Polish Market (178) 05 2011

Military University of Technology

60 YEARS

Contents

5/2011

From The President’s Press Office # 6

From The Government Information Centre # 7

Elżbieta Wojnicka, PhD: Aviation Valley: the leading aviation industry cluster in Poland # 22

Andrzej Rybka, Director of the Aviation Valley Association: Aviation Valley Polish Supercluster # 26

Patryk Mirecki: Rail freighting an investment-worthy market # 32

LOWER SILESIA

OUR GUESTS

Janusz Lewandowski, the EU Commissioner for Financial Programming and Budget # 8

Marcin Korolec, Undersecretary of State at the Ministry of Economy # 9

Sandra Wierzbicka: Regional airports are spreading their wings # 11

Magdalena Szwed: Airports and roads under construction # 14

Rafał Jurkowlaniec, Chairman of the Lower Silesia Province: Development prospects for Lower Silesia # 41

Ranking of companies in Lower Silesia #42

LAW & TAXES

Leszek Chorzewski, Polish Airlines LOT spokesman: Challenges ahead of LOT # 16

Ewelina Janczylik: Wrocław: The Meeting Place # 39

transport

Rafał Dutkiewicz, Mayor of Wrocław: The Wrocław Metropolitan Area # 38

Paweł Kisiel, legal adviser, labour law specialist at Chałas and Partners Law Firm: The employer and the workplace #46 Maja Sujkowska: Pursuing a career in a regulated profession in Poland # 47

Patryk Mirecki: The gap between LOT and other carriers in narrowing # 18

Major events in May 2011 with “Polish Market” as a media partner:

International Fair Petrol

International Economy

The 14th Congress

Congress of Polish

Station

Forum-Świetokrzyskie

of Insurance Brokers

Technicians

Polish-Indian Business Forum

Energy Summit Congress

Golf Master Series

Warsaw Book Fair

Debate – LIBERALISM OR LAISSEZ-FAIREISM

Innovations Forum

Real Vienna

European Martime Day

Warsaw School of Economics Alumni Club & Bocconi Alumni Association present the conference

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Contents

INVEST IN POLAND # 48

INFRASTRUCTURE & CONSTRUCTION

POLISH EU PRESIDENCY

Sandra Wierzbicka: Poland and the countries currently under the EU enlargement process # 49

Jerzy Bojanowicz: The priorities of the Ministry of the Economy during the Polish presidency of the Council of the European Union # 50

OPINION

Korporacja Radex S.A. # 67

Sandra Wierzbicka: 2012 looks uncertain due to the state of budget # 70

Ranking of PUDS Companies # 73

Andrzej Arendarski, PhD: Money will not solve the problem of innovation # 52

Prof. Małgorzata Zaleska: Waiting for the Polish presidency # 66

Cultural Monitor # 78

Ecological energy for economy and industry # 53

Piotr Sienkiewicz, staff member at the National Security department of the National Defense Academy and ViceRector for educational affairs at the Warsaw School of Computer Science: Security specialists # 54

Teva – 80 years of history and the widest pharmaceutical product portfolio in Poland # 57

Polpharma Scientific Foundation celebrates 10 years of support to scientists # 58

ECONOMY AND FINANCE Prof. Elżbieta Mączyńska, President of the Polish Economic Society, Professor at the Warsaw School of Economics: Dichotomy between knowledge and wisdom # 62

Polish Market :: 05/2011

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

(RYNEK POLSKI Publishers Co. Ltd.)

15 YEARS ::

Maciej Proliński: The unknown operas, the latest operas # 80 Maciej Proliński: Private theaters: culture and business? # 82

Ewelina Janczylik: Katowice – a city of culture # 88

The Miłosz Year: a year that is to become an investment # 90

Reasons to smile… # 92

Agnieszka Szyfter: China – the Great Dragon, a country of plurality and quickly passing time # 93

EVENTS

The Promotion of Poland # 94

Tops finance groups in Poland # 64

President: Krystyna Woźniak-Trzosek

PUBLISHED SINCE 1996 No. 5 (178) 2011

Sławomir Doliński, Founder and Chairman of the Supervisory Board at Dolcan: Dolcan Construction Company of the Year 2010 # 76

CULTURAL MONITOR

SCIENCE AND INNOVATION

Janusz Zaleski, Vice President of PZPB: The Polish Association of Construction Industry Employees (PZPB) # 74

www.polishmarket.com.pl

Vice-Presidents: Błażej Grabowski, Grażyna Jaskuła

polish aviation market Construction and Infrastructure

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

Lower Silesia Region

Editor-in-Chief: Rita Schultz rita.schultz@polishmarket.com.pl

Radex Corporation managerial success of Janusz Sobieraj

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Editorial board: Jerzy Bojanowicz, Janusz Korzeń, Maciej Proliński, Jan Sosna, Magdalena Szwed, Janusz Turakiewicz, Sandra Wierzbicka, Elżbieta Wojnicka, Małgorzata Wyderka

English Editor: Sylwia Wesołowska-Betkier Translators: Maciej Bańkowski, Marek Gogolewski, Elżbieta Krajewska, Grażyna Śleszyńska, Sylwia Wesołowska-Betkier, Sandra Wierzbicka Photographers: Jan Balana, Łukasz Giersz Polish Market Online Editor-in-Chief: Wiktoria Grabowska Marketing: Phone (+48 22) 620 38 34, 654 95 77 Katarzyna Malinowska – Marketing Director k.malinowska@polishmarket.com.pl Natalia Suhoveeva natalia.s@polishmarket.com.pl Ewelina Surma e.surma@polishmarket.com.pl PR: Joanna Fijałkowska j_fijalkowska@polishmarket.com.pl

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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

Optimism? Yes, but… The 4.5% GDP growth in Q1 2011 gives Poland’s economy a good position in postcrisis Europe. Despite the forecasts being slightly less optimistic (for example we are no longer the World Bank’s favourite, as – for some reason – they have begun coddling Romania from the countries of our region), it is probably not the limit of our capabilities this year.

Unless, of course, we are disturbed by spring or summer floods, tornadoes, or another volcano in Iceland.

According to the National Bank of Poland, demand issues will not be a major obstacle preventing the development of business. Most companies are planning to increase their production and employment in the near future and are starting investments. This optimism is hampered by rising prices, but the struggle of the USA and other giants with the crisis by pumping the mass of empty money into the economy could not result in anything but inflation. The problem is who and to what extent will have to face the music.

This is all in projections and reports. Everyday news provides space for some other conclusions too – conclusions that support the optimistic view of Poland’s economy. Firstly, the draft summary of 2010 results confirms the opinion that the biggest Polish companies are now past the crisis, with new development strategies prepared and already in implementation. Secondly, a particular peculiarity of the Polish economy is beginning to come to the surface ever more clearly. It is not expressed in consolidation processes, but in the more and more rapid establishment and development of SMEs, taking advantage of, and even creating their own market niches.

What are the potential consequences? The great Polish yearning for a “national brand” in the style of Nokia, Siemens, or Red Bull will probably remain unfulfilled. Still, a much better variant for the future of Poland’s economy may be dozens of thousands of smaller hi-tech companies manufacturing top products and services based on their own technologies. Perhaps the inventor of blue-laser technology does not generate a lot of media hype when he gets involved with food packaging in an ultra-high vacuum. And such things as the Polish contribution to the engines of the best Boeing and Airbus airplanes, robots performing micro-operations in the insides of human cells, bio-carbon, and the most cutting-edge film studio in Europe, may be considered five-minute curiosities. I also believe that we need not put our media faith on Polish graphene to supersede silicon in electronic devices, but this may be what the development path of our economy is going to look like.

Will we step onto this path? The condition of Poland’s infrastructure is a real ticking time bomb for the Polish economy, with transport, energy, logistics, and ICT facilities trailing behind. Even though, as it might seem, the development model of the Polish economy is already being decided by thousands of entrepreneurs and innovators without the need for a nationwide debate, the untying of the infrastructural Gordian knot is the domain of public authorities.

This reduces my optimism by a few percent.

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

A Moment Before the Presidency. We are practically on the eve of our country taking over the presidency of the European Union. Why is it such an important event for our country? Passing over all lofty and overly-optimistic hopes concerning this event, the most important aspect is the promotion of our country. To show Poland’s best, emphasise its assets and negotiating skills, and primarily the ability to be a big country, without an inferiority complex with regard to countries like Germany, France, or the United Kingdom. We should do what we can to reinforce our strong position in Europe.

Poland has the ambition to become the main player in the activities for Eastern Partnership. This is made possible not only by our geographic location, but also by cultural closeness, and the comprehension of economic, legal, and political problems, which, thanks to our own experience, are closer to us and easier to understand than they are to other Western countries. During the presidency Poland wants to popularise the subject matter connected to Eastern policy. Poland will make efforts to conclude association agreements, create free trade zones between the East and the EU, and finalise contracts with Ukraine. It is important for this presidency to make progress in the liberalisation of visa and trading policies, as well as the intensification of economic cooperation. Poland wants to encourage Belarus to cooperate with the West. However, the necessary condition is for that country to respect human and civil rights and the principles of a democratic state. Moreover, the EU Council will be trying to formulate a new cooperation framework and sign a new agreement between the EU and Russia, and to develop the EU-Russia Partnership for Modernisation.

The Eastern Partnership Civil Society Forum, planned for October 2011, will feature the setting of further cooperation goals between the EU and its eastern partners. Poland has raised the bar very high for itself, planning to achieve its programme goals.

In this edition of “Polish Market,” we are continuing the Presidency section, in which we present the principles of and expectations connected to this event. I also invite you to read our transport report, and the material on the economic achievements of the Lower Silesia region.

Rita Schultz Editor-in-Chief

5/2011 :: polish market :: 5

Meeting with the President of Italy The Beatification of John Paul II, cooperation within the EU, and the situation in North Africa, were the main subjects of conversation between President Bronisław Komorowski and Italian President Giorgio Napolitano.

According to the President, we should observe the situation in North

Africa together, but we should also observe the situation in Eastern Europe. “We cannot choose between engaging the EU in the African crisis and the problems of the Eastern Partnership – the EU policy must be equally balanced in these two cases,” said the President. ::

Audience with Pope Benedict XVI President honours activists in the Polish diaspora In Rome on 2 May 2011 President Bronisław Komorow­ski honoured activists in the Polish diaspora for outstanding services to the people of Polish origin living outside of Poland, the promotion of Poland, and actions taken to spread Polish culture and traditions. The President handed out the awards during a meeting with the leaders of Polish diaspora organisations. “All Polish roads lead to Rome. They lead from all over the world, from all countries where Polish people live and prove their devotion to the culture and traditions of Poland, to the Polish language, and to the faith of their ancestors,” said President Bronisław Komorowski.

He observed that the awards were proof of gratitude towards the whole of the Polish diaspora. “I wish to thank you all for your ability to keep in mind what is of greatest importance in Poland, and for your willingness to celebrate this special day of the beatification of John Paul II,” added the President.

He recalled that on 2 May the Polish Diaspora and the Polish Flag Day are celebrated. “I would like to wish you pride of these red and white colours, that added to the dignity of the beatification ceremony of our great compatriot,” emphasised Mr. Komorowski.

The lapel of the President’s jacket was decorated with a red and white rosette, which was later handed over to the Ambassador of Poland in Italy to remind Polish people, as the President said, that 2 May is the Polish Flag Day and that they should celebrate 3 May in a truly joyful manner.

The Vice-President of the World Polonia Council, Helena Miziniak, thanked the President on behalf of the honoured activists. “I feel proud that I can serve my country, as I believe that that we are part of the fatherland, that we are one,” said ­Miziniak. ::

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Polish President Bronisław Komorow­ ski, together with his wife Anna, were hosted by Pope Benedict XVI in the papal library. Before that, the President and his wife attended a thanksgiving mass for the beatification of John Paul II, which was officiated by Cardinal Secretary of State Tarcisio Bertone, on St. Peter’s Square.

“Holy Father, I wish to thank you for the beatification,” said the Polish President at the beginning of his conversation with Pope Benedict XVI. “We can hardly imagine a more joyful event.” The Pope, during his conversation with the President, used the expression “Viva la Polonia” (Long live Poland).

Bronisław Komorowski presented the Pope with a drawing of Saint Stanislaus, a martyred Polish bishop, and explained to the Pope that the celebrations in honour of this patron saint of Poland will take place at the same time as the thanksgiving celebrations for the beatification of John Paul II. Pope Benedict XVI presented the Polish President with a bas-relief showing the liberation of Saint Peter from prison.

Bronisław Komorowski repeated Poland’s standing invitation to the Pope.

“If the Pope’s health and agenda allow, Benedict XVI will make the best of guests to our country,” the President remarked. ::

European aspiration of Ukraine

Cooperation with the UK The Polish Prime Minister paid a one-day visit to London. The main subjects of talks with his British counterpart David Cameron concerned the situation in Libya, plans for the EU budget, and the top priorities of Polish presidency.

Both PMs emphasised the importance of good relations between Poland and the UK. One of the topics discussed was the development and meaning of the Eastern Partnership, especially in the light of recent events taking place in the Mediterranean. PM Tusk reacted positively to the declarations made by head of the British government, who said that the EU’s engagement in the affairs in North Africa will not affect the Eastern Partnership. “It was a spontaneous yet firm declaration which makes us believe that Europe will treat both neighbouring sides, Southern and Eastern, in a harmonious and balanced way,” said PM Tusk.

The Prime Ministers also discussed the matter of cooperation with the UN, e.g. in Afghanistan. Speaking of the EU budget, Donald Tusk admitted that Poland and the UK have different expectations as far as this matter is concerned.

PM Tusk presented the top priorities of the Polish Presidency, such as the single market, raising competitiveness and increasing economic freedom. “These are the issues that are common to Poland and the United Kingdom, and personally close to me and PM Cameron,” added Tusk. He also observed that Poland and the UK will work together to introduce Polish priorities, especially those concerning the single market and Internet exchange. The head of the Polish Government also observed that current regulations concerning this matter vary significantly in various EU countries and need to be standardised. ::

Donald Tusk, the Polish Prime Minister, has declared during his visit in Kiev that Poland fully supports Ukraine’s aspirations towards a close cooperation with the European Union. “We hope that Poland’s Presidency will become the moment in European history and of both our nations, where the enlargement of the European Union will reach a subsequent and higher level,” said the head of the Polish Government.

Donald Tusk made it clear that according to Polish experts Ukraine’s aspirations to join the EU are fully justified and it may be expected that Poland will give full support to all reasonable actions.

The Polish PM emphasised that Ukraine’s talks with the EU concerning establishing a free trade zone and the association agreement are currently at a decisive stage. The head

of the Polish government observed that strengthening the ties between Poland and Ukraine, as well as between Ukraine and the EU, is one of the goals of the Eastern Partnership, a common initiative of Poland and Sweden, started in order to build up close cooperation between the EU and its neighbours.

The head of the Polish Government spoke with the President and the Prime Minister of Ukraine on the preparations for the 2012 UEFA European Football Championship, energy security, the process of the liberalisation of visa requirements, commercial and economic cooperation, and also the subject of the preparations for the opening of the Polish cemetery of the victims of NKVD in Bykivnia near Kiev, where Polish victims of the Katyń massacre are also buried. ::

The Prime Minister and the question of the Internet PM Donald Tusk has met the representatives of NGOs, bloggers, Internet experts, and entrepreneurs dealing with the Internet industry to discuss the matters of the Audiovisual Media Services Directive, public consultations on government Internet projects, and access to public documents on the Internet.

The head of the Polish government said that both Poland and Europe lack a detailed depiction of virtual reality in the light of traditionally-perceived legal regulations and

civic duties. “I assume that until we are able to correlate real-life and virtual realities, we should consider the Internet as a special freedom zone,” emphasised the PM and added: “We have decided that this special position of the Internet should be retained until we are able to precisely define the consequences and construct the rules that will satisfy the needs. Except for crimes such as paedophile activity, of course.”

According to the Prime Minister we should all consider what should be done to make the law equally important in real-life and virtual reality. “If we are dealing with a crime, than this crime is by no means lesser because it is committed on the Internet,” said Donald Tusk. He admitted, however, that actions taken by the government and the administration in virtual space are on smaller scale in comparison to real life. ::

5/2011 :: polish market :: 7

Our Guest

Entropy on the continent which once ­overcame the state of nature Janusz Lewandowski, the EU Commissioner for Financial Programming and Budget tells “Polish Market” about the new face of the crisis - the rising of right-wing parties and separatist sentiment in Europe in the second decade of the 21st century.

Janusz Lewandowski the EU Commissioner for Financial Programming and Budget

The European crisis is now a hot topic on many continents. A world leader even said that Europe was “unnecessary”, that Europe had become a “problem for the world”.

There are certain reasons behind this current perception of Europe.

First of all, the European Union has spent too much time and energy working on the Lisbon Treaty rather than focussing on addressing people’s concerns, maybe we went through a phase looking too much inwardly. Secondly, there is a perception of Europe irritating many with over-regulation, which contradicts the principle of subsidiarity. Yet there are also more objective reasons: these days too many people take the concept of European community for granted. The gigantic peace dividends, the freedom of travelling and many other European freedoms, which are an unattainable dream on other continents, escape our minds.

Since 2009, it has become clear that we are facing a phenomenon of rising of nationalist, sometime farright movements as can be seen from the results of elections. In 2009 for the first time in half of European countries such new parties crossed the threshold of 5% in general elections. I saw this as the first sign of a malaise that reflects much deeper issues. Today we see euro-frustration from both the endowed and rescued and those who pay for the bailout packages.

The second sign of the underlying European crisis is the fact that despite the economic slowdown, the position

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of xenophobic right-wing groups is rising, even in countries where nobody thought they could take root. Of course the euro-crisis is not the only reason behind this phenomenon; another reason is the fear amongst many that the European way of life is threatened due to immigration. Europe is aware that in future it will become increasingly dependent on labour immigration and imported raw materials. It is a source of concern since both raw materials and workforce may come from non-European cultures.

It strikes me that such fears, fuelled by xenophobic parties, take root although there is no mass influx of immigrants from North Africa. However there is Europe’s hysteria. Fears have reached even those countries in which not even one single refugee from Tunisia or Libya has arrived! Fears are ahead of the facts.

These two signs of anxiety are accompanied by the fear that Europe’s power and role in the world is eroding. The EU was a major power in the 1990s – not a military or political hard power, this role was attributed to the Americans, not as a rising economic power either, as was China, rather as the so called soft power. Yet Europe remains the benchmark in terms of way of life. Monitoring the Internet it is striking that for young people in Algeria, Tunisia or Syria, Europe is a beacon. This means that Europe and its values retain their appeal.

It seems to me that the way out of the crisis is to answer the questions: How can Europe be useful for its 500

million citizens? How can it calm their fears? How can it protect itself against the return of borders and border control? We must look for Europe’s utilitarian value. An example? Look at the banking crisis; when it erupted the 27 member states of the EU quickly agreed on the introduction of state guarantees. This is an example of a quick reaction, which could be appreciated by citizens.

Take climate change for instance: since 2007 the EU has been offering to increase its 2020 reduction from 20% to 30% if other major economies commit to doing their share of a global effort to reduce emissions. This is clearly a very ambitious goal despite the fact that Europe accounts for a mere 14% of global greenhouse gas emissions. Other countries have a higher foot print, but it is Europe that has set the highest standards for itself to reduce carbon dioxide emissions even though some industries find this could harm them. In future, it will be important to strike a sensible balance between the need to fight climate change and that for economic growth and jobs.

Yes, Poland will have to take on some of the burden to tackle the current crisis, and this for a simple reason: Poland has not joined the EU to sit idle and witness the decline of Europe. ::

From Commissioner Lewandowski’s statement at a debate organized at the University of Warsaw by the Polish-French Cooperation Forum on 13 May 2011.

Our Guest

Marcin ­Korolec Undersecretary of State at the Ministry of Economy Poland and the United states share similar energy conditions. Both countries have a relatively large share of coal in the energy structure and, like the United States, Poland is striving for innovative green economy using its own energy resources. The year 2011 is the Year of Energy, and Poland from July 1 will hold the EU presidency. After the Japanese tragedy, as well as in connection with events in North Africa, a new dimension of energy policy and the need for new, in-depth discussion on this topic are needed. Therefore the political priority for the Polish presidency will be to launch a discussion within the EU on the external aspects of energy policy. The intention of the Polish presidency will also be effective negotiations on legislation taken over from the Hungarian presidency, including in particular the regulations on transparency and coherence of the

energy market. Poland also draws attention to the legal regulations related to energy infrastructure, particularly the connection between the member states, as an indispensable element of the single energy market. We will also work on issues of energy efficiency. I want to point out that in order to improve energy efficiency in Poland in 2013, the mechanism of White Certificates will be introduced, based on the Energy Efficiency Act, which was signed a few days ago by the President of Poland Bronisław Komorowski. The mechanism of White Certificates is intended to motivate both suppliers and end users of energy to undertake investments aimed at improving energy efficiency and reducing greenhouse gas emissions. New solutions will help rationalize the energy prices for end users and increase the competitiveness of Polish enterprises on the European market, particularly in sectors with high energy consumption. This mechanism will support businesses in reducing energy consumption by investing in new technologies. We have the ambition to finish the work during our presidency of the EU on the draft EU-US Energy Star project. Cooperation on energy efficiency should be focused on cooperation in terms of technical standards and energy efficiency labelling of products and energy-using equipment. In this area the programme for energy-efficiency labelling of EU Energy Star can be very helpful. As for bilateral cooperation, members of the Polish government and experts are actively involved in many organizations working on energy and climate change, in which we work closely with American partners - the International Energy Agency, International Renewable Energy Agency, Carbon Sequestration Global Forum, the Global CCS Institute, and the Methane to Market Partnership, where Poland could share its experience in the use of methane, especially in the coal industry and is interested in participating in projects of the Amercian Environmental Protection Agency. Due to the strategic importance of coal to ensure energy security in Poland, and taking into account the importance

of this fuel in electricity production in the US, it seems desirable to make our countries even closer in the development of clean coal technologies. Particular attention should be paid to scientific collaboration. Poland’s Central Mining Institute and the Institute for Chemical Processing of Coal have already signed an agreement with the National Energy Technology Laboratory of the US Department of Energy. In July 2010 Poland signed with the US a joint statement between the Ministry of Economic Affairs and the Department of Energy, and Department of Commerce for industrial and trade cooperation in the nuclear energy sector. During the 74th session of the General Convention of the International Atomic Energy, an agreement was signed between the president of the Polish National Atomic Energy Agency and the US Nuclear Regulatory Commission on information exchange and cooperation in the field of nuclear safety. As for the goals of energy security and the environment in Poland, we are creating a strategy for 2020. The main objectives of this strategy are the sustainable management of environmental resources and ensuring secure and competitive energy supplies. Poland’s economy has for decades been based on the use of coal, which results from the existing resources in coal and lignite. Currently, the share of coal as a fuel for electricity production is dominant - about 85%. Poland also has large resources of conventional gas. In the area of​​ oil and gas, Poland has the political and economic priorities in building a national strategy of supply lines, we also need to build underground storage facilities for crude oil and liquid fuels in the caverns. In this area we would like to benefit from the experience of American partners. U ​ nconventional methods of obtaining natural gas is a new prospect of cooperation. Over the last decade, the industry of gas exploration and production, has undergone a true evolution, particularly in the USA, where the possibility of extracting gas from unconventional sources, particularly shale gas has been recognized. The 5/2011 :: polish market :: 9

Our Guest

US is the world leader here. Exploration of unconventional gas reservoirs require mutual cooperation. Project exploration of unconventional gas reserves is a priority for the Polish economy. This year, a report appeared on the shale gas resources developed by the US Government’s Energy Information Agency, which shows that Poland might have as much as 5.3 billion cubic meters of gas in the shales.

The expectations are enormous, but we must remember that more reliable information about shale gas resources will be known after the exploration and verification of the geological documentation of licensed companies. It should be noted, however, that in the coming years, Poland’s energy and power sector will transform towards a greater demand for natural gas exploitation. First, as a reserve fuel for renewable energy, and secondly in relation to the entry

into force of the CO2 emissions trading scheme in 2013. One of the biggest challenges facing Poland is to reconcile economic growth with care for the environment for present and future generations - to improve air quality, reduce emissions, manage water properly, introduce rational management of waste, use it also as energy source, promote environmentally friendly behaviour and create green jobs. An opportunity for the development and promotion of Polish companies is created by the participation in programmes dedicated to environmental affairs such as GreenEvo, whose purpose is the transfer of innovative technologies and promotion of Polish thought and technology. The Minister of Economy has adopted a national action plan on renewable energy. In Polish conditions, renewable energy includes energy from the direct use of solar energy,

wind, geothermal resources, water, solid biomass, biogas and liquid biofuels. The target share of renewable energies in final energy consumption in 2020 is 15%. As for nuclear energy, in July 2009 the Ministry of Economy published a timetable framework for nuclear energy. Polish nuclear energy programme should be adopted by the Council of Ministers by the end of June. This programme envisages that before 2020 the first nuclear power plant in Poland will be built. ::

Speech by Marcin Korolec, the Undersecretary of State at the Ministry of Economy, the Poland US Energy RoundTable organized by the Chamber of Commerce for Energy and the Environment, and the United States Energy Association on 11 May 2011.

ADVERTISEMENT

It is the nineteenth time “Gazeta Bankowa” is organising a ranking selecting the Best Banks of the Year based on the aggregate of the financial results for 2010. Banks are very interested in the ranking, which results will be announced at the “Gazeta Bankowa” Gala on 9 June this year in the House of Polonia in Warsaw. It is prepared in cooperation with PwC, the world’s leading organisation providing professional services.

In the nineteenth edition of the Ranking the Best Banks of 2010 will be awarded in the following categories: • Large banks (with equity of more than PLN 500 mln) • Small and medium-sized banks (with equity of less than PLN 500 mln) • Co-operative Banks.

In addition, for the second time the laureates of the Best SKOK ranking will be selected.

The invited guests will include presidents and directors of the largest Polish banks, insurance companies and major financial institutions in Poland. Every year during the gala evening we host 150 prominent personalities from the world of finance.

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Transport and Aviation

Regional airports are spreading their wings The development of regional airports is one of the earliest aspects of the Polish economic transformation. Although Poland has had a fairly welldeveloped network of civilian airports, and particularly military airports, since after World War II, their role was very limited. They used to be auxiliary airports for the main airport in Warsaw, which means that, in practice, they were falling into decline.

Sandra Wierzbicka

Szczecin

The airport is located 15 km from the centre of Gdańsk, the same distance from the centre of Gdynia, and about 20 km from the centre of Sopot. A taxi to the city centre costs about PLN40.

Warsaw

Bydgoszcz

The airport is 10 km away from the centre of the capital. The journey to the city centre takes about 25 minutes, you can take buses no. 175 or 188, or a taxi (about PLN30).

The airport is situated 3 km away from the centre of Bydgoszcz.

Access by bus is possible by bus line 80, which is the connection with the centre of Bydgoszcz.

Łódź

Poznań

The airport is located about 6 km away from the city centre.

The journey takes no more than 10 minutes.

The airport is located about 7 km away from the city centre. A taxi costs about PLN30.

Zielona Góra

Wrocław Bus line no. 406 runs to the central railway station and the central bus station every day every 20 minutes.

The airport is located about 10 km from the city centre and a taxi costs about PLN40.

After Poland’s entry to the European Union and the liberalisation of the air transport market in 2004 the situation began to change. A special role was played by the mass emergence of low-cost airlines, which began to fly also to Poland. They contributed to a change in the philosophy of flying, and, from being a luxury item, air travel has become a convenient way to travel which everyone wanted to use.

The aviation market in Poland has been revolutionised by EasyJet, Ryanair, SkyEurope, Centralwings and Wizz Air, though now some of these carriers no longer fly to Poland. It became clear that regional airports should be developed. The government adopted a strategy of expanding and modernising the existing civilian airports and using and adapting military, sports and service airports. The construction of new airports will be possible only after the exhaustion of the modernisation opportunities of the existing

Gdańsk

The airport is located about 40 km away from the city centre. A taxi costs more than PLN100. LOT Polish Airlines provide a shuttle bus to the city centre, which leaves 15 minutes after the landing of an aircraft.

Ticket price PLN20.

The airport is located near the agglomeration called the Lubuskie Tricity (Sulechów, Zielona Góra, Nowa Sól), about 30 km from Zielona Góra, 26 km from Świebodzin, with the border crossing with Germany, and 80 km from Gorzów, the capital of the region. Currently, passenger flights are suspended.

A new start

Rzeszów The distance which separates the airport from the city centre is about 10 km. A taxi costs some PLN30.

Katowice The airport is located nearly in the centre of conurbation with a population of approximately 5.5 million people. Access to Katowice 35 km (approx. 30 minutes), to Gliwice and Zabrze 45 minutes, to Bielsko approx. 50 minutes, to Bytom approx. 25 minutes, and Tarnowskie Góry approx. 15 minutes. A taxi to Katowice costs about PLN100, and you can also use Express Bus - ticket price PLN20.

Kraków This is the only airport that has a fast rail link to and from the city centre. Departures are every half an hour. The journey takes 18 minutes.

Ticket price PLN10.

Practical information on regional airports in Poland

5/2011 :: polish market :: 11

Transport and Aviation

Airports in Poland – number of passengers No.

City

% share of PPL

Managing entity

1

Warsaw

Przedsiębiorstwo Państwowe “Porty Lotnicze” (PPL)

2

Kraków

Międzynarodowy Port Lotniczy im. Jana Pawła II Kraków‑Balice Sp. z o.o.

3

Katowice

Górnośląskie Towarzystwo Lotnicze S.A.w Katowicach (Międzynarodowy Port Lotniczy Katowice w Pyrzowicach)

4

Gdańsk

Port Lotniczy Gdańsk Sp. z o.o.

5

Wrocław

Port Lotniczy Wrocław S.A.

6

Poznań

7 8 9

Number of passengers in 2009

Number of passengers in 2010

growth 2010/2009

8 280 345

8 666 552

4.66%

76.19

2 658 841

2 839 124

6.78%

17.896

2 301 161 0

2 366 410

2.84% 16.92%

36.59

1 890 263

2 210 066

25.011

1 324 483

1 598 693

20.70%

Port Lotniczy Poznań-Ławica Sp. z o.o.

49.89

1 235 942

1 384 311

12.00%

Rzeszów

Port Lotniczy “Rzeszów-Jasionka” Sp. z o.o.

45.65

380 691

451 720

18.66%

Łódź

Port Lotniczy Łódź im. Władysława Reymonta Sp. z o.o.

0.0

312 197

413 662

32.50% -2,90%

Szczecin

Port Lotniczy Szczecin-Goleniów Sp. z o.o. im. NSZZ Solidarność

10

Bydgoszcz

Bydgoszcz S.A.

11

Zielona Góra

Przedsiębiorstwo Państwowe “Porty Lotnicze”

12

Szczytno

Port Lotniczy Mazury-Szczytno Sp. z o.o.

54.498

276 582

268 563

8.062

264 528

266 480

0.74%

n/a

2 935

3 637

23.92%

12.67

0

0

0

Data: Civil Aviation Office, the number of passengers served and the operations performed in regular and charter traffic in the years 20082010; Przedsiębiorstwo Państwowe “Porty Lotnicze”, 2009 annual report on Polish airports

airports. In practice, as to the construction of a new airport, one option is being considered at the moment the Central Airport.

A giant and ugly ducklings For many years, Poland had one airport - in Warsaw. In addition to the central Warsaw Frederic Chopin Airport, in Poland there are now 11 regional airports - in Kraków, Katowice, Gdańsk, Wrocław, Poznań, Rzeszów, Łódź, and Szczecin, as well as in Szczy­tno and Zielona Góra, which currently do not handle passenger flights.

Four provinces: Podlaskie, Opolskie, Lubelskie and Świętokrzyskie do not have airports. But the effects of the former centralisation are visible today. Just compare the results of the two airports, which handled the greatest (Warsaw) and the smallest (Zielona Góra) number of passengers last year.

The numbers - more than 8.5 million and less than 4,000 respectively - speak for themselves. Of course, the difference between Warsaw and Kraków, in the second place, is not so massive... just triple.

An analogous situation can be observed in the air carriers market. Almost 30% of market share is held by LOT - Polish Airlines. In 2010, the low-cost WizzAir and RyanAir handled approximately 20% of the market each, but Lufthansa, which was outside the top three, handled only 7%, and the next ranked EasyJet 3% (according to the Central Aviation Office). As far as the most popular

12 :: polish market :: 5/2011

destinations are concerned, the dominance of one destination is again noticeable. Nearly 17% of people who departed from Poland flew to London, over 6% to Frankfurt, which is a popular transit airport, and just over 1% to New York.

Ownership structure and financing Regional airports are managed by independent companies, whose shareholders are, however, similar institutions. They usually include province authorities, municipalities and/or cities in the region in which airports are situated and the “Polish Airports” State Enterprise – PPL. PPL manages two airports - in Warsaw and Zielona Góra. It also holds shares in 10 companies managing the airports in Kraków, Szczecin, Poznań, Gdańsk, Modlin, Wrocław, Katowice, Szczytno, Bydgoszcz and Rzeszów.

Most of the airport management companies are profitable and their current airport activities are financed from their own income. The degree to which airports use the incomes from non-aviation activity is very varied from just a few percent in Rzeszów, an average of about 20-30% in Kraków, Katowice, Poznań and Wrocław, to 60% in Szczecin.

As regards investments - it must be acknowledged that there are numerous and ambitious investments in the country - most of the airports also partially finance them from their own resources, EU funds and other funds raised. An example of a business

approach to financing investments is the programme for the years 2009– 2015 adopted by Gdańsk Lech Wałęsa Airport. The total investment amounts to nearly PLN400 million net, of which PLN178 million has been obtained from the EU Infrastructure and Environment Operational Programme, PLN140 million is to be gained from bond issues (by Nordea Bank), PLN88 million will be contributed by the company, and PLN55 million will be raised from the capital increase in the company’s shares. Wrocław Airport similarly prospers in the market. In April it signed an agreement with Bank Pekao SA for corporate bonds issuance of PLN230 million. In late March, the investment was supported by the Infrastructure and Environment Operational Programme under Measure 6.3 - Development of the TEN-T air transport network. The EU funding for this project will be over PLN128 million. In total, the value of the multiannual airport investment programme is more than PLN400 million.

Those who invest are those who expect return on investment. According to recent data, regional airports in the first quarter reported significant increases in the number of checked-in passengers, and 2011 and 2012 should be a prosperity period for regional airports. ::

Sources: airports’ spokespersons, the Civil Aviation Office

Transport and Aviation Alina Wołoszyn Director at the consulting company KPMG Over the last three years the majority of Polish regional airports have started the process of expanding the infrastructure necessary to handle the growing number of passengers and preparing for the EURO 2012 European Football Chapmionship. The growing investment needs have forced most regional airports to increase external financing from the banking market.

For some of the regional airports this task has proved to be difficult to complete because the timetable for expansion of the airport forced them to seek funding at the beginning of the financial crisis. During this period, a significant part of banks restrained from providing funding or offered very restrictive financial conditions.

In the years 2008–2010 financing banks expected the involvement and support of regional airports’ shareholders in the form of recapitalisation and/ or provision of a guarantee/ the signing of a support agreement.

Such support from shareholders is required, because the start of major investments in the airport infrastructure by the regional airports results, in

particular in the first years after the completion of the investment, in a difficult financial situation of such an airport resulting from a surge-increase of the escalating long-term financial debts.

Obtaining this support was not easy, considering the often complicated shareholding structure of the regional airports, where there are several shareholders, including local government units, PPL, and state-owned enterprises. Often individual shareholders’ interests are contradictory.

Additionally, the situation is hindered by the lack of a long-term strategy of PPL for regional airports.

There has also been the problem of rising public sector debt, including local government units’ debts. Therefore, some of them cannot afford a significant recapitalisation of regional airports, or guarantees.

PPL, as a shareholder, also implements its investments, which significantly limits its ability to financially support regional airports.

Under these conditions it was especially difficult for airports to agree on the form of support between several shareholders and financial

institutions, because banks expected as big a shareholders’ support as possible, while the shareholders, due to their financial situation, sought to reduce the additional financial commitment.

For banks the support of the public sector (local governments) is essential for the financing of regional airports, as it significantly reduces the credit risk of the project, changing it from project finance/hybrid risk to public sector risk.

Since early 2011 the situation on the financial market has significantly improved, and there has been an increase in the number of financial institutions interested in financing regional airports.

Increased competition among banks will result in improved financial conditions offered to regional airports. In addition, banks are willing to provide financing of regional airport activity without the support of shareholders, and take the risk of air traffic.

Moreover, pricing conditions have been improved and margins have been significantly reduced for investment loans, approaching a level closer to 100150 bps, unlike a period of financial crisis, where margins were significantly above 200 bps.

ADVERTISEMENT

Regular flights from Rzeszow: London (LTN, STN), Dublin, Birmingham, Bristol, East Midlands, Frankfurt (FRA, HHN), Barcelona (Girona), Warsaw, Gdansk Rzeszow Airport Total Traffic Trends „Rzeszow-Jasionka” Airport (LTD.)

2003 2004 2005

36-002 Jasionka 942, Poland www.rzeszowairport.pl Tel. +48 17 852 00 81, fax +48 17 852 07 09, e-mail: rzeszowairport@rzeszowairport.pl

2006 2007 2008 2009 2010 0

100

200 2 Way Pax (000)

300

400

500

Marketing and Route Development Department 5/2011 :: polish market :: 13 Tel. +48 17 7178 740, -729, -739, e-mail: marketing@rzeszowairport.pl

Transport and Aviation

Airports and roads under construction The biggest boom in Polish air traffic came in 2007, with as many as 19 million passengers processed through the country’s airports. In 2010 the passenger count rose 7.8% against the previous year (to 17.36 million). Most frequented in 2010 was Warsaw’s Chopin Airport (45%) and terminals in Kraków (10%) and Gdańsk (8%).

Magdalena Szwed Air traffic in Poland is expected to grow fast with new terminals enabling more people to travel by plane.

Also expansions of existing local terminals are expected to boost regional growth, especially the construction of new roads throughout the country, which will improve Poland’s connections with the rest of Europe. The fastest-developing airports last year were Łódź (32.5%), Zielona Góra (23.9%) and Wrocław (20.7%).

According to an ACI report, there were 1,700 air terminals in operation worldwide in 2009, including 400 in Europe. Together they processed 4,445 million passengers (1,360 million in Europe). In all, 73.2 million tonnes of goods were freighted by air, onefifth of the amount in Europe. Poland has relatively few airports compared to other European countries.

Europe’s leaders in terms of airport numbers are France, Spain, Russia, Greece and Britain, where the average ratio is one airport per 460,000 inhabitants. In Poland the ratio is one airport (per 3.2 million inhabitants).

The biggest share in Europe’s air traffic (one-third) belongs to air terminals in London, Frankfurt and Paris, Amsterdam, Madrid and Rome.

In keeping with government plans, the development of Poland’s airport network will take a dual course: first will come the modernization of existing military and sport airfield, most of which are located in the Pojeziere Pomorskie district. Also upgraded will be airfields in the provinces of Zachodniopomorskie, WarmińskoMazurskie, Podlaskie, Lubelskie and

14 :: polish market :: 5/2011

Świętokrzyskie, as well as a number of tourist and commercial ports, among others in Szczecin, Gorzów Wielkopolski, Toruń, Grudziądz, Olsztyn, Suwałki, Katowice, Częstochowa, Nowy Targ and Stary Sącz.

This will be followed by the construction of new airports. Also necessary will be the inclusion of Polish air terminals in the EU transportation network.

Financing The main barriers in developing air transport are the shortage of funds, outdated infrastructure, insufficient terrain and ecological restrictions.

Current aviation policy bases on the rational employment of EU funding as a means of eliminating the disproportions in this respect between Poland and other EU countries. EU funds and funding from the Operational Programme Infrastructure and Environment enable the construction and modernization of airports and roads.

Smaller local terminals will be erected with the help of the European Regional Development Fund. The Infrastructure Ministry has said that eight terminals in the TEN-T network will focus on modernizing infrastructure.

Investments planned until 2015 are to total PLN 4.7 million, including PLN 1.2 million in EU funding.

Most expensive will be modernization work at Warsaw’s Chopin Airport, expected to total PLN 1.2 billion including PLN 148 million in EU funding. In 2009 Chopin Airport processed 8,320,900 passengers (7,489,600 on international routes).

The biggest beneficiaries of the Operational Programme Infrastructure and Environment will be Balice International Airport in Kraków (PLN 223 million), Gdańsk Airport (PLN 178 million), Katowice Airport (PLN 164 million), Frederic Chopin Airport in Warsaw (PLN 143 million), Wrocław Airport (PLN 142 million), Ławica Airport in Poznań (PLN 111 million) and Jasionka Airport in Rzeszów (PLN 102 million).

Most EU funding – over PLN 180 million – will go to airports in Gdańsk and Rzeszów. Wrocław and Poznań will receive over PLN 140 million.

The biggest investments (after Warsaw) are planned in Kraków, where construction work is to cost about PLN 988 million. Airport upgrades in Katowice are estimated at over PLN 700 million, half of which will come from the EU and the Infrastructure and Environment programme.

The total value of investments at the remaining airports (Gdańsk, Wrocław, Poznań, Rzeszów, Szczecin) will come to PLN 1.8 billion, of which PLN 655 million will come from the EU and PLN 589 million from the budget of the Infrastructure and Environment programme. Airports in Szczecin, Poznań, Wrocław and Zielona Góra are expected to provide competition for German terminals. Regional airports planned in Radom, Sochaczew, Mińsk Mazowiecki and Gdynia will receive EU funding but will also have to seek private investors.

New airports In a few years Chopin Airport will no longer be able to cope with growing passenger traffic. According to forecasts, the passenger count at Polish air terminals will cross the 30-million mark by 2015, reaching almost 80 million in 2035. To resolve the problem a new central terminal is planned between Warsaw and Łódź, which would eventually relieve or even replace Warsaw. The estimated cost of this terminal is EUR 3.1 billion, its construction

Transport and Aviation

Flights by year

Funding for the programme to build domestic roads until 2013 Source of funding

Number of flights Year

domestic traffic

international traffic

Spending planned for 2008–2010 (in PLN thousands)

transit traffic

2000

33

96

123

2001

40

110

126

2002

41

102

135

2003

46

109

145

2004

45

133

178

2005

41

156

213

2006

46

186

246

2007

48

211

283

2008

46

226

323

2009

45

208

300

should be launched in 2013 and will take 8 years.

The year 2012 should see the opening of three new terminals in Modlin, Gdynia and Świdnik. The costs will be respectively PLN 305 million, PLN 60 million and PLN 350 million.

Passenger traffic A report by the Civil Aviation Office (ULC) lists 2010 passenger figures at Polish airports. Although considerably below the record year 2008, passenger traffic was nonetheless 8% higher than in 2009. The leader here was Warsaw with 8,666,000 passengers.

Roads Poland has a shortage of motorways and expressways. In 2008 dual carriageways accounted for only slightly over 1.5% of all public roads. In 2009 only 9 Polish provinces had motorway

National Road Fund

28 856 289

30 957 827

23 188 792

9 183 758

National budget

22 501 395

2 994 424

3 000 000

3 100 000

9 094 424

Total

51 357 827

33 957 827

26 188 792

12 283 758

72 430 378

stretches. The provinces of Podlaskie, Podkarpackie, Mazowieckie, Lubelskie, Świętokrzyskie, Lubuskie and Warmińsko-Mazurskie had no motorways at all. In 2009 12 Polish provinces had expressways. According to the General Directorate for National Roads and Motorways (GDDKiA), 59% of Poland’s trunk roads were in good condition, 21.5% were in a mediocre state and 18.9% in a decidedly bad condition. Over 40% of them are in need of repair, of this 20% need upgrading urgently.

Poland has 383,000 kilometres of public roads, of which 4.8 thousand belong to the TEN-T system. Construction work on major routes is to be completed after 2020. The National Road Fund will channel PLN 82 billion to road projects planned until 2013.

The Infrastructure Ministry said that in 2010 1,403 kilometres of roads were under construction with contracts for further projects amounting to PLN 22 billion, and 767 kilometres of roads underwent repairs. The past 15 years saw road investments worth 20 times this amount, from PLN 1 billion in 1995 to PLN 20 billion in 2010.

Hard-paved roads in Poland

Poland

Outlays in 2011-2013 (in PLN thousands)

2013 (in PLN thousands)

2012 (in PLN thousands)

63 335 954

Source: Programme to build national roads 2011- 2015

Source: Polish Air Navigation Services Agency

Area

2011 (in PLN thousands)

The peak years were 2008-2009, when the value of road investments rose from PLN 13.6 billion to 18.3 billion.

Road projects until 2015 The Infrastructure Ministry has reported that contracts for the construction of 1,891 kilometres of roads countrywide were sealed between 2007 and 2011. Planned are 781 kilometres of motorways, of which 168 kilometres will be built in PPP (Public-Private Partnership) projects. In the same period 1,233 kilometres of roads were completed. Currently work is underway on 1,433 kilometres, 76 kilometres are being modernized. Also under construction are 736 kilometres of motorways and 528 kilometres of expressways.

In 2011 construction will be launched on 40 kilometres of motorways, 159 kilometres of expressways and 66 kilometres of ring-roads. Completed will be 230 kilometres of motorways, 70 kilometres of expressways and 79 kilometres of ring-roads.

The national roadbuilding plan for 2011-2015 foresees the completion of 810 kilometres of motorways, 782 kilometres of expressways and 26 ring-roads by 2013. The related costs are estimated at PLN 72 billion, of which 63 billion will come from the National Road Fund and 9 billion from the national budget.

The year 2010 saw a marked growth in PPP undertakings. According to a PPP Market in Poland 2010 report, 22 of 61 road projects contracted last year will be carried our in the PPP system, mainly in the provinces of Małopolska, Mazowsze and Pomorze. ::

Passengers, cargo, number of operations Hard-paved roads (in km)

Change in road length in 2004–2009 (in km)

in %

Airport

Cargo (tonnes)

Number of operations

Warszawa-Okęcie

8320

50143

123225

Kraków-Balice

2680

2400

32907

9.8

Katowice-Pyrzowice

2364

6543

26206

4.4

Gdańsk-Rębiechowo

1897

4017

28450

Wrocław-Starachowice

1365

1132

227744

Poznań-Ławica

1271

2180

22862

Rzeszów-Jasionka

383

557

8798

Łódź-Lublinek

312

3

4176

Szczecin-Goleniów

296

730

10887

275

528

6376

3

n.a.

1264

268807

20021

8.0

Mazowieckie province

32959

5025

18.0

Wielkopolskie province

26790

2383

Małopolskie province

22469

945

Lubelskie province

19582

1710

9.6

Łódzkie province

18172

1951

12.0

Śląskie province

20991

1031

5.2

Dolnośląskie province

18369

286

1.6

Kujawsko-Pomorskie province

15140

1539

11.3

Podkarpackie province

14791

947

6.8

Bydgoszcz-Szwederowo

Zachodniopomorskie province

13566

540

4.1

Zielona Góra-Babimost

Source: Central Statistical Office (GUS), Regional Data Bank

Number of passengers (thousands)

Source: Civil Aviation Office

5/2011 :: polish market :: 15

Transport and Aviation

Challenges ahead of LOT Leszek Chorzewski, Polish Airlines LOT spokesman, discusses the ideas concerning the new company strategy, the activities of the company on a highly-competitive market, building new standards of customer service, and ideas concerning the most important link of the sales and customer communication process, which is the Internet.

fleet but a change in our attitude towards customer service as well. As far as our competitive edge is concerned, a significant point will be the shortening of the journey time of transatlantic flights. Our company will be the first carrier in Europe to use Boeing 787.

Our cooperation with other airports aiming at creating a transit airport for LOT in Warsaw is of high importance as far as the development of Poland’s national air carrier is concerned, and takes a high place in our strategy of developing connections with the East. The construction of a hub airport means naturally taking the next step in the cooperation of the airport with the main carrier operating at that airport. Better quality of services offered to passengers changing flights at Warsaw airport is our common goal.

What are the advantages of LOT and what are the main ideas that will be shaping the future of one of the strongest and high-profile brands on the Polish market?

A state-of-the-art fleet based on Embraer Airbus planes is definitely what we can call our good side. The decision that we had taken more than 10 years ago to purchase Embraer planes from the Brazilian producer allowed us to make our fleet up-to-date. LOT was the first European airline to introduce EMB 170 airplanes. The deliveries of EMB 195 planes, which can board 112 passengers, have commenced this year.

The first plane joined our fleet in April and is to serve our European connections. Currently LOT is using 25 planes from the Brazilian producer and we are planning to introduce three more Embraer 195’s during this year and next.

LOT is also going to offer its passengers an entirely new quality and comfort in travel thanks to Boeing 787 Dreamliner airplanes. The first passengers are to fly the planes under the LOT logo at the beginning of 2012. We have just started – as part of the Elite Fleet programme – the recruitment process for the on-board personnel dedicated to serving business-class passengers on long-haul flights only. The introduction of the B787 means not only the replacement of the

16 :: polish market :: 5/2011

The supervisory board accepted this new strategy for LOT months ago. What is it that the company is doing now in order to make up for the losses of 2008-2010 and to be off to the races?

Our new strategy should aim at increasing the market share of the company, as well as increasing its value before the privatisation process starts.

We do need to change the situation LOT is currently in, as a result of various wrong decisions, and restore the profitability of the company. We need to close down the unprofitable connections, increase profits, and then think of opening up new connections in order to make up for the losses and take the company out of the woods.

Especially as new connections are always a large investment. Because of all these, the main assumptions of our new strategy aim at the improvement

of our financial results, the construction of a hybrid business model based on competitive prices and simultaneous high quality of passenger services, and the optimisation of the connections network.

Your Internet website lot.com is becoming more and more userfriendly and attractive for passengers. New fare tariffs, tools facilitating earlier planning of the journey and looking up the best prices are available. What are the effects of the development of this sales channel?

If you plan your journey carefully, and if the main criterion is the price, you can buy flight tickets really cheap e.g. to Chicago it is PLN1500, Toronto PLN1800, and return tickets to European cities may cost as little as PLN329.

The LOT website is now becoming the main sales channel. In March a new First Minute tariff appeared on the website and it is the first marketing campaign organised on such a big scale not only in Poland but on 12 foreign markets as well. In April we started also a new search option “Find the best price.” This application is very useful, especially if your budget is limited.

The lot.com website is now the fastest growing sales channel and the most effective way to get our existing and potential customers. Over 70% of all our marketing investments are dedicated to the on-line channel. Currently the number of visitors of lot. com is around 1.5 million a day, and the number of sold First Minute tickets is far beyond our expectations.

We are currently working on a new campaign concerning the holiday product range by LOT. Interview: Henryka Kopacz

Transport and Aviation

Polish airports have already made up for the losses they suffered after the 2009 global crisis. The strongest points on the map of Polish airports and airlines are still Warsaw Chopin Airport and PLL LOT (together with Eurolot). Considerable changes may be observed among the low-cost carriers, some of which have stopped their operations in our country for good, while others have limited their activities, which allowed the strengthening of the second and third positions of the two biggest operators in this segment, namely Wizzair and Ryanair, as far as the number of the passengers flown under Polish skies is concerned.

also believes that although the role of Warsaw is becoming weaker each year, it is still the leading airport in Poland, which serves three times more passengers than the biggest regional airport in Balice, near Kraków, and Warsaw airline connections are still the most significant ones. According to the Civil Aviation Office, last year the fastest-developing regional airports, i.e. the airports where the number of passengers served had grown considerably compared to the previous year, were Łódź - 32.5% more passengers, Wrocław – 20.7%, Rzeszów – 18.7%, Gdańsk – 16.9%, and the smallest airport in Zielona Góra – 23.9%. Overall, the regional airports have increased their market share from 56.3% in 2009 to 57.7% in 2010.

Patryk Mirecki

The biggest regular carriers

The gap between LOT and other carriers is narrowing

Over the last 20 or so years that have passed since the fall of the communist system, Poland has only partially reduced the gap separating the Polish passenger airline market from the markets of the developed Western countries. Polish passengers still travel by air much less often than Germans or Brits do. Our airports, perhaps except for Warsaw, still fall far behind Frankfurt, London, or Paris airports. The expansion of the international Chopin Airport in Warsaw has been dragging on for years on end, which makes the airport a not particularly good proof of our aspirations and potential, especially in the light of the next year’s football championship.

Destination: Euro 2012 It is because of the Euro 2012 European Football Championship that four of our airports (in Warsaw, Gdańsk, Wrocław, and Poznań) have been designated the “Main Airports for Euro 2012” while Katowice Airport has become a support airport. This new role they are to play has gained them a bigger share of the over PLN4.7 billion earmarked for government investments in the eight biggest airports in our country. The above-mentioned four will get some PLN3 billion to expand their airport infrastructure by 2015.

Speed-up in the last decade According to Krzysztof Laprus, an expert from the Faculty of Tourism and Leisure at the University School of Physical Education in Kraków, a considerable speeding-up of the development of the Polish passenger airline market took place after the year 2000. In 2000 the number of passengers checked-in at Polish airports reached 5.7 million, in 2009 16.2 million (0.5 million less than 6 months earlier), and in 2010 20.5 million. According to the Civil Aviation Office (ULC), Polish airports are to serve as many as 40 million people in 2020, and thanks to this fact another 100,000 jobs will be created in this industry. It is worth mentioning, though, that the statistics concerning passengers travelling by air are quite remote from similar statistics

18 :: polish market :: 5/2011

concerning passengers travelling by rail. From January to July 2010 passenger railway operators served 151.6 million passengers (14.7 million less than in the similar period in 2009).

Warsaw + 11 In Poland there are 12 civilian airports and that are used for civilian passenger traffic. The leading airport is still Warsaw Chopin Airport, and the remaining 11 are regional airports. According to Laprus, the Warsaw Chopin Airport, has long been favoured by the state authorities, which limited the chances for the development of other airports. Warsaw was supposed to be a kind of transit station for Poland.

Today, more than half of passengers travelling by air are served in Warsaw, but this airport is going to lose in importance as the artificially-limited traffic in other regional airports is going to rise, and by “regional” we mean “other than Warsaw.” “The development of airports located in the vicinity of larger cities could easily be observed after the liberalisation of the passenger airline market in May 2004. Many of the regional airports introduced international connections by means of cooperation with cheap airlines such as EasyJet, Ryanair, SkyEurope (withdrew from Poland in 2008), Centralwings (stopped their operations as a low-cost carrier and concentrated on charter flights) and Wizz Air,” Krzy­sztof Laprus says. He

According to the Civil Aviation Office, last year brought a substantial rise in the passenger airline market (compared to the falls in 2009). Polish airports served 20,469,000 passengers altogether. 17.36 million of these were served by regular passenger flights, and over 3.1 million by charter flights. PLL LOT, together with Eurolot, remained the most significant partners at Polish airports. Passengers served by the group reached 29% of all passengers, i.e. around 5 million people served in this segment. The four next places belonged to Wizzair (22.6%, i.e. 3.9 million people), Ryanair (21.5%. 3.73 million), Lufthansa (7.1% - 1.24 million), and EasyJet (3.1% - 0.53 million). 39 regular carriers offered connections to and from Poland. The report issued by ULC states that there is a slight tendency to concentrate on the connections around the biggest airlines. The market share of the five biggest carriers has been steadily growing since 2005, and at present they serve 83.3% of passenger flights.

What’s more, the market share of the low-cost carriers has stabilised, and since 2007 it has maintained the level of around 50%, although the number of no frills flight operators has fallen from 15 to 9, observes ULC. The Office also points to the fact that the phenomenon of the market share loss of PLL LOT has stopped (starting from 2008), although the distance between the biggest and the other carriers is getting smaller. The biggest

Transport and Aviation The construction of a new airport for Warsaw (apart from the existing Chopin Airport) would definitely improve the quality of services offered to passengers in Poland. “Unfortunately, this type of investment, considering its size, could be completed in about 20 years time,” says Tomasz Dziedzic, Ph.D. from the Institute of Tourism, who adds that “it may prove necessary, as otherwise part of our passenger traffic might be taken over by the expanding airports in Germany.”

group of passengers served were passengers flying to and from London (2,597,000, i.e. 16.77% of all passengers), yet this number is going down each year. A growing number of passengers has been observed in all 10 of the most popular destination cities except from Dublin and the abovementioned London. Connections to and from Düsseldorf, Oslo, and Rome have been rising very dynamically.

Charter flights The charter-flight segment grew by around 10% in the previous year, compared to 2009, and reached the level of 3,283,000 passengers served. Unlike in the case of regular carriers, the structure of the market as far as charter flights are concerned is much more diverse. PLL LOT has proved to be the biggest operator in this segment of the market as well (15.7% of passengers at Polish airports). The other biggest carriers were Travel Service (8.5%), Eurocypria (7.1%), AMC Airlines (7.0%), and Air Italy Polska /now Air Poland (6.8%). 80% of charter flights were served by 15 carriers altogether (5 in the case of regular flights). ULC emphasises the fact of the considerable

growth in the market share of Polish charter flight operators in this segment. Compared to 2009, the share of the Polish operators has grown by 7.5%, which means a growth in the number of passengers flown by nearly 50%. This growth was caused by the appearance on the market of a new airline - Enter Air, which served 200,000 passengers in the first year of its activity and became the sixth most important player. The company developed its main hubs at Warsaw and Katowice airports. Both are to serve connections from all over Poland to Turkey, Greece, Italy, Bulgaria, Israel, Dubai, the Canary Islands, Morocco, Spain, Egypt, and Tunisia. The company plans to serve 600,000 passengers and introduce new connections in 2011. The competitor of Enter Air – Air Poland – has announced plans to start transatlantic connections. The first flight, from Kraków to TorontoHamilton, is scheduled for 28 May. There are also possibilities for starting connections from Warsaw to New York and Chicago (in LOT colours and numbers). The most popular destination as far as charter flights are concerned was Egypt (Sharm El Sheikh

This year, the Management Board of PLL Lot SA has presented the basic ideas of the new company strategy: • securing revenue by means of optimization of the present connections network, geographical expansion, and an attractive pricing policy; • the construction of a transit airport for LOT (the so-called “hub”) on the East – West route at the Frederic Chopin Airport in Warsaw; • further expansion of the connections with the East and the Far East; • the construction of a hybrid business model based on low operational costs and high quality of services offered to passengers at the same time.

The most significant aim for the company is to raise the market share of LOT, to increase the company’s value, and to secure its financial liquidity. “LOT has accepted the new strategy and the implementation of this strategy will help us to get out of the woods,” says Marcin Piróg, the President of the company. and Hurghada). The number of passengers flying to or from Egypt reached 1,042,000 i.e. 32.09% of the total number. The next places belonged to Turkey (Antalya) – 629,000 passengers and Greece (Heraklion) – 465,000 passengers. The results of the events taking place in Egypt and Tunisia during the last several months mean that this year the number of Polish passengers travelling to Turkey, Egypt, and Israel is going to rise. :: 5/2011 :: polish market :: 19

Transport and Aviation

On the wings of success “The beginnings of our family business were by no means easy, but thanks to our persistence and an innovative outlook on business, we succeeded.” An interview with the management of ANKOL – Anna and Czesław Kolisz

How was ANKOL established and how did you come up with the idea for a business in the aircraft and automotive sectors?

CK: We have always aimed high and, being people of commitment, we have never been satisfied with mediocrity. Quite the opposite - each and every day we would keep on proving to ourselves that what we were doing could surely be done the best way possible.

With such determination for work, enthusiasm, and belief in the success of our idea for the business, we decided to set up a company. That was precisely 20 years ago. The name and logo of ANKOL came from the name and surname of my wife – Anna Kolisz.

At the beginning there were just the two of us in the company and we were its only capital. At that point we utilised our professional experience: mine - in engineering and in the field of the construction of aircraft vessels, and my wife’s - in administration and management. From the very beginning we were

Member of the Board and Commercial Director Eryk Kolisz after receiving the International Star for Leadership in Quality Award and the Diamond Quality Summit Award, Paris 2011

20 :: polish market :: 5/2011

determined to run a trade company operating in the aircraft sector. Obtaining a ministry licence for domestic and foreign trade in goods and services of strategic significance gave us the opportunity to expand the commercial activities while observing strict procedures and quality standards. Today, ANKOL is a modern and innovative family enterprise that has become a leading provider of spare parts and repair services for military and civil aircraft plants. We deliver spare parts for civil and military airplanes and helicopters.

Our main and strategic client in Poland is the Ministry of National Defence.

The fast growth of the company has enabled us to expand activities to cover the automotive sector. Our Automotive Centre, which was started from scratch, trades in the sale and repairs of KIA cars, highly-advanced diagnostic-repair and control-measure services for cars under the Bosch Car Service Partnership.

W hat kind of activities support you in building such a strong and recognisable brand? Is it the policy of high quality and high standards, or perhaps competent employees?

CK: Success never comes by chance or luck, especially in such a responsible and demanding sector as aviation. It is rather the result of a concept, courage, and continuous work. The company’s position has stemmed from a specific vision and a development strategy that we undertook 20 years ago, when we set out on our business venture. The creation of a strong, profitable, and recognisable brand is the chief factor in the company’s management, followed by quality, competence, and standards. Since the specificity of deliveries to the aircraft industry is connected with the safety of flights, it requires the highest quality, in the achieving of which it is supported by the highly-developed and strictly-observed procedures that result from gradually-implemented management systems based on national and

international standards. These systems involve quality, products, HS&E, information security, management of the quality of deliveries to NATO member states, the American AS/EN 9120 system for the distributors and suppliers to the aircraft and astronaut sector, and systems from the Russian Federation: the ISO 9001-compliant GOST R system and voluntary certification of the providers of aircraft equipment of the Russian Federation (the so-called SDS PATI) meeting the requirements of the International Aviation Committee, MSTMAK. We have also implemented a certified HR management system compliant with a European standard. These systems are interconnected and belong to the Integrated Management System. Since 2010, the quality-oriented policy of the company has been supplemented with a superior Total Quality Management (TQM) system developed in accordance with QC100 criteria and based on the following pillars: orientation towards the client, leadership, employees’ commitment, a process and system approach, constant improvements, and good relations with contractors. Well-developed and consistent internal procedures allow efficient fulfilment of complex domestic and foreign contracts, with due consideration given to the dynamic changes and ever-growing requirements of the economic market, both in this country and abroad. By subjecting itself to continuous verification and controls, ANKOL has been distinguished by the international BID (Business Initiative Directions) organisation, with awards that can be regarded as the Academy Awards of the quality segment. These include the International Quality Crown Award in London (2010) and the Diamond Quality Summit Award in Paris (2011).

However, despite so many introduced improvements, the company would have not become successful without its employees – without their creativity and commitment.

This is the key aspect of the success and the company’s most valuable asset.

AK: In the permanently-changing reality, where we race against time every day, it is only with competent, educated, and professional staff, able to quickly respond to new market and business situations, that we can race against time and rival companies, and achieve success. Through the personal leadership and financial support of many development projects, my husband and I try to

Transport and Aviation

influence the transformation of our employees. The friendly organisational culture featuring an exemplary partnership between the owners and employees of the company has been acknowledged by honorary distinctions awarded to ANKOL in this area: HR Management Leader, Human Capital Investor, and the Company of the Year from the Primus Inter Pares Association. In April this year, we also received the International Star for Leadership in Quality Award.

What is the secret behind the success of a Polish family business? How did you manage to beat the competition in such a demanding industry and gain prestigious international awards?

AK: First of all, you have to believe in your success, even though there are no ready instructions on how to achieve it. Business does not only entail focussing on profit: its main foundation is the urge to create and to face new challenges. By being aware of the impact which market instability exerts on a company, we can identify the risks, as well as have the courage to search for new development opportunities. The success of ANKOL is the fruit of our family’s trust and support, combined with our common trait - determination. The way we manage the business, in which we have been assisted by our son Eryk for a number of years now, results from common goals, mutual support, passion, and work.

We are satisfied to say that working hand-inhand is an excellent model of an in-tandem,

Anna and Czesław Kolisz with the President of Business Initiative Directions (BID) Jose E. Prieto

husband-and-wife duo. The management policy that my husband, son, and I pursue, utilising global standards, has allowed the creation of a model company which – while being successful in business – has earned prestige, trust, and money. What is more, we are always guided by the well-understood leadership and partnership between employees and owners – and this pays. The best confirmation can be the fact that ANKOL remained unaffected by the global crisis, as evidenced by its achievements in terms of trade and new profits. The secret of beating the competition is not only about observing international standards and the renewed positioning of the strategy, but it is also based on established reputation. Because reputation cannot be forged, and building it involves constant improvement. Numerous titles and awards, apart from earning trust for the brand, serve as a source of knowledge.

Stagnation is an alien concept to us. Our familiarity with trends on the global markets is a factor which obliges and mobilises us to take on new challenges and make giant steps to be “ahead of the rest.”

You have received the Grand Prix for the Outstanding Polish Exporter of the Year 2010, meaning that you cooperate with many foreign companies on a daily basis.

Do you concentrate on any particular market?

A distinction from the Deputy Prime Minister and Minister of Economy, Waldemar Pawlak, is a very valuable award to ANKOL. We have been granted that title for obtaining a 70% share of exports within the total sales turnover and we consider it a token of appreciation for the efforts in building a positive image of the Polish economy on the international scene. Currently, we cooperate with about 34 countries, for instance from the Mediterranean Region. We are also entitled to participate in tender proceedings of NATO member states and the US Department of Defence. As suppliers to the aircraft industry, we are registered members of the Aviation Suppliers Association (ASA). The list of our partners is long and becomes longer each year. An example here can be the provision of spare parts and repair services to our contractors’ aircraft made in Russia. We also provide parts for F16s and other western planes and helicopters. One of our strategic partners is the Russian SUKHOI aircraft company, to which we deliver all kinds of bearings for its latest civil plane, the SUPERJET 100. This cooperation is possible thanks to our exclusive rights to supply bearings produced by the American Kamatics Corporation to the East European countries. ::

Czesław Kolisz and the Minister of Economy Waldemar Pawlak

Systemy Zarządzania Jakością:

Nagrody i wyróżnienia:

The New Era Award - Paryż 2010

Nagroda Ministra Gospodarki Narodowej 2010

International Quality Crown Award - Londyn 2010

GEPARD BIZNESU 2011

Przedsiębiorstwo The Platinum Technology Fair Play Award For Quality and Best Trade Name - Genewa 2010

Century International Gold Quality Era Award - Genewa 2010

Lider Zarządzania Zasobami Ludzkimi 2010

Firma Roku Primus Inter Pares

ANKOL Sp. z o.o.

Chorzelów 244 k/Mielca 39-331 Chorzelów tel. (17) 584 01 00 5/2011 polish market :: 21 fax (17) 584::01 20 ankol@ankol.com.pl www.ankol.com.pl

Transport and Aviation

Aviation Valley: the leading aviation industry cluster in Poland The Aviation Valley is an association which is the base for the largest aviation cluster in Poland. The Association was established in 2003. Significant funding for the Association has been provided by Pratt&Whitney, a world leader in the design, manufacture and servicing of aircraft engines, space propulsion systems and industrial gas turbines – an investor in Wytwórnia Sprzętu Komunikacyjnego in Rzeszów. The Aviation Valley is located in south-eastern Poland, mainly in the Podkarpackie province.

The Association is the formal form of cooperation of aviation companies based on the region’s long-term tradition in this industry.

Elżbieta Wojnicka, PhD

Elżbieta Wojnicka, PhD, lecturer at the Institute of Organisation and Management of the University of Gdańsk, expert and consultant on innovation, regional development and European integration. Author of expert reports, among others, for OECD, Industrial Development Agency, Polish Agency for Enterprise Development, the Ministry of Regional Development and Province Chairmen’s Offices.

The development of the aviation industry in the Podkarpackie province has its origin in interwar period in Poland, namely the implementation of a project called the Central Industrial Region (1936-1939). Among many industrial plants built in the region, two factories manufacturing aviation equipment occupied an important place: a plant manufacturing aircraft engines in Rzeszów and an airframe manufacturer in Mielec. In the post-war period, under the conditions of a centrally-planned economy, the development of these plants was continued. However the output was mainly shipped to the Soviet Union. As a result, at the time of transformation the region’s aviation companies lost almost 80% of their orders. To survive the difficult period of restructuring, the companies had to jointly approach to the central government.

The companies had to find new orders from other parts of the world. It was necessary to change their mode of operating, namely to restructure employment and create a network of local suppliers with higher quality and lower operational costs than in large companies.

However, the course of these processes and the effects of restructuring were different in individual plants.

The specific location of aviation companies - these companies used to be the largest employers on the local labour market - was a big hindrance

22 :: polish market :: 5/2011

for the adjustment process. Attempts to rationalise employment, for example, resulted in strong opposition from trade unions and workers who had no chance for other jobs. Hence this process spread over a long period of time.

The scale of restructuring was clearly indicated by the change of the number of employees. For example, in WSK “PZL-Rzeszów” employment was reduced from 10,800 to 5,800 people in 1995. In 2006, the labour force was 4,700 people.

In 1991-1996 the restructuring of the companies in terms of organisation and ownership was carried out.

They acquired the status of commercial companies. Different types of activities of companies were singled out and new companies were created on the basis of those previously existing.

The leading plant focused on the final product and the newly-established companies became partners and suppliers of parts and services. Also many start-up companies, founded mostly by former employees, began cooperation with aviation companies, becoming cooperators and sub-suppliers.

The favourable location encouraged foreign investors from the aviation industry and cooperating industries to locate operations in the Podkarpackie province. They created companies from scratch (e.g. Hispano Suiza, Creuzet Poland), or created them on the basis of state-owned enterprises

(WSK “PZL-Rzeszów”– privatised by UTC, Goodrich Krosno – established on the basis of the assets of WSK “PZLKrosno”).

The Aviation Valley was initiated by the existing companies and the entities which emerged as a result of the restructuring of the industry and new ones attracted to the region, following the example of other companies of the investors. The industry is still the main driving force behind the aviation cluster, but it also comprises other institutions such as universities and development support institutions. Cooperation with regional and local authorities is very important.

The cluster consists of international companies – the presence of a single investor Pratt&Whitney attracted to the region other foreign cooperators.

There are investments by foreign family companies and these investments are generally more durable, because families consider exactly where to take the risk of family capital investment.

They are established next to the international corporations.

The objectives of the Aviation Valley Association is the organisation and development of a low-cost supply chain, the creation of favourable conditions for the development of the aviation industry companies in the region, the further development of research, skills and qualifications in the field of aviation, the cooperation and development of the aviation industry and universities, which will promote new ideas and develop the research and development sector in the aviation industry. The Association also works to promote the Polish aviation industry, obtain support for enterprises from the industry and affects the economic policy of the Polish government on the issues related to the aviation industry. The chief aim of the cluster is that the Podkarpackie province becomes one of the leading aviation regions in Europe, which will provide a variety of products and services for the aviation industry for the most demanding customers. The result

FIRST POLISH SPECIAL ECONOMIC ZONE: EURO-PARK MIELEC

• Expertise in management of investment projects;

one-stop-shop, industrially developed real-estate in Industrial and Technological Parks

• Maximum public aid to investors • Potential of highly qualified work-force;

graduates of Lublin and Rzeszów universities

• New production space available on site Branch Office in Mielec, Poland 39-300 Mielec ul. Partyzantów 25 tel. +48 17 788 72 36 e-mail: europark@europark.com.pl

• Cooperation opportunities in Aviation Valley

www.europark.com.pl

Transport and Aviation of this would be the region’s dynamic growth, more jobs, and improved living conditions for its residents.

Currently, the Aviation Valley Association has 80 members from the region and there are prospective members undergoing the application process. The Association is going to have 100 members over the next few years. A company or an institution associated with the aviation industry of south-eastern Poland, having recommendations from at least two current members, can become a member of the Aviation Valley.

The cluster cooperates internationally with other aviation clusters. This cooperation involves the exchange of good and bad practices to avoid mistakes – such a cluster platform was established 6 years ago in Rzeszów. California’s Silicon Valley, the most famous cluster in the world, is also one of the exemplars for the Aviation Valley.

The Aviation Valley Association is a partner in the Centre of Advanced Technology “AERONET– Aviation

Valley” at the Rzeszów University of Technology. This consortium was established in January 2004 as a response to the competition announced by the Ministry of Science on the funding of coordination and organisational activities of Advanced Technology Centres (ATC). Apart from Rzeszów University of Technology, the University of Rzeszów, and the Association of Entrepreneurs of Aviation Industry “Aviation Valley”, AERONET also includes the Lublin University of Technology, Łódź University of Technology, Warsaw University of Technology, the Institute of Aviation in Warsaw and the Institute of Fundamental Technological Research Polish Academy of Sciences in Warsaw. The main objective of ATC “AERONET – Aviation Valley” is the implementation and commercialisation of new technologies for the aviation industry through the implementation of research and training programmes.

The Aviation Valley Association influences the training of staff at the secondary and higher education levels. Aviation Valley has included

technical secondary schools into its programme through creating professional laboratories there – workshops, such as in the Aviation Valley’s factories – by equipping schools with equipment such as in enterprises. Teachers have also been trained.

The Aviation Valley Association encourages children’s interest in scientific education. There is the “University of Technology for Children,” where the heads of the cluster companies teach children. The Association also contributes to the professional development of teachers. The cluster cooperates with local and national authorities and the Polish Information and Foreign Investment Agency (PAIiIZ). Aviation Valley is present at fairs, therefore it joins the activities of the aviation industry.

The aviation cluster companies cooperate with each other primarily on the customer – supplier basis (supply of parts, materials and raw materials).

This is the most common model of cooperation between leading and small companies who are subcontractors and cooperators. Particularly intensive cooperation exists between the so-called spin-off companies – established under the restructuring of large enterprises – and the core company, which usually is the main purchaser of products and services of these newly created companies. With the promotion of the Podkarpackie province as a location for the aviation industry, the cluster companies are able to find almost all cooperators and subsuppliers in the region.

The presence of the aviation industry in Poland is very important because, in fact, it exists only in a few countries in the world. The activities carried out within the Aviation Valley are conducive to improving the quality of this industry and creating the best location conditions for companies in the industry from all over the world, including those affecting the availability of skilled labour. A particularly important development direction of the cluster should be to increase the research and development activities related to the industry carried out in the region, so that not only will products associated with the aviation industry be manufactured there, but also new solutions be developed, especially whole aircraft. ::

24 :: polish market :: 5/2011

Cooperation between science and industry within the Centre of Advanced Technologies (CAT) AERONET – Aviation Valley NE

T

Romana Ewa Śliwa, Rzeszów University of Technology, CAT AERONET Aviation Valley coordinator engineering, and modern manufacturing techniques in aviation and aerodynamics. The Rzeszow University of Technology has opened one of the most state-of-the-art laboratories in Europe – the Aero­ space Materials Research Laboratory, which is still developing.

Its tasks include research in the fields of comprehensive materials specification, high speed machining (HSM), monocrystal and directional crystallisation, and technologies for heat-resistant coatings and chemical vapour deposition (CVD) coatings, as well as other cutting-edge technologies for manufacturing, including composite materials, plastic working, and surface engineering.

CAT AERONET is primarily involved in the implementation of a variety of projects. One of them is an individual key project titled “Modern material technologies in the aerospace industry,” which is coordinated by the Rzeszow University of Technology (the winner of the Funds & Science contest in the category Commercialisation of Research in 2010, and of the Quality of the Year 2010 mark).

The project is being implemented within the Operational Programme Innovative Economy 2007-2013. Its strategic goal is to lead Polish research in the aerospace industry.

The project’s specificity is indicated by the performance indicators which take into account the research tasks achieved by producing scientific papers, master’s, doctoral, and postdoctoral theses linked

AE

to the project - and by presenting, in recognised scientific publications and patent solutions, results which form the basis for future implementation in the industry.

The PKAERO project has resulted in developing innovative materials technologies for use in the production of aerospace materials and parts characterised by increased durability, lightness, thermal resistance, and other enhanced parameters. Their future implementation will help aerospace businesses in Poland gain a competitive edge on the global market – through applying cutting-edge solutions and potentially reducing production costs, and

O

Centre of Advanced Technologies AERONET - Aviation Valley

eventually the operating costs of airplanes. The implementation of the project started in July 2008 and is to be concluded by the end of 2013. Its total value is PLN 85,880,000.00. It should be expected that the technological solutions to be developed within the project will contribute to the progress of aerospace companies in Poland and, through this, will stimulate economic growth – on a regional, national, and global scale.

Gdansk

POLAND Belarus Warszawa Kalisz

Lodz

Częstochowa Wrocław

CAT AERONET AVIATION VALLEY

Lublin

n tio tion via cia A e so Katowice Th As Krakow ley Rzeszow l Bielsko- Biala Va Krosno Ukraine Ukraine

Czech Republic Financial support of Structural Funds in the Operational Programme - Innovative Economy (IE OP) financed from the European Regional Development Fund - Project “Modern material technologies in the aerospace industry”, No.POIG.01.01.02-00-015/08, is gratefully acknowledged.

R

The location of the Centre of Advanced Technology AERONET “Aviation Valley” (gray area+Gdańsk) and the members of the Aviation Valley industrial cluster (blue-bordered area + Kalisz)

Germany

It is a challenge for our time to develop good mechanisms of communication across science and the economy. Cooperation between universities, scientific institutes and businesses in the aerospace industry, which has been going on for years, has provided a good basis for joint actions towards the development of the industry and science sectors. CAT AERONET “Aviation Valley,” closely collaborating with the Aviation Valley cluster, is a good example of this. The technical potential of our laboratories and the highly-qualified staff allow us to provide specialised education and conduct research for the aerospace industry at the highest, world-class level. CAT AERONET, which is coordinated by the Rzeszow University of Technology comprises 11 universities and R&D institutions and 90 companies in the Aviation Valley industrial cluster. The consortium includes the Lublin, Czestochowa, Silesian, Lodz and Warsaw Universities of Technology, the Institute of Aviation in Warsaw, the University of Rzeszow, the Air Force Institute of Technology, the Institute of Fundamental Technological Research – PAS (Polish Academy of Sciences) in Warsaw, the Szewalski Institute of Fluid-Flow Machinery – PAS in Gdansk, and the Aviation Valley industrial cluster. CAT’s main fields of activity include the design of and research into aviation construction and propulsion, aviation ICT and avionics systems, modern processes in materials and surface

Slovakia

Transport and Aviation

Polish Supercluster Black Hawk Sikorsky S-70i helicopters, and components for the latest Boeing 787 Dreamliner, F-16 fighters, Airbus A380 and Eurocopter are the most spectacular examples of products manufactured at the Aviation Valley cluster in Poland. “This year we will keep the sales level at USD1.5 billion,” says Andrzej Rybka, Director of the Aviation Valley Association.

The Aviation Valley in south-eastern Poland has already developed to become a powerful cluster for the design and manufacture of helicopters, airplanes and aircraft components for global aviation giants including Boeing, Airbus, Eurocopter and Latecoere. The cluster brings together businesses operating in the aviation sector in three provinces in south-eastern Poland, mainly in Podkarpackie province with the capital city Rzeszów. At the beginning of the decade, when the cluster was established, it was composed of 18 companies providing employment to 9,000 people. Today there are 90 companies in the cluster and they employ 23,000 employees with the highest qualifications.

According to Andrzej Rybka, the Aviation Valley owes its success to its excellent staff. With more than 70 years of experience in aircraft production, a high technical culture had developed in the area, making it possible for the local staff to embrace new technologies at a pace which won admiration and recognition from the world leading aviation firms investing in the Aviation Valley. This is how PZL ­Mielec embraced the technology provided by the US helicopter giant Sikorsky. The conversion of the PZL Świdnik helicopter manufacturing plant, after its acquisition by Agusta Westland, to meet the needs of the Italian-British investor, is going on at a similar fast pace. The turbocharger plant of BorgWarner Turbo Systems of the United States and a subsidiary of MTU Aeroengines, a Bavarian aerospace giant, are already working at full steam. Another large aerospace corporation, Goodrich, is doing business in the city of Krosno and is going to build more manufacturing plants in the cluster. “Millions will be invested in the Aviation Valley in the near future,” says Andrzej Rybka. “Interest in our cluster is not declining.”

But the Aviation Valley does not rely for its future on foreign investors alone. Of special significance is collaboration between the aviation industry and the research sector. The Centre for Advanced Technologies Aeronet – Aviation Valley has been set up for this purpose. It brings together businesses operating in the cluster and 11 universities of technology and scientific institutes that conduct research needed for the development of technologies used by the aviation industry.

Collaboration with the universities also has an educational dimension. The universities train new staff with the

26 :: polish market :: 5/2011

highest qualifications for the needs of the aviation industry. The Rzeszów University of Technology, with its Faculty of Mechanical Engineering and Aeronautics, plays a leading role in this respect. It is at the top of the education pyramid built by the Aviation Valley. Secondary schools make up its lower level. There are already 12 secondary vocational schools in Podkarpackie province sponsored by the Aviation Valley, which offers consultation for the teachers and assistance in equipping their labs and modernising their curricula. The schools also receive assistance from European Union sources under the Regional Operational Programme.

This comprehensive efforts to create suitable conditions for the aerospace industry have attracted wide interest from global manufacturers operating in the sector. In order to respond to this interest, the Aviation Valley organises trade missions to France, Germany and the United States, and seeks promotion at all important aerospace industry exhibitions. The results of these activities are increasingly evident. However, the Aviation Valley looks not only at distant countries to develop its initiatives. The economic slowdown in almost all countries prompted the Aviation Valley to look for streamlining opportunities, reserves and an additional potential for expansion. These were found in a Slovak automotive cluster. Due to the crisis of the automotive industry, Slovak companies turned their interest to the aviation sector. The production and cooperation potential of the Slovak plants which are potential

partners for Polish aviation companies is now being analysed. Many of them have modern numerically controlled manufacturing equipment and staff trained to work with modern technologies. It quickly turned out that the technical university in the Slovak city of Žilina may be an excellent partner for the Rzeszów University of Technology. And Slovak manufacturers of ultralight aircraft may become partners for small Aviation Valley companies which produce general aviation aircraft. The designer of the Slovak companies’ flagship export product, the Dynamic aircraft, is a Pole living in Slovakia.

But Andrzej Rybka stresses the aviation community are not the only people behind the success of the Aviation Valley. “A great role is played by awareness on the part of the authorities, especially the authorities of Podkarpackie province and the Rzeszów municipality, as well as growing numbers of local residents that the development of the aviation industry has become a chance for the development of the region as a whole,” Andrzej Rybka says. “Thanks to this, we are ceasing to be, or actually have already ceased to be ‘Poland B’ [as the less developed eastern part of Poland is traditionally called – ed.]. One can fly from the Rzeszów airport directly to many countries.

Foreign investors are interested in us. It makes sense to receive education from our schools and this education is at the highest level. At the same time, we have an industry able to co-exist with our splendid natural environment and create a high quality of life.” ::

EASA certificate for Orka EM 11C The Margański & Mysłowski Aviation Plant in Bielsko-Biała has obtained EASA A.115 certification for its Orka EM11C aircraft from the European Aviation Safety Agency (EASA).

The company has also received a second DOA (Design Organization Approval) certificate (Margański & Mysłowski Ltd. EASA.21J.117 04/04/2011 Sailplanes and small aeroplanes /TC and STC/). EASA officials presented the Orka EM11C certificate to producer Margański & Mysłowski at an aviation fair in April of this year.

The Orka EM 11C is a two-engine, high-wing, four-seater plane with retractable landing gear suited for daytime and nighttime VFR flights. In future the producer plans to adapt the machine to IFR flights.

Chipolbrok – Chinese-Polish Joint Stock Shipping Company was founded on 15th of June 1951 under the governments of China and Poland bilateral agreement – as a first ever Sino-foreign joint-venture set up after proclamation of the People’s Republic of China. Its head office is located at Shanghai, China and European base at Gdynia, Poland. In 2011 Chipolbrok celebrates its 60th anniversary being today the world’s leading project cargo ocean carrier offering their shipping services Round-the-Globe in both directions: eastbound and westbound.

Photographer: Dariusz Śliwinski

This pioneer, equally shared, partnership enterprise arose out of 6 ships contributed by each contracting party.

Assigned to provide the sea transportation link between Polish and Chinese ports for carriage of investment goods and other commodities necessary for both countries development – over 60 years period Chipolbrok has voyaged through different, sometimes tough political and economical times. However, activities did not remain limited to trade between China and Poland. Meanwhile, the company has been continuously and flexibly adjusting its services and fleet capabilities according to altered international trade exchange challenges.

At present, modern and multipurpose fleet of 19 heavy crane geared triple-deckers with total DWT over 470,000 suits perfectly for transportation of project cargo, plant materials, heavy pieces, overdimensional units and all kinds of general cargo. Already eight of those 19 vessels have been equipped with cranes able to lift pieces weighing up to 640 tonnes.

Those heavy duty vessels have supported liner service as from 2003 and enabled Chipolbrok to call at many ports including outports en-route, where heavy cranes are unavailable.

The advantage for safe cargo handling is Chipolbrok rich experience gained over the years in carriage of awkward and overdimensioned packages, heavy lifts, transformers, metro wagons, locomotives, trunk building machines, crane parts, vehicles, steel products besides the different sort of regular commodities.

In the year of 2011 next 2 innovatively designed ships of this type will be delivered ex Dalian shipyard (mv Kraszewski and mv Chipolbrok Cosmos). This investment will only

Andrzej Karnabal

strengthen company`s world leading market position.

Apart from that Chipolbrok management decided to convert 7 ships which were built between 1991 and 1998 to be up-graded. All of those were equipped with new cranes allowing lifting of heavy units up to 300ts pieceweight.

Today, the shipping services offered by Chipolbrok are building the bridge linking many ports between three continents: Europe, Asia and America. The regular liner sailings offered to the customers are scheduled in both worldwide directions: eastbound and westbound from: For customers convenience – a net of professional agencies in all countries within sailing routes has been set up.

Besides the main locations in Shanghai and Gdynia, the Company has its own offices in Houston, Singapore,

Rotterdam and Beijing. Additionally, in order to assist the customers with their business requirements, the set of subsidiary forwarding & agency companies have been established in both China and Poland.

Needless to mention, that customers’ transportation needs and requirements are the guide line and always take top priority in Chipolbrok business philosophy. The company, being the world’s leading project cargo ocean carrier, with professional and experienced staff guarantees a very high standard of services, which was confirmed by awarded in 1999 Lloyd’s Register certificates of compliance to ISO 9002 Standards and ISM Code.

Apart from shipping business, Chipolbrok is also involved in other activities like real estate and financial capital investments, shareholding in other companies. ::

Transport and Sea Ports

For a number of years now, the managing board of the Port of Gdynia Authority SA has been implementing its development programme, included in “The Development Strategy of the Port of Gdynia until 2015,” and passed by the company’s general meeting in 2003.

Between 2003 and 2010, the port authority invested in the expansion and modernisation of the port an amount of PLN763 million of its own resources from the company’s income and the privatisation of port companies. In the period 2011-2012 the board plans to spend further PLN278 million for the implementation of three EU projects, for which it will also leverage additional support from the Cohesion Fund, under the Operational Programme Infrastructure and Environment: the infrastructure of road and railway access to the eastern part of the port, the development of the port infrastructure for servicing RO-RO vessels with road and railway access, and the development of the Bulgarian Quay Area.

Another project, completed only recently, was the implementation of a strategic investment in terms of the port’s market position, entitled “The Reconstruction of the Port Channel in the Port of Gdynia,” and subsidised by the European Union in the amount of over PLN53 million. The sum allocated to the co-financing of the projects implemented by the board of

30 :: polish market :: 5/2011

Janusz Jarosiński President of Managing Board Port of Gdynia Authority S.A. the Port of Gdynia Authority SA, on the so-called List of Individual Projects issued by the Ministry of Regional Development, is PLN342 million. The Port of Gdynia is an universal modern port specializing in handling general cargo, mainly unitized cargo transported in containers and in a ro-ro system, based on the well-developed network of multimodal connections

including hinterland, regular Short Sea Shipping Lines as well as ferry connections (ferry terminal) . The Port of Gdynia is an important link in the Corridor VI of the Trans-European Transport Network (TEN-T).

Around 70% of containers from the Polish market come through the container terminals in Gdynia, and over 90% of goods in Polish-Finnish trade exchange by sea are handled by the Baltic General Cargo Terminal Gdynia Ltd. In 2010, the European Commission classified the Gdynia – Karlskrona ferry line as part of the Motorways of the sea system, as it handles around 30% of all passenger and cargo traffic between Poland and Sweden. The modernised infrastructure and the terminals of the Gdynia port serve major global and European shipping operators such as MSC, CMA-CGM, Finnlines - Grimaldi, Stena Lines, and others. For many decades, the Port of Gdynia has been a recognised brand in transport-logistic systems across the world. We are guided by the principle of a flexible approach to the market’s needs, while achieving good economic performance. In our activities we are focussed on preparing the Port for new challenges in the global economy and to fully meet the requirements of our business partners. The above-mentioned, large-scale infrastructural investments serve to fulfil this goal. ::

Transport and Railway Rail freight will not be able to compete with road transport without a considerable rise in infrastructure outlays, especially for track upgrades. Last year saw some improvement in this respect, nonetheless five times as much was spent on roads as on railways.

Patryk Mirecki

“Nonetheless, even after years of negligence in upgrading railway infrastructure we can still say that rail freight has developed well over recent years – and especially in 2010. Best proof of this is PKP Cargo the leading company on the market, which noted a net profit of almost PLN 62 million last year after two crisis years (2008, 2009) and today is preparing for privatization. In 2010 PKP Cargo was one of very few European railway carriers to attain a positive balance and close the year with a profit. More important, however, is that in-depth reforms in the company have provided sound foundations for generating steadily rising profits in the years to come. “We expect this year’s profit to be higher than last year’s and by 2015 we should be able to have net profits of several hundred million złotys annually,” says PKP Cargo President Wojciech Balczun.

EU-forced changes

Rail freight

an investment-­ -worthy market 32 :: polish market :: 5/2011

Still recently most European countries had no rail freight to speak of. The situation began to change in the 1990s, largely due to the introduction of EU Directive 440/1991 of July 29, 1991 and its subsequent amendments. The directive stressed the need for the following changes: :: granting railway carriers government-independent status, :: commercializing railway carrier management, :: creating an effective financial structure for railway carriers, :: separation of transport and infrastructure management,

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Transport and Railway :: opening the market to new public and private carriers, :: creating international carrier groups to provide transport services between countries.

Poland Ten years ago Poland’s national rail carrier PKP was divided into several units which today form the PKP SA Group. Consequently, Polish Railway Lines (PLK) oversees infrastructure, freight belongs to PKP Cargo (still the biggest rail freight operator in Poland and second largest in Europe) and PKP LHS. Both must cope with rising competition since the market opened to private operators. The main rivals are CTL, DB Schenker and Lotos Kolej.

Business conditions Polish rail carriers have to cope with many more obstacles than road transport companies, a fact recently noted

by Andrzej Arendarski, head of the Polish Chamber of Commerce (KIG): “For years now the railways have been losing the race against road transport. And no wonder, considering that railway infrastructure is considerably more expensive to use than roads.

This is largely a question of ownership and funding, which differs vastly from the situation in road transport, and mismanagement. Almost all road infrastructure is financed from public funds while in the case of railways it is only 20-30%.”

Low funding, high costs In its Programme for Railways published earlier this year, KIG revealed that between 2000 and 2009 the share of rail transport in overall freight fell from 42.1% to 18.5%. KIG’s Józef Kowalczyk sums up: “Roads and railways in Poland are of comparable overall length, about 19,000 kilometres. In 2009 budget funding for roads came to PLN 18.1 billion while the railways received PLN 2.76 billion. According to Central Statistical Office (GUS) data, 2002-2009 outlays for railway infrastructure totalled PLN 13,186,600,000 while outlays for roads amounted to PLN 72,708,000,000–5.5 times as much! And it doesn’t look as if this disproportion will change in coming years.”

And this is not all. According to KIG figures, access to transport infrastructure for trucks costs 5 times

34 :: polish market :: 5/2011

less per kilometre than in the case of freight cars. Józef Kowalczyk says, “In terms of investment outlays, the railways are like a poor relative of road transport. By excessively raising access costs to railway infrastructure the state makes it impossible for carriers to use it, and in consequence they cannot compete with road transport companies.”

I choose rail (40/60 campaign) Today the EU demands a more rational distribution of transport infrastructure funds. According to the new 40/60 norms, 40% of annual outlays should be channelled to railway transport and 60% to road projects.

This inspired Poland to launch an I Choose Rail campaign, which has the support of most rail carriers in the country. The aim of this campaign is to rally the railway market around a common idea – promoting the railways as an optimum transportation means. According to the campaign authors, the 40/60 principle will ensure adequate financing for both road and railway upgrades and will help make rail transport safer, more environment friendly, and cheaper.

The market According to the Railway Transport Office (UTK), 238.4 million tonnes of freight were forwarded by rail in Poland between January and November of last year, 16.4 million tonnes (7.4%) more than a year earlier. Unfortunately UTK has not yet published the entire figures for 2010. In this period transport output came to 45,360 tonne-kilometres (14% up on 2009). According to UTK, PKP Group still holds the biggest share of the market, with 117.8 million tonnes of freighted cargo and a transport output of 31.6 billion tonnekilometres. At the close of November 2010 PKP Group companies had a 49.5% share in the market by freight tonnage and 69.7% by transport output. DB Schenker’s share was estimated at 17% and Lotos Kolej’s at 7% (by freight tonnage).

Dangerous and military cargo Coal and other minerals, construction materials and timber were the predominant cargo in 2010, however domestic operators also carried a considerable amount of dangerous loads.

UTK reports that 15.7 million tonnes

of dangerous cargo were freighted in Poland in the first three quarters of 2010, over 71% (11.2 million tonnes) of which were inflammable liquids, mainly fuel and other petroleum products. At respectively 37% and 25.6%, PKP Group and Lotos Kolej had the highest share in the transport of dangerous loads. Also increasingly present on the market is the transport of nuclear fuel for plants in the Czech Republic (via Szczecin Harbour). In 2001-2010 PKP Cargo carried over 350 tonnes of nuclear fuel in 16 transports. In 2009-2010 the company carried out five transports of waste nuclear fuel from research reactors at Świerk near Warsaw. The company transported in total 844 tonnes including about 366 kilogrammes of waste fuel. In March PKP Cargo carried out this year’s first transport of Patriot missile parts from the German border to Ustka on the Polish coast on commission by the U.S. Forces and DB Schenker Rail Deutschland A.G. Overall, this was the fourth transport of Patriot elements to Poland, the earlier three were carried out between May and December, 2010. Also this year PKP Cargo freighted equipment for the Polish Army, including a batch of Rosomak armoured transporters to Jankowo Pomorskie.

PKP Cargo for sale With 2010 sales at PLN 4.6 billion, PKP Cargo is the dominant rail freight operator in Poland. In March the mother company PKP SA invited bidders for a 51% stake in PKP Cargo stock, the deadline for initial purchase offers closed on May 12. Subsequently PKP will choose a short list of bidders from which a final buyer will be selected. PKP Cargo is Europe’s second-largest carrier. In 2008 the company launched an ongoing reform programme, among others laying off 39% of its staff and introducing a new organizational structure. PKP Cargo’s planned privatization has evoked some controversy, most opposed to the idea is the right-wing opposition Law and Justice (PiS) party: “This company’s sale to a strategic investor may result in the loss of this market and PKP Cargo’s independence,

Polish rail carriers have to cope with many more obstacles than road transport companies.

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12.05.2010 15:57:15 Uhr

Transport and Railway

road will arrive in Piotrków by rail to continue on trucks.

DB Schenker Rail Polska – biggest in Europe

layoffs, a monopoly in rail freight and, in effect, negative consequences for the Polish economy,” says PiS MP Mariusz Błaszczak. KIG expert Józef Kowalczyk supports the company’s privatization plans but warns against its takeover by the German national rail carrier Deutsche Bahn (DB). “DB is a state-owned enterprise. Replacing our monopolist by a German one won’t exactly boost our market leverage,” Kowalczyk notes.

Broad-gauge tracks to the east PKP LHS is the westernmost-reaching broad-gauge line in Europe. The Polish stretch (400 kilometres) begins in Hrubieszów-Izov on the PolishUkrainian border and ends in Sławków near Katowice. Via the Ukrainian rail network LHS has direct access to the Trans-Siberian Railway, thus functioning as a connection between the Ukrainian and Russian railway systems. This in turn will allow for the creation of a Europe-Asia transport corridor. Ukraine’s broad-gauge tracks connect the LHS line to rail systems in all CIS countries, including the

36 :: polish market :: 5/2011

New Silk Route through Kazakhstan to China.

Last year PKP LHS freighted 8.5 million tonnes of cargo including 4.66 million tonnes of iron ore.

CTL Logistics – first to go private CTL Logistics was one of the first Polish operators to use its own rolling stock (since 2004). In 2006 the company booked EUR 250 million and became the biggest logistics firm on the railway market.

CTL Logistics Group has companies in Poland, Germany, the Czech Republic, Romania and Ukraine. After launching container freight operations to Germany and Hungary, CTL Logistics is now busy with a project in Piotrków Trybunalski which will ensure combined rail-road freight operations in central Poland. In effect, goods to date freighted exclusively by

According to the new 40/60 norms, 40% of annual outlays should be channelled to railway transport and 60% to road projects. This inspired Poland to launch an I Choose Rail campaign, which has the support of most rail carriers in the country.

“Our company has a firm position on the Polish market. A year after we came under DB Schenker Rail our management and crew launched numerous projects which strengthened our position and elevated us to second place on the Polish freighting market.

We still have to work somewhat on our profitability,” says DB Schenker Rail President Hans-Georg Werner.

In mid-2009 DB Schenker Rail took over PCC Logistics and PTK Holding and concentrated on restructuring its smaller and coal-transporting subsidiaries. Based in Zabrze, Schenker Rail employs around 5.5 thousand people and is one of the major employers in the Silesian area. The company is run by Germans and Poles. In partnership with seaports in Szczecin and Świnoujście, DB Schenker Rail plans to invest over PLN 90 million in new reloading infrastructure and gantry cranes in the ports until 2018. In the near future a new terminal will open in the DB Port in Szczecin, raising the port’s reloading volume to as much as 220,000 TEU (twenty-feet equivalent unit) annually. Also planned are upgrades on rolling stock. For many months now the company has been trying to obtain certification for modern Class 66 engines, 40 of which it wants to import until 2015.

Lotos Kolej – leader in rolling stock A subsidiary of the Lotos Group, Lotos Kolej is one of the biggest private rail carriers in Poland with a 7% market share. The company mainly freights for Lotos Group but also works for other customers on domestic and international routes. Lotos Kolej operates over 90 engine types, at the moment it has 16 ultra-modern engines – 14 TRAXX MS and two Siemens Eurosprinter models.

After it receives more TRAXX engines and following July-planned test runs on the new Polish Dragon electric engine – the first domestically-designed engine in years – the company will boast Poland’s most advanced fleet of freight locomotives in the country. ::

Transport and Railway

Market leader – high quality of services

The objective of establishing our company has been verified by real life and market needs. Initially, the team had to fulfil the tasks for which Jastrzębska Spółka Kolejowa had been established. Above all, the tasks comprised the regulation of land ownership issues, and the repairs of track systems and their modernisation. Over the years, we have introduced new solutions, which include the services related to road transport, and the transport of empty and loaded wagons on PKP PLK S.A. (PKP Polish Railway Lines) lines.

Innovative projects?

We are currently working on projects that can be justifiably classified as innovation. It is a programme involving the modernisation of the railway infrastructure in track equipment and railway traffic control. I think that these modernisations can certainly be classified as innovative.

Today, with the emergence of such projects, funds are very important. We reckon on funding from the European funds and now we are waiting for a decision on this matter.

Interview with Bronisław Borski, President of the Board and Director of the Jastrzębska Railway Company

W hat are the main activities of Jastrzębska Spółka Kolejowa (the Jastrzębska Railway Company) What is your mission and the objective of your business?

Jastrzębska Spółka Kolejowa (JSK Sp. z o.o.) was established in 1998. Our activities led to obtaining on July 24, 1998 a licence issued for a period of 50 years (as amended – Decision of the Minister of Infrastructure of 25 November 2001 on the changes to licences) to carry out economic activity involving the management of railway lines. Our Security Authorisation is a document stating that the company meets the requirements of the Railway Transport Act of 28 March 2003.

JSK Sp. z o.o. (Ltd.) is the owner of the buildings, structures and equipment used for railway traffic, while the land on which these facilities are

located is contributed by JSW S.A. (Plc.) The priority task for Jastrzębska Spółka Kolejowa is managing the railway infrastructure for those entities that entered the Jastrzębska Spółka Węglowa (Jastrzębska Coal Company) capital group.

Our company, as a full Railway Board, has taken actions in the provision of railway lines, the maintenance of buildings and railway infrastructure equipment, the construction and repair of track systems and rail facilities, design services and expertise, forwarding services, and road transport.

You’ve been on the market since 1998, that is for 13 years. What has changed over the years and how much has the company been modernised?

You can be proud of your many awards, prizes and certificates. Which is the most valuable for you?

In fact, we have received many awards and we are very pleased to receive them. However, the most valuable is the satisfaction of our partners. The quality awards for our services that we receive are very important for us (winner of the Polish Quality Award Competition 2007, Fair Play 2008 and Laurel of Skills and Competence 2008). Our recent Market Leader Award 2011 is also very important. All these awards are a signal to us that we do our job very diligently, and with the full involvement of our employees. It should be noted that the success achieved comprises the skills, commitment and professionalism of the staff. Our staff are young ambitious people who are qualified in their fields. A very important criterion of our business is to implement our quality policy, and hence, the satisfaction of our customers. We give our customers integrity and professionalism in the provision of services, and the provision of railway lines through the continuous process of improvement in the areas of quality, flexibility, speed and cost optimisation. It is also important to meet the requirements for safety in rail transport, so last year the Company implemented a Safety Management System approved by the Office for Railway Transport.

What are your plans for the years 2011/2012?

First of all, we want to continue to perform our duties, those for which the company was established. We do everything so that the owner – Jastrzębska Spółka Węglowa – is satisfied with the quality, timeliness and reliability of our work. We are aware of the fact that the implementation of our tasks has an indirect impact on the customers of Jastrzębska Spółka Węglowa. However, the main task for the coming years is the modernisation of the infrastructure and the effective elimination of the effects of mining damage.

Interview by Ewelina Janczylik 5/2011 :: polish market :: 37

Lower Silesia

The Wrocław Metropolitan Area Rafał Dutkiewicz

The Wrocław Metropolitan Area is a dynamic, knowledge-based business centre. It offers the best climate for investment in Poland, which is used not only by foreign investors but also by a large group of fast-growing local businesses. Wrocław is the second location after Warsaw in terms of attractiveness to high-tech investors. The advantages of the city certainly include its location – right in the heart of Europe among Berlin, Warsaw and Prague, with a developed transport infrastructure. However, the city is not just the place – after all, it is people that make it up.

Wrocław is a city of young and welleducated people who know foreign

38 :: polish market :: 5/2011

languages. They want to use their knowledge and they are ambitious, hardworking and brave. The Wrocław Metropolitan Area is an area with a rapidly-growing economy, and vast potential in local universities, which educate future professionals. In recent years there has been a significant increase in foreign investment in the city, both in terms of the number of investors and the amount of capital invested by them in Wrocław and the surrounding areas. The largest investors in the city include French, Irish, American, German, Spanish and Swedish companies. As for the surrounding communes, the South Koreans have had the lead in this respect, as well as the Japanese and Americans, whose contribution to investments has also been great. As regards the number of companies from individual countries, South Korea, the USA and Germany are in the lead. The process of deep transformation, initiated after the collapse of communism, which continues till this day, had originally focussed on the machine-building

Rafał Dutkiewicz, Mayor of Wrocław

industry. Currently, the driving force of the economic development of the city and its surroundings is the automotive industry, on a par with the IT and financial sectors. Today, the latest technology and innovation is the most crucial to Wrocław. ::

Lower Silesia Wrocław delights visitors with its ­archi­tecture. The diversity of its monuments and Gothic churches, has been splendidly integrated with modern style. The Old Town, Wrocław’s showcase, is the oldest part of Wrocław. It’s worth­while to visit the Market Square and the City Hall. The Market Square is one of the largest old urban marketplaces in Europe, surrounded by historic buildings from different periods.

One of the most important elements of the market is the Gothic-style City Hall. It presently hosts the City Museum of Wrocław. Being in Wrocław, one cannot indifferently walk past the Cathedral of St. John the Baptist, which is surrounded by numerous chapels dedicated to St. Elisabeth, Virgin Mary, St. John the Baptist, St. Casimir, the Saviour and Resurrection and the Electoral Chapel. Wrocław’s panorama can be admired from the Cathedral’s tower.

One cannot forget about the “Panorama of the Battle of Racławice” while visiting Wrocław. The artwork created in the nineteenth century presents the battle of Racławice in 1794.

The popularity of the painting is based on it’s monumental proportions as well as creating the feeling of actually being in the battle for the onlooker. The painting, considered to be one of the most beautiful, enjoys enormous interest. In spare time, it’s also worthwhile to visit the Botanical Garden of Wrocław University. Founded in 1811, it has a combined area of 7.4 ha. It can be visited from 1 April to 30 November.

The admission price is very attractive.

It is considered to be an oasis of peace.

It is one of the oldest gardens in Poland and is on the list of cultural heritage of Lower Silesia. Cyclical events take place there such as the Lower Silesian Pumpkin Festival, the Folklore Festival and flower composition displays.

During the spring-summer season the musical Festival “Music in the Gardens” takes place, where Wrocław’s artists, students of Wrocław’s music

Over the course of the last several years, Wrocław has become one of the most recognisable cities in Poland. It was founded in the 13th century.

Almost 70% of the city was destroyed in WWII. Wrocław was “granted” to Poland, together with Silesia at the Conference of Potsdam on 2 August 1945. People from former Polish eastern territories annexed by the Soviet Union began to settle in Wrocław following the war, making Wrocław a multicultural city.

Ewelina Janczylik

Wrocław:

The Meeting Place

Wrocław is one of the largest Polish cities, the capital of Dolnośląskie province, and the fourth most populous city in Poland. The area of the city is almost 300 square kilometres.

5/2011 :: polish market :: 39

Lower Silesia

Wrocław is located on the Odra river and its four tributaries, with many foot-bridges and bridges. As a result it is considered by many as the Venice of the North, and by others as the “Flower of Europe.”

In 2000, Wrocław has been named as the Meeting Place. It is a slogan promoting the city.

schools and other valued artists perform. A huge attraction for the entire family will surely be the Wrocław Zoo. The zoological garden exists since 1865 and covers an area of 33 ha, as many as 559 animal species can be seen there.

The zoo is open all year round. Around 4-5 hours should be set aside to tour the garden but it can also be accomplished in an express fashion by following a path with that name and then it will only take us 2 hours. A trip to the zoo is an excellent idea to spend free time together.

Wrocław is not only a place rich in monuments and delighting architecture, colourful buildings, statues and bridges. Wrocław has also a well developed cultural life, it is a place suited for rest and relaxation, strolls and meetings. Wrocław is one of the candidates to the European Capital of Culture 2016. Wrocław has many museums, theatres, galleries and several cinemas. Undoubtedly, the central station cinema is a popular attraction, placed right in the Central Railway Station. This is the only cinema of its kind in Europe. The Wrocław fountain by the Centennial Hall will delight many with water displays in the rhythm of classical or contemporary music. A variety of styles and

40 :: polish market :: 5/2011

cultural spots cause that no one visiting Wrocław can complain of boredom. Wrocław offers a wide range of sports and recreation opportunities, beginning from typical sports centres such as skating rinks, swimming pools, stadiums, tennis courts and all the way to encouraging the usage of dance schools.

Since 2005, Wrocław has been famous for its Krasnale (dwarfs). These are miniature bronze sculptures. Their presence was not initially noted by Wrocław residents or tourists. This is the reason why popularisation of this

initiative has minimised accidental tripping. Many dwarfs are located near the Market Square and the Old Town.

Wrocław is also a well-solved logistics problem. The junction of the A4 highway is placed directly beside the city’s border. Wrocław is also an important railway junction. One can rely on the municipal transport when commuting in the city itself, the tram network is one of the largest in the country. The tram, bus and suburban transport compose an integrated whole. Nevertheless one should keep in mind roadwork and traffic jams.

For this reason the city authorities are constructing many bicycle paths, although the biggest problem is their scarcity along the entire city. The creation of an Urban Bicycle rentals is planned in order to encourage their use. :: Photos: Stanisław Klimek

Lower Silesia

Development prospects for Lower Silesia Lower Silesia (Dolny Śląsk) is currently a rapidly-developing region with a very convenient location in Europe. Transport connections provide quick access by plane and by car to the major European cities. The redevelopment work on railway lines currently under way will allow faster and more efficient mobility within the global economic network in the coming years. The new airport terminal to be handed over this autumn will make air travel even more comfortable. The redevelopment and extension of the current road network will favour the construction of new industrial plants that will quickly send their products to customers in all Europe. In the years to come, the region’s transport infrastructure will be developed further. It is also worth pointing out that we are a pioneer in Poland when it comes to using public-private partnerships as a tool to maintain provincial roads. It is my conviction that only if we cooperate with business can we make the management of the region more effective and beneficial to residents.

Rafał Jurkowlaniec, Marshal of the Lower Silesia Region

As for the economic structure of the region, an interesting illustration of the favourable variety of business actors may be the list of the major CIT payers who are the cornerstones of the Province’s budget. The mining industry is represented by four entities (obviously led by KGHM), the financial sector has six entities, the automotive industry (until recently in crisis, currently considered one of the key prospective sectors) three, and the insurance sector two. This means we are not dependent on a single branch of the economy.

Lower Silesia is characterised by its rich resources, thanks to which our region has been successfully developing on the basis of its own natural reserves.

The copper and silver beds are accompanied by rock raw materials, unique in Poland. Brown coal resources are a good protection in the context of the unstable international environment which brings challenges in relation to energy security.

Another, but no less important, factor that determines the strong development potential of Lower Silesia is its social potential, based on people and their achievement. The region’s driving force is Wrocław – a strong academic centre, and a place that successfully competes with Warsaw in terms of attracting creative people who are curious about the world, open to new ideas and willing to take challenges. It is in Wrocław that the centres of major global business players are located.

Needless to say, the Capital of the region does not function separately from its surroundings; on the contrary, the

vicinity of the mountains makes it a perfect place for both work and leisure.

For several years now we have made vital efforts to support the development of an innovative economy and stimulate the establishment of business clusters. Special Economic Zones - the basis for locating investments of importance to the region - also fulfil their role. In the coming years this potential will continue to build strong foundations for our growth. It is worth adding that in terms of investment attractiveness among other regions of Poland between 2005 and 2009, Lower Silesia was always placed between second and fourth places (according to the ranking prepared by the Gdańsk Institute For Market Economics), and in terms of its activeness towards investors and the level of economic infrastructure development we have always occupied first or second places.

I should now mention EU funds, which make up an important element of the region’s investment policy. According to ongoing research conducted using the HERMIN macroeconomic model, the recent years have seen an increasing contribution from the funds of the Regional Operational Programme to Lower Silesia’s GDP. As stressed by the authors of the report, which was prepared in late 2010, in the coming years there will be a further increase in the effects of procuring EU funds for the years 2007-2013. They state that “even in the last year under study (2020), five years after financing within the National Development Fund/National Strategic Reference Framework and the Regional Operational Programme for Lower Silesia is expected to stop, EU funds will still significantly contribute to the GDP of the Province.” It is a harbinger of bright future for the region’s development.

Finally, I would like to add that we are currently working on updating the development strategy for our Province up to the year 2020. We are drawing on the knowledge of the representatives of the Office that I am in charge of, prominent figures from the world of science, and also on the experience and intuition of businesspeople who stress the necessity to include the point of view of entrepreneurs. This guarantees that the future development of Lower Silesia will favour an even more effective use of the resources we have. :: 5/2011 :: polish market :: 41

Lower Silesia Dolnośląskie

Ranking of companies in ­Lower Silesia Company name

1 KGHM Polska Miedź SA

Head of company

Based in

Herbert Wirth

Lubin

Sales revenue in 2010 (in PLN thousands)

Net profit/loss in 2010 (in PLN thousands)

Gross profit/loss for 2010 (in PLN thousands)

Operating income in 2010 (in PLN thousands)

Employment in 2010

17292590

4714863

5777550

5545338

30928

2 AB SA GK

Andrzej Przybyło

Wrocław

2882109

35160

45393

58276

na

3 EKO HOLDING

Krzysztof Gradecki

Wrocław

1254159

20819

27007

31153

2964 14425

4 IMPEL SA GK

Grzegorz Dzik

Wrocław

1110671

53306

62189

64834

5 NG2 SA

Dariusz Miłek

Polkowice

1028559

117856

122609

129119

na

6 ZESPÓŁ ELEKTROWNI WROCŁAWSKICH KOGENERACJA SA

Philippe Gagneux

Wrocław

1022156

140572

171053

186724

na 240

7 TU EUROPA SA

Jacek Podoba

Wrocław

958670

150517

186469

na

8 SELENA FM

Krzysztof Domarecki

Wrocław

878906

25107

28339

32589

na

9 AMREST

Piotr Boliński

Wrocław

774960

na

na

na

na 1029

10 HUTMEN SA GK

Kazimierz Śmigielski

Wrocław

747406

-16695

-12093

-4474

11 KOELNER SA

Radosław Koelner

Wrocław

559633

837

3868

18968

na

12 DIALOG SA GK

Arkadiusz Miszuk

Wrocław

528755

80155

46049

50299

1339

13 PRZEDSIĘBIORSTWO BUDOWY KOPALŃ PeBeKa SA

Ryszard Janeczek

Lubin

486167

7801

8981

7441

1595

14 TIM SA

Krzysztof Folta

Siechnice

332317

10139

12892

10632

na

15 ZETKAMA SA

Leszek Jurasz

Ścinawka Średnia

196422

5515

7354

10314

838

16 LC CORP

Dariusz Niedospiał

Wrocław

156202

50548

73271

65943

49

17 BUDOPOL WROCŁAW

Mirosław Motyka

Wrocław

130065

5983

6328

3738

119

18 EMC INSTYTUT MEDYCZNY

Piotr Gerber

Wrocław

126802

840

1142

3144

624

19 ELEKTROTIM SA

Andrzej Diakun

Wrocław

116449

3837

5514

5417

na

20 ATM GRUPA SA

Tomasz Kurzewski

Bielany Wrocławskie

113344

3062

4920

4652

na

21 TELEFORCEONE SA GK

Sebastian Sawicki

Wrocław

113067

4310

4875

8515

na

22 NETLINE GROUP SP. Z O.O.

Jacek Wilczyński

Wrocław

107258

6096

7943

8448

170

23 ADVATECH SP. Z O.O.

Jacek Szubert

Wrocław

88443

2612

3108

3213

53

24 BLACK POINT SA

Kamila Yamasaki

Kobierzyce Bielany Wrocławskie

71485

5653

7225

7326

na

25 INTAKUS SA

Jarosław Ślipek

Wrocław

63784

1488

2446

5389

105

26 PRIMA MODA

Dariusz Plesiak

Wrocław

52781

1122

1079

1014

na

27 ANTI SA

Arkadiusz Rzepa

Wrocław

52487

-5291

-4997

-4444

na

28 HORTICO SA

Paweł Kolasa

Wrocław

48273

2000

2459

178

na

29 VOTUM SA GK

Dariusz Czyż

Wrocław

47523

5318

6598

5631

na

30 INTERFERIE SA

Adam Malinowski

Lubin

39432

3 148

4 039

3 778

na

31 RANK PROGRESS SA

Jan Mroczka

Legnica

37614

5399

6717

-4495

na

32 SONEL SA

Krzysztof Wieczorkowski Świdnica

35954

4646

4961

4677

209

33 VIDIS SA

Bartosz Palusko

Wrocław

30776

1236

1533

1853

na

34 GRUPA KONSULTINGOWOINŻYNIERYJNA KOMPLEKS SA

Janusz Wystemp

Wałbrzych

28081

1336

1665

1829

na

35 DOM MAKLERSKI WDM SA

Wojciech Gudaszewski

Wrocław

25165

17161

20181

19604

na

36 EUROPEJSKIE CENTRUM ODSZKODOWAŃ

Krzysztof Lewandowski

Legnica

24018

6138

7741

7463

99

37 PPH WADEX SA

Zbigniew Piechociński

Wrocław

22387

3344

3897

3969

na

Ranking continued on page 44

42 :: polish market :: 5/2011

Lower Silesia

Piotr Krupa

Robert Banasiak

president of KRUK S.A.

Vice-President of the Board of Dialog Telecommunications

BACK IN 1998, when two graduates from law school were establishing KRUK S.A. in Wrocław, it was hard to predict that in only a few years it would have become an undisputed leader in the debt management industry. Today, KRUK is the largest entity in this sector in Poland, a company listed on the Warsaw Stock Exchange, and also present beyond the country’s borders. The company’s activity spans into Romania, and is expected to expand onto the Czech, Slovakian and possibly the Hungarian markets. Its board boldly plans to make KRUK the biggest player in the debt collection industry in Central Europe. At the same time, the company continues to show its devotion to local roots and supports the community it derives from.

The headquarters of KRUK S.A. are located in Wrocław, the Polish debt collection centre. It is the place where many fi nancial institutions have their premises, as well as some of the most important players in the debt management industry. The favourable economic atmosphere of the region, as well as the highly-qualified graduates of Wrocław’s universities, create the opportunity for the business to grow. In the region of Lower Silesia, KRUK has also got its operational division. In the Technology Park in Szczawno Zdrój, the company has a modern contact centre, with almost 200 posts. Its high level of automation and many CC functions dedicated especially to the purposes of debt collection facilitate the carrying out of 2.4 million conversations with debtors a year.

Taken together, in Poland and Romania the KRUK group of companies employs ca. 1300 workers. It is worth mentioning that the company is the biggest employer in Szczawno Zdrój and one of the biggest in the Wałbrzych region.

But business is not everything. “For several years, the KRUK team has been organising voluntary blood donations. Since the beginning of 2010 alone, we have managed to collect almost 70 litres of blood from approx.

150 people,” says Piotr Krupa, President of the KRUK S.A. Board. Employees also regularly initiate voluntary campaigns supporting the Orphanage in Wałbrzych. Also, money is collected periodically to support the associations that, take care of sick people and protect animals. “An important element of our business is the pro-conciliation strategy addressed to debtors, employed for several years now. It makes it possible to pay the debt in instalments adjusted to the actual fi nancial means of the debtors. In fact, it is an entirely new fi nancial service on the market, a kind of debt adjustment,” says Piotr Krupa.

Despite being a national leader, KRUK is developing dynamically. “The company’s recent successful stock exchange debut is the cap of a certain stage. It does not mean however, that we have already achieved everything and can now rest on our laurels.” claims Piotr Krupa. “Our history continues, and we are already working intensively on our next steps,” he adds. One such step will be the expansion on the Central European markets.

According to the report of the Gdańsk Institute for Market Economics, the Polish debt collection market will reach PLN 22.2 billion in 2014. It means that there will be a growth of over 55% in relation to 2009. Thus, it seems, that KRUK has a bright future. ::

DIALOG – ONE OF POLAND‘S biggest telecommunications operators – is fi rmly rooted in Lower Silesia and Wrocław. In this region, the recognisability of our brand is just shy of 100%, and residents associate us with cutting-edge technology, quality, and innovation. Dialog is not only a provider of comprehensive telecommunications services (landline and mobile phones, desktop and mobile Internet, and digital television), but also an important employer and a significant investor.

In Lower Silesia Dialog has an extensive infrastructure of its own, which is constantly being extended and modernised to become a next-generation network. The optical fibre is brought as close as possible to the service user, the building, or flat, which guarantees the highest data transmission capabilities and unique additional features. Dialog has chosen one of the most innovative technologies in the world – a passive optical network (PON).

Connecting the optical fibre directly to buildings opens up a wide array of innovative services to clients. Besides broadband Internet with up to 100 Mbps, HDTV, and home CCTV (as the fi rst operator in Poland) we will soon provide access to gaming communities and on-line shopping.

Thanks to its innovative concept and positive influence on the development of the information society, Dialog has procured EU co-fi nancing for the project within the Innovative Economy Operational Programme.

By the end of April 2011, the overall number of optical fibre connections to homes in Lower Silesia including Wrocław, Wałbrzych, Lubin, and Legnica, reached over 57 thousand (with 73.6 thousand in the whole of Poland). By the end of 2011 it will exceed 90.7 thousand (150 thousand overall). These numbers confi rm Dialog’s strong position as one of the most important entities on the Polish market.

The company’s consistent investment policy is reflected in its business results, its stable fi nancial situation and growing numbers of clients, who are more and more willing to take advantage of its range of services. ::

5/2011 5/2011 :: polish market market :: 43 63

Lower Silesia Dolnośląskie

Ranking of companies in ­Lower Silesia Company name

Head of company

Based in

Sales revenue in 2010 (in PLN thousands)

Net profit/loss in 2010 (in PLN thousands)

Gross profit/loss for 2010 (in PLN thousands)

Operating income in 2010 (in PLN thousands)

Employment in 2010

38 M.W. TRADE

Rafał Wasilewski

Wrocław

21088

7035

9022

9027

20

39 INSERT SA

Jarosław Szawlis

Wrocław

20666

3333

4481

3829

151

40 FAST FINANCE SA

Jacek Longin Daroszewski

Wrocław

20449

6238

7715

11914

na 18

41 VEGANET SP. Z O.O.

Ryszard Kołacz

Wrocław

20095

1390

1724

1703

42 ELEKTROMONT SA

Jarosław Mazur

Jelenia Góra

19233

102

142

157

na

43 SMT SOFTWARE SA

Sebastian Łękawa

Wrocław

18158

2674

3342

3338

45

44 DORADCY24 SA

Grzegorz Rojewski

Wrocław

16932

-584

-584

-512

na

45 TRAVELPLANET.PL

Bożena Garbińska

Wrocław

16850

-2838

-3317

-3192

na

46 MICROTECH INTERNATIONAL SA

Mirosław Loch

Wrocław

16436

-540

-958

-889

na

47 SECURITY SYSTEM INTEGRATION SA

Waldemar Garwol

Bielany Wrocławskie

15606

738

734

858

na

48 HICRON SP. Z O.O.

Bartosz Fudala, Remigiusz Efinowicz, Michał Guzek, Ireneusz Czapski

Wrocław

15235

1591

1866

1660

70

49 GANT DEVELOPMENT

Karol Antkowiak

Wrocław

14493

33304

44028

-6783

na

50 SURFLAND SYSTEMY KOMPUTEROWE SA

Dariusz Kucharski

Wrocław

13700

276

na

na

23

51 Q4NET QUALITY FOR NETWORKING

Robert Pernak

Wrocław

13324

437

567

568

15

52 INWESTYCJE.PL SA

Grzegorz Czapla

Wrocław

10129

595

674

685

na

53 TRO MEDIA SA

Marcin Misztal

Wrocław

9001

3866

4687

2081

na

54 PGS SOFTWARE SA

Wojciech Gurgul

Wrocław

8817

1267

1586

1466

43

55 PRZEDSIĘBIORSTWO BUDOWLANE BUDOTEX SP. Z O.O.

Krzysztof Gołuchowski, Wojciech Libera

Wrocław

8447

610

790

1023

57

56 POWER MEDIA SA

Wojciech Narczyński

Wrocław

7267

-317

-298

-408

80

57 DOMEX-BUD DEVELOPMENT SA

Tomasz Kowalski

Wrocław

6119

1001

1298

1059

na

58 POLSKI FUNDUSZ HIPOTECZNY SA

Mirosław Magda

Wrocław

3382

4419

5464

1854

na

59 KORBANK SA

Tymoteusz Biłyk

Wrocław

3166

721

848

905

na

60 CENTRUM WSPIERIANIA PROJEKTÓW EUROPEJSKICH SA

Rafał Czerkawski

Wrocław

3006

469

570

613

na

61 KOMFORT-KLIMA SA

Robert Kopeć

Wrocław

2996

-782

-714

-565

na

62 DENT-A-MEDICAL SA

Mariusz Andrych

Wrocław

2850

-2920

-2920

-2621

na

63 NANOTEL SA

Daniel Wojnarowicz

Wrocław

2521

61

9

48

na

64 BLUE TAX GROUP SA

Mirosław Stanisławski

Wrocław

2501

-794

-794

-575

na

65 TELIANI VALLEY POLSKA SA

Adam Sworowski

Wrocław

2298

69

70

93

na

66 WDB BROKERZY UBEZPIECZENIOWI SA

Krzysztof Cichecki

Wrocław

1818

121

167

173

na

67 GRUPA PRAWNO FINANSOWA CAUSA SA

Piotr Szalbierz

Wrocław

1128

409

412

509

na

68 BIO-MED INVESTORS SA

Andrzej Trznadel

Wrocław

829

3005

3757

-283

na

69 IBIZA ICE CAFE SA

Jacek Jabłoński

Wrocław

782

-2446

-2452

-2190

na

70 E-KIOSK SA

Piotr Kubiszewski

Wrocław

716

-217

-217

-218

na

71 ONERAY INVESTMENT SA

Bogusław Bartoń

Wrocław

76

-233

-233

-222

na

72 VENTURE INCUBATOR SA

Maciej Jarzębowski

Wrocław

27

1035

1294

-297

na

44 :: polish market :: 5/2011

The Karkonosze Region is one of the few places in Poland with a varied, yet beautiful, landscape.

Visitors will find numerous diverse attractions. The Jeleniogórska Valley is a special venue on the cultural map of Poland.

The Karkonosze Mountains attract tourists with their multiple leisure opportunities. Their uniqueness and international, European, significance stem from the fact that this small area is home to some 29 castles and palaces which used to be the residences of Silesian princesses and the Prussian royal family, as well as renowned Polish, German, Czech, and Austrian aristocratic and nobility lines.

Here, a unique complex of palaces and parks has been created – they fit in with the surrounding scenery so well that, along with a combination of agricultural landscapes and forest, today they constitute a monument on a European scale, characterised by exceptional spatial qualities.

The system of scenic spots linking particular facilities, which comprise an area of over 1000 ha, has been retained. These include residencies in Bukowiec, Bobrowo, Ciszyca, Janowice Wielkie, Karpniki, Komarno, Kowary, Miłków, Mniszków, Mysłakowice, Radomierz, Staniszów, Wojanów, the Chojnik Castle, the ruins of Bolczów castle, Sokolec, the Knight Tower in Siedlęcin Palium Palace and the Czarne (Black) Manor. Traces of history can be found in numerous museums – the Karkonoskie Museum in Jelenia Góra, the Museum of Sport and Tourism in Karpacz, the Museum of Hauptmann in Szklarska Poręba, and the Tyrolean House in Mysłakowice.

We can also encounter old traditions in the plethora of unusual events, such as the Walloon rituals in Szklarska Poręba, the Slide on Horned Sledge in Kowary, the Tragaria in Karpacz, and the the Musical Garden of Liczyrzepa – the Opera Festival...

Karkonosze welcomes you all year round We invite you to spend your holiday in a variety of facilities with different standards and prices, in ever-hospitable hotels and pensions, resorts, hostels, guest rooms, and agritourist farms... Equally rich and interesting are the attractions offered by restaurants, pubs, and cafes – the abundance of dishes combined with

The Karkonosze Mountains Region the special atmosphere of each venue are the greatest assets of these services.

We invite enthusiasts of active leisure, who seek peace and quiet – we can cater for all tastes!

The Karkonosze Region comprises the Karkonosze National Park, the Rudawski Scenic Park, the Scenic Park of the Bober Valley, and the Cultural Park. In 1993, by a decision of the UNESCO-affiliated International MaB Committee (the Human and Environment programme) in Paris, the Bilateral Wildlife Reserve of the Karkonosze/Krkonose Biosphere came into being.

In winter we get off our bikes and put on skis!

Excellently-prepared slopes, with additional snow provided, are a paradise to skiers and snowboarders. It is in Karkonosze where you will find the longest ski slope in Poland – the Lolobrygida (4444 m). We invite you to visit ski resorts on Kopa in Karpacz, the Szrenica Ski Arenas in Szklarska Poręba and Polana Jakuszycka, and Łysa Góra in Dziwiszów.

The Association of Karkonosze Communes Established on 23 March 1992; it is a legal entity.

Member communes: Mysłakowice, Podgórzyn, Karpacz, Kowary, Szklarska Poręba and Piechowice.

The tasks of the Association: Implementing common tasks in the area of: :: the protection of water, land, air and landscape as bases for recreation and domestic and abroad tourism,

:: directing the economic development of towns and communes affiliated to the Association, based on the values of natural environment, :: the representation of common interests of towns and villages in contact with foreign Local Governments and commune associations, :: the common implementation of tasks and municipal/industrial investments, phone communication, and conducting business activity (the development of a landfill sites, tourism), :: the conducting of education and care, as well as sport and cultural activities, :: the undertaking of other measures resulting from the resolutions of commune councils.

The main initiatives of the Association :: the installation of telephone lines in member communes, :: “the ecological development of a landfill site in Ścięgny Kostrzyca – Stage I”, which included the reclamation of old waste tips and the construction of a new site for waste storage, :: the construction of a Waste Treatment Plant with selective waste collection, :: environmental education: ecology contests for pupils in kindergartens, primary schools, and junior secondary schools, :: the preparation and printing of informational and educational materials :: the Karkonosze Waterworks and Sewage System which covered the communes of Podgórzyn, Mysłakowice, Szklarska Poręba, Kowary in the 1st stage and Karpacz and Piechowice in the 2nd stage. :: the promotion of the Karkonosze Region.

Law & Taxes

The employer and the workplace A foreigner buying a workplace located in Poland has no freedom in shaping labour relations. Becoming the employer of people in the workplace, he or she is unable to cancel or conclude new employment contracts, dismiss as a result of the transfer, or change the pay and working conditions. The new employer is bound by the employment contracts signed with the previous employer.

Paweł Kisiel

The author is a legal adviser, labour law specialist at Chałas and Partners Law Firm.

Pursuant to Art. 23§ 1 of the Labour Code, in the event of a workplace or part of a workplace being transferred to another employer, by force of law he or she becomes a party in the current labour relations. This standard is correlated with Art. 3 par.

1 of the Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the member states relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses.

employment contracts. By force of law, the content of labour relations remains identical to that between the previous employer and the employees. For example, an employer to whom the business has been transferred is bound by the rules of awarding bonuses that were previously in force in the workplace. It is also impossible to exclude – by way of agreement or employer’s decision – some of the employees from being transferred. The actual circumstances are decisive in establishing whether a transfer has taken place.

The transfer of the workplace occurs independently of the will of employers and employees

The transfer of databases alone may be considered a transfer of the workplace

The notion of a workplace in the aspect of its transfer is used by the legislator in an objective meaning – as a set of material, personal and organisational (i.e. non-material) components. The workplace is not the employer in this meaning. Its transfer is an institution of the Labour Code which ensures stability of employment and guarantees the durability of labour relations, irrespective of any changes on the part of the employer.

Poland is not an exception in the EU. The transfer of employees to a new employer is carried out by force of law.

It is not conditional on the actions of employees, so they are not required to give their permission for the transfer.

They cannot effectively act against it either. The effects of the transfer cannot be revoked on the basis of a contract concluded between the previous and the new employer, or between the employees and any of the employers.

The new employer and employees are not required to conclude new

The simplest example of the transfer of a workplace is the transfer of the entire business. The new employer becomes the owner of the entire workplace, understood as an undertaking, with all its material and non-material components, and employees.

For many years there was a dispute in the courts as to whether it is necessary to transfer the material components, or it is enough to transfer the non-material components. The answer eventually arrived at by the judicature indicates that the latter is sufficient.

This stance deserves full acceptance and support. The Supreme Court points to the sample components of a workplace, which decide whether a transfer has taken place or not. It is enough if the new employer takes over the tasks carried out by the previous employer. This may involve only the transfer of the part of the workplace which is only organisationally separate, for example one of the shops in a chain,

46 :: polish market :: 5/2011

even if it still acts under the old brand or trademark. The transfer of a workplace occurs also in the opposite situation, when the new employer takes over part of the property of the former employer, discontinuing its activities.

Organisational changes alone, following which the work of a specific employee is not needed in the previous place, at times may decide about the transfer of the workplace. The transfer may take place as a result of such events as sale, lease, inheritance, restructuring, and changing into a company or cooperative.

Outsourcing Outsourcing, i.e. the transfer of some tasks of an employer to another employer, has become very popular. In the majority of such cases part of the workplace is transferred. For example, in a transport company, a traffic controller plans the transport and supply of goods by lorries. In order to reduce costs, the head of the company decides to outsource the responsibilities of traffic controller and gives them to another entrepreneur. The employee will still plan the transport for the same target group of clients.

Even though the employer will continue his or her work in the same place, using the same instruments, part of his or her workplace will be transferred.

It would be in violation of the law if the former employer cancelled the employment contract or did not renew it, and the new employer concluded a civil law contract with the employeetraffic controller. Likewise, the former employer cannot cancel the employment contract, and the new employer cannot conclude a new agreement with the same employee on different terms. In each of these cases a court would rule that the former employment contract is still valid and unchanged. The only difference will be that the new employer will replace the former one. The transferred employee may receive different pay and work under other conditions, but only by way of a notice of change. ::

www.chwp.pl

Law & Taxes

Pursuing a career in a regulated profession in Poland Foreigners who wish to practice a regulated profession in Poland, both on their own account and through a company, will be able to do so only after going through a special procedure, aimed at ascertaining whether they possess appropriate professional qualifications that are in accordance with the norms of Polish law.

Maja Sujkowska

Chairperson General Partner’s Board at European Center for Legal Consultations

These restrictions concern both foreigners as well as Poles who have been educated abroad in professions which are regulated in Poland. These professions include, among others: attorney, legal advisor, stock broker, geodesist, architect, building engineer, chartered auditor, pharmacist, physician, dentist, veterinary surgeon, nurse, midwife, laboratory diagnostician, psychologist, teacher, fireman and others.

Persons staying in Poland and intending to personally work in a profession or run a business that is not considered a regulated one may do so without the necessity of undergoing the procedure verifying their qualifications. In this case, a decision from an employer or going through the standard procedure of registering a business in an appropriate form is all that’s needed.

The legal basis for carrying out the said procedure of approving qualifications is Directive 205/36/EC and the Act of 18 March 2008 on the rules of recognising qualifications gained in EU Member States and other Acts that concern mainly medical, legal and technical professions. Because the indicated laws encompass several hundred different professions and types of business activities, listing all of them is aimless (an exact list is included in the appendix to the said directive).

The legal procedure of recognising professional qualifications applies to: :: citizens of EU member states, :: citizens of member states of the European Free Trade Agreement (EFTA) – parties to the European Economic Area (Liechtenstein, Iceland, Norway)

:: citizens of the Swiss Confederation :: members of their families :: citizens of third party countries possessing a permit for a long-term European Communities residency, as per the act of 14 June 2003 on foreigners (Dz. U. [Journal of Laws] 2006, No 234, item 1694, with amend.)

Regulated professions are professions that require meeting certain requirements described in separate regulations of each EU member state concerning access to the given profession. The deciding body for the majority of regulated professions in Poland are professional self-governing bodies, which condition the ability to legally carry out a profession on the basis of the entry to the list of people entitled to do so. If a given regulated profession or type of regulated business activity is not covered by special self-governing bodies then the decision rests directly with a unit of government administration.

Regulated business activity is an activity whose performance in a given member state is dependent on the possession of certain qualifications. The term qualifications is understood as knowledge and abilities of a general, trade or professional character. The confirmation of appropriate qualifications is usually automatic, provided that the migrant possesses appropriate professional experience gained in time from carrying out activities that characterise a given business activity or experience coupled with completing appropriate training in carrying out the same business activity in a member state, from which he or she comes from.

The document confirming the possession of appropriate professional experience by a foreigner is a certificate issued by an appropriate body in the country in which the activity was previously carried out. If the foreigner does not meet the necessary criteria to automatically qualify to carry out a regulated business activity on the basis of professional experience, the recognition can be granted in accordance with an appropriate procedure.

During a proceeding to recognise professional qualifications, the organ supervising a given profession or a certain type of business activity checks whether the applicant possesses an appropriate level of education and qualifications meriting the right to practice a given profession in the country in which it has been earned.

In a situation where the appropriate organ determines considerable gaps in education or training, or determines that the period of education or training completed in the applicant’s country is shorter by at least a year than the period required in the accepting country, or there is a difference in the scope of professional responsibilities in a given profession between the country from which the person arrives and the accepting country, it can determine that remedial measures are necessary.

The appropriate body will decide about the necessity of applying remedial measures only after analysing the documents certifying professional experience of the applicant and concluding that the occurring differences have not been remediated. Remedial measures may include an ability test or an adaptation internship (lasting 3 years).

As a rule, the choice between an ability test and an adaptation internship is up to the applicant, unless the regulated profession requires an exact knowledge of national law and its fundamental and lasting characteristic is giving legal advice and assistance.

The appropriate institution in Poland in matters concerning accrediting foreign diplomas and scholarly degrees is the Department of International Affairs and Recognition of Diplomas of the Ministry of Science and Higher Education.

It is worthwhile to mention at the end that there is a small group of professions or public positions whose performance, in accordance with the legal framework of the Republic of Poland, is predicated on both the possession of appropriate professional qualifications and experience, as well as a Polish citizenship. These professions include judge or Member of Parliament. :: 5/2011 :: polish market :: 47

New business permit for the HJ Heinz Poland in the KostrzynSłubice Special Economic Zone A new permit to conduct business activity in the Kostrzyn-Słubice Special Economic Zone was granted to the HJ Heinz Company, with its registered office in Pudliszki, Krobia Commune, on 22 April, 2011.

As part of its investment plan, the HJ Heinz Company is about to open two new tinned meat and vegetable production plants. The investment includes the implementation of complex processing lines covering all levels of production processes, from storing to loading final products onto pallets. The processing line will be accompanied by innovative technological solutions in the field of product cooling after sterilization in a special ventilated drying chamber. The innovative technology will require outlays of PLN26.6 million which will enable the creation of 30 new jobs. The investment will be completed by the end of August of 2012.

Invest in Pomerania This is the name of a new investor assistance system for foreign investors in Pomerania. All initiatives run by units which help foreign investors enter and operate in Pomerania will from now on be run under one common initiative Invest in Pomerania. The co-founders of Invest in Pomerania shall be Pomerania and the Słupsk Special Economic Zones; the cities of Gdańsk, Gdynia, Słupsk, and Sopot; the Gdańsk Economic Development Agency, and the Pomerania Development Agency, the coordinator of actions taken by the new support system.

Other entities from the region may also be enlisted as co-founders.

The aims of the new organisational structure are to facilitate close cooperation between the entities in charge of foreign investor support in the region, and the elimination of repetitive actions, and as a result more effectiveness in attracting new investments. What’s more, the support system for the investors already present in Pomerania will broaden its range of services - the investors will be offered informational and organisational support from Invest in Pomerania.

Qualified Project Managers will take care of investors from different industries, and the implementation of the new system is to be constantly monitored and verified by the Steering Committee, chaired by the Marshal of the Region.

Ericpol as an opportunity for the IT sector Ericpol, the biggest Polish exporter in the IT sector, is to employ 200 people more. Job offers are waiting for computer programmers, software designers, and telecommunication application testers, regardless of whether they are experienced professionals or graduates from technical universities. The company is based in Kraków Technology Park in Pychowice; however, 150 jobs will be created in Kraków and

48 :: polish market :: 5/2011

Łódź branches of Ericpol. Subsidiary companies Ukraininan Ericpol TZOV and IOOO ERICPOL BREST are planning to take on 50 people in Belarus. The company’s demand for new employees stems from the growing order portfolio and the company’s expansion process.

Ericpol’s revenue growth for the last year reached the level of 17%.

BSH to invest in Łódź The concern is going to build more manufacturing plans in Łódź, in order to expand the production of tumble dryers. The company plans to invest PLN80 million and create 20 jobs. It is going to be the third project implemented by BSH in the Łódź Special Economic Zone. BSH obtained the previous permits in 2004 and 2010. Previous expenditures incurred by BSH in the Łódź Special Economic Zone have reached the amount of PLN267.5 million, and 400 jobs have been created. BSH has also attracted its subcontractors, e.g. Coko Werk, Wirthwein, Hirsch Porozell, HSV, Drahtzug Stein, Mecalit, Schaumplast Organika, E.G.O., and Hutchinson, to invest in the Łódź Special Economic Zone. BSH subcontractors have so far invested around PLN400 million and created 1630 jobs.

A new production plant in the Płock Industry and Technology Park The management board of the Płock Industry and Technology Park has finalised a transaction with a new investor – the B4 Group. The investment will cover the construction of a production plant of light finishing elements for modern residential, commercial, and industrial buildings. According to the Investor 200 jobs are to be created and the production plant will be located in the 3rd zone of the Płock Industry and Technology Park on a site of 2.3ha. The value of the investment is estimated at about PLN23million.

Metsa Tissue to invest in Krapkowice This paper products manufacturer is going to invest EUR55 million in the construction of a new factory in Krapkowice.

The investment covers the construction of a production plant with two state-of-the-art base paper production machines, an environment-friendly, gas-powered thermal-electric power station, and a processing mall and store, as well as the modernisation of one of the two machines working in Krapkowice. After the opening of the new production plant – planned for mid-2013 – the company’s production capacity in Poland will rise by about 35,000 tonnes of base paper. The profile of Metsa customers is also going to change.

Metsa Tissue is the leading supplier of tissue papers for households and institutions in Europe. It is also a global leader in manufacturing of baking and cooking paper products. ::

Polish Presidency

Poland and the countries currently under the EU enlargement process Eastern Partnership is Poland’s priority in the field of EU enlargement. Poland often links the visa, economic and institutional facilitation processes in cooperating with the 6 countries in the Eastern Partnership with the current enlargement process, mentioning the Balkan countries, Turkey, and Ukraine at the same time.

breakthroughs for this country should be expected this year, until a stable majority government is formed, declaring further reforms.

Kosovo Kosovo may be considered outside the integration process.

Neither visa liberalisation nor a stabilisation and association process have been proposed. The EU policy towards Kosovo is made difficult primarily by the fact that some EU countries do not consider this territory an independent country.

Turkey Croatia The only country in the West Balkans negotiating membership. Croatia has currently completed 29 of the 33 negotiation chapters. The European Commission (EC) presented Croatia with 10 benchmarks concerning judicature and essentials issues. To date, Croatia has fulfilled only one. Poland’s position will be difficult, as it will not be easy to smooth out the EC’s assessment. Poland clearly supports Croatia, at the same time being aware that it is in the interests of all countries promoting enlargement that Croatia joins the EU very well prepared. During the Polish presidency Croatia’s negotiations will probably be concluded positively.

membership, which was given a positive opinion by the EC, and since December 2010 it has had candidate status. The date for starting negotiations with Montenegro has not been specified yet, but chances are that such a decision will be made this year, and it may happen during the Polish presidency.

Serbia It has filed its application to the EC and has a considerable chance of attaining candidate status during the Polish presidency of the Council of the European Union. It seems that Poland’s success would be not only to lead Serbia to receive candidate status but also to specify the date for starting negotiations.

Macedonia

Albania

It is in conflict with Greece, who continues to block the enlargement process, despite the fact that Macedonia has had candidate status for almost six years, and a year-and-a-half ago the EC recommended launching negotiations. Poland is in a difficult situation in this context, as it attaches great importance to European solidarity, so it would be hard for it to make a stand that would significantly undermine the Greek attitude towards Macedonia.

In its latest report on this country’s progress in the integration with the EU, the EC has given a negative assessment of Albania’s application for membership. It is connected with Albania’s internal situation, where, according to the Organisation for Security and Cooperation in Europe, none of the elections carried out after 1990 met democratic standards in full.

Montenegro It is performing very well. Montenegro has submitted its application for EU

There are currently no declarations on the part of either the EU or Turkey that the enlargement process will be continued. 13 negotiation chapters are open, but only one has been completed, while 17 are blocked due to the unresolved Cyprus issue. This state of affairs would be difficult to change during the mere six months of the presidency, even though Poland provides very strong support to Turkey in its progression into Europe. What is more, Turkey is a country that fits well into the priorities of the Polish presidency regarding energy security and European identity in the fields of security and defence. Turkey is often highlighted as a key partner in NATO, and its role has become even greater following the events in the Middle East and North Africa.

Achieving a consensus in the issue of completing successive chapters could be aided by the Polish project the European Foundation for Democracy. Poland will try to prevent the events in the Middle East from consuming EU resources at the cost of its eastern neighbours. That is why Turkey may prove useful in creating democratic institutions in the post-revolution countries of North Africa, as it has repeatedly expressed its interest in this role. This would demonstrate that Turkey is a good partner, also in other fields.

Iceland

Bosnia and Herzegovina

The financial crisis persuaded Iceland to integrate with the EU. Iceland filed its application for EU membership in 2009, and a year later it was given candidate status, starting negotiations within a dozen or so days. The screening process is currently under way, and it may end in this six-month period. If it does, there will be a chance to open, and possibly complete, several chapters of negotiations during the Polish Presidency. ::

It may be said that the ratification process for the agreement on stabilisation and association with Bosnia and Herzegovina is now over, but no

Written by Sandra Wierzbicka on the basis of Tomasz Żornaczuk’s statement during a meeting organised by the Polish Institute of International Affairs on 18 April 2011.

5/2011 :: polish market :: 49

Polish Presidency

The priorities of the Ministry of presidency of the Council of the Poland will have the chance to put forward its economic priorities at three international forums – the Energy Council, the Competitiveness Council and during sessions of EU trade officials within the framework of the Foreign Affairs Council.

Jerzy Bojanowicz Among the six central priorities of the Polish Presidency adopted by the Polish government in July 2010 are the expansion of the internal market and the tightening of foreign energy policy, which fit directly into the capacity of the Minister of the Economy, who also intends, in cooperation with the EU, to place greater emphasis on the EU’s relations with third countries in the context of common trade policy.

The priorities of the Polish presidency may be summarised in three main concepts – “European integration as a source of development”, “A Secure Europe”, and “A Europe open to the world”

European integration as a source of development The implementation of this priority will be based on the Single Market Act (the SMA) - an internal market revival project presented by the European Commission in the autumn of 2010.

“Our top priority during the presidency will be to develop the electronic services market. One of our goals will be to eliminate the obstacles that hinder cross-border transactions. Furthermore, entrepreneurs expect the introduction of a uniform EU patent system within the SMA. We are facing a truly unique opportunity to create a pan-European, affordable patent protection framework. Poland will make every effort to create real solutions in this field. The actions of the Ministry of the Economy will be focussing on continuing the development of

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the services market, which generates about 70% of the EU’s GDP,” stressed Deputy Prime Minister Pawlak.

To allow businesses operating on the EU market the full use of electronic services, it is necessary to reduce legal and administrative barriers, including those that hinder carrying out online cross-border transactions. The EU will also continue to work towards lowering prices for roaming services. On 3-4 October 2011 in Kraków, the Ministry of the Economy, the European Parliament and the European Commission will organise the Single Market Forum (SIMFO). Its aim will be to support the development of the single market by increasing the awareness of entrepreneurs and citizens about their rights and opportunities.

One of the priority issues concerning the internal market will be the improvement of the regulatory environment in which European companies operate. Under the Smart Regulation initiative, special attention will be devoted to the regulatory impact assessment instrument applicable in the lawmaking process.

In addition, emphasis will be put on the increase of the benefits of enterprises (mainly the SME sector) from the single market. 2011 will see the summing up of the actions taken by EU member states to which they have committed by adopting the Small Business Act. The Erasmus for Entrepreneurs programme is to support the development of European entrepreneurs.

Polish presidency will seek to finalise work on the development of a

cheap and easily accessible patent system, and will focus on further opening up of the European market to business relationships with external partners.

The key issue will be to eliminate nontariff barriers, which limit or prevent access by EU goods and services to the third-country markets.

A secure Europe This priority will be pursued in the field of external energy policy. In such a way the Polish presidency, referring to the new treaty legitimacy of EU energy policy (the Treaty of Lisbon), intends to give attention to the external dimension of the energy policy. This is fundamental to ensure a secure future of the EU in an increasingly globalised world.

“The establishment of the EU’s external energy policy is necessary, due, among other things, to recent events in the Mediterranean countries. Relationships with such countries as Libya, Algeria, Tunisia and Morocco will have to be regulated. Specific proposals will have to be presented at the European Council summit in December 2011. We believe that without a strong and coherent policy in this field, the EU will not be able to maintain its position in the global market. In talks with partners, the EU as a whole can gain much more than individual Member States,” says the Minister of the Economy.

The EU will seek to strengthen its position in relations with major producers, consumers and transit countries for energy resources. This will be supported by the actions aimed

Polish Presidency

the Economy during the Polish European Union at improving and coordinating the functioning of EU institutions in this field.

“Poland is also very interested in further work on the Regulation on Energy Market Integrity and Transparency. Access to information is a prerequisite for the effective functioning of the market. Our country will continue the procedures in this case conducted by the Hungarian Presidency,” said the Minister.

Poland is also calling for the broadening and strengthening of the Energy Community, to which Georgia and Turkey should be incorporated first.

We would also like the Commission to try to persuade the third countries which are the parties to the Energy Community Treaty to accelerate the implementation of EU law. Poland is also going to discuss the issue of the globalisation of the Energy Charter Treaty. The talks should be primarily held with such strategic partners as the United States, China, India, Brazil and Australia.

A Europe open to the world The Ministry will pursue this issue in the area of the ​​common trade policy.

According to the new EU trade strategy (“Trade, growth and world affairs.

Trade policy as a major component of the Europe 2020 Strategy”) presented by the European Commission in autumn 2010, a fundamentally important issue for the EU and its further growth in the context of relations with the world is the successful completion of the Doha Round negotiations at the World Trade Organisation (WTO) forum. The liberalisation of world trade and the reciprocal opening of markets are the basis for ensuring the necessary conditions for global sustainable economic growth.

Extremely important will also be the involvement of the Polish presidency in the strengthening of economies and trade in the eastern European

regions (similar to the EU’s involvement in the Mediterranean Basin). In this respect, Polish presidency will draw attention to the intensification of the negotiations on a deepened free trade agreement between the EU and Ukraine, so that they could be completed before the end of 2011. Polish presidency will promote the process of Russia’s accession to the WTO, hoping that this will take place in 2011. The challenge for the Polish presidency will also

be the examination of available measures to normalise trade relations with other CIS countries.

Important issues during the Polish presidency will also include the negotiation of free trade agreements ​​with Asian countries. Polish presidency will promote the process of the negotiation of EU free-trade agreements ​​with India, Singapore and Malaysia. It is possible to open similar negotiations with Vietnam. ::

Calendar of the main events organised by the Ministry of the Economy during the Polish Presidency of the EU: Name

Date

City

Meeting of the High-Level Group on Energy

Jul. 13-15

Bełchatów

Informal Meeting of the EU Competitiveness Council

Jul. 22

Sopot

Conference on Corporate Social Responsibility

Sept.5

Gdańsk

Ministerial Conference on the Eastern Partnership (at the 21st Economic Forum)

Sept. 8

Krynica-Zdrój

Conference connected with the 15th Anniversvary of the Polish Membership in the OECD

Sept. 15

Warsaw

Informal Meeting of the EU Transport, Telecommunications and Energy Council

Sept. 19-20 Wrocław

Formal Meeting of the Foreign Affairs Council

Sept. 26

Annual Conference of the Enterprise Europe Network (Organised by the Polish Agency for Enterprise Development PARP)

Sept. 26-28 Warsaw

Meeting of the Executive Committee and the Steering Group of the International Framework for Nuclear Energy Cooperation (IFNEC)

Sept. 28-29 Warsaw

Formal Meeting of the EU Competitiveness Council

Sept. 29-30 Brussels

Seminar on SSA (Space Situation Awareness)

Sept. 29

Warsaw

Single Market Forum (SIMFO)

Oct. 3-4

Kraków

Conference on the EU Internal Energy Market co-organised by the Ministry of the Economy, the Ministry of Treasury and the Energy Regulatory Office (URE)

Oct. 10-11

Kraków

Conference on the Implementation of the Lead Market Initiatives and the European Innovation Partnerships

Oct. 26-27

Warsaw

Women’s Entrepreneurship Conference (organised by PARP)

Nov. 15

Warsaw

Meeting of the European Economic Area (EEA) on the margins of the EU General Affairs Council

Nov. 22

Brussels

“5th Anniversary of REACH” Conference

Nov. 23-24

Warsaw

Formal Meeting of the EU Transport, Telecommunications and Energy Council

Nov. 24

Brussels

Formal Meeting of the Competitiveness Council

Dec. 5-6

Brussels

Regular WTO Ministerial Conference

Dec. 15-17

Geneva

Brussels

5/2011 :: polish market :: 51

Opinion

Money will not solve the problem of innovation Andrzej Arendarski, PhD

Co-founder and president of the Polish Chamber of Commerce right from its inception

The low ratio of expenditures in the R&D sector to the GDP value is often mentioned as one of the major reasons behind the low innovation performance of the Polish economy. Indeed, Poland comes out poorly compared to other countries. In 2008 the amount of money earmarked for R&D in Poland reached merely 0.59% of GDP, while in Spain this amount reached the level of 1.2%, in Germany 2.53%, and in Sweden about 4%.

What’s more, Poland is falling behind other countries as far as the number of patents is concerned.

Is it the case then, that an increase in R&D expenditures will solve the problems of innovation in the Polish economy? Unfortunately, it is not. Poland needs to solve the still-present problem of the business – science relationship first, and building up this link requires changes in the fields of both business and science. On the one hand, representatives of the scientific community take business people with a grain of salt and believe that the world of business cares for nothing except profit. On the other hand business people consider scientists as daydreamers who do not know economic reality.

How can this be changed? First of all, scientists should do their best to understand the needs of business people and the specific character of conducting business activities. Universities lack academics with professional business experience, knowledge of finance management and raising capital. In other words, they lack people that are needed to manage companies.

And the problem is not one-sided. Entrepreneurs show too little interest in the results of research and

52 :: polish market :: 5/2011

development studies - they are more interested in purchasing ready-made, often foreign, licences than developing new technological thought by means of commissioning national research centres.

The 2009 survey, conducted by the Institute for Private Enterprise and Democracy working at the Polish Chamber of Commerce, and the National Foundation for Business Culture (KFKP), shows that more than a half of the surveyed businessmen do not cooperate with scientific centres.

Close cooperation was declared by about 10% of the respondents. Over 60% of academic workers admitted that they were sometimes presented with cooperation proposals from companies, and more than 12% of research centres declared that they were presented with such offers quite often.

Nearly 50% of the entrepreneurs said that they had never received a cooperation proposal from a university or a research institute. All of these may be considered proof that there is a large, untapped potential for cooperation between business and science.

What’s more, business people are often constrained by legal and financial restrictions that hinder the development of innovation. Poland still lacks institutions that would be specialists in financing and commercialising R&D activities. Due to the high risk of such operations (and potentially commensurate profits), considerable experience is needed. Therefore Poland still needs to create the higher-risk funds that will motivate private investors to finance innovative projects.

Banking law requires changes as well, especially as far as start-up financing is concerned, as do activities

aimed at reducing tax obligations for innovative companies. Polish entrepreneurs are often too little aware of the importance of R&D, and they are not willing to take risks and bear the costs that may not pay back. It might be a good idea to create an incentive system that would be based on tax instruments encouraging companies to increase the funds dedicated to research and the employment of academic workers.

There is no doubt that proper cooperation between business and science is a condition necessary for the existence of competitive and innovative economies. Finding a solution to this problem will not cure the whole problem of innovation in Poland. The above-mentioned financial, legal, and mental barriers mean the Polish economy is far behind other countries in terms of innovation.

The EU, while preparing the Lisbon Agenda, noted the importance of innovation for the development of competitive economies. A new economic strategy “Europe 2020”, where lots of attention is given to the question of innovation, is centred around the very same spirit. Following in these footsteps, the Polish Chamber of Commerce has long been trying to convince us that innovation is a condition necessary for the development of the Polish economy. No doubt it will not be possible without closer business – science cooperation. The question of how to make this relationship better and more economically effective will be discussed during the 2nd Innovative Economy Congress, which is to be held at the beginning of June, in Warsaw. ::

IT-HPS

Ecologically pure energy Industry Technology for High Pressure System (IT-HPS) is a Polish leader in providing innovative technologies and equipment for the production of ecologically pure energy from biomass, biogases and natural gas in the form of ecological fuel for public utilities, industry and power stations.

Our innovative production technologies are based on the latest technological developments in fuel gas compression, as well as efficient and economical use of cheap pure energy in production processes.

We are looking forward to doing business with you.

Paweł Malkowski – IT-HPS Director

Office: 1 / 214 Lukasiewicza Street Poland, Cracow 31-429 Contact: +48 12 617 76 16/17 www.it-hps.pl

Science and Innovation

Security specialists “The Polish ‘education boom’ which at the turn of the century brought a nearly fourfold rise in academic schools and students (at both regular and evening classes) was an unprecedented social phenomenon.

Another such phenomenon is the rising popularity of ‘security-oriented’ faculties like national security, internal security or security engineering, offered by more than a hundred higher schools in Poland. It would be difficult to explain this merely by the emergence of ‘new security areas’ (global, regional and local) alongside traditional political and military threats”, Prof. Piotr Sienkiewicz, a research staff member at the National Security Department of the National Defense Academy and Vice-Rector for educational affairs at the Warsaw School of Computer Science, tells “Polish Market’s” Jerzy Bojanowicz.

Are Poland’s chief institutions safe from the kind of cyber-attack Estonia experienced in the spring of 2007?

It would be hard to give a comprehensive rundown of our vulnerability to such threats as this differs according to social sphere, economic sector and organization. However, an all-round security assessment of this kind may be contained in a currently-prepared Strategic National Security Review.

Estonia’s case is ­particularly interesting. Already in the early 1990s Estonia was among the EU’s

Thanks to their advanced technology, smart grids enable constant security and performance monitoring, diagnosing, predictions of changes in the system and early warning in case of crisis.

54 :: polish market :: 5/2011

most advanced IT society builders, which was best visible in the extent to which IT was used by the country’s public administration and financial sector. The 2007 attack on Estonia’s telecommunications systems revealed its high vulnerability to cyber-threats.

In result, the EU and NATO countries decided to undertake measures to raise security in cyber-space.

A prognosis for the Polish Armed Forces until 2030 foresees that cyber-terrorism will evolve to a major national security threat as societies make themselves increasingly dependent on IT. This means that the annihilation of national defense systems and cyber-attacks on crucial national infrastructure (energy, communications, transport, banking, etc.) are today both possible and probable. In

effect, the Polish Army decided to create special units trained and equipped for cyber-warfare – including psychological tactics and offensive-defensive action. We may only hope that such security solutions find their way into civilian cyber-space.

A re smart grids the future?

Thanks to their advanced technology, smart grids enable constant security and performance monitoring, diagnosing, predictions of changes in the system and early warning in case of crisis. The aim is to ensure adequate security and performance levels in the power and other systems (communications, transport, logistics, water and gas supply).

It’s worth noting that the blackout which struck Szczecin and most

Science and Innovation

of the Zachodniopomorskie Province, and whose causes lay in a faulty element of the transmission system, is comparable to the effects of a terrorist attack, especially a cybernetic one.

S ome time ago, after serving a 4-year sentence, Kevin Mitnick, one of the world’s best-known hackers, founded a consultancy.

Who works in Polish units dealing with cyber-security?

Mitnick is a typical example of an American-style career, where someone with doubtless talent becomes an expert in his field after serving a deserved penalty. The ability to create tangible threats can prove very useful in creating effective information security systems. Information security skills are fast becoming a must in schools teaching network and database management. Many of their graduates will find employment in the public administration and other nationally crucial organizations.

One such school is the Military Cybernetics Department at the Military University of Technology (WAT). Information security will also be introduced in national security courses at the National Defense Academy.

Does the Warsaw School of Computer Science also offer information security training?

The Warsaw School of Computer Science is a relatively young school, opened 10 years ago, and ranks among

small and medium-sized schools. The school’s engineering faculty offers courses in software engineering, databank engineering, computer network engineering and information system security engineering, the latter conducted together with the Research and Academic Computer Network (NASK). Our students can also specialize in computer network security and information security management.

In May we will celebrate World Information Society Day. To what extent are Poles an information society?

As early as at the turn of the 1980s and 90s I and some associates launched research on the information society.

Today I head the Information Society Studies Centre at the Warsaw School of Computer Science.

The Polish road to information society is long and hard but the direction is good. There is some progress, although not everything in this respect has worked out as expected. Certainly Poland’s place in information society rankings leaves much to be wished for.

One of the most popular indicators in this respect is the so-called Networked Readiness Index (NRI) consisting of a large number of partial indices used to asses the degree of computerization in the administration and customer service. NRI is based on “hard data” provided by, among others, the International Telecommunication Union,

the UN and the World Bank, and “soft data” obtained from expert surveys.

As of 2001 NRI is the chief tool used by the World Economic Forum and the INSEAD-run Business School for the World to compile annual Global Information Technology Reports. The 20102011 report covers 138 countries, Poland ranked 62nd (69th in the previous year’s ranking) after among others Latvia, Croatia, Lithuania, Hungary, the Czech Republic, Slovakia and Estonia. The leader was Sweden with 5.6 points against Poland’s 3.84 points.

On January 18 the London School of Business published a Connectivity Scorecard in which Poland ranked last among sixteen “innovation-driven” economies with 2.18 points on a 10-point scale. The leader was the US (6.97 pts) followed by Sweden (6.83 pts).

Regardless of any methodological controversies such “global” indices may arouse, we must admit that Poland’s road to information society needs modification and possibly even a change of strategy. There is probably no universal information society model. There is, for instance, a Silicon Valley model, Finnish, Singaporean and mixed models. Regrettably we are not relying on the Finnish model, which is really worth copying.

To mark this year’s World Information Society Day students at the National Defense Academy’s national defense department will organize a conference devoted to the prospects, threats and challenges of information society. The Warsaw School of Computer Science will host a session devoted to the recently deceased creator of the Arpanet computer network Paul Baran (who, by the way, was born in 1921 in the Polish city of Grodno). ::

The Polish road to information society is long and hard but the direction is good. There is some progress, although not everything in this respect has worked out as expected. Certainly Poland’s place in information society rankings leaves much to be wished for.

5/2011 :: polish market :: 55

Science and Innovation

Teva – 80 years of history and the widest pharmaceutical product portfolio in Poland Interview with Michał Nitka, Director General and President of Teva Pharmaceuticals Polska Sp. z o.o.

Teva is the biggest generic medicines manufacturer in the world and what is Teva’s position on the Polish market?

We are the third generic company in Poland in terms of size, however, from the point of view of our product range, we have the widest offer and we are active in all segments of the Polish pharmaceutical market: prescription drugs, highly specialized ones used in the hospital treatment, OTC drugs, dietary supplements and cosmoceutics. We offer both generic and innovative drugs, as well as highly advanced biological therapies. Poland is also one of Teva’s six key markets in Europe which is reflected in the European structure of the organization.

Poland reports directly to the President and CEO of Teva Europe, together with the United Kingdom, Italy, Spain, Germany and France.

Innovative drugs account for 30% of Teva’s overall portfolio. Is it similar in Poland?

Yes, we offer innovative drugs also in Poland, for example glatiramer acetate, an immunomodulator drug used most often worldwide as first-line treatment of multiple sclerosis (MS) to slow down progression of the disease. In Poland, however, it is still not used as widely as, for instance, by our southern neighbors. But we do believe that the excellent research results will help to increase accessibility of the drug to the Polish patients.

You have mentioned biological therapies in Teva’s portfolio …

New drug approvals are increasingly based on biological components instead of chemical molecules, and are now one of the fastest growing sectors of the pharmaceutical industry. Biogenerics will be an important growth engine for Teva in the future. One biogeneric product was launched in Poland in September 2010. The drug available in the form of pre-filled syringes has been approved for use in a number of therapeutic indications including the treatment of neutropenia.

Poland, however, still lags behind other countries in terms of biogenerics accessibility. Can anything be done to change it?

The drug reimbursement process in Poland is long, to the disadvantage of both the patients and the National Health Fund. If reimbursement procedures were less time-consuming, prices would go down quicker and the drugs would become more affordable.

In the case of biogenerics, copying the solutions from the generic market could be an easy way out. When a better priced medicine becomes available, reimbursement should be immediate, provided the defined pricing terms are met. All parties would benefit from such a model, including the payer who would be able to finance more therapies with the same budget.

What is the share of products manufactured in Poland in Teva’s impressive portfolio?

Over 75% of locally offered products are manufactured in the Polish factories of Teva Group. The manufacturing site in Cracow will celebrate its 80th anniversary this year! It is worth emphasizing that over 70% of products made in Cracow are intended for export sales to the largest export markets of the United States and Russia and to other countries of Western and Eastern Europe. Our site in Kutno exports its products to Europe, but also to Canada, however 80% of its production is sold on the domestic market. One of Kutno’s flagship products is a dietary supplement called Vibovit which enjoys a ‘cult’ status among Poles who are currently in their 30s and 40s. :: 5/2011 :: polish market :: 57

Science and Innovation

Polpharma Scientific Foundation celebrates 10 years of support to scientists The laureates of the 9th competition organised by the Polpharma Scientific Foundation for the financing of research projects are Piotr Rieske, PhD, Prof. Wojciech Młynarski, PhD, Prof. Katarzyna Koziak, PhD, and Anna Jurewicz, PhD. During an official ceremony, the Foundation, for which 2011 is its 10th year of existence, also granted scientific scholarships to seven PhD students. The statutory activities of the Foundation are financed from Polpharma’s budget – so far PLN15 million has been spent for this purpose.

The official handing of scientific grants to the four laureates took place on 19 April 2011 at the Stanisławowski Theatre in the Royal Łazienki Park in Warsaw. Guests at this event, hosted by Grażyna Torbicka, included scientists, laureates of previous editions of the competition, representatives of the medical and pharmaceutical council, public officials, members of Polpharma’s board, the authorities and the Scientific Council of the Foundation, students, including PhD students, and journalists.

The competition for the financing of research projects in the field of pharmaceutical and medical sciences is the most important programme implemented by the Foundation. There have been more than 350 projects submitted throughout the nine previous editions of the contest. Grants have been awarded to 55 research teams, thirty five of which have completed their projects. “I am convinced that the prosperity and progress of our country lies in the hands of scientists. The gap between Poland and the leading countries

The laureates of the 9th edition of the contest organised by the Polpharma Scientific Foundation

from Europe and the rest of the world can be bridged only by investing in science and advanced technologies. The immense social capital – the capital of knowledge, skills, and entrepreneurship, which Poles have – predestines us to conduct scientific research at the highest level,” said Jerzy Starak, chairman of the Supervisory Board of Polpharma and founder of the Foundation.

Furthermore, the ceremony held at the Stanisławowski Theatre entailed the granting of scientific scholarships to PhD students. A special scholarship programme was launched by the Foundation in 2006; it is designed for young scientists and PhD students from medical universities and the Medical Post-Graduate Education Centre.

Scholarship holders are selected in a contest organised by the Foundation every two years. So far, in three editions of the contest, 17 scholarships have been granted.

Formerly, the Foundation functioned as “The Foundation for the Development of Polish Pharmacy and Medicine”. In the anniversary year it changed its name to the Polpharma Scientific Foundation. ::

Piotr Rieske, PhD Medical University of Łódź, Department of Oncology, Institute of Molecular Pathology and Neuropathology

In the 9th edition of the Foundation’s competition for the financing of research projects from the Foundation’s resources, 57 research teams submitted their applications and 32 were selected for evaluation. On the basis of the assessors’ evaluation and the recommendations of the Scientific Council, the Board of the Foundation has decided to award the grants to:

58 :: polish market :: 5/2011

Topic: Search for the causes of elimination of the cells of multiform gliomas and astrocytomas in standard in-vitro cultures as an innovative approach in planning a cancer therapy.

Project cost: PLN448,800

Science and Innovation

Jerzy Starak – Chairman of the Supervisory Board Polpharma SA

Wojciech Kuźmierkiewicz Ph.D. – Chairman of the Foundation, Piotr Kuna – Chairman of the Foundation’s Scientific Council, Jerzy Starak – Chairman of the Supervisory Board Polpharma SA with representatives of the Scientific Council of the Foundation

Henryka Bochniarz – President of the Polish Confederation of the Private Employers Lewiatan (PKPP Lewiatan) and Jerzy Starak, Chairman of the Supervisory Board Polpharma SA

Piotr Kuna – Chairman of the Foundation’s Scientific Council and Wojciech Kuźmierkiewicz Ph.D. – Chairman of the Foundation with scholars

The event featured performance of Edyta Geppert

Prof. Katarzyna Koziak

Prof. Wojciech Młynarski

Anna Jurewicz, PhD

Medical University of Warsaw, Institute of General Biochemistry and Nutrition, Department of Health Sciences

Medical University of Łódź, Laboratory of Immunopathology and Genetics, Clinic of Paediatrics, Oncology, Haematology and Diabetology of the 1st Department of Paediatrics

Medical University of Łódź, Laboratory of Neuroimmunology, Department and Clinic of Neurology, Medical Faculty

Topic: The identification of a chemical compound inhibiting the biological effects of interleukin 15 (IL-15) through the selective blocking of the IL-15Rα receptor.

Project cost: PLN415,040

Topic: Breaking the drug-resistance of the cells of high-risk acute lymphoblastic leukemia in children, determined by the mutation of the IKZF1 gene.

Project cost: PLN280,000

Topic: A new receptor for amino-Nogo and its pathogenic role in ­multiple sclerosis.

Project cost: PLN439,800

5/2011 :: polish market :: 59

2nd Innovation Forum in Rzeszów innovation is also the area on

event was also confirmed by

which rely increasing num-

deputy prime minister Wal-

bers of regions and govern-

demar Pawlak. Addition-

ments. – As innovation cre-

al attraction of the Forum

ates modern workplaces and

will be Innovations Tent,

new technologies. The states

where a few telecommunica-

that care for the develop-

tion companies will present

ment of innovative technol-

their latest technological so-

ogies in their economies win

lutions.

in fact the race for the future and economic develop-

Waldemar Pawlak, deputy

ment of their countries – said

prime minister and minister

the deputy minister of State

of economy remarked during

Treasury during the press

the last year’s meeting that

conference.

nowadays cutting edge solutions can be located anywhere

The venues for the debates of

in the world, and the deci-

Roughly 200 participants will

the 2nd Innovations Forum

sion on selection of a specif-

attend the 2nd Innovations

will be provided by the re-

ic place depends finally on the

Forum, which will be organ-

gional Concert Hall – the dis-

go-aheadness of people and

ized on 24 and 25 of May in

cussion will centre around

the business environment. In

Rzeszow. The event is con-

three topics: information

projects that require knowl-

nected with the September’s

technology, telecommunica-

edge, imagination and inven-

Economic Forum in Krynica-

tions and electric power sec-

tiveness a very important role

Zdroj. The Forum in Rzeszow

tor. The agenda includes: sev-

is played by the external en-

will provide the opportuni-

en discussion panels with

vironment and the compo-

ty for exchange of views and

participation of key persons

nents composing culture for

ideas among the represent-

representing business, science

the development of new, in-

atives of the science, politics

and politics, and also a lecture

novative solutions – e.g. new

and business.

of a Special Guest.

technologies in the aviation and space industry.

Jan Bury, deputy minister of

One of the guests of the Fo-

State Treasury, who took the

rum will be a vice-president

At the 2nd Forum of Inno-

lead in the Programme Coun-

of the Technological Institute

vativeness, “Polish Mar-

cil of the Innovations Fo-

in Beijing, Prof. Sun Feng-

ket” will present the Busi-

rum, said that “innovation

chun and a vice-president

ness Innovation Award to the

is embedded in the strate-

of Alcatel-Lucent, Gabrielle

most ­innovative ­company

gy of Rzeszow, but nowadays

Gauthey. Participation in the

of the year.

::

Business Innovation Award Polish Market – Economic Magazine awards the Business Innovation Award: • for the most innovative company, • for developing activity in industry, • for build regional economy.

The prize is awarded at the Innovation Forum of the Economic Forum in Krynica.

It is aimed at initiating the activity of chosen entrepreneurs from Poland and Central and Eastern Europe.

The Business Innovation Award statuette refers to the symbol of infinity, continuous development and pursuit of excellence, which is the engine of economic development of regions of global importance.

Economy and Finance

Dichotomy between knowledge and wisdom The term “knowledge-based economy” may sound slightly awkward, as the actions taken by civilised human beings have always been based on knowledge. Still, over the past several decades, the term has grown to one of the key slogans which are very characteristic of today’s world. Today, knowledge has become a kind of universal “processing machine” and the genesis of such enterprises as the Google search engine or the Facebook social-networking service has proven that the operational capacity of this machine is measureless.

Prof. Elżbieta Mączyńska In the times of civilisation of knowledge, the growing dichotomy between knowledge and wisdom appears to be one of the most embarrassing characteristics of today’s world.

José Ortega y Gasset put it in a crude way in his work entitled La Rebelión de las masas (The Revolt of the Masses): “It is a distinctive feature of our times that those of commonplace and mediocre minds, although aware of their mediocrity, have the courage to stand for their right to be commonplace and mediocre, and impose these features onto others.” There is more than enough evidence to the fact that “these times” have not gone by.

Although scientific and technological progress has been enormous, and our knowledge is constantly growing, we are still incapable of transforming this knowledge into social welfare in a satisfactory way. Today, when changes are becoming more and more dynamic, knowledge is growing old at a relatively fast pace, and if it is used in an improper way, or it is ill-managed, knowledge may become a short route to disaster.

The lack of wisdom results in global imbalance in the fields of ecology, economics, demography, and politics.

It may be easily observed in the constantly-growing gap between the rich and poor. Social imbalance results in deviation, crime, terrorism, and, in extreme cases, even wars. Ecological imbalance may be observed in our everyday lives in the forms of water or air contamination. All these make our lives considerably less comfortable,

62 :: polish market :: 5/2011

and paradoxically, the problem concerns mainly rich countries, although the level of their gross domestic product (GDP), which reflects the level of the wealth of a country, is growing.

It means then, that wealth does not guarantee protection against the consequences of distorting balance, especially ecological balance, but the degradation of the natural environment results in ecological depreciation and dispossession. The thoughtless pursuit of wealth, and uncontrolled consumerism, are two of the primary reasons for the growing imbalance.

The reckless application of knowledge leads to the malfunctioning of democracy and the law, and the proliferation of laws. Democracy, law, and living according to the rules of law and order used to be, but no longer are, considered synonyms. Hyperdemocracy and hyperliberalism may, in extreme cases, result in their opposites - authoritarian regimes and monopolies, and consequently in the violation of economic market competition order. This changeability and complexity of legal regulations have made them much more “lenient.” Legal regulations are over-detailed and therefore each change of economic reality necessitates amendments of these regulations.

Although it is believed that in the days of the paradigm of the knowledge-based economy, this type of economy “means everything to us, then, at the same time, as a result of rapid changes, it may easily become nothing.” Life cycles of knowledge

are constantly getting shorter, while simultaneously human life cycles are becoming longer. This is the reason why knowledge is becoming more and more undemocratic, differentiating entities and their opportunities. Our knowledge-based civilisation is flooding the unprepared, whose numbers are on the rise, and adds to the workPresident of the load of those who are highly-qualiPolish Economic fied, while increasing the number of Society, Professor at unemployed. the Warsaw School This malfunctioning in the field of of Economics knowledge application has long been the subject of many analyses and articles, the number of which has grown significantly after the global crisis that started in the USA at the turn of 2007 and 2008. Economists are also being blamed for misreading Adam Smith and claiming that participating in the economic market exempts its participants from considering the questions of morality. If pursuing your own egoistic goals - guided by an invisible hand – will result in social welfare and “the wealth of the nations”, then “everything we should care about and everything we should do is to make sure we are acting in our interest.”

The magnitude of the imbalance and its complex global consequences result in the lack of convincing concepts and strategies for solving the problem. The question of strategy and models of an economic system that would act in favour of social rationalisation remains open. Despite many theoretical disputes concerning the economic system, the rule of a competitive economic order remains unquestionable.

At the same time, however, the tenets of free market economics and free market competition result in its perversions and limitations. Entities being over-confrontational on the market may lead to undesirable phenomena and threats, especially as “the border between competition and destruction is nearly invisible.”

Unfortunately we have more than enough evidence that the line separating destruction and knowledge may also become invisible, and if we wish our knowledge not to be used in a destructive way then it must be accompanied by wisdom.

In the light of the above, the demand to turn the paradigm of a knowledge-based economy into the paradigm of a wisdom-based economy appears fully justified. This demand was suggested by Prof. Antoni Kukliński during the Forum on Strategic Thinking organised by the Polish Economic Society, and the question of the wisdombased economy will be discussed during the First Congress on Polish Strategic Thought, also organised by the Polish Economic Society. More Information is available on http://www.pte.pl/pliki/pdf/Biuletyn_2_2011.pdf ::

Selected Publications of The Polish Economic Society (PTE)

Joseph E. Styglitz

Freefall

Freefall is a book on the disastrous effects of the lack of economic reflection and imagination. It should be read by all those who want to better understand the underlying mechanisms of the economy and the reasons for the errors committed. The reader will be advised on how to avoid undesirable economic behaviour. “Let’s learn from other people’s mistakes, and we won’t have time to make them on our own.”

Elżbieta Mączyńska, President of the Polish Economic Society

John Kenneth Galbraith

Money

Research in the field of money is, to a greater extent than in other areas of economics, a domain whose complexity is often used to obfuscate or overlook the truth, rather than to reveal it. The majority of things in life - such as cars, lovers, or cancer – are of significance only to those who have them. Money, in contrast, is equally important for people who have and don’t have it. Both these groups are interested in discovering its arcana. And they should be fully convinced that they can do it. (an extract from the book)

John Kenneth Galbraith

Economics in perspective

One cannot understand economics without knowing its history, and this fact is well known to researchers. (...) Much of what has been written so far on the history of economic thought is incredibly boring. Many researchers believe that any successful attempt at presenting this thought in a lively, comprehensible, and interesting manner entails insufficient erudition. Such a shield is invariably employed by those who are unable to formulate logical and accessible arguments. These remarks are to explain the purpose I was guided by while writing this history. I tried to show economics as a reflection of the world in which specific economic theories have been developing. (an extract from the book)

Economics and economists in times of breakthrough The book is a collection of a dozen or so interesting essays by various authors, on the challenges faced by the modern economy and, as a consequence, by the economic sciences.

Although they concern different aspects of management, all of them discuss fundamental problems society confronts today. (...)

From a review by Marek Barański

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

Economy and Finance

Top finance groups in Poland Managing person

Sales Headquarters of the holding revenue for Q1-Q3 2010 company

1 Grupa Kapitałowa PZU SA

Andrzej Klesyk

Warsaw

2 Grupa Kapitałowa Banku Pekao SA

Alicja Kornasiewicz

3 Grupa Kapitałowa Banku Zachodniego WBK SA

Mateusz Morawiecki

4 Grupa BRE Banku SA

Name of group

Net profit/loss

Gross profit/loss 2,319,391

Total assets

Ownership equity

Employment (at end of Q3)

10,946,506

na

49,171,718

12,191,979

na

Warsaw

6,901,720

1,888,814

Wrocław

3,496,848

756,167

2,325,017 134,621,582 989,795

55,485,414

19,714,259

20975

6,513,932

9714

Cezary Stypułkowski

Warsaw

3,408,888

446,120

608,705 84,421,803

6,764,713

5894

5 Grupa Warta SA

Jarosław Parkot

Warsaw

3,317,942

na

na

na

1,238,913

na

6 Grupa ING Banku Śląskiego SA

Małgorzata Kołakowska Katowice

3,026,089

561,420

7 Grupa Kapitałowa Ergo Hestia

Piotr Maria Śliwicki

Sopot

2,761,979

–18,301

693,148

62,165,535

5,529,516

8525

–21,910

na

na

na

8 Grupa Allianz Polska*

Paweł Dangel

Warsaw

2,448,600

–103,263

–101,279

6,078,551

863,181

1130

9 Bank BPH SA

Richard Gaskin

Kraków

2,418,604

–187,518

–214,166

36,093,978

4,202,007

7204

10 Grupa Banku Millennium

Bogusław Kott

Warsaw

2,219,455

213,891

266,404

44,796,929

4,022,001

6179

11 Vienna Insurance Group Polska

Franz Fuchs

Warsaw

2,153,509

22,489

50,276

4,798,788

840,499

1922

12 Grupa Kapitałowa Banku Handlowego w Warszawie SA

Sławomir S. Sikora

Warsaw

2,035,647

560,006

703,063

41,300,067

6,349,405

5830

13 Grupa Kredyt Banku SA

Maciej Bardan

Warsaw

1,956,900

128,839

174,672 43,095,288

2,816

4836

14 Grupa Lukas Bank

Romuald Szeliga

Wrocław

1,505,653

34,043

34,729

12,310,088

1,279,357

6091

15 Getin Noble Bank SA

Krzysztof Rosiński

Warsaw

1,475,562

348,476

324,182

35,830,873

3,159,741

5345

16 Grupa Ubezpieczeniowa Uniqa

Andrzej Jarczyk

Łódź

1,392,543

–36,246

–41,163

1,889,190

333,234

864

270,083 42,482,864

17 Getin Holding SA

Radosław Boniecki

Wrocław

1,292,875

299,676

4,447,694

6868

18 Grupa Bank BGŻ

Jacek Bartkiewicz

Warsaw

1,238,616

42,203

44,684

26,595,954

2,433,516

5206

19 Grupa Kapitałowa Europa

Jacek Podoba

Wrocław

592,058

108,872

134,700

7,168,619

501,662

na

20 Bank Ochrony Środowiska SA GK

Mariusz Klimczak

Warsaw

581,603

51,173

60,686

14,372,395

1,077,310

1748

21 Grupa SKOK

Grzegorz Buczkowski

Sopot

240,603

56,453

69,666

479,003

262,344

144

22 Grupa Concordia Ubezpieczenia

Piotr Narloch

Poznań

229,577

1,325

1,904

325,251

51,561

na

23 DZ Bank Polska SA

Rainer Fuhrmann

Warsaw

92,959

17,689

22,567

2,507,922

362,971

230

24 Grupa Signal Iduna**

Adam H. Pustelnik

Warsaw

65,475

–15,825

–15,825

na

43,287

na

* data for Allianz TUiR and Allianz Życie ** data for Signal Iduna Polska TU SA and Signal Iduna Życie Polska TU SA

Line-up of group Name of company

Headquarters

Line-up of group Name of company

Headquarters

Grupa Kapitałowa Pzu Sa

Grupa Centralny Dom Maklerski Pekao SA Kapitałowa Pekao Fundusz Kapitałowy Sp. z o.o.

Banku Pekao Sa Pekao Leasing Sp. z o.o.

Warsaw

PZU SA

Warsaw

PZU Życie SA

Warsaw

PTE PZU SA

Warsaw

PZU Centrum Operacji SA

Warsaw

Pekao Faktoring Sp. z o.o.

TOWER INWESTYCJE Sp. z o.o.

Warsaw

Pekao Pioneer Powszechne Towarzystwo Emerytalne SA Warsaw

PZU UKRAINE

Kiev

Pekao Telecentrum Sp. z o.o.

Kraków

PZU LIETUVA

Vilnius

Centrum Kart SA

Warsaw

Ogrodowa-Inwestycje Sp. z o.o.

Warsaw

Pekao Financial Services Sp. z o.o.

Warsaw

Warsaw

Pekao Bank Hipoteczny SA

Warsaw

Warsaw

Warsaw

Katowice

Pekao Leasing Holding SA, including Pekao Leasing Sp. z o.o.

Solver Sp. z o.o. (82.3% owned)

Bielsko-Biała

Holding Sp. z o.o., including Pekao Bank Hipoteczny SA

Warsaw

ING Powszechne Towarzystwo Emerytalne SA (20% owned)

Warsaw

Centrum Bankowości Bezpośredniej Sp. z o.o.

Kraków

Pekao Property SA, including Metropolis Sp. z o.o., Jana Kazimierza Development Sp. z o.o.

Warsaw

Property Sp. z o.o. (in liquidation), including FPB Media Sp. z o.o.

Warsaw

Grupa Ing ING Securities SA (100% owned) Banku Śląskiego ING Bank Hipoteczny SA (100% owned) SA Centrum Banku Śląskiego SA (100% owned)

64 :: polish market :: 5/2011

Warsaw Warsaw Lublin

Economy and Finance

Methodology: The ranking is for financial groups operating on the Polish market. The groups have been ranked in six categories: revenue, net profit, gross profit, total assets, ownership equity and employment. The main criterion was revenue for Q1-Q3 2010. All the

groups disclosed their consolidated results for the whole group, except for Allianz, Signal Iduna and Skok. These three groups disclosed only data for their insurance companies because the remaining companies in the groups operate as separate entities. In the case

of the KBC group, which is made up of Kredyt Bank and Warta companies, they have been included in the ranking as independent units because Warta is not a company listed on the stock exchange and, as such, has not published its overall data so far. ::

Line-up of group Name of company

Headquarters

Line-up of group Name of company

Headquarters

Grupa Banku Millenium

Millennium Dom Maklerski

Warsaw

Poznań

Warsaw

BZ WBK Nieruchomości SA

Poznań

Millennium Leasing

Warsaw

Grupa Kapitałowa Bz Wbk Sa

Dom Maklerski BZ WBK SA

Millennium TFI

BZ WBK Asset Management SA

Poznań

Vienna Compensa TU SA Vienna Insurance Group Insurance Group Compensa TU na Życie SA Vienna Insurance Group Polska Benefia TU SA Vienna Insurance Group

Warsaw

BZ WBK AIB Towarzystwo Funduszy Inwestycyjnych SA Poznań

Warsaw

BZ WBK Finanse Sp. z o.o.

Poznań

Warsaw

BZ WBK Faktor Sp. z o.o.

Warsaw

Benefia TU na Życie SA Vienna Insurance Group

Warsaw

BZ WBK Leasing SA

Poznań

TU InterRisk SA Vienna Insurance Group

Warsaw

BZ WBK Finanse i Leasing SA

Poznań

PZM TU SA Vienna Insurance Group

Warsaw

BZ WBK Inwestycje Sp. z o.o.

Poznań

Metrohouse SA

Warsaw

additionally 6 service companies Grupa Kredyt Banku Sa

Grupa Kapitałowa Banku Handlowego w Warszawie SA

Kredyt Lease

Warsaw

Krynicki Recykling SA

Olsztyn

Kredyt Trade

Warsaw

POLFUND - Fundusz Poręczeń Kredytowych SA

Szczecin

Reliz Sp z o.o.

Katowice

BZ WBK - Aviva Towarzystwo Ubezpieczeń Ogólnych SA

Poznań

Lizar Sp z o.o.

Warsaw

BZ WBK - Aviva Towarzystwo Ubezpieczeń na Życie SA

Poznań

BFI Serwis Sp z o.o.

Warsaw

Bank Ochrony Środowiska SA

Warsaw

Kredyt Bank

Warsaw

Dom Maklerski BOŚ SA

Warsaw

Bank Handlowy w Warszawie SA

Warsaw

Bank Ochrony Środowiska SA Gk

BOŚ Eko Profit SA

Warsaw

Dom Maklerski Banku Handlowego SA

Warsaw

TUiR Allianz Polska SA

Warsaw

Handlowy-Leasing Sp. z o.o.

Warsaw

Grupa Allianz Polska

TU Allianz Życie Polska SA

Warsaw

Handlowy Investments SA

Luxembourg

STU Ergo Hestia SA

Sopot

PPH Spomasz Sp. z o.o. (in liquidation)

Warsaw

Grupa Ergo Hestia

STUnŻ Ergo Hestia SA

Sopot

Handlowy Inwestycje Sp. z o.o.

Warsaw

MTU Moje Towarzystwo Ubezpieczeń SA

Sopot

Handlowy Investments II S.a.r.l.

Luxembourg

Bank Rozwoju Cukrownictwa SA (in liquidation)

Poznań

Getin Noble Bank SA

Bank Bph Sa

Poznań

SIGNAL IDUNA Polska TU SA

Warsaw

SIGNAL IDUNA Życie Polska TU SA

Warsaw

Actus Sp. z o.o.

Warsaw

Grupa Signal Iduna

Bank BGŻ

Warsaw

Grupa Warta SA TUiR WARTA

GETIN Holding

Wrocław

Grupa Getin Noble Bank

Warsaw

Grupa Kapitałowa Europa

Wrocław

Fiolet PDK

Wrocław

MW Trade

Grupa Bank Bgż BGŻ Leasing Sp. z o.o.

Getin Holding SA

Grupa Concordia Concordia TUW Ubezpieczenia Concordia Capital SA

Warsaw

Poznań

Warsaw

TU ŻYCIE WARTA SA

Warsaw

Aspiro SA

Łódź

BRE Bank Hipoteczny SA

Warsaw

BRE Holding Sp. z o.o.

Warsaw

Wrocław

BRE Ubezpieczenia Sp. z o.o.

Warsaw

Carcade

Russia

BRE Ubezpieczenia TUiR SA

Warsaw

Sombel Bank

Belarus

BRE Wealth Management SA

Warsaw

Plus Bank

Ukraine

Centrum Rozliczen i Informacji CERI Sp. z o.o.

Getin Noble Bank

Warsaw

Aleksandrów Łódzki

Open Finance

Warsaw

Dom Inwestycyjny BRE Banku SA

Warsaw

Noble Funds TFI

Warsaw

BRE Finance France SA

France

Getin Leasing

Wrocław

BRE.locum SA

Łódź

Noble Securities

Kraków

Magyar Factor zRt.

Budapest

Idea Bank

Warsaw

Polfactor SA

Warsaw

BANK BPH

Warsaw

Transfinance a.s.

Prague

BPH PBK Zarządzanie Funduszami

Warsaw

Intermarket Bank AG

Austria

BPH Towarzystwo Funduszy Inwestycyjnych

Warsaw

BRE Leasing Sp. z o.o.

Warsaw Warsaw

Grupa Bre Banku Sa

DZ Bank Polska SA

DZ BANK Polska SA

Warsaw

BRE Corporate Finance SA

Dom Maklerski AmerBrokers SA

Warsaw

Tele-Tech Investment Sp. z o.o.

Warsaw

Grupa Ubezpie­ czeniowa Uniqa

UNIQA Towarzystwo Ubezpieczeń SA

Łódź

TU EUROPA SA

Wrocław

UNIQa Towarzystwo Ubezpieczeń na Życie SA

Łódź

TU na Życie EUROPA SA

Wrocław

Grupa Skok

TUW SKOK

Sopot

TU SKOK ŻYCIE SA

Sopot

Grupa Europa

5/2011 :: polish market :: 65

Opinion

Waiting for the Polish presidency Prof. Małgorzata Zaleska, PhD

The author is a member of the board of the National Bank of Poland, full professor at the Department of Banking at the Warsaw School of Economics (SGH), member of the Presidium of the Committee on Financial Sciences of the Polish Academy of Sciences.

Polish presidency of the EU Council, which falls in the second half of 2011 is just around the corner. On 1 July 2011, Poland will take over the presidency from Hungary, and at the end of the year it will pass it on to Denmark. Without a doubt, the beginning is important, but so is the course of the presidency. We have to remember not to repeat the unfortunate events from the beginnings of other presidencies. For example, the beginning of the Hungarian presidency is remembered for the debate over changes in the media law.

The presidency is associated with both substantive and organisational challenges. Referring to the first matter, the initial list of priorities of the Polish presidency should be mentioned. It covers a broad spectrum of issues related to the internal market, the EU’s relations with Eastern European countries, energy policy, European defence policy and the multiannual financial framework for 2014-2020. As part of the issues related to the functioning of financial markets, the key matters raised under the Polish presidency are to be the projects already under discussion relating to crisis management, the introduction of additional charges or taxes payable by the banking sector, modification of the Capital Requirements Directive, i.e. an increase in the capital requirements of banks to cover bank risk, and also referring to the Directive on Responsible Lending and Borrowing of Mortgage Credits. Certainly, there may be other, additional, initiatives in response to current, nonstandard events, requiring “damage control.” At the same time we should not expect revolutionary undertakings from the Polish presidency, as the presiding country is one of the 27 EU countries making decisions while not

66 :: polish market :: 5/2011

having a preferential vote. The course and effects of the presidency also depend on the adopted model of leadership. In principle, two models are singled out: striving for emphasis on and implementation of political ambitions by the presiding country or being the intermediary, the coordinator of works, seeking compromise and consensus on matters of substance. It should be emphasised that the recent presidencies, particularly the Belgian one proceeded rather according to the “coordinator model.”

Poland is also facing significant challenges from the point of view of organisational preparation for the EU presidency. This is a big logistic challenge requiring proper coordination.

In this respect the Team of Rapid Information and Analysis of the European Dossier (ZWIAD), which is likely to meet every day, will play a special role. Notwithstanding the foregoing, virtually all central and government institutions, with a particular role for the Ministry of Foreign Affairs, will be involved in the work of the presidency. The complexity and the number of issues discussed and the short time for the preparation of positions and actions will certainly require flexibility and overtime from the persons involved in the presidency.

It must be stressed that the presidency creates opportunities for many entities assisting it, including those providing accommodation, conference organisation and translation services.

This will also involve the need to organise tender procedures, which requires a large amount of work, lengthens the procedure and creates an additional risk of selecting not the best option.

Therefore, the presidency creates additional jobs for a specified period of time (during the tenure of the presidency). For the period of the presidency

liaison officers are employed to, for example, assist delegations in the country of the presidency. These individuals and others, including officials, participate in special, dedicated training programmes on the functioning of the EU, which contributes to the greater knowledge of this topic among part of the society. These individuals will also become the showcase for Poland, next to other very important promotional campaigns. In this context, the logo of the Polish presidency will play a special role, the official launch of which is scheduled for 14 May 2011.

It follows from the above that the functioning of the presidency of the EU is complex. It enables the presentation of the country, including its ​​non-political and non-economic values, in the international arena, particularly in Europe. In Poland it has also been decided that various meetings under the presidency will take place not only in Warsaw but also in other large cities, for example, in Kraków and Wrocław. This solution, of course, hampers logistics, because of Polish problems with transport infrastructure, including the poor quality of Polish roads, but it also allows the presentation and promotion of selected Polish regions.

It is worth mentioning that during the presidency, in connection with the several thousand meetings of the presidency, Poland will be visited by tens of thousands of delegates, several thousand journalists, and several thousand different suppliers. Therefore, the exercising of the presidency naturally creates a temporary increase in demand for certain products and services, as well as additional jobs, as has already been mentioned.

It also has an educational dimension which can yield benefits not only in the short-term perspective.

In conclusion, we all should wish for ourselves that the Polish presidency of the EU inscribes in our, and the European, memory as a success. Similar wishes can now be formulated for the following year, in the context of the organisation of an international sports event by Poland - the UEFA Euro 2012 tournament. ::

Infrastructure & Construction

Janusz Sobieraj, President of the Board of Korporacja Radex

Counting on know-how and experience Construction engineer, a graduate of The Faculty of Civil Engineering at the Warsaw University of Technology, and holder of several postgraduate diplomas – at the Main School of Planning and Statistics, now the Warsaw School of Economics, and The University of Warsaw. Main shareholder and President of the Board of Korporacja Radex.

After over 10 years, in 1999, he established the Korporacja Radex S.A. company, which took over the coordination of shopping centres in Olsztyn, Wileńska and Arkadia in Warsaw, and the coordination of housing complexes in Warsaw, Ursynów and Bemowo districts. It is the best-managed Polish company in its industry, using state-of-the-art, world-recognised IT-supported methods of management. The Radex S.A. corporation also manages the office-warehouse complex at 34 Marywilska street in Warsaw.

31 years’experience Janusz Sobieraj’s over 31 years’ experience gives him the skill to perform a valid market analysis. It is also a capability to act in such a way that, taking into account various directions of activity, the planned goal is successfully achieved. This amassed experience has allowed Korporacja Radex S.A. to achieve a very strong position on the market.

Know-how and practice In 1973 the President of Korporacja Radex S.A. began his studies at the Warsaw University of Technology, where he was Head of the Faculty Council of the Faculty of Civil Engineering, Secretary (Fifth Vice-Chairman) of the Council of the Warsaw University of Technology, and member of the Dean’s Committee of the Faculty of Civil Engineering and the Vice-Chancellor’s Committee of the Warsaw University of Technology. For his achievements in science and social involvement he was awarded the Silver Badge of Merit by SZSP (the Socialist Union of Polish Students), the special Warsaw University of Technology Vice-Chancellor’s (Polish Academy of Sciences Secretary’s) prize, as well as the 3rd Level Award of the Minister of Construction in a nationwide contest for the best theses in the field of construction. He graduated from the Warsaw University of Technology as the “Best student awarded the Golden Distinction of Nicolaus Copernicus ‘Primus Inter Pares.’” Between 1 February 1976 and 31 December 1978, he participated in the research of the Department of Construction Technology and Organisation in the team led by Prof. Zbigniew Wasilewski.

Experience In 1979 he started work at W.P.B.P. Kablo­ beton. He worked, among other places, on the construction of Ursus, FSO, the Sugar Factory in Glinojeck, an Oncology Department, and the Northern Water Main. He was the leading production-streamlining advocate in Poland. He was many times awarded

Pro publico bono the medals of the Young Master of Technology, and the Young Master of Organisation.

While working in W.P.B.P. Kablobeton, he prepared, submitted, and implemented about 167 streamlining applications and utility models, including many solutions which are still widespread in construction, such as “a change in the technology and organisation of earthworks at construction sites in urban centres,” for which he received the gold medal and title of the Young Master of Organisation. In 1986 and 1987 he achieved second place in the competition for “the most active originator of improvement” organised by the Inter-Institute Club of Technology and Construction Streamlining Warsaw. For his achievements in streamlining, he was also awarded the “Originator of Improvement in Production” distinction and was appointed on 18 May 1988 by the Deputy Prime Minister of the People’s Republic of Poland (being also President of the Science and Technical Progress Committee) Zbigniew Szałajda, as a member of the Team of Innovative Youth Activity of the said Committee, operating under the Council of Ministers. At this time he graduated with distinction from postgraduate studies in organisation and management at the University of Warsaw, studies in construction economics at the Main School of Planning and Statistics in Warsaw, and social sciences in the theory of enterprise management.

In 1989 he established the CPH Radex company, becoming its first President. The company constructed such facilities as the Northern Water Main, the Sewage Treatment Plants - Czajka in Warsaw, and Kujawy in Kraków, and the steelworks of Sendzimir, Baildon, Łabędy, Jedność, and Ostrowiec Świętokrzyski.

Janusz Sobieraj has been the head of the team of consultants of the Foundation for the Construction of the National Temple of Divine Providence. He is also its co-founder, along with His Excellency Archbishop Sławoj Leszek Głódź – the Metropolitan of Gdańsk.

Sobieraj is the President of the Praga Monument Foundation. Korporacja Radex S.A. was one of the main donors of the monument of Praga’s Backyard Orchestra. He financially supports such organisations as Jerzy Owsiak’s Great Orchestra of Christmas Charity, various social initiatives in Warsaw’s districts – Bemowo, Ursy­nów, and Białołęka, the Zielonka Commune, the Praga Monument Foundation, and the Foundation for the Construction of the National Temple of Divine Providence. Korporacja Radex S.A. funded the construction of the National Sanctuary of Our Lady of Victory “The Miracle Upon the Vistula” in Ossów, and cooperates with the “Monar – Markot” Help Centre.

For its pro bono activities, Korporacja Radex S.A. and its President Janusz Sobieraj have met with numerous acts of gratitude, e.g. from His Eminence the Primate of Poland, the Rev. Cardinal Józef Glemp, His Excellency Archbishop Sławoj Leszek Głódź, the Auxilliary Bishop of the Archdiocese of Warsaw Rev. Marian Duś – President of the Board of the Foundation for the Construction of the National Temple of Divine Providence on behalf of His Eminence the Primate of Poland Rev. Cardinal Józef Glemp.

Korporacja Radex S.A. has received words of gratitude from the Foundation for Children “Help on Time,” Krystyna Janda’s Foundation for Culture, the “Joy and Hope” Association, and the Foundation “For the Good of Children.” :: 5/2011 :: polish market :: 67

Infrastructure & Construction

Korporacja Radex S.A. Korporacja Radex S.A. is the coordinator of projects, plans and works, connected with preparing construction investments. It provides comprehensive services - from the concept stage, negotiations, arrangements, approvals, and arranging financing to construction completion and handing over for use. The company is specialised in assuming the role of project manager for multi-aspect investment projects, including pioneer implementations in Poland.

building of its type in Europe, which received the Central & Eastern European Real Estate Quality Award for the best construction in Europe.

Moreover, one of the projects implemented by the company is the redevelopment of the Warsaw Chopin Airport, and the modernisation and general renovation of the air traffic control tower, while ensuring the uninterrupted operation of the airport.

Innovation What are the benefits of choosing Korporacja Radex?

First of all, the company stands out with its numerous completed investments. Korporacja Radex has taken part in the construction of buildings and process facilities of the biggest Polish wastewater treatment plant – “Czajka” in Warsaw – and in the construction of the wastewater treatment plants “Kujawy” and “Płaszów” in Kraków, and in Ostrowiec Świętokrzyski. The corporation also cooperated in the construction of the Northern Waterworks

68 :: polish market :: 5/2011

covering 64 hectares. The company is specialised in constructing large shopping malls, such as the M1 Shopping Centre in Olsztyn, built for the German investor Metro Group AG. The company also entered into a consortium to build a shopping complex within the railway station Warszawa Wileńska. It is the only shopping complex in Europe with railway access.

One of the biggest and most important undertakings was the coordination of the process of constructing the shopping and entertainment centre “Arkadia” in Warsaw, the largest

Korporacja Radex deals with the preparation and implementation of modern and innovative management systems in construction, based on cooperation with the leading companies from Germany, France, Great Britain, the USA, and with the ORGMASZ Institute, the Warsaw University of Technology, the Faculty of Management of the University of Warsaw and Kozminski University. The company’s competitive edge is its know-how in preparing the most complicated investments from collecting the documentation to handing over the completed structure. Currently Korporacja Radex, supported

Infrastructure & Construction Awards granted to Radex recently for implementing investment projects:

by the best companies on the market, is working on an innovative project, the details of which have not been revealed yet.

exit roads from Warsaw, and allow reaching the city centre in a dozen or so minutes. Over 40 companies have their offices and warehouses in Marywilska Business Park.

Real estate Cooperation with other construction companies is not Korporacja Radex’s only field of activity. It also deals with real estate, services and manages a commercial real property complex in Warsaw, within the area of Marywilska, Daniszewska, and Odlewnicza Streets. Its office and warehouse space for rent is aimed at companies that require a decent, clean and convenient location for road transport operations, with quick access to Warsaw’s centre.

The biggest property of Korpora­ cja Radex is the office-warehouse park Marywil­ ska 34 in Warsaw.

The office-warehouse centre is situated near important transport routes, which give quick access to

Specialised Construction In the field of specialised construction Korporacja Radex S.A. has: :: designed and carried out the construction of Europe’s most modern testing station for jet aircraft engines for civilian Boeing and military F16 airplanes; for the exemplary implementation of this project General Electric expressed their thanks and congratulations to Radex; :: carried out the process of relocating a part of the WZL-4 plant, including construction works, due to the necessity to transfer land for the construction of the S8 expressway to the General Directorate for National Roads and Motorways (­GDDKiA). The plot was

:: In the 2009 Polish Association of Civil Engineers and Technicians (PZITB) Construction Project of the Year competition: 2nd award for “The investment process and the construction of housing estates connected with the revitalization of historical sites at Fort Bema associated with other projects carried out in Warsaw’s district of Bemowo. The housing estates are located among the streets: Obrońców Tobruku, Powązkowska, a section of Armii Krajowej, Księcia Bolesława, Widawska, Osmańczyka and a section of Piastów Śląskich”; :: In the 2009 Polish Association of Civil Engineers and Technicians (PZITB) Construction Project of the Year: Diploma of Recognition for “Developing Parkowe residential complex at Fort Bema by Księcia Bolesława and Obrońców Tobruku Streets”; :: In August 2010 Korporacja Radex S.A. received the Gold Medal “Zasłużony dla Budownictwa” for services to the construction sector, :: In the 13th edition of the competition held by the Association of Construction Employers (PZPB) on 16 September 2010, Janusz Sobieraj, the president of Korporacja Radex S.A. received the title of the “Construction Employer of the Year 2009”; :: Certificate of Business Credibility for the highest grade for stability in 2009 according to Dun & Bradstreet Poland; :: Reliability Certificate of the National Debt Register (KRD); :: On 1 December 2010, the Chapter of the Tadeusz Kotarbiński Medal at the Polish Academy of Sciences (PAN) awarded Korporacja Radex S.A. the Medal in recognition of the company’s outstanding achievements in the implementation of investment projects in Poland; :: 2010 - Korporacja Radex S.A. wins the Business Gazelle title; :: Business Security Policy of the Business Centre Club for Korporacja Radex SA, 18 November 2010; :: 2011 – Nomination for the Poland Now Emblem (Teraz Polska) for Korporacja Radex S.A.; :: The title of the “Ambassador for the Polish Economy” in the category “Creator of 21st-Century Solutions” granted by the Jury of a Business Centre Club competition under the patronage of the Ministry of Foreign Affairs – 18 April 2011.

transferred to the Regional Branch of GDDKiA 18 months before the agreed date. As a result, this section of the expressway was completed in February 2011 - 12 months before the deadline.

20 years on the market and still at the top “The anniversary of our corporation is of great satisfaction to us. The results of our efforts and work have been recognised by numerous awards. Recently, we received the ‘Zasłużony dla Budownictwa’ (Merited for the Construction Sector) award and the titles of the ‘Employer of the Year in Construction’ and ‘Construction of the Year.’ These awards are very important to us, proving that the direction in which we are heading is right, and that when you do your best, everything turns out as planned. The everyday work of the people who create our company, from the President to regular employees,” says President Janusz Sobieraj. :: 5/2011 :: polish market :: 69

Infrastructure & Construction

2012 looks uncertain due to the state of budget The overall results of the survey show that the expectations in Poland are for continued growth in the construction market. For the current year 2011 the expectation is a growth of 3.4% in terms of revenues. This is similar to the result of the survey at the end of last year when the expectation was 3.2% growth. Unfortunately, for 2012 the growth expectations have gone down to the level of 1.5%.

70 :: polish market :: 5/2011

The overall results of the ­survey show that the expectations in Poland are for continued growth in the construction market. For the current year 2011 the expectation is a growth of 3.4% in terms of revenues. This is similar to the result of the survey at the end of last year when the expectation was 3.2% growth. Unfortunately, for 2012 the growth expectations have gone down to the level of 1.5%.

Poland has been lucky enough to have growth in the construction sector for the last several years. During the period 2006-2008 there was growth of 10% or more per year. 2009 was still positive, but it started to slow down with the level of 3% to 4%. What has changed this year is that the level of uncertainty started to grow, with 21% of the surveyed companies uncertain of the growth or decrease of their revenues in 2012. In these terms Poland stands out against the Czech Republic, Hungary and Slovakia. These countries in 2010 had decreases in their growth, whereas in Poland there was growth.

The actual results for 2010 were similar to the survey expectations, with the exception of Hungary. The result in Hungary in expectations was 1% decrease, but in reality this optimism didn’t come through and a decrease of 10% was noted.

Looking forward to the current year, Poland is still the most optimistic of these countries, with 3.4% positive expectations for growth compared to negative expectations for Slovakia and the Czech Republic and just a very small increase for Hungary. However, going forward to 2012 the optimism is tempering off. Due to the continued good result in Poland it became harder and harder for Poland to keep it up. For 2012 Poland is forecasting 1.5% growth, whereas other countries, especially Slovakia and Hungary, are expecting greater growth.

Of course, after the decrease the base for these countries has become smaller making it easier to achieve the growth.

building trust over years

STABILATOR Spółka z o.o. is a company with a tradition.

Established in 1995, and initially based in Gdynia, it originated from the Stabilator AB Group, owned by the Swedish company SKANSKA. Today, STABILATOR operates as a Polish private entity with its registered office in Gdańsk.

STABILATOR Sp. z o.o. provides comprehensive specialist building services in the following fields of the construction market – the preservation of monuments of culture, and foundation, and hydraulic and sanitary engineering.

These services are generally provided through the company’s own capabilities, its qualified and experienced engineers, and the use of innovative and green technologies.

Our services are comprehensive – concept and design preparation, contracting – all compliant with quality, environmental and health and safety standards.

In 2010 the Company completed the construction of a complex of facilities composed of: the Company’s headquarters, a laboratory with a testing ground and an equipment base.

The headquarters is a “model intelligent” building. It was equipped with four operational systems – fire-fighting, intelligent monitoring, ICT, and energy-heating. The new headquarters also introduced a new opportunity to cooperate with Stabilator Sp. z o.o.

Office and warehouse space will be designated for rent (900 sq.m.), particularly for enterprises that complement the Company’s range of services. Stabilator would also like to cooperate with foreign entities in the field of energy-saving technologies and innovative construction technologies.

You are invited to cooperate!

www.stabilator.com.pl

Infrastructure & Construction Another question in the survey concerned companies’ expectations for their market growth. The findings were similar – in Poland 2012 was less optimistic than in other countries in terms of growth that could be achieved. 58% of Polish companies predict they will outperform their competition in 2011, as compared with 55% in Slovakia, 50% in the Czech Republic and 59% in Hungary. In 2012 however 56% of Polish companies expect to be better than their competition, as compared with 65% in Slovakia, 68% in the Czech Republic and 67% in Hungary. In Poland building companies are more optimistic than the civil engineering companies.

The answer to the question about the utilization of the companies’ capacity did not bring significant changes as compared with the same period of prior year. Companies use on average 71% of their capacity. It can be expected that capacity utilization should increase. Comparing the second half of 2010 to the beginning of 2011 with the other countries, there were bigger drops in the Czech Republic and Slovakia, Poland once more outperforming in terms of companies being able to utilize their capacity.

Looking at the contracted work going forward, a slight improvement was noted compared to the same period of last year, with the longest period going forward remaining the same.

Large construction companies on average had contracts 11.5 months going forward.

The companies were asked which way was the most effective in getting new contracts. In Poland the results were that the most effective method is through the tender process. On a scale from 1 to 10 it was ranked 7 by 92% of companies who use tender methods to get contracts. Compared to other countries such as Slovakia and Hungary, it can be observed that long-term cooperation and personal contact are more effective methods of getting business in those countries. In Poland, the large companies tended to bring up this percentage. In the past more companies were willing to accept contract with zero or even negative margins. Partially that was explained by the fact that costs were dropping and therefore even at a zero percent, potentially there was profit. But now with contract costs either

72 :: polish market :: 5/2011

staying the same or increasing, the potential loses with contracts are greater than in the recent past.

In terms of constraints on companies’ growth, there were changes in some very specific areas. In particular, having adequate skilled labour as well as the cost of labour were rated the highest in the past (in 2008).

In 2011, a shortage of skilled workers has dropped significantly, the cost of labour and materials has decreased.

These are no longer large barriers to the growth of the companies. Currently bureaucracy is the number one growth constraint. The level is similar to 2008, but the number of companies reporting this as a problem has grown significantly. Looking back to 2008 there was extreme demand on the construction companies. In 2008 there was a much smaller number of companies complaining that demand constrained their growth. The demand factor has made the biggest move from around 60% to 95% companies in Poland stating that it was an issue now.

In terms of bureaucracy, Poland was similar to other countries. The priorities of construction companies have not changed significantly from the second half of last year. The highest priorities remain optimising the procurement process, quality improvement in selecting suppliers and improving the operational efficiency of the company.

To sum up, Poland should continue to outperform other countries up to 2011, but the expectations for 2012 are less certain and it looks like the growth is expected to slow down then.

This could largely relate to the tender process and therefore there are considerable changes between the expectations of the large and small companies with the latter remaining more optimistic. In general, however, companies, when they look beyond their contracted work, find it difficult to estimate the level of contracts they could get in the future. ::

Edited by Sandra Wierzbicka based on a speech given by Steven Baxted, Head of the construction and real estate department advisory team at KPMG, on 20 April 2011. The CEEC Research, KPMG and Norstat survey was based on telephone interviews with 100 small, medium and large construction companies in Poland carried out in March 2011.

Krzysztof Andrulewicz president of Skanska SA I find the results interesting and inspiring. I believe that the expectations of large and small companies for 2011 and 2012 are similar. 2011 is characterized by large optimism concerning the realization of projects. A lot of large contracts were granted in the previous years which are realized now. 2012 however is to bring a drop of optimism, which is generally connected with the situation on the procurement market. It is commonly known what the state of Poland’s budget is and what are Poland’s obligations are concerning the lowering of its deficit in the following years as required by the EU. This will take its toll on the quantity and size of tenders. There is a rather strong correlation between the method of obtaining contracts and the future condition of the market. In Poland the largest source of new offers are public tenders which will be hindered by the pressure on the government and local authorities to lower the deficit. The lower optimism for 2012 seems justified.

Mirosław Boguszewski president of Podkowa The presented results seem completely accurate from the point of view of our company. We belong to the small-medium size sector therefore we practically do not have direct access to tenders and we compete for orders from large companies such as Skanska, Budimex, Mostostal and Dromex. We deal with electric work in road infrastructure. From my point of view another factor holding back the tender process is the fact that price is often used as the sole criterion. This is not how it works in other countries. Usually the highest and lowest offers are rejected and a mean price is calculated. Often it is known what price the investor envisages. It is impossible to do a good job for half price. The prospects are not optimistic. There is a large mobilization before the UEFA EURO 2012 tournament, but this will end in a year. What then? I believe everything will slow down. EU funds will also end soon and we still don’t know what the next tranche will be. I believe the development of Poland may be constrained.

John Monaghan president of Atut Rental We are a supplier to many large and small companies, so we have a broad spectrum to refer to. First of all, I agree in general with the findings of the report. As a company this is also our personal feeling. We are supplying equipment and even in civil engineering, which is the biggest area of activity in Poland, our contractors do not know the perspective of work.

They seem sure about this year, but they are not sure about the next year and this makes us worry. There is demand just now for rental of construction equipment. In fact, there is a concentration of demand for a short period of time and uncertainty after the end of this period. We are taking very serious note of this.

Ranking

Ranking of PUDS Companies – Data For 2010 No.

Company name

Steel sales in PLN thousands

No.

Company name

Steel sales in PLN thousands

1 ThyssenKrupp Energostal S.A.

1 105 585

17 ThyssenKrupp Stal Serwis Polska Sp. z o.o.

2 Konsorcjum Stali S.A.

1 132 277

18 PRH Bobrek Sp. J. T. Niewiadomska, J. Małek, B. Macianty

183 317

980 045

19 Centrostal S.A. Kielce

171 184

4 Bowim S.A.

813 325

20 Drozapol-Profil S.A.

166 603

5 Grupa Pruszyński

792 242

21 TM Steel Sp. z o.o.

157 761

6 Grupa Polska Stal S.A.

751 144

22 Maxstal Sp. z o.o.

148 800

7 Stalprofil S.A.

592 206

23 Ferona Polska S.A.

141 199

8 Stalprodukt Centrostal Kraków Sp. z o.o.

541 193

24 PUH Odmet Sp. z o.o.

130 079

3 Budmat Bogdan Więcek

189 936

9 Nova Trading S.A.

513 300

25 Stal Service Sp. z o.o.

129 981

10 MG Murbet sp. z o.o.

298 801

26 PPHU Elektrometal Krawczyk, Wilk, Zwolińscy Sp. j.

126 600

11 Sambud-2 Sp. z o.o.

278 800

27 ZW Profil S.A.

113 326

12 PZM Vimex S.A.

240 046

28 IMS Stalserwis Sp. z o.o.

107 778

13 BSK Return S.A.

218 800

29 Poland Alloys Sp. z o.o.

45 519

14 Montan Stal Sp. z o.o.

212 236

30 BE Group Sp. z o.o.

39 950

15 Staler Grupa Kapitałowa

208 801

31 Meg aset Sp. z o.o.

36 685

16 Ekoinstal Sp.j

197 737

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5/2011 :: polish market :: 1

Infrastructure & Construction

The Polish Association of Construction Industry Employers (PZPB) Interview with Janusz Zaleski, Vice-President of PZPB

The Polish Association of Construction Industry Employers is an organisation bringing together construction companies existing on the Polish market. What are your goals and how do you implement them?

PZPB is the largest association of construction companies in the country. The objectives are clearly defined in the statutes of the association. Our basic objectives include representing the interests of entrepreneurs - the association’s members - before the state authorities, the state administration and the local government authorities. First of all, we work to achieve the common goals and interests of construction contractors. Moreover, we continually inform them about existing legislation, assess and provide opinions on these Acts. PZPB participates in meetings of parliamentary committees, and holds talks and conducts negotiations with ministries dealing with economic matters. In addition, we try to show the companies the directions of their activities and potential development.

We implement our tasks by organising training sessions and conferences on construction contracts or public procurement law. The next conference will be held on 20 June 2011 and will address the topic “An investor, a contractor and a subcontractor as partners in the implementation of an investment project. True or false?” We aim to demonstrate that the investor and the contractor must work together to jointly carry out the project. We also deal with the education of young people; we have assumed patronage over many schools in Warsaw in the construction industry.

You work with the Warsaw City Office on the “Building Competition on the Labour Market” programme. Could you tell us about this project?

This programme is being financed from European funds. The project will cover 1410 students from Warsaw’s vocational building schools. The programme aims to familiarise young people with the issues of the direct operation of a construction site. It is an approach based on a practical demonstration of what work on a construction site looks like and discussions with students on the latest

74 :: polish market :: 5/2011

the general idea of ​​a builder is that he is a dirty man, with a cigarette in his hand. The association has noted this problem. We try to show that this is a very good occupation, that technology has gone ahead and that to be a good builder you need to undergo appropriate training, and it is necessary to have perfect knowledge of the use of construction machinery. Now, the Warsaw University of Technology Faculty of Civil Engineering is organising postgraduate studies in the field of construction management and the management of investment projects.

technologies used in the construction process. In addition, the project aims to adapt vocational education to the needs of the labour market, which, in this case, is the construction industry. The expected result of this will be an increase in the level of education in these institutions, as well as an initiation of long-term cooperation between schools and universities of technology and construction companies.

Does this project also aim to encourage young people to return to traditional craft occupations which haven’t been very popular recently?

Contrary to popular opinion, craft occupations are doing quite well. Vocational schools and technical high schools provide education to people who are later specialists in their fields. These occupations require vast knowledge in the field of technology, IT and energy efficiency. Unfortunately, there are certain stereotypes that we have been trying to overcome. We try to show that these are occupations for people with intellect, that the work itself is participating in a very complicated technological process. Unfortunately,

Aren’t Polish employers afraid of a situation in which we will have very well educated specialists, for example, in the field of construction, and then they will go abroad because they will be offered better conditions there?

I don’t think it’s a big problem. Despite the opening of the German market on 1 May 2011, it has turned out that only a few hundred people are expected to travel abroad in search of work. A few hundred people in the whole country is basically an insignificant number.

Now, there are a lot of investment projects underway in our country on which builders can find employment.

What are the biggest legal and economic problems for entrepreneurs?

Unfortunately, it occurs that the law is often abused. We, as an association, aim to ensure that the provision of the Civil Code relating to freedom of contracts is supported by a model construction contract, which covers the entire investment process, and proportionally distributes the risk between the parties. As to the recent amendment of the construction law, which has been questioned by the Constitutional Tribunal, it is the right decision in social terms. The Association members often report to us their problems. And, in turn, we act on their behalf requesting government departments for opinions or interpretations of regulations. As for economic problems, the recent increase in VAT rates is a significant one.

Interview by Ewelina Janczylik

Huta Łabędy S.A. ul. Zawadzkiego 45 44-109 Gliwice tel. (32) 23 47 201 fax (32) 23 42 141 Trade Office tel. (32) 23 47 291 fax (32) 23 47 680

HUTA ŁABĘDY (ŁABĘDY STEELWORKS) – A TRUSTWORTHY PARTNER Offers: • steel mine-roadway supports • accessories for mine-roadway supports • roadway tunel supports • constructional section – channels – I-sections • purchase and sale of scrap metal • steel sheet coils rip-cutting

www.hutalab.com.pl e-mail: office@hutalab.com.pl

Infrastructure & Construction

Dolcan

Construction Company of the Year 2010 developed we entered other, related industries, with such facilities as the Dębinki sand and aggregate mine near Serock, and a furniture and interior design store.

Sławomir Doliński, Founder and Chairman of the Supervisory Board at Dolcan Ltd.

What are Dolcan’s areas of activity? Is it only a developer, or does it provide comprehensive services?

Dolcan is primarily a developer. Our main scope of activity is the construction of housing estates and houses, large and small. Our services range from acquiring land, constructing housing estates, and advertising and selling flats through our customer service office, to handing over ready flats to clients.

In 2000 we opened the first of the three building and finishing materials wholesale outlets. As the company

76 :: polish market :: 5/2011

“The Builder” magazine awarded the Dolcan Group the title of the Construction Company of the Year 2010 in the developer category. What is the secret of your success?

Our know-how, definitely. Dolcan itself was established in 1991, but it actually began as early as in 1986, as a cooperative carrying out a variety of construction tasks.

Since April 2001 Dolcan has been the holder of the Developer Certificate, which is renewed every two years.

As the company grew, it completed housing estate construction projects in other Polish cities and towns – Bydgoszcz, Lublin, Szczecin, and Kozienice.

Over the last four years the company has made a lot of progress. We are one of the leading construction companies on the Polish market, introducing new projects and investments. And we were the first to introduce rent-free apartments.

Dolcan cooperates with such contractors as Strabag, Unibep, and FaberBud, guaranteeing the quality of investment projects.

Another reason for Dolcan’s success was its highly-qualified staff, overseeing all the stages in the development process. The managerial staff is made up of top-class experts, making the company independent and self-reliant. It has over 100 employees.

W hat are rent-free apartments?

They are a novelty on the Polish market. Even though we are breaking completely new ground, they have already become very popular. The concept of rent-free apartments provides the same benefits as living in a house, but for half the cost. Moreover,

the maintenance cost of such a place is much lower than in the case of a house or flat. Rent-free apartments are low, detached buildings with gardens – separate for families living on the ground floor and on the first floor.

Residents can also have a fireplace, additional utility rooms and usable attics.

Each family also has its own stairway.

As a result, there is no shared area, so residents will not have to incur costs of property management, repair funds, cleaning, lift maintenance, or stairway lighting. Each apartment owner will be able to control his or her own expenditure and decide about the costs of use.

Dolcan is not just a business. It is a socially responsible business.

That is correct. For 18 years already Dolcan has been sponsoring the sports club and the Dolcan Ząbki football team, which plays in the Polish Second Division. This cooperation brings many sporting successes for the professional team, and for the youth teams. Dolcan was also a sponsor of the European and World Athletics events in Bydgoszcz, and the general sponsor of the official Sport Champions Gala in Lublin.

Aside from financing a football team, the company has supported public institutions, including the hospital in Wołomin, and the Children’s Homes.

It also co-funded the renovation of the Children’s Hospital on Niekłańska street in Warsaw. Dolcan also supports the “Dzieci Ulicy” (Street Children) Foundation, and has organised a special charity match collecting money for surgery on a teenager from Ząbki, who is fighting a serious illness.

T his year Dolcan turns twenty. Could you sum up this period?

In two words – hard work. It was only thanks to this that we have achieved so much over the last twenty years.

Whatever the situation on the market we have been constantly developing and gaining recognition in our field.

The thousands of Polish families who live in our flats – our satisfied clients are a source of great satisfaction to us.

We believe that the coming years will bring our further growth and more new solutions from us. ::

Cultural Monitor

Compiled by Maciek Proliński A tradition which is new...

The 14th New Tradition (Nowa Tradycja) Polish Radio Folk Festival will be held on 12-15 May this year. According to Piotr Kędziorek from Polish Radio, the festival was created to promote our indigenous, Central European folk music. “In addition, thanks to a cyclical event, folk bands can be supported, their activity on the Polish market can be facilitated to some extent, and they can be allowed to choose their path. Even more important is that we also help with the arrangements of songs.

The idea is that folk bands are not only inspired by foreign folk patterns, but they also appreciate the potential of Polish folk culture,” says Kędziorek. Apart from this year’s laureates of the competitions Folk Phonogram (Folkowy Fonogram) and Phonogram of Sources (Fonogram Źródeł), the artists awarded at the New Tradition in recent years and the star of Sardinia – the singer Elena Ledda - are to perform in the Witold Lutosławski Concert Studio in Warsaw. The festival will be “taken over” by young performers of folk music, who will present themselves in the New Tradition ­Competition. ::

The future of theatre For the fifth time the Theatre Academy in Warsaw is organising the International Theatre Schools Festival, which will be held from 27 June to 3 July.

More than 50 theatre schools from around the world – from most European countries, USA, China, Israel, Japan, Australia and Mexico,

Polish cinema in the competition, which is to become an extra class The 36th edition of the biggest event in Polish cinema the Polish Film Festival (Festiwal Polskich Filmów Fabularnych) - will take place on 6-11 June in Gdynia. Like every year, films will compete in three groups: the Main Competition, the Independent Cinema Competition and the Young Cinema Competition.

“The Main Competition is to be the brand – to be in the competition means to be in the league. The audience should know that they can go straight to watch the movie from the competition without any doubts,” says Michał Chaciński, a film critic, since this year the new Artistic Director of the Festival. As many as 41 fulllength films have been submitted to the Main Competition. 54 films have been submitted to the Young Cinema Competition. Etudes and videos have been submitted by graduate students of nearly all the film schools in Poland, including the Polish National Film, Television and Theatre School in Łódź (Państwowa Wyższa Szkoła Filmowa, Telewizyjna i Teatralna w Łodzi), the Department of Radio and Television of the University of Silesia (Wydział Radia i Telewizji Uniwesytetu Śląskiego) and the Andrzej Wajda Master School of Film Directing (Mistrzowska Szkoła Reżyserii Filmowej Andrzeja Wajdy). ::

performed during the five editions in Warsaw. Just after the first edition, Jacques Lassalle – an outstanding French director, and multiple festival juror – said a sentence often quoted by the media and guests of the festival: “The future of theatre takes place in these schools. Bah, the peace of the world and its future – in part – takes place during such ­meetings.” ::

World Jazz The 20th edition of the Warsaw Summer Jazz Days will be held on 1722 June. Concerts will be given at Skwer, Palladium Club and the Kongresowa Hall. The programme covers the concerts of the legendary British rock guitarist Jeff Beck (the first time in Poland!), a British band playing nu jazz, combining the elements of jazz and electronic music, the Cinematic Orchestra from Israel, one of the most interesting pianists in recent years Avishai Cohen - and the regular, American guest of the Warsaw Festival, one of the most important singers

of contemporary jazz - Cassandra Wilson. The Warsaw Summer Jazz Days is an original project by Mariusz Adamiak who, maintaining its pioneering or even avant-garde character, over the years has become a major jazz enterprise presenting world jazz in ­Poland. ::

Guitar heaven Carlos Santana - one of the greatest virtuosos of Latin rock, will play on 22 June at the Legia Stadium in Warsaw! The concert will take place as part of the World Tour “Santana Guitar Heaven 2011” promoting his latest album “Guitar Heaven... The

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Greatest Guitar Classics of All Times.” The album was released in Poland on 20 September last year. It is Santana’s return to the classics of rock, a tribute to the work of such masters as Led Zeppelin, Cream and the Rolling Stones. ::

Cultural Monitor

Authenticity and folk fun The 45th Folk Groups and Singers Festival will be held on 24-26 June in Kazimierz Dolny, located on the Vistula River. This is the most important festival for folk musicians in Poland, held since 1966. Its main objective is the promotion, protection and documentation of authentic folk playing and singing. Participants in the contest include folk groups, the composition and repertoire of which are consistent with the traditions of the region; instrumentalists and soloists playing on traditional instruments; and singers – soloists and singing groups.

During the festival there is a Big-Little (Duży-Mały) competition, in which instrumentalist masters and folk singers present their students. The festival is accompanied by exhibitions of folk art, ritual performances and folk entertainment. The main organiser of the event is the Regional Cultural Centre in Lublin. ::

All Mozart!

15 June is the date firmly inscribed in the consciousness of every lover of the music of Wolfgang Amadeus Mozart. The day marks the beginning of the Mozart Festival organised by the Warsaw Chamber Opera which ends on 26 July. The programme covers all stage works, selected songs, chamber symphonies, and symphonies and oratorios by Mozart. The Mozart Festival was first organised in 1991 by the Warsaw Chamber Opera in the Year of Mozart, celebrated to commemorate the 200th anniversary of the death of the Viennese composer. The originator of the event was Stefan Sutkowski - director of the Opera. From the beginning till this day this is the only festival in Europe which presents all the staged work of Wolfgang Amadeus Mozart! ::

Holzer reads Szymborska The exhibition and projections of Jenny Holzer – one of the most original contemporary artists – are presented till the end of August at the Poznań Art Stations Gallery in Stary Browar (the Old Brewery).

The central element of Holzer’s work is text – on posters, stone benches and electronic signs. The Poznań exhibition presents her recent paintings and installations.

The American artist shows projections in the urban space whose contents are the poems of the Polish Nobel Prize winner Wisława Szymborska. “Szymborska writes about many things that are interesting to me. She is the author of a poem about torture, refugees, terrorists. Nowadays people think about these issues. She writes about writing. She writes about the sense of guilt,” says Holzer. In Poznań,

In summer, the Era New Horizons (Era Nowe Horyzonty) International Film Festival will be held for the 6th time in Wroclaw. From 21 to 31 July we will see 430 films from 50 countries. “Era New Horizons focuses on more difficult films,” declares Roman Gutek, Head of the Festival. “We want to promote little-known directors who already have their own style, but find it difficult to break through. The Wrocław Festival has a great chance to become a place for young and rebellious artistes who make unconventional, very independent films,” explains Gutek. Hits of this year’s festival may be Bella Tara’s “The Turin Horse” and Catherine Breillat’s “The Sleeping Beauty.”

As part of this year’s festival, the audience will also have an opportunity to see a 3D movie. This will be the new film by Wim Wenders devoted to Pina Bausch, the German choreographer and dancer. One of the most original retrospectives of Era New Horizons will be a series of “Behind the pink curtain.” This is an overview of the popular mainstream of erotic cinema in Japan which emerged in the 1960s. The festival is not only film but also music. The stars who will visit Wrocław this year are Nick Cave and Grinderman. The artists will perform on 29 July on Wyspa Słodowa. ::

Lech Majewski – Kouros

A feast for demanding moviegoers

Archetypes and Symbols To 5 June, the National Museum in Kraków presents a retrospective exhibition of the works of Lech Majewski.

Majewski directs in the theatre, opera and cinema. He is also a poet, a prose writer and a painter. He works mainly abroad, evidently following his own

Holzer’s projections are displayed on the facade of Stary Browar and on the Town Hall. Thus, the capital of Wielkopolska is one of the cities – next to Rome, or New York – hosting large-format works of the artist. ::

Jenny Holzer, My Skin, Galeria Art Stations in Poznań

way outside the mainstream. Kraków is now presenting his famous video series “Blood of a Poet” (Krew Poety) and “Classes on Brueghel” (Ćwiczenia z Brueghla), and even Brueghel’s work! Majewski’s exhibition is accompanied by the presentation of the recently-preserved painting of Pieter Brueghel the Younger – the “Sermon of St. John the Baptist.” “In his work Lech Majewski illustrates existential trauma, human obsessions and cultural fascinations in a subtle way. The element which integrates the whole visual art of Lech Majewski is great esteem of and sensitivity to cultural tradition. Thus, his works include numerous quotations and allusions to classical European paintings.

All of them, however, undergo a creative treatment and are a form of an intimate dialogue with tradition, and also act as a nostalgic mirror in which collective and individual archetypes and symbols see themselves,” Roman Lewandowski wrote in the text entitled “Transgression and alchemy” (Transgresja i alchemia) inviting people to this event. ::

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Cultural Monitor

The unknown operas, the latest operas

Natalia Korczakowska

In May, the Grand Theatre – National Opera in Warsaw will invite its audiences to the premières of two contemporary operas. These events clearly contribute to the new, modern, European, and at the same time global, style of the place. A young Polish director, Natalia Korczakowska, will present the German opera “Jakob Lenz”, and a distinguished German director and choreographer – Sasha Waltz – will present the Japanese opera “Matsukaze.” “Both performances are part of the Terytoria (Territories) series, to which we particularly invite innovative artists, who evoke previously unencountered associations among the audiences, and by means of which we wish to present the less-known pieces, and also give a chance to young creators,” says the General Director of the Grand Theatre – National Opera, Waldemar Dąbrowski.

Maciek Proliński “Matsukaze” is the most famous work from the traditional Japanese Nô repertoire – the story of the spirits of two sisters Matsukaze and Murasame, who both fall in love with a deceased nobleman. The story describes contemplatively how the state of Buddhist balance between life and death is achieved. Born in 1955 in Hiroshima, Toshio Hosokawa has adapted the story to the needs of opera, creating an outstanding modern work that harmoniously blends Far Eastern and Western cultures. Japan’s best-known living composer, Hosokawa studied composition in Europe where he has lived since he was 21. His works include orchestra music, concertos for classical and farEastern instruments, compositions for solo instruments, chamber music, operas, and the “Hiroshima” requiem. His music is deep and peaceful, harmonious, and noble. When asked about what contemporary music is, the composer

responds: “It is music that breaths today’s air.” “Matsukaze” is the first co-production between the National Opera in Warsaw and the Theatre Royal de la Monnaie in Brussels. The international première took place on 3 May 2011 in the Theatre Royal de la Monnaie, and the Polish première is scheduled for 31 May 2011. On stage we will see the outstanding dancers of Sasha Waltz & Guests, and we will hear the National Opera Choir, Vocalconsort Berlin, and the Orchestra of the Polish National Opera. The Orchestra will be conducted by a Spaniard – Pablo Heras Casado.

Kussharo – Lake Tree Study 6 – Kotan–Hokkaido–Japan Michael Kenna 2007

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“Jakob Lenz” is a chamber opera created by ­Wolfgang Rihm at the end of the 1970s on the basis of a story, the stage adaptation of which may also be seen at the Warsaw Grand Theatre. According to Georg Büchner, the libretto of the opera was written by Michael Fröhling.

Born in 1952, in Karlsruhe, Wolfgang Rihm is one of the most important and accomplished composers of our times. His numerous works – symphonies, opera plays, piano compositions and chamber music pieces – show an exceptionally expressive and individual style, so very different from the avant-garde works of the 1950s and 1960s. The aim of the performance by Korczakowska is to reveal the schizophrenic and “broken” world of the romantic poet, as well as his need to control reality, so emblematic of the culture of our times. The performance is the first co-production of an opera house and a drama theatre. The première of the production took place on 7 May, on the chamber stage of the National Opera. The Orchestra of the Polish National Opera was led by a Polish expert on contemporary music, Woj­ ciech Michniewski. The production features: Agnieszka Bajer, Małgorzata Godlewska, Holger Falk, and Jacek Janiszewski, and actors Dorota Lan­ dowska and Krzysztof Wakuliński. ::

teatrwielki.pl

ToShio hoSoKAwA

MATSUKAZE Pablo heras Casado / Sasha waltz

PREMiERE 31/05/2011 NEXT PERFoRMANCES: 1, 2/06/2011 Cocktail:

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Cultural Monitor

Private theatres: Krystyna Janda buys the building of the former Polonia cinema for PLN 1.5 million. After having it renovated, she opens the Polonia Theatre in 2005. Four years later she leases from Max Film the building of the closed Ochota cinema, and in January, together with her daughter, Maria Seweryn, opens the Och-Theatre. Anna Gornostaj leases from the Poland-East Cooperation Association the former premises of the Capitol cinema and in 2008 invites the audience to visit her Capitol Theatre. Having decided to lease a tenement house from the city, Emilian Kamiński obtains a substantial EU subsidy, and, in 2009, after years of preparations, opens his Kamienica Theatre. Why do renowned Polish actors set up private theatres? As we could judge by their answers, this is more of a costly passion and a need than a business, in the classical meaning of the term.

Maciej Prolińskii

Anna Gornostaj – actress and director of the Capitol Theatre Times have changed in Poland – not just in politics, but also in the economy. I believe that the simplest solution is to just take everything into your own hands. I have always dreamt of owning a theatre. For a few years I ran an off-theatre stage at Fort Sokolnicki. After that I was not afraid any­ more and started looking for a place of my own.

An idea for a business plan was born, and among friends, with my husband – Stanisław Mączyński – we are still carrying it out... We managed to get a magnificent building – the former Capitol cinema. Owing to the tradition of the place, its name has remained unchanged. Three years ago the Capitol at 115 Marszałkowska St. – after several bad years of being “claimed by the dust” and oblivion – became a modern entertainment complex, one of a kind in the capital city. Primarily, a theatre... After the show, however, without going out, you can go to a music club, have dinner and listen to music.

The music club is open on Fridays and Saturdays from 10 p.m. The theatre can hold 350 people, and the club 900. Under our business plan, besides the daily activity of the theatre and music club, there is also the renting of these places for a variety of events (as the primary source of income). Our services include

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the organisation of closed shows exclusively for invited guests, the organisation of events such as formal meetings, conferences, concerts, art evenings, and a booking agency. These three years have been a time of dynamic development. At times we employ 160 people!

And our theatre works without any subsidies. We produce it all with our own means. It’s a purely private affair. I don’t rely on any special support from the city. I’d only like the city to see that we’re enriching Warsaw’s cultural scene, and that we are also Warsaw’s ambassadors, travelling around Poland with our performances. The economy of places like Capitol is hard. These “four legs” of ours are a necessity to maintain the theatre. Because theatre is a need, a precious passion... not a business. We have no complaints regarding the needs of Warsaw residents, though.

On the contrary. Last year alone over 100,000 people came to the theatre!

This should not be taken lightly. When it comes to our repertoire I focus on promoting contemporary comedy, including Polish comedy. The need for such theatre is enormous, and comedy has always been ignored in Poland.

And yet it is much more difficult to act and to write. I’d like the Capitol to have a fairly eclectic repertoire, which people would simply like. From our coming

premieres, I would recommend the hilarious and moving story of a star admired by millions – Billy Van Zandt’s “The Property Known as Garland” directed by Sławomir Chwastowski. The star is played by a favourite comedy actress of Polish audiences – Hanna Śleszyńska. The Polish translations of song lyrics were prepared by Wojciech Młynarski himself. Then another Polish premiere – Esther Vilar’s “Carmen, a Play for 10 Cell Phones” directed by Robert Talarczyk, featuring Krzysztof Tyniec, Jacek Bończyk, and Anna Gornostaj. This production ends the season, but we have several surprises in store for the summer... And for the new season, up to the end of December, we are planning as many as 4 premieres! ::

Cultural Monitor

culture and business?

Krystyna Janda – actress and director of the Polonia Theatre after P ­ olonia and Och. It’s very intensive there, as we play 60 to 80 shows during the two summer months, delivering free theatre to audiences. I hope that this year we’ll come back to Konstytucji Square and invite people to enter this wonderful agreement called theatre... ::

Photo: Karolina Karwan

I’m doing the kind of theatre I would like to watch myself. That’s the most important to me. Business is not my concern. What interests me is to stage a decent play. For 6 years I’ve been doing my best to make the Polonia Theatre one of the most dynamically-developing private cultural institutions in Warsaw.

A year ago we started another undertaking within the Polonia Theatre – Och-Theatre, which I manage jointly with my daughter Maria Seweryn.

It seems that theatre is currently one of the purest, in terms of ideas, the happiest, and the safest places in the world. A place where, under a special agreement, some are on stage and others are listening and watching in the audience, people constantly ponder over the most sublime ideas of mankind – love, morality, truth, friendship, and humanity. Moreover, this exchange of ideas is still warm, genuine, relevant, and, most importantly, engaged in for no material or personal gain. Not a thing or a person has any influence over it, save for talents and the needs of the soul. Such places are few these days. Since establishing the Krystyna Janda Foundation for Culture we have been making efforts to enrich Warsaw’s culture with such places as Polonia and Och. The beginnings were far from easy. In the autumn of 2005, I along with my husband, the late Edward Kłosiński, decided to sell our house, and for PLN 1.5 million to buy a large stage in the former Polonia Cinema at 56 Marszałkowska Street from Max Film. It was not long before I had to face financial difficulties, an argument with the housing community in whose building the theatre was established, and the withdrawal of our biggest sponsor. It was a huge ordeal, but I emerged victorious. I was determined, because having a theatre

of my own was a dream fulfilled. This gave me strength. Without a sponsor around, I hit upon the idea of “selling” the theatre’s seats. Everyone could be a sponsor. The idea caught on. Today Polonia’s stage is regarded as one of the most interesting and original in Warsaw, and tickets must be bought well in advance, as we have a full house every evening. Our next premiere is “32 Omdlenia” (“32 Faints”) directed by Andrzej Domalik. The play was created on the basis of three stories by Anton Chekhov: “The Bear,” “A Marriage Proposal,” and “Backstage ­Stories.”

On stage – Ignacy Gogolewski, Jerzy Stuhr, and Krystyna Janda. At the very beginning I announced that the Polonia Theatre was going to be open all summer round, and I have kept my word. While the majority of Warsaw’s stages close their doors in July and August, the Polonia Theatre is showing its best known plays, like “Shirley Valentine.” Also Konstytucji Square and open air performances played there have naturally become our third stage, 5/2011 :: polish market :: 83

Cultural Monitor

I would never in my life have plucked up my courage to run a theatre on my own if it hadn’t been for the professional relationship with my mum – Krystyna Janda. So I can speak on behalf of the Polonia and Och theatres. Over 6 years ago my mum approached me with the idea of a partnership and the establishment of the Krystyna Janda Foundation for Culture, created to found and run a theatre, although there are many other goals in its statute. There were three of us – my mum, Edward Kłosiński, and me. A family. An artistic family.

We were totally aware of the risks we were taking, and the costs we were about to incur, including the personal ones. We were also the founders, which was quite a burden. We are a family foundation, and this formation has a long legacy in Poland.

We had concerns. Doubts. Mum had moments of actual fear, because we had put a lot of money and our prestige at stake. I always responded – who, if not you, could run a THEATRE on their own responsibility and at their whim! I’ve always been sure this was a good decision. Both theatres are run by the Foundation led by

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Krystyna Janda, with me as a member of the board. I stress whenever I can – the Och-Theatre, located in the former Ochota cinema at 65 Grójecka Street, is not my theatre! Artistically speaking, both theatres are run by my mum, with a lot of support from me. We usually talk and make decisions together.

I’m happy to have been honoured by my mum with this partnership. I’m responsible for Och, being its “face,” as it is a different theatre from Polonia. Much “younger”, more open, taking risks... Och-Theatre is surely the offspring of Polonia’s success, also in terms of attendance. It is my task to create the conditions in which our artistic ideas could materialise. I had been very involved in the Polonia Theatre before. I took an interest in everything – not just acting, but also backstage, technology, office, ticket sales, contact with the audience... I went through it all for real during my several years there. As for Och-Theatre, it was our dream to have a versatile place, not just with interesting performances… but theatre, obviously, is our major interest. Och, which celebrated its first anniversary in January, shows international and Polish classics, but also modern plays – brave, tackling social subjects. Our constant cooperation with the Montownia Theatre and their plays have also become part of our repertoire.

Finally, we have our musical scene – the wonderful artists who take pleasure in returning to us: Urszula Dudziak, Kasia Nosowska, Maria Peszek, Stanisław Sojka, Wojciech Waglewski, Fisz and Emade, and others. Financially, it wasn’t an easy year for us, but it had many other, brighter, aspects. Running a theatre is not just a business to us. It’s a passion and a need. Often “doing the impossible...” and we want to perform for everyone.

What will we be showing in the near future? First, a large venture, also logistically – the premiere of the musical “The Rocky Horror Show” by Richard O’Brien. It has been adapted for our stage by Tomasz Dutkiewicz. Next, in June, another dream will become reality – the premiere of Witkacy’s “Country House” directed

by Anna Augustynowicz, who represents this author’s theatre in Poland. I also see it as a very personal return to Anna, who once gave me faith in the sense of being an actor... Finally, in the autumn, the Montownia Theatre will be celebrating its ­a nniversary. ::

Photo: Robert Jaworski

Photo: Robert Jaworski

Maria Seweryn – actress and the “face” of Och-Theatre

Cultural Monitor

Małgorzata Potocka – actress, dancer, and director of the Sabat Theatre

Photo: K. Opalinski

The Sabat Theatre, located at 16 Foksal st. – the only revue theatre in Poland – is the realisation of the dream of my life. Ten years ago I myself began the renovation of the dilapidated Kameralny Theatre and established the Sabat Theatre, for which I take full responsibility – both in terms of art and business. In my theatre I am the creator of shows – as a director, choreographer, and costume designer. Achieving your own place on the capital city’s cultural map and winning the hearts of the audience is difficult, yet rewarding, work.

And this is very important for the Theatre, because I do not receive any subsidy. It requires considerable effort, but I love what I do, and – although I may sound immodest – I know how to do it.

I graduated from the Warsaw Ballet School, and was a visiting student at a Broadway dance school and a Parisian revue theatre, I danced at the Grand Theatre in Warsaw, and then set up the Sabat ballet group, having toured almost the whole world, I picked up a lot. I intended my theatre to be a place where artists and audiences felt equally well. In our repertoire, you can see cabaret, music, revue performances and musicals. We have a wonderful ensemble led by the Artistic Director Jolanta Jaszkowska, and there is a ballet group which can dance virtually anything, from rap to Can-Can and folk dance. I have also managed to build a great management team. Sabat is the only theatre in Poland which offers, instead of regular places in the audience, individual tables. We also run a cafe inside the theatre. I restored all these beautiful interiors on my own.

The theatre is popular and has a faithful audience – we entertain diplomats, ambassadors, foreigners, and delegations from abroad. This year’s hit is a musical adaptation of “Wielki Szu” (“The Great Gambler”) directed

by Sylwester Chęciński, an excellent movie made in the 1980’s. In the final scene of this legendary Polish production, its protagonist lies dead in a heap of cardboard boxes, somewhere at the back of the shop. The musical under my direction starts exactly at this point: the main character wakes up at the gates of hell, where he encounters all those whom he has wronged and the women he has slept with. Most importantly, he meets the girl of his life – Małgorzata...

With this show, Jan Nowicki, one of the greatest Polish actors, celebrated the 45th anniversary of his work on stage.

Apart from him, the show features a team of 30 artists from our theatre.

Our latest premiere is the impressive “Rewia Forever” directed by myself. It presents the greatest hits of the famous stars in the history of musicals and revue shows, including Marlene Dietrich and Frank Sinatra. We also organise occasional and exclusive events, conferences, company and product promotions, jubilees, and concerts. :: 5/2011 :: polish market :: 85

Cultural Monitor

Emilian Kamiński – actor and director of the Kamienica Theatre

What motivated me to set up ­K amienica? The need for self-dependence and the overwhelming urge of freedom...

As a human being, I have always been free. But as a so-called “artist,” employed in repertoire theatres on a regular basis, I would often encounter constraints. Only one of them allowed me to implement my ideas. However, I strove for something more than just being a “9 to 5” actor – I wanted to create my own shows. Only Janusz Warmiński – a wonderful man, the former director of the Ateneum Theatre – gave me a real chance to put my ideas into practice, and, as it turned out, not without success... I decided that everything Mr. Warmiński had done for me I would reproduce in this theatre I set up with my wife – actress Justyna Sieńczyłło.

In 2002 I found a beautiful 100-year-old tenement house at 93 Solidarności Avenue. The name I chose for my theatre, “Kamienica” (“Tenement”), reflects it being literally “put” in the tenement’s edifice which miraculously survived the World War II and the Warsaw Uprising. In 2005, in a contest, I won PLN5 million of EU subsidy for my ATUT foundation for theatre purposes. The Capital City, the Province Chairman’s Office, and the Ministry of Culture and National Heritage, provided me with invaluable assistance.

Soon after, however, the crisis began. It turned out I would

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not receive the funds unless I made a contribution to the amount of PLN 8 million! I did not have such a sum and started making efforts to obtain the grant, which took me 3 years. At the very last moment, thanks to the Mayor of Warsaw, Hanna Gronkiewicz-Waltz, and the Warsaw Council, I was granted the subsidy and finally, together with the Mazowieckie province governor, I could sign an adequate agreement. The transfer of EU funds was launched.

I received the first tranche in July 2008, and we had opened the theatre already by March 2009. The Kamienica Theatre is a great gift of human kindness! I met a lot of wonderful people while bringing it to life. On the tenement’s yard I hung a large board with a list of 168 names – the mothers and fathers of Kamienica. I guess playing the roles of actor, director, and manager poses no problem to me. I just treat all of these as tasks to be carried out, duties of the host of this place. From the very beginning, Kamienica was intended to be something more than a traditional theatre. It is an original venue, with a special, yet home-like surroundings in which the audience and the actors can establish a close contact. The Warsaw atmosphere of the performances echoes the interwar period and remains long after the show. Our guests come earlier and stay longer, treating the event as a chance to meet. We have three stages of various sizes, suitable for a varied repertoire (the Annexe for 300 people, the Ground Floor for 120 people, and the Warsz Cellar for 80 people). So in total this is an area of about 2,500 sq. metres! As far as our artistic work is concerned, three trends predominate. The first one is a traditional social theatre featuring lighter performances, comedies, music shows, etc. An example here can be our latest premiere, “Romances... Romances...” – an evening of romances in which I sing in a duo with Justyna Sieńczyłło, intermingled with love poetry by such authors as Pushkin, Norwid, and Mickiewicz.

The second trend is what I would call “civic,” as exemplified by two

moving spectacles: “A Diary of the Warsaw Uprising” by Miron Białoszewski and “Wroniec” by Jacek Dukaj, directed by Jerzy Bielunas, with music by Mateusz Pospieszalski. The third trend involves our charity initiatives. “To share and to help” is the underlying concept of the ATUT foundation, run by my wife and I. Our theatre is host to many events designed for children from flooded areas and orphanages, Caritas common rooms, and the homeless. I invite everyone to cooperate with the Kamienica Theatre – its interiors provide the opportunity to organise performances, concerts, company meetings, balls, anniversaries, training – all kinds of events.

Our clients enjoy them thanks to the distinctive character of this place and its special atmosphere, but also owing to the comprehensiveness of services (we even have our own kitchen!). The maintenance of such a venue can be highly expensive at times, so we do attach importance to the “to have” factor. On the other hand, however, the issue of “to be” and the everlasting question of “what content should it have?” are the basic criteria to me.

And if you want to see the content, come to the Kamienica Theatre and find out for yourself. ::

Cultural Monitor

Katowice – a city of culture A city located in the south of Poland, the capital of the Śląskie Province, and a contender for the European Capital of Culture 2016 title. Historically, it has “switched hands,” at times belonging to Poland, at other times to the German Reich. Stereotypically, Katowice is associated only with industry, mining, and polluted air. What is it like in reality?

Ewelina Janczylik

Katowice also has cinemas, theatres, and other entertainment. The remnants of old deserted production halls are being turned into restaurants, galleries, and museums. The first cinema in the city – the Capitol Cinema – was established about 1910. Unfortunately the building is currently privately

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owned and has not been developed.

At the Rialto Cinema-Theatre, which occupies one of the historical buildings in the city centre, you may see not just film screenings but also other cultural attractions. Katowice has

Photos: Archive of the Katowice City Hall

Even though Katowice is considered a typically industrial city, there are a number of places worth visiting there. Katowice’s oldest building is St. Michael the Archangel Church, built in 1510 and moved to Katowice in 1938, just before World War II. There are also two palaces worth visiting – the Goldstein Palace, and the Palace in Załęże.

Goldstein Palace represents art from the second half of the 19th century, but its architect is unknown. It currently houses the Civil Registry Office. As for the Palace in Załęże, it was built in 1886 and reconstructed in 1906. Since 2009 it has been a private hospital. Another tourist attraction is Teatr Śląski (the Silesian Theatre), which was established in the early 20th century as Teatr Miejski (the Municipal Theatre).

The erdifice of the Silesian Parliament is surely another of Katowice’s important historical buildings – it is now occupied by the Chairman of the Śląskie Province Office. This building is made up of over 600 rooms. Its underground levels contain several tunnels which served as a shelter for German forces during WWII. Visiting Katowice, you have to see the Parachute Tower from 1925, which stands in the Kościuszko Park. It is the only tower of this type in Poland. The tower was an important observation point during the resistance of Polish scouts against the German troops during WWII.

a lot to offer theatre and music lovers. Culture events are organised all the year round, and during the summer holidays Katowice is renowned for the “Summer Theatre Garden” and promenade concerts in the charming wooden church in Kościuszko Park.

Residents of Katowice are well accustomed to major sports events (the FIVB Volleyball World League, the FIBA European Basketball Championship and “Free Style Motocross”) organised at Katowice’s Spodek. Katowice is famous for the Tauron New Music festival, selected in 2010 as the best in Europe in the category of medium-sized festivals. Off-Festival enjoys similar fame. Though it was originally held in Mysłowice, it attracted large crowds to Katowice, and last year it switched to Katowice. The National Symphony Orchestra and the Academy of Music, considered the best in the country, are located there. Events, concerts, street exhibitions and skateboarding contests are organised under the slogan “Let’s Meet on Mariacka.”

Katowice is one of the contenders for the European Capital of Culture 2016 title. The phrase promoting the city is “Katowice – City of Gardens.” It is quite a subversive slogan, as Katowice, as I mentioned, is stereotypically associated with heavy industry. The slogan may be seen as a metaphor, as caring for the common good – such as a garden – but it also reflects the efforts of the city’s authorities to change the hackneyed view of Katowice. There are many forest areas in the city, the most valuable being the “Murckow­ ski Forest” reserve. In order to promote the concept of the “City of Gardens,” contests are planned for people who make their own small gardens on their lots, property, and even balconies. The city’s authorities are of the opinion that the successful creation of a garden in a large urban centre will hinge not only on the efforts of the authorities, but also on the involvement of the local community. Lovers of cycling have at their disposal 100 km of bicycle trails running through interesting natural areas. ::

Katowice during the cultural transformation During the last decade Katowice became one of the leaders among the Polish metropolises and, with the neighbouring cities, established the ninth in size agglomeration of the European Union. Every year the investors’ interest in the city increases which, at the same time, influences the quality of the citizens’ life and attractiveness of its labour market.

The capital of the Silesian region is the host to the growing number of cultural events of the global range, not only sport and business ones but also fairs. The current position enabled Katowice becoming one of the finalists of the competition of the European Capital of Culture 2016.

Currently the city is being involved in numerous huge investments including a reconstruction of the city centre (Rynek, Korfanty Avenue, 3-go Maja Street) and the train station. Huge transformation is expected at the area of the former ‘Katowice’ mine. The venue, already labelled as the ‘culture zone’, will become the building site for the new seats of the Polish National Radio Symphony Orchestra Katowice (NOSPR) or International Congress Centre (ICC).

Although investments in culture amount to 1 billion zlotych Katowice considers also the erection of the Skłodowska Curie Education Centre and Great Theatre of Opera and Ballet. The Spodek Arena, which is planned to co-function with ICC, has underwent the thorough renovation in order to become the best and most modern hall in Poland.

The hallmark of the city is the extraordinary musical society, from which many great luminaries are drawn, such as Wojciech Kilar, Henryk Mikołaj Górecki, Witold Szalonek or Krystian Zimmerman. And it should not surprise because it is exactly in Katowice where Polish National Symphony Orchestra Katowice and excellent Karol Szymanowski Music Academy have their headquarters and also the unique in Europe blues scene with the annual ‘Rawa Blues Festival’. Other regular cultural events include ‘Grzegorz Fitelberg International Conductors’ Competition’, ‘Ars Cameralis Festival’, ‘Threatre Director’s Festival Interpretation’ and finally electronic music festival ‘Mayday’ and ‘Off Festival’ with tens of thousands of participants.

The city is also proud of its cinema and theatre groups. The lives of many well-known Polish actors, such as Gustaw Holoubek, Ignacy Gogolewski, Marek Kondrat, Aleksandra Śląska and many more are connected with the Stanisław Wyspaiński Theatre. Furthermore Katowice is associated with one of the most remarkable Polish actors, Zbigniew Cybulski.

Centrum Kultury Katowice im. Krystyny Bochenek supports a broad scope of artistic activities and is the headquarters for numerous galleries as well as the KOREZ Theatre, the originator of the annual Summer Theatrical Garden.

The plastic arts in Katowice are closely bound with the local Academy of Fine Arts, which is the genuine pool of talents of the famous Polish Poster School. Art of the primitive painters from Janów is often compared to the leading representatives of this current in Europe; their works have been recently exhibited in the new branch of the Katowice History Museum in the historical district, Nikiszowiec.

The strong position of the city is proved by the regular Triennial of Polish Graphic Arts and International Festival of Naive Art ‘Nikisz-For’.

In the capital of Upper Silesia there are dozens of galleries and clubs, three multiplexes, the cinema-theatre ‘Rialto’, modern Centre of Cinematic Art and ‘Światowid’, the cinema with more ambitious projects.

The cultural offer of the city, its tradition, names of famous artists and ambitious investments in culture encourage hope that a struggle for the prestigious title of the European Capital of Culture 2016 and the stereotypical image of Katowice as the city of steel and coal will be won.

Cultural Monitor

The Miłosz Year: a year that is to become an investment Publications, festivals and academic conferences make up the Czesław Miłosz Year programme, announced on the 100th anniversary of the poet’s birth. As the Minister of Culture and National Hertage Bogdan Zdrojewski declares, the most important points of the programme are those that will provide long-term promotion of the Polish Nobel laureate’s work, rather than ephemeral events. “This is why we attach so great importance to new translations of Miłosz’s works into foreign languages. This year there will be more than 50 translations in 23 countries and most of them will be subsidised by Poland,” says Minister Zdrojewski.

Czesław Miłosz (1911-2004) A Nobel Prize laureate in 1980, he was a poet of culture, shaped by the Mediterranean and – in a broader sense- European traditions. His philosophical and literary influences included: Eliot, Shakespeare, Blake, and finally – Mic­ kiewicz. Miłosz was also a poet of nature; what’s more – he was a poet consciously fleeing to nature. The Grand Duchy of Lithuania, where Miłosz grew up, along with its multi-cultural atmosphere, certainly had a decisive influence on his work. The poet often referred to memories of his childhood. He used a high style, but the pathos of his words always mingled with irony, sometimes self-irony. He particularly liked the treatise form. In his “Traktat moralny” (“The

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Moral Treatise”) he denounced the disappearance of values, criticised the lack of morality and pointed out what should be changed in the human mentality.

In addition to many poems, Miłosz also wrote essays (including “Zniewolony umysł”/“The Captive Mind”, “Ziemia Ulro”/“The Land of Ulro”, “Ogród nauk”/“The Garden of Science”, novels “Dolina Issy”/“The Issa Valley”) and a journal. After World War II he worked in the USA and in France until 1951, when he appealed for political asylum in Paris. In 1960 he left for California, where he spent twenty years as a professor of Slavic languages and literatures, lecturing at the University of California in Berkeley. Until 1989 he mainly published in the Paris journal “Kultura” and in the Polish underground press. After 1989 he lived in Berkeley and in Kraków.

MP

Photo: MDCarchives

very good. I have the impression that in cultural activities we have managed to break down barriers, so difficult to overcome in strictly political activities,” says Minister Zdrojewski. In Lithuania there will be a two-day academic conference in Vilnius and many literary events in Kaunas and in the birthplace of the Nobel Prize winner – Szetejnie (Šeteniai). Academic conferences and other events are also being organised in Italy, France, Hungary, Russia and in Latin American countries.

The main events in Poland primarily include the Czesław Miłosz Literary Festival taking place in Kraków from 9–15 May 2011. Moreover, there will be the largest-ever academic conference “Miłosz and Miłosz” at the Jagiellonian University, and an international

“It’s not that we want to set up a chapel to Miłosz in every country in the world – we want this period, which is called ‘the period of purgatory,’ that is, from a writer’s death to the recurrence of his works in public circulation, to be as short as possible in Poland and abroad. The recompiling of his works, emphasising his status, can also help contemporary Polish literature to break through in the world.

Thus, dozens of events have been planned in the Czesław Miłosz Year, among them an unusual edition of ‘The Captive Mind’ in Chinese!,” says Grzegorz Gauden, Director of the Book Institute.

Abroad, the Miłosz Year will be celebrated, among others, in Lithuania and the United States including poetry readings in New York and a conference organised by the University of Illinois in Chicago. In Lithuania, the anniversary events are being prepared in large part in cooperation with Poland. “Just as it was during the Chopin Year celebrations in France, also in connection with the Miłosz Year in Lithuania we are trying to jostle a little, but at the same time elegantly and without appropriation... Cooperation with Lithuania is

literary and academic session entitled “Miłosz’s Warsaw,” as well as the opening of the International Centre for Dialogue in Krasnogruda. However, the most important events are book publications. In Poland, the Znak Publishing House will publish the first biography of the poet, written by Andrzej Franaszek and the first single-volume edition of Miłosz’s collected poems.

Events related to the Miłosz Year, and from late June, also to the Polish presidency of the European Union, will be promoted by the National Cultural Centre at the Warsaw Kordegarda Gallery. Poland will soon also receive ancestral archives of the Miłosz family, with the oldest document dating back to 1581. These are mainly property documents, letters by Miłosz’s father, letters by young Czesław Miłosz to his father and over a thousand prewar and post-war photographs of the :: Miłosz family.

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Cultural Monitor

Reasons to smile…

“Kings of life”

Kurka Wodna Productions Sp. z o.o.

Królowie życia

“It is not he who gets up in Mariusz Pujszo the morning that is sucPiotr Paweł Wyrwas cessful but he that gets up with a smile,” is the motto of Mariusz Pujszo, a well known Polish director, screenwriter and lead actor in the independent production named “Polisz Kicz Project.” The breakthrough in the artist’s career is, however, considPatroni Medialni ered to be the film “Kings of life”, shot in France in 1997 and directed by Francoise Velle. In 2011, the “Kings of life” return – this time in a book version containing amusing commentaries/drawings of one of the best Polish cartoonist, Henryk Sawka. The book is about the trials and tribulations of two young friends – Mariusz Pujszo and Piotr Wyrwas, who, in 1981, leave Poland immersed in martial law to begin an international career in Paris. Pujszo learns the glamorous film business from the “backstage”, being an extra in almost 200 productions, coning his way into the majority of these roles, and lives the life of Parisian bohemians. Wyrwas ends up with Austrian aristocrats and begins a promising career of an opera singer as graduate of the Mozarteum University in Salzburg. They live through dozens of adventures together and separately, meet the most famous and wealthy people of their time (including: Claudia Cardinale, Alain Delon, Jean Marais, Boris Becker and Stephanie de Monaco) and party a lot… They return to the new Poland in 1989. Mariusz Pujszo says this is the first book of this kind on the Polish publishing market. Why? “Because contrary to the French or Americans, Poles do not have a tradition of writing funny and painfully honest biographies, those written by actors and producers tend to be boring,” Pujszo declares. It is believed that everything revealed by the authors really took place. There is therefore no way to deny them that the entire decade of the 80’s was a great success for them. Even if not creatively then certainly socially… The book contains many anecdotes and gossips about the lives of the biggest stars. Its documentary value is strengthened by numerous pictures of the authors with world-class stars from private archives. Every page of this book is also a lot a laughs. The authors describe the world of directors, businessmen, actresses and models with irony, but also with a certain sentiment. The main characters get tangled up in this world partly without any goal and seek out entertainment, attempt to make a career and avoid life’s pitfalls, observing the surrounding world from a distance. This reminiscence of their own path has undoubtedly produced an unpretentious artistic statement.

The final product presented to the reader in an easily accessible form – relaxed and pathos-free – will suit fans of our domestic show business and people interested in the behind-the-scenes of international show business.

Mariusz Pujszo Piotr Paweł Wyrwas

„Królowie życia” to książka zabawna, pikantna, fascynująca, a przede wszystkim autentyczna. Opisuje przygody dwóch młodych przyjaciół, którzy wyjechali z Polski w stanie wojennym z mocnym postanowieniem zrobienia wielkiej kariery.

Choć startują z tego samego punktu – obydwaj mają talent, wdzięk i ani grosza przy duszy – los pisze dla nich zupełnie różne scenariusze. Mariusz Pujszo, aktor, scenarzysta, reżyser i producent filmowy, poznaje „od kuchni” wielki świat filmu, statystując w przeróżnych produkcjach, żyje życiem paryskiej bohemy.

Jego przyjaciel, Piotr Wyrwas w tym czasie pławi się w luksusie na zamku austriackich arystokratów i zaczyna obiecującą karierę śpiewaka operowego.

Na podstawie ich przygód nakręcono głośne filmy fabularne. Film „Królowie życia” („Commes des Rois”) w reżyserii Francisa Velle odniósł wielki światowy sukces, był wyświetlany w kinach i telewizjach w ponad 20 krajach, zaś prawa do do remake’u kupił „Dreamworks” Stevena Spielberga. „Francuski numer” zaś, w reżyserii Roberta Wichrowskiego, miał kilkaset tysięcy widzów w kinach i był wielokrotnie pokazywany w polskich i zagranicznych stacjach telewizyjnych.

O przygodach Mariusza i Piotra mówiono w wielu programach telewizyjnych, m.in. w zadedykowanym im specjalnie programie Ewy Drzyzgi - „Życie pisze scenariusze” z cyklu „Rozmowy w toku”.

Książka zawiera mnóstwo niesamowutych przygód rodem z „Kariery Nikodema Dyzmy”, plotek z życia największych gwiazd filmowych, a także unikalne zdjęcia z prywatnych archiwów Autorów.

WYDAWCA

www.kurkawodna.com

92 :: polish market :: 5/2011

Królowie życia

Rysunki Henryk Sawka

The World Premiere of “On Foot” in Petersburg Piotr Salaber – one of the most interesting Polish composers of theatre music – is working on the music to Sławomir Mrożek’s play “On Foot” at the Tovstonogov Bolshoi Drama Theatre in St. Petersburg. The play will be directed by a Polish director who for several years has been the artistic director of the Satire Theatre on Vasilievsky Ostrov in St. Petersburg - Andrzej Bubień. The premiere is on 26 November 2011, while rehearsals are due to start as early as 6 June 2011.

Sławomir Mrożek’s 1980 play is a realistic depiction of a crucial time in Polish history – the last moments of World War II and the first days of the new, communist reality. “On Foot” was described as “a drama with a distinct flair for realism, in which Mrożek provided a fascinatingly clear synthesis of ‘the roots’ of our present day, and found an intensely thought-provoking dramatic formula for his fascination with the twists and turns of 20th century ideas.”

Piotr Salaber (born in 1966 in Wrocław) – composer, arranger, conductor, and pianist; graduated from

the Academy of Music in Bydgoszcz, first from the Faculty of Choir Conducting and Music Education, and later from the Faculty of Composition, Theory of Music and Sound; he earned a doctorate in musical arts, in conducting (2005).

He polished his composing skills under Karlheinz Stockhausen during master courses in Kuerten, near Cologne (1998-2002), as well as Elżbieta Sikora and Alain Savouret (International Course For Composers, Gdańsk 2000). Since the academic year 2006/07 he has been giving lectures on film music at the Institute of Audiovisual Arts at the Jagiellonian University in Kraków, and since 2010 also at the Academy of Music in Bydgoszcz. He describes his work in theatre: “Working in the theatre gives you a chance to apply your skills of moving across very different styles and ages...

The theatre is an oasis – a place where you can feel truly liberated! Here, you can always speak subjectively and genuinely, without that massive apparatus of producers and decision-makers that you have to deal with in film.” :: MP

Cultural Monitor

China – the Great Dragon, a country of duality and quickly passing time Agnieszka Szyfter Whatever can be said about politics – China is a country of the future, of an aggressive and peculiar capitalism that wastes no time. Time matters here. You will not see children playing on the street after school in Beijing. They are at home studying during spare days and evenings. Time passes by faster here, you cannot waste it. The future can be seen in China. It is developing dynamically. Beijiners are young and hard working. They enjoy the smallest of life’s pleasures. They speak formal Mandarin with a touch of jargon.

The rest of the country uses foreign, strange and different dialects. Beijing has a rich history topped with episodes of strong and ruthless women in power, splendid multitude of cultures, religions, philosophies and colours that inspire. It is the gateway to the Great Wall, a headquarters of smokefilled incense – Buddhist temples and a heritage of the most wonderful Chinese palaces in the Forbidden City or the Summer Palace. An atmosphere of kindness and gentleness can be felt here, the awareness to avoid conflict drawing on the principles of Taoism. The all-powerful smile dominating the streets can be seen here, or at least kind indifference. This

also has an impact on negotiation and business. The Chinese frequently enter with a Taoist, apparent passivity while making decisions or frequently change their decisions, as though they were not sure which choice is the best. They are kind but this can mislead Europeans. It’s hard to discover what they really think. There is no sorrow and sadness, not even on the faces of the poor, deprived of prospects for the future, actually you can’t see them at all. In turn, traders at the bazaars are able to sell everything at an inflated price. You literally have to pay for every movement.

Beijing amazes visitors with modern skyscrapers, display screens the size of a lake, an opera building full of water, a stadium as though built of matches, or a swimming pool where bubbles full of air have formed on its external architectural surface. Old Beijing is a remainder of gray quarters scattered around the Forbidden City, low-rise construction and networks of tunnels from the times of the Qing dynasty, hutongs, remembering Mediaeval times. And real baked duck …

Beijing style.

The Chinese are convinced that everything: man, power, plants and food are made of both Yin and Yang – the masculine and the feminine, elements opposed to each other. The combination of opposites is illogical in Western

culture, it is however at the basis of Eastern ideas. In order to understand China, Europeans would need to deeply change their enrooted thinking patterns. Everything is dual at the same time in China: nameless and named, invisible and visible, masculine and feminine, even dishes are composed of both cooling and warming elements.

Beijing favours artists, prices of avantgarde artists reach six digits. In 2001, in the Dashanzi district, a giant artist quarter 798 was created from renovated factories. It is almost like a multiplied artistic area Chelsea and Soho in Manhattan. 798 Art Space has instantly overgrown with cafés, bars, bookstores and more than a hundred professional, comparable to those in New York, galleries. It has a life of its own and time passes fast here with changing original displays and events.

A display of my paintings took place at the NING Space gallery in 798 entitled “A Kiss for Four Seasons.” The Country of the Great Dragon has accepted my creativity with favour and interest. Many reviews have been written, there were many interviews. The Chinese have enquired about my work with unusual courtesy and detail. The questions were unusually inquisitive and sometimes strange. Full of courtesy, they were trying to understand the essence of my work. I cannot read Chinese yet, so I am still waiting for the translations. I have to learn Mandarin. :: www.szyfter.pl

5/2011 :: polish market :: 93

Events

The Promotion of Poland A conference entitled “The Promotion of Poland – A Strategy of Cooperation, A Cooperation of Strategies,” organised on the initiative of the Teraz Polska Polish Promotional Emblem Foundation, and in cooperation with the Best Place – European Place Marketing Institute took place in late April at the Palace of Culture and Science in Warsaw. The main aim of the meeting was to prepare a common axis for promotional campaigns to create a coherent image for the Poland brand abroad.

In the global Country Brand ­Index of 2010, Poland ranked 82nd, while, of the countries in our region, much better positions were held by the Czech Republic – 43rd, Hungary – 66th, and Bulgaria – 76th.

For many years one of the most serious problems in shaping an attractive image for Poland abroad has been the lack of a coherent concept for creating a country brand, no coordination of action, and a reluctance to connect budgets, resulting in the low effectiveness of marketing projects. The conference, attended by decision-makers from the

Anita Szczykutowicz

Robert Korzeniowski

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most important institutions and organisations responsible for the promotion of our country, was the perfect occasion for discussing cooperation in the creation of a joint strategy for promoting Poland.

In the first part of the meeting moderated by Jarosław Górski of Best Place, the invited guests analysed Poland’s “promotional anchors,” which are the key events, initiatives and circumstances that create opportunities to present to the world public the competitive edge and promotional benefits of Poland. One of the recent events in this context was this year’s International Trade Fair ITB Berlin, whose partner country was Poland. During ITB, the Polish Tourist Organisation inaugurated its latest advertising campaign “Move Your Imagination,” with animated clips featuring colourful vinyl toys discovering our country, made under the supervision of the renowned director Tomasz Bagiński of Platige Image. Poland was also a partner country in another world event in Berlin – the International Green Week 2011 – at which it presented Polish cuisine, under the title “Flavours

of Poland.” Last year Poland’s promotion was centred on EXPO 2010 in Shanghai and the international Chopin Year celebrations. Both events turned out to be massive media successes, contributing to a widespread promotion of the awareness of the Poland brand. Their actual results, however, can only be evaluated after some time has passed.

The second part featured a discussion panel led by the President of the Foundation Krzysztof Przybył, and Business TV’s Krzysztof Turowski. Participants included, among others, the President of the Polish Tourist Organisation Rafał Szmytke, the Polish Secretary of State in the Chancellery of the President Olgierd Dziekoński, the Head of the Minister’s Office at the Ministry of Agriculture and Rural Development Anita Szczykutowicz, the Vice-President of the Polish Agency for Enterprise Development (PARP) Aneta Wilmańska, and the Director of the Department of Public and Cultural Diplomacy of the Ministry of Foreign Affairs Aleksandra Piątkowska.

The debaters were trying to find a shared vision for shaping our country’s image and looked for common areas for creating projects synergistically enhancing the Poland brand. The majority of participants said that cooperation between departments has considerably improved in recent years. This cooperation resulted in such projects as those discussed in the first part of the conference. There was unanimous criticism of formal and legal conditions, which greatly hinder work on such procedures as public procurement, and even make it impossible to implement certain innovative marketing projects. ::

Krzysztof Przybył, Olgierd Dziekoński

POLAND ON THE GLOBAL MAP OF ADVANCED BUSINESS SERVICES 17th June 2011 Westin Hotel, Warsaw

More information: www.polishinvestforum.pl • info@roadshowpolska.pl • tel.: (+48) 22 357 09 77, (+48) 22 498 92 77 Organizers:

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Warsaw School of Economics Alumni Club & Bocconi Alumni Association present the conference:

“Current and Future Challenges for Polish SMEs. Sources of Financing” 7th June 2011, 10:00 – 16:00 Warsaw School of Economics, Warsaw, Poland al. Niepodległości 128, building C, Auditorium I based on a format designed with:

Cooperating associations

During four discussion panel sessions, speakers will consider macroeconomic trends at the SME level, providing practical advice on how to take the step from entrepreneur to manager, how to deliver growth in SMEs, including with the support of private equity investment or debt, and finally how to exploit business opportunities beyond the Polish market.

The panel speakers will include representatives of the Polish Information and Foreign Investment Agency (PAIiIZ), PKPP Lewiatan, Polish Private Equity Association, Wardyński & Partners, Enterprise Investors, MCI Group, as well as Jacek Piechota and Krzysztof Jakubiszyn. Academics and SGH alumni and Bocconi University will also participate in the discussion.

Participation is free of charge, but numbers are limited. Please register by 13 May 2011.

For a detailed program, venue and registration procedure please visit: www.sgh.waw.pl/conferenceSME

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Economic Monitor

Economic Monitor March 2011

Key economic trends

year on year) and gross fixed capital formation (up by 0.4% year on year) had a positive impact on GDP growth. The acceleration in gross fixed capital formation (investment), though slight, is especially important because investment was on the decrease until mid-2010, making a negative contribution to GDP growth.

Seasonally adjusted Gross Value Added (GVA) rose in 2010Q4 by 3.9% year on year against 3.4% in 2010Q3, with value added in construction up by as much as 7.2% year on year. This represented a major improvement compared to the previous quarter when GVA in construction had increased by 3.2%. GVA growth in the industrial sector was slightly slower but also relatively fast – 6.3% year on year. GVA growth in transport, warehousing and communications sector was also slower – 4.5%. However, the improvement in the trade and repair sector was stronger than a year earlier – up by 4.5%. In 2010Q4 GVA growth in the service sector was the lowest of all economic sectors. The increase in the gross value added of market services and non-market services was respectively 2.6% and 2.1% year on year.

Trends noted in previous months strengthened in most sectors of the economy in February 2011. Growth in industrial

In 2011M1-2 the situation in most sectors of the Polish economy was favourable. Increases in industrial and construction output and retail sales were relatively high, which indicates that economic growth in the first quarter of the year may have remained at the level recorded in 2010Q4. The favourable situation in Poland was coupled with a continued global economic revival.

In 2010Q4, Poland’s seasonally adjusted GDP (in constant prices with 2000 as the reference year) grew by 0.8% in real terms quarter on quarter and was higher by 3.9% than a year earlier. (Source: www.stat.gov.pl).

According to Eurostat, the Polish economy grew by 4% compared to a year earlier. The rate of economic growth slowed compared to 2010Q3 when it reached 4.6% according to the Central Statistical Office (GUS) and 4.8% according to Eurostat. For the first time in four quarters the rate of seasonally adjusted GDP growth dropped. Looking from the expenditure side (GUS data), this was due to slower growth in gross capital formation (up by 7.9% year on year) and exports (up by 7.1% year on year). A slightly faster growth in public consumption (up by 4.2%

7.7 6.7 4.8

2.5 2.8

2.6

3.0

2.7

1.6

OECD

G7

NAFTA

Euro Area

European Union

Japan

United States

Iceland

-0.6 -0.7

Switzerland

0.0 Norway

Greece

1.9 1.9 Ireland

0.6

Spain

Italy

Portugal

France

1.2 1.1 1.0

United Kingdom

Hungary

Belgium

1.5

Romania

3.1 2.2 2.1 1.9

Slovenia

Cyprus

Netherlands

Austria

Czech Republic

Bulgaria

3.1 3.0 2.9 2.7 2.5 2.5

Denmark

3.6 3.5

Slovakia

Malta

Poland

Germany

Finland

Lithuania

Estonia

Sweden

4.0 4.0 3.9

Latvia

5.2

-6.6 Source: Eurostat, OECD. No data available for Luxembourg

Fig. 1. Change in seasonally adjusted GDP in 2010Q4, Qt/Qt-4, in selected countries

output stayed at a high level while construction and assembly output was much higher compared to the very low level of a year earlier. After a slowdown in January, retail sales accelerated in February.

Source: Informacja o sytuacji społeczno‑gospodarczej kraju. Luty 2011; www.stat.gov.pl

Data coming from the Polish economy indicate that the GDP growth rate in the first quarter could have been similar to that noted in the previous quarter. The data also point to the strengthening of growth trends in the global economy at the beginning of 2011.

Economic activity in the United States continued to increase. Economic conditions in the euro-zone were improving, with an especially fast increase in economic activity in Germany, Poland’s main trade partner.

Source: Informacja po posiedzeniu Rady Polityki Pieniężnej w dniach 4-5 kwietnia 2011; www.nbp.pl

According to official data for 2010Q4, the economic growth of NAFTA countries reached 3%. The OECD countries grew at a rate of 2.7% and G7 at a rate of 2.6% year on year.

The real GDP of the European Union and the euro-zone grew at a slower pace of 1.9% year on year. The GDP of the United States grew by 2.8%. In Japan, it grew by 2.5% according to OECD and by 2.2% according to Eurostat.

Among the EU countries (no data available for Luxembourg; slight changes to the estimates for the remaining countries compared to the data available in the previous month), the fastest growth rate in 2010Q4 was recorded in Sweden (7.7% year on year), Estonia (6.7%), Finland (5.2%) and Lithuania. Poland was in fifth place with a growth rate similar to that noted by Germany. In 2010Q3 Poland was in third place.

Greece, Ireland and Romania were in negative growth. Greece’s situation is steadily deteriorating. In 2010Q4 its GDP dropped by as much as 6.6% year on year. In Ireland the decline in GDP also accelerated slightly 5/2011 :: Polish Market :: I

Economic Monitor

15% 14% 13% 12% 11% 10% 9% 8% 7%

8.5

9.0

9.4

9.4

10.1

10.6 10.4

10.4

10.7

9.6

9.7

9.8

10.3

10.1

6% 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M1 M2 cumulative

non-cumulative

Source: Central Statistical Office (GUS)

Fig. 2. Change in industrial output, Mt/Mt-12

– from -0.5% in 2010Q3 to -0.7% in 2010Q4.

Meanwhile, in Romania, the decline in GDP is increasingly slow – in 2010Q4 the country’s GDP dropped by 0.6% year on year.

In 2010Q3-2010Q4 Lithuania, Finland and Bulgaria witnessed the sharpest acceleration in their economic growth rates while Greece and Britain saw quite a significant slowdown in their growth.

The BIEC (Bureau for Investments and Economic Cycles) Leading Index (LI), which indicates future economic trends, rose in 2011M3 by 1.8 points. However, it failed to recoup the severe loss of the previous month.

Prospects for the acceleration of Poland’s growth rate this year are increasingly uncertain. Growing prices of raw materials and food, coupled with market uncertainty, are the unfavourable external factors affecting the Polish economy. Polish businesses are facing growing production costs, which is indicated by a rise in producer prices by more than 7% year on year. Internal demand is threatened by a rise in consumer prices while foreign demand has stagnated for several months now Source: www.biec.org

The European Commission projects that Poland’s economic growth rate will reach 3.9% this year and will be higher by 0.1 pct. points than in 2010. The EU growth rate is projected to drop from 1.8% in 2010 to 1.7% in 2011. The EU economy is expected to accelerate in 2012, with a growth rate of 2%. In that year, the economies of all EU members should record a positive rate of growth. Poland’s growth rate in 2012 is projected to reach 4.2% and be one of the highest in the EU. II :: Polish Market :: 5/2011

Industry Industrial output in constant prices has been growing at a stable pace for more than a year.

In 2011M2 it increased by 10.7% in the yearon-year terms. The inflow of new orders is stable, which indicates that industrial output is likely to continue to grow at an unchanged pace in coming months.

In 2011M2 industrial output rose by 10.7% year on year. The increase was slightly faster compared to the 10.3% recorded a month earlier. The seasonally adjusted output has been growing at an annual rate of around 10% since the beginning of 2010. In 2011M2 it increased by 9.8% year on year, up by 1.4% compared to 2011M1. In cumulative terms, in 2011M1-M2 the rate of change in industrial output diminished slightly compared to the rate of change for 2011M1.

In 2011M1-2 labour productivity in the industrial sector measured by sales per employee was by 7.1% higher than in 2010M1-2. (Source: Informacja o sytuacji społeczno-gospodarczej kraju. Luty 2011; www.stat.gov.pl). This represented a drop in its rate of change compared to the rate for 2010M1-2011M1, which amounted to 7.5% year on year.

Since 2010Q2 the inflow of new orders has been stable in the industrial sector. In 2011M2 the number of orders was by 12.9% higher than in 2010M2 against a rise of 10% in 2011M1. In month-on-month terms, the number of orders grew by 1.9%. The steady inflow of orders indicates that no major changes to industrial sales growth should be expected

in coming months. This is optimistic news because the industrial sector is usually the first to respond to changes in business conditions. No strong signs of an imminent cyclical downturn can now be seen.

Among commodity groups in key industrial sectors, the production of intermediate and investment goods is growing the fastest. In 2011M2 the seasonally adjusted production of intermediate goods rose by 15.6% year on year. After a prolonged period of fast growth, the rate of change in the production of intermediate goods slowed for a third month in a row but was still high. In the same month, the production of investment goods went up by 15.5%. Looking at the past year, it was a very strong figure, one which bodes well for the future level of investment. After five months of decline, sales of energy-related goods rose in 2011M2 by 2.8% year on year and by 3.7% month on month. In 2011 growth in these sales rebounded after increasingly fast declines noted last year. As regards consumer goods, changes in the sales of non-durables are much more favourable than in durables.

In 2011M2 the production of non-durable consumer goods rose by 5.8% year on year against an increase of 3.6% a month earlier.

For several months the production of these goods had been growing at a stable pace – lower than in 2010H2 but slightly higher than in 2010H1. The production of durable consumer goods dropped in 2011M2 both in the year-on-year and month-on-month terms – respectively by 12% and 3.6%. Growth in this production had been gradually slowing since the beginning of 2010 after a boom in the previous year. Its growth had been negative for three months but the drop in February was especially sharp.

Among individual segments of the industrial sector, 2011M2 saw a rapid growth in manufacturing output, which was higher by 10.4% compared to 2010M2 (seasonally adjusted data). The pace of growth accelerated compared to 2011M1 when it stood at 9.7%. After a few quarters of declines, sales in the electricity, gas, heat and hot water sector rose significantly again – by 6.3% year on year. In the water supply/sewage and waste management/land reclamation sector, sales increased by 7.7% in year-on-year terms. Sales in this sector had been grow-

Economic Monitor

The business climate indicator in manufacturing stays at a low, though positive, level, which indicates that manufacturers are moderately optimistic. The good news is that there are expectations for a slight improvement in order books and production.

The seasonally adjusted general business climate indicator in manufacturing has not changed much for several months now. In 2011M3 it stood at 4.5 points, which indicates that optimism in the sector was weak. This resulted from the weak pessimism of assessments of the current situation in the sector and optimistic projections for the next three or four months. The assessments of the current situation in the sector have deteriorated slightly in recent months, but industrial manager’s views on production and order books have remained positive. Their assessments of financial liabilities were negative in 2011M3. The assessments of the expected changes in order books and production were optimistic. In 2011M1-3 average assessments were better than in 2010M10-12 (seasonally adjusted data). There is weak optimism in projections for financial obligations and pessimism in employment projections. In both cases, no major changes were recorded in these assessments for six months.

14.0 12.5

11.1 10.3 10.3

9.1

8.6 7.5 0.5

coke and petroleum products

beverages

food products

metals

furniture

electrical equipment

paper and paper products

wearing apparel

textiles

printing and reproduction of recorded media wood, cork, straw and wicker products

leather and related products chemicals and chemical products

other transport equipment

rubber and plastic products

metal products

motor vehicles, trailers and semitrailers

0.1

tobacco products

17.4

pharmaceutical products

18.0

14.3

other non-metallic mineral products

ing steadily since mid-2010. The slowest growth in sales is in the mining and quarrying sector – in 2011M2 they were higher by 2.2% than a year earlier. However, the situation in early 2011 was much better than in late 2010, when the seasonally adjusted mining and quarrying output was declining at a fast pace.

Among 22 selected manufacturing sectors, four reported a decrease in sales in 2011M1-2 compared to 2010M1-2: tobacco products; pharmaceuticals; machines and equipment; and computers, electronics and optical products. In January the last sector still posted a slight increase. The situation in the coke and petroleum products sector slightly improved as sales in the sector stopped decreasing. There were increases in the remaining sectors but in 12 out of 18 sectors they were weaker than in January.

The strongest increase was observed in the manufacture of “other non-metallic mineral products” and metal products.

23.0 20.4

machinery and equipment...

25.3 23.4

computers and consumer electronics

37.9

-5.5 -8.7

-9.6 -19.0

Source: Central Statistical Office (GUS) Fig. 3. Change in output in selected manufacturing sectors, 2011M1-2, Mt/Mt-12

25 20 15 10 5 0 -5

2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 2011 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M1 M2 M3 general business climate

output

order books (projection) Source: Central Statistical Office (GUS)

Fig. 4. Business climate indicators in the manufacturing sector

Construction Construction output is growing increasingly fast, reflecting a positive impact of economic revival on the sector. However, some of its segments are still in recession. Drops in output on the residential building market are increasingly small.

In 2011M2 construction and assembly output rose by 23% year on year, which represented the highest increase since the start of the impact of the economic crisis. The seasonally adjusted increase was 14.4% against

*The projection is for the next three months

8.8% in 2011M1 and was the highest since 2008M6. This means that construction businesses managed to exploit favourable seasonal conditions this year. Compared to 2011M1, the seasonally adjusted output was higher by 2.1%. In cumulative terms, in 2011M12, the non-seasonally adjusted output rose by 17.6% year on year. Output increased the fastest in the construction of civil engineering facilities (up by 28.2%), specialised construction work (up by 22.8%) and in the construction of buildings (up by 9.4%). In each of the three segments, production has been gradually accelerating.

5/2011 :: Polish Market :: III

Economic Monitor

17.6 20%

11.2

15% 10% 5%

0.2

2.3

3.5

0% -5%

-3.4

-10%

-8.7

-15% -20% -25%

-6.1

-1.5

-5.7

-11.5 -15.2

-15.3 -20.9

2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M1 M2 in cumulative terms

in non-cumulative terms

Source: Central Statistical Office (GUS)

Fig. 5. Change in construction output, Mt/Mt-12

20 10 0

ly. But predictions of managers of building companies were still optimistic and much better compared to a month earlier. The outlook on the current financial situation in the sector was the most pessimistic, but the outlook on order books on the domestic market and production was also negative. Forecasts for the next three or four months were the most pessimistic in terms of expected changes in employment. The percentage of the surveyed who planned to cut jobs was higher than the percentage of those who planned to increase employment.

The difference between the two groups was not significant – the indicator stood at -3.9 points – but widened slightly compared to 2011M2. Expectations for the financial situation in the sector and domestic order books were better while expectations for changes in production were the best and optimistic. This last component of the business climate indicator improved for a third month in succession, which means that production is expected to rise.

-10

Trade -20 -30

2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 2011 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M1 M2 M3 general business climate

output

domestic orders (projection) Source: Central Statistical Office (GUS)

Fig. 6. Business climate indicators in the construction sector

The year-on-year decline in the number of home completions which had begun in 2010M4 continued in 2011M2. The number of home permits was smaller than a year earlier but the number of home starts was higher. According to preliminary data, 8,500 homes, or by 13.8% less than a year earlier, were completed in 2011M2. (Source: Infor‑ macja o sytuacji społeczno-gospodarczej kraju. Luty 2011; www.stat.gov.pl). Compared to January, the pace of decline decreased almost two times. The number of completions was smaller than a year earlier in the segment of homes for sale or rent but higher in the segment of self-built homes, and homes built by housing associations and workplaces. The number of home permits dropped in 2010M2-2011M2 by 7.9% to IV :: Polish Market :: 5/2011

10,200. The number of home starts rose by 12.8% to 7,400. The number of homes under construction was by 4.5% higher than a year earlier.

In 2011M3 business sentiment in the construction sector deteriorated slightly again after an improvement in 2011M1 and 2011M2. Expectations for the next three or four months are still optimistic, especially assessments concerning production.

In 2011M3 the business climate indicator in construction amounted to -5.5 points compared to -1 a month earlier. It remained in the range of pessimistic assessments. Assessments of the current and future business situation in the sector deteriorated slight-

After a sharp decline in retail sales growth in 2011M1, retail sales accelerated again in 2011M2. As a result, the increase in retail sales was relatively high. Sales grew year on year in almost all retail sectors.

In 2011M2 retail sales in constant prices increased by 8.6% year on year versus 2.1% in the previous month. In cumulative terms, in 2011M1-2, sales grew by 6.1% year on year, continuing the upward trend noted in the second half of 2010. Wholesale sales in current prices rose by 14.8% in year-on-year terms against 16.3% in January. Growth in wholesale sales is also accelerating.

In 2011M1-2 sales increased year on year in almost all segments of the retail sector. As in January, the highest growth was recorded by retailers dealing with “other sales in non-specialised stores” (up by 31.6%) and those selling furniture, household appliances and radio and TV equipment (up by 30.4%). A drop was only recorded in the sales of newspapers, books and “other sales in specialised stores” (down by 16.2%) as well as sales of food, beverages and tobacco products (down by 1.9%). An improve-

Economic Monitor

10% 8% 6%

2%

0.7

0.3

0.2

0.8

1.5

1.9

2.1

6.1

2.2

0% -0.5

-2% -1.1 -4%

-0.1

-1.6 2010 2010 2010 2010 2010 2010 2010 2011 M6 M7 M8 M9 M10 M11 M12 M1

2010 2010 2010 2010 2010 M1 M2 M3 M4 M5

in cumulative terms

in non-cumulative terms

2011 M2

Source: Central Statistical Office (GUS)

22.3

18.1

5.5

3.2

3.2

other…

motor vehicles, motorcycles and parts

solid, liquid and gaseous fuels

newspapers, books and other goods from specialised stores

30.4

food, beverages, tobacco products

31.6

textiles, clothing, footwear

In 2011M3 the seasonally adjusted business climate indicator amounted to -0.2 points against 1.5 points in 2011M2, reflecting weak optimism in assessments of the current situation and slight pessimism in projections for the next three or four months. Both indicators went down slightly after several months when they had increased. The assessment of current financial liabilities was poor, with the indicator’s reading at -10 points, while the assessment of sales was slightly better.

The assessment of expectations for financial liabilities was also the most pessimistic, with a slow downward trend. In the case of employment expectations, the indicator stabilised at a low level. The outlook on future demand and sales is better but the indicators have entered a downward correction after a major improvement last year.

pharmaceuticals, cosmetics, orthopaedic equipment

Fig. 7. Change in retail sales, Mt/Mt-12

furniture, radio and TV equipment, household appliances

In 2011M3 the assessment of the business climate in the trade and repair of motor vehicles was slightly worse than a month earlier. The business climate indicator stood at the level indicating an equilibrium between positive and negative assessments.

3.1

4%

other retail sales in non-specialised stores

ment was noted in year-on-year terms in almost all of the nine segments of the retail sector compared to January. Growth slowed slightly only in the textile, clothing and footwear segment but was still positive. This shows that favourable cyclical trends are spreading to cover more and more segments of the retail sector.

-1.9

-16.2

Source: Central Statistical Office (GUS)

Fig. 8. Change in retail sales of selected products in 2011M1-2, Mt/Mt-12

Consumer sentiment The growing prices of food and fuels, coupled with persistently high unemployment, have had an adverse impact on consumer sentiment. According to GUS research, consumers’ assessments of the current situation and projections for the next 12 months deteriorated in 2011M3. As a result, the Current Consumer Confidence Index and the Leading Consumer Confidence Index remained on the downward trend which had started in mid-2010.

The Current Consumer Confidence Index (BWUK), which describes current trends in individual consumption, decreased in 2011M3 by 4 pct. points compared to the previous month and reached -29 pct. points. (Source:

10 5 0 -5 -10 -15

2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 2011 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M1 M2 M3 general business climate

sales

demand (projection)

Source: Central Statistical Office (GUS)

Fig. 9. Business climate indicators in the trade and repair of motor vehicles

5/2011 :: Polish Market :: V

Economic Monitor

Labour market The seasonally adjusted unemployment rate has remained at a stable level in Poland for several months. The number of job offers, the number of unemployed people who find jobs, and real wages are growing at a stable rate as the impact of cyclical factors on the labour market has stabilised. But the percentage of long-term unemployed is on the rise.

9.5%

9.9%

Euro area

8.9%

4.3%

Netherlands

European Union

4.6%

4.5%

Japan

4.8%

Austria

Luxembourg

United States

6.5%

6.3%

Malta

Germany

7.2%

7.6%

Sweden

7.0%

7.6%

Belgium

Cyprus

7.9%

Czech Republic

8.0%

February was another month with the seasonally adjusted harmonised unemployment rate (HUR) for Poland staying at 9.7%. This rate has remained close to this figure since 2010Q2. The unemployment rates for the euro-zone and the EU27, after a long period when they had remained virtually stable, dropped slightly by 0.1 pct. points to 9.9% and 9.5% respectively. In 2011M1-2011M2 unemployment also decreased in the United States and Japan. After two months of rela-

Finland

8.4%

8.0%

Italy

Slovenia

ments of changes in unemployment, with the indicator at -41 pct. points, propensity to save (-28 pct. points), and changes in the general economic situation of Poland (-37.7 pct. points). The assessment of changes to the financial situation of households was the least pessimistic (-19.2 pct. points). Compared to a month earlier, the assessment of the economic situation of Poland deteriorated the most, with the indicator falling by 7.4 pct. points.

Denmark

9.7%

9.6%

Poland

11.1%

France

11.6%

Bulgaria

12.0%

Portugal

14.0%

Slovakia

Hungary

20.5%

14.9%

Spain

Ireland

Koniunktura konsumencka. Marzec 2011; www.stat.gov.pl). A year earlier, the indicator stood at -17.3 pct. points and in 2011M2 at -25 pct. points. Among the components of the Current Consumer Confidence Index, the poorest assessment, as usual, was for changes in the general economic situation in Poland. Additionally, both the assessment of the situation in the past 12 months and predictions for the next 12 months deteriorated the most, with the indicators dropping respectively from -41.5 to -46.4 pct. points in 2011M2-2011M3 and from -30.3 to -37.7 pct. points. Less pessimistic were assessments and projections for the financial situation of households, with the indicators at -24.8 and -19.2 pct. points respectively. However, these indicators also decreased sharply compared to a month earlier. Assessments of households’ current potential to buy were the least pessimistic, with the smallest drop in the indicator – from -15.6 pct. points in 2011M2 to -16.9 pct. points in 2011M3.

The Leading Consumer Confidence Index (WWUK), which describes trends in individual consumption expected in the next months, dropped by 4.9 pct. points compared to the previous month to -34.1 pct. points. (Source: Koniunktura konsumencka.

Marzec 2011; www.stat.gov.pl). A year earlier, the indicator stood at -23.4 pct. points and in 2011M2 at -29.2 pct. points. Among the components of the Leading Consumer Confidence Index, the most pessimistic were the assess-

Source: Eurostat

Fig. 10. Harmonised Unemployment Rate in selected countries in 2011M2, seasonally adjusted

VI :: Polish Market :: 5/2011

tively sharp drops, the harmonised unemployment rate for the United States fell in February by 0.1 pct. points to 8.9%. Also in Japan, the drops in unemployment seem to be a lasting trend. In 2011M1-2011M2 the harmonised unemployment rate fell in Japan by 0.3 pct. points to 4.6%. It was the sharpest drop in more than a year.

Among the EU countries for which data for 2011M2 were available, the highest unemployment rate was noted in Spain, Slovakia and Ireland, while the lowest in the Netherlands, Luxemburg and Austria1. In most EU countries, there was no significant change in the HUR in 2010M12-2011M1. But the unemployment rates in Austria and Malta rose for a second month in succession. Slight increases were also noted in Spain and Cyprus. A gradual decrease in unemployment has been observed in Germany and Sweden. There are differences in labour market trends among EU countries. In some countries, unemployment is on the decrease while others are experiencing an increasingly unfavourable situation on the labour market. In February the rise in the unemployment rate was not significant in most countries but the situation is still gloomy in some of them. Poland stays in the middle, with no clear changes to its harmonised unemployment rate.

In Poland, the registered unemployment rate amounted in 2011M2 to 13.2% and was by 0.2 pct. points higher than in 2011M1 and almost unchanged compared to a year earlier. Half of the month-on-month increase was due to the impact of seasonal factors the seasonally adjusted rate was up by 0.1 pct. points. In 2011M2 the number of newly unemployed registered with employment agencies was 212,600, which represented a drop by 11% in year-on-year terms compared to a drop of 4.5% in the previous month.

The number of unemployed who were taken off the official register also decreased – it was down by 17.8% compared to a year earlier against 3.2% in 2010M1-2011M1. But the number of unemployed taken off the register because they have found jobs is on the rise, with a simultaneous drop in the number of 1 Th e most recent HUR data for the countries for which unemployment data for 2011M2 were unavailable: Estonia – 14.3% (2010M12), Greece – 12.9% (2010M9), Lithuania – 17.4% (2010M12), Latvia – 18.3% (2010M9), Romania – 7.3% (2010M9) and United Kingdom – 7.8% (2010M12).

Economic Monitor

13.5 13.0

newly unemployed registered for reasons on the employer’s side.

After seasonal adjustments, the inflow of newly unemployed and their outflow because they have found jobs have stabilised in recent months. Since 2010M4 the monthly inflow of newly unemployed has stayed at around 250,000. After some acceleration in 2010M12, at the beginning of the year – in January and February - it fell again to below the average for the recent quarters. However, it is too early to say that the inflow of the unemployed has been reduced for good. Around 100,000 unemployed people a month were taken off the official register in the past three months for non-seasonal reasons – because they took up jobs. In February there was a slight increase in the number of unemployed taken off the register for this reason. But the increase was so small that it had no influence on the general trend towards the outflow of the unemployed who have found jobs becoming stable.

The number of registered unemployed totalled 2,150,200 in 2011M2 and was by 2.3% higher than a year earlier. This means a slower rise in unemployment than in the previous two months (in 2011M1 the increase was 2.6% year on year). Among the selected groups of unemployed, the number of registered graduates grew at a relatively fast pace (a rise of 7.6% year on year, or more than two times faster than in 2011M1). A relatively fast increase was also recorded for the unemployed not eligible for unemployment benefits and unemployed women – up by respectively 6.8% and 6.2% year on year. In 2011M2 the pace of growth in the number of unemployed who had not been in employment before becoming unemployed accelerated while the pace of growth in the number of unemployed who had been in employment slowed.

The situation of the long-term unemployed is still difficult. After a period of some stability, the percentage of long-term unemployed rose again in 2011M2. The share of long-term unemployed, who represented the largest group of all the unemployed registered with employment agencies, increased by 6.2 pct. points year on year to 46.3%. The percentage of unemployed aged over 50 also rose – by 0.7 pct. points to 21.1%, with the increase being higher than in 2011M1 – as did the percentage of unemployed parents with at least one child aged under 18 (up by 0.6 pct. points to 8%) and the percentage of unem-

12.5 12.0 11.5 11.0 10.5 2009 2009 2009 2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 M9 M10 M11 M12 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M1 M2

seasonally un-adjusted

seasonally adjusted

Source:Central CentralStatistical StatisticalOffice Office(GUS) (GUS) Source:

Fig. 11. Registered unemployment rate, %

3,600

4%

3,550

3%

3,500

2%

3,450

1%

3,400

0%

3,350

-1%

3,300 3,250

-2%

3,200

-3%

3,150

-4% 2009 2009 2009 2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 M9 M10 M11 M12 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M1 M2 average nominal wages (seasonally adjusted, left axis) Source:Central CentralStatistical StatisticalOffice Office(GUS) (GUS) real wage change, Mt/Mt-12 (non-seasonally adjusted, right axis) Source:

Fig. 12. Wages in the corporate sector

ployed university graduates aged under 27 (up by 0.2 pct. points to 1.9%). The share of unemployed without job qualifications dropped by 0.8 pct. points to 26.3%, with the pace of decrease being slower than in 2011M1. The percentage of unemployed aged 25 or under stood at a level similar to that recorded a year earlier (22.2%, with a drop recorded in 2011M1) as did the percentage of disabled unemployed people (4.9%, with a rise recorded in 2011M1).

Source: Informacja o sytuacji społeczno‑gospodarczej kraju. Luty 2011; www.stat.gov.pl.

The BIEC Future Unemployment Rate Index, which provides data on expected changes in unemployment, has shown a weak upward trend since November 2010. Its increase in March was slightly higher than in February.

(Source: www.biec.org). This indicates that a further slight rise in the unemployment rate may be expected in coming months.

Average employment in the corporate sector is growing at an increasingly fast rate. In 2011M2 it rose by 4.2% year on year against an increase of 3.8% in the previous month. Compared to a year earlier, there were 220,000 more jobs in the corporate sector. Seasonally adjusted data indicate that employment in the sector was higher by 0.3%, or by around 14,500, compared to 2011M1. The increase was slightly slower than in the previous month.

Employment increased in most sectors, with the highest increases noted in administration and supporting activities (up by 11.6%), real estate services (up by 9.5%), accommodation and restaurant services (9.4%), construction (8.7%) and professional, research and technical activities (8.2%).

Source: Informacja o sytuacji społeczno‑gospodarczej kraju. Luty 2011; www stat.gov.pl

At the end of February the number of group lay-offs planned was higher than in January 5/2011 :: Polish Market :: VII

Economic Monitor

Table 1. Selected labour market indicators 2010M2

2010M3

2010M6

2010M9

2010M12

2011M1

2011M2

Average employment in the corporate sector, in thousands

5 293

5 294

5 336

5 364

5 379

5 501

5 513

Change in average employment, year on year, %

-1,1%

-0,6%

1,1%

1,9%

2,4%

3,8%

4,2%

3 288,29

3 493,42

3 403,65

3 403,68

3 847,91

3 391,59

3 422,14

Change in real wages, year on year, %

Average nominal monthly wage in the corporate sector, in PLN

-0,1%

2,1%

1,3%

1,3%

2,3%

1,5%

0,7%

Registered unemployment rate

13,2%

13,0%

11,7%

11,5%

12,3%

13,0%

13,2%

Change in the number of job offers submitted to employment agencies, y-o-y, %

26,3%

25,2%

15,1%

12,6%

8,2%

-22,8%

-38,2%

Employment rate according to LFS (BAEL) *

-

49,4%

50,4%

51,1%

50,6%

-

-

Unemployment rate according to LFS (BAEL) *

-

10,6%

9,5%

9,1%

9,3%

-

-

Economic activity rate according to LFS (BAEL)

-

55,2%

55,7%

56,2%

55,8%

-

-

* Quarterly data

and in February last year, with 325 workplaces declaring they planned to make 38,400 workers redundant, including 28,400 persons employed in the public sector. At the end of January 232 workplaces planned to lay off 29,500 workers, including 19,600 in the public sector while at the end of February last year the respective figures were as follows: 201 workplaces, 33,700 workers, including 19,900 in the public sector. (Source: Infor‑ macja o sytuacji społeczno-gospodarczej kraju. Luty 2011; www.stat.gov.pl). In 2011M2 the number of job offers submitted to employment agencies at county level was lower than a year earlier by 38.2%. Although the figure rose by 11.1% compared to the previous month (seasonally adjusted data), this did not offset the sharp drops in earlier months.

According to a quarterly survey on demand for labour conducted by GUS, at the end of 2010Q4 around 21,100 employers, or 3.6% of those surveyed, showed 58,900 job vacancies, that is more than a year earlier when 18,600 employers, or 4.0% of those surveyed, had had 51,600 vacancies. The increase was noted in workplaces of all sizes: by 17.8% in workplaces providing employment to more than 49 people, by 9.9% in workplaces employing from 10 to 49 people, and by 11% in workplaces employing less than 10 people. Compared to a year earlier, the highest increases in the percentage of vacancies was in manufacturing (up by 5.4 pct. points to 26.9%), in transport and warehousing (up by 2.5 pct. points to 8.7%) and in construction (up by 1.8 pct. points to 12.7%). The largest decreases were recorded in the public administration and defence, obligatory social insurance (down by 4.5 pct. points to 6.3%), VIII :: Polish Market :: 5/2011

Source: GUS and authors’ calculations

trade, motor vehicle repair (down by 3.1 pct. points to 15.4%), and healthcare and welfare sectors (down by 1.7 pct. points to 4.0%).

Source: Informacja o sytuacji społeczno‑gospodarczej kraju. Luty 2011; www stat.gov.pl

In 2011M3 there was no significant change in the number of job offers posted on the Internet. The situation on the job offers market is now stable, with a steady inflow of new offers, which is likely to result in a gradual improvement in job prospects. There was some change to the structure of offers published in March, with less offers for sellers, advertising specialists and jobs in the telecommunications and insurance sectors. Demand for lawyers has stagnated in recent months. Analysts and people specialising in designing and applying new solutions in firms had more opportunity to choose among job offers as employers tend to appreciate their large contribution to the development of firms during a period of economic revival. Additionally, the number of offers for IT specialists, managers and accountants also rose. The general trend on the job offers market is still favourable. Except for short-term corrections, growth in job offers has been seen since mid-2009.

In 2011M2 average nominal wage in the corporate sector amounted to PLN3,422.14, up by 4.1% year on year. The increase was smaller than in the previous two months. In 2011M2, seasonally adjusted wages rose by 1% month on month. Growth in real wages was also slower than in the previous two months. In 2011M2 real wages were up by 0.7% compared to a year earlier. This growth rate does not differ much from the average pace of growth seen since 2010M4.

Prices In 2011M2 inflation stayed in Poland at the high level of a month earlier. There was a fast increase in producer prices, especially prices of energy-related goods and intermediate goods. Construction prices rose slightly. Inflationary expectations of private individuals went up sharply.

After a relatively long period of growth, the harmonised index of consumer prices (HICP) for Poland dropped from 3.5% in 2011M1 to 3.3% in 2011M2. Despite the decrease, the index was still above the EU average, which stayed at 2.8% for the two months. In the euro-zone, HICP rose from 2.3% to 2.4%.

In eight EU countries HICP rose in 2011M2 compared to 2011M1, in three countries it remained unchanged and in the remaining 16 increased. There is a clear downward trend in inflation in Greece but its HICP is still at a relatively high level. In recent months, growth in consumer prices has also slowed in Sweden and Malta. Meanwhile, the prices have been accelerating since the beginning of the year in Ireland, where deflation was recorded until recently, as well as in Austria and Finland. In most EU countries, inflation tends to be on the rise. HICP was the highest in Romania, Estonia and Bulgaria. In these countries, inflationary trends intensified in February. The lowest inflation was in Ireland, Sweden and France. In Sweden and France, HICP dropped month on month in 2011M2.

At the beginning of the year growth in producer prices stabilised at the high level of December last year as prices of energy-related

Turkey 4.1%

Croatia 2.2%

0.5% Switzerland

Norway 1.1%

Iceland 2.3%

European Union 2.8%

Euro area 2.4%

Ireland

Sweden 1.2%

France 1.8%

Czech Republic 1.9%

Slovenia 2.0%

Netherlands 2.0%

Italy 2.1%

Germany 2.2%

Denmark 2.6%

Malta 2.7%

Lithuania 3.0%

Austria 3.1%

Cyprus 3.1%

Poland 3.3%

Spain 3.4%

Finland 3.5%

Slovakia 3.5%

Portugal 3.5%

Belgium 3.5%

Latvia 3.8%

Luxembourg 3.9%

Hungary 4.2%

Greece 4.2%

Bulgaria 4.6%

Estonia 5.5%

Romania 7.5%

0.9%

Economic Monitor

Source: Eurostat. No data available for Ireland and United Kingdom

Fig. 13. Harmonised Index of Consumer Prices in selected countries, 2011M2, Mt/Mt-12

goods and intermediate goods increased. Construction prices also started to rise.

The pace of growth in producer prices stabilised in 2011M1 at the previous month’s level. Producer prices increased by 6.2% year on year. The fastest growth, though slower than a month earlier, was in prices in the mining and quarrying sector (up by 20.2% year on year). The increase in prices in the electricity, gas, heat and hot water sector was also slower than in 2010M12 (up by 5% year on year). Meanwhile, prices in the water supply, sewage and waste management and land reclamation sector accelerated compared to the previous month, with a rise of 6.8% year on year. The same was the case in manufacturing (up by 5.3% year on year). Growth in prices of energy-related goods was the fastest, though slightly slower than in January

(up by 15.2% year on year). As production is growing at a fast pace, prices of intermediate goods are going up increasingly fast (up by 8.9% year on year). The sales and prices of intermediate goods are driven by demand factors.

Average construction and assembly prices rose slightly at the beginning of the year after a few months when they had remained stable. In 2011M1 they were up by 0.3% year on year and by 0.1% month on month. This was due to an increase in prices in the sector of civil engineering facilities and specialist construction work. Transport prices also grew at a faster pace than in 2010M12. In 2011M1 they increased by 1.8% compared to 2010M1, reflecting a fast growth in prices in water transport and a much slower growth, though accelerating, in prices of warehousing and transport support services.

7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3%

2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M1 M2 inflation

industrial prices

Fig. 14. Producer and consumer prices in Poland

construction prices

Source:Central CentralStatistical StatisticalOffice Office(GUS) (GUS) Source:

In 2011M2 CPI inflation stood at the previous month’s level of 3.6% (revised figure) and was much higher than the NBP inflation target of 2.5%. The main contribution to inflation came again from food and energy prices. Inflation stays at a heightened level due to rising prices of agricultural raw materials and petroleum on global markets, a trend which is not offset by changes in the exchange rate of the zloty, and additionally by increases in most VAT rates at the beginning of 2011. (Source: Informacja po posiedzeniu Rady Polityki Pieniężnej w dniach 4-5 kwi‑ etnia 2011; www.nbp.pl). Prices of eight types of consumer goods and services pushed inflation upwards while prices of the remaining four had the opposite effect. Compared to January, prices of recreation and culture, food and non-alcoholic beverages, and communications accelerated the most while transport, clothing and footwear, housing and energy prices slowed. As in 2011M1, transport and housing prices grew the fastest while clothing, footwear and communications prices were on the decrease.

2011M3 saw a sharp rise in the inflationary expectations of individuals. The expected inflation rate for the next 12 months was 4.6%, against 3.2% a month earlier. The detailed results of the 2011M2 survey showed that the percentage of respondents who said that prices would grow at a faster rate than at present, decreased by 5.3 pct. points. The percentage of respondents predicting a higher inflation rate stood at 24.9%. The share of those who expected that prices would be growing at the same pace was higher - 51%. It dropped by 5 pct. points compared to the pre5/2011 :: Polish Market :: IX

clothing and footwear

0.3 recreation and culture

1.5

home furnishings

2.7

education

2.7

other goods and services

3.5

health

3.7

restaurants and hotels

4.2

alcoholic beverages and tobacco products

5.0

food

5.5

housing

transport

6.5

communications

Economic Monitor

-1.1 -4.2

Source: Central Statistical Office (GUS) Fig. 15. Change in prices of selected consumer goods and services in 2011M2, Mt/Mt-12

vious survey. The percentage of people saying that prices would be growing at a slower pace was 14.4%, down by 0.8 pct. points. The percentage of respondents who said that prices will remain unchanged or will decrease was 3%, down by 0.1 pct. points. The remainder had no opinion on the issue.

The BIEC Future Inflation Index, which provides data on consumer goods and service prices several months in advance, rose again in 2011M3 but did not exceed the peak value of August 2010, which offers some hope that inflationary pressure will be easing in the second half of the year. However, one can hardly expect any radical easing of inflationary pressure from the Polish economic environment in the near future. The greatest risk is associated with food prices. They are pushed up by both supply and demand factors. As harvests were poor last year, food stocks declined, leading to a surge in food prices. At the same time, as a result of the rapid growth of the most populous economies, like China and India, global demand for food is on the rise. And increasingly expensive raw materials influence production costs in Polish industry and agriculture. A stronger zloty could counteract to some extent these inflation-fuelling factors.

The decision came as a result of inflation staying at a relatively high level and because of the expected further increase in wage and inflationary pressure. In order to reduce the risk of inflation running above the inflation target in medium term, the Council decided to raise NBP interest rates again, in continuation of a round of monetary policy tightening.

Source: www.nbp.pl.

In the Council’s opinion, the interest rate increases were possible thanks to optimistic data concerning expected GDP growth in Poland. It is expected that in 2011Q1 GDP will grow at a pace similar to that noted in 2010Q4, which enables raising interest rates relatively safely. At the same time, there was an acceleration in sales, which indicates a reduction in the risk of a significant weakening of household consumption. Capacity utilisation is on the rise and the general business situation is improving. Household demand for loans denominated in foreign currencies stays at a stable level. But, considering earlier data, the Council believes that for the sake of macroeconomic stability it is important to take measures aimed at preventing a rapid increase in such loans (…).

Source: www.nbp.pl.

Source: www.biec.org.

Central bank and monetary policy At a meeting on April 4-5, 2011 the Monetary Policy Council decided to raise central bank interest rates by 0.25 pct. points, with the reference rate going up to 4.00%, the Lombard rate 5.50%, the deposit rate 2.50%, and the rediscount rate 4.25%.

X :: Polish Market :: 5/2011

Investment activity is still low while the unemployment rate is high. This is coupled with a rise in the number of employed people and a moderate increase in wages. Corporate lending activity is subdued, which is mainly due to low demand for business loans. Meanwhile, home loans continue to grow relatively fast, which is coupled with a drop in consumer loans.

Source: www.nbp.pl

At the end of 2011M2 the M3 money supply was PLN775.3 billion, up by 0.8% compared to 2011M1 and up by 8.3% year on year. The amount of cash money in circulation (outside banks) increased to PLN91.4 billion at the end of February, up by 0.9% compared to 2011M1 and 3.9% compared to a year earlier. The value of the “deposits and other liabilities” component of the M3 money supply rose by 1% to PLN677 billion. The remaining M3 components amounted in 2011M2 to PLN6.5 billion, which represented a drop of 18.7% compared to 2011M1.

At the end of 2011M3 the central bank’s average exchange rate of the zloty to the euro was PLN4.0119 against PLN3.9763 in 2011M2. The average exchange rate of the zloty to the dollar was PLN2.8229 against PLN2.8765.

Trends on the Warsaw Stock Exchange 2011M3 saw 22 new companies debuting on the Warsaw Stock Exchange (WSE), including three foreign companies. At the end of the month, the WIG20 blue-chip index stood at 2,816.96, the WIG broad-market index at 48,729.83 and WIG-BANKI at 7,091.76. Compared to 2011M2, the three indices rose respectively by 3.65%, 2.50% and 4.54%.

On March 11, 2011 the WSE Management Board adopted a resolution to lower fees collected by issuers of structured certificates on the WSE’s main market. The new fees are in force from April 1 to June 30, 2011.

Source: www.gpw.pl

Annual revisions of the WIG20, mWIG40 and sWIG80 were made after the March 18 session. Kernel Holding became the first issuer from Ukraine to join the WIG20 blue-chip index of the largest and most liquid companies. As part of this periodical revision, WSE stock (GPW) was added to the mWIG40 index.

Changes to WIG20: new companies – KERNEL, BOGDANKA; companies leaving the index – CYFRPLSAT, POLIMEXMS. Changes to mWIG40: new companies CYFRPLSAT, POLIMEXMS, GPW, PULAWY, ASTARTA; companies leaving the index – KERNEL, BOGDANKA, MOSTALWAR, GANT, MMPPL. Changes to sWIG80: new companies – MOSTALWAR, GANT, AGROTON, MMP-

Economic Monitor

Table 2. Selected components of the balance of payments, in PLN millions 2010M1 Current account Balance on goods

2010M12

2011M1

-826

-1 573

-930

-109

-1 106

275

Balance on services

109

375

259

Balance on income

-837

-1 280

-1 305

11

438

-159

317

1 553

153

6 124

-4 452

3 616

-249

-1 086

-992

1 368

825

1 446

-402

-574

-85

4 777

537

1 320

849

-2 307

997

Other investment – liabilities

-113

-1 632

1 191

Derivative financial instruments

-106

-215

-261

-4 665

3 482

-1 246

Balance on current transfers Capital account Financial account Polish direct investment abroad Foreign direct investment in Poland Portfolio investment - assets Portfolio investment - liabilities Other investment - assets

Official reserve assets

- recorded second-degree liquidity ratios of between 100% and 130%.

The structure of inventories changed slightly, with a rise in the share of materials by 0.6 pct. points, and drops in the share of goods by 0.7 pct. points, in the share of finished products by 0.6 pct. points and in the share of semi-finished and in-process products by 0.1 pct. points. The changes reflect a rise in demand and an upward trend in sales.

Among the businesses surveyed by GUS, 47.4% reported exporting activity, against 49.6% a year earlier. The value of exports increased by 12.6% while the share of exports in total net revenues from the sales of products, goods and materials went up from 19.1% in 2009 to 20.3% in 2010. The percentage of exporters showing a net profit was 78.9% against 76.3% in 2009.

Balance of payments

Source: NBP

PL, EFH, CORMAY, MILKILAND, LUBAWA, PBSFINANSE, CALATRAVA; companies leaving the index – PULAWY, ASTARTA, FORTE, KOELNER, INSTALKRK, QUMAKSEK, PAGED, NOWAGALA, MOSTALEXP, GASTELZUR. Source: www.gpw.pl

Financial results of non-financial enterprises Data from the Central Statistical Office (GUS) indicate an improvement in the results of non-financial enterprises in 2010. Revenues from overall business operations, profits and the main business and financial indicators improved compared to 2009.

In 2010 revenues from business operations rose faster than business expenditures – respectively by 5% and 4.6% year on year.

The cost index improved slightly from 95% in 2009 to 94.7% in 2010. In 2010Q4 revenues from business operations rose by 7.9% compared to 2010Q3 from PLN516 billion to PLN556 billion. In 2009Q4 revenues from business operations reached PLN517 billion and were higher by 5.9% month on month.

In 2010 profits from the sales of products, goods and materials amounted to PLN102 billion, which represented a rise of 9.6% com-

pared to 2009. Profits from other operating activity decreased from PLN5.9 billion to PLN5.2 billion. The balance on financial operations improved from PLN-3.0 billion in 2009 to PLN0.5 billion in 2010Q1-4 as financial revenue dropped by 17.9% and financial expenditure by 25.2%.

Gross profit amounted in 2010 to PLN107 billion against PLN95.9 billion in 2009. The ratio of personal income tax to gross profit rose from 14.3% in 2009 to 14.8% in 2010. Net profit was by 13.4% higher than in 2009 and amounted to PLN89.4 billion. The net profit of profit-making businesses was higher in 2010 by 5.8% than a year earlier. The loss of loss-making businesses was by 26.5% lower than in 2009. 78.4% of the 17,525 businesses surveyed by GUS reported a net profit.

In 2010 an improvement was also noted in basic performance indicators. The cost index dropped from 95% in 2009 to 94.7% in 2010Q1-4. The rate of gross return on sales rose from 5% to 5.3% while the rate of net return on sales went up from 4.1% to 4.4%.

Compared to 2009, the first-degree financial liquidity ratio rose by 1.2 pct. points from 38.5% to 39.7%, the second-degree liquidity ratio rose by 3.3 pct. points from 102.2% to 105.5%. A total of 46.7% of businesses – 0.6% less than in 2009 - recorded first-degree liquidity ratios higher than 20% while 12% of businesses – 0.7% more than in 2009

Preliminary data from the Central Statistical Office (GUS) and the National Bank of Poland (NBP) indicate that in 2011M1 there were significant drops on the balance of payments accounts compared to 2010M1, with the current account balance down by 12.6%, the capital account balance down by 51.7% and the financial account balance down by 41.0% compared to a year earlier.

The current account balance stood at EUR930 million, or EUR104 million less than in 2010M1. The current account figure resulted mainly from a deterioration in the balance on income by 55.9% compared to a year earlier. The balance on income stood in 2011M1 at EUR-1,305 million, down by EUR468 million from EUR-837 million in 2010M1. There was also a significant deterioration in the balance on current transfers, which decreased from EUR11 million in 2010M1 to EUR-159 million.

The figure was determined by a negative balance on transfers with the European Union, which stood at EUR-133 million. In 2011M1 Poland received EUR191 million from the EU and contributed EUR324 million to the EU budget. The current account deficit was eased by a strong increase in the balance on services and goods. In 2011M1 the balance on services amounted to EUR259 million and was higher

by EUR150 million than in 2010M1. The balance on goods amounted to EUR109 million in 2010M1 and EUR275 million in 2011M1.

5/2011 :: Polish Market :: XI

Economic Monitor

The capital account balance amounted to EUR317 million in 2010M1 and EUR153 million in 2011M1, dropping by EUR164 million. This reflected a 50% decrease in income (from EUR345 million in 2010M1 to EUR174 million in 2011M1) and a 25% drop in expenditure (from EUR28 million to EUR21 million).

The financial account balance deteriorated by EUR2,508 million, dropping from EUR6,124 million in 2010M1 to EUR3,616 million in 2011M1. The figure was influenced by a 298.4% drop in the balance on Polish direct investment abroad (from EUR-249 million in 2010M1 to EUR-992 million in 2011M1). Foreign direct investment in Poland increased by 5.7% from EUR1,368 million in 2010M1 to EUR1,446 million in 2011M1. The deficit on the account of portfolio investment assets narrowed from EUR-402 million to EUR85 million, which represented a change of 79%. On the account of portfolio investment liabilities, there was a drop of 72% from EUR4,777 million in 2010M1 to EUR1,320 million in 2011M1. The remaining invest-

XII :: Polish Market :: 5/2011

ment increased, both on the side of assets and liabilities, by respectively EUR148 million and EUR1,304 million to EUR1,191 million and EUR997 million. The deficit on the account of derivative financial instruments widened by 146.2% from EUR-106 million to EUR-261 million in 2011M1.

The balance of payments remained positive and official reserve assets grew by EUR1,246 million compared to a rise of EUR4,665 million in 2010M1.

Source: NBP

Notes It is always clearly stated in the text if the data given are seasonally adjusted or in cumulative terms. Otherwise, the data are nonseasonally adjusted and in non-cumulative terms. GUS and Eurostat use the TRAMOSEATS procedure for seasonal adjustment.

Time series cleared from the impact of seasonal factors by the authors of the report have been adjusted using the ARIMA X-12 method.

2011M2 – February 2011 2010Q4 – fourth quarter of 2010 2010H2 – second half of 2010 2011M1-2 – cumulative data for the JanuaryFebruary 2011 period 2010Q1-4 – cumulative data for the period from the 1st to the 4th quarter of 2010 Mt/Mt-12 – rate of change for a given month compared with the same month a year earlier Mt/Mt-1 – rate of change for a given month compared with the preceding month Qt/Qt-4 – rate of change for a given quarter compared with the same quarter a year earlier Qt/Qt-1 – rate of change for a given quarter compared with the preceding quarter

Team of experts: Robert Pater, Ph.D., Łukasz Cywiński in conjunction with Tomasz Soliński, Ph.D. Institute of Economics, University of Information Technology and Management in Rzeszów www.ig.wsiz.pl