honestly.”

Even the best business there is, with high­ ly-qualified personnel, can have difficulties making it on the market if it hasn’t built its reputation and established some long-stand­ ing business links.

So what is essential in Norway is loyalty, long-standing cooperation and enduring relationships. Do you think that such an attitude would work the same way in Poland?

It is possible indeed. However, we’d need some specific regulations to ensure that all companies operate according to the same rules. Also, one should develop rules for the servicing and scrutiny of companies by the public sector. In Poland, it’s often the case that you have to depend on somebody else’s good will, or the lack of it, whereas the rules are not always uniform and transparent for all the players. The introduction of “simple and transparent regulations” (tax regulations in particular) would make the often-pro­ claimed concern for the welfare of the State and the employees something more than just an empty slogan. And carried out consist­ ently, these regulations could change a lot.

Poles, however, still put up with this regula­ tory dilution, the arbitrary interpretation of the law. This way we allow public officers to boss us around, and the entrepreneurs who fall victim to this treatment are left to fend for themselves. It goes without saying that there are few companies resilient enough to endure a clash with the callous bureaucratic machine. Sometimes, it seems that the Polish State agencies are there not to help the Poles, but to make their lives more difficult.

There must be a trace of the past in all this, of the old Communist system, in which the bureaucratic apparatus held the ultimate power.

We often put forward this explanation, but it’s wrong. Why is it that Poles can easily at­ tune themselves to specific behaviour, spe­ cific labour regulations abroad?

Why is it then?

We put too little emphasis on developing our own elites, on allowing space for the voice of mentors, so that they can guide us in the appropriate directions. We are unable to de­ rive strength from and take advantage of the insights offered by the internationally-ac­ claimed authorities. We have the chance to take over the leading role. The Norwegians recognise Poles as fit candidates for respect­ able citizens of Norway. And despite the con­ fessional difference, the Christian values fos­ tered by the Poles are highly valued by the people of Norway as well. :: 1-2 /2013 :: polish market :: 57

Invest in Poland

Looking for an investment location?

For eight years now the “Investment Attractiveness of the Polish Regions and Sub-Regions” has been the focus of a study prepared by the Gdańsk Institute for Market Economics (IBnGR), which – contrary to the authors’ intent – has been widely regarded as an inter-regional ranking, thus provoking strong emotions.

Jan Sosna The Report compiles findings on the investment attractiveness of indi­ vidual regions and sub-regions. Re­ gions are characterised in terms of their general investment attractive­ ness, with a focus on universal fac­ tors, applicable almost to all types of investment. Sub-regions, on the oth­ er hand, are described in respect of three investment sectors - industry, services and advanced technologies.

Among the regions, the Śląskie Region continues to be the leader in investment attractiveness. The Ma­ zowieckie and Dolnośląskie Regions also offer favourable environments for investment. The regions finding themselves above the average were the Wielkopolskie, Małopolskie, Za­ chodniopomorskie, Pomorskie and Łódzkie Regions.

Finally, five regions are catego­ rised as being of low attractiveness.

These are the Podkarpackie, Lubel­ sk ie, Wa r m i ń sko-Ma z u r sk ie, Świętokrzyskie and Podlaskie Re­ gions. Their low intensity of urbanisa­ tion and industrialisation has prevent­ ed the development of the necessary “critical mass” in resources considered as vital for large investors. Moreover, these regions have poor transport ac­ cessibility. The low investment attrac­ tiveness of these five regions does not mean that they do not stand a chance in the competition for investors. They can gain some edge by strengthening their appeal to businesses dependent on the unique resources and assets of these regions – perforce excluded from the comparative study – and sourc­ ing not necessarily large investors but rather those that could make efficient use of the available assets.

Compared to 2011, the Report does not find any significant changes in

Table 1. Investment attractiveness by region (data for 2012)

Weight

20

25

15

10

Investment

with investors

attractiveness

5

5

20

Rank

Rank

Value

Cooperation

safety

Value

General

Rank

Rank

Value

Rank

Value

Rank

Value

Social

infrastructure infrastructure

Value

Economic

Outlet

and costs Rank

Rank

Value

accessibility

Labour resources

Value

Transport

-

1

Śląskie

0.37

6

1.33

1

1.20

2

1.10

2

2.23

1

-1.22

16

0.54

5

0.86

2

Mazowieckie

0.61

1

-0.24

12

2.06

1

0.75

3

0.47

4

-0.49

12

1.05

1

0.66

1 2

3

Dolnośląskie

0.40

5

0.09

5

0.40

4

1.43

1

0.73

3

-1.09

15

0.84

3

0.46

3 4

4

Wielkopolskie

0.60

2

0.19

3

0.03

7

0.11

6

-0.49

10

0.40

5

0.78

4

0.33

5

Małopolskie

0.09

10

0.59

2

0.19

5

0.17

5

1.89

2

-0.17

9

-0.17

9

0.26

2

6

Zachodniopomorskie

0.42

4

0.15

9

-0.08

8

-0.13

7

-0.04

6

-0.60

13

0.97

2

0.18

6

7

Pomorskie

-0.22

11

-0.07

7

0.85

3

-0.25

9

0.07

2

-0.79

14

0.54

6

0.12

7

8

Łódzkie

0.35

7

0.12

4

-0.26

9

-0.13

8

-0.16

7

-0.32

10

0.29

7

0.08

8

9

Kujawsko-Pomorskie

0.12

9

0.01

6

-0.28

11

-0.64

16

-0.19

8

0.12

7

-0.05

8

-0.09

9

10

Opolskie

0.12

8

-0.22

11

0.06

6

-0.31

4

-0.63

13

0.12

8

-0.89

14

-0.19

10

11

Lubuskie

0.43

3

-0.28

13

-0.27

10

-0.43

12

-0.71

14

-0.46

11

-0.41

11

-0.21

11

12

Podkarpackie

-0.84

16

-0.07

8

-0.73

14

-0.30

10

-0.54

12

1.37

1

-0.67

13

-0.42

12

13

Lubelskie

-0.65

13

-0.39

15

-1.02

16

-0.36

11

-0.94

16

0.85

3

-0.21

10

-0.46

13

14

Warmińsko-Mazurskie

-0.75

15

-0.30

14

-0.72

13

-0.53

13

-0.50

11

0.39

6

-0.45

12

-0.48

14

15

Świętokrzyskie

-0.33

12

-0.18

10

-1.02

15

-0.53

14

-0.46

9

1.02

2

-1.15

16

-0.52

15

16

Podlaskie

-0.72

14

-0.45

16

-0.41

12

-0.59

15

-0.73

15

0.80

4

-1.03

15

-0.58

16

Compiled by IBnGR, source: http://ez1.ibngr.pl/index.php/pl/lewe_menu/atrakcyjnosc_inwest_wojewodztw

58 :: polish market ::

1-2 /2013

differences in the general investment attractiveness. What it does establish, though, is a major change in transport availability. The commissioning of the remaining sections of the A2 Motor­ way between Świecko and Warsaw has markedly improved the acces­ sibility of the Lubuskie, Wielkopol­ skie, Łódzkie, and Mazowieckie Regions. By the same token, the re­ gions crossed by the A4 Motorway (Dolnośląskie, Opolskie, Śląskie and Małopolskie) have lost some of their previous, near-monopolistic, dom­ inance in terms of access to infra­ structure facilitating fast connection with the motorway system of West­ ern Europe.

The sub-regions with the highest in­ vestment attractiveness for industri­ al activity are located around Upper Silesia and western Lesser Poland.

This area is exclusive of only five subregions - Łódzkie, Wrocławskie, Poznańskie, Bydgosko-Toruńskie and Szczecińskie. In fact, these are fair­ ly heavily-industrialised areas, with good transport accessibility.

The category of service investment at­ tractiveness is topped by sub-regions of a mainly metropolitan make-up.

These are centred around the larg­ est Polish cities. This group of subregions also exhibits the highest in­ vestment attractiveness for businesses operating in advanced technologies.

It is the focal point for infrastructure and HR in R&D. The labour market resources include both locally-edu­ cated specialists and migrant work­ ers attracted by high living standards and a well-developed cultural envi­ ronment. In addition, these centres have the most developed ICT facil­ ities and relatively easy availability of passenger transport. ::

Invest in Poland The Wałbrzych Special Economic Zone A business license for the Oleśnica Sub-Zone has been granted to GKN Driveline Polska sp. z o.o. The company will engage in the production of inno­ vative car parts. The minimum capi­ tal expenditure to be made amounts to PLN100 million, in addition to at least 100 new jobs. The company is planning to complete the project by the end of December 2015 at the latest.

The Słupsk Special Economic Zone Another two companies have ob­ tained licenses to operate in the Ko­ szalin Sub-Zone of the Słupsk Special Economic Zone.

Special economic zones issue new licences to investors The Łódź Special Economic Zone Intelligent Logistic Solutions Sp. z o.o., S. i A. Pietrucha Sp. z o.o. and MP Pro­ duction Sp. z o.o. have obtained busi­ ness licenses.

In Łódź, Intelligent Logistic Solutions Sp. z o.o. will set up a cutting-edge lo­ gistics centre and an IT centre with a server room. The company’s activities will focus on the provision of compre­ hensive logistical services, including the storage, trans-shipment and trans­ port of goods, and also IT and call-cen­ tre services. The company is planning to invest a minimum of PLN45 mil­ lion in this project and employ at least 200 people.

The Turek Sub-Zone of the Łódź Spe­ cial Economic Zone will in turn host an investment by MP Production Sp. z o. o. The company belongs to the Mess­ er Polska Group - a producer and pro­ vider of industrial (in both liquid and compressed forms), consumer, and medical and special-purpose gases.

Besides trading in gas, Messer Polska offers all-round support regarding sys­ tems for gas storage and distribution.

The project to be implemented by MP Production involves the construction and launch of a Liquefied Gases Plant which will include a cryogenic air sep­ aration facility. The company’s plans include a minimum capital expendi­ ture of PLN102.5 million and the cre­ ation of at least ten new jobs.

S. i A. Pietrucha is one of the major manufacturers of PVC windowsills in Europe. In the Ksawerów Sub-Zone of the Łódź Special Economic Zone, the company is planning to launch a new project which will feature the expan­ sion of the facility producing plastic components for the construction sec­ tor. This will broaden the company’s current range with new types of vinyl sheet pilings used in civil-engineering structures. The investment will entail capital expenditure of at least PLN1.2 million and the creation of six jobs, with 36 current jobs retained.

The licenses, officially handed over by the Mayor of Koszalin, Piotr Jedliński, and President of the Po­ morska Agencja Rozwoju Regional­ nego S.A., Mirosław Kamiński, went to the owners of Romex (cistern manufacturing) and Bałtyk-TransSpedition Paweł Sominka (transport and shipping services).

The Starachowice Special Economic Zone A new business license has been issued for operating in the Starachowice Spe­ cial Economic Zone. Rebond Sp. z o. o. is intending to start the production of reflective multilayer insulation ma­ terials (reflective thermal insulation) characterised by low thickness.

The minimum capital expenditure to be incurred by November 30, 2015 will amount to PLN2,016,000. Over the same period, the company will add at least 25 employees to their staff and guarantee the retaining of 25 jobs un­ til November 30, 2018.

The project will be completed by March 31, 2016.

The Pomeranian Special Economic Zone The second business license for oper­ ating in the Pomeranian Special Eco­ nomic Zone was received by Zbigniew Gotartowski, President of the Board at Bibus Menos Sp. z o.o.

Bibus Menos, a limited-liability compa­ ny based in Gdańsk, plans to expand its activities in the Gdańsk Sub-Zone. :: 1-2 /2013 :: polish market :: 59

Infrastructure

“Poland under construction” - a moment for consideration Last year’s peak in infrastructure investments in Poland, particularly in the field of road projects, resembled at some points an economic tsunami.

Many huge projects still remain in the construction phase, while the new selection for the next EU financial perspective of 2014-2020 is to begin.

The enforced winter break in site works has created an opportunity for organising the works and constructive reflection on how to improve on what is wrong.

Paweł Tamborski, Deputy Minister of Treasury

A lot of that has accumulated. Most of the projects were related to the UEFA EURO 2012 tournament. There­ fore, these were completed under the pressure of deadlines, quality con­ trollers and accumulated demand for construction materials that created an increase in prices and destroyed any business plan. Even many of the current construction market leaders ended their “investment toll” with bankruptcy proceedings. What will happen next on the construction mar­ ket, with subsequent waves of large

60 :: polish market ::

1-2 /2013

projects in view (first in rail, then in energy)?

The conditions for such a con­ structive discussion were proposed by the Warsaw Business Executive Club by organising on 23 January a conference of several dozen presi­ dents and board members of compa­ nies dealing with investments and the implementation of works. The scene after the battle was outlined by Marek Michałowski, President of the Pol­ ish Construction Employers Asso­ ciation, and Doctor Tomasz Ka­czor,

Chief Economist of Bank Gospodarst­ wa Krajowego. They initiated a dis­ cussion on the reasons for the bank­ ruptcy of construction companies and its consequences, asking whether these spectacular bankruptcies will not end with an equally spectacular domino effect on the Polish economy?

Lech Witecki, President of the Gener­ al Directorate for National Roads and Motorways (GDDKiA), the biggest in­ vestor in Poland, and Paweł Tambor­ ski, Undersecretary of State for the Ministry of Treasury also contrib­ uted to the discussion. Paweł Tam­ borski, Deputy Minister of Treasury, presented the main assumptions of the Polish Investments programme.

“The programme is not meant to replace private financing, but rather to support it. It should provide the first and last resources needed to in­ itiate and complete it when there are no more funds. The main direction is that of large infrastructure projects energy, mining, port, rail and road,” said Tamborski. However, he point­ ed out that industrial infrastructure construction will also be support­ ed if entrepreneurs have good ideas.

“Polish Investments will allow the swift launch of financial resources from privatisation. The investment committee, which will be the deci­ sion-making body in the case of com­ mitment to specific projects, will be the most important. We mean in­ frastructure projects lasting 10 to 20 years, and our minimum com­ mitment threshold is approximately PLN50 million, while the maximum is about PLN750 million,” Tambor­ ski said.

After this diagnosis, the managers and financiers went on to talk about efficient ways out of the difficult situ­ ation and not wasting the great busi­ ness opportunity (and a chance for big progress for society) that huge infrastructure projects give to their companies. Therefore, the debate fo­ cussed on the changes introduced to Polish public procurement law, the

Photos: Executive Club

Infrastructure

From the left: Krzysztof Celiński, Director General at Halcrow PKP PLK, Paweł Jagusiak, Member of the Board of CTL Logistics, Director for Development, Member of the Board at PSE Operator, Moderator: Bartłomiej Jankowski, Attorney-at-Law, a lawyer and a Partner in the WKB Wierciński, Kwieciński, Baehr Law Firm

improving of funding mechanisms and the issue of how not to repeat the mistakes made during road invest­ ments in respect of railway and en­ ergy projects. Moreover, it turned out that professionals can reach a reason­ able agreement even when the sub­ ject is touchy, and additionally veri­ fy tête à tête whether the information with which executives are provided by subordinates can really withstand confrontation with reality. The subject of rail transport in Poland and the is­ sue whether only the PKP Group can be a driving force in the infrastruc­ ture was commented on in an inter­ esting way by Paweł Jagusiak, mem­ ber of the Board at CTL Logistics and Director for Development.

“CTL Logistics is an independ­ ent logistics operator, the largest in Poland; it also operates on the railtransport market. This is a more and more difficult market, due to which fact the share of cargo-rail transport in Polish transport is falling for an­ other year.

This means that rail carriers are systematically losing orders to road carriers, even regarding the mass car­ riage of goods, in which the railways should show its technical and eco­ nomic superiority. This is reflected in statistics that show how much ag­ gregate was transported by rail dur­ ing the Polish road investment boom

62 :: polish market ::

1-2 /2013

- only 10% of the total quantity of ag­ gregate, the rest of which was loaded onto lorries and sent by road. When the whole of Europe tries to improve economic competitiveness, when the preference for the rail transport of mass cargo is formulated, also as a priority for environmental policy, such a situation in Poland cannot be dignified with a comment.

The Polish rail market, the second largest in Europe, possibly has a very big chance for development. Unfortu­ nately, in practice it does not develop at all, which affects not only the mar­ ket for transport and logistics. On the one hand, many years of negligence in maintaining track infrastructure led to a significant reduction in the technical speed on the main trans­ port routes, and the closing of side lines and railway station tracks.

On the other hand, the pressure on the speedy expenditure of EU funds caused uncontrolled works, which led in recent years to reducing the capacity of modernised lines by 50%.

As a result, the average speed of car­ go traffic fell to 20 km/h, in Silesia even to 15 km/h, and it is still fall­ ing. Only on slightly more than 5% of the length of the tracks can trains move at speeds greater than or equal to 160 km/h, which is the European standard. It should also be noted that the modernisation of no line was fully

completed and the repairs of individ­ ual sections last longer; they may take up twice or three times the initiallyplanned time.

The modernisation programme for the years 2013-2015 presented by PKP PLK extends works and thus intro­ duces subsequent reductions in ca­ pacity. The low quality and capacity of infrastructure offered by PKP PLK does not, however, mean a reduction in rates for access. On the contrary, charges are already twice as high as in Western Europe, and PKP PLK wants to continuously increase them, when in the case of rail transport, fees for access to the infrastructure already reach 30% of the costs and thus be­ come a crucial element in each carri­ er’s profitability and competitiveness.

In order to change the current sit­ uation and halt the decrease in the railway’s share in transport, we need to transfer the railway infrastructure from the companies of the Group un­ der the direct ownership of the Treas­ ury and local government units, as it will take place in the public road and motorway infrastructure. More­ over, the Minister of Transport should establish comparably competitive charges for carriers for the use of the road infrastructure. The proportions of expenditure on the modernisation and development of the road and rail infrastructure should be equalised to a level of 60% funding for roads and 40% for railway.

There have been announcements of changes to the existing status; we do not know whether they are real, though. I am very glad that at the Ministry of Transport, at PKP and in the railway investment market there appear signs of thinking different from before. People seek to draw con­ clusions from all these negative phe­ nomena that occurred at the peak of the investment in road infrastructure.

Fortunately, the discussion is not lim­ ited only to the question of the lowest price, and ways are being looked for to avoid the errors committed during the construction of roads. It is a posi­ tive phenomenon that these are most­ ly the companies that participated in such projects that insist on that as they have the most practical experience.

This debate is beginning to look con­ structive, so let us not lose hope that the conditions within the industry will change within a few years.” ::

Commercial Real Estate

What is the value of a retail scheme?

The answer to this question clearly depends on the type of retail scheme.

While shopping centres account for nearly three quarters of the retail stock in Poland, retail parks and retail warehouses make up the remaining nearly three million square metres. By comparison, the area of the Principality of Monaco is two million square metres.

Aleksander Loster Each retail scheme is unique with its own rental rates and yields. Mean­ while most retail property market re­ ports quote prime shopping centre yields, i.e. yields for the best or, to be more precise, most expensive shop­ ping centres. Prime yields may pro­ vide some useful insight, but practi­ cally speaking there is only one best shopping centre in a city. And what about the others? According to some reports, the discount for the oth­ er shopping centres is 125-150 basis points. This means that if the prime yield stands at around 6%, which amounts to nearly 16.5 times the an­ nual net operating income, yields for other properties may reach around 13.5 times the annual net operating income. This, however, is not always the case. In smaller regional cities with 100,000-200,000 inhabitants, yields averaged 7.5-8% in the last two years, i.e. around 12.5 times the annual net operating income. Yields in other less populated towns rarely drop below 8.5% or exceed 12 times the annual net operating income. This is a major difference compared with the prime yield.

Prime yields for retail parks stand at around 7.5%, but the most common yields are 8-8.5%, which is 12 times the annual net operating income.

Standalone discount stores which have been the highlight on the devel­ opment market in recent years offer yields of around 9%, i.e. 11 times the annual net operating income.

The above yields or the net operat­ ing income level multiples apply to properties without any technical or legal defects. It is further assumed that tenants pay rent and additional charges timely and can afford to do so. Such affordability to pay rent can

be estimated on the basis of the effort ratio which shows the relation of rent and other charges paid by the tenant to the turnover volume. It is impos­ sible to establish the property value only on the basis of correct yield es­ timates. The volume of the net oper­ ating income must be known.

The first step is to calculate the rent income which, for the sake of sim­ plification, can be achieved by mul­ tiplying the average rent by the total lease area of a property and adding

other rent proceeds such as rent paid in shopping centres for kiosks in com­ mon areas. This may be problematic as market reports quote the highest rental rates while average rents are not widely researched or published.

According to publicly available infor­ mation on some retail schemes, the average rent amounts to around 60% of the highest rental rate published in reports, which e.g. is EUR 24/sq m/ month, and not EUR 40/sq m/month.

This applies to a shopping centre in one of Poland’s five major cities where minor tenants are likely to pay rent of around EUR 40/sq m/month, but an­ chor tenants leasing large space will bring the average rental rate down considerably.

What’s more, the rent income does not equate to the net operating in­ come. The owner’s share in main­ tenance or marketing costs needs to be subtracted from the rent income.

Reduced rents for tenants or step-up rents are also becoming increasing­ ly common. Bad debts or long out­ standing payments also constitute a major cost. Differences between the rent income and the net operating in­ come may sometimes reach 10%. This means that the sum to be capitalized should be 10% lower.

For instance, the owner wants to sell a retail scheme providing the annu­ al rent income of PLN 5,500,000. The property is located in a city of just un­ der 200,000 inhabitants and, there­ fore, the owner expects 14 times the annual income, but following nego­ tiations he accepts the purchase price of 13 times the net operating income.

However, following the due diligence of the property by the buyer it turns out that the net operating income is actually 10% lower than the rent in­ come and the price accepted by the buyer is 13 times the net operating income, i.e. around 11.5 times the annual rent. This example could also help answer the question why prop­ erty sales take so long. ::

The author is an associate, Capital Markets Group, Cushman & Wakefield

1-2 /2013 :: polish market :: 63

International relations

Relations with China – current state and prospects

Political and economic environment 2012 was a year when political relations between Poland and China normal­ ized and stabilized. Numerous bilat­ eral visits at high governmental lev­ el were followed by Polish President Bronisław Komorowski’s visit to China in December 2011 and Chinese Prime Minister Wen Jiabao’s visit to Poland in April 2012. The latter visit confirmed the Chinese authorities’ perception of Poland as a strategic partner. In the Chinese cultural context, one can hard­ ly speak about progress and accelera­ tion in the development of economic relations without a political, symbol­ ic so to speak, consent from the au­ thorities.

64 :: polish market ::

1-2 /2013

The improvement in mutual rela­ tions was confirmed in a practical way by the entry of two Chinese banks to Poland – the Bank of China (BOC) and then ICBC. The banks are state-owned and their entry to Poland is a sign of po­ litical acceptance and “a green light” to business. It is worth noting that the opening of Bank of China outlets in Spain and Portugal was postponed while the opening of its Polish subsid­ iary was brought forward. Additional­ ly, by the decision of the BOC head of­ fice, the Polish subsidiary is to operate in the whole region.

Prospects for BOC BOC has taken an interest in the Pol­ ish market because of our country’s

political and economic stability. Many of the projects carried out and planned in Poland in the energy and infrastruc­ ture sectors attract Chinese investors.

The bank would like to fund their local projects. Such companies as Shanghai Electric, Shanghai Construction Group and Huawei are BOC’s strategic cus­ tomers and the bank has substantial resources to provide loans to them. Be­ cause of many year’s of work with these companies, both in China and on inter­ national markets, we have developed models of providing funding to them while the risk for the bank is relative­ ly low because of guarantees from the companies’ headquarters.

Political decisions of the Chinese government have their practical di­ mension in the form of increased inter­ est in the Polish market from Chinese companies. BOC is receiving more and more enquiries from Chinese investors about opportunities to enter the Polish market. At the same time, we are ap­ proached by individual BOC branches in Chinese provinces who ask us about the Polish market because their local customers are interested in it. Also, we already carry out several projects of Polish firms which want to build man­ ufacturing facilities in China. These two areas – Chinese investments in Poland and Polish investments in China – are strategic for the bank.

Business dimension – chances for businesses This year, BOC sees a big chance for Polish firms planning to export their products to China. The biggest op­ portunities are opening for produc­ ers operating in the food sector. We are receiving enquiries from Chinese shop­ ping chains and distributors about im­ ports of meat and dairy products, such as yoghurts and cheeses, from Poland.

In turn, the Chinese market is becom­ ing attractive for Polish companies be­ cause of the crisis in Europe. The more so as Polish companies are European leaders in these sectors. The need for cooperation from both sides creates a

International relations win-win situation, which is so desir­ able for the Chinese.

One should remember that China now has big food problems. Chinese foodstuffs are of poor quality and its agricultural products are very con­ taminated. As a result, dairy and meat products from the European Union are sought after in China. The Chinese gov­ ernment has recommended a rise in the consumption of healthy and nutri­ tious dairy products by children. Chi­ nese people living in Poland send huge amounts of powdered milk to their families in China. Demand for qual­ ity products goes hand in hand with increasingly high incomes earned by Chinese people and the increasingly af­ fluent and aware Chinese middle class able to spend huge amounts of mon­ ey on quality products, not to men­ tion parents who are ready to pay any price to meet the needs of their child, who is often a single child in the family.

We think that 2013 will be a crucial year in terms of Chinese investment in Poland. But I do not mean typical di­ rect investments. Chinese entrepre­ neurs will be intensively looking for

Polish partners with whom they could cooperate, set up joint venture compa­ nies and then jointly expand on the Eu­ ropean market. They will be repeating the example of Liu Gong, which took over the Huta Stalowa Wola company.

We have a few similar projects in our base. The milk-processing sector is particularly attractive – several Chi­ nese companies are considering joint projects with Polish businesses or their acquisition. This year, Chinese com­ panies will also intensify their activi­ ty in the energy sector. We are waiting for contracts to be awarded in several tenders in which large Chinese stateowned companies are taking part. Ac­ cording to the Chinese calendar, 2013 will be the Year of the Snake. The Chi­ nese say that this year is the most fa­ vourable for people who trust logic more than emotions. If political emo­ tions in mutual relations have already subsided, time has come for a pragmat­ ic approach to business, and the use of the potential of the Chinese market, its absorption capacity and demand, and the production capacity of Polish companies.

Bartosz Komasa has dealt with Pol­ ish-Chinese economic relations for 10 years now. He started his career with providing services to Polish companies at the Economic and Trade Department of the Polish Embassy in Beijing.

From 2004 to 2012, he worked for the Polish Information and Foreign Investment Agency (PAIiIZ) where he was responsible for providing servic­ es to Asian investors, especially those from China, Japan and South Korea.

He specializes in training in the area of cultural differences and foreign in­ vestment. :: Bartosz Komasa also advises Polish businesses cooperating with Asian companies, especially Chinese ones. He is also a former vice-president of the Forum of Young Diplomats, now a member of the Programme Council, a lecturer at the European Academy of Diplomacy and an expert for the Association of Employers and Entrepreneurs (ZPiP). He is also a consultant for the Taiwan External Trade Development Council (TAITRA) in Poland. In February 2012, Bartosz Komasa started work for the first subsidiary of a Chinese bank in Poland - Bank of China. He assumed the post of relationship manager and deals with market development.

ADVERTISEMENT

1-2 /2013 :: polish market :: 65

IT

Prospects for the Polish IT market in 2013 Global economies, including Poland’s, are experiencing dynamic change, which is bringing about a speedy increase in the volume of information transfer. Companies and businesses in the IT sector are being presented with a number of challenges posed by the volume of digital data and analyses transferred on an unprecedented scale, for which they have to devise appropriate technologies. Poland is facing some exciting prospects for better sales figures in software, mass-storage systems, and infrastructure applications.

Bogdan Sadecki On the one hand, Poland is a strong­ ly-developing market, driven, by an increase in internal demand. On the other, the presence of such global corporations as Oracle, IBM, Micro­ soft, HP, Google, and SAP, confirms the fact that Poland has grown not only as a market for products and services. The success of our country as a recognised IT-services centre is largely due to its ready availability of the workforce, the unique and most valuable resource. Polish specialists have come to provide their expertise for an increasing number of foreign customers.

However, this year is not likely to see any revolution in the ICT sector.

Mainstream investments will focus on already-known solutions. The previ­ ous year revolved around the concepts of cloud computing, business intel­ ligence and mobile solutions. These, as confirmed by several factors, will stay with us during the whole of 2013.

66 :: polish market ::

1-2 /2013

This year, cloud computing, as a method of cutting IT expenditure, achieving higher flexibility, and meeting business needs, is expected to continue to be the popular choice for developing solutions. An analysis carried out by PMR, a company pro­ viding market information, consul­ tancy and services, shows that Polish entrepreneurs have been developing a growing interest in cloud comput­ ing solutions (see “The Cloud-Com­ puting Data-Processing Market in Poland. Development Prospects for 2012-2016” report, prepared on the basis of surveys conducted last spring among the leading Polish compa­ nies operating in new technologies).

In 2011, this segment of the IT sector has experienced growth by as much as 41%.

Such rapid development in cloud computing has been impacted on by the savings-oriented attitude of cus­ tomers. However, an increase in the

popularity of mobile Internet access and applications has been of equal im­ portance (29% of answers).

Experts are expecting the cloudcomputing services market in Poland to follow this highly-dynamic trend in the subsequent years. The follow­ ing five years are to see the aggregate annual market growth rate in cloudcomputing services rise above 47%. In 2013, its market value is expected to ex­ ceed PLN 200 million.

Challenges posed by the massive increase in the volume of digital data are being faced by business operators and mass-storage producers. Each day an amazing 2.5 quintillion bytes of data is produced. What is even more surprising is that 90% of all data that exist in today’s world have come into being within only the last two years.

The enormous economic pressure the modern world is under is call­ ing for the analysis of all areas of da­ ta-storage systems in terms of the

IT potential increase in their efficiency and reduction in costs. The volume of data processed by companies is growing quickly, but IT departments sometimes find it difficult to convince their supervisors that mass-storage equipment expenditure is really un­ avoidable. Therefore, producers will have to offer solutions which, due to their excellent efficiency and perfor­ mance, will help to reduce the need for the never-ending investments in new disk array systems.

The market situation will be de­ termined by investment plans, espe­ cially in the area of mobile solutions, the above-mentioned cloud comput­ ing technologies, social networks, and the need for the rapid processing of massive data.

The mobile-solutions sector is expected to be characterised by the highest growth rate. Revenue from the sales of mobile devices and apps in 2013 will reach 20% of the whole IT market value, to become the prima­ ry driving force for the industry (ac­ cording to IDC). Within two years at the latest, 20% of sales departments will be using tablets as their prima­ ry work tools, say experts at Gartner.

Without taking mobile equipment sales into the equation, the expected growth within the IT market in 2013 would be no more than 2.9%.

Although it is well known which technologies and solutions will shape the IT market this year, new challeng­ es will crop up as they mature and grow popular. With a growing num­ ber of mobile devices, we are facing increased problems with secure ac­ cess to data and efficient manage­ ment of terminals. The conclusions that may be drawn immediately from an ever-growing volume of data in­ volve potential problems with the ef­ ficiency of networks and equipment, and the logic of the systems.

New challenges will also involve busi­ ness areas and IT management.

The plans for the next 12 months to computerise Polish businesses are focussing on achieving the efficient processing of large volumes of data, implementing or developing Busi­ ness Intelligence tools, applying mo­ bile solutions, and, importantly, en­ suring data security.

The industrial sector plans to invest in the integration and standardisation

Major barriers to the development of the Polish IT market in 2011-2012 42%

Unfavourable economic conditions

23% 40%

Shortage of funds for IT investments in comapanies HR and payroll problems

55% 15% 11% 15%

No awareness of benefits of investing in IT Unclear and frequently-changing laws Problems in accessing EU funds

17% 10% 0%

No or insufficient State investments

5% 10%

No or insufficient Local Government investments

3%

Fierce competition

3%

Exchange risks Education system Software piracy

of the existing solutions, and also in the management of enterprise archi­ tecture and IT outsourcing. The trad­ ing, distribution and banking sectors will be eager to implement mobile so­ lutions and act towards boosting their knowledge and developing contacts through social networks. The health­ care sector will focus on informational

27%

10%

5% 12% 2% 0% 2% 0% 0%

1%

2011

integration and electronic recordkeeping.

The most comprehensive IT plans are being made in public-sector or­ ganisations. They will invest in so­ lutions involving networks, virtu­ alisation, security, data and systems integration, and also in streamlining business and analytical processes. ::

2012

Source: PMR Report “IT Market in Poland in 2012.

Development Prospects for 20122016”

Expert opinions Jacek Kilian, MSc, CodePay Sp. z o.o. Member of the Board “Already in 2012 one could see the changing approach to mobile devices and new technologies. A growing number of people, including staff and various levels, are using mobile devices. Tablets are crowding out traditional PC’s and laptops, and they are increasingly popular. Many IT businesses are working towards developing mobile applications, a solution that they perceive as highly prospective. New applications intended for business users are being introduced. It seems that 2013 will be the year of mobile business apps.

Another significant feature will be the use of social networking which, like mobile applications, has been known for a long time now. Apparently, social networking has not been fully used in Poland yet, and there is a great potential inherent in it. Additionally, large and small businesses have watched the development of this market with a keen interest.

2013 promises to be a highly-eventful year in the IT sector that seems to be insusceptible to the crisis that has gripped other branches. This is, at the very least, the reason why it is worth keeping track of this market, since there might be interesting events awaiting us.”

Bartosz Pleban, MSc, academic teacher, member of the Polish Information Processing Society, the Polish Society of Economic Information Processing, member of the Polish Artificial Intelligence Society “In 2013 I do not expect any phenomena unique to the Polish IT market. The dawning year will continue the evolution towards the possibility of working at any place and with the use of any information and communication device. The increasing computing power of tablets and smartphones and the developing idea of cloud computing will contribute to users’ decreasing dependence on a stationary workplace. At the same time, the crisis pushing towards limiting IT costs will result in a more optimum use of resources through personnel training.

Digital distribution and streaming of multimedia and computer games will be of growing importance. Among the changes crucial from the corporate point of view will be the migration to the new Windows 8 system, Office 2013 suite and Office 365, which is particularly interesting from the corporate perspective. Another important phenomenon is a rapid increase in the amount of data for storage and analysis. For this reasons, solutions such as data centre and business intelligence will require increased expenditures connected with their implementation in order to retain competitive advantage.” ::

1-2 /2013 :: polish market :: 67

IT

It’s cheaper outside The outsourcing of specific tasks, such as accounting, HR, payroll, legal, IT, logistics or PR services, has gained in importance in the time of economic slowdown. However, in Poland, where it became a common business practice about a decade ago, outsourcing is doing well regardless of the economic conditions. Poland has become an attractive market for the development of outsourcing services in this part of Europe. Quite wellconnected cities and a sufficient amount of modern office space make it able to host outsourcing centers staffed by appropriately educated and trained professionals.

Patryk Mirecki BPO, SSC, R&D, offshoring - outsourcing typology :: Perhaps the most “classic” and the most common category of out­ sourcing is the BPO (Business Pro­ cess Outsourcing). It covers the comprehensive business services provided by an external contrac­ tor. Thanks to the contracting of specific business functions or pro­ cesses to a third-party provider, the company becomes more flex­ ible, and thus is able to focus on its core competencies, without being burdened by the demands of bu­ reaucratic restraints. :: Shared Service Centers (SSC) are the entities responsible for the exe­ cution and the handling of specific

Łukasz Maciak Director, Commercial Investment, Arka BZ WBK Real Estate Investment Fund In an attempt to cut costs, companies increasingly tend to locate their headquarters outside Warsaw, and if they choose one of the regional capitals, it is never the city center. This allows to save on office space and reduce the labor costs. Keeping costs low is extremely important in the back office and outsourcing.

In these sectors, the office does not have to be the company’s showcase. What matters is that the office can be easily accessible for employees. The location outside the city center not only helps reduce costs, but also allows a company to remain “invisible” to the ultimate customer. The office buildings where the company’s internal processes (HR, accounting, call centers, logistics, storage) are handled should ensure comfortable working conditions and space efficiency. At the same time, it should be borne in mind that savings can be made thanks to a cheaper location, but not at the expense of the quality and standard of the office space.

68 :: polish market ::

1-2 /2013

operational tasks. SSC are spinoffs of the corporate services, de­ signed to separate all operational type of tasks from the corporate headquarters, which has to focus on a leadership and corporate gov­ ernance type of role. :: Research and Development Centers (R&D centers) are intended as an instrument to maintain the com­ pany’s competitive advantage, and therefore they typically take the form of a SSC, providing servic­ es for one particular corporation.

However, in business sectors re­ quiring huge research outlays, it occurs that R&D centers work for a number of often heavily compet­ ing corporations (such as SiemensNokia). :: Outsourcing can also be catego­ rized in terms of the distance be­ tween the client and the provider.

If outsourced serviced are con­ tracted in another country or even continent, the procedure is called offshoring. If the provider’s coun­ try neighbors the client’s one, then outsourcing is referred to as near­ shoring. Finally, contracting ser­ vices from a domestically-located supplier is called nearshoring.

Because it’s cheaper The most common reason why compa­ nies, in Poland but also in other coun­ tries, decide to outsource is cost re­ duction and cost savings. This trend is especially evident in the current period of recession. In one of the in­ terviews, Marcin Jurczak, a Partner

at Ernst & Young said: “I know not a single company in which a decent in­ ternal accounting and tax department, staffed by up to 10 people, would be cheaper than outsourcing”. Inquired by “Polish Market”, Jurczak also points to the economic attractiveness of the Polish workforce. “They earn signif­ icantly less than their peers in West­ ern Europe. Another reason is the ge­ ographical proximity of Poland - the same time zone, the same culture. Our advantage is also the high mobility of young Poles. We are curious about the world and willing to travel abroad to gain experience,” says Jurczak.

300 outsourcing centers According to data from the ABSL (As­ sociation of Business Service Leaders in Poland), there are already as many as 300 outsourcing centers with for­ eign capital operating on the Polish market. The largest of them are mul­ tinationals such as Capgemini, Gen­ eral Electric, IBM, France Telecom, Hewlett-Packard, Bertelsmann Media, Nokia Siemens Networks, Citi Group, Shell, Accenture, and Infosys. Ac­ cording to “Twój Biznes”, Capgemini and General Electric have more than 3 thousand employees each, Bertels­ mann, France Telecom and Hewlett Packard - over two thousand each, and the remaining companies have a head­ count of around 1-2 thousand. Anna Bartoszewicz, a Director with Jones Lang LaSalle, says that outsourcing companies with foreign capital em­ ploy in Poland about 80 thousand peo­ ple, and the market value is estimat­ ed at over USD 3 billion. A report by PMR Consulting reveals that the rap­ id growth of this market in our coun­ try occurred especially in the last few years. Back in 2008, outsourcing com­ panies employed 46.5 thousand peo­ ple. In 2009, i.e. a year after the global economic crisis hit, 10 thousand jobs were created in BPO in Poland alone.

The main centers Last year’s report by the ABSL shows that the main offshoring centers in Poland are located in Warsaw (54), Kraków (43), Wrocław (38) and Łódź (31). These four cities account for more than half of the service centers with foreign capital operating in Po­ land. Warsaw is home to service cent­ ers of such companies as: Accenture, Avon, City Group, Dimar, Guest-Tek,

IT Hewlett-Packard, IBM, Thomson Re­ uters, TNT Express, CTM Teleper­ formance; Kraków: AFS, Amway, AON Hewitt, Bayer, Capgemini, IBM, KPMG, Lufthansa, Philip Morris, Shell, State Street Corporation, communication Factory, Electrolux, Exult; Wrocław: Capgemini, Hewlett-Packard, McKin­ sey, QAD, Volvo, Wipro; Łódź: Accen­ ture, Citi Group, Infosys, Philips, Er­ icpol Telecom, Fujitsu, General Electric.

Another rapidly developing offshoring hub is the Tri-City, which hosts service centers providing for the needs of such companies as Geoban, Thomson Reu­ ters (in Gdynia), Arla, Compuware, Fi­ neos, First Data Corporation, IBM, In­ tel, Kainos, Lufthansa System Poland, Zensar (in Gdańsk). With more than 20 international service centers, the TriCity is an example of a new outsourc­ ing hub in Poland. “The Tri-City has re­ cently won such investors as Germany’s Bayer and Finland’s Metsä Group. What makes the strength of the Tri-City is a wide availability of high-quality office space. Local developers are perfectly aware of the needs of the internation­ al service providing companies. They are able to develop facilities dedicated to the service industry, which meet the high standard requirements, and even anticipate the market demand,” com­ mented Anna Bartoszewicz.

The future According to Marcin Jurczak, the out­ sourcing industry, including in Po­ land, will naturally gravitate towards specialization. It will not be an easy process though. “Only the centers of competence (KPO - Knowledge Pro­ cess Outsourcing, R&D, etc.) can en­ sure the transfer of knowledge, tech­ nology and experience. They are often a career stepping stone for graduates too. Many of them are very different from the factory-like offices typical of large SSCs or BPOs. But switching from providing simple services to advanced ones is an evolutionary process and cannot be taken for granted. Poland is facing fierce competition in this field, and it needs to learn a lesson to harness this opportunity. Economic advantag­ es alone are not sufficient in the case of knowledge outsourcing.

Jacek Levernes, Vice President of HP GBS EMEA, Board member of HP Europe and President of ABSL, con­ firms this opinion. In his view, there is a strong trend to locate in Poland

advanced knowledge-based services, including consulting, business analysis and legal advice. “Outsourcing centers perform ever more complex projects, and their primary function evolves to­ wards the development of innovative process and technology solutions that are implemented in a number of cor­ porate branches across the world. This way, Polish branches are increasingly playing a strategic role in international corporations. According to the Associ­ ation of Business Service Leaders, over the past two years 90% of outsourcing centers have modified the profiles of their activities through the introduc­ tion of more advanced services. It is a great opportunity for the Polish econ­ omy,” says Levernes.

Unlimited potential of outsourcing The outsourcing market in Poland will evolve based on the demand for specific services. The above mentioned report

by PMR Consulting points to the fact that in global terms the IT outsourc­ ing gives way to the outsourcing of business processes. The types of out­ sourced functions change over time, depending on the current needs and the market situation in the host coun­ try. Thus, the higher the saturation, the more complex business processes can be handled. At the same time, it seems that the list of such services is open and constantly evolving. For example, it becomes quite common to outsource certain management functions. The potential of outsourcing is almost un­ limited, especially that there is a rea­ son to expect that it will also develop in smaller cities. Besides, considering the whole Central and Eastern Europe, the report notes that the market of ser­ vices for local companies is underde­ veloped, while the CEE countries re­ main far behind Western Europe (e.g. in Belgium as much as 80% of compa­ nies use outsourcing services).

The public sector can be a poten­ tial outlet for the outsourcing servic­ es too. Yet, in our part of Europe they have been limited to the private sec­ tor so far. “In Western countries, many functions of central and regional ad­ ministration are transferred to the pri­ vate sector. The key argument that is likely to encourage the local author­ ities in Central and Eastern Europe to outsource certain tasks is the cost optimization,” the report forecasts.

Jacek Levernes Vice President of HP GBS EMEA, Board member of HP Europe and President of ABSL The crucial thing while selecting a location for a center providing advanced knowledge-based services is the quality of a “human resources pool”, that is access to a highly-skilled workforce. We have much to offer here. In 2011, 450 Polish universities served nearly 2 million students. Polish professionals, especially financiers, IT specialists and engineers are highly valued all over the world. Poles are distinguished by their diligence, flexibility, selfreliance, as well as the ability to cope in crisis situations and work under pressure. We offer know-how and experience necessary to handle advanced services and strategic projects. Although currently 27% of working age Poles hold a higher education diploma, their qualifications do not always correspond to the real needs of employers. Students and graduates do not have sufficient practical skills. They also lack the understanding of the labor market, economic phenomena and business environment.

A good solution seems to be the cooperation between universities and business in creating curricula and teaching courses.

Marcin Jurczak Managing Partner EMEIA Ernst & Young Global Talent Hub Kraków or Wrocław have become the real “outsourcing ecosystems”. But there are also other very popular cities such as Łódź, Poznań and the Tri-city. From my experience, I can say that not all decisions about the location are as thoughtful as it seems. Determining is often the fact that others do so too, and a part of the ecosystem is overestimated. You could even say that the accumulation of centers providing similar services becomes a burden and a factor in the high staff turnover between them. That is why, it is worth looking at the cities that have already hosted first investments, such as Lublin, Rzeszów, Toruń and Bydgoszcz, but have not risen to the status of an outsourcing hub yet. Ernst & Young located its two large back office centers in Wrocław, and now we are building a knowledge center in Łódź and Warsaw. While it is not so difficult to find workforce to handle relatively simple processes (provided by the SSC and BPO), then it is much more of a challenge when it comes to the advanced services like KPO (Knowledge Process Outsourcing).

That said, I must admit that in big cities (like Wrocław) the outsourcing market is definitely the employee’s market. One solution can be joint programs run by the outsourcing providers and universities educating future employees. A couple of companies and universities have already successfully embarked on such a cooperation.

“Further development involves ex­ panding the scope of operations. Out­ sourcing centers increasingly pro­ vide services for clients not only from Western Europe and the United States, but also from India, Africa and the Middle East. Units located in Poland usually handle projects in various ar­ eas, such as finance and accounting, IT or HR. This is because projects are complex and comprehensive support is needed,” says Jacek Levernes. :: 1-2 /2013 :: polish market :: 69

Law

A sea of possibilities Michał Paprocki In 2011 wind farms in the EU had a total capacity of 93,957 megawatts (MW), which represents 6.3% of elec­ tricity generation structure. Since 1995 the EU wind power sector has seen an average growth rate of about 15.6% per year. This rate is even high­ er for offshore wind farms, which are considered to be the future of the European RES sector. The European

Wind Energy Association (EWEA) has set a target of 40,000 GW of offshore wind energy to be installed in the Eu­ ropean Union by 2020, with an annual market growth rate assumed at 28%.

Recently, compared to nuclear power plants, offshore wind farms are not only more environmentally friendly but, at the same time, more advantageous from the economic

Fig. 1. Cumulative and annual offshore wind installations in EU (MW) 1,000 900 800 700 600 500 400 300 200 100 0

2000

2001

2002

2003

2004

2005 H1

2006

2007

2008

2009

2010

2011

2012

Full year

Fig. 2. Annual installed offshore wind capacity in Europe (MW) 1000

4500

900

4000

800

3500

700

2500 500 2000

400

1500

300 200

1000

100

500 0

At present, a large proportion of ap­ plicants are domestic energy compa­ nies that lack experience in the off­ shore wind power industry. Therefore, it is worth holding talks with leading foreign investors, aimed primarily to back up technological background of the projects carried out in the Baltic Sea. ::

2011

2010

2009

2008

2007

cumulative (right axis)

2006

2005

2004

2003

1-2 /2013

2002

70 :: polish market ::

2001

2000

1999

1998

1997

1996

1995

1994

1993

annual (left axis)

(MW)

(MW)

3000 600

point of view. Offshore wind farms are so successful thanks to their effi­ ciency and effectiveness. An offshore wind turbine has an average capacity of up to 6 MW, approx. 3 times more than a turbine installed on land. It is estimated that offshore genera­ tors will reach up to 15 MW with­ in a few years. In addition, owing to their location, offshore wind farms have a higher installed capacity uti­ lization rate.

Poland does not have any offshore wind farm yet. Nevertheless, the po­ tential to build offshore wind farms in the Baltic Sea creates a market that is of interest to major national and in­ ternational energy companies. This is also helped by the removal of admin­ istrative and legal barriers and crea­ tion of favourable conditions for the development of the offshore sector in Poland. Enacted in 2011, an amend­ ment to the Act on Maritime Zones of the Republic of Poland and Maritime Administration has set new rules for location of offshore wind farms in Po­ land’s maritime areas. The National Renewable Energy Action Plan as­ sumes that offshore wind power sec­ tor in Poland will achieve a total in­ stalled capacity of 500 MW. As a result, more than 60 applica­ tions worth over PLN 400 billion have been filed for the location of offshore wind farms. A decision granting the right to use a given part of Poland’s ex­ clusive economic zone is issued in the form of a permit for the location of ar­ tificial islands. Such a permit shall be valid for 30 years, renewable for fur­ ther 20 years. As yet, 8 applications have been examined, 6 of them being successful. The next stage of the pro­ ject involves obtaining environmental approvals and construction permits, including the one for laying subma­ rine cables.

The author is a lawyer, partner at Kancelaria Radcowska Chmaj i Wspólnicy

Law

Amber Toga 2012 “Polish Market,” in cooperation with Kozminski University’s Law School, has prepared a ranking of law firms. The ranking was compiled on the basis of a survey carried out among law firms. Only 43 from among 250 firms made it to the ranking. The maximum score was 20. Each category spanned from 0.5 to 2 points, which were scored on the basis of information obtained from the participating firms. ::

No. Name

Location

A

1

Kancelaria Prawna Filipek&Kamiński Sp.k.

Lublin / Warszawa

2

Chałas i Wspólnicy Kancelaria Prawna

Warszawa

3

Kancelaria Adwokatów i Radców Prawnych P.J.Sowisło&Topolewski sp.k.

Poznań

4

M. Mazurek i Partnerzy Prawnicza Spółka Komandytowa

Warszawa

5

Wierciński. Kwieciński. Baehr Sp. k.

Total

B

C

D

E

1

11

0

14

15

11

3

19

4

5

3

10.5

7

15

12

8

5

10

1

12

2

4

1

9.5

Warszawa

15

14

7

6

8

9.5

score

6

Kochański Zięba Rapal i Partnerzy

Warszawa

12

9

8

8

0

9.5

7

KKG Kubas Kos Gaertner - Adwokaci sp.p. Sp.k.

Warszawa

15

4

14

5

21

9.5

8

R. Olszewski. J. Tokarski i Wspólnicy Kancelaria Prawnicza sp.k.

Warszawa

6

4

2

9

0

9

9

Chmaj i Wspólnicy Kancelaria Radcowska Sp. k.

Warszawa

3

20

0

5

10

9

10

Tokarczuk. Jędrzejczyk i Wspólnicy - Kancelaria Prawna GLN Spółka komandytowa

Warszawa

8

10

4

3

16

8.5

11

Ślązak. Zapiór i Wspólnicy Kancelaria Adwokatów i Radców Prawnych Spółka Komandytowa

Katowice

8

13

11

8

2

8.5

12

Budzowska Fiutowski i Partnerzy. Radcowie Prawni

Kraków

0

6

0

8

3

8

13

CWW. S. Cetera. M. Węgrzyn-Wysocka i Wspólnicy Kancelaria Radców Prawnych i Adwokatów Spółka Komandytowa

Wrocław

3

20

0

10

8

8

14

GFKK Grzybczyk. Kałuża. Kamiński i Partnerzy Radcy Prawni Sp. p.

Katowice

0

9

0

5

5

7.5

15

Kancelaria Radcy Prawnego Andrzej Mikulski

Kraków

1

5

1

4

7

7.5

16

Kancelaria Prawna Piszcz. Norek i Wspólnicy sp.k.

Poznań

1

18

1

9

4

7.5

17

Traple Konarski Podrecki i Wspólnicy sp.j.

Kraków

21

5

3

6

4

7.5

18

Kancelaria Prawna Chajec. Don-Siemion & Żyto Sp. k.

Warszawa

2

19

2

7

6

7.5

19

Sójka & Maciak Adwokaci Sp. k.

Poznań / Warszawa

9

10

5

5

4

7.5

20

Porwisz i Partnerzy - Adwokaci i Radcowie Prawni

Kraków / Warszawa

7

4

3

6

0

7 7

21

Kancelaria Adwokatów i Radców Prawnych Baczańska Szarata Spółka Partnerska

Zielona Góra

1

3

4

5

1

22

Kwaśnicki. Wróbel & Partnerzy-Radcowie Prawni Spółka partnerska

Warszawa

3

10

1

7

3

7

23

Kancelaria Prawna I. Korczyńska i Wspólnicy Sp. k.

Wrocław

0

6

0

1

3

7

24

"Obligo" Sieczkowski i Spółka Kancelaria Adwokacka Sp. k.

Łódź

4

2

3

6

7

7

25

Kancelaria Prawna Jatczak i Wspólnicy Sp. k.

Poznań / Warszawa

1

9

0

2

3

7

26

Gach. Hulist. Mizińska Wawer Adwokaci i Radcowie Prawni sp.p.

Kraków

1

4

1

5

0

6.5

27

Malinowski Płachta i Wspólnicy Radcowie Prawni Sp. p.

Warszawa

1

4

1

4

2

6.5

28

Kuczek-Maruta Kancelaria Radców Prawnych

Kraków

0

3

0

4

0

6.5

29

Kozłowski. Śmigielska i Wspólnicy Sp. k.

Warszawa

1

5

2

5

2

6.5

30

Jaworski Pogoda Gładki Adwokaci i Radcowie Prawni sp. k.

Kraków

2

4

1

4

2

6.5

31

Trusiewicz Siwko Kancelaria Prawna Radców Prawnych Sp.p.

Warszawa

7

9

0

5

0

6.5

32

BSO Prawo&Podatki Bramorski Szermach i Wspólnicy Kancelaria Prawna Sp. k.

Wrocław

1

4

1

0

4

6

33

Adwokat Rafał Pirożek Kancelaria Adwokacka

Katowice

3

0

3

0

1

6

34

Kancelaria Radcowska Mariusz Boruch

Proszowice

0

1

0

4

6

6

35

Siwek Gaczyński & Partners

Warszawa

6

9

2

2

1

6

36

Kancelaria Adwokatów A. Dudkowiak. T. Kopeć SP.J. / Dudkowiak&Kopeć Business Lawyers

Zielona Góra

3

1

6

0

6

6

37

Talarczyk i Roessler spółka partnerska radców prawnych

Tychy

0

5

0

2

0

5.5

38

Kancelaria Prawna dr Marek Jarzyński & Kornel Novak

Poznań

0

5

0

1

2

5.5

39

Tomasik. Pakosiewicz i Wspólnicy Spółka Komandytowa

Kraków

3

1

3

0

0

5.5

40

Kancelaria Radców Prawnych Kowalski. Popłowski i Wspólnicy S.C.

Legnica

0

2

0

2

1

5.5

41

Kancelaria Prawna Renata Urowska i Wspólnicy Spółka Komandytowa

Poznań

2

4

1

5

3

5.5

42

Weremczuk. Bobeł i Wspólnicy Kancelaria Radców Prawnych

Warszawa

0

4

0

2

3

5

43

Kancelaria Radców Prawnych M. Wojciechowska-Szac. G. Kotarba s.c.

Warszawa

2

4

0

3

4

5

A - Number of solicitors/barristers employed in 2012 (as on July 31, 2012) B - Number of legal advisers employed in 2012 (as on July 31, 2012) C - Number of solicitor/barrister trainees in 2012 (as on July 31, 2012) D - Number of legal adviser trainees in 2012 (as on July 31, 2012) E - Number of trainees on placement in the firm in 2012 (as on July 31, 2012)

1-2 /2013 :: polish market :: 71

Cultural Monitor Compiled by Maciej Proliński The Year of Lutosławski As much as PLN14.8 million has been earmarked by the Minis­ try of Culture and National Her­ itage for the celebration of the 100th anniversary of Witold Lutosławski’s birthday (19131994) to commemorate one of the greatest composers of the 20th Century. At the request of Bogdan Zdrojewski, Head of the De­ partment, the celebrations were placed under the patronage of the UNESCO. As a result, 40 cities in 18 countries will hold over 100 events to commemorate this outstanding artist. The pro­ gramme will feature symphony and chamber music concerts, re­ citals, conferences, symposia, and various publications, both mul­ timedia and on CDs. The inauguration of the national Lutosławski Year celebrations, which is to take place on 25 January 2013, will be dignified by the performance by Anne-Sophie Mutter, accom­ panied by the National Philharmonic Symphony Orchestra, di­ rected by Antoni Wit. In 2013, the National Audiovisual Institute is to release a unique six-CD publication entitled “Lutosławski / świat” [Lutosławski / world], featuring 5 CDs and a DVD. The se­ ries puts the artistic heritage of the composer in a wider perspec­ tive - cultural, social, and civilisational. The recordings had been sourced from the archives of Polish Radio and, in the case of the DVD, from the archives of the Documentary and Feature Film Pro­ duction Company (WFDiF). ::

The Jubilee Zadymka Jazzowa (Jazz Spree) Bielska Zadymka Jazzowa, with its 15th edition to take place on January 29 to February 3 2013, is to celebrate a double jubilee.

For 10 years the Festival has been sponsored by the Lotos Group, hence the two parts of its name - The Lotos Jazz Festival – Bielska Zadymka Jazzowa. The event is to be organised under the banner of jazz legends and classics, but also some worldwide premieres, latest discoveries, and musicians who have been shaping the image of contemporary jazz music in Europe and America. A particularly promising item on the programme is the concert at the Klimat Galerii Sfera Club, scheduled for 30 January, that is to feature the clash of two outstanding alto saxophonists. The “Battle of the Sax – Altissimo!” concert will see such performers as Kenny Garrett Quintet and Henryk Miśkiewicz Full Drive 3, and Michael “Ptaches” Stewart. The Zadymka finale will treat the audience to a performance by Us3, a British acid-jazz legend. ::

Recommended publications “Męskie Granie 2012” (Men Playing) – Polish Radio – 2CDs This 3rd album in the series released by Pol­ ish Radio and the Żywiec Group, presents a selection of songs from the summer tour organised under the same name. This year, the musical image of the album was created by the new artistic director of the project, the lead singer of a rock band called Hey, Katarzyna Nosowska. The album features a selection of tracks re­ corded during concerts in Warsaw, Kraków and Gdańsk, given by renowned Polish performers, such as Marek Dyjak and bands like Hey, Dezerter and Muzykoterapia, as well as some less-experienced but already-celebrated musicians, including first-timer females to the tour Julia Marcell and Kari Amirian. Undoubtedly, the Męskie Granie (Men Playing) Tour gathers a number of prominent person­ alities, who often represent very distant musical realms. The suc­ cess of this musical undertaking is about its diversity and unique opportunity to hear completely different tunes ranging from clas­ sical music to rock and experimental club music, and all this on a single stage. This album is just a small footprint left after the event but still it’s worth having on the shelf!

72 :: polish market :: 1-2/2013

“Neurotyki” (Neurotics) – Olek Klepacz – Polish Radio - CD Olek Klepacz, composer, songwriter and leader of the “Formacja Nieżywych Schabuff” band has released his first solo album. “I’ve decided to show the audience a somehow different, more intimate side of me. The personal, romantic and neurotic emotions that tor­ ment my inner self gave me this solo,” declared Olek, who performs accompanied by a string quartet and several Polish instrumen­ talists with an established position on the Polish stage, includ­ ing Adam Niedzielin, Leszek Szczerba, Sebastian Karpiel-Bułecka and Mateusz Pospieszalski. The album treats the listener to a set of tunes that is easy on the ear and has a certain hit quality to each track. The release is a combination of some well-known, rhyth­ mic and melodic tunes that may sound somewhat familiar but still sound appealing and coherent. The lyrics are generally intriguing and thought-provoking, or even controversial... The musicians, in turn, move around the sound realm very skilfully, and sometimes their performance is just brilliant.

“Bohdan Łazuka. 40 piosenek” (40 songs) – Polskie Nagrania - CD Bohdan Łazuka is one of the most popular and acclaimed Polish singers and actors. This apprentice of Ludwik Sempoliński earned

Cultural Monitor

his name mainly in comic parts. Since the very beginning of his ca­ reer he has been associated with the Syrena Theatre in Warsaw. He used to perform, in the Szpak and Starszych Panów cabaret bands.

This collection of 40 songs is an accurate, albeit minute, profile of this magnificent singer and a real treat to all fans of old but wellcrafted songmaking. These performances stand up for themselves after all those years, no two ways about it. Łazuka is an indisput­ able legend (those who admire his talent only compare him with such titans as Sinatra or Aznavour), and the bulk of this selection forms absolute classics nowadays. At first glance there is nothing new to it (a mixture of Marian Hemar, Wojciech Młynarski, Bulat Okudzhava, Janusz Sent and Jerzy Wasowski). But still, this music combines freedom and gallantry in a way that makes each compo­ sition and each individual performance become a tiny little mar­ vel of lyrical music.

“Żyj mój świecie” (Live, my world) – Maryla Rodowicz – Universal Music - CD This first album opens a unique series that starts with the end of 2012 under the name of “Antologia Maryli Rodo­wicz” (Anthol­ ogy of Maryla Rodowicz), as a tribute to a truly iconic personage of the Polish scene.

It will present a collection of all the albums that have been released since 1970 until the present day! The an­ thology will be made of all-time goodies to delight all fans of the artist, including albums that have only been released on vinyl re­ cords and songs that had never made it to any release, such as concert performances or film songs. The journey starts in the late 1960s with musical fascination with American folk music and the acoustic sounds of the guitar. At the time, Rodowicz, as the front woman, created the band called “Maryla Rodowicz i jej gitarzyści” (Maryla Rodowicz and her guitarists). All fans with a liking for the most popular hit songs produced by Rodowicz throughout her ca­ reer might be taken aback by this first release. Yet it will let them find what is most characteristic of Rodowicz - a great voice, mov­ ing lyrics (by some prominent Polish songwriters) and a piece of really emotional music.

“The best of Polish Jazz 1964-1990” – Polskie Nagrania – 3CDs The jazz movement in Poland emerged in the second half of the 1950s. It was at that time that this exceptional talent made his way on the Polish jazz scene to leave a mark on all musicians that cooperated with him and later came to be the pillars of the Polish jazz world (Tomasz Stańko, Michał Urban­ iak, Zbigniew Namysłowski, to name but a few), as well as on the next generations of Polish jazzmen. This man was Krzysztof Kome­ da – a prematurely-deceased pianist and composer – a self-taught musician. “Polish Jazz” is a series made up of as many as 76 albums produced by Polskie Nagrania between 1964 and 1990, originally released as vinyl records to be later republished on CDs, also in the form of compilations of songs taken from different albums with­ in the series. Nearly half a century from the first release under the “Polish Jazz” label, the house releases a “the best of...” selection - a monument to Polish jazz music. The first CD (most experimental) is

a cross-section through five top albums and bands of the 60s (fea­ turing the quartets of Tomasz Stańko and Zbigniew Namysłowski, the quintets of Krzysztof Komeda and Andrzej Kurylewicz, and the sextet of Andrzej Trzaskowski). The second CD presents Polish jazz that draws on contemporary pop music. (music by the bands of Michał Urbaniak and Wojciech Karolak, the Young Power band, and songs by Ula Dudziak and Staszek Soyka). The third CD fea­ tures top Polish traditional-jazz bands (including the Old Timers, the Vistula River Brass Band, Asocjacja Hagaw, and Sami Swoi). In its every release, Polish jazz proves that it can intrigue the audi­ ence and rock the improvised compositions.

“Marley” – Best Film - DVD Polish stores have just welcomed a bril­ liant documentary, directed by Kevin Mac­ donald, on the reggae music legend – Bob Marley. It is the first production to enjoy authorisation from Marley’s family and it features some previously-unpublished ma­ terial. It is not merely a portrait of the art­ ist – for Jamaican reggae he was and still is a guru. He was the first artist born in that country to receive global acclaim. A vocal­ ist responsible for such all-time classics as “Exodus” and “No Woman, No Cry”. This movie is also a chronicle that bears witness to custom-related, social and political transformations that have taken place in his homeland. The film has already garnered most favourable reviews from film critics worldwide. “A passionate, purposeful portrait of a truly-inspiring musician,” commented "The Sun." Definitely...

I believe that the merit of this piece of work, and indeed of Mar­ ley himself, as well as a certain guarantee confirmed by a num­ ber of social certificates, lies in the truth. I find it difficult to re­ count what aspect of the movie I like the most – whether it is the family, love, musical, or the political one... All I know is that all of them add up to create an experience of truth thrown in your face straight from the screen.

“Kobra 3” – TVP – 3DVDs This collection features 3 real cult “Cobras” (criminal performanc­ es of the TV theatre from the 60s and 70s). During its peak popu­ larity, the “Cobra” gathered 90% of the audience. Nowadays, the audience might be amazed that performances with only a handful of actors performing against a “plywood” set, can inspire great­ er horror than many contemporary thrillers. What lies behind the phenomenon of the highly-popular “Cobra”? I reckon that during the omnipresent shortages characteristic of communist rule, Pol­ ish ingenuity still managed to prevail in art and entertainment.

The box comprises Janusz Morgenstern’s “Znowu łut szczęścia” (A stroke of luck again), Marek T. Nowakowski’s “Śmierć w samo­ chodzie” (Death in the car), and Henryk Drygalski’s “Brydż” (The Bridge). The first story, with remarkable acting by Wiesław Mich­ nikowski as a private detective, who carries out an investigation into a stolen pearl necklace, was produced in 1962.

It was set in a foreign context – in Rome. The other two, pro­ duced already in the 1970s, tell about bright Polish militia officers, investigating mysterious murders. The whole box is a true whodun­ it, and a well-thought-out and played one. I can, therefore, vouch for it to be quality entertainment.

1-2/2013 :: polish market :: 73

Culture

A reverence for history and new challenges

Photo: Piotr Pękala for Art&Business

Maciej Proliński

Zofia Gołubiew

The National Museum in Kraków, established in 1879, was the first na­ tional institution of its type for Poles, who at that time had no state or coun­ try of their own, as it was partitioned by three invaders. Until the end of World War I the National Museum in Kraków had been the only large open museum on Polish soil. Since then it has remained a place with the largest number of collections (20), permanent galleries (12) and departments (10).

According to the prestigious British “Art Newspaper”, it is currently the only Polish institution to be listed as one of the most popular museums in the world. The museum is visited by more than 650 thousand guests an­ nually. “The museum protects the na­ tional heritage it is entrusted with. It does so using modern means, but with a deep reverence for tradition. Owing to this – we hope – it will find itself in a prominent place with a signifi­ cant role to play in a united Europe.

For museums this is a time of change and they are seeking new forms of communication. Audiences are also changing their expectations. It is our role to actively respond to them. Our

74 :: polish market ::

1-2 /2013

greatest value resides in our authen­ tic interiors and works of art. We need to strike a balance between this value and new media, and new platforms of communication with the consumers of art – between the rich, esteemed tradition and today’s multimedia.

This is by no means, however, the only idea for presenting art in our interi­ ors. I will stress this very strongly. We have a very rich collection. The col­ lection entrusted with the care of the National Museum in Kraków contains more than 800 thousand items from all periods. The core of the collec­ tion is made up of Polish art – paint­ ing, sculpture, drawing, and hand­ icraft,” relates Zofia Gołubiew, the Museum’s Director.

An excellent example of all the good things that come from combining the old with the new – respect for tradition with new needs – is the “New Cloth Hall” project, completed in the sum­ mer of 2010, which involved a thor­ ough renovation and modernisation of the Museum’s Department – The Gal­ lery of 19th-Century Polish Art in the Cloth Hall (Sukiennice). For over 130

years of its history, the Gallery has been one of the most beautiful and rec­ ognisable symbols of Kraków and Po­ land. The investment itself was one of the largest renovation projects in Eu­ rope, which cost over EUR 8,700,000.

It would not be possible without the funds from the Norwegian Financial Mechanism and the Ministry of Cul­ ture and National Heritage. The mu­ seum also obtained support from the Social Committee for the Renovation of Kraków Historical Monuments. The colours of 196 old paintings, including such enormous canvasses (each meas­ uring nearly 30 sq. m) as “Nero’s Torch­ es” by Henryk Siemiradzki and Jan Matejko’s “Kościuszko at Racławice”, and also 19 sculptures have been re­ turned to the walls. All this in an area of one thousand sq. m plus a new mul­ timedia hall, touchscreens and terraces with a view of the Main Square!

“I have been the Director of the Mu­ seum for 13 years. Until recently I was the only woman in Poland in such a position. What have I been fighting for the most? Above all to improve the museum’s infrastruc­ ture. We have managed to pull off a thorough revival of the institution.

Without underplaying my roles as in­ itiator and supervisor I have to em­ phasise that it was a massive team effort. We have cooperated with nu­ merous institutions, museums, the­ atres, schools, universities, and lo­ cal authorities. This collaboration is very valuable to me. It enables us to hold festivals, concerts, and perfor­ mances. This inspires a lot of cultur­ al activity in and around the muse­ um. There are so many fascinating things going on besides our basic ac­ tivities. It is worth remembering that it was our institution that introduced the Night of Museums to Poland eight years ago. Our plans for 2013 involve the organisation of more than ten exhibitions and, most importantly, the opening of three of our Depart­ ments after renovation and moderni­ sation – the Karol Szymanowski Mu­ seum in the “Atma” villa in Zakopane (May), the European Centre of Polish Numismatics in the Emeryk HuttenCzapski Museum (June) and the EU­ ROPEUM European Culture Centre in the historic granary at 6 Sikor­ skiego Sq. (September),” invites Zofia Gołubiew. ::

Culture

Events calendar or...

Photo: Michał Rusinek

Not to be missed at the National Museum in Kraków!

On 1 February 2013, which marks the first anniversary of the death of the Nobel Prize-winning Polish poet Wisława Szymborska, the National Museum in Kraków and the Wisława Szymborska Foundation inaugurate the “Szymborska’s Drawer” exhibition in the Szołayski House.

Szymborska’s poetry is a unique lyrical voice with an unprecedented depth of expression, with distinct philosophical overtones. Her work was distinguished by precision, pithiness, frequent use of irony, paradox, and perspective. Her poetry broadened your horizons. Although it grew out of the Polish historical and geographical landscape, it was universal. Her books – just a dozen or so collections – were translated into 42 languages!

“Wisława Szymborska was the Ambassador of the Gallery of 19th-Century Polish Art in the Cloth Hall. For this reason, the National Museum in Kraków, which has always

been grateful for this honour, put forward a proposal to the Wisława Szymborska Foundation regarding some of the poet’s heritage. We offered several recently-renovated rooms in the Szołayski House to organise an exhibition of Szymborska’s collections, cut-outs, knick-knacks, books, and items from her flat, including the famous chest of drawers and sofa. We wished to bring those valuable memorabilia out of the storeroom and make them available for audiences to see.” relates the Director of the National Museum in Kraków, Zofia Gołubiew. “Our proposal was accepted by the Foundation, especially since it has inherited the title of the Ambassador of the Gallery in the Cloth Hall. Jointly with the Foundation and designers we have prepared a place called “Szymborska’ Drawer”, which is neither a reconstruction of her flat nor a chamber of memory, but rather an interior furnished in a slightly surreal style that was her own.”

From 22 March to 16 June 2013, the Main Building of the National Museum in Kraków will be holding “Obłęd” (Insanity) – a large cross-sectional exhibition of Edward Dwurnik, one of the most popular and recognised contemporary Polish painters. The exhibition covers over 100 paintings by the artist, divided into 15 cycles created from the second half of the 1960s until the first decade of the 21st Century. The presentation of works produced over more than 40 years will be a cross-sectional exhibition, but not a retrospective.

“It will feature a broad selection of works created as part of cycles which were developed over many years. In this way we are following the artist’s way when it comes to organising his works. The selection is subjective, however. It is as little or so much as yet another voice “regarding Dwurnik”. The

exhibition’s title refers to a colloquial, but ambiguous expression – similar to the ambiguity of the artist’s paintings. On the one hand it is madness, and on the other, it hints at something extraordinary, incredible, amazing. We often hear that something was “pure insanity”. Something can be “insanely great” and someone can look “insanely gorgeous.” On visiting the exhibition, you should take note of the relationship between Dwurnik’s art and the Polish reality of the last four decades. This is aided by the evocative titles given to paintings by the artist and the biographical sketch distributed in the exhibition area, the folder and brochure, which contains key information about Dwurnik’s oeuvre, and also about the social, political, and artistic events shaping the context for interpreting his art,” stresses Dominik Kuryłek, Curator. ::

1-2 /2013 :: polish market :: 75 Background photo: Edward Dwurnik – „Prayers under Helicopters” from „My Heroes” series, 1972, linocut, ink, felt tip, colour pencil, 33,7 x 51,3 cm, property of the artist.

Culture

Possibly the last spurt of honesty Acclaimed actor and director Jerzy Stuhr talks to Maciej Proliński.

“Imagine Washington D.C. had a theatre school that featured Meryl Streep, Dustin Hoffman or Robert de Niro in the faculty. There’s no such school there! Whereas in Poland a host of numerous excellent Polish actors, such as Krzysztof Globisz, Jerzy Trela, and Jerzy Stuhr, are Professors at theatre schools,” pointed out Bogdan Zdrojewski, the Minister of Culture and National Heritage during the inauguration of the academic year 2012/2013 at the Ludwik Solski State Drama School in Kraków. That’s a rather comforting point, isn’t it, Professor?

For me it’s perfectly natural to rec­ ognise that handing down knowledge is a part, and I don’t think it’s too strong a word, of our mission. Maybe not so much a mission as a very important

76 :: polish market ::

1-2 /2013

element of our experience as actors.

The things I’ve learnt, experienced, achieved - I know I just have to share them with others, and do it quickly. As I said, it comes naturally to me – after all, I too had the occasion to be taught by the great figures of the Polish theatre – Prof. Danuta Michałowska, Prof. Ewa Lassek, Prof. Jerzy Jarocki. I was per­ sonally involved in teaching in differ­ ent schools across the world, in Buenos Aires, in New Haven and, of course, in Italy, where I did a lot of teaching. True, rarely do you see such an ensemble of teachers working in one place. One year students can have a good teach­ er, while the next year there will be no one they can take inspiration from. So you see, such an ensemble, a constella­ tion of great names, is definitely a dis­ tinctive feature of our artistic schools.

I want to retire, but they won’t let me.

Today, as a lecturer in two faculties, I use a slightly different approach to what I teach. I put more emphasis on tech­ nical courses. The generation gap has grown so wide that I sometimes can’t make sense of what these young people actually represent and want. Contem­ porary theatre aesthetics are chang­ ing so much. When Ignacy Gogolews­ ki played Gustaw-Konrad in “Dziady”

by Adam Mickiewicz, directed by Alek­ sander Bardini in 1955, it was a great ro­ mantic impulse. 20 years later, the gen­ eration of my parents simply couldn’t come to like Jerzy Trela, as he played Gustaw-Konrad in a performance di­ rected by Konrad Swinarski. I too find some of the modern-day aesthetics in the contemporary theatre some­ what “unengaging”, and tend to keep myself uninvolved. I believe it’s mal­ practice to compile different pieces on stage. Whereas the modern-day gen­ eration... they do as they please, put­ ting together Hanna Krall’s work with Eurypides, just like that. They don’t flinch from that. Sure, young directors might need me, but I think that what they need more is to gain the experi­ ence I have to think beyond the clichés.

Minister Zdrojewski often talks about the inherent responsibility of the State for culture. How would you, Professor, see this responsibility? I, for example, keep on hearing voices like “Why is culture so expensive?” This conviction still lingers on...whereas ignorance in this area can cost us even more.

I’ve recently been to Australia. I was invited to a charity dinner. It was held on an old jetty, which is now adapt­ ed for theatrical purposes, and there was this table for a thousand guests.

I’ve never seen such a table in my life.

And though I wasn’t particularly look­ ing forward to taking part in this din­ ner, I did want to see what was going on there. As it turned out, the whole event was put together by local businessmen.

They were working for their charitable cause, and the cause was to support theatres. On a side note, what I found out there was that for two and a half thousand dollars you could have a din­ ner with, for instance, Cate Blanchett,

Culture who would later put this money into the theatre. At this point, a question cropped up in my mind: now, aren’t these artists taking over that which is essentially the obligation of the State?

It was just beyond my comprehension; the idea didn’t feed into my mentality.

In fact, in every political system I have seen, it is State that primarily takes care of culture. Even the communists recognised and fulfilled this role. They felt it was their mission to “save” Pol­ ish culture. I have to admit, paradox­ ically, it’s never been worse than it is today. I wouldn’t get along with peo­ ple who claim that culture has to fend for itself. To my mind, certain types of art which have the ambition to stay ahead of their time simply have to be supported by the State. There is also the question of whether we can invert these unfavourable proportions and render the relationship between cul­ ture and the economy much stronger by overcoming some mental barriers at work. I also hope that one day some­ one will help bring down these barri­ ers and build the bridges between cul­ ture, the economy and State patronage,

since this is the right way to increase innovation in Poland.

The more so that Polish culture has for years been our great and constant pride....

Culture has always been the flag­ ship of Poland. Polish music is ac­ knowledged across the world, espe­ cially in Europe. We remain present on the international stage. We have a good artistic rapport with the world.

The Polish theatre continues to en­ joy high international acclaim. This is much less the case today with the cin­ ema, which I think is our fault, includ­ ing especially the young generation.

After all, we’ve already “wallowed” through all the red carpets and fes­ tivals. I believe there’s too much selfpreoccupation among the young Pol­ ish filmmakers. And because of this they seem to be unable to translate their ideas into a language that is uni­ versal, intelligible everywhere. In my day, I’ve certainly witnessed at least two great examples of Polish art, in the area I represent, being rendered uni­ versally understandable. The first one

involved a theatre piece. It was made

by Tadeusz Kantor, who put together a play about his home village of “Wielo­ pole”. Ultimately, he made his small, provincial universe from near Tarnów internationally famous. The other one involved the cinema. It was Krzysztof Kieślowski, with his 10 films about the Stawki Estate in Warsaw and the people who lived there. The message of “The Decalogue” films is understandable beyond cultural boundaries.

We are dealing here, Professor, with what is essential for art and its interpretation. The question is, for example, what does it mean to be an artist, a performer? In your new book “Tak sobie myślę” (“I was just thinking”) – a unique “journal of life”, which is not only an account of your struggle with illness, but a testimony of your love for art as well – you are very complimentary about two new Polish films: “Róża” (“Rose”) by Wojtek Smarzowski and Marek Lechki’s “Erratum.” I was very happy about this praise, as I think that these two films, with ADVERTISEMENT

1-2 /2013 :: polish market :: 77

Culture essentially different styles and stories, end with a similar, grand and universal finale. Just like in Tarkovski’s films. And I must admit, it has always been distressing to hear that some people might be “unable to understand” what I meant by that in my reviews.

You have to get used to the fact that Tarkovski’s films have, after all, a narrow audience. You’ll find his fol­ lowers everywhere in the world, but they are still few. It’s similar with Fellini. The Italians adored him, but rarely did any­body watch his films.

As he was lying sick in Grand Hotel in Rimini, they would announce on a beach nearby that “Today the Maestro has been given an injection.” Some­ how, they would not watch his films and he would have problems getting money for his films. And Tarkovs­ ki had to leave Russia to make his last productions. That’s the life of an artist.

W hich brings me to the issue of your new film project that you mentioned in your journal. It is still only a project, because of, as you say, considerable difficulties you have getting the Polish Film Institute to provide the financial backing. What’s wrong?

To be honest, I’m in a quite pecu­ liar situation. Contemporary Polish

Jerzy Stuhr – one of the most appreciated Polish theatre and film actors, director, lecturer at the Ludwik Solski State Drama School in Kraków, for many years Rector of the School; he received the Honorary Pearl 2012 awarded by “Polish Market” for “being a watchful observer of his own life and other people, which is a property of great artists only.” In 1994 Stuhr made his debut on the other side of the camera directing a comedy entitled “Spis cudzołożnic (List of Lovers).” However, he gained real popularity as a director three years later due to the film “Historie miłosne” (Love Stories). Since then he also directed “Tydzień z życia mężczyzny” (A Week in the Life of a Man), “Pogoda na jutro” (Tomorrow’s Weather), “Korowód” (Twists of Fate) and “Duże zwierzę” (The Big Animal) based on the screenplay by Krzysztof Kieślowski.

There is a common feature between Krzysztof Kieślowski and his great works and Stuhr, his favourite actor who featured in “Spokój” (Calm Before the Storm), “Blizna” (The Scar), “Amator” (Camera Buff),”Dekalog 10”(The Decalogue), “Trzy kolory: ’Biały’” (Three Colours: White) – Stuhr as a screenplay writer and director, similar to Kieślowski, is a creator focussed on metaphysics, but one who, throughout all his work, seems to see and sense it mostly in human relations. Being a watchful observer of his own life – frequently through other people – is a key to interpreting his artistic path. Stuhr’s book “Tak sobie myślę” is a brilliant example of a step on a human being’s path to oneself. ::

78 :: polish market ::

1-2 /2013

film often deals with problemat­ ic, historical issues. It involves the admission to certain sins, a kind of a defect that the Polish nation, or should I say the people, are respon­ sible for. Several books came out that dealt with this issue, and also a few films, such as “Obława” by Marcin Krzyształowicz and “Pokłosie” by Władysław Pasikowski. In my project, things would go a step further. Why don’t we discuss serious issues and have a good laugh at the same time.

Still, nobody in the PFI wants to talk it over with me yet. It seems some­ thing is standing in the way. I suspect the whole thing is political. Of course, nobody will openly admit it. They are avoiding me. It has been a period of waiting for me. And a restless peri­ od it has been. The PFI should decide by the end of March. If the decision is positive, I can start filming as early as September. Let me put it this way: This would be the last intimate subject I could bring myself to discuss. Pos­ sibly the last spurt of honesty.

Can you be a little more specific?

It’s supposed to be a comedy deal­ ing with the modern history of Po­ land. It will tell the story of someone who represents my generation, start­ ing from the 1950s until the modern day. Starring my son Maciej and me.

Paweł Edelman will be the Director of Photography. The piece is meant to discuss the issues of anti-Semitism, the Solidarity Movement, the Martial Law, and more, in a distorted mirror.

This is because many things make me laugh before I get upset about them.

Are we ready to have “this laugh”?

I once ate a dinner with Roberto Benigni. It’s hard to eat dinner with him, as he’s always clowning around.

I tell him: “Roberto, I envy you a lot.

See, I wouldn’t be able to make a film like ‘La vita è bella’ in Poland.” His response was: “Because you live too close to Auschwitz”... And I’m dying to be able to make a joke of our Pol­ ish anti-Semitism.

If I were to give a one-word review of your book “Tak sobie myślę” (“I was thinking…), I would say “freethinker”... It’s a tough one...

I must proudly say that 100 thou­ sand copies of this book have been sold so far. Doctors recommend my

journal as a therapeutic book. Free­ thinker? That’s nice to hear. I owe this freethinking to my family home. To my father. In the darkest communist times, when Władysław Gomułka de­ manded the death penalty, my father, a non-party prosecutor, wrote an ar­ ticle on the death penalty and secretly sent it to Switzerland under a pseu­ donym. He always remained an in­ dependent thinker. A special place on the way of my life is occupied by the signpost quotation by Iosif Brod­ sky. He wrote about the difference be­ tween a free and enslaved man. In ex­ treme circumstances such as war or disaster an enslaved man will always blame others, while a free man will always blame himself. This is a rule which I always try to live by. When something goes wrong, I always ask myself: “And why did you even get involved in that?”

In my opinion the journal is very consistent with the films which you directed. This is particularly the case with “Pogoda na jutro” (Tomorrow’s Weather).

Yes, “Pogoda na jutro” is a very representative example. Also in terms of stylistics. My formal experiments are aiming towards combining gen­ res – fire and water, comedy and dra­ ma. Fellini is the best example of such combinations. In Poland this style has never really caught on.

But there’s a sort of a phenomenon of Stuhr the Actor. People have great sympathy for you despite that fact that the characters you play are often unlikeable at first glance.

Let me answer with an anecdote.

My first film as director was “Spis cudzołożnic” (List of Lovers) based on Jerzy Pilch’s book. The film was pre­ sented during the Gdynia Film Festival, which I attended. I was anxious because this was another time when my debut feature was to be evaluated. After the screening a young lad approached me and said: “You know, you made a re­ ally cool film.” So I asked, “What did you like about it?” He replied, “You were honest.” At my age, being honest in the privacy of my own home is easy, but in public... I must say that it’s get­ ting more and more difficult to make this decision. But once you make it, you can’t take any half measures ::

Culture

A joke, a thought and a piece of truth at the same time – a song…

Maryla Rodowicz, one of the most famous Polish singers, talks to Maciej Proliński.

“The First Lady of Polish song” – this designation is probably both a source of great comfort and a challenge. Is it?

Definitely a challenge, which be­ comes greater each year. The audi­ ence know what I’m capable of. And each time I must prove that I can do more. This is an interesting struggle with myself.

It’s already been half a century...

I’m still singing and releasing re­ cords, giving concerts. I can’t live with­ out it. I know that when I sing from my heart, people can feel my soul.

Our conversation is going to appear in a magazine which professes that the distance between the economy and culture should not be too great.

What is the situation in Poland in this matter from the point of view of an artist?

Culture is something that makes us what we are - this something that makes us want to be better. I must ad­ mit that this thought always accom­ panies my work. I appreciate the eco­ nomic aspect but culture is not always able to be self-sufficient financially. I, for example, make considerable invest­ ments in my development in a year; the cost is quite high but I believe it’s worth it. Development and raising standards for oneself is what is the most impor­ tant for me. Unfortunately, the cul­ tural needs of society are regarded as the least important, so it is increas­ ingly difficult to sell a theatre perfor­ mance or a concert. Still, I think that Polish artists are our best representa­ tion in the world.

What does the Pearl award from by “Polish Market” mean to you?

It’s an unexpected award. I have been awarded many distinctions such as Singer of the Year and festival prizes, but I’ve never thought I could become

a Pearl of “Polish Market!” I began my career in 1967 at the Student Songs and Singers Festival in Kraków and I won the first prize. I believe that the Pearl will motivate me to perform as a singer for another fifty years! Beware!

Our conversation also coincides with the launch of a unique publication series including the entirety of your artistic achievements - the Maryla Rodowicz Anthology. This is a truly excellent way to find out more about your career...

This publication is a token of grat­ itude towards my audience, a proof of my existence, and a presentation of all my musical accomplishments. The an­ thology is a collection of all my records published since 1970. They include al­ bums previously available only on vinyl and songs which were never released, 200 songs from the archives of the Pol­ ish Radio. These will be the so-called rarities, and the entire series will have a special graphic design. The series will be published regularly until the mid­ dle of 2013, and will be complemented

with a collector’s box. From November 2012 the first 6 records were released.

For me they are a discovery, especially the first record – “‘Żyj mój świecie (Live, my world).” Acoustic, guitar, very modern in terms of sound and literary value...

The late 1960s was for me the time of student clubs, and when it came to music – fascination with American folk music and the acoustic sound of guitars.

Together with club musicians we cre­ ated a group named “Maryla Rodowicz and her guitarists”. I wore a headband on my hair. This was a good, creative and nice time.

Did you reject many songs from release throughout the years?

Definitely a lot! I always had a lot of lyrics, often in excess. This is still the case.

From the beginning of your career you are strongly associated with the Polish Song Festival in Opole, which back in those days was a several-day 1-2 /2013 :: polish market :: 79

Culture celebration of music. You won the highest awards there. What do you think of the festival now?

I think that I am still in the business also because I have certain achieve­ ments and many years of intensive work behind me. Today debuting art­ ists, even very talented ones, are in a much more difficult situation than in the times when I started my ca­ reer. It should be borne in mind that in the past there used to be only one ra­ dio station, which in addition played mainly Polish music without paying attention to popularity rates. The pro­ gramme was ambitious, and the texts were written by great poets; compe­ titions for composition arrangements were regularly organised – both for the music and lyrics. This stimulated the market, ambitious works were in the avant-garde. This year the Polish National Television (TVP) is celebrat­ ing its 60th anniversary, and the Fes­ tival in Opole its 50 years of existence.

TVP is planning to issue some of my TV programmes in DVD format, which is very pleasing, because the TV archives hold about 1000 programmes with my participation. What else? The times are unfavourable, as no TV station is pro­ ducing music programmes any more.

There are only talent shows for ama­ teurs. So, if something is not on TV, it does not exist. This is a generally-ac­ cepted view. Only radio remains... but radio stations are reluctant to play Pol­ ish songs.

This year the regulations are more beneficial for the Polish song. Last year’s amendment to the Act on radio and television broadcasting of March 2011 imposed on radio stations the obligation to devote at least 33% of the monthly broadcasting time to Polish-language songs.

Until this year it was 33% quarterly.

I’m very glad that from this year on at least half of Polish-language songs will be broadcast by radio stations from 5 a.m. to midnight. We must protect our music industry. It’s a standard for the whole EU! And there are signals that commercial radio stations are ap­ palled that certain things are imposed on them by law. I don’t understand this.

If we don’t protect, support and pro­ mote our artists, we will not survive.

In order to produce a song, many spe­ cialists are necessary – songwriters,

80 :: polish market ::

1-2 /2013

producers and publishers. We are active only in our country and sing in Pol­ ish, we create our own show business.

After the fascination with the English language Polish artists are slowly coming back to their mother tongue. Your singing is mastery of the word. And you sing mainly in Polish.

I don’t understand young Polish artists who sing in English in Poland. I assume that they regard it as a step to­ wards an international career. I wish them luck, opportunities should be seized. My discography also includes records in German, English, Russian and Czech. I played hundreds of con­ certs in those countries, which is very important because I had a chance to test myself.

You gave concerts in various countries, from the USA to China. There were particularly many of them in Germany and Russia. Which of the places visited turned out the most fascinating?

When you manage to reach an au­ dience in another country, to commu­ nicate something important, the sat­ isfaction is immense. The audiences in Russia were certainly marvellous.

There was a time when Russian peo­ ple learned Polish in order to read Pol­ ish newspapers and to listen to Polish songs. In the 1970s our culture was to them like Western culture. On the oth­ er hand, using playback during con­ certs is simply a disgrace, and in Russia this is normal. All concerts are played using full playback! When several years ago I was invited to a New Year’s con­ cert in Moscow, in a “cosy” hall for 25 thousand people, when I heard the rehearsal of their music in the style of our disco-polo, and suddenly I start­ ed a live performance with acoustic guitars. they looked at me as if I came from a different planet.

Your voice is like a fingerprint – would you agree with such a comparison?

I’ve always listened to American and British music a lot but I’ve never copied anything. I’ve sung the way I felt, with many elements of the Slav­ ic style. Edyta Bartosiewicz, now re­ turning to the Polish music scene, is certainly an original artist, and so is Monika Brodka.

A good song is a creation combining the artistic efforts of the composer, the songwriter and the singer. Sometimes only one person can combine all these elements. When you look at the Polish music industry today, what do you see?

The profession of a lyric writer has disappeared. Everyone writes their own lyrics. In many cases, unfortu­ nately... These are today’s trends. The lyrics are supposed to appear more per­ sonal, belonging to the author. Poorlywritten, but personal. Another thing – a lot of music is created at home using computers. When you record a song at home, you can make a million ver­ sions and edit everything. And a live performance always gives a real pic­ ture, in a confrontation with the au­ dience. I know artists who don’t even look people in the eyes. And I must see people and their eyes. For me emotions are the most important, and so is the relationship between the audience and the performer.

That is, for the artist, not a celebrity...

I’m annoyed by the phenomenon, but I can’t do anything about it, when the lifestyle columns in colour maga­ zines include reports from the open­ ing of a shoe store. And there’s a per­ manent list of names of people who come to events of this type. These are usually actors playing in soap operas or weather presenters. And suddenly there’s a caption: “the very cream of show business”...

A truly excellent cream of jazz artists have performed on your records: Włodzimierz Nahorny, Jan “Ptaszyn” Wróblewski, Wojciech Karolak, Tomasz Stańko, and Woj­ ciech Waglewski. I think that many celebrities today should be reminded of that.

The 1970s were a good time, when jazz intermingled with pop music. I think that now there is an independ­ ent scene where artists experiment but we won’t hear their music on commer­ cial stations.

This brings up a question essential for an artist – “why do I do this?”

Yes. This is what Czesław Niemen would always ask. It was very difficult to persuade him to participate in any project because he would always ask

Culture “what for?”. He agreed to sing with me once at the Festival in Opole in 1976. He wrote very difficult music to a beauti­ ful poem by Jonasz Kofta: “Share your pain with me, and I’ll share mine with you.” This was “Pieśń ocalenia (The Song of Salvation).” In the end, they didn’t include it in the TV report. And now our appearance is released on the mentioned rarities in my anthology.

What about your friendship with Agnieszka Osiecka? On the album entitled “Buty 2 (Shoes 2)” you sing the discovered unpublished lyrics

by Osiecka, paying a wonderful and unpretentious tribute to the friendship between you and her.

Agnieszka accompanied me on more than one tour. We used to spend a lot of time together – holidays, trips, we met almost every day. Agnieszka wrote plenty of lyrics for me - more than 100 songs! She used to say “Mańka, come and take your guitar”. She would sit at a cafe table and, while scribbling something on a napkin, she would say “Sing this to me, and I’ll write you a ‘fish’”[any word that goes well with a particular piece of music]. When I was

going through the archive, I repeated­ ly stumbled upon some of Agnieszka’s unknown lyrics, and I immediately thought that this should be record­ ed! The album was produced by Mar­ cin Bors – the musical producer of such artists as Kasia Nosowska and Hey. The music was written by Seweryn Kra­ jewski, Jacek Mikuła, and Kasia Gaert­ ner. One song is by Adam Sławiński – “Za­miast wódkę pić” (Instead of vod­ ka). A music video was created for it, which went on to promote the re-re­ lease of “Buty” (Shoes).

It’s difficult not to ask about Seweryn Krajewski.

Seweryn is a genius! His composi­ tions are simple but gorgeous. He’s a rare specimen, a true wonder. We’ve been working together for so many years now – since the very first al­ bum. For him, it’s enough to glance at the lyrics to come up with some musical idea.

W hat are your plans for 2013?

I’d like to do something connect­ ed with the Anthology. For example, an exhibition of my stage costumes,

Maryla Rodowicz – she received the 2012 Honorary Pearl of the Polish Market, for a “voice that goes deep”... Her output comprises about 2000 songs and more than 30 albums. For several decades she has never ceased to surprise and push forward. Her writers included the greatest masters of Polish song, including Agnieszka Osiecka, Ernest Bryll, and Jonasz Kofta, and such composers as Katarzyna Gaertner and Seweryn Krajewski.

A total of 15 million of Maryla Rodowicz’s albums have been sold. She has given concerts all around the world – in Europe, Russia, America, Australia, and Asia. She has also won numerous awards and has featured at many festivals - also cities abroad, in Oklahoma and Los Angeles to name but two. :: as I have hundreds in my wardrobe.

I’d like to produce a musical called “Maryla” based on my songs, but not just them. This year should see an ex­ hibition of my archives in the Nation­ al Library. At this point, I’m trying to get them in order. I’m segregating photos, lyrics. Not thinking about a new album yet, but... I have a fat file of Andrzej Poniedzielski’s lyrics. He once gave it to me and told me to do anything I wanted with it. There’s so much beauty inside! Amusing and thought-provoking at the same time. :: ADVERTISEMENT

1-2 /2013 :: polish market :: 81

Culture

Verdi for the New Year!

The first premiere in 2013 in Teatr Wielki – Polish National Opera in Warsaw will be Giuseppe Verdi’s “Don Carlos” - a well-known historical opera directed by Willy Decker, the German director who is one of the most famous operatic artists in the world. The opera is a production by De Nederlandse Opera in Amsterdam. The Polish premiere is to take place on 13 January 2013.

stage adaptations or co-productions of his plays. Some of these have enjoyed an almost cult-like status, as, for example Verdi’s “Tra­ viata”, shown at the Salzburg Festival, with Anna Netrebko and Rolando Villazón in the leading roles.

Archives of the Teatr Wielki – Polish National Opera / Photo: K. Bieliński

Maciej Proliński

“Don Carlos” is an opera based on a dra­ ma by Friedrich Schiller, set in 16th-Centu­ ry Spain. The work depicts the life of a son of King Philip II of Spain from the House of Habsburg, the eponymous Don Carlos. The story shows the dark side of Spanish histo­ ry and of the reign of Philip II, who collabo­ rated with the Spanish Inquisition. In Verdi’s opera, the predominant themes are that of the love between Elisabeth (Carlos’s moth­ er) and Don Carlos, and the friendship be­ tween Carlos and Rodrigue, Marquis of Posa, together with historical themes (the Flem­ ish struggle for independence).

The four (or five, depending on the ver­ sion) acts of the opera superbly illustrate this complex interplay of love and politics.

82 :: polish market ::

1-2 /2013

Over its numerous renditions, this grand his­ torical opera has seen a whole gallery of great singers who successfully portrayed their complex characters. Their fates intertwine, creating this dramatic story about the most important human feelings of love, friend­ ship, loyalty, betrayal, and loneliness. The story features extraordinary arias, gripping ensembles and crowd scenes, a great depth of dramatic characterisation and a master­ ful structure of the score.

The performance in Warsaw is being created

by Willy Decker – one of today’s most recog­ nised operatic artists in the world. The most significant musical theatres make great en­ deavours to cooperate with him and often

Decker started to produce his own plays in 1978. He came to international fame due to the preview showing of the opera “Pollici­ no” by Hans Werner Henze in the Cantiere Internationale d’Arte in Montepulciano in 1980. From that time on he cooperated with the most significant operas, such as the Vi­ enna Opera, the Paris Opera, Covent Garden in London, and the Chicago Lyric Opera; and musical theatres in Brussels, Amsterdam, Ge­ neva, Madrid and Barcelona, as well as with the leading opera theatres in Germany. He has been associated with the Salzburg Fes­ tival for many years now. He made his debut on the stage of the National Opera in Warsaw with a dark staging of “Elektra” by Richard Strauss in 2010.

“We are still on our way towards the achieve­ ment of the artistic quality we planned. Nev­ ertheless, it is the first season that we have planned two years ahead. We have had time and comfort of choice; therefore I hope that the quality of each event will be high, espe­ cially since we are cooperating with the best partners. After all, “Don Carlos” produced

by Willy Decker was conceived in De Ned­ erlandse Opera in Amsterdam,” emphasis­ es Waldemar Dąbrowski, Director of the Na­ tional Opera in Warsaw.

The performance will be conducted by the Musical Director of the National Opera in Warsaw – Carlo Montanaro. Montanaro stud­ ied in Florence and Vienna, and he has co­ operated with many significant orchestras in Italy, also in the famous theatre La Scala in Milan, as well as in Israel, Germany, and the United States. He made his debut in War­ saw in April 2011 when he delightfully con­ ducted the premiere of Puccini’s “Turandot”.

The stage design and costumes will be pre­ pared by Wolfgang Gussmann, who coop­ erated with Decker in Warsaw when stag­ ing Strauss’s “Elektra”. The eponymous role will be performed by Chilean tenor Gian­ carlo Monsalve, Philip II by Polish bass sing­ er Rafał Siwek, Rodrigue by Italian baritone Davide Damiani, and Elisabeth by Ukraini­ an soprano Nataliya Kovalova. ::

projekt: Adam Żebrowski | zdjęcie: Aristide Economopoulos / Star Ledger / Corbis

VERDI

MONTANARO / DECKER / GUSSMANN | PREMIERE 13/01/2013

NEXT PERFORANCES 16, 18, 20, 22/01/2013

Don_Carlo_B-1.indd 1

Honorary Patronage

Partners of Teatr Wielki - Polish National Opera

28.11.2012 23:34

Technological Partner of Teatr Wielki - Polish National Opera:

Media Patronage of Teatr Wielki - Polish National Opera:

teatrwielki.pl

Culture

Sensitivity, soul, heart and a God-given gift – a voice Bernard Ładysz, an outstanding performer welcomed by some of the mostrenowned opera stages, is celebrating his 90th birthday this year. He has sung all over the world and is the only Polish singer to have performed with Maria Callas. To commemorate the jubilee of this distinguished artist, on 20 December 2012 the Teatr Wielki – Polish National Opera held a special benefit organised by Waldemar Dąbrowski.

Photo: Rafał Nowak

Maciej Proliński

Krystyna WoźniakTrzosek presents Honorary Pearl to Bernard Ładysz

The event was attended by such guests as President of the Republic of Poland Bronisław Komorowski, ac­ companied by his wife, film direc­ tor Jerzy Hoffman, and actor Krzysz­ tof Kowalewski. The celebrations saw guests reminiscing about Vilnius, the hometown of Bernard Ładysz, and some of his remarkable successes as an artist, such as his eponymous cre­ ation in “Boris Godunov” by Modest Mussorgsky staged in Teatr Wielki in Warsaw in 1972. Some of Mr Ładysz’s cinema appearances were recalled as well, since this great Polish bass-bar­ itone voice has also starred in films such as “Ziemia obiecana” (The Prom­ ised Land) directed by Andrzej Wajda, and “Znachor” (The Quack) directed

by Jerzy Hoffman.

During the event Krystyna Woźniak-Trzosek, President of Oficyna Wydawnicza Rynek Polski, and Prof.

84 :: polish market ::

1-2 /2013

Michał Kleiber, President of the Polish Academy of Sciences (PAN), awarded Mr Ładysz the Honorary Pearl of “Pol­ ish Market” in culture for promoting Poland with his marvellous voice. “It has been 7 years that “Polish Market” has awarded its Honorary Pearls in categories such as the economy, cul­ ture, science, and the propagation of social and patriotic values, to the most prominent personages and institu­ tions, whose accomplishments, ex­ perience, prestige and unquestionable personal charm warrant them being honoured with the status of the am­ bassadors of top Polish qualities. This year we have waited to award you this Pearl until today, which is the day of your celebration,” emphasised Krysty­ na Woźniak-Trzosek in addressing the main guest of the ceremony.

At the gala, Tomasz Siemoniak, Minister of National Defence, promot­ ed Mr Ładysz to the rank of a Lieuten­ ant Colonel. Waldemar Dąbrowski, the Director of the Opera, called the artist “the Tsar of Polish opera” and the Choir and Orchestra of the Te­ atr Wielki – Polish National Opera performed, fragments of “Boris Go­ dunov” with some alterations to the text... The maestro either brandished his cane that he normally uses to sup­ port himself when walking, or hid his face in his hands in true astonishment or when he was overcome with emo­ tion. The place beside him, on a red leather couch, was occupied that day by his wife, Leokadia RymkiewiczŁadysz. “A good and wise woman,”

commented the master of Polish vo­ cal art every now and then.

Bernard Ładysz was born in Vil­ nius on 24 July 1922. He was 17 when WW2 broke out. He took part in Op­ eration Tempest in the Vilnius Region.

As a sergeant of the Polish Home Army (AK) for Ziemia Wileńska (an admin­ istrative unit of the Second Polish Re­ public, located in the Vilnus Region), he was kept prisoner in Kaluga, the Soviet Union, where he stayed be­ tween 1944 and 1946. After the War, Warsaw became his second home. It was here that in 1946-48 he complet­ ed his vocal studies at the Higher Mu­ sical School (the present-day Fryderyk Chopin University of Music). As an op­ era singer he started his artistic career in the Polish Armed Forces Represent­ ative Band. Between 1946 and 1950 he was a soloist for the Polish Armed Forces Central Artistic Band, also giv­ ing performances abroad.

The turning point in his career was a singing competition held in Vercel­ li in 1956. Winning the 1st prize and receiving international acclaim, he emerged triumphant from the con­ test. This opened a window of op­ portunity for him to perform in Italy with such renowned artists as An­ ita Cerquetti and Tullio Serafin. In 1959 in London he recorded “Lucia di Lammermoor” (with Maria Callas) by Gaetano Donizetti, directed by Tullio Serafin. He has performed in operas

by Stanisław Moniuszko and sang his songs. He has taken part in the record­ ing of the “King Roger” opera by Karol Szymanowski, and in the world pre­ mieres of the “St. Luke Passion” and “Jutrznia” (The Matins), as well as in the first performance of the “Devils of Loudun” opera by Krzysztof Pende­ recki. He has also collaborated with the Syrena Theatre in Warsaw. Asked about the essence of singing, the art­ ist replied briefly – “Sensitivity, soul, heart and a God-given gift – a voice.

But above all, you have to know how to appreciate it”. ::

S T E R SEC TING

C Har ome to va th R ev r d B u s i e ie ne con w Polsk ss fere nces a

A R E N E G F O H T W O R G E E R F K S I R

S R E M O T S U C G N I N N I AND W E N O H P E OVER TH 3

13

0 H 19, 2 MARC w Warsa

ook

is Z dr Chr

Book your place and download a free special report: www.hbrp.pl/konferencje | 22Â 250 11 44

1 H 5, 20 MARC w Warsa

czak

b Art So

Culture

The Castle that vanished for years…

During World War II the Royal Castle in Warsaw was completely destroyed.

The permanent exhibition entitled “The Royal Castle - from Destruction to Reconstruction” is a record of the Castle’s history during the war and of the circumstances surrounding the decision on its reconstruction.

ruins through the first reconstruc­ tion concepts up to the times when the decision on the Royal Castle re­ construction was taken. In each of the exhibition halls there are small mul­ timedia display cabinets that present more detailed information on select­ ed exhibition fragments.

Maciej Proliński

The exhibition starts with a hall de­ voted to the history of the build­ ing from the 14th Century up to the outbreak of World War II. Three in­ ter-connected multimedia screens attached to the walls present the Cas­ tle’s development in the times of the Saxon Dynasty, and then during the reign of Stanisław August Poniatows­ ki, among others, and also the key moments in the building’s history, such as the drafting of the Consti­ tution of May 3 or the sessions of the authorities of the reborn Second Pol­ ish Republic.

86 :: polish market ::

1-2 /2013

In the second hall, multimedia screens were installed to present the destruction of the Royal Castle

by Germans during World War II. The last part of the exhibition pre­ sents the history of the reconstruc­ tion of the building from clearing the debris and rearranging the Castle’s

Ruins of Royal Castle

Royal Castle now

Photo: A. Ring

“The new exhibition was organised in three halls in the Castle’s cellars. We considered that the multimedia way of bringing closer the Castle’s histo­ ry was the best to present the compli­ cated and dramatic social and histor­ ical process of the reconstruction of the edifice. We would like to show the Castle’s meaning and role in history, so that then, in an emotional specta­ cle, we could convey the drama of its destruction and present a documen­ tary on the reconstruction. Through this exhibition we wished to honour all those who contributed to its re­ construction and bring this history to the youngest generation that probably does not have any idea that 40 years ago there was an empty space in that place,” said the Director of the Roy­ al Castle, Prof. Andrzej Rottermund.

Photo by anonymous

The exhibition is primarily ad­ dressed to the younger generation who do not remember that the Cas­ tle was not present on the post-war map of Warsaw! It is also an occasion to present foreigners with an exam­ ple of exceptional care for the legacy of the past that was recognised by in­ cluding the Royal Castle and the Old Town into the UNESCO World Her­ itage List.

Interestingly, the voices invoking the Royal Castle reconstruction could be heard just after the War finished.

However, the initiative was not en­ thusiastically welcomed by the then authorities, not only because of the estimated cost, but also because of ideological reasons. Finally, the Gen­ eral Conservation Officer, Prof. Jan Zachwatowicz, managed to persuade the decision-makers to reconstruct the Castle, invoking their “sense of responsibility towards future genera­ tions”. In June 1945 the Castle Recon­ struction Lab was established, which first worked within the Warsaw Re­ construction Office, and then within the Capital City Conservation Office.

The plan for the reconstruction draft­ ed in the Lab reflected the character of the historic architecture. How­ ever, the final decision on the Cas­ tle’s reconstruction was taken af­ ter many years – on 20 January 1971 by the Political Bureau at the Cen­ tral Committee of the Polish Unit­ ed Workers’ Party (KC PZPR), led by Edward Gierek – the then 1st Secre­ tary of the Party. The construction was financed mainly from the peo­ ple’s and the Polish diaspora’s contri­ butions. More than PLN1 billion and USD800 thousand, and also numer­ ous material gifts for furnishing the Castle, were collected. The open shell of the building was commissioned in 1974. Prof. Aleksander Gieysztor was the first Director of this establish­ ment. The same year the Old Town and the Royal Castle were included in the U ­ NESCO World Heritage List.

On 30 August 1984 the official open­ ing of the Castle took place; howev­ er, the finishing works were finalised a couple of years later. The opening of the reconstructed Kubicki Arcades in 2009 was the event that crowned the process of reconstruction. ::

Events

The 2012 Friendly Insurance Company The contest for the Friendly Insurance Company covered insurance companies operating in Poland which responded to the survey sent by “Gazeta Bankowa”. The contest is based on data from insurance companies and the Insurance Ombudsman. This was complemented with an assessment by an independent jury led by Danuta Wałcerz, an insurance market expert, the former President of the National Insurance Supervisory Authority. This year’s gala featured the presentations of awards in three categories: life insurance, vehicle insurance, and property and personal insurance.

Maciej Proliński assume patronage over Feliksy War­ szawskie – the Capital City’s prestig­ ious theatrical prizes, which are or­ ganised by a different theatre every year. Paweł Dangel stressed: “I had the pleasure to meet Feliks Łaski in person when I arrived in London as a young director. I received a lot of sup­ port from Feliks at that time, so I have a debt of gratitude to him. I am doing my best to repay it, carrying on the work he began. Taking over the pa­ tronage of Feliksy Warszawskie was a natural way to go for me, when, af­ ter its original founder departed, the

future of this esteemed award became uncertain.” In 2010, for outstand­ ing services to in the development of the insurance market in Poland, Paweł Dangel received the Officer’s Cross of the Order of Polonia Resti­ tuta. Today, after over 15 years in the chair of the President of the Board of Grupa Allianz Polska, he is handing in his resignation. His successor will be Witold Jaworski, who not so long ago was Vice-President of PZU SA. By the end of 2012 Allianz announced that the new President will take of­ fice in mid-2013. ::

From the left: Tjeerd Bosklopper (ING TUnŻ SA), Piotr Szczepiórkowski (Aviva TUnŻ SA), Maciej Berger (Nordea Polska TUnŻ SA)

From the left: Renata Pietrzyk (STU Ergo Hestia SA), Andrzej Cyganik (Concordia Polska TUW), Katarzyna Bieranowska (TUW SKOK)

From the left: Stanisław Borkowski (TUiR Allianz Polska SA), Andrzej Cyganik (Concordia Polska TUW), Renata Pietrzyk (STU Ergo Hestia SA)

Paweł Dangel (Grupa Allianz Polska) and Maciej Goniszewski (Gazeta Bankowa)

1-2 /2013 :: polish market :: 87

Photos: Foto Fama

“The picture that we get from the three categories this year seems to be a true reflection of the reality of the insurance sector in Poland, which is confirmed by the results of the win­ ning companies, including in relation to premium written, the proper man­ agement of the liquidation of damag­ es and the emphasis laid on the level of customer service quality,” summa­ rised Marek Sowa, manager at Price­ waterhouseCoopers (PwC), the con­ tent partner of the project.

Aviva won the life insurance cat­ egory (up from 5th place in 2011), and the statuette was received by the VicePresident of the Board Piotr Szcze­ piórkowski. The vehicle insurance cat­ egory prize went to Concordia Polska, and the statuette went into the hands of Member of the Board Andrzej Cyganik.

Concordia Polska also emerged victo­ rious in the property and personal in­ surance category, and it was Andrzej Cyganik again who had the honour of accepting the statuette.

A special moment in the evening was the announcement of the 2012 Insurance Manager of the Year. It was awarded to Paweł Dangel, President of the Board of Allianz Polska, who received it from Maciej Goniszew­ ski, the Editor-in-Chief of “Gaze­ ta Bankowa”.

Paweł Dangel belongs to the select group of outstanding Polish managers who are also accomplished patrons of the arts. A stage director by educa­ tion, he has long provided financial support to numerous Warsaw thea­ tres, including Teatr Muzyczny Roma, Teatr Ateneum, Teatr Dramatyc­ zny, Syrena, and Teatr Bania­luka in Bielsko-Biała. It was through his agency that, after the death of Feliks Łaski, the Allianz Group decided to

Events

Leaders still believe in a successful year…

The Grand Gala of the Business Centre Club (BCC) was held at the Grand Theatre - National Opera in Warsaw on 26 January 2013 to crown the 22nd edition of the Polish Business Leader Competition. The heads of the best Polish companies were awarded the Golden Statuettes of Polish Business Leader and the Social Solidarity Medals. Three Special Awards for contributing to the development of entrepreneurship in Poland were also presented to outstanding personalities from outside the business arena.

The winners were Janusz Onyszkiewicz, former head of the Ministry of National Defence, Janusz Steinhoff, former Deputy Prime Minister and Tony Blair, former UK Prime Minister. Maciej Proliński reports on the event.

Besides the best entrepreneurs from all around Poland – BCC mem­ bers – the Gala was attended by Janusz Piechociński, Deputy Prime Minister and Minister of the Economy, Mikołaj Budzanowski, Minister of the Treasury, Professor Jerzy Buzek, former President of the European Parliament, and Janusz Lewandowski, EU Commissioner for Financial Programming and Budget.

Marek Goliszewski, the BCC Pres­ ident, remarked provocatively, “We have met in this theatre for 20 years, this time in 2013. This will be the best year for Poland. The government will reject Keynesian state intervention and Friedman’s monetarism and will final­ ly adopt Professor Stanisław Gomułka’s stabilising and emergency plan from

88 :: polish market ::

1-2 /2013

Janusz Piechociński, Deputy Prime Minister and Minister of the Economy and Marek Goliszewski, the BCC President

two years ago. Contrary to the pessi­ mistic forecast of 2%, economic growth will reach 6%. The budget deficit of 3% planned by the Ministry of Finance will shrink to the level of 2%. (…) Po­ land this year will become, as the late Professor Bronisław Geremek main­ tained, a medium-sized superpower.

Ladies and Gentlemen, I would have said much more, but I woke up! How­ ever, seeing people with initiative gath­ ered here today, the nominees for the Statuettes, I have no doubt that what I said will become reality.”

Janusz Piechociński stressed, pre­ senting the Golden Statuettes of Polish Business Leader to the most excellent Polish entrepreneurs: “What is impos­ sible becomes possible, thanks to the determination with which the Polish economy is progressing. During the global economic uncertainty we should protect this Polish entrepreneurial in­ stinct.” The Minister also emphasised that the BCC Gala is an important event in the Polish business calendar and he congratulated all the entrepreneurs on their enthusiasm, creativity and com­ bativeness.

Janusz Lewandowski added opti­ mistically: “Poland was the only coun­ try in the EU that underwent so much of a transformation, in both reality and its image. Poles not only made a mark for themselves regarding independ­ ence, but also in the economy. There is no other country that did not waste

Events

The winners of the 22nd edition of the Polish Business Leader Competition 2012

a single year within the time span of the 20 since it set out in search of the lost time. This is collective work of all the Poles, their daily resourcefulness and creativity, which is called ‘every­ day life patriotism’.”

The Special Award for the efforts to attain Polish membership of NATO, and thus increase the confidence of for­ eign investors in Poland, was granted

The winners of the 22nd edition of the Polish Business Leader Competition 2012: :: Biuro Turystyki Związku Nauczycielstwa Polskiego Logostour Sp. z o.o. and Teresa Górecka, President of the Board :: Ceramika Paradyż Sp. z o.o. and Łukasz Kardas, President of the Board :: Corab Sp. z o.o. and Henryk Biały, Board Member :: Energoprojekt - Katowice S.A. and Andrzej Kowalski, Executive Director & President of the Board :: Hertz Systems Ltd sp. z o.o. and Zygmunt Rafał Trzaskowski, General Director :: Hochland Polska Sp. z o.o. and Jacek Migrała, General Director :: International Paper-Kwidzyn Sp. z o.o. and Marek Krzykowski, President of the Board :: Pruszyński Sp. z o.o. and Krzysztof Pruszyński, President of the Board :: Przedsiębiorstwo Budowlane Calbud Sp. z o.o. and Edward Osina, President of the Board :: Trans Polonia S.A. and Dariusz Cegielski, President of the Board :: TurboCare Poland Spółka Akcyjna and Fryderyk Zębik, President of the Board

90 :: polish market ::

1-2 /2013

to Janusz Onyszkiewicz. Former Prime Minister, Tadeusz Mazowiecki, noted in the speech in honour of the win­ ner: “Janusz Onyszkiewicz has con­ tributed significantly to the ‘nation­ al consensus’ that led us to join NATO, which contributed to the fact that our country became predictable and sta­ ble in the eyes of investors.” It was at the request of Mazowiecki, in 1989, that Onyszkiewicz took on the posi­ tion of the Deputy Minister of Nation­ al Defence to consequently become the Minister of National Defence and start the process of democratisation of the Polish army and the journey from the Warsaw Pact to NATO. In total, he held a minister’s office twice, in the years 1992-1993 and 1997-2000. “When they asked me why it was so important to join NATO, I often quoted an anec­ dote about a man who thought he was a mouse. The man went to a psychia­ trist. The psychiatrist, after a long con­ versation, thought that he was cured.

The patient went out, but after a while came back in panic… ‘What is it?’ asked the doctor. ‘There’s a cat on the stairs,’ said the patient. ‘So what?’ replied the doctor, ‘now you know you’re not a mouse.’ ‘I know,’ said he ‘but does the cat know?’ As we are in NATO, even if a cat appears, it will know that we are not a mouse,” Onyszkiewicz summed up.

The second BCC Special Award went to Janusz Steinhoff, former Dep­ uty Prime Minister and Minister of

the Economy in Jerzy Buzek’s gov­ ernment. It was granted for the suc­ cessful reforms of the Polish economy and, in particular, for the transforma­ tion of heavy industry. Jerzy Buzek, giving a speech in honour of the win­ ner observed: “Janusz is a man who in his activities has always been guided by the Polish raison d’état - as a pol­ itician, expert and researcher. He has his place in history.” Professor Buzek, with great tenderness and affection of a friend, recalled the most important facts and dates from the winner’s life.

The years spent at Jerzy Buzek’s side in the government (1997-2001), where he developed, among other things, the programme for the restructuring of the Polish mining industry, as well as the 1980s, a time of active involvement in the dissident movement. Janusz Stein­ hoff was a co-founder of Solidarity at the Silesian University of Technology.

And at the end of the 1980s, as Solidar­ ity’s expert, he took part in the Polish Round Table Talks. “Janusz was one of those dreamers; he had dreams about the good of our country, Polish free­ dom, independence and democracy...

He was one of those who dreamed of our joining NATO and the EU. In 1980, these fantasies were as high-flown as those of Marek Goliszewski’s today,” said Je­rzy Buzek.

Then, for the increase in trade to GBP6.2 billion during his tenure as Prime Minister, the reception of Polish

Events BCC Special Award Janusz Steinhoff, former Deputy Prime Minister and Minister of the Economy in Jerzy Buzek’s government

Jerzy Buzek during his laudatory speech on Janusz Steinhoff Edward Trzosek, Krystyna Woźniak- Trzosek ( Polish Market) and Józef Wancer (Chairman of Board of Directors of the American Chamber of Commerce in Poland) with wife

workers in the UK and supporting Pol­ ish efforts to join the EU, the third of BCC Special Awards went to former British prime minister Tony Blair. “I wish to thank you for my award grant­ ed in the form of the Golden Statuette.

I have a lot of admiration for Poland and the Polish people. I would like to thank you for the contribution that you brought to the EU, as well as the role you play in my country, the United Kingdom. This is a difficult time for the economy, but I know about the fantas­ tic job that the Business Centre Club can boast of. I therefore think that award­ ing me the prize for the contribution to

BCC Special Award Janusz Onyszkiewicz.

Former Prime Minister

Tadeusz Mazowiecki during his laudatory speech on Janusz Onyszkiewicz

the development of Polish-British rela­ tions and contacts between the British and the Poles is an extraordinary hon­ our,” thanked former Prime Minister in the film displayed during the Gala. The Award was collected on his behalf by Robin Barnett, United Kingdom Am­ bassador to Poland.

During the Gala, Social Solidari­ ty Medals were also granted. These are annual awards for the social­ ly involved, helping the needy, pro­ moting the idea of social solidarity of business and building social soli­ darity. This year the following peo­ ple were honoured: Zbigniew Niem­ czycki, owner of the Curtis Group, Stanisław Łuniewski, Co-owner and General Director of Przedsiębiorstwo Usługowo-Asenizacyjne ASTWA Sp. z o.o., Bogusław Miszczuk, Presi­ dent of the Board of Sokołów S.A. and Stanisław Kowalski, founder and Pres­ ident of the “Help on Time” Founda­ tion for Children. ::

Photos: Rafał Nowak

What is impossible becomes possible, thanks to the determination with which the Polish economy is progressing. During the global economic uncertainty we should protect this Polish entrepreneurial instinct.

92 :: polish market ::

1-2 /2013

Events

Executive Club

“Media – the First Estate?” debate

In December, under the patronage of Polish Market, a debate took place featuring discussions on the responsibility of the media for shaping the business climate, on the extent to which politicians and businesspeople should foster good relations with the media, and on personal branding as a product.

The discussion panel ended with an anniversary club evening.

The participants included: Paweł Jaguś – President of the Board of Qumak – Sekom, Michał Lisiecki – President of the Platforma Mediowa Point Group, Roman Młodkowski – Editorin-Chief, TVN CNBC, Business Services Division Director, TVN Józef Oleksy – Vice-President of the Democratic Left Alliance (SLD) political party, Adam Pawłowicz – President of the Board of Konsalnet Holding. ::

ADVERTISEMENT

1-2 /2013 :: polish market :: 93

Events

The Laurels of Skills and Competence 2012 The highest commendation – the Diamond Laurel of Skills and Competence – has been awarded to Janusz Lewandowski, European Commissioner for Financial Programming and Budget.

Another annual edition of the Lau­ rels of Skills and Competence Gala was organised this year by the Katowice Chamber of Commerce and Industry.

This year the circle of laureates includ­ ed 63 people, companies and institu­ tions in seven categories: :: The Diamond Laurel of Skills and Competence :: The Crystal Laurel of Skills and Competence :: The Platinum Laurel of Skills and Competence :: The Platinum Laurel of “Pro Publi­ co Bono” :: The Platinum Laurel of “the Am­ bassador for Polish affairs” :: The Platinum Laurel of “Culture and Media” :: The Golden Laurel of Skills and Competence.

“The laureates of each subsequent edi­ tion of the Laurels of Skills and Com­ petence prove that there are many ex­ traordinary and exceptional people,

94 :: polish market ::

1-2 /2013

who, regardless of difficulties they are facing, are always capable of accepting the challenge and taking action for the common good. We can find such peo­ ple in every branch of our life, in the world of science, economy, politics, culture, media or art,” said Tadeusz Donocik, President of the Katowice Chamber of Commerce and Industry and Chairman of the Laurel Chapter.

“Each person awarded the Laurel of Skills and Competence embodies such an authority figure. They are exception­ al both in what they do and what val­ ues they represent. They inspire action and constant improvement,” added Ta­ deusz Donocik.

The Diamond Laurel of Skills and Com­ petence was awarded to Janusz Lewan­ dowski, the European Commissioner for Financial Programming and Budget.

The laudation for the laureate of the Diamond Laurel was giv­ en by former Prime Minister Jerzy Buzek, a colleague and friend of the

Commissioner. He introduced Janusz Lewandowski as a great patriot, pol­ itician and an unwavering liberal.

“He remained true to these deep and patriotic convictions till this very day,” emphasised the former Prime Minister.

The Commissioner, who was visiting Zabrze for the first time, summarised his speech with these words: “From now on, I will associate Zabrze with a great gala, as today, the strong and proud Silesia filled me with much joy.”

Among the laureates were such names as Olgierd Dziekoński, Secretary of State at the Chancellery of the Pres­ ident of the Republic of Poland, Dari­ usz Bogdan, Under-Secretary of State at the Ministry of Economy, Jan Ol­ brycht, PhD, Member of the Europe­ an Parliament, Ivan del Vechio, Am­ bassador of the Republic of Croatia to Poland, Prof. Wiesław Banyś, PhD, Chancellor of the University of Silesia in Katowice, Dariusz Lubera, Presi­ dent of the Board of Tauron Polska En­ ergia S.A., Herbert Wirth, President of the Board of KGHM Polska Miedź S.A., Roman Łój, President of the Board of Katowicki Holding Węglowy, Ryszard Florek, President of the Board of Fak­ ro Sp. z o.o., and many others.

Events “This award shows the best of Sile­ sia, that also radiates throughout the whole of Poland. It’s an acknowledge­ ment of hard work, competences, cre­ ativity and the ability to cooperate,” said Olgierd Dziekoński, Secretary of State at the Chancellery of the Presi­ dent of the Republic of Poland.

For the first time in the history of the Laurels of Skills and Competence we are without one of the laureates. The Laurel Chapter has honoured the late Michał Kulesza, the Social Advisor to the President of the Republic of Po­ land. Minister Olgierd Dziekoński collected the Crystal Laurel in his name.

“It is a special situation, when I won’t be able to hand over the award and convey these emotions. However, the spirit of Michał and his faith is still with us,” said Minister Dziekoński when collecting the award.

Apart from the distinguished lau­ reates, the gala also featured repre­ sentatives of the Polish Government and the European Commission, rep­ resentatives of local and regional au­ thorities, international guests and businesspersons.

“Ladies and Gentleman, it is with great pleasure that I welcome you once again at our doorstep. I believe that today is a great day, a great day for Silesia and a great day for Poland, as here in Zabrze, the heart of Sile­ sia, we have the opportunity to meet those who do so much for Poland, for Silesia and our cities. In our rush we sometimes lack time to stop for a while and take a look at the successes we work so hard for,” said Małgorzata Mańka-Szulik, the Mayor of Zabrze, in the opening speech.

Joanna Schmid, Vice-President of the Management Board for Strategy and Development, Tauron Polska Energia, speaks to “Polish Market.”

The Platinum Laurel of Skills and Competence awarded by the Katowice Chamber of Commerce and Industry is for me an honour and a great motivation to take on new challenges. It is a true pleasure for me to be in such an eminent circle of experts and people representing business, culture and science, who have been so successful in a variety of fields. In receiving the award, I was also proud of my region which every year attracts esteemed guests and awards them for every effort made to support Silesia and Poland as a whole.

that reduced the adverse balance in the labour market.

Today it is facing ordeal again because the automotive and related industries are extremely sensitive to the economic situation abroad. And the economic outlook is grim, which is strongly felt in Silesia. For me, the Gala was a meeting with the Silesia region and the Silesian tradition.

You have received the Diamond Laurel 2012.

As I listened to the eulogy by Prof. Jerzy Buzek, I said to myself that I would be happy to be like the laudator portrayed me. That is why it is always a commitment.

As I said during the Gala, I will deserve this award, if despite the crisis Poland is given decent funding in the next 7 years.

Janusz Lewandowski, the European Commissioner for Financial Programming and Budget talks to “Polish Market.”

Can we expect decent funding, as you put it, in the new financial perspective?

Or, being aware of the crisis, should we appreciate any amount we are granted?

What do you think of the Laurels of Skills and Competence Gala?

The crisis is increasingly a crisis of confidence in the European Union itself. A crisis of confidence that is undeserved. Sometimes the criticism is justified, as the European Union is over-regulated and happens to make mistakes. This is mainly because whatever is difficult in Europe, tough lessons to learn for the Greeks and the Portuguese, is blamed on the European Union and orders coming from Brussels as if it was its duty to make sure that irresponsible politicians do not build up debts and plunge their countries into huge problems that we can see now in southern Europe. It is a deeper crisis because it is a crisis of confidence. The paradox is that, with this crisis of confidence, the EU institutions will be increasingly demanding. They will be more and more invasive, because this is what the new architecture of the eurozone requires. The union cannot revolve around the common currency, it must be something more, it must keep an eye on economic standards. Here is the problem of democratic legitimacy, public trust. ::

When coming to Katowice, I did not realize the scope of this event, the number of people it brings together and the tradition it has. I only knew that it was very obliging since those previously awarded were Jan Nowak Jeziorański, José Manuel Barroso and even Pope John Paul II. On the spot, I appreciated something that is regionally very interesting. I mean the fact that the Gala rewards competences and people who build the region, and that it is so rooted in the tradition of the region. A very interesting, though little recognizable region, I should add. A curious thing is that this region went through an accelerated process of change, including transformation of the coal and steel industry, which took decades for the Ruhr, Burgundy or Wales.

It was a hurried process, probably felt as painful, but successful in the sense that Silesia opened itself to a number of new specialties, developed business sectors

The House of Music and Dance in Zabrze has been the Honorary Host of the ceremony since 2008. The cer­ emony was honoured by the per­ formance of “Camerata Silesia”, the Katowice City Singers’ Ensemble, di­ rected by Anna Szostak, joined by Wojciech Myrczka. The artistic sec­ tion included Leszek Możdżer, joined by the Aukso chamber orchestra from Tychy, directed by Marek Moś, a lau­ reate of this year’s Golden Laurel in the category of “Culture”. :: 1-2 /2013 :: polish market :: 95

KONKURSY TECHNOLOGICZNE

2013

Gazeta Bankowa ogłosiła konkursy technologiczne:

LIDER INFORMATYKI INSTYTUCJI FINANSOWYCH 2012 oraz

HIT ROKU 2013 DLA INSTYTUCJI FINANSOWYCH Tegorocznych kandydatów do obu tytułów przedstawimy Państwu na łamach marcowego wydania.

Prezentacja zwycięzców konkursów oraz pełna relacja z gali wręczenia nagród już w kwietniowym wydaniu„Gazety Bankowej”.

Więcej informacji na stronie internetowej: www.konkursytechnologiczne.gb.pl

LIDER INFORMATYKI

2012 MIESIĘCZNIKA

KU HIT RO

2 013 MIE SIĘC

ZN IK A

HR

Human Capital on the Polish Market Małgorzata Skucha, the new President of the Board of NFOŚiGW Marcin Korolec, the Minister of the Environment, has ap­ pointed a new Board of Directors of the National Fund for En­ vironmental Protection and Water Management (NFOŚiGW).

Małgorzata Skucha, the existing Vice-President of the Man­ agement Board, was appointed President, and Jacek Gdański, Barbara Koszułap and Krystian Szczepański Vice-Presidents.

The new board start their work on 1 January 2013.The new President of NFOŚiGW has the title of Doctor of Economics in the field of management. She is a manager and an expert

in management and finance. Since 2005 she has cooperated with the University School of Banking and Finance in BielskoBiała. Between 1999 and 2003 she was President of the Board of Beskidzki Fundusz Ekorozwoju S.A. (the Beskidy Region­ al Eco-Development Fund Ltd.). Between 1993 and 1998 she worked as President of the National Fund for Environmental Protection and Water Management in Bielsko Biała, and then she was Director of the Bielsko-Biała Division of WFOŚiGW in Katowice. ::

The new President of the Management Board of the Polish Fujitsu Technology Solutions office Maciej Wiśniewski has taken up the position of President of the Board of the Polish Fujitsu Technology Solutions of­ fice. Wiśniewski has almost 20 years of experience in man­ agerial positions in consulting companies and the IT sec­ tor. Before he came to Fujitsu, he had been President of the Board of S&T Polska. He also worked as a Director of the Re­ tail Banking IT Department at Raiffeisen Bank Polska. Since 1999 he has cooperated with Arthur Andersen and Anders­ en Business Consulting companies, where, as a Partner, he

created the IT Counselling Department and System Imple­ mentation Department. From 2006 he was a partner in De­ loitte Central Europe, where he supervised the IT-counsel­ ling division, systems integration and ERP implementation divisions in Poland and Central Europe. He was responsible for consulting projects and system implementations for ma­ jor institutions in Poland and abroad, mainly in the finan­ cial and industrial sectors. ::

Sygnity S.A has a new Vice-President of the Management Board responsible for finance From 1 February 2013 Wiesław Strąk takes up the position of Vice-President of the Management Board responsible for Fi­ nance (CFO). He started his professional career in Price Wa­ terhouse in 1996 and he continued it in PricewaterhouseCoop­ ers in the audit and consulting division. Between 1999 and 2004 he worked in the Impexmetal Group as a Vice-Financial Director responsible for controlling, where he was respon­ sible for supervision over accountancy, taxes and reporting to the Warsaw Stock Exchange for Impexmetal S.A. He was engaged in the Capital Group’s restructuring and managing.

He occupied the role of a member of the supervisory boards of Group companies such as Hutmen S.A., Huta Alumini­ um Konin S.A, and Baterpol Sp. z o.o.. Between 2004 and 2007 he worked in Telekomunikacja Polska S.A. as a Direc­ tor of Business Controlling Department and the Director of the Management Information Systems Department. In No­ vember 2007 he took up the position of Financial Director in Dell Sp z o.o., where he was also responsible for finance in the Central Europe Region: the Czech Republic, Slovakia and Austria. ::

Krzysztof Adaszewski the new President of the Management Board of NFI Midas Krzysztof Adaszewski, now a Member of the Management Board responsible for finance, will take up the post of Pres­ ident of the Management Board of NFI Midas, as was decid­ ed by the Company’s Supervisory Board. Wojciech Pytel, current President of the Management Board, will join the Company’s Supervisory Board as its President.

“The current Management Board, led by Wojciech Pytel, successfully managed to meet the most important chal­ lenges that the Company has had to face. The Midas Group successfully started operating as a wholesale provider of ul­ tra-fast LTE Internet technology, and protected the financ­ ing of further network development and it has to continue its expansion that will be implemented mainly by Polkom­ tel” said Zygmunt Solorz-Żak, current President of the NFI Midas Supervisory Board.

On the NFI Midas Supervisory Board Wojciech Pytel will take the place of Andrzej Chajec and he will perform the func­ tion of Chairman of the Board. Zygmunt Solorz-Żak will re­ tain his position in the Supervisory Board as Vice-Chairman.

98 :: polish market ::

1-2 /2013

At the beginning of November the Group announced that it will set out the conditions for the additional fi­ nancing of network development. Terms were agreed (term sheet) under which NFI Midas was to receive cred­ its amounting to over PLN 500 mln, and also the condi­ tions under which the Company will issue bonds worth up to PLN 250 mln. The acquisition of bonds worth about PLN 200 mln is guaranteed by Zygmunt Solorz-Żak, the Company’s main shareholder.

“The present NFI Midas strategy will certainly be con­ tinued. We have already built a group that is a strong pro­ vider of wholesale telecommunications services and now we are focussing on expanding the range and quality of our network” said Krzysztof Adaszewski, the newly-ap­ pointed NFI Midas President. The Midas Group is now the only provider of ultra-fast Internet access with the state-of-the-art LTE technology. It provides its services to Polkomtel and Cyfrowy Polsat. ::

Organizatorzy:

Food industry

Best wishes with the white wafer The 2013 New Year Meeting of the Association of Polish Butchers and Producers of Processed Meat Bożena Skarżyńska New Year meetings have been a long-lasting tradition of the Asso­ ciation of Polish Butchers and Pro­ ducers of Processed Meat, and they have enjoyed great popularity among the Association members, partners and friends. The invariable points on the agenda include sharing our best wishes, symbolised by the old Polish custom of wafer breaking, receiving blessings from chaplains and priests connected with the industry, award­ ing the most distinguished people in the Polish meat industry, as well as organising a dinner with a menu mostly featuring meat dishes.

New Year wishes for the meat industry were offered by (from the left) Kazimierz Stańczyk, Vice-President of the Association of Polish Butchers and Producers of Processed Meat (SRW RP); Jerzy Bartnik, President of the Polish Craft Association; Janusz Rodziewicz, President of SRW RP; and Stanisław Kowalczyk, Chief Inspector at

The 2013 New Year Meeting took place on 10 January. It was attended by rep­ resentatives of the Ministry of Agri­ culture and Rural Development, the General Veterinary Inspectorate, the Main Inspectorate of Agricultural and Food Quality Inspection, the Sani­ tary Inspectorate, and other author­ ities. Moreover, it was attended by the research staff of many universities of natural sciences, by members of in­ dustry organisations and institutions cooperating with the Association of Polish Butchers and Producers of Pro­ cessed Meat, by representatives of the media, and by a numerous group of Association members and managers of supporting companies. There were over 200 attendees in total.

The Meeting was opened by Mr Jerzy Bartnik, President of the Polish Craft Association, which has coop­ erated with the Association of Polish Butchers and Producers of Processed Meat for many years. On behalf of the National Council and the Manage­ ment Board of the Association, the attendees were welcomed by Chair­ man Zbigniew Nowak, by President Janusz Rodziewicz and by Vice-Pres­ ident Kazimierz Stańczyk, who out­ lined the events initiated and imple­ mented by the Association of Polish Butchers and Producers of Processed Meat in the preceding year, which

100 :: polish market ::

1-2 /2013

the Main Inspectorate of Agricultural and Food Quality Inspection (IJHARS)

The White Stork (Bocian Biały) Awards for efforts in the field of ecology went to Piotr Ziemann and Janusz Rodziewicz (SRW RP), Andrzej Kuczyński (Sina-Polska Food Manufacture Shanghai) and Marcin Suchenek (Chef de Cuisine at the Hyatt Warsaw Hotel); they received congratulations from Zbigniew Nowak, Chairman of the National Council of SRW RP

The guests at the 2013 New Year Meeting

was when the Association celebrat­ ed its 90th Anniversary. The Meet­ ing also provided an opportunity to distribute awards in recognition of special achievements in the meat in­ dustry. These awards were given to Janusz Rodziewicz, Piotr Ziemann, Kazimierz Stańczyk, Paweł Krajmas, and others.

Zbigniew Nowak reminisced about the people who had operated in the industry and who passed away in De­ cember of the preceding year, includ­ ing among others, Tadeusz Dudek, Henryk Nowicki and Eugeniusz Jaje­ cznik. The last wish expressed by Ta­ deusz Dudek – who in the meat in­ dustry was referred to as “the world’s oldest butcher”, and who died at the age of 98 and had still run his shop even until two years ago – was to in­ tegrate the meat industry.

The attendees honoured the mem­ ory of their deceased colleagues from the industry and from the Association with a moment of silence.

The blessings for the New Year were this time given by two clergymen, by Priest Michał Szwemin, the Minister of the Polish Chamber of Commerce and of the Entrepreneurs and Eco­ nomic Life Organisers, and by Father Adam Ostapkowicz, President of the Eleos Charity Foundation. The attend­ ees broke wafers and wished each oth­ er a good fortune in the personal and professional field.

Following the official part of the Meeting, the attendees could taste the exceptional products and dishes made with Simmental beef, produced by the Experimental Department of the National Research Institute of An­ imal Production. The unique quality of the beef was praised by Vice-Pres­ ident Władysław Brejta.

The entire menu based on beef from the Podkarpackie Province was prepared by Paweł Krajmas, President of the Polish Ecology Association. The tasters praised the taste and quality of meat dishes.

As usual, the New Year Meeting provided an excellent opportunity to talk, to summarise the preceding year and to discuss the future of the Polish meat industry. ::

Genuine taste

www.lazur.pl

Food industry

Stalgast – over 20 years of experience Stalgast is a Polish family-owned company, which has operated on the Polish restaurant market since 1990. At the outset of the Polish political and economic transformations, we based our activities, as did many other companies emerging at that time, on our intuition, enthusiasm, and the hope that our hard work and strong involvement would let us create a venture from scratch.

NaturaFood, Łódź, 2012, Master Show

by Wojciech Modest Amaro

Some 20 years later, we have be­ come a leading Polish producer and supplier of professional equipment for restaurants, pubs, hotels and catering enterprises. We supply our products to customers in Poland and in Europe through local distribution networks, and we provide a wide variety of prod­ ucts of recognised domestic and inter­ national brands. Imported products in­ itially accounted for most of our sales.

Later on, we turned to our own prod­ ucts manufactured in a factory in Ra­ dom, established in 2008. Today, we produce stainless steel furniture, serv­ ing lines and hi-tech heat processing equipment. Our high-quality prod­ ucts have earned recognition among customers, both in Poland and abroad.

Stalgast employs nearly 250 peo­ ple. Our experienced and dynamic staff guarantees professional services to cus­ tomers, producing top-quality restau­ rant equipment based on cutting-edge 21st Century technologies.

Our computerised warehous­ es (20,000 sq m) and constant sales

102 :: polish market ::

1-2 /2013

availability of over 5,000 products pro­ vide the customer with a guaranteed product dispatch within just 48 hours after order receipt. All goods in the catalogue are goods available in our warehouse.

Being aware that the modern res­ taurant market in Poland is still subject to change, we seek to exert our influ­ ence by our constant presence at most fairs and publicity events, including the EuroGastro Fairs which we have attended since their beginning.

Attendance at strictly equipment related fairs is not the only means of ex­ erting influence. We attach a lot of im­ portance to being regular participants at product related fairs and events, such as NaturaFood in Łódz, Grüne Woche in Berlin and BioFach in Nuremberg, providing our partners from the ex­ hibiting organisations and institutions with professional equipment.

We also cooperate with the Pol­ ish Ecology Association, the Union of Producers and Employers of the Meat Industry (UPEMI), the Association

of Polish Butchers and Producers of Processed Meat, and so on. Moreo­ ver, we have jointly participated in various undertakings promoting Pol­ ish food at national and internation­ al fairs and events, such as the Fancy Food Show in New York, Washington and San Francisco, Slow Food 2012 in Turin, “Świętomięs” (Meat Festival) in Poznań, fairs in Seoul, Tbilisi, Ho Chi Minh in Vietnam, and Prodexpo in Moscow.

What is more, we have supported, co-organised and sponsored a num­ ber of cuisine contests countrywide for over 15 years. Examples include: the Martell competition in Ryn, Siel­ awa Blues in Stare Jabłonki, the lamb serving competition in Ustronie, and the Brigands Cuisine competition in Skoczów or the Beskidzkie Kociołki competition. Our partners during such events include the Polish Chefs and Pastry Chefs Association, the Beskidy Culinary Club, the Chefs Club and Eu­ roToques Poland.

In our showroom, located in the Stalgast Headquarters in Warsaw, we conduct training courses as part of EU projects addressed to cooks and teach­ ers. We also train our customers, dis­ tributors and service staff.

We do not forget about education.

We mark our presence at various initi­ atives promoting culinary knowledge and familiarity with catering tech­ nologies in the major catering schools in Poland. We also run culinary com­ petitions for students and we sponsor student apprenticeships that are su­ pervised by famous master chefs in Warsaw. We conduct training courses for students and teachers of the pres­ tigious schools countrywide, includ­ ing the Catering Schools Centres in Białystok, Łódź, Olsztyn, Rzeszów and on Komorska Street in Warsaw.

We believe that such activity is of great importance to the future of the Polish restaurant industry. We do not only do this pro publico bono, but also out of the best business interest of our company. The skills and expertise of future master chefs is a guarantee of growing sales in the entire restaurant industry, and for Stalgast, will mean entry to the top hundred companies in Poland. ::

Obituary

It is with deep regret that we announce the passing away, on December 26, 2012 of Captain Henryk Strzelecki Born October 4, 1925, in Brodnica, Poland, a soldier of the 2nd Polish Corps, he fought, since October 1944, in the Italian Campaign, serving under the 2nd battery of the 13th Heavy Artillery Regiment on the Senio River and in the Battle of Bologna, which ended with the liberation of the city by Polish troops. He was demobilized in December 1946 in the UK. A prominent activist in exile, a founder of Henri-Lloyd Limited, a member of the Management Board of the Polish Association of War Veterans in Manchester, a honorary doctor of Manchester Metropolitan University.

A Knight Commander of the Order of the British Empire, awarded with the Military Medal, the Gold Cross of Merit, the “Pro Memoria” Medal and with many other distinctions and honors. Laureate of the “Polish Market’s” Honorary Pearl 2006 in the “Economy” category.

We are grieved to chronicle the death of Marek Misiak A noble Man, a longstanding contributor and a Friend of “Polish Market”, a tireless promoter of knowledge about the economy and statistics.

Thank you, Marek, for all those years we spent working together and for all the great moments we shared...

On January, 16, 2013 we said farewell to Marek Misiak, a noble Man, a longstanding contributor and a Friend of “Polish Market”. Aged almost 80, he devoted more than fifty years to journalism. He was involved with “Polish Market” since its inception, that is for sixteen years. Our readers knew him as an impartial and competent economic commentator, as well as the author of the Economic Monitor. For our part, we will remember him first and foremost as a senior colleague who always had time to talk and a head full of ideas on how to further improve our work.

Of course we were not the only magazine to benefit from inexhaustible energy and diligence of Marek. For over thirty years, he regularly wrote in the columns of “Życie Gospodarcze” and the “Nowe Życie Gospodarcze”. He was also known as a contributor of “Miesięcznik Kapitałowy”. There is no exaggeration in stating that Marek Misiak was the guru of Polish economic analysts and journalists, a prominent expert in the field of macroeconomic forecasts. Perhaps the most spectacular expression of his professional clout was

the ranking of Polish forecasters. It was a private initiative of Marek Borowski, a senator, former Deputy Prime Minister, the Speaker of the Sejm, who, in the years 1999-2010, compiled his own ranking of analysts, companies and institutions that announced annual macroeconomic forecasts for Poland’s economy, and awarded “Crystal Balls” to those whose predictions proved to be the most accurate. Marek Misiak won three out of ten editions of this ranking; he never fell below the fifth place, leaving behind not only the professional analysts, but also brokerage houses, banks and experts of... the Finance Ministry. Marek’s “Crystal Ball” was Makrometr (MnRK) - an observation model that he personally designed to analyze changes in the macro-economic situation of Poland, as well as to make international and inter-regional comparisons.

Marek formed his models and rankings in collaboration with the Central Statistical Office (GUS). He also had time for a somewhat less sophisticated type of activity. Indeed, he was a tireless promoter of knowledge about the economy and statistics, a sort of a social worker. Deeply involved in civic life, he sought to bring around economists of different orientations. He became a member of the Polish Economic Society (PTE) in the second half of 1950s, and in 1995 he also joined the Association of Polish Economists (TEP). In 1970s he took an active part in the famous “Thursdays in PTE”, whose tradition is today continued under the name of “Thursdays at the Economists”.

Honour to Their Memory!

Editorial team of “Polish Market”

104 :: polish market ::

1 /2013

Over 20 years on the market Direct presence in 8 countries Active sales to 30 countries An extensive product portfolio: over 56,000 products over 300 suppliers

• The ABC Data group is the leading IT distributor in Central and Eastern Europe • Thanks to continuous development and multiyear investments in Internet customer service platforms, our company is one of the top online sales companies • In June 2011 ABC Data – Colorovo, a proprietary brand of ABC Data S.A., made its debut.

• Every year from 2009 to 2012, ABC Data S.A. was awarded by EMEA Channel Academy with the title of the best IT distributor in the CEE Region