Polish Market No. 5 (188) 2012 by Polish Market

Polish Market :: 5/2012

PUBLISHED since 1996 No. 5 (188) 2012 :: www.polishmarket.com.pl

Alicja

Wiecka Managing Director of SAS Institute in Poland

Inside:

Business with China Warsaw Financial Hub Retail Construction Energy Sector Shale Gas Euro 2012 Logistics

Contents

5/2012

Letter from the Publisher # 5

Poland gets serious about business with China # 18

Letter from the Editor # 5

Chinese banks—no longer a distant land # 20

From The President’s Press Office # 6

From The Government Information Centre # 7

Our Guests

Rafał Baniak , talks about the privatization of stateowned companies # 8

Prof. Marek Tukiendorf talks about how the Opole University of Technology builds realties with China # 22

energy sector The Polish power system needs upgrades # 24

Warsaw Mayor Hanna Gronkiewicz-Waltz writes about Warsaw’s rising prominence as the financial hub of Central and Eastern Europe # 10

Piotr Grzegorz Woźniak talks about different estimates of shale gas deposits in Poland # 24

Prof. Maciej Nowicki talks about the prospects for the development of solar energy in Poland # 28

Leszek Świrski talks about gas from landfills # 30

Cover story interview

Alicja Wiecka SAS Institute talks about the company’s 20 years in business in Poland # 12

international relations

Sun Yunxi , the Ambassador of China to Poland, talks about the intensification of Polish-Chinese relations # 13

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logistics

Poland as a transit country between Scandinavia and Southern Europe # 32

Logistics solution for Euro 2012 # 40

Warsaw National Stadium

Gdansk PGE Arena Stadium

Poznan City Stadium

INVESTMENTS CRUCIAL FOR POLAND We built three stadiums for the Euro 2012 in Warsaw, Gdansk and Poznan, which together can hold 120 000 spectators. During construction, we used very unique and innovative solutions never before applied in Europe. Our constructions meet the highest standards of elite class facilities.

www.grupapbg.pl

Contents

Transport and logistics sectors need to evolve to grow # 44

euro 2012

The Chopin Airport is getting ready to receive soccer fans # 36 How the Polish airports will handle the demand during Euro 2012 # 45 Google has launched the Street View service for Poland vis-a-vis Euro # 46

Tomasz Bil talks about things you have to know when outsourcing business # 62

The government has made the life of entrepreneurs easier # 64

Mariusz Bidziński and Michał Paprocki talk about the European Patent system # 65

WARSAW FINANCIAL HUB

The Warsaw Stock Exchange grows fast # 66

Tomasz Witczak, about the privatization and the selling points of the Warsaw Stock Exchange # 68

Filip Gorczyca about the future of the Warsaw Stock Exchange # 69

commercial real estate

Shopping centers are growing but not as fast as developers would wish for # 48Sławomir Gajewski of Torus, about the Tricity market # 54

economic monitor # 70 banking

Prof. Małgorzata Zaleska talks about new regulations in the banking sector # 56

Katarzyna Jóźwik of Provident Polska talks about personal finance # 58

law

Maja Sujkowska talks about the rules of outdoor advertising # 60

Polish Market :: 5/2012

PUBLISHED SINCE 1996 No. 5 (188) 2012 :: www.polishmarket.com.pl

Alicja

Wiecka managing Director of sas institute in Poland

insiDe:

business with China warsaw Financial Hub retail Construction energy sector shale Gas euro 2012 logistics

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Cultural Monitor # 72 Culture

Maciej Proliński writes about the Summer Jazz Days 2012 # 76

Maciej Proliński writes about Pekao SA and Project Room brand-new art indicative # 80

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

Contributors: Magdalena Szwed, Bogdan Sadecki, Janusz Turakiewicz

President: Krystyna Woźniak-Trzosek

Columnists: Małgorzata Zaleska, Maja Sujkowska, Chałas & Partners

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

Photographers: Jan Balana, Łukasz Giersz Polish Market Online Editor-in-Chief: Wiktoria Grabowska Sales: Phone (+48 22) 620 38 34, 654 95 77

Editor-in-Chief: Tomasz Ćwiok t.cwiok@polishmarket.com.pl

Natalia Suhoveeva natalia.s@polishmarket.com.pl

Managing Editor: Ewelina Janczylik-Foryś redakcja@polishmarket.com.pl

Ewelina Surma e.surma@polishmarket.com.pl

Writers/Editors: Maciej Proliński, Jan Sosna, Sylwia WesołowskaBetkier, Grażyna Śleszyńska

Public Relations: Joanna Fijałkowska j_fijalkowska@polishmarket.com.pl

Design and DTP: Foxrabbit Designers Printing: Zakłady Graficzne TAURUS – Roszkowscy Sp. z o. o., www.drukarniataurus.pl Circulation: 8,000 Oficyna Wydawnicza RYNEK POLSKI Sp. z o.o. Nr KRS 0000080385, Sąd Rejonowy dla m.st. Warszawy XII Wydział Gospodarczy Kapitał zakładowy 80.000,- zł. REGON 011915685, NIP 526-11-62-572 Published articles represent the authors’ personal views only. The Editor and Publisher disclaim any responsibility or liability for their contents. Unsolicited material will not be returned. The editors reserve the right to edit the material for length and content. The editors accept no responsibility whatsoever for the content of advertising material. Reproduction of any material from this magazine requires prior written permission from the Publisher.

Editorial

Apparently it seems that the Polish economic diplomacy has taken off. In December 2011 Poland and China became strategic trade partners. In March the Ministry of Economy ran a review of trade promo projects codenamed “Go China” with which Poland plans to enter the Chinese market. In April Chinese PM Wen Jiabao met in Warsaw with Polish PM Donald Tusk and President Komorowski and attended some cultural events. At the same time Deputy Prime Minister Waldemar Pawlak met a group of Japanese business people. Earlier, Poland’s Minister of Foreign Affairs Radosław Sikorski took a trip to India accompanied by a delegation of business people. PM Tusk also tripped the world heading a delegation to the Arab Emirates, which included business executives as well. But the government focuses not only on building trade with emerging global economies and other countries which sit on piles of cash. It also promotes the idea of expanding abroad among Polish business. Its message is that Poland has a strategy to promote exports and investment and that there are the instruments and money to effectively help those companies who fall into one of the 15 business categories that have been selected as strategic. The effort is pragmatic. Although Poland’s exports in 2011 were record high (EUR 135 billion) and growing, Polish exports to the EU markets dropped slightly (-3.4%) vis-a-vis the 2010 numbers. While Poland’s exports to Russia, Belarus and Ukraine soared last year, those countries can impose protectionist measures if the need be. Thus Poland needs to establish a wider trade perspective to keep the growth of its GDP this year and beyond. Looking beyond the EU and Poland’s direct eastern neighbors is a welcome change in Poland’s economic diplomacy. Since the entry into the European Union in 2004 Poland has been focused on the EU-related affairs including trade. The single EU market, indeed, was good for Polish exporters, especially those selling food and furniture. While the Polish focus on the EU culminated in the second half of 2011 with the Polish presidency over the EU, the presidency, it seems, must have been a big lesson for Polish diplomats and politicians who saw first hand some big lobbying and the protection of national interests in Brussels. The world is big and there are markets, such as the Chinese consumer market, that are still awaiting Polish products. It is high time Polish exporters put their footprint there too. :: Krystyna Woźniak-Trzosek President Rynek Polski Publishers Co. Ltd.

It is interesting to see how US companies, supported by US diplomatic efforts, work to broaden and deepen business opportunities in Poland. The American Chamber of Commerce in Poland, in cooperation with the US-Poland Business Council and the Polish Confederation of Private Employers Lewiatan, has published a white paper The Next Level: Polish-American Economic Cooperation, 2012 and Beyond on business relations between Poland and the US, as a run-up to the US-Poland Business Summit scheduled for June 20 in Warsaw. The summit will involve highlevel government representatives, with the US delegation led by Secretary of Commerce John Bryson. The idea of the summit originated during talks between US President Barack Obama and Polish Prime Minister Donald Tusk during Obama’s visit to Warsaw in May 2011. The paper maps American investments in Poland across all sectors of the economy, including energy, BPO and IT. It details impediments to further business growth and proposes reforms that seem necessary to broaden and deepen trade and investment between the two countries. Speaking at the press conference in Warsaw where the white paper was presented to the media, AmCham Chairman Joseph Wancer highlighted some of the main points of the white paper. He said that the government in Poland should follow the business community in the way it utilizes IT and communications technology to boost business efficiency and cut operating costs. “E-government cuts costs and improves the quality of the services rendered to the citizens by the administration,” Wancer said. Identifying problems in Polish-US cooperation, Wancer noted that the number of Polish students at American universities has dropped in recent years—a trend which he said needs to be reversed. Wancer also said that while Poland has become one of the global centers of the BPO sector, Polish universities somehow fail to adjust their curricula to the future market demand for professional labor. Henryka Bochniarz, president of Lewiatan, said that one of the most difficult subjects on the agenda for the summit will be the energy sector, especially when it comes to regulatory issues. “Poland will look at legislative solutions in different countries, including the US,” Bochniarz said. Eric Stewart, president of the US-Poland Business Council, noted that a number of cooperation agreements will be signed by Polish and US company executives during the summit, although he declined to reveal any details. American companies have been present in Poland for over 20 years. Their impact on the Polish economy is significant, but it is good to see that despite that, US business is still pushing furher. This only can lead to mutual benefits. :: Tomasz Ćwiok Editor-in-Chief

5 /2012 :: polish market :: 5

Polish President Bronisław Komorowski met with his newly elected German counterpart Joachim

Visit to Hungary

Gauck, who paid a two-day working visit to Poland in March. The visit was supposed to confirm good relations between the two nations, good Polish-German bilateral cooperation and an excellent cooperation between the two countries in the European integration. “Poland is a European country of freedom. And, as a person supporting freedom, I feel good where freedom is at home,” said German president. ::

Picture Wojciech Grzedzinski

Polish-German relations

Picture Wojciech Grzedzinski

Komorowski in Kosovo Bronisław Komorowski and his wife paid a two-day visit to Hungary in March, on the occasion of the Polish-Hungarian Friendship Days proclaimed by the two countries’ parliaments in 2007. During the visit, President Komorowski and his Hungarian counterpart Pal Schmitt presided over talks held by their delegations. Among the leading topics was cooperation within the Visegrad Group, economic relations and a NATO summit in May. ::

President meets OECD chief

Monument to victims of Smolensk air crash in Russia? A design for a monument commemorating the victims of the air crash in which Polish President Lech Kaczyński and 95 other people had died in 2010 near the Russian city of Smolensk while on their way to an event marking the 70th anniversary of the Katyń massacre was presented in April 3 to President Komorowski. The design had been selected in a contest announced last year by Polish President Komorowski and Russian President Dmitri Medvedev. “We will try to ensure that the monument in Smolensk is built by joint, Polish and Russian, effort,” President Komorowski said. “I am sure that this form of permanent commemoration, one supposed to unite rather than divide, is the most appropriate and that it may also be expected by all those who have lost their relatives and friends in the Smolensk crash.” The winning design is the work of sculptor Andrzej Sołyga, architect Dariusz Śmiechowski and graphic artist Dariusz Komorek. ::

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Photo Piotr Molecki

Bronisław Komorowski on Easter met the Polish contingent in Pristina, Kosovo. He met with soldiers of the 25th rotation of the Polish military contingent and 20th rotation of the police contingent. At present, there are around 220 Polish soldiers and military personnel and around 120 policemen and other staff on a mission in Kosovo. The president was accompanied on his visit by Stanisław Koziej, chief of the National Security Bureau, Tomasz Siemoniak, chief of the General Staff of the Polish armed forces, and General Mieczysław Cieniuch. ::

Bronisław Komorowski met in March with Angel Gurria, Secretary General of the Organization for Economic Cooperation and Development (OECD), to discuss the most important conclusions of the Economic Survey of Poland 2012 report published by OECD. In their latest report, OECD economists project that the Polish economy will grow by 3% this year and 2.7% next year. The Polish government hopes to reduce the public deficit this year to 2.9% of GDP while OECD predicts that the deficit will reach 3.2% this year to fall to 2% next year. Gurria spoke about issues related to Russia’s entry to OECD, Ukraine’s application for OECD membership, OECD’s opinion on the impact of the deteriorating demographic situation on economic growth and reforms needed to maintain growth momentum in the face of population decline. ::

Fot. Maciej Śmiarowski/KPRM

Consultations between Polish and Spanish governments

The Polish and Spanish governments held consultations in Warsaw April 12 devoted to the European Union’s agricultural and cohesion policies and other issues. The prime ministers of Poland and Spain, Donald Tusk and Mariano Rajoy, presided over the meeting.

One of the objectives of the meeting was to deepen European integration and continue measures designed to overcome the economic crisis in the European Union. The head of the Polish government said Madrid and Warsaw will be able to take effective steps within the EU to promote a favorable financial framework. “We live in times which are very important for Europe and I think that the consequences of the economic crisis require a joint effort from us all aimed at establishing a basis for a new economic stability so as to restore growth and jobs,” the Spanish prime minister said. He added that Poland and Spain both meet their obligations and accept this responsibility. ::

Fot. Maciej Śmiarowski/KPRM

Foreign policy in 2012

Minister of Foreign Affairs Radosław Sikorski reported to the parliament March 29 about guidelines for Poland’s foreign policy in 2012. The parliamentary meeting was attended by President Bronisław Komorowski, Prime Minister Donald Tusk and members of the government. A success of the Polish foreign policy is that it has become clear, predictable and stable. The primary goal for 2012 is to pursue a policy contributing significantly to improving Poland’s

security, raising its affluence and strengthening its power. Sikorski said that with each passing year Poland was closer to taking its due place in the world and that the country was coping well in economic terms, despite the global crisis. He also cited the recently published OECD report which says that since 2007 Poland has been the fastest growing economy among the 34 OECD member states. The minister also spoke about Poland’s membership in the European Union. He said that, despite adverse circumstances, the Polish EU presidency was regarded as the best since the Lisbon Treaty’s coming into force and that Poland was associated with economic growth, modernity and effective management. Sikorski noted that in 2015 Poland should be ready to adopt the euro and added it was in Poland’s political interest to join the group of countries which use the single currency. ::

Real separation of Church and State? The working teams of the concordat commission of the government and the Catholic Church met in March to discuss the system of financing religious organizations in Poland. Cardinal Kazimierz Nycz and minister of administration and digitization, Michał Boni, presided over the meeting. The government proposed that funding of religious organizations should come from voluntary personal income tax deductions of 0.3%, which would replace the existing Church Fund which is maintained by the state budget. The government estimates that the amount deducted by taxpayers to finance the religious organizations may reach around PLN100 million annually, a figure corresponding with what the state now spends on faiths. The new system could be put in place in 2013. At present, the state provides around PLN90 million to the Church Fund annually. The money is used to finance social insurance and health insurance contributions for missionaries and nuns and monks in enclosed orders, and 80% of social and health insurance contributions for other members of the clergy. Some of the money goes to charitable activity and the conservation of historical sacred buildings and objects. The Catholic church, and other churches in Poland, fear that after the reform they will have much less money. Minister Boni admitted that in the initial period this might be a problem and added that the government would consider the payment of subsidies to offset the loss. He added that the money from the income tax would go to a single account and it would be up to the Church to distribute it. ::

Smolensk air crash, two years on

Ukrainian prime minister pays visit to Poland Polish Prime Minister Donald Tusk met in March with his Ukrainian counterpart Mykola Azarov. The two prime ministers presided over a meeting of the Polish-Ukrainian committee for the UEFA Euro 2012 championship. At a joint press conference, they said the two countries were fully prepared to host the tournament, despite difficulties, especially the global crisis. Among the topics discussed was also economic cooperation and Ukraine’s integration with the European Union. The prime ministers discussed prospects for Polish-Ukrainian relations in the context of Ukraine’s declared will to continue its integration with the EU. Despite the friendly

atmosphere, Donald Tusk touched upon the trial and conviction of former Ukrainian Prime Minister Yulia Tymoshenko. “ From the perspective of Poland and our EU partners, with the intention of gaining the best understanding of the circumstances and arguments of the Ukrainian government, we wish to express our concern over this situation,” he said. The prime ministers also talked about the situation of the Polish minority in Ukraine and the Ukrainian minority in Poland. Prime Minister Azarov said the Polish consulate would start its operations in the eastern Ukrainian city of Donetsk in May. ::

Prime Minister Donald Tusk and members of his government paid tribute April 10 at the Powązki cemetery to the victims of the 2010 air crash in which Polish President Lech Kaczyński was killed near the Russian city of Smolensk, together with 95 other people on board, en route to an event commemorating the 70th anniversary of the Katyn massacre of Polish officers in 1940. :: 5 /2012 :: polish market :: 7

Our Guest

A new lease of life Polish Market talks with Rafał Baniak, Deputy Minister at the Ministry of the Treasury, about the ministry’s take on the privatization of state-owned companies.

economy from energy and chemical firms to financial institutions such as the bank PKO BP and insurers such as PZU. W hat is the revenue target for 2012? We plan to generate a minimum of PLN 10 billion in 2012. So far we have seen 30% of that amount. Obviously the real amount of money we will generate in 2012 will depend on the situation on the capital markets but I am sure that the goal will be met.

Last year was a good year when it comes to the privatization of state-owned companies.How many companies do you think the ministry will divest of this year? What are going to be the hottest offers? Indeed, 2011 was a very good year for the privatization process in Poland which significantly brought us closer to the end of the process of economic transformation of our country. We accomplished 500 projects which turned out to amount to PLN 13.06 billion in privatization revenues. We continue to dynamically pursue further goals. There are approximately 300 companies lined up for privatization in 2012-2013. Some of them are supervised by other government ministries than the Treasury. Our strategy for privatization is laid out in a document entitled ‘Privatization Plan for the years 2012-2013’. There are also companies that have significant importance for the Treasury. At present we are working on the privatization of the real estate developer PHN Group. The prospectus will be submitted to the Polish Financial Supervision Authority in the second quarter while the IPO on the Warsaw Stock Exchange is planned by the end of the first half of 2012. Another project is the privatization of power holding ZE PAK planned in autumn. To sum up we plan to sell our stakes in companies in different sectors of the

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How does the current economic crisis influence the privatization process? The economic crisis is a bit of an overstatement. I would say it is an economic slowdown. Despite that the Polish economy is relatively strong when compared to other countries in Europe the privatization processes are a little bit more difficult in current market conditions. We have seen it already when we had to postpone the sale of a stake in the retail bank PKO BP last year because of the instability of the eurozone. The Ministry of the Treasury is monitoring developments on capital markets and as any market player we try to take advantage of the situation. For instance, we picked a good moment for the sale of a 7% stake in the energy group PGE on the Warsaw Stock Exchange in February. It worked well. W hen the privatization process started the most wanted investors were strategic investors who acquired entire companies. At present the ministry has three different privatization procedures: public auctions, open tenders and negotiations for preselected investors. Are the three different types of privatization meant to reflect the different needs of different investors and companies? Indeed. But along with the three types of privatization procedures there are among others two more: privatization through communalization and privatization through contribution of Treasury shares to another company. The best way to handle privatization depends on many variables such as its size, the number of employees, structure of ownership, or the importance of the company for the local community. Small and

medium-sized companies are most often privatized through public auctions or tenders. In turn, for big companies, we resort to negotiations undertaken on the basis of a public invitation which require a deep involvement on the part of investors and are time-consuming. In other words, negotiations are a good way to privatize big companies. When it comes to the sale of minority stakes that the Treasury still has in some companies the best way to sell is offer the stakes to the majority shareholders. Each sale, however, is a result of a thorough analysis of what is the best way of selling for the company in the given market environment. W hat types of investors are in demand when it comes to the development plans of the companies in the offing? The Treasury takes all investment propositions into consideration that meet our requirements. We are open to all investors; we have no preferential treatment for any class of investors. How do the trade unions react to the privatization plans of the ministry? Can the unions stall a privatization process? In order to stand for the best interest of the Treasury we look for the best investors available for the companies lined up for privatization. Some companies that we privatize are underinvested, which impacts their competitiveness in the marketplace and consequently the situation of their workforce. In such circumstances there is no reason why those companies should not be given a chance to get another lease of life with a private owner who has the capital and the know-how it takes to develop the company further. ::

The Treasury takes all investment propositions into consideration that meet our requirements. We are open to all investors; we have no preferential treatment for any class of investors.

Turning Vision into Value

www.hochtief-polska.pl

Our Guest

From good to great There are many reasons why Poland’s capital city is emerging as the financial center of Central and Eastern Europe.

In business terms, Warsaw is one of the most prominent European metropolises. During the last two decades, the city, like the whole country, went through significant changes. Warsaw has become a more and more open and friendly city both for investors and the inhabitants, as well as for our guests. One in four new companies in Poland is established in Warsaw, and 30% of all companies with foreign capital in Poland have chosen Warsaw as their central location. Warsaw is home to the Warsaw Stock Exchange, one of the largest trading floors in Central and Eastern Europe. According to the IPO Watch Europe 2010 report from PwC, in 2010 WSE gave way only to the London Stock Exchange as far as the number of initial public offerings and their total value are concerned. But Warsaw is not only the home of such a dynamic trading floor but a city that works hard to promote the development of the financial sector. Such a strategy is anchored in the fact that almost all financial institutions that provide services in this part of Europe are located in Warsaw. The World Bank, the International Finance Corporation, and the European Bank for Reconstruction and Development started their Eastern European operations in Warsaw gaining there their experience in dealing with Central and Eastern Europe. Being the financial center of Central and Eastern Europe also means raising new opportunities of development through innovations and stimulating economic growth on both the national and local levels. Creating an investment-friendly environment, also in the infrastructural area, has a considerable influence on the city’s prospects both in the economic and demographic sense. Emerging companies or branches of international enterprises that pop up in Warsaw trigger highly-qualified professionals to relocate to the city. Warsaw is attractive to the pros in Poland and abroad. Market analysts note that the so-called “brain drain” that the city suffered in the 1990s and later, is currently being replaced by an influx of specialists and intellectuals looking for job opportunities and enriching the scientific and technical potential of the city, a labor market phenomenon referred

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to as brain gain. This leads to multiple benefits for the city: Warsaw is developing and is becoming more attractive for new investors and citizens while the taxpaying population is on the rise which gives the city more opportunities to develop further. One of the key factors forming the city’s position on the map of the financial markets is the method of its resource management. Not without significance here is the debt policy which influences the assessment of the city’s credit rating. Warsaw complies with internal regulations concerning liabilities set at the level of 55% of its annual budget. It needs to be underlined that the city has adhered to stricter solutions than those applied in the case of the country’s central budget for which the public debt cannot exceed 60% of Poland’s annual gross domestic product. The aim of Warsaw’s debt policy is to limit the use of commercial loans for the benefit of the loans provided by international institutions such as the European Investment Bank, but also the loans taken through the issuance of debt securities. Warsaw was the only Polish municipal government to implement in 2009 the Euro Medium Term Note issuance program, the so-called EMTN, which gives immediate access to the European capital markets. Until now only a few commercial units

had such a program at their disposal. Also in 2009 Warsaw issued the first tranche of bonds on a foreign market, worth EUR 200 million, which was the first bond offering from Warsaw since the end of World War Two. Currently the value of all bonds sold by Warsaw totals PLN 2.1 billion. The basic aim of the city’s municipal government is to ensure economic stability. Predictable business conditions make one of the best incentives a city can offer to a business. Warsaw’s success in this field can be seen in the positive assessment the city receives in business rankings and ratings. Warsaw tops the annual ranking European Cities Monitor 2011 by Cushman&Wakefield. The CNN Fortune magazine, which lists 15 business locations, put Warsaw next to Stockholm and Doha in 2011. But with the A2 rating that Moody’s Investor Service has been assigning to Warsaw since 2007, the city’s potential for business is clear to see. In turn, Fitch rates Warsaw at AAA. These are the highest possible ratings. Warsaw’s ambition to be the regional financial hub for Central and Eastern Europe is well founded. It is a city that is open to changes, has a highly-qualified labour force and a huge potential for commercial growth. It has an excellent office and logistics infrastructure as well. Business costs in Warsaw are competitive with London and Frankfurt but also with Budapest, Prague and Vienna. The perfect position of Warsaw is supported by the country’s healthy economic growth and the high rate of investments related with Poland’s membership in the European Union. All investments, including those financed from the EU, need support from the capital market, which positively influences the development of the financial services market. ::

Warsaw’s ambition to be the financial hub for Central and Eastern Europe is well founded. The city is changing fast, has a highly-qualified labour force and a huge commercial growth potential.

Cover story

Power of Analytics Polish Market talks with Alicja Wiecka, Managing Director of SAS Institute in Poland.

How did the company made a start in Poland? SAS Institute has been delivering software solutions since 1976. The company established its presence in Poland in 1992. Before there had been no market for SAS products in Poland. In 1992 only big corporations used IT. I participated in the transformation of the IT sector in Poland into a modern market. The objective for our country was to catch up with Western

Some SAS Institute business solutions created in Poland were offered in Western Europe as well as in such markets as Kuwait, Japan, and the US.

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Europe and introduce changes to the economic structures. We were setting up banks and enterprises. With the knowledge acquired in the West I knew very well that SAS can play an important role in those processes. I had the know-how necessary to quickly and efficiently build businesses based on modern technology and expertise. So was our idea of developing the SAS Institute business in Poland and it worked. We aimed at the central bank NBP. The other client strategic for us from the point of view of the

development of our business was BRE Bank. As a commercial and dynamic bank, it intended to build its advantage based on IT and technology solutions. Since its beginnings it was meant as a truly modern bank. Our cooperation with BRE Bank president, Jan Zieliński, significantly contributed to success. He gave us his trust, understood the need of building a competitive advantage based on knowledge and was open to our ideas of enhancing banking processes and their verification. As a client of BRE Bank, I could check myself how the solutions implemented by SAS were functioning. With time, it was the presidents of other banks who telephoned us and asked for similar services. BRE Bank, after applying advanced technologies, took away a mass of clients from other banks creating confusion on the market. All that was partly due to cooperation with SAS Institute. A great support was credentials from the NBP where we introduced a monitoring system for all banks’ reports. We put the foundation to the whole IT system which greatly supported a modern banking system in Poland with advanced monitoring and supervising according to the world’s best practices. The cooperation with it gave us an opportunity to develop and to win over the banking sector. It was the first liberalized sector and it aimed at development and modern solutions. But once you had established your presence in the banking sector it was easy to disseminate the IT standards to other sectors. W hat was 2011 like for the company? 2011 was, in many ways, a good year for our company. First of all, we managed to generate an excellent 19 percent revenue growth. What is more, we reinforced our position in the key market sectors where we significantly extended our cooperation with old clients and won new ones. We are especially happy about the dynamic growth of our business in the public sector as a growing number of public institutions adapt our solutions. The Central Statistical Office used our platform to efficiently execute the census in 2011. It is a very innovative project which became

Cover story a staple for our best practices in Poland and globally. Is the banking sector still a strategic client for products and services offered by SAS Institute? The banking sector accounts for almost 50% of our income in Poland. The clients are connected with us and we are connected with them and grateful for their trust. In Poland, due to a highly technologically advanced infrastructure we have for many years implemented IT solutions identical with Western standards. It often happens that it is here, in Poland, where in cooperation with Polish clients we work out innovative solutions which are later offered by SAS throughout the world. Polish clients of SAS have been willing from the beginning to participate in adaptation of IT to its new applications in the commercial sector and in public institutions. It often happens that they recommend our products in other markets and most up-to-date systems are created in our country. For example, Kredyt Bank has one of the most advanced management systems in the KBC Group. The situation looks similar in many international finance and telecommunication groups where Polish branches have cooperated with SAS for a long time. From the start, together with our clients, we had a vision of comprehensive IT solutions which could significantly support the client’s business by increasing their income, improving processes and reducing costs. We did not aim just at introducing technology on the market but pursued more ambitious goals to create optimal solutions based on IT tools and know-how which would address all demands of clients. What does SAS Poland look like in comparison to SAS operations in other countries? In Poland we have one of the highest market shares of all SAS branches in the world. Many of the innovative products or solutions were created in Poland. We have made here a new line of products—business solutions which have been sold by SAS for over a decade throughout the world. What is your strategy for product development in Poland? We made business solutions based on our technology, on the main

production of SAS but with our business logic, our consulting. We worked out the whole methodology of product sale as well as product names. Poland became a strong centre of excellence. The SAS Institute business solutions created in Poland were offered not only in Western Europe but much further: in Kuwait, Japan, the US. Together with a great market success the business solutions entered the main SAS Institute product line and they are still developed and improved attracting a lot of interest on the part of clients. Is the availability of manpower becoming an issue? How do you search for talented IT specialists, programmers, analysts? For over a decade we have been in cooperation with universities in Poland, mainly with IT departments which are popular with most talented students. We are looking for the best students and invite them to cooperate. We have established Academy of Young Talents where students can have training during the summer holidays. The recruitment process is not easy and the tasks are rather difficult. For 2 months the students learn our solutions and programs. However, it is due to this process that we obtain the best students who will stay with us for many years. As a result, the majority of our staff are graduates from Academy of Young Talents. Each year we receive up to twenty young people. We also aim to encourage them to work for pleasure and satisfaction rather than out of duty. When creating innovative projects one

can learn a lot but also fulfil one’s passions. I do want my team to be satisfied with their work for SAS. W hat are the main challenges for SAS Poland in 2012 and beyond? The last 20 years have been good for SAS Polska. We are in the lead of software and consulting service providers in Poland. We are also in the lead when it comes to the best employers in Poland. New challenges lie ahead for us and new opportunities for a dynamic business growth. We have the technologies and the competencies that are sought after by our clients. In the era of big data no company can be in business, not to mention being successful, without a system of efficient and effective data exchange, processing and analyzing. This is about the competitive edge. Companies need to have access to detailed data to analyze it in real time and this is provided exclusively by analytical software. Apart from winning new business, specialized software is used in risk management. Risk management has become a priority especially in the financial sector while the issue of asset misappropriation is still urgent. In all those three areas our technology has no match in tests, while our developers guarantee seamless and timely software implementation. Companies which cooperate with us do it in anticipation of having more opportunities for creating new market strategies that will give them business edge based on the knowledge of SAS Institute professionals. :: 5 /2012 :: polish market :: 13

International relations

A giant step Polish Market talks with Sun Yunxi, the Ambassador of China to Poland, about the intensification of Poland-China relations. 14 :: polish market ::

5 /2012

In April Poland welcomed the Prime Minister of China, Wen Jiabao, the first Chinese Prime Minister to visit Poland in the last 25 years. What had led to such a development? Warm relations between two countries do not develop overnight. They require many efforts by all the people involved on many levels.

Since 2010 there have been in Poland almost 100 official high-level delegations from China which included a few government ministers, some political leaders, some mayors and local governors, military and defense delegations, educators and hundreds of business leaders and entrepreneurs. All those delegations were making efforts to promote our

International relations bilateral relations, which lead to the visit of our prime minister.  What change do you anticipate in PolandChina relations after the PM Jiabao visit? Our trade relations will intensify. The Chinese business will invest more in Poland and buy more from Poland. There will also be a new momentum in other areas, such as cultural cooperation and tourism, but we have to wait and see.    Who will accompany the prime Minister this time?  The Prime Minister will be accompanied by a delegation of over 200 people including bankers, investors and entrepreneurs. They are looking for investment opportunities and we are also expecting a number of contracts to be signed during this visit. In what areas?  We expect to sign a few memorandum agreements and letters of intent about a number of infrastructural projects and also in manufacturing of consumer goods, pharmaceuticals, electronics, production and telecommunications, to name just the few.  Some agreements will be signed in the presence of the two prime ministers and others during the economic forum. Which sectors may be promising for the Chinese investors in Poland?  Chinese investors look at a range of sectors but also at the privatization program of the government. Some Chinese companies take steps in that direction. Others look at what the Polish Information and Foreign Investment Agency has in the offing.  How do you see the transformation in investment and trade relations with Poland since you became the ambassador here? When I arrived in 2010 China was ranked 7th largest foreign investor in Poland. By the end of 2011 China made a leap to number four. In that time there was also a strong growth in bilateral trade from USD 9 billion to USD 13 billion. Poland has a big trade deficit but it is being reduced because China buys a lot from Poland today. One of the most exported commodities from Poland is food. Is the Chinese market ready for Polish food?  Indeed, we have opened the poultry and pork market. We also opened the market for dairy products, milk powder and cheese.  I also see a great potential for Polish cheeses, which are high-quality and relatively inexpensive. Even Polish vodka is getting very

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The Ambassador of China is a professional diplomat and during his career has visited more then 80 countries. Prior to his post in Poland, he was serving as diplomat in UK, France, Pakistan, Afghanistan, Cambodia, South Korea, India, and Italy. He was also acting as the spokesperson for the ministry of foreign affairs of China for a period of 4 years. In his post in Warsaw since 2010. ::

popular in China. We know that the environment protection in Poland is on a very high level so it makes the products of Polish agriculture even more welcome in China. What is the cooperation between Poland and China in education? In 2010 there were only 300 Chinese students in Poland but last year the number grew to 1,035 and it may reach nearly 2,000 by the end of this year. Nearly 300 Rectors of Chinese and Polish universities have collaborated so far to develop exchange programs between our universities.  Which other sectors of cooperation do you plan to develop between our countries? Tourism can support friendship and increase our commercial cooperation as well. I would like to develop more tourism exchange between our countries. There is a great potential in this area. Last year alone over 7 million Chinese tourists visited Europe. Unfortunately only about 20,000 came to Poland. I would like to make efforts to promote tourism in China so the number of Chinese visitors in Poland increases by hundreds of thousands every year. This is possible. At Expo China, Poland had a nice pavilion, which attracted over 8 million visitors and obviously made a vast contribution to the promotion of Poland in China. Also, the December 2011 visit of Polish Pre sident Bronisław Komorowski to China had a very good reception in China. It was broadly covered by the national media. As a result, many organizations in China write letters to the Chinese embassy in Warsaw to find out more about Poland. How do you plan to promote the tourism?  I work with the Ministry of Sport and Tourism to hold a tourism forum in Poland which will bring tour operators and agencies from both countries together. The forum will take place in Warsaw in September. How do you view the opening of a direct connection between Warsaw and Beijing by LOT?  This is definitely another good effort made by PLL Lot. The plan is now to start the flights by the end of May. We expect that the numbers of travelers will rapidly increase. PLL Lot works in cooperation with the Chinese airlines and when we see the demand grow

on the Chinese airlines will support more air connections between our countries too.  It looks that Chinese banks are coming to Poland as well?  So far two Chinese banks have applied for a license in Poland. How their business will develop we shall see. Will China invest in Polish Government bonds?  This is a big question and I know that such decisions are done by our financial institutions following careful studies. Polish government bonds have very good reputation and maybe some Chinese banks will invest in that kind of financial instruments. It is business here. Poland has not requested any financial support from China. There is no financial crisis in Poland. How many Chinese companies are already active in the Polish market?  According to our information there are already 26 Chinese companies in business in Poland, among them 10 are very big state owned companies, and 15 are medium-sized. When it comes to the private sector, there are some 300 privately-held companies in Poland including small Chinese restaurants.  When I came to Poland, the local Chinese companies and nationals which have permission to stay and do business here and be considered as the Chinese community, were only 3000 but now there are more then 10,000 Chinese people, living and working in Poland. Can we expect to have a Chinatown in Poland in the near future? This kind of development is a natural progress based on immigration laws and close cooperation with the local communities. We as government do not interfere in creating such communities, they are created in many countries just by themselves in response to the local needs. I hope the situation in Poland will be no different. I’m looking forward to the emergence of a strong and vibrant Chinese community in Poland because it would be just another great development in the relations between our countries. ::

Polish Market wishes to extend warm thanks to Jacques Tourel in Warsaw for facilitating this interview.

Photo by Kuba Woźniak

International relations

The Chinese embassy in Warsaw

Better late than never Poland gets serious about business with China Tom Cwiok with Ewelina Jankczylik-Foryś Earlier this year in a move to establish regular air connection between Poland and China Poland’s national air carrier PLL Lot signed a two-year maintenance agreement with Boeing Shanghai Aviation services. The new business was welcomed by Boeing Shanghai’s CEO, Bernard Hensey, who said his company looks forward to a long and mutually beneficial partnership with PLL Lot. Under the agreement Boeing Shanghai will perform maintenance services on PLL Lot’s Boeing 767300s. The first airplane was already induced at the Shanghai facility to conduct a check. But while the importance of China for business is a universally acknowledged truth the world over, not too

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many Polish companies grasped it, or so it seems. “Until now, the presence of Polish companies in the Chinese market is very limited,” says Andrzej Kaczmarek, chief of KPMG China Practice in Poland. Kaczmarek hopes, however, that with the signing of strategic partnership between Poland and China in December last year, mutual business relations between the two countries will get a kickstart. “We hope to see a growth in the inflow of Chinese investments to Poland but also hope that the Chinese government will take steps to attract Polish investors as well,” Kaczmarek says. He notes that the Chinese government has pinpointed strategic economic areas in its Five-Year Economic Plan 2011-2015 and a best practice

guide for foreign investors, in which it stated that foreign investors can expect preferential treatment in project financing and tax incentives. “We see business opportunities for Polish companies in smaller Chinese cities, with populations of over one million, but also in western parts of China which are not yet saturated with foreign investments,” Kaczmarek says.

Are they going? The question is, however, whether or not Polish companies are really interested. According to a KPMG global survey entitled Succeeding in a changing world, “Polish business leaders do not fully recognize the opportunities in emerging markets. Only 7 percent of them pointed that this is a priority, while in the whole

International relations

Europe this was more than 20 percent.” Explains Mirosław Grabarek, partner at KPMG: “The reason for this may be that the majority of Polish companies still perceive the Polish market as a dynamically developing and most profitable and thus it is their priority to tap into that potential while viewing expansion opportunities in foreign markets rather as a distant alternative.”

President Bronisław Komorowski and his wife got a touch of China last December

The Polish government is well aware of that. To propel Polish business to China, it has orchestrated an unprecedented promotional effort, codenamed Go China!, which is engaging all government agencies that each handles foreign promotions for Poland in their own specific field of interest and a couple of government ministries as well. Says Sławomir Majman, president of PAIiIZ, an agency that handles big foreign investors in Poland. “We take solid steps when it comes to China. It is about merging the experience and the budgets of the ministries of Economy, Agriculture, Foreign Affairs, and Sports and Tourism, but also government agencies such as the Polish Agency for Enterprise Development, The Agency of Agricultural Markets, the Polish Foreign Investment and Information Agency and the Polish Tourism Organization.” Majman underlines that the effort has good financial backing too. “The money is there,” he says. “It comes from the EU funds as well as the the agencies’s own budgets.” But while PAIiIZ is focused on helping Chinese investors find their way in Poland it is PARP that handles the promotions of the Polish economy in China. “We have noticed a huge interest among small and medium-sized companies in the Chinese market,” says Bożena Lublińska-Kasprzak, president of PARP. We have organized several trade missions to China. We will focus on the cooperation with trade organization in China.” But PARP will also tap into the potential of European business organizations, such as the EuropeChina Chamber of Commerce and the China-based European Center of Small and Medium-Sized Companies and that can promote the Polish economy outside of the EU. PARP

Photo: Wojciech Grzedzinski/KPRP

With a little help

in cooperation with the center will launch conferences for small companies interested in expanding in the Chinese market. “Our goal is to promote Polish companies and Polish exports to China,” Lubińska Kasprzak says. “We will lecture about a very important issue in China—the protection of intellectual property. We expect that several hundred companies will take advantage of those conferences for they will be available online as well.”

Driving inward traffic Along with trying to sell Polish stuff in China, the government-sponsored marketing push focuses on selling Poland as a tourist destination. “We target individuals with a web site in Chinese offering tourist information about Poland,” says Radał Szmytke, President of POT. “We also try to tap into those tourists from China who plan to visit Europe. The planned opening of the Warsaw-Beijing air connection is pivotal because for the first time Poland will be the landing point in Europe for Chinese tourists. So with this Poland has a chance to become an entry point for them into Europe, especially Central Europe.”

a good development of Poland’s bilateral relations with Beijing is “an absolute priority” for the Polish diplomacy. “China is becoming a global economic powerhouse, and is on the way to become number one global economy in 20 years,” says Pomianowski. “This makes us focus on China carefully.” The shift in Poland’s strategy in approaching China took place late last year when nation’s president Bronisław Komorowski met in Beijing with China’s President, Prime Minister and other top politicians, and signed a bilateral agreement of strategic partnership. According to Pomianowski the agreement is a tool with which Poland can enter the Chinese market. To use the tool efficiently will require a determination on the part of the government and the private sector. “We can always do more when it comes to sending information to China,” says Pomianowski. “We want to the Chinese to visit Poland and Chinese investors in Poland. But we also want our export to China grow. This will require a major effort from all government ministers.” ::

Political cooperation Business with China can not move forward without a political agenda. According to Jerzy Pomianowski, deputy minister of foreign affairs,

We want to the Chinese to visit Poland and Chinese investors in Poland. But we also want our export to China grow. This will require a major effort from all government ministers. 5 /2012 :: polish market :: 19

International banking

Chinese banks — no longer a distant land Two Chinese banks have established their presence in Poland.

Since the inception of reforms in the Chinese banking sector in 1978, Chinese banks have seen some 400fold growth of their total assets, increasing annually by 20 percent on the average. In the same period the US banking sector grew only nine times. It was therefore unavoidable for China to surpass the US when it comes to the total assets held by their banks. The moment came in mid-2010. There were many factors contributing to that, but arguably, one of the

most important was the fixed exchange rate of the yuan to the dollar, which was being gradually lowered each month starting at the beginning of 2010. Despite it, measured in the yuan, the Chinese banking sector’s assets grew 15 percent in this period, while, measured in the dollar, the US banking sector assets grew by 3 percent. It needs to be highlighted that, regardless of its size, the Chinese banking sector is very well managed. Its

individual components have been created for a particular reason set forth by the government. Five large commercial banks (Agricultural Bank of China, Bank of China, China Construction Bank, Industrial and Commercial Bank of China and Bank of Communications) make up over a half of the entire sector. The state executes its strategic activities via three so-called “Policy Banks” which are responsible for the development of rural areas (Agricultural Development Bank of China), infrastructure (China Development Bank) and commerce (Export-Import Bank of China). These banks act in a slightly different manner than other commercial banks as they provide credits mainly to projects of strategic importance and acquire funding for new credits from loans granted by the central bank (or other large commercial banks) or from issues of government-guaranteed bonds. Local banks—municipal and rural credit

Bank of China

The Industrial and Commercial Bank of China

Bank of China is regarded the oldest Chinese bank— it was founded in 1921 as a “successor” to the Government Bank of Imperial China. Until 1948 it had served as a central bank. Later on, when the civil war in China was over, it was divided into two parts – one, named Bank of China, continued its activity in the mainland, while the other, along with the Kuomintang government, was relocated to Taiwan (where it continues to operate as the Mega International Commercial Bank). BOC is currently the second largest lender in China (with regard to credits granted) and the tenth largest bank worldwide with regard to market capitalisation. Its branches are located on each continent, which makes it one of the best-known Chinese banks. Since 2006 the Bank of China’s shares are listed on stock exchanges in Hong Kong and Shanghai. ::

Founded in 1984, the Industrial and Commercial Bank of China is the fourth member of the “big four” group of state-owned Chinese commercial banks and the only bank established during the period of financial financial sector reforms (implemented after 1978). The bank has been responsible for accepting deposits and granting medium-term investment loans. It was the People’s Bank of China, the Chinese central bank, that had served these functions before. Since its very foundation, ICBC has been the largest bank in China. In 1992, the value of its assets comprised 31% of assets of all banks in total. ICBC handled 47% of all domestic transactions performed by so-called specialised banks (all state commercial banks and other private and public commercial banks), excluding BOC. On October 27, 2006 ICBC was floated on the stock exchanges in Hong Kong and Shanghai, gaining capital of USD 21.9 billion, which remained world record for another 4 years (until floatation of Agricultural Bank of China). Prior to the IPO, in January 2006 three strategic investors were introduced to the bank. These were: Goldman Sachs (USD 2.6 billion), Allianz (EUR 824.7 milion) and American Express (USD 200 milion). Their role was to improve ICBC worthiness in the eyes of foreign investors and to introduce western know-how to the bank. ::

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International banking cooperatives or municipal commercial banks—are of much lower significance. A greater part of the Chinese banking system continues to be state-owned via Ministry of Finance or Central Huijin Investment Co., a company established to manage the state’s shares in banks. However, more and more banks are constantly going public in order to acquire new capital for development. Even though, the state holds a controlling stake in most of the Chinese banks listed on the stock exchange.

Foreign banks in China Foreign expansion of banks, even these non-state ones is also a part of economic policy; each acquisition or establishment of a new division requires Beijing’s approval. Moreover, entering a new market is not the aim per se – the banks should be present in the locations where Chinese business blossoms. The Chinese business, on the other hand, is present in the locations having access to output markets for Chinese products, raw materials needed in the Chinese industry, as well as valuable knowhow. Mr. Ma Weihua, President of China

Chinese banking sector – data as of late 2010

No. of institutions

Policy banks & the China Development Bank Large commercial banks

No. of employees

Net profit billion PLN

Balance sheet total billion PLN

59 503

3 441

1 545 050

232

21 088

237 158

6 702

147

206 604

3 531

Rural commercial banks

96 721

124

Rural cooperative banks

223

81 076

675

2 646

550 859

2 874

212

24 908

941

36 017

784

396

152 820

1 578

3 769

2 990 716

404

41 739

Joint-stock commercial banks City commercial banks

Rural credit cooperatives Other financial institutions Foreign banks New type rural financial institutions and Postal Savings Bank Total

Source: CBRC 2010 Annual Report

Merchants Bank, said: “Our customers have gone abroad. Shouldn’t we be following them?”.

Chinese banks in Poland In recent months, two Chinese banks have entered the Polish market—Bank of China and Industrial and Commercial Bank of China. The strategy of the Chinese banks is not clear yet. It may be presumed, however, that the banks will

focus their attention on market research and penetration, especially in such sectors as power industry, construction or mining industry. Yet, their priority task will be to support Chinese transactions and enterprises in Poland :: Agata Geppert Research &Analysis Manager at Dąbrowski Finance Sp. z o.o. a.geppert@dabrowskifinance.eu ADVERTISEMENT

5 /2012 :: polish market :: 21

International relations

Working from the ground up Polish Market talks with Prof. Marek Tukiendorf, Vice Rector for Science and International Affairs at Opole University of Technology about how the university builds relations with China.

In December last year Polish President Bronisław Komorowski visited China. This year in April Chinese PM Wen Jiabao visited Poland. Are we seeing the dawn of a new era? It is a very important visit as far as the official relations are concerned. It is an important symbol, but you have to remember that soon somebody else will be heading the Chinese government. You have to remember that it is important to draw a line between the official high-level relations and the grassroots business relations. To understand where the PolishChinese relations are you have to take a look at the last 20 years. Had it not been for the cooperation between Polish and Chinese academic circles, the relations between our countries would have been null. China was not atop of Poland’s list of countries with which to build good relations. Universities, however, which are free to pursue any policies kept their eyes on China because they knew the country’s economy was growing and so was the Chinese cultural, scientific and academic potential. Those relations were not artificial but real, instinctively broad and deep. This, among other things, is why Poland is on the Chinese radar when it comes to building relations in business and investment. How do you see the role Poland may play for China? Poland wants to be a gateway through which the Chinese business enters the EU markets. There is no better way to benefit from the Chinese involvement in Europe today. It is a big opportunity for the Polish economy to use the momentum to its advantage. Why do the Chinese choose Poland? Of course it is not by accident. The Chinese have been looking at how Polish-Chinese relations evolved. The relations between the academic circles were

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an important factor of the overall picture and turned out to be one of the key arguments for the Chinese to choose Poland as their gateway to the EU. As a matter of fact, the Chinese did not have to choose Poland at all because our relations are not full. For instance until now there is no bilateral agreement between Poland and China to honor university degrees. It happens that Poland’s neighboring countries have all signed such treaties which China. So the Chinese have been very patiently approaching Poland over the years. Despite initial problems that some Chinese companies experienced in Poland, they do not want to throw in the towel. Quite to the contrary, they plan to make their presence in Poland more intensive. The entry of Bank of China to Poland is a sign of an upcoming huge intensification of Chinese investment and trade. It is a very good sign for Poland. Since 2008 Opole University of Technology and Beijing University of Technology have been jointly running the Confucius Institute in Opole. How do you evaluate the institute’s work? There are four Confucius Institutes in Poland at present. They have been

established to diagnose the attitudes of the Poles to Chinese culture and China as such. For them it is extremely important to see how they are received in Poland, whether there is interest and demand for their courses and how their activities impact on the relations with local communities, governments, and business leaders. The Confucius Institute in Opole, established in 2008, has passed that test in flying colors. The Chinese know there are people in Poland who read Chinese literature, poetry, who dig Chinese culture. The institute has developed a range of statutory activities, such as language courses. Some of our courses, to our surprise, generated more interest than we originally anticipated. For instance the calligraphy course has turned out to be an excellent activity not only for those interested in calligraphy per se but also autistic children, who find calligraphy a way to express themselves. But the institute also engages our local government. The speaker of the regional parliament sits on the program board of the institute. The Opole city council has recently decided to make a Chinese language version of its website. By the way, it is my sincere advice for every company and local government in Poland to have web content in Chinese because when the Chinese see a foreign website in Chinese it stimulates their curiosity and interest. This may lead to very beneficial mutual relations. How does the institute facilitate business relations at present? The institute offers its extensive expertise in evaluating the quality of business propositions that our businesses get from Chinese entrepreneurs. So the institute is becoming a backoffice which facilitates business with China on the local government level. It is a big niche to fill and the sooner we do it the better. Our example goes to show that the Confucius Institute is a very good center to develop grassroots business relations with China. Cooperation with China is an opportunity for Poland. It is a big, historical opportunity and such that must not be wasted. ::

Energy security

Time for a plan B In December 2015, the 5,008 MW units that do not meet the EU standards will be disabled from the Polish power system. Such a resolution is provided for in Annex XII of the Accession Treaty of Poland to the European Union. Jan Sosna The Polish power system is based on baseload power plants with a total installed capacity of approx. 31,000 MW. It features great disparities both in terms of geographic location and energy sources. Most power plants are located in southern and central Poland. It is unfavorable not only from the point of view of the energy security of various regions of the country, but also because of an over-extension of transmission lines, which obviously leads to excessive losses of energy during the transmission process (estimated at 10-12%) and creates costs. Out of approximately 150 TWh of electricity produced yearly in Poland, 3 TWh are lost in the transmission networks and an other 15 TWh in the distribution networks. In comparison with Western Europe, Poland has a disproportionately large share of low-voltage distribution networks, which means that the most remote users receive only the 170-180 V power instead of 230 V. In addition, the average rate of depreciation of network infrastructure is 71%, and in some places it exceeds 90%. Baseload power plants are concerned by the problem of advanced depreciation too. Approximately 60% of boilers and 55% of turbines have been in operation for over 30 years and must be replaced.

Polish energy sector is dominated by several large (on a national scale) state-owned companies that in a natural way tend to recreate rather than drastically change their technologies and market positions. Prof. K. Żmijewski, secretary of the Social Council of the National Emissions Reduction Program, characterized this problem in “Polish Energy Policy until 2030”, comparing the strategy of energy companies with the state-desired energy strategy. “The question arises,” says prof. Żmijewski, about the sense of adopting any state policy if the largest state-owned (in majority) companies do not take it into account. Also, the sum of the companies’ strategies does not correspond with the sum of state policy: companies do not see the energy efficiency at all. The share of renewable energy is planned by companies at 19%, and by the state at 25%; perhaps other energy companies like Iberdrola and EDF will make the difference. The state-owned companies want to produce as much as 49% from fossil fuels, although it is inconsistent with the state policy. But who cares? I am not so much afraid of these forecasts, because I know that the plants planned by the companies will not be built. These are a kind of energy avatars – virtual space objects,” says prof. Żmijewski.

Energy avatars

However, Brussels bureaucrats turned out to be the masters of obstruction. Before any agreed deadline, they present the Polish side with another list of questions and requests for additional information, and the negotiation agenda gets restarted. As of today, the Polish energy sector has still no approval from the European Commission, it does not know which derogations with regard to the purchase emission permits to count on, it cannot close the business plans and arrange the funding for investment programs. Due to the crisis in European economies and the eurozone, the situation has changed on the energy market: the prices of CO2 emission permits from 2013 are the great unknown. Investors did what they could—they prepared projects, auctions’ guidelines, some have even already announced the auctions. For the Polish energy balance, one thing is certain—after 2015 the installed generating capacity will decrease by about 15%. During the three years and a half that remain, no major power plant will be built in Poland. There is no point in counting on the implementation of the plans outlined in the state “Energy Policy” paper or in the strategies of energy companies—these are just energy avatars.

Do we have a plan B?

How did it happen that the Polish energy policy and the climate policy of the European Union are on a collision course? First of all, because of the rapid economic growth (an average annual GDP rate was 4.5% in the past 20 years), Poland began to run out of power-generating reserves. The recent economic crisis has slowed this tendency. Nevertheless, the heating demand during the frosty winter of 2012 increased to the extent that the peak power reserve in the system was whittled down to 800 MW, which means that a failure of one large power-generating unit would be enough for energy shortages to be felt. This shows how vulnerable the Polish energy sector is. Secondly, the

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15 000 MW, and the completion of 2/3 of them would allow to satisfy Poland’s demand for energy until 2020. The list includes of course the projects that meet the target of reducing CO2 emissions: the gas-steam units, cogeneration units, coal-fired supercritical units, CO2 capturing (the so-called CCS) units, biomass-fired units, etc.

5 /2012

What is this conviction based on? In 2009, Poland conditionally signed the Climate and Energy Package. It was put as a condition that from 2013 to 2020 all the plants whose construction was started before 2010 will be exempted from the obligation to purchase CO2 emission permits. The catch is that the list of these plants was to be agreed with the European Commission by June 2011. The first stage of the negotiations went surprisingly smoothly – both sides agreed that the term “start of the construction” would be defined according to the Polish construction law. On the basis of this agreement, the Ministry of Economy drew up a list of the “started” energy investments – these represent a total of

Two years ago, the Social Council of the National Emissions Reduction Program (SR NPRE) was established under the Minister of Economy, consisting of over 100 leading experts in various fields. Its head is prof. Jerzy Buzek, former President of the European Parliament, while deputy chairmen are prof. Michał Kleiber, President of the Polish Academy of Sciences (PAN), and Janusz Steinhoff, former Deputy Prime Minister and Minister of Economy. The Council’s work is organized by prof. Krzysztof Żmijewski from the Warsaw University of Technology. The Council has carried out several studies and reports, culminating in a package of guidelines that gradually enter the path of legislation. The

Energy security

Council also sought to address the question of how to acquire additional 6 500 MW in the Polish energy balance by 2016? The reply was as follows: improve energy efficiency - 2 000 MW; allow a substantial increase in imports - 2 000 MW; provide an efficient support for renewable energy and develop prosumer energy - 2 000 MW; build regulatory sources – 500 MW. Expenditure necessary to implement a “plan B” was estimated at EUR 10 billion. What does it cover?

lighting streets and cities. Isn’t it worth it?,” says prof. Żmijewski.

Efficiency – the cheapest source of energy

“We do not foresee a particular increase in import capacities beyond what we have today,” says Dr. Henryk Majchrzak, President of PSE Operator. “In recent months, we have rebuilt the connection with Ukraine (the ZamośćDobrotwór line).The project of the PolandLithuania power connection is underway. Its first stage is expected to be completed by 2015, which will allow to approximately 500 MW to the Polish National Power System (KSE). Investments are also planned for the connections with Germany. Scheduled to be completed by 2014, they will increase the safety of work with the German system. It is about regulating the German-side flows, affected by the instability of German wind power plants, to safe levels. For this reason, it would be very hard to increase imports on the connections with Germany and the Czech Republic, and we cannot count on such imports in difficult situations”, warns Majchrzak.

Already 3 years ago, the Minister of Economy ordered a report by the consulting firm McKinsey & Company to examine the possibility to introduce in all sectors of economy efficient technologies, the costs involved and possible effects. “There are many ways of improving the energy efficiency of vehicles, buildings and industrial machinery, and thus reducing their energy consumption. If all the measures of improving the energy efficiency we mentioned are implemented, the annual growth of electricity demand in the years 2005-2030 would fall from 1.5% to about 0.9% per year,” claim the authors of the report. Another initiator of the measures boosting energy efficiency is the Prime Minister’s Office. As part of its competencies regarding national security, including energy security, it initiates the introduction of new norms and energy standards, especially in the construction sector. Together with the SR NPRE it had a significant part in the preparation of a new law on energy efficiency, and a related system of white certificates, analogous to that successfully functioning in France and other countries. Poland is currently excessively fulfilling the agenda of the EU 3x20 Package, but experts believe it is necessary to quickly launch further mechanisms, and above all to promote the conviction that the cheapest solution is reusing the energy that had previously been used for other purposes. “When you are in a block of flats, take a look at the elevator. It runs empty and the light is on. Why? Because such is the provision. Why? No one knows, but because of that a 200MW turbine spins, coal and workforce must be paid for, and CO2 emission permits much be purchased. Some may say it is a trifle, stupidity, but there are thousands of such elevators in Poland. We could save 40% of the cost of

Import – end of the energy island? Poland is an active player on the European energy market. It exports a daily average of 400 MW worth of energy, being one of the cheapest energy producers in Europe and using a 600 MW cable that links it to Sweden. If need be, will Poland be able to quickly and effectively import large amounts of energy?

The green revolution The share of renewables in Poland’s energy mix is still small, although it has shown a high growth rate in recent years, mainly thanks to wind power plants and biomass firing. According to the data of the Energy Regulatory Office (URE), at the end of 2010, installed capacity of the renewable energy sources accounted for 7%. At the same time, approximately 9.3 TWh (6%) were generated from renewables. The share of the particular RES was as follows: 45% co-fired biomass, 28% water, 16% wind, 7% biomass, 4% - biogas and minute quantities of photovoltaics. The main problem is the overhaul of the RES support system. Poland introduced the green certificate system which turned out to be illdefined. This led, on one hand, to such pathologies as financial support to hydroelectric power plants that have long since been amortized, and, on the other hand, to degenerating co-fired biomass as a renewable energy source. Low quality requirements of old coal installations allowed a massive replacement

of coal with biomass and additional revenues, which, in turn, led to the import of biomass in the quantity of over 3 million tonnes per year, the production of pellets and their subsequent grinding, burning of valuable timber, etc. These practices make it possible to present the European Commission with better reports, but the fact is that they contradict the idea of biomass as an effective local source of energy, and thus cause real damage to the environment. The new Polish law on renewable energy sources, which is currently in the making, will categorically eliminate such pathologies and guarantee durability of regulations over the course of 18-20 years. Another problem is connecting RES to transmission and distribution networks, which has for many years hindered the development of small and dispersed energy sources. The new law will provide for the obligation for network operators to purchase energy from renewable sources, which will result in an increased demand for it. Dr. Henryk Majchrzak, President of PSE Operator, promises significant progress in this field, but with reservations: “We have prepared a plan for the energy system development until 2015 and we have obtained the approval of the Energy Regulatory Office (URE) for expenditures that we calculated very precisely - investment by investment, station by station, line by line—until 2016 to the amount of approximately PLN 8 billion. They include, lines from north to south, important for wind farms that for evident reasons are located in the north. These will be either new or transformed multi-track 440 kV lines. The third issue for the “green revolution” involves launching a small, dispersed energy sector and prosumer sources. These issues have been addressed for the first time in the drafts of the new energy law and the law on renewable energy. The debate is dominated by two trends. Large energy companies accept microsources of energy, but on the condition of their bureaucratization, the introduction of stringent technical and operational standards, and combining them with smart grid solutions. There is also a “populist” trend which postulates the prosumer energy to be recognized as free of formal obligations, taxes and with minimum technical standards. It further envisages that in case of a drastic increase in energy prices resulting in power shortages, Poland will act accordingly and resort to cost-effective, alternative power sources. :: 5 /2012 :: polish market :: 25

Energy

Hope of deliverance Polish Market talks with Piotr Grzegorz Woźniak, Deputy Minister at the Ministry of Environment and Chief National Geologist of Poland, about different estimates of shale gas deposits in Poland.

According to the estimates by the US Geological Survey, Poland’s shale gas resources may reach some 5.3 tcm Yet according to the Polish Geological Institute, which published its estimates of shale gas deposits last February, between 346 to 768 billion cubic meters of gas in shale rock formations is available. Why such different numbers? There are several different methods of estimating shale gas resources. The USGS method applied in the report by Advanced Resources International and published by US Energy Information Agency (EIA) in April last year is rather a simplified

volumetric version of estimating technically recoverable resources. Quite another approach was applied by Polish Geological Survey (PGI) in the report of March 2012. Although both reports are based on mostly historical and not recent data, the outcomes were different due to much more conservative approach by PGI. In the PGI report all estimates are analogues to US shale plays actual production (output on the wellhead). Both reports are reliable enough to justify continuous investments. I would rather stick to the PGI estimation as more conservative approach is better at the early stage of development. The positive thing is that the estimate may only grow along with the progress in exploration. Why did the PGI resolved to use a conservative approach? What determined the method was the quantity and quality of samples available to the PGI. There were a few factors at play here. The Institute could resort to only a limited number of deep drilling samples, some 170. However, only about 40 were technically speaking reliable. Another issue was that the institute could use samples that were in the public domain. In Poland, unfortunately, the companies that have been licensed for exploration are not legally bound to share their geological data with the geological authorities immediately. So the PGI had a relatively few new samples to use. Acting upon advice from the USGS, the institute picked up a new method which so far has not been widely used because there are other, simpler methods available. The conservative approach in this method is that instead of estimating resources by volume or by technical availability, the PGI looked at the quantity of gas that by itself

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gets out of the rocks. This is the socalled “analogue” estimate as it is in fact a comparison with other productive plays. It does not look at the technical potential or geological potential. It looks at the volume of gas that is out of the rock by its own. As a result, the final estimate is closest to industrial resources. And the difference in industrial and geological estimates may range between 60—80%. The US is the largest producer of gas from shale in the world today. What are the differences between shale formations in Poland and generally in the US? Shale rocks in Poland do not let the gas out as easily as shales do in North America. Shale formations in Poland differ from American ones by lithology, mineralogy, depth, thickness and TOC content. On average they comprise rocks with more clay content. That differences require adjustments of fracking method to make gas flow. What are the conditions for a further PGI research into shale gas formations in Poland? To have new research we need to have new data and samples. They may be provided by companies which explore for shale gas in Poland. This requires a good cooperation with them. But as I said they are not under any obligation to let share the data with the PGI instantly. D o you think that Poland will change the law in this respect? We will certainly work on that. The state has to have unrestricted access to such data. It is not about preventing investors from getting into the field to drill—it is about safeguarding access to vital geological information for Poland who is the owner of all natural deposits in its territory. ::

Energy

Eternal energy Polish Market talks with Maciej Nowicki, former Minister of Environment, about the prospects for the development of solar energy in Poland.

We are meeting on the occasion of the release of your book Here comes the era of the Sun. You point is that that solar energy is infinite, safe, clean and free... However, a rather small amount of solar energy is used in a systematic way and not only in Poland. Why? Twenty years ago, I wrote that in the 21st century the humanity would make a full use of this inexhaustible and free energy source. As little as 0.03% of the Sun power is sufficient to meet all energy needs of Earth. Solar energy is extremely dispersed while reaching the Earth’s atmosphere. For a long time, people were not able to use sunlight for power generation an effective manner. In recent decades, however, a great progress has been made. Today, there are tremendous technological advances that put down the costs of solar collectors and photovoltaic panels. Therefore, I believe that just a few years, solar energy will be able to compete in financial terms with fossil fuels. Today, it is not competitive yet, but in fifty or a hundred years’ time, it will become the dominant source of energy in the world. Your book is more a manual than a specialist publication. Who is your book’s target audience?  On one hand, the book is intended as a tool for knowledge building. On the other hand, it is meant to stimulate some wider debate, which,unfortunately, is not going on at all in Poland. In my book I discuss three basic methods of using solar power: solar collectors, photovoltaic panels, solar power plants. The publication is aimed at a wide range of readers interested in the future of the energy sector, as well to the opinion leaders, including politicians, economists, and journalists; not necessarily to the energy professionals. I think that Poland needs today a „signal”, but also a strategic research program, similar to European or American government programs dealing with these issues. Twenty years have passed and such programs are still not there. We are at the starting point. In Poland we have a rather uneven distribution of solar radiation throughout the

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MW, in the Czech Republic 2,000 MW, while in Poland only 1.5 MW. We certainly do not have suitable conditions to build solar power plants, but we can successfully use solar technology to heat and air-condition buildings, and to heat utility water. These technologies represent a perfect test-ground for scientists too. We have great physicists. They are certainly worth investing in!

Professor Maciej Nowicki is former Minister of Environmental Protection, Natural Resources and Forestry in the governments of Jan Krzysztof Bielecki and Donald Tusk. In 1996, he was awarded “Der Deutsche Umweltpreis”, one of the most prestigious environmental awards in Europe, by the German Federal Environmental Foundation, in recognition of his overall achievements in the field of environmental research and policy making. With the money that came with the price Nowicki established a foundation that supports outstanding Polish graduates in environmental protection :: year. In fact, only six months are sunny... Is it worth fighting for? The EU countries that have a similar insolation as Poland have seen in the past few years a huge investment boom in the field of solar collectors and photovoltaic systems. Sweden has three times more solar collectors than Poland does. In 2010, in Germany these systems had a total capacity of 17,000

The solar market in Poland is emerging. How advanced is it now? We can talk about such a market, knowing that it is still far from saturation in comparison with the EU average. In Poland, there are currently about 60 companies that manufacture solar panels. Interestingly enough collectors enjoy the greatest popularity in Silesia, an area which still to a great extend depends on coal. But Silesia is also home to many domestic manufacturers of solar panels of which 50 percent is exported. In Poland the purchase of such a panel for a single-family house is subsidized by the National Fund for Environmental Protection. The cost of such an investment varies from a few to several thousand zloty. It will pay for itself within several years. W ho we can learn from the innovative use of solar energy in our climate zone? How do for example Germans stimulate this market? The market potential of solar energy in Poland is not exploited, because of the lack of effective instruments of support. How did Germans handle it? By adding one sentence to the law act. Nothing more. The government did not pay anything, it is the society that paid. In 1990, the program “1,000 solar roofs” was launched. Then, for ten years, little was done in this matter, until in 2000 when a legal provision was introduced stating that for each kWh of power generated from solar energy, the investor i.e, the owner of a given system, will 20 receive EUR 0.45 for the period of twenty years. Over time, as many as 40 countries have implemented similar financial support mechanisms for all types of renewable energy sources. In Europe, only Poland and Romania did not. ::

Our company exists since 1984 and is one of the largest and most reputable companies for prime and basic emergency supply of electricity and heat. We offer everything that is related to the generator sets, starting with the selection phase, through the execution of necessary projects, together with arrangements, delivery, complete specialist installation and commissioning with the warranty and post warranty. Our products are characterized by the highest quality, which is documented by ISO 9001 certificate. Our systems can work 24 hours a day, 7 days a week, acting in both emergency or primary as well as the only source of power. Now you can have electricity and heat of any power, in any place, any time you want. Whole range of products and services on primary and emergency power-supply area:  diesel generator sets ranging from 9,5 kVA to 2,5 MVA – stationary containerized power plants – fully autonomics ranging from 9,5 kVA to 2,5 MVA  Combined heat and power (CHP) generators driven by: – Diesel fuel ranging from 9,5 kVA to 2,5 MVA – natural gas or biogas ranging from 44 kW to 2 MW – biofuels ranging from 100 kW to 900 kW  Complete systems can count to 32 units working in parallel in synchronization

– G enerator sets that converts waste heat energy into electrical power using the Organic Rankine Cycle (ORC) – low voltage switchgears in many configurations, also with electric power meters equipment, synchronization of many different power sources or Automatic Transfer Switches – power supply sources monitoring and steering systems – I T grids powering systems – premises and medical equipment

Complex service: We offer professional support you may need. We provide everything what is required to assure continuous supply of electric energy:  free consultancy and choice of solutions – free inspection – realization of all needed projects with all agreements according to fire and industrial safety regulations

– device building and supplying – comprehensive, professional installation and start up, also turn key investments – device maintenance employers training – warranty and post-warranty services, 24 hours a day, all year round – delivery of replacement generator set for time of repair of service works

PPUH HORUS-ENERGIA Sp. z.o.o. 05-070 Sulejówek, ul. Drobiarska 43 Tel.: (22) 33 15 300 Dział handlowy: (22) 33 15 331 Serwis: (22) 33 15 322 Fax: (22) 33 15 323 w w w. h o r u s - e n e r g i a . p l poczta@horus-energia.pl

Renewable energy

Eternal gas Polish Market talks with Leszek Świrski, Director of Ener-G, one of the biggest Polish producers of gas from landfills.

Entrepreneurs do not know what to do next and withhold investments. Ener-G has its origins in the United Kingdom. Do you see any significant differences in the functioning of both markets? Ener-G is a Polish company with the British capital. For ten years, we have generated clean energy of a capacity between 50kW and 15MW. The cogeneration market in the UK has been operational for at least twenty years, and Ener-G has exploited gas for all this period. We operate a total of 150 MW in generation capacity in the UK. While setting up a Polish branch of the company, we tried to bring some experience, but the local market is younger, very specific, and in fact we had to work it all out from scratch. I would not compare these markets, not least because of very different rules with regard to extending the certificate validity period.

How do you assess the regulatory system of the certificates’ market in Poland? We do have in Poland mechanisms supporting the green economy. Where I see the problem is in the absence of continuity in planning policy. Support is granted in stages, and when an investor decides to enter the market, he or she wants to know what to expect. Developers in this business already run enough risk. For example, green certificates are valid until 2018, while the yellow certificates, which provide support for cogeneration, expire by the end of 2012.

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The company generates energy using various technologies: biomass firing, co-generation, methane extraction. Which renewable energy sector have you invested the most in? In the municipal waste management. We make use of mine methane that appears in the course of biodegradation of the municipal waste that is dumped in regional, municipal or private landfills. We make use of the landfill gas and recycle it. So far, it has been our core business in Poland. Do you cooperate with local authorities on the basis of publicprivate partnership? Yes. Most of the time, we invest our own resources in the equipment and technology, then we extract landfill gas, convert it into electrical or thermal energy, and share profits with the municipalities. So far, we have set up 17 such installations. One

of the largest is located in Mława. The local landfill produces enough landfill gas to generate the amount of steam equivalent to 2MW of electricity and 1.5 MW of thermal energy, which makes a total of 3.5MW of clean renewable energy that is entirely consumed. It is the only installation based on such a technology in Poland. What steps should the landfill administrator take so that such a plant could be set up? The most important is the efficient and effective exploitation and utilization of landfill gas and its conversion into energy. If the administrator lacks experience in this field, it is essential to find the appropriate partner. Ener-G has significant experience in the use of landfill gas. Its annual conversion output in Poland is enough to produce about 17 MW of green energy. With each megawatt of electricity generated from waste, we prevent 35,000 tonnes of CO2 from polluting the environment.   W hat is the average time for the owner of the landfill to get the return on investment? With the participation of Ener-G, the owner will get the return on investment immediately. The total investment cost is entirely covered by Ener-G. In which direction will the company develop in the coming years? Currently, the company is posting strong growth due to the exploitation of mine gas, as well agricultural and industrial biogas. Also, we intend to further develop in the cogeneration sector through generating energy in combination with natural gas. The Group is present in many European countries, where it operates about 1,500 power generators. ::

The most important is the efficient and effective exploitation and utilization of landfill gas and its conversion into energy. If the administrator lacks experience in this field, it is essential to find the appropriate partner.

www.roadshowpolska.pl â&#x20AC;˘ info@roadshowpolska.pl tel.: (+48) 22 357 09 77, (+48) 22 498 92 77 Organizer

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Logistics Baltic Container Terminal (BCT Gdynia)

equipment for container handling and add new depots. We are investing in intermodal transport, which – in our view – should be based on railways. Because of the poor condition of railway tracks and insufficient railway connections, it is still more cost-effective in Poland to transport goods by road.

Michał Kużajczyk, marketing manager at Bal-

North-South. Future Poland as a transit country between Scandinavia and Southern Europe was the topic of the Skandynawigacje conference held in Warsaw in March. Executives of the largest companies operating on the Polish transport, forwarding and logistics market expressed the view that the north-south transport corridor running across Poland was an important factor conducive to the development of the Polish logistics industry. However, politicians have not yet fully appreciated its significance.

Rafał Zahorski, general director of Magemar Polska: Magemar is a member of the Magemar, Dongemar, Magetra and CBT-Magemon group of logistics companies, which has a large network of offices throughout Europe and in China, and handles more than 6 million tonnes of cargo annually. What are the prospects for the development of the port of Szczecin? The infrastructure which provides access to the port from the sea needs to be modernized to enable the passage of handymax-class vessels. The modernization is to consist of deepening the SzczecinŚwinoujście waterway to at least 12.5 meters, broadening it and changing its shape. The ability to use larger ships to transport cargo to and from the port of Szczecin will make the port more competitive and will reduce the cost of the whole transport chain. Turnover in dry bulk cargo, especially imported coal, is on the rise in Poland as is turnover in containerized cargo. But all of the Scandinavian cargo destined for Southern Europe is carried via Germany rather than Poland. The reason is that freight trains are three times slower in Poland 32 :: polish market ::

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than in Germany while lorries are two times slower. We are the only European country with no river transport and the only country where road transport is cheaper than rail transport. We have to start investing heavily in infrastructure. Otherwise, our industry will have no future in Europe. There is one simple rule: cargo will go where it receives cheaper, faster and more professional service.

Dominik Landa, director for business development at Deepwater Container Terminal (DCT Gdańsk): DCT Gdańsk is now the fastest growing terminal in Poland, the leader in handling Polish imports and exports, and a reloading port for ports in the Baltic region. We want to develop to become a Baltic container hub. At present, the terminal has a reloading capacity of around 1 million TEU annually. We are going to expand our facilities to reach a reloading capacity of up to 4 million TEU in 2015. Demand for our services is consistently on the rise and exceeds our capacity, which means we have to continue investing. In the near future, we want to expand our railway siding, buy new

tic Container Terminal (BCT Gdynia): The transport of containers by sea and then by rail is one of the European Union’s goals. The Port of Gdynia Authority is seeking EU funding for projects designed to modernize the port’s infrastructure. We will spend the money to develop intermodal transport. Reloading times will be shortened thanks to the purchase of new reloading equipment. Our primary goal is to improve the quality of rail transport service. Road and depot infrastructure will also be expanded and the ship channels in the port will be deepened to 16 meters to accommodate larger ships. Our port has to be deepened as soon as possible. Otherwise, it will be marginalized. Road transport, which is still dominant in Polish ports, is a problem for terminals. There are also other barriers to the operation of our ports. It takes two days to carry out an inspection in the port of Hamburg, for instance, while in Poland it may take up to 20 days.

Adam Górnikiewicz, director at Trade Trans: Today, the Polish transport, forwarding and logistics market has a chance, which we may exploit to the full or only to a minimum. To achieve success, companies operating in the sector, the government and non-governmental organizations need to coordinate their way of thinking and activities. Trade Trans focuses on international forwarding, and road and ferry transport. In 2010, the company bought a stake in the Curtici terminal, Romania, which is part of the 4th transport corridor running across Hungary to Germany. We are also intensifying our ferry train service from and to Scandinavia. Apart from forwarding, we offer complete logistics services: rail, road, air and sea transport, customs services, reloading, sorting and storage. One of the most important EU research projects with an influence on the efficiency of connections between the Baltic and Adriatic Seas is Sonora (SOuthNORth Axis). It is to be completed in May and indicate an effective way to coordinate work between the Central and Eastern European regions located along the individual transport corridors. Trade Trans took part in the project by analyzing the findings of a study aimed at stimulating logistics services in intermodal transport in the corridor between the ports of Świnoujście and Szczecin and the ports of Rijeka and Koper. ::

Advertorial

Unlimited possibilities The beginnings of their family business were not easy at all, but thanks to their perseverance and innovative approach to business, Anna and Czesław Kolisz succeeded. Interview with ANKOL’s owners, Anna and Czesław Kolisz.

In what circumstances was the ANKOL company established and how did you come up with the idea to get involved in the aviation and automotive sectors? We have always aimed high, and as individuals with a strong sense of commitment, we have never accepted imperfection. On the contrary, every day we proved to ourselves that whatever we do, we do it the best we can. Armed with determination, enthusiasm and faith in the success of our business idea, we decided to set up a company. This was exactly 20 years ago. The name and logo of the ANKOL company come from the first and last name of my wife, Anna Kolisz. At the beginning, there were just the two of us, and we were this company’s only asset. We made use of our experience: mine - in the field of aircraft engineering and my wife’s in administration and management. From the outset, we wanted to run a trading company, operating in the aviation industry. After being granted the ministerial license to operate domestic and foreign trade in goods and services of strategic importance, we were able to expand our activities, while maintaining the specific procedures and quality standards. Today, ANKOL is a modern and innovative company that has become a leading supplier of spare parts and repair services for

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Anna and Czesław Kolisz are receiving the International Star for Leadership in Quality Award in the Diamond category, Paris 2011

manufacturers of both civilian and military aircraft. We supply spare parts for civilian and military aircraft carriers and helicopters. Our main and strategic customer in Poland is the Ministry of Defense. The rapid growth of the company allowed the expansion into the automotive sector. Our car centers offer sale and service for KIA cars, as well as high-quality diagnostic repairs and control equipment services in partnership with Bosch Car Service.

What helps you in building such a strong and recognizable brand? Is it a strategy of high quality and high standards or perhaps competent employees? It is not an accident that we have achieved success nor was it a stroke of luck, especially in such a demanding and responsible sector as aviation. What we achieved, we owe it to our ideas, courage and continuous efforts. The position of the company is the result of the business vision and the development strategy that we adopted 20 years ago, when we were starting this venture. Building a strong, profitable and recognizable brand is of crucial importance in the management of the company, while quality, competence and standards are complementary factors. What is special about providing supplies for the aerospace industry is that flight safety is at stake. It requires the highest quality, which can be helped by a strict adherence to procedures arising from the management systems based on national and international standards. These systems form the Integrated Management System which includes the following: the quality management systems ISO 9001 and AS/EN 9120 for distributors of the aviation, space and defense equipment, AQAP 2120 for suppliers of the NATO member states, the Internal Control System of the products of strategic importance for the national security and environmental management systems, as well as regulations regarding occupational health and safety, and information security. The company has also implemented Russian systems: the quality management system GOST R ISO 9001, and the system of the voluntary certification of aircraft equipment suppliers of the Russian Federation MSTMAK 007-01-03 (the so-called SDS PATI), which meets requirements of the Interstate Aviation Committee. We have also introduced the certified human resources management system “Fair-Play Employment-2007” in line with the European standards. In 2010, the

Advertorial Ewelina Mączka-Kukiełka Head of the U.S. market: Since 2002 we have been the exclusive representative in Eastern Europe of Kamatics Co., the American manufacturer of special, unmanned, self-lubricating bearings. This is our major success. The negotiations took six years, which shows how demanding as a partner this producer of bearings is. We reached the aviation industry with this product line. One of our major clients is SUKHOI with its medium-range airliner Superjet100. The design process of this unique aircraft lasted several years, with 30 companies being involved, among which ANKOL was the only Polish one. The aircraft had its first flight in 2011, and the first few carriers are already in service. As of 2012, one of them will serve the Cracow-Moscow route. We have already signed a contract for the supply of bearings for 20 carriers. Other companies have also shown interest in Kamatics’s bearings, including the Antonov plant in Kiev. In Poland, these bearings are purchased by PZL Mielec and WSK PZL Świdnik.

Agnieszka Ćwięka Head of the Latin American markets ANKOL is present in Peru and Mexico. For a couple of years, we have been registered at their national defense ministries as a supplier of spare parts for aircraft carriers and helicopters for the air forces and the navy. Business negotiations with Latin American partners are very open and spontaneous, which is, on one hand, typical for the culture of these countries, and on the other hand, when

a model of a company, in which along with succeeding in business, we also won prestige and confidence. It is best proved by the fact that the ANKOL company has not been affected by the global crisis, as evidenced by its performance in terms of trade volume and profits. The secret of defeating competitors is not the mere application of new international standards with regard to strategy, but it rather lies in the ability to build and strengthen confidence, prestige and reputation. And since reputation cannot be pretended, you have to make continuous progress while building it. Numerous titles and awards, along with the customers’ confidence in the brand, is a source of knowledge. Stagnation is something we are not familiar with. Our knowledge of global markets obliges and encourages us to take up new challenges and take strides to always be in the lead.

it comes to the Navy, it is the result of their specific needs. I am very pleased that being a woman from a different region in terms of culture, I am highly respected as a partner during business negotiations. Representing Polish companies in Latin America, we have often hosted people from these plants, which led to the conclusion of important contracts between Poland and Peru. Together with the Polish Ministry of Foreign Affairs, ANKOL organized a conference in Mielec for the Polish ambassadors in Latin America.

Integrated Management System was extended to a superior model of Total Quality Management (TQM) based on the QC100 criteria, whose objectives are: customer focus, leadership, employee involvement, process and system approach, continuous improvement and good relationships with contractors. Well-developed and constantly improved internal procedures allow the effective implementation of national and international contracts. Following numerous controls and verifications, ANKOL was honored by the Business Initiative Directions (BID), an organization renowned for its expertise in the analysis of quality programs worldwide, with awards that can be considered the equivalent of Oscars when it comes to quality assessment. These include the International Quality Crown Award in London (2010) and the Diamond Quality Summit Award in Paris (2011). However, despite all the improvements introduced, the company would not be successful were it not for its employees, their creativity and engagement. That is what the key factor of success and the greatest asset of the company is. In a constantly changing reality, with every day being a race against time, it is only thanks to competent, educated and professional employees, skilled in quick responding to new market and business situations, that we are able to face up to this race against time and successfully compete with rival companies. Through personal leadership and the financing of various training projects, my husband and I are trying to enhance professional

development of our employees. In recognition of its friendly corporate culture featuring an exemplary partnership between the owners and employees, ANKOL was presented with the honorable awards: HR Management Leader, Human Capital Investor and the Company of the Year Primus Inter Pares Association. In April 2011, in Paris, we also won the International Star for Leadership in Quality Award. What is the secret behind the success of a Polish family in business? How did you manage to defeat your competitors in this challenging business environment and to win prestigious awards? First of all, you must believe in your success, even though there is no ready recipe for how to achieve it. Business is not only about making profit: the desire to create and successfully cope with new challenges is fundamental. Aware of the negative impact that market volatility has on our business, we are able to identify risks and have the courage to seek new opportunities for development. We owe ANKOL’s success to our mutual trust and support, as well as to our great determination. The way we run our business, in which we have been helped for many years by our son Eryk, is the result of our common goals, mutual support, passion and hard work. We can conclude with satisfaction that working together is for us like tandem-biking. The management policy that we have pursued in keeping with global standards, allowed us to create such

You received the Grand Prix for the Outstanding Exporter of the Year 2010, which means that you work with many foreign companies on a daily basis. Are you focused on any particular market? The award from the Minister of Economy, Waldemar Pawlak, is a very prestigious distinction. We received it for having a 70% share of exports in the overall turnover, and also in gratitude for the efforts we put into building a positive image of Polish economy on the international market. We are currently working with 34 countries, including for example those of the Mediterranean. We are also entitled to participate in the auctions of the NATO member states and those of the U.S. Ministry of Defense. As an aerospace industry supplier, we are registered as a member of Aerospace States Association (ASA). The list of our partners is long and gets longer every year. One example is providing spare parts and repair services for the Russian-made aircraft carriers. We also deliver spare parts for F16 jet fighters and other Western aircraft and helicopters. One of our strategic partners is the Russian company SUKHOI; we supply bearings for its latest civil aircraft Superjet100. This cooperation is possible thanks to our exclusive rights in Eastern Europe for the supply of bearings manufactured by the U.S. company Kamatics Co. Furthermore, our database includes one hundred thousand products and is kept in four languages, including Russian. The multilingual character of our database represents a competitive advantage, as this has led to a substantial increase in the efficiency of business relationship building between the East and West. In 2011, ANKOL’s turnover reached EUR 19 701 524.75, with 44% of this amount accounting for export revenue and 56% was the domestic market share. :: 5 /2012 :: polish market :: 35

Euro 2012

Processing crowds

The Chopin Airport is preparing to receive soccer fans. Agata Kraczek

who will play in the quarterfinals and semifinals. But of course we are prepared to give them all an equally warm welcome”.

Renovation and development   The UEFA’s decision to entrust Poland and Ukraine with the task to organize the European soccer championships was a historic moment for both countries. It will no doubt also be a significant event for the airports in the cities hosting matches at Euro 2012.  So far, the Chopin Airport has been notified about 320 additional aircraft that will carry soccer fans outside the regular schedule. According to the guidelines of the UEFA, the airport should also be prepared to handle about 30 thousand additional passengers within 10 hours before and 10 hours after the end of each match at the National Stadium in Warsaw. Including the regular daily traffic unrelated with Euro 2012, a total of around 60 thousand passengers are estimated to be served every day during this period. “This will be the record traffic for the Chopin Airport, but of course we are ready to handle it,” assures Przemysław Przybylski, the spokesman for the airport. “We expect primarily passengers from the countries whose teams will be playing their matches in Warsaw. In the group stage, there will be mostly Russians and Greeks, while it is hard to say

The Chopin International Airport in Warsaw will serve extra 300 aircraft and 120 thousand extra passengers during the EURO 2012 soccer championships. It is going to be one of the biggest logistical challenges in the history of Warsaw’s airport. ::

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The airport is ready to handle this record traffic, both in terms of organization and infrastructure. As part of preparations for the championships four major investment projects have been carried out: the construction of the central and south piers, which allowed the number of waiting lounges to be increased from 28 to 45 and that of passenger fingers from 15 to 23; a general overhaul of the runway no. 1 and a renovation of the apron PPS3 along the maneuvering area DK-U2, a major restructuring the road system leading to the terminal. Some minor works are still being held in the terminal with the aim to improve the passenger traffic capacity, including increasing the number of security checkpoints and expanding check-in lanes, as well as building an additional passage leading from the departures hall to the luggage claim area. All these works will be completed by the end of May. “All these facilities will serve passengers arriving in Poland not only during Euro 2012, but also in the following years. In this sense, we can say that the organization of the championships has already paid off,” says Przybylski.

The Airport City   Regardless of the UEFA’s Euro 2012, but with the view of raising the prestige of the Chopin Airport, Polish Airports State Enterprise has also launched the

Chopin Airport City project, the first such initiative in Poland. In 10 years’ time, a business park with leisure and entertainment facilities will be created on the area of 22.5 ha near the Terminal A. The project was presented at the MIPIM - International Real Estate Fair in Cannes at the beginning of March, where it gained enormous recognition. “We had several meetings with investors and developers who have shown great interest in our project. We also made a lot of contacts that are of capital importance for the implementation of the project. The Chopin Airport City got off to a good start,” says Michał Marzec, Executive Director of Polish Airports State Enterprise.  Chopin Airport City will be located in Warsaw which, according to a recent (2012) report by CB Richard Ellis, is the second most attractive real estate investment location in Europe, ahead of such cities as Paris, Berlin or Munich.  Chopin Airport City will have a usable area of 165,000 square meters. 17 high-quality, A-Class buildings with modern office and retail space as well as conference centers are planned to be constructed. A railway with an underground station will become operational within this area in early June. The construction of the expressway system around the airport is also nearing an end, which will allow a quick and convenient access to Chopin Airport City from the south and the west.  Thanks to the creative approach to the use of public area, the complex will become a unique urban form and one of Warsaw’s new landmarks. Just as the Chopin Airport itself. ::

– 68 regular connections – 19 airlines – 19 new routes – 3 millions satisfied passengers – VIP & business services

Aviation

Orka – flagship product of Polish aircraft industry Zakłady Lotnicze Margański & Mysłowski SA

The history of the aircraft manufacturer Zakłady Lotnicze Margański & Mysłowski SA dates back to 1986, when Edward Margański, MSc, Eng. set up an aircraft repair and production company. Initially, the company mainly serviced and repaired wooden gliders. In 1990, its business was expanded to include glider design. It took 26 months for the company to design the Swift-S1, a single-seat training glider for basic and competitive aerobatics, and build its prototypes, conduct test flights, obtain a Type Certificate for the glider and launch its production. The success of the Swift-S1 helped the company expand and acquire an order for the design of a two-seater aerobatic glider, MDM-1 Fox, which received a Type Certificate in 1994. The glider was first displayed at the World Glider Aerobatics Championships in Venlo, Holland, where Jerzy Makula won the championship title flying an M DM-1 Fox. The Swift-S1 and MDM-1 Fox are still the world’s best aerobatic gliders, scoring many important successes at international sporting events. Relying on the experience gained over the years in aircraft design, in 1999 the company started to develop a prototype of the Iskra II, a jet aircraft for training purposes. Test flights on the new aircraft, renamed Bielik, were conducted in 2003. The Bielik was designed as an aircraft for basic and advanced training for military pilots, with its basic version intended for teaching basic piloting, aerobatics,

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navigation and flying at low altitudes. In 2001, the company started to work on a new design – EM-11C Orka, a general aviation aircraft which underwent test flights in 2003. In 2006, the EM-11C Orka won two awards in the 14th Good Design competition for the best designed products on the Polish market: Design of the Year 2006, a special award of the economy minister for the best product designed by a Polish designer and manufactured by a Polish producer, and Good Design 2006 in the Work Sphere category. On April 8, 2011, the EM-11C Orka was granted a Type Certificate after two more prototypes and two pre-serial aircraft were built, a number of tests were conducted on the ground and in the air, and documentation proving that the aircraft meets airworthiness requirements was collected. The Orka is a four-seater twin-engine aircraft with retractable landing gear and a comfortable passenger cabin. The basic version of the aircraft is suitable for VFR (Visual Flight Rules) flights at daytime and at night – the pilot has to navigate by visual reference to the ground in appropriate weather conditions. The company is now working to provide the aircraft with additional equipment and to enable flights under IFR (Instrument Flight Rules), which means flying by reference to instruments. The aircraft has an all-composite airframe with a shell structure and a honeycomb filler. Its wing

tips can be foldable, which makes it easier to place the aircraft in a hangar. The wings are provided with ailerons and electrically controlled flaps. Two fuel tanks, each with a capacity of 200 liters, are mounted in the wings. The fuselage has a large upwardsopening door in the front part and a cargo hatch in the central part. The passenger cabin is provided with four separate seats, of which the front ones are reclining and sliding. The seats have three-point inertial safety belts. The hydraulically retracted landing gear is mounted on the fuselage and has gas-hydraulic shock absorbers. This solutions makes it possible for the aircraft to land and take off on virtually any kind of airfield, including those of poor quality and uneven surface. The Orka is called an air limousine. The aircraft is designated for business, training and patrol flights. What sets the Orka apart from other aircraft, apart from its technical features, is a beautiful silhouette, care for detail, user comfort and the ability to come in unique, customized versions. It is possible to mount special devices on this plane, like for example cameras, including night-vision cameras. Aboard the Orka, one can reach any destination within a 1,500-kilometer radius without the need to stop for refueling. The number and amount of subsidies awarded to the Margański & Mysłowski company for the development of the Orka is the best proof of how innovative the aircraft is. Thanks to its efforts and interesting projects, the company acquired PLN15 million in EU funding for new projects, including more than PLN5 million for launching the serial production of the Orka. On December 21, 2011, Zakłady Lotnicze Margański & Mysłowski SA, Canada-Poland Business Bridges Corporation, China International General Aviation Industry Group Ltd. and China Aviation Pioneer Technology (Beijing) signed a framework agreement on strategic partnership in general aviation. Under the agreement, the serial production of the Orka will first be launched in Poland. Then, service centers will be set up in various Chinese cities and the production line will be expanded to include the Chinese province of Hainan. It is the only Chinese province to have opened its skies for flights at low altitudes. The Margański & Mysłowski company is becoming a driving force for other firms operating in the aircraft industry in the Podbeskidzie region in southern Poland, creating a good climate for cooperation. The company is a good example of how to successfully combine experience and a young engineering staff. And it has its doors always open to ambitious and creative engineers. ::

e-logistyka • rozwiązania mobilne w logistyce • koszty i controlling łańcuchów dostaw • wyzwania sektora FMCG • łańcuch dostaw w branży motoryzacyjnej i farmaceutycznej • usługi logistyczne • innowacje technologiczne w magazynowaniu • ICT w łańcuchach dostaw • innowacyjne rozwiązania w transporcie

Zrównoważona logistyka człowiek • środowisko • gospodarka Poznań, 16-18 maja 2012 Organizator:

www.logistics.pl

Logistics

Soccer championships and logistics the EURO UEFA European Football Championship, one of the largest sporting events in the world this year, has come. It is a challenge also for the providers of logistics solutions. Arkadiusz Wojtas Big sporting events are massive endeavors which require big investment potential in their logistics aspect. The event that lasts for a month requires a massive preparation phase, which in the case of the EURO UEFA European Football Championship began at least two months before the event. It will end a few weeks after the finals. Author is “Let’s Play Together” project director at Schenker, a logistics company

Fans going to the stadium to watch their favorite team’s match, usually do not realize how many elements of the logistics puzzle must have been precisely matched before the game can be held. Logistics service for large-scale sporting events such as the Championships and the Olympics involves mainly the fitting out of sporting facilities (technical equipment, construction and dismantling of the stadium stands, the supply of adequate land covers, security, signage), but also the transport of sportsmen and their equipment (including food, diet supplements, medicaments and personal belongings). Logistics professionals are also responsible for ensuring appropriate conditions for fans: the arrangement of fan zones, tickets and accreditations, handling accompanying events, as well as the supply of drinks and food. Furthermore, logistics is needed while carrying out sponsors’ promotional programs, and to properly serve fan zones in different cities. Also television and radio stations require logistical support to transport the necessary equipment to various host cities and the teams’ accommodation centers. A number of challenges associated with the complex management of logistics projects determine the choice of partners to support such events. In the

structure of DB Schenker a special division – DB SCHENKERsportsevents has been formed, specializing in the preparation and providing logistics services for major sporting events worldwide. For this year’s UEFA Championships, DB SCHENKERsportsevents will rely on the company’s previous experience in organizing such events, including i.a., the previous European soccer championships played in Austria and Switzerland in 2008.

UEFA Euro 2012 During the UEFA championships 2012 in Poland and Ukraine, we can above all expect a massive accumulation of supplies and unpredictable demand. This will be the biggest sporting event organized in this part of Europe. According to estimations of various polling companies, more than 1 million spectators will come to Poland and Ukraine, which will naturally lead to an increase in consumption in both countries. The logistics of this event will be characterized by a number of non-standard-size transports and by a strong emphasis on security in supply chains. This will require a high level of flexibility and a well-established, reliable logistics network in order to quickly react to customers’ needs. A certain difficulty during this year’s European soccer championships will certainly be the state of roads, which is far from being ideal, and thus does not provide such work comfort as in Austria and Switzerland during Euro 2008. The proximity of the Olympics in London poses a logistical challenge too, insofar as it requires some equipment, e.g. that of TV stations, to be delivered shortly after the EURO UEFA European Football Championship.

At the border Logistics service for large-scale sporting events such as the Championships and the Olympics involves mainly the fitting out of sporting facilities but also the transport of sportsmen and their equipment.

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Since the EURO UEFA European Football Championship takes place in two countries, a special attention must be given to customs procedures at the

Polish-Ukrainian border check points. What makes it complicated is the fact that Ukraine is not part of the Schengen Area and the European Union. Both the organizers and the fans want customs checks to go as smoothly as possible. DB Schenker will be the recommended provider of customs services in all locations specified by the organizers in Poland: at the border check points with Ukraine, at the airports and other locations in Gdańsk, Warsaw, Cracow, Wrocław and Poznań. In order to streamline customs clearance as much as possible, a solution in the form of a mobile customs agent has been introduced. He is not assigned to one location, but serves clients in different places depending on their needs. This is possible owing to the fact that DB Schenker holds the AEO certificate. The latter allows a number of facilities in the process of customs clearance, such as: the use of simplified declarations with less data to be filled in, a faster and easier access to customs facilitations, less passport and personal controls, the priority over other travelers at customs clearance, the priority handling of requests and customs declarations, separate lanes. The certificate also enables to choose the location of the customs clearance at the request of the authorized entrepreneur, upon a prior consultation with the customs authority. In the era of electronic customs clearance, all you need is a computer and a car in case you are required go to the customs office to show documents or participate in possible revisions. Of course, infrastructural problems will not disappear. But as a company recommended to provide the customs logistics services for the EURO UEFA European Football Championship, we were assured to be offered all the necessary assistance regarding the transportation of equipment. The UEFA championships is going to be one of the most important exams ahead of the TSL sector this year. The logistical success of this event will depend on the quality of the logistics network, as well as on the commitment, passion and experience of the people working on this project. ::

Euro 2012

The Orlen network is ready for Euro 2012 The Orlen Group has launched “Welcome Fans” and “Get the Ball!” campaigns for football fans. During the European Football Championships, customers will have a possibility to pay in foreign currencies on favourable terms. Thanks to new motorway service areas located along the major route, football fans travelling to Poland from Western Europe will be able to enjoy a comfortable break.

The Orlen Group will turn this summer’s European Football Championships into a unique opportunity to carry out a campaign designed to bring together customers who use the Group’s service stations operating under different brands. As part of the campaign, customers buying fuel in the Czech Republic and Germany from Benzina or Star service stations will receive special prize vouchers, redeemable at 150 selected ORLEN and BLISKA stations in Poland marked with the “Welcome Fans” slogan. Starting from April 21st, over eleven hundred ORLEN service stations in Poland will take part in the “Get the Ball!” campaign. Their customers will have an opportunity to win a PUMA football and five collector’s edition footballs, designed exclusively for ORLEN. Moreover, key ORLEN service stations will carry a special range of accessories in the Polish national colours, making life easier for fans travelling by car. “The European Football Championships are a great opportunity to exploit the potential of the ORLEN Group, which operates in four Central European countries, three of which – Poland, Germany and the Czech Republic – are set to experience a significant increase in road traffic in connection with the event. Our “Welcome Fans” campaign spans these three countries. We hope to strengthen ORLEN’s image as a leading business in this part of Europe. Of course, we would also like to win new regular customers,” said Marek Podstawa, Member of PKN ORLEN’s Management Board, Sales. Currently, all customers can pay in the euro at nearly 300 ORLEN service stations, but ultimately such option will be offered at 480 stations, located along main transit routes, in the cities where matches are taking place, as well as on roads connecting those cities.

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“We are well aware that our station network will be a key element of the service system for visitors who will be travelling through Poland during the upcoming football fever. This is why we are determined to ensure additional amenities and a feeling of security to our customers. Our two newest ORLEN motorway service areas, located along the A2 motorway just 5 km away from the German border, will speak volumes for Polish hospitality and the quality of products and services,” added Mr Podstawa. Both stations are located at key points of the A2 motorway, which is the main artery between Warsaw and the European road network. From among 17 other motorway service areas run by PKN ORLEN, the two newly launched sites are the most advanced. They are family-friendly as they have play areas for children and changing tables for babies. The Sosna service station at the A2 motorway will be the first stop for football fans travelling from the west where they will be able to have a rest, shop or enjoy a meal, whereas the Gnilec station will be their final stop before leaving Poland. Both stations have large capacities, which will be very convenient for customers given the heavy traffic expected during the Championships. Twelve filling pumps for passenger cars, four LPG dispensers and eight special-purpose filling pumps for lorries and buses will be available. The motorway service areas in Gnilec and Sosna will offer a wide variety of non-fuel products and services. Apart from traditional ORLEN snacks, the refreshment offering will include lunch meals and desserts. The restaurant area can seat as many as 72 customers, who will be able to rest comfortably and regain strength to drive safely on. ::

www.stopcafe.pl

We are FAIR The Fair Trade sign is an independent guarantee that our coffee has been certiďŹ ed in compliance with international Fairtrade standards. www.info.fairtrade.net

Logistics

Survival of the fittest Transport and logistics sectors need to evolve to grow. Bogdan Sadecki It seems that there is nothing more straightforward than logistics: it is about shipping the right product to the right place at the right time. More specifically, using trade definition, logistics is about shipping the right product in right quantity and right condition to the right place at the right time to the right customer and at the right price. But in the time of economic crisis, the definition of “right”, especially when it comes to the price, has been evolving. The process has taken place despite the fact that retail sales have been on the raise in the last two years in Poland. Today logistics operators find it increasingly difficult to keep their fees on a competitive level. Among the problems that transportation companies face is the relatively underdeveloped transportation infrastructure in Poland, new, higher fees and a relatively low demand for second-hand trucks which makes it hard for small companies to generate cash for new investments. And then come client expectations: “Because of the economic crisis in Europe our clients demand low prices,” said Materusz Gostyński, co-owner of a small shipping company Artyst Ltd registered in England. “The competition is heavy and market consolidation seems unavoidable.” Gostyński expects that small transportation companies will be in trouble in the years to come. “They do not have enough resources to safeguard their cashflow on a sustainable level,” Gostyński said.

A wish list For Marcin Wnuczek, director of Air Container Logistics Poland, the sector finds it difficult to maintain its competitive edge because of the growing running costs including higher

After many years Poland’s geographical position is slowly becoming a selling point when it comes to logistics and transportation.

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salaries that the companies have to pay their employees, and higher fuel bills. The underdeveloped road system is also a factor more so as many investment projects have been frozen or delayed because “of the lack of a coherent policy for the development of the infrastructure,” Wnuczek said. Wnuczek sees many business-related problems that good government policies would have prevented. The lack of adequate investments in the development of cargo railroad systems is one of them. Another is a very restrictive policy toward importers especially when clearing and custom red tape is concerned. “Instead of developing tight control the government should develop a liberal approach to importers and streamline the red tape,” Wnuczek said. An example of such liberal approach would be to enable foreign companies who bring in their products to the country to store them in Poland, but who do not sell them in Poland, to be exempted from VAT on the products they introduce within Poland’s borders. At present they have to pay VAT regardless of whether or not they sell it. Wnuczek also sees other problems with VAT. Some 25% of customs fees goes to the pocket of the country where the customs are held. In Poland a paradox continues whereby goods imported from China or India enter Poland in Szczecin but are then taken away to Hamburg in Germany where they go through the customs. Polish importers do this trick because with it they can avoid paying VAT within 10 days since the goods reached Poland. “Most goods imported to Poland goes through the customs in Hamburg, which slows down the development of Polish ports and dwarfs the revenue of the Polish budget,” Wnuczek said.

Need to evolve Because of the sharp changes in demand the existing business models

that logistics and transportation companies have mastered do not seem to work any more. This problem is especially painful to big companies who find it much more difficult and financially painful to adjust to the new reality by offering new value-added services through high-level specialization. In Silesia, for instance, there are logistic operators who adjust their operations to suit the needs of automotive producers, who are plentiful in the region. But it also takes the client to see the benefits of such customized logistics. According to Gostyński, “there is a very limited understanding on the part of the clients. Most of them do not understand what logistics can do for their business operations. It is about adjusting to the pace of production, to the rhythm of cooperation between subcontractors. Meanwhile, potential clients focus on the price as they think the lower price is a better deal for them. Such aspects as quality of service, long-term business relations, are now of secondary importance, although they used to be the most important business aspects not so long time ago.” After many years Poland’s geographical position is slowly becoming a selling point when it comes to logistics and transportation. Along with all the things that should have been already in place, such as good infrastructure and pro-business regulations, the government should work harder on building deeper and broader relations with the country’s neighbors, especially Lithuania and Russia. Because of that and because of the ever-increasing globalization of trade, Poland is losing to Western companies who skillfully manage to “reduce our industry to the role of sub-contractor in transportation and logistics services,” Wnuczek said. ::

Euro 2012

Busy in the air Can Polish airports handle the air traffic during Euro 2012?

When it comes to air traffic, the UEFA Euro 2012 tournament poses a big challenge for the organizers who expect to see hundreds of additional flights which will bring football fans to the host cities for the matches and take them back home after the events. Such a perspective, initially, triggered the government to undertake extra investment projects to up the processing capabilities of at least the largest airports in the country. However, after a while, the realization stroke that the airports will have to support themselves after the soccer championship as well. The growth plans were realigned to somehow match the needs of EURO 2012 with the demand for passenger processing capacity after the event, which obviously is much lower. The government, therefore, concluded that the investments in airport infrastructure will not be executed exclusively vis-a-vis the needs of Euro 2012 but having in mind long-term projections for passenger air traffic as well. The most immediate upgrades regard traffic control during the event, boosting the processing capacity of selected airports and the coordination of operations between the main and supporting airports. Most of the investment project are executed under the supervision from the Polish Air

Navigation Services Agency; all the projects that the agency coordinates are co-financed by EU funds.

Adjusting capacity One of the most ambitious projects, and unrealistic as it later occurred, were the modernization plans for the Warsaw international airport. The goal, set in 2008, was to modernize Terminal One and integrate it with Terminal Two, the latter being under construction at the time of planning. The reality proved much more difficult. Terminal Two was delivered late, in August 2011. The construction of a train station next to Terminal Two was also delayed but it was operational by in good time for the tournament but its functions were not integrated with Terminal One. The airport also managed to upgrade the tarmac and the landsides. The works are still going. When all the investment projects are finished the airport will be more than fit to process 12 million passengers a year. The goal for the Wrocław airport is to make it functional at the processing capacity of 3.5 million passengers a year. Individual investment projects include new tarmac and airside and parking among other things.

AIRPORT NETWORK FOR EURO 2012 Main airports

GDYNIA

Warszawa (WAW) Gdańsk (GDN) Poznań-Ławica (POZ) Wrocław (WRO)

GDAŃSK SZCZECIN BYDGOSZCZ

WARSZAWA-MODLIN

POZNAŃ

ŁÓDŹ

ZIELONA GÓRA

WARSZAWA

WROCŁAW KATOWICE KRAKÓW

Supporting airports Bydgoszcz (BZG) Zielona Góra (IEG) Łódź (LCJ) Katowice-Pyrzowice (KTW)

Airports with supporting capacity Gdynia Szczecin (SZZ) Warszawa Modlin Kraków (KRK)

The total cost is estimated at PLN 457 million with PLN 147 million from the EU. When it comes to the Lech Wałęsa International Airport in Gdańsk, it will have the second terminal finished this year with which the airport will be capable of processing 5 million passengers a year. The already completed projects include the construction of a new parking lane, airside, new tarmac plus the facility to de-ice airplanes. An irrigation system to take away rainfall waters was also finished. The total cost of all projects is estimated at PLN 396 million with some PLN 183 million shouldered by the EU. The International airport Poznań Ławica, in turn, has managed to upgrade parking lanes and the facility to de-ice. When it comes to pure passenger processing, however, the airport is still finishing a new arrivals terminal while the extension of the existing terminal will be commenced later next year. When finished, in 2013 according to the schedule, the new airport will handle 3 million passengers a year. The total cost of the upgrade is estimated at over PLN 326 million with PLN over 111 million provided from the EU. It is worth underlining that the overall plans to boost the processing power of the airports were not developed with Euro 2012 in mind alone. Those are long-term development plans. In fact the investment plans drawn until 2015 will result in boosting the processing capacity starting 2020-2025.

Heavy traffic Euro 2012 will pose extra challenge for logistics in the host cities and between the co-hoisting countries and traffic control. For instance, the estimates of extra passengers who will fly to Warsaw for the tournament range from nearly 10,000 to nearly 30,000. In Poznań experts expect to see even 25,000 additional passengers arrive at the Ławica airport, nearly 22,000 in Gdańsk and Wrocław each. When it comes to play days, it is estimated that in Warsaw additional 150 flights will land before each match and take off after; up to 130 in Poznań, 120 in Gdańsk and Wrocław, each. The pick of the traffic is expected to take place for the quarter-finals on. The extra-high estimates stem from the assumption that the road system in Poland, which still has a lot of room for improvement, may effectively scare away thousands of motorists from driving to host cities for the matches. They will fly in and out. Many of them will have no choice because of huge distances between some of the host cities. Gdańsk and another host city, Donetsk in Ukraine, are 1900 kilometers apart. The time will show whether Poland and Ukraine will handle the air traffic effectively. :: 5 /2012 :: polish market :: 45

Euro 2012

Street View for Poland Google has launched the Street View service for Poland. First go Euro 2012 host cities. Maciej Proliński do not differ from pictures that can be taken by a passer-by.

Poznań City Center

The Momentum

Street View is a popular Google Maps function launched in May 2007. It enables the user to travel the world virtually by watching panoramic views of individual places shown from the perspective of the passer-by. “A year ago, we asked Poles to indicate places worth showing in Street View,” says Artur Waliszewski, Google country manager for Poland. “The response from Internet users and interest from cities was huge—we received thousands of proposals and more than 100,000 people took part in the final vote. It gives me pleasure to say today that we managed to present in Street View Wrocław Downtown

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pictures of the places which made it to the finals of the contest as well as many other interesting spots worth showing to the whole world.” The images of Street View locations can be seen by zooming in to the highest level in Google Maps or by dragging the Pegman icon in the upper left corner of the map onto a location on the map. Preparing Street View coverage is a great logistical and technological undertaking. Street View photos are taken from cars moving along public roads and

Street View is also a tool useful for Polish businesses, which may use the technology to place Google maps for free on their websites and show their location. The website of a hotel, for instance, may feature a panoramic view of the street where the hotel is situated. “Euro 2012 is a moment when the whole of Poland will say ‘Hello Europe’. June 2012 is a time when we will have a unique opportunity to show that Poland is a really great country, with nice people and very attractive places,” adds Mikołaj Piotrowski, director for communication at PL.2012, the special-purpose company responsible for preparations for Euro 2012. “Today, everyone who wants to get to know us has an opportunity to ‘touch’ our country in Street View. But in a while they will be able to get to know Poland and Polish people in person.” And there is a lot to see in Poland while heading for the beautiful modern stadiums built in Warsaw, Wrocław, Poznań and Gdańsk. Poland’s capital boasts many classical and modern cultural institutions of international renown, like for example the National Opera, National Philharmonic, Royal Castle, the Museum of Modern Art, an institution which is still in the making, as well as numerous festivals attracting world-class artist. The Street View service will certainly help tourists get around in Warsaw and may encourage those who are still undecided to come to the city. The south-western city of Wrocław will be the European Culture Capital in 2016. Wrocław is one of the oldest and most beautiful cities in Poland. Over the centuries, it has seen the influence of many cultures and peoples and has been part of different states. Its history dates back to the 10th century. The diverse influences have left their mark on the city’s material and spiritual culture. The municipal authorities invest in culture because they know that this is a magnet which attracts tourists and entrepreneurs, both Polish and foreign ones. Wrocław is a venue for important cultural events, including international festivals, the largest of them being Wratislavia Cantans. Other festivals that deserve special attention are the Jazz nad Odrą

Euro 2012

Photos: Google Poland

Gdańsk Landmark Gramary

Festival, Actor’s Song Review and the Era Nowe Horyzonty Film Festival. Jerzy Grotowski (1933-1999), one of the greatest theater innovators of the 20th century, had artistic connections with Wrocław. Another important name in Wrocław’s theater was Henryk Tomaszewski (1919-2001), the founder, director and artistic manager of the Wrocław Pantomime Theater, actor, mime and theater director. One of the city’s cultural icons is also Lech Janerka, an important Polish rock musician. The mid-western city of Poznań may also benefit from Street View coverage. The gem of its Old Town is a Renaissance town hall. Another valuable historical building is the Poznań Cathedral, Poland’s first church founded around 968. Poznań is a leading venue for international fairs in Poland. Launched in 1921, the Poznań international fairs have an almost 50% share in the Polish exhibition and conference industry and rank second in Central and Eastern Europe. Poznań is also an important center of culture. Its International Theater Festival Malta is the largest theater festival in Poland. Several years ago, the city got a new landmark - the Stary Browar 5050 Shopping and Art Center. It is a unique place combining culture and business in equal proportions. Its mission is to promote modern art and its flagship project is the Art & Fashion Festival. The coastal city of Gdańsk is associated with Solidarity, the peaceful civic movement which contributed to the fall of communism, and its legendary leader Lech Wałęsa. The city’s cultural heritage spans more than 1,000 years. Its airport, with the recently opened most modern terminal in Poland, is named after Lech Wałęsa. The European Solidarity Center, which is the most important cultural project now underway in the city, will open in Gdańsk in October 2013. Its main part will be an interactive exhibition presenting the ideas of the Solidarity movement. The city will also continue to invest in large reputable events, which attract tourists from across the world, such as the Shakespeare Festival, Solidarity of Arts, All About Freedom Festival and the St. Dominic’s Fair. “Thanks to Street View, it will probably be much easier for us to talk about the city and its unique character. Tourists will be getting familiar with the city even before arrival and planning in detail their stay here. And the residents will discover Gdańsk’s nooks - its streets and alleys – they have not known before,” says Paweł Adamowicz, mayor of Gdańsk. ::

Shopping centers

Poland in good shape in terms of shopping centre provision in Europe The expected upturn in European shopping centre development in 2011 was knocked off course by delays in a number of markets, according to a report from Cushman & Wakefield. Katarzyna Michnikowska Overview - Europe

space and another 686,100 sq.m is projected to come onto the Polish market in 2012-2013. 2011 proved positive for the shopping centre sector in Poland with increased provision, stable rental levels and demand generated by major international and Polish retail chains. Despite limited access to funding, over a dozen new developments broke ground and several large deals were made on the back of the retail investment market recovery. The largest schemes delivered in 2011 included Millenium Hall in Rzeszów and Galeria Kaskada in Szczecin. The construction of the second phase of the Wzgórze shopping centre in Gdynia was resumed and there was increased development activity in Silesia with Poland’s two largest retail schemes under way: Europa Centralna Park in Gliwice and Galeria Katowicka in Katowice.

Shopping centre provision in Europe increased by nearly 3.6 million sq.m in the second half of 2011. This brings the European completion total for the year to 5.9 million sq.m – virtually identical to the 2010 figure. Central and Eastern Europe accounted for 65% of new space added. With delays reported in a number of markets, the 2011 total fell short of projections made earlier in the year. The 2012/13 pipeline is estimated at 10.9 million sq.m, with 6.4 million sq.m of GLA scheduled for completion this year, although further delays are possible.

Market size Russia accounts for 21% of the European pipeline, with 2.3 million sq.m of new space likely to be delivered in 2012/13. In Moscow, activity has shifted towards the outskirts following restrictions on construction within the Third Transport Ring. Several projects have recently been delayed around the country, and there is some uncertainty surrounding completion dates for many schemes. In Turkey, a number of delays have also been reported. Istanbul remains the centre of activity, with more than 700,000 sq.m of new space under construction. Shopping centres with GLA of 40,000 sq.m and up account for around 80% of the pipeline.

Overview of development in 2011 Just under 5.9 million sq.m of new space was added to the market in 2011 – an increase of less than 1% compared with 2010. Russia and Turkey accounted for 42% of the total. Over the year as a whole, 197 new shopping centres were completed, 117 of them in the second half. On 1 January 2012, total GLA across Europe stood at 139.9 million sq.m. Average shopping centre provision per 1,000 inhabitants in the EU-27 on 1 January 2012 stood at 246.6 sq.m. The largest shopping centre completed in 2011 was Westfield Stratford City in London (176,500 sq.m), followed by Marmara Forum in Istanbul (156,000

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Poland’s prospects

sq.m) and Marineda City in A Coruña, Spain (146,000 sq.m).

Key trends across Europe Of the 34 markets surveyed, 19 saw annual completions decline relative to 2010, with particularly steep drops in the Czech Republic, Austria, Slovakia and Croatia. In Bulgaria, following a record completion total in 2010, no new space was added. In Germany, the 2011 figure was the lowest level on record since 1989. On the other hand, Turkey, Poland, France and Finland saw a rebound in activity after the previous year’s slowdown.

This year is likely to be similar to 2011 in terms of supply, demand, rental levels and investment activity. Poland saw provision increase by more than 7% of GLA, including large centres in Rzeszów, Radom, Szczecin and Kielce. No new schemes were completed in the capital; indeed, the last major shopping centre to open in Warsaw was Złote Tarasy in 2007, although provision should improve in the coming years with a few schemes in the pipeline.

Shopping centre definition

Poland in 2011

Cushman & Wakefield defines a shopping centre as a centrally managed, purpose-built retail facility, comprising units and communal areas, with a Gross Lettable Area of over 5,000 sq.m. Factory Outlets and Retail Parks are excluded. ::

Of the 34 European countries surveyed, Poland came third behind Russia and Turkey in terms of new shopping centre space provision in 2011 and is forecast to slip down into sixth place this year. Last year’s completions provided 554,200 sq.m of shopping centre

Katarzyna Michnikowska, Senior Analyst, Valuation & Advisory, Cushman& Wakefield The text is based on the C&W Shopping Centre Development report

Sztuka budowania! www.bilfinger.pl

Advertorial

The best of the best in the promotion of the region IPB building company receives award from Warmińsko-Mazurskie province chairman Polish Market talks to Eugeniusz Jaremko, President of the lława Building Company, about the new regional trophy.

“The Best of the Best Laurel” gala was held in the Philharmonic in the north-eastern city of Olsztyn on Sunday 25 March. The winners, including the Iława Building Company (Iławskie Przedsiębiorstwo Budowlane), received the award from the chairman of the Warmińsko-Mazurskie province, Jacek Protas. Eugeniusz Jaremko, president of IPB, collected the Laurel on behalf of his company. Mr President, you head one of the largest companies in the region. The IPB brand has been present in the construction industry for over 45 years, and the province chairman’s award gives a further confirmation of the company’s position as the construction industry leader in the Warmińsko-Mazurskie province. The fact that the Iława Building Company was among the winners is for me and my team a great honor and satisfaction. I am glad that despite the economic slowdown, our company continues to grow and competes successfully in such a hazardous business as the construction industry. This could not be achieved without the confidence of our customers and partners, which raises the company’s credibility on the market, and thus creates a competitive advantage. IPB is a company that boasts a 45-year tradition and that is still building its brand and position on the regional, national and European markets. Thanks to an effective development policy we survived many difficult moments, and today we are a leading builder in the region. Our market position is confirmed by the recommendations of our customers,

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Business Leader”, as well as the title of “Well Seen Company” (CSR superbrand) for the best image with regard to the corporate social responsibility in our province. Both awards fit perfectly with the socio-economic development of the region. It is also in this category that we received “The Best of the Best Laurel”. These awards count among our last year’s spectacular successes and, at the same time, they contribute to the promotion of Warmia and Mazury on a national scale.

but also by numerous regional awards such as “Warmia and Mazury Business Eagle”, “Warmia and Mazury Construction project of the Year” or “Top Mazur”. The chairman of the Warmińsko-Mazurskie province honored individuals and institutions whose last year’s achievements, initiatives and successes contributed to building a positive image of the region. What IPB’s successes were recognized by the jury? 2011 was a very special year for us, because we were granted by the Business Centre Club in Warsaw two prestigious distinctions: “Diamond to the Golden Statuette of the Polish

The IPB has been successful not only in Poland, but also at European or even world level. Yes, indeed. The Office of the Committee for European Integration (UKIE) and the European Economic and Social Committee granted us a total of eight European medals in every category of our services, including for the construction and assembly services, real estate development and sales of building materials. Our services gained recognition from the European competition bodies, because they are at the European quality level. Another confirmation of our successfulness at the European level is the four-star Krasicki Hotel that we built in Lidzbark Warmiński and that won the “Best New Hotel Construction & Design” contest. It was considered to be the best hotel in Poland, Europe and even in the world. We are all the more pleased that, as a general contractor of this project, we were able to make a contribution to the restoration of this neglected historical building. The hotel rose like a phoenix from the ashes last year, and in January of this year it conquered London. ::

Advertorial

Hilton Garden Inn in Rzeszów the new quality in Podkarpacie region

The Hilton Garden Inn in the south-eastern city of Rzeszów will be the first Hilton Worldwide hotel in Podkarpacie region. The Hilton Garden Inn is expected to be categorized with 4-stars. Thanks to a great location and worldwide standards, the hotel will soon become the true determinant in the development of horeca branch in the region.

The Hilton Garden Inn is located in the business city center, 2.5 kilometers from Main Railway Station and 20 kilometers from Jasionka Airport. The hotel is just 700 meters away from historic Market Square (Old Town) and 17 kilometers from the historical city of Łańcut. Direct proximity to Millenium Hall Cultural and Shopping Center provides easy access to more than 200 retail shops, a cinema complex and other entertainment. The hotel’s highly qualified staff will help the guests to plan their spare time, advising city and regional attractions tailor-made for its guests. Guests visiting the Hilton Garden Inn hotel will have pleasant memories of their stay.

comfortable beds, 32-inch LCD TV with a wide range of TV channels and access to HSIA Internet. Following the expectations of the most demanding guests, hotel rooms offer dedicated working zone with wide desk and ergonomic Mirra Chair® created especially for the Hilton Garden Inn hotel brand by famous designer Herman Miller. To provide the guests with the best business and leisure conditions, the Hilton Garden Inn in Rzeszów offers complimentary access to: Fitness, self-service laundry room, Business Center and PrintOn service (remote printing from private computer to Business Center) and access to HSIA Internet throughout the hotel.

International standard

Business place

The interior design of the hotel is based on the brand standards of the Hilton Garden Inn. The colors of mellow green, beige and brown make an impression of feeling like home. The details such as a fireplace in the hotel lobby create the atmosphere of calm and comfort. Representing one of the Hilton Worldwide brands guarantees the best standards of the product and service. The hotel offers 101 bright and spacious guest rooms, including 99 standard rooms and 2 suites. All guest rooms are air-conditioned, with bathrooms equipped with bath tubs and showers and Neutrogena® amenities. The rooms are provided with

The Hilton Garden Inn Rzeszów is an ideal place to organize business meetings, conferences or training sessions. The hotel offers 9 modern conference rooms on the total of 650 sqm and 240 sqm of foyer. The hotel offers the biggest conference capacity for up to 420 persons in theatre shape. All conference rooms are equipped with the highest quality technology and have access to wireless HSIA Internet. The hotel offers full technical equipment (screen, LCD projector, flipchart with paper and pens, sound system with wireless microphone), as well as possibility to organize a video conference. The Hotel

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provides the conference guests with complimentary paper and pens and mineral water.

Taste of success The Garden Restaurant serving dishes of Polish and international cuisine will be dedicated to 70 persons and the hotel bar located on the mezzanine to 40 persons. The Chef also recommends rich breakfast with live cooking station – the cook will gladly take special orders such as omelets, French toasts and many others. The hotel offers an additional attraction dedicated to Hilton Garden Inn brand – HGI waffles® with fruit. The Pavillon Pantry, a standard in all Hilton Garden Inn hotels, open 24 hours a day, allows the guests to purchase snacks, food, beverages and consumer staples. Guests staying in Hilton Garden Inn hotels are invited to participate in Hilton Honors® reward program which allows them to receive points for the same stay both on the hotel account and airline miles. (More information: www.hhonors1.hilton.com). The opening of the Hilton Garden Inn in Rzeszów is expected in late May or early June 2012. ::

Hilton Garden Inn Rzeszów

1 Majora Wacława Kopisto Street 35-315 Rzeszów, Polska Tel. +48 (0) 17 770 00 00 Fax +48 (0) 17 770 00 01 e-mail: reservation@hgi.rzeszow.pl More information: w w w.hgi.com

Advertorial

Millenium Hall

– a modern urban space of Podkarpacie Millenium Hall, a modern shopping and cultural center in the southern Polish city of Rzeszów, is a response to the potential of the city and the region. It combines the worlds of business, trade and entertainment. In a short time, it has become a showcase of the booming Podkarpacie region.

which hosts concerts, as well as art and fashion shows. The square was inaugurated by the concert of Suzanne Vega, and the special guest was Anja Rubik. By organizing various events the center promotes current trends such as: fan zone, innovation city, women’s galaxy, thematic fair, and many others. The center also houses the European Art Gallery, where visitors can admire the works of internationally recognized artists, including, Magdalena Abakanowicz, Franciszek Starowieyski, Kirill Datsouk, Georgiy Sherstobitov, Tadeusz Dominik and Pablo Picasso. Admission to each of the exhibitions is free, and each of them attracts thousands of locals who so far have not had the opportunity to see the works of such prominent artists in Rzeszów.

Pro-social activities

Millenium Hall is the largest multifunctional complex in Rzeszów and the first one of the regional scope. The center was built in a strategic location, on a principal commercial thoroughfare in Rzeszów – Rejtana Avenue. The center will cater for 2 million potential customers living within 100 km of it. It houses more than 200 stores and service points, cafes, restaurants, the PureHealth Fitness club, the ninescreen Multikino cinema and the event square able to accommodate 6 thousand people. This is the first facility in the region having such a wide entertainment and fashion offer, and a modern architectural form. Within 6 months from its opening, the center was visited by nearly 5 million people. The success of Millenium Hall confirmed the potential of the region, while completely changing the standards prevailing on the local retail market.

The fashion center of Podkarpacie It was in the Millennium Hall that brands so far absent in the Podkarpacie region had their debut. A wide fashion offer makes the center the most important shopping spot in the region. In addition, the center actively supports the development of the fashion industry by organizing fashion shows of famous brands, as well as fashion events that build fashion awareness among

customers. Thanks to Millenium Hall, the highlife fashion has found its way to Podkarpacie.

Modern urban space The architectural design of Millenium Hall is impressive. It combines classics and modernity, associating a modern shape of the building with traditional materials such as ceramics and glass. The body of the building is based on a circle – a symbol of continuity, and formed by a circular shopping arcade and a circular hotel. The three-storey interior space is also designed this way. As a result, all the functions form a harmonious whole. Foot traffic in Millennium Hall is organized based on four spacious passages, named after the timeless, everlasting values. These are the Art Passage, the Philosophy Passage, the Nature Passage and the Science Passage. Each of them is distinguished by a particular mood and design. In addition, the light inside the gallery is still alive, plays with geometric motifs on ceilings and floors, and highlights the texture of surfaces. The color and intensity of light varies with time of day and year, which creates an amazing effect.

In order to meet the dynamics of today’s lifestyle, Millenium Hall offers an opportunity to settle many urgent matters in one place. Customers will find there a branch of the City Council, a post office, and a branch of the Employment Office. Millenium Hall is a regular venue for the inhabitants of the region. It is a great responsibility. That is why, the center is actively involved in pro-social initiatives. It works closely with, the Foundation “Bliźniemu Swemu” that acts for the benefit of the St. Albert Aid Society and the Podkarpackie Hospice for Children. The center also houses a branch of the Association “Siemacha”, which aims to support youth development. Millenium Hall is a modern and multifunctional urban space. Its rich offer and a wide range of services make it an innovative facility that, while combining commercial activity with social objectives, sets out new ways of the retail sector development. The upcoming period will be for Millenium Hall a time of new opportunities and new challenges. Soon, the center will open new stores, as well as the 4-star Hilton Garden Inn, the first hotel of this prestigious brand in Podkarpacie. ::

Not just shopping An unusual architectural solution used in Millenium Hall is an event square 5 /2012 :: polish market :: 53

Commercial real estate

Building the Tricity Polish Market talks with Sławomir Gajewski, president of Torus, a developer of commercial real estate in the Tricity area.

partners, in particular companies where the average age of employees does not exceed 30 years. It is primarily for them that all the additional functionalities of Alchemia have been designed. First contracts will for sure be signed later this year. Is Torus planning any other office space projects currently? Alchemia will be the focus of our attention for the next few years. The first stage was inaugurated last October, and the second one will probably be officially announced soon. If the market allows, this very dynamically developing business and scientific part of Gdańsk will eventually have seven innovative buildings. The history of Torus and its owner has repeatedly shown that we know how to take advantage of opportunities, so everything is ahead of us.

First, what is the current situation on the office space market in the Tricity of Gdańsk, Gdynia and Sopot on the Baltic coast? Is there a strong demand for new office space and is it expected to grow? Definitely yes. The Tricity has much to offer: the high quality of life, highly-skilled workforce and relatively low business costs and a large availability of modern office space. All this draws the attention of potential investors, which makes our position as the third market in Poland - after Wrocław and Kraków - grow ever stronger. Thanks to the availability of highquality office space and the ability to meet complicated corporate technical requirements, we attract more and more world-class companies. A relatively common phenomenon is the relocation of companies that want to change their premises so they are more technologically advanced, more prestigious, or preferably located from the point of view of customers. However, there are also many those that are only opening their branch offices, headquarters and shared service centers in our region.

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Which sectors do potential tenants come from? Using the example of our current flagship facility - Arkońska Business Park - we should mention first of all IT companies, research and development centers, and financial firms. It is also worth noting a huge interest in the Tricity from the BPO/SSC sector. W hen exactly did the construction of the Alchemia project start and how is its commercialization coming along? After a sharp slowdown caused by the turmoil on world financial markets in 2009, Torus had to put on hold the launching of such a complex project as Alchemia. The construction works started on 10 October 2011, and I must admit this is a much-awaited project for me. First of all, because of its uniqueness and the fact that it is so focused on people, on providing them with facilitations both in the workplace and in their spare time. The commercialization has only started, and the interest of potential tenants went far beyond our expectations. At the moment, talks are held with some very seriously interested

Does the company plan to expand into other markets in Poland too? The Tricity market is dominated by local developers which prove that they are not any worse than the world champions. Given the particularities of our region I mentioned above, for the time being, we focus on the local market. We have to go through the long investment period associated with the Alchemia project. That being said, we do not exclude anything. W hat are Torus’s plans when it comes to other sectors of the real estate market, in which the company is active? Torus’s portfolio includes hotels, a logistics and storage center and residential buildings. However, office facilities are our core business and that is what we want to focus on. The experience shows that we do best in the office space sector, which is evidenced not only by the number of square meters rented out, but also by the recommendations of our tenants. According to your estimations, how much will Torus invest in the Polish real estate market in 2012? The total value of the first stage of the Alchemia project is more than PLN 160 million, while the total cost of the project, depending on the market situation, can amount to 800 million within the next 10-12 years. ::

Banking

New (old) players Prof. Małgorzata Zaleska

The author is a member of the Management Board of the National Bank of Poland, professor at the Department of Banking Warsaw School of Economics, and vice-president of the Committee on Financial Sciences Polish Academy of Sciences.

The turbulence on global markets has no direct impact on the Polish banking sector, which is exceptionally profitable and solvent. The profit generated in 2011 by banks operating in Poland came to PLN15.7 billion and was by 37% higher than in 2010. Data for the first months of 2012 indicate that the banks are still making record-high profits. This is not to say that the present crisis does not have a bearing on conditions for conducting banking activity in Poland or structural changes. In the first case, we have to do with uncertainty and high volatility on the market, including exchange rate volatility. As regards structural changes in the banking sector, one should mention the planned merger of two banks operating in Poland, BZ WBK SA and Kredyt Bank SA, and the appearance of more players on the Polish market in the form of branches of foreign credit institutions—Bank of China, Commercial Bank of China and Vanquis Bank. The structural changes are the result of decisions taken outside Poland. Banco Santander, the owner of BZ WBK SA, plans the merger so as to further expand on the Polish market while the KBC group wants to sell Kredyt Bank SA to be able to repay state aid. Banco Santander and KBC have both been affected by the crisis. Because of its difficult financial situation, KBC had to apply for state aid while Banco Santander is obliged to raise its own funds by the end of June 2012.

Globalization rules The banking industry is becoming increasingly globalized and less and less local, or national. What is more, decision-making is becoming supranational also in the area of banking supervision because there are plans to transfer more powers, like liquidity regulation, to the regulators in a bank’s country of origin. This is especially important in Poland’s case

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because it plays host to many foreign banks. Also, the powers of the national banking supervision authority are limited when it comes to mergers and notification requirements for branches of foreign credit institutions. Until recently, consent from the Polish Financial Supervision Authority (KNF) was needed in bank acquisition deals. Now, KNF merely has the right to formally object to an acquisition deal within 60 workdays since it has been notified about the move and received all the required documents. And KNF has to justify its decision to object. The Banking Law specifies that KNF has the right to object if the reputation of the prospective owners and managers is bad, if the financial condition of the proposed acquirer is poor, if law is not respected and if the sources of funding are not substantiated.

been notified about their activity and indicated what conditions they have to meet in the interest of the public good, in particular to protect the consumer’s rights. The obligations imposed on the branches of foreign credit institutions include: informing clients about terms of deposit guarantees and the place where data which are bank secrets are stored and processed, making sure that advertising and marketing materials are not misleading, and publishing financial reports in Polish. The above obligations are a new practice for the Polish supervisory authority. Earlier, such notifications were automatic and did not involve imposing any requirements. This shows that the present turbulence not only results in a new lineup of players on global financial markets and changes to banks’ strategies but also makes supervisory bodies modify their practices. ::

New landscape If KNF does not object and if the Office of Competition and Consumer Protection (UOKiK) approves the deal, a new bank will be set up in the second half of 2012 as a result of the merger between BZ WBK SA and Kredyt Bank SA. It will be an important player on the Polish market but will not be a systematically important financial institution on a European or global scale. It will be the third largest bank on the Polish market, with around 900 banking outlets, 3.5 million clients and assets exceeding 23 billion euros, an equivalent of 6.2% of Poland’s GDP. As a comparison, Poland’s largest bank, PKO BP SA, has 43.2 billion euros in assets, which accounts for 11.7% of Poland’s GDP. The assets of the largest global or European banks exceed 100% of the GDP of the country where they are domiciled.

New kids in town Branches of three foreign credit institutions are also expected to start operations in Poland soon. KNF has

The banking industry is becoming increasingly globalized and less and less local, or national. Decision-making is becoming supranational also in the area of banking supervision because there are plans to transfer more powers, like liquidity regulation, to the regulators in a bank’s country of origin.

Najlepszy Bank 2012 Już od 20 lat przeprowadzamy Konkurs, w którym wyłaniamy liderów polskiej bankowości. 20 czerwca podczas XX Gali Najlepszy Bank zostaną wręczone zwycięzcom statuetki w trzech kategoriach: • Najlepsza dynamika • Najlepsza struktura portfela • Najwyższa efektywność

Nagrodzimy także jak co roku najlepszych z najlepszych sektora bankowego:

Ponadto z okazji jubileuszowego Konkursu zostaną przyznane także nagrody specjalne:

• Bankowy Menedżer Roku 2011 • Ekonomista Roku 2011

• Bank XX-lecia • Bankowiec XX-lecia

tel. 58 768 33 11 e-mail: reklama@gb.pl www.gb.pl

Partner merytoryczny

Organizator

NAJLEPSZY

BANK

2012 MIESIĘCZNIKA

Personal finance

Building lasting relations Polish Market talks with Katarzyna Jóźwik, Provident Polska management board member, about the personal finance market.

Provident Polska is a financial institution that specializes in the provision of fast loans to individual customers. How, in your opinion, does the personal finance market develop in Poland? The personal finance market is a natural extension of the banking sector which is why I think it is in for stable growth. The standard bank loan amounts to about PLN 10,000— Provident offers loans from PLN 1,000 to PLN 1,500, which is the money you need to buy a new TV set or have your car repaired. Banks currently have a very diverse product lines but even those banks that used to target the consumer finance sector have now withdrawn a bit from this market due to relatively high costs of small loans. Small loans have a significantly high fixed cost which is why banks usually offer higher loans. Banks are also unable to deliver the money fast to the customer, even if they were to deliver it to the customer’s home. Our company operates on the basis of very clear procedures and transparent rules. The fast loans that we offer allow us to supplement the market and the services of other financial institutions. Why should a potential customer select Provident? Because of our experience and quality of service. Provident is an international financial institution with 130 years of tradition. Several million people in Poland, the Czech Republic, Slovakia, Romania, Hungary and Mexico have already benefited from our services. Research shows that the possibility to obtain a loan in less than 48 hours is most important for our customers. Apart from the fast cash delivery, our customers can also select the repayment option. Our customers know how much they are going to pay and there are no “small print” clauses in our loan agreements. Fast loans are your flagship products... We offer fast loans with the home service option from PLN 300 to PLN 7,000. However, the average Provident loan amounts to PLN 1000-1500. The term of the agreement is 30, 45 or 60 weeks. The rates are paid on a weekly basis. Our customers can select between the money transfer option and the home service

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option. The majority of our customers select the home service option due to the speed of the cash delivery – up to 48 hours, but very often the cash is delivered much faster. With this option the customer can also be sure that in case of a delay in the payment, no additional default fee is going to be calculated. Our business is based on interpersonal relations which are the most important aspect of our activity. We have a network of nearly 10,000 representatives that operate throughout the whole country. Due to the personal contact with the customers, the representatives know their needs very well. How do you check the customer’s creditworthiness? How does this process differ from the one performed by banks? In a business sense, we act similarly to banks. Risk optimization is the main pillar of our business. We use technologies that allow us to assess the customer’s creditworthiness and to minimize the risk both for the customer and for the company. Our scoring systems allow us to perform a two-stage assessment of the customer’s creditworthiness before issuing the loan. In the first stage our scoring system assesses the customer’s creditworthiness. The second, much more important stage is our representative’s visit. During this visit the representative confirms the credibility of the assessment performed by the system. Our system indicates the maximum loan that we can offer to our customer. The representative, however, has direct contact with the customer and it is the representative that assesses whether we can indeed issue the loan in such amount, whether the customer is going to be able to repay the offered rates.

One of the specifics of our business is the representative remuneration system. Our Representatives are paid for the provision of quality service and not just for issuing the loan. This shows that we want the customer to receive a loan adjusted to their individual situation and we all want the customer to be able to repay it. There is a myth that Provident issues loans to everyone interested and that the growth in the customer number or the issued loans is caused by the fact that banks do not want to issue such credits. Similarly to banks we tighten our credit policy in the period of economic downturn. For instance, due to such tightening Q4 2011 was a little bit slower for the business than the preceding quarters. However, our business grows in a stable and sustainable way. At the end of 2010 we had 782,000 customers and at the end of 2011 as many as 834,000 customers. We constantly perform the credit risk analyses; we revise the scoring systems and adjust the risk to the market conditions. It is in our best interest to issue loans to customers that are able to repay them. Therefore, proper risk management is key for us. Out of all the people that contact our call center only 29% become our customers. There are also cases in which the customers do not receive the loan or are able to receive it only in the minimum amount. The growth of our business is not, as often perceived, related to the fact that customers switch to non-banking institutions due to the recommendation T. While there is no market research available at hand, I can definitely state that we have changed many processes and we executed the assumptions and projects as part of the growth strategy adopted by the company and all this contributed significantly to our performance in 2011. What are the company’s plans for the future? Provident achieves stable and constant growth. We have new management and new processes in place which are also constantly improved. We have many fantastic ideas. As we are an organization that is still learning, we review the market on an ongoing basis and we are constantly changing for the customer which does not mean that we make them choose our product. I think that this has a major impact on the growing interest in our company. Our greatest advantage is, however, the fact that we build relations with our customers. We carry out customer satisfaction surveys concerning different levels on which the customers contact us. Recent results showed that over 90% of our customers are satisfied with our service. This is why customers keep coming back to us. And thanks to the customers’ satisfaction, the company can grow. ::

II Europejski Kongres Finansowy

23-25 maja 2012

Hotel Sheraton, Sopot

Stabilnoœæ i bezpieczeñstwo finansowe Europy Ponad 1500 uczestników Przedstawiciele najwa¿niejszych w³adz krajowych i wspólnotowych, politycy, cz³onkowie zarz¹dów oraz rad nadzorczych przedsiêbiorstw i instytucji finansowych, przedstawiciele instytucji nadzorczych i regulacyjnych, przedstawiciele œrodowiska akademickiego oraz organizacji pozarz¹dowych Debaty plenarne i kilkanaœcie debat tematycznych z obszarów: Bezpieczeñstwo i stabilnoœæ rynków

Zarz¹dzanie wartoœci¹ przedsiêbiorstw

Finansowanie rozwoju infrastruktury

finansowych UE fot. Europejski Kongres Finansowy 2011

Informacje i kontakt:

www.efcongress.com +48 58 524 49 01, efc@ibngr.pl.

Wspó³organizatorzy:

I Instytut Badañ nad Gospodark¹ Rynkow¹ I Gie³da Papierów Wartoœciowych w Warszawie

G³ówny Partner Kongresu:

I PKO Bank Polski

I NDI I PKN Orlen

Law

Costs of visibility Things you should know before put up hang a board advertising your business in the street. Maja Sujkowska

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

A wide range of businesses use different formats of outdoor advertising, such as stands with the menus often displayed in front of restaurants, to target potential customers with information about their products and services. However, many do not realize that placing a folded stand featuring today’s menu in front of the restaurant, putting up a notice on the nearby lighthouse, or setting up a small billboard by the side of the road or even placing an advertisement on a service point’s marquee without permission may cost a lot.

Know your fees A good business practice is for entrepreneurs running a specific activity to get familiar with the regulations governing both the domestic market and local markets. Such regulations, as already mentioned, include, the City (or Commune) Council resolutions on the fee rates for occupying a roadway. The Warsaw City Council has ruled that fees are charged for all advertisements placed within the traffic lane, that is “in the field of view of road users”. The municipal authorities decided to diversify fees by setting different rates for the scrollable advertisements with variable content, the commercials shown on the displays and monitors and as moving images, those featured on marquees, umbrellas, shop windows and display cases, advertisements that serve as Easter, Christmas and New Year decorations, those put on the cylindershaped advertising pillars, commercials on the mobile advertising boards located in the pedestrian passageways, those on all types of carriers in underpasses or inflatable ones. The fee rates range from PLN 0.01 to 10 a day. In case of the advertisements placed without the consent of local authorities, fees are calculated back ten times the rate. The fact might raise doubts

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that, according to the resolution of the Warsaw City Council, fees apply also to the advertisements placed on the signboards referred to as a graphic description of the business entity, including the entrepreneur’s name or a concise definition of the type of business, located over or at the building where the business has its seat. Thus, at least within the meaning of the Warsaw local law, it is mandatory to pay the fee also for the signs no larger than a square meter that carry information about the locally-run business activity, located for example on the office buildings in the immediate vicinity of the road, when these signs are “in the field of view of road users”, whether it is a national, provincial, county or municipal road. The daily rate for the company’s signboard in Warsaw ranges from PLN 1.60 to 4.

Costly penalties The legal basis for charging fees for certain forms of advertising is provided by the Act of 21 March 1985 on Public Roads (Journal of Laws of 2007, No. 19, item 115 with later amendments). According to it, it falls within the competence of the road’s administrator, which is the entity responsible for planning, construction, reconstruction, renovation, maintenance and protection of roads, to issue permits with regard to occupying roadways. Such an authorization is required for all activities unrelated to the construction, reconstruction, renovation, maintenance and protection of roads. Under the Act, a permit is also necessary when using a traffic lane to fix an advertisement board or any structure unneeded from the point view of road management and road traffic. As defined by the Act, the roadway is a land area, separated by demarcation lines, together with the space above and below the surface, where the road is located along with

the infrastructure facilities and technical equipment connected with the functioning, security and maintenance of traffic, as well devices required to ensure the proper administration of the road (Article 4 point 1). The meaning of advertisement is defined in Article 4 point 23 as a visual information carrier in any material form whatsoever, together with the structural elements and fixings, that is placed “in the field of view of road users” and that is not a road sign within the meaning of the traffic signs and signals regulations nor a public utilities notice board set by the commune authorities. The combination of these two elements, i.e. the definition of the roadway and the definition of advertisement, especially in the passage about the “field of view of road users”, brings in the need to provide the interpretation of law as to where an advertisement or a business activity information notice can be placed free of charge and where they cannot. It should be mentioned that entrepreneurs quite often fall victim to the ignorance of the law, whereas fines tend to be very high here. The permit to occupy a roadway is subject to a fee based on a daily rate set by the local authorities such as the city council. It means that every town can have different regulations in this respect. Using of a traffic lane for private purposes without a prior permission from the relevant local body is punishable by a fine of up to 10 times the regular fee. ::

Warsaw City Council has ruled that fees apply to advertisements placed on the signboards defined as a graphic description of the business entity, including the entrepreneur’s name or a concise definition of the type of business, located over or at the building where the business has its seat.

Law

Polish law lacks specific outsourcing regulations Outsourcing is ok but you have to do it right. Tomasz Bil

The Author is a lawyer, Chałas & Partners Law Firm, branch in Cracow

Outsourcing was once a strange word for Polish entrepreneurs and lawyers. Then, after a while the word was en vogue, which caused pain to some companies who have thoughtlessly outsourced some of their processes that they should not have. Today outsourcing is becoming commonplace in business and this is why some of its legal aspects have to be known. Outsourcing proves to be very efficient when it comes to IT services, which is why it is extremely popular in this sector. In practice, the IT outsourcing covers a whole range of solutions, from the relatively simple activities i.e., outside network administration or hardware support services, to complex processes and multi-dimensional telecommunications services. In each case, the IT outsourcing involves issues that fall within various areas of law.

Lack of specific provisions Entrepreneurs usually consult lawyers late, at the final stage of contract negotiations, which often results in overturning of the whole concept because of legal risks. It is much better to take legal advise earlier, at the stage of concept building and goal setting. In general, Polish law does not regulate the phenomenon of outsourcing. The exception is the banking outsourcing which is governed by specific provisions. Yet there is no regulation with regard to the content of outsourcing contracts, whereas for a lawyer, outsourcing is primarily a contract or, in more complex cases, even a group of contracts. Under Polish law, the outsourcing contract belongs to the general category of the so-called service contracts. The latter do not have a specific regulation in the Polish civil law. Therefore, they are subject to the Civil Code’s provisions regarding the contract of mandate applied accordingly.

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The lack of a detailed regulation with regard to the content of the outsourcing contract has a good side too, as it gives the parties greater freedom in shaping their relationship. On the other hand, the lack of regulations makes it necessary to be cautious and meticulously identify in the contract all the relevant elements, because in case of loopholes or disputes the legal framework may not be enough to ensure a safe landing. For the IT outsourcing, the practice becomes common of setting the specific parameters of services in the documents called the SLA (Service Legal Agreements).

Transfer of work establishment When signing the outsourcing contracts, it is often necessary to take into account the labor law provisions, in particular these regarding the transfer of work establishment to another employer. Under the Polish Labor Code, which is consistent in this respect with the European Union law, in some cases the transfer of employees from one company to another occurs automatically, with all rights and obligations arising from the employment contracts concluded with the original employer. This becomes effective by operation of law and regardless of the intent of the concerned parties, in case of the acquisition by another entity of at least a part of the company’s property or nonproperty assets. Polish courts are of the opinion that the transfer of work establishment is lawful even if only a part of tasks is taken over from the previous employer. The transfer of work establishment is therefore a common effect of outsourcing. For example, if a company decides to entrust the tasks performed by the internal IT department to an outside entity, it may be that the employees of the IT department will become, by operation of law, the employees of the outsourcing company. Importantly, this will apply to all employees assigned to the structure of the

IT department, so not only to IT professionals, but also to the IT manager’s secretary, etc. You cannot ignore these issues when planning the future outsourcing operations.

Intellectual property and information protection Legal issues specific to the IT outsourcing contracts focus on the broadly understood intellectual property and information protection. Of particular importance is the issue of rights to the software used by the company considering the outsourcing. At all times, it is necessary to check whether the hiring of an external entity to perform specific IT services does not constitute a breach of the conditions of license. And in case the cooperation as part of outsourcing involves the creation of software, a key issue for the ordering company is to secure acqiusition of a copyright within the required range. The IT outsourcing often involves entrusting an external entity with the processing of personal data. In such a case, the ordering company in its capacity of the data controller has to conclude an additional contract for the processing of personal data, in accordance with the legal standards. Particular caution should be taken when personal data is to be transferred outside the EU, in which case it is obligatory to determine the country where the servers used by the outsourcing company to store the data are located. ::

Legal issues specific to the IT-sector outsourcing contracts focus on the broadly understood intellectual property and information protection.

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Law

Easier and faster? The government has made the life of entrepreneurs easier. Ewelina Janczylik - Foryś As of 2012, amendments to the Commercial Companies Code and related laws entered into force. While the new regulations provide for the possibility to establish a limited liability company (LLC) through the Internet, they do not exclude the previous procedure of starting a business either. Why does the amendment apply to the LLC? Because, according to the data from the Ministry of Justice’ Statistics Department, over 75% of all the applications received by the registry courts between 2008 and 2010 concerned the registration of a limited liability company. It can, therefore, be assumed that facilitation that provides for the registration of LLCs through the Internet will have a positive impact on the registration process, and thus will bring up the number of successful applications. Until recently, the establishment of an LLC required a number of very important steps, the most lengthy of which was the process of registration in the National Court Register (KRS). The first step involves the conclusion of a foundation agreement in the form of a notarial act, with its mandatory elements being: the name and the registered seat of the company, the object of its activity, the capital stock, the number of shares owned by the shareholders and the duration of the company. Moreover, it is necessary to establish the management board. The latter must be formed before the company is incorporated in the KRS.

Step lightly The registration of a company is the longest and the most important stage. The Board is bound to submit a registration application to the court no later than 6 months from the date of signing the notarized agreement. The application must be made on an official form, with all the required documents enclosed. If this basic requirement is not fulfilled, the court will return the application. The principal form used for the registration purpose is the application for the incorporation in the register of entrepreneurs, which bears the symbol KRS W3. Other documents that must be submitted include a confirmation of the establishment of the bodies authorized to represent the company, a statement regarding the object of the company’s activity and the personal data of the company’s

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shareholders. These documents constitute an attachment to the principal application (the KRS W3 form). The application is subject to the registration fee of PLN 1,000. The announcement of the company’s first registration in the Court and Economic Official Journal is also payable and costs PLN 500. In addition, the principal application should be accompanied by the following: the application for the incorporation in the National Register of Business Entities and the assignment of the REGON number, a declaration regarding social insurance (ZUS) contributions, the identification form together with the application for the assignment of the taxpayer’s identification number (NIP), mentioning the appropriate tax office. Once dully completed, the application should be submitted to the court competent for the seat of the company. The entry of the company into the National Court Register must be announced in the Court and Economic Official Journal, which makes the registration effective.

a user’s account. The following data are required while creating an account: user’s first and last name, the PESEL number (Polish Resident Identification Number), the identity card number, e-mail and postal address. The user must assign a password to the account. Then, in order to set up a company, the user should fill in a standard contract template and approve it. It is important to use a contract template because the online registration of a company can only be done if the LLC foundation agreement is concluded using a standard pattern. The standard contract template represents the general terms of agreement. The provisions are very general and do not determine a specific entity. There are blank spaces in the template to be filled out. The contract template cannot be modified while registering the company. The next step is to draw up, and approve, a list of shareholders using a special form too. The application made through the Internet should be dealt with within 24 hours.

Room for improvement? Is one day enough? Thanks to the introduction of new regulations, a limited liability company can be registered in one day. The legislature made an effort to meet the expectations of citizensentrepreneurs by facilitating the LLC registration procedure the way it can be done through the Internet. However, it is not the unique purpose of the amendment: the legislature also strives to reduce costs. “The amendments enabling the online registration of a limited liability company came into force on 1 January 2012. The new regulations are a clear continuation of legislative changes aimed at the widest possible use of electronic communications systems e.g., electronic communication system with the Social Security Institution (ZUS) or Tax Office, e-court, the online business activity registration. The subsequent amendments introduced by the legislature are intended to simplify various proceedings, relieve public authorities and courts, as well as to reduce registration costs and increase efficiency of the registration system,” says Mariusz Bidziński, Ph.D., a Partner at Chmaj & Partners Legal Advisor Office. In order to electronically submit a registration application, it is necessary to create

The amendment enabling the electronic registration of an LLC being relatively fresh, entrepreneurs might prefer to stick to the traditional procedure. “What hampers the electronic registration is the need for the newly registered company to approach on its own the tax office, ZUS and the statistical office. That being said, on one hand, the electronic registration procedure of the limited liability companies allows a faster attainment of the desired effect, while on the other hand, it implies the necessity to have appropriate tools and to be able to individually take action before other administrative bodies. In order to complete the procedure, one needs to register with the system (create a user’s account). Then, for the registration to be effective, he or she should dully fill in the registration form and sign it using the electronic signature,” says Mariusz Bidziński. Given the fact that the regulations recently introduced in Poland proved successful in other countries, as well as the widespread use of the internet, it is natural that the law should be adjusted to allow individuals to make certain actions through the ICT systems. ::

Law

European patent and patent applications under national regulations

Mariusz Bidziński, PhD, lawyer, partner at the Chmaj and Partners law firm, lecturer at the University of Social Sciences and Humanities in Warsaw

Michał Paprocki, lawyer, partner at the Chmaj and Partners law firm

European patents are granted under the European Patent Convention of October 5, 1973. Poland has been a party to the convention since March 1, 2004. Under the convention, European patent owners cannot receive protection retroactive to before the date of Poland’s entry to the convention. By obtaining a European patent, the entitled person receives the same protection as the one resulting from national regulations, that is the industrial property law of June 30, 2000 (Journal of Laws 2003, no. 119, item 1117 with amendments). A European patent, in each of the contracting states for which it is granted, has the effect of a national patent granted by that state. Entitled persons have the right to seek a European patent for one or more of the contracting states. However, entrepreneurs operating only on the domestic market may still apply for patent protection exclusively under the industrial property law. The European patent is of special importance for entrepreneurs conducting activity on a large scale. Instead of seeking national patent protection first, they have an opportunity to apply directly for a European patent and avoid the need of going through two patent processes. It is worth noting that to receive patent protection, whether under the national law or the convention, the invention has to be novel, must not be obvious to others skilled in the same field and should have a potential for industrial application. Both the industrial property law and the convention provide an open list of inventions which are not patentable. They also specify the term of patent protection, which is 20 years from the date of filing the application. Under the convention, a European patent confers on its proprietor, from the date on which the mention of its grant is published, in each contracting state in respect of which it is granted, the same rights as would be

conferred by a national patent. Consequently, a European patent gives its owner the exclusive right to use the invention commercially or for professional purposes. On the other hand, it is worth noting that the publication of a European patent application also creates a specific protection spectrum. In this case, however, the level of protection depends on the decision of the state indicated in the application - the convention states that each contracting state ensures that, from the date of publication of a European patent application, the applicant can claim compensation reasonable in the circumstances from any person who has used the invention in that state in circumstances where that person would be liable under national law for infringement of a national patent. If Poland has been indicated in a European patent as the country where protection is granted the patentee acquires the same rights as would be conferred by a national patent. However, the rights are acquired only after the owner of the European patent has met the condition specified by the law of March 14, 2004 on filing European patent applications and the effects of the European patent in the Republic of Poland. Under the regulations in force, to receive protection in Poland under a European patent its proprietor has to submit a Polish translation of the patent within three months from the date on which the European Patent Office has published the mention of its grant. It is a preclusive time limit, which means that the deadline, if not met, cannot be reinstated. The important thing for those interested in obtaining a European patent is that they may apply for it even if they do not hold a patent granted under national law, that is the industrial property law. But in this case, the European patent application has to be filed with the Polish Patent Office. In contrast, the owner of a patent granted under national law has the right to

file a European patent application either with the European Patent Office or the Polish Patent Office. The convention is applicable exclusively to inventions. Those who seek protection for utility models have to submit applications according to the national patent regulations. A European patent may be of great benefit, especially to entrepreneurs who conduct business operations abroad or plan to expand onto foreign markets. But one should first analyze relevant regulations which are in force in the country where protection is to be granted. To receive protection, it may be necessary, as in Poland’s case, to submit a translation of the patent into the official language of the state where protection is to be granted. Despite the benefits associated with a European patent, its costs may be a problem to some applicants. They are required to pay the filing fee, search fee, claims fee for the 16th and each subsequent claim up to the limit of 50, claims fee for the 51st and each subsequent claim, translation of the patent and transfer fee. The total amount of the fees and payments involved may reach as much as EUR3,000-4,000. ::

Despite the benefits associated with a European patent, its costs may be a problem to some applicants. 5 /2012 :: polish market :: 65

Warsaw financial hub

Thinking big The Warsaw Stock Exchange (WSE) is the largest national stock exchange in Central and Eastern Europe and one of the fastestgrowing exchanges in Europe

The traditions of the Polish financial market go back to 1817 when the Warsaw Mercantile Exchange was established. However, the real Polish capital market started on 16 April 1991 when the Warsaw Stock Exchange commenced business in its present form. On the first trading day, at the unpleasantly looking stock exchange building—previously the seat of the Central Committee of the ruling Communist party—only five stocks were listed. Seven brokerages took part in the trading and there were 112 buy and sell orders, with a turnover of only PLN 1,990 (USD 2,000). Still, this event could be perceived as a symbol of the rapid Polish transition from a communist to a market economy. Initially, trading sessions at the WSE took place only once a week but in the next year the second session was introduced and with time, the next ones. Finally, in 1994 every work day was a business day at the WSE. Since 1992 government bonds were listed alongside shares and in 1998 the WSE commenced derivatives trading.

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Every year the turnover and the capitalization of companies listed on the stock exchange was growing and in 1999 it exceeded PLN 100 billion. The WSE continued to innovate and evolve to meet the needs of its clients and in 2000 it launched the WARSET trading system which enabled a continuous trading for the first time on the WSE. Soon the WSE was firmly established on the European capital market. As the first exchange from Central and Eastern Europe, it was granted the status of a designated offshore securities market by the US Securities and Exchange Commission. With this the SEC confirmed the status of the WSE as a well-regulated capital market which meets the standards recognized in the US. In 2008 the stock exchange was also recognized as an „Advanced Emerging” exchange by FTSE, alongside markets from such countries as South Korea or Taiwan and in July 2010 the WSE entered into the Master Agreement with NYSE Euronext to establish a framework for their strategic cooperation. Moreover, in September 2011 FTSE denoted the Polish Capital Market for a possible promotion to Developed Markets Watch List Category. Since 9 November 2010 the WSE has been a public company listed on the Warsaw Stock Exchange. The exchange continued to evolve to meet the needs of its clients. Apart from running a regulated Main Market for shares and derivative instruments, in 2007 the WSE opened an alternative stock market NewConnect for small and medium sized, developing companies; in 2009 launched Catalyst market, designed for corporate, mortgagebacked, co-operative and municipal bond issuers; and in 2010 created the POEE WSE Energy Market – energy trading platform. In February 2012 the WSE acquired more than 90% shares of the Polish Power Exchange (POLPX or TGE SA).

The present day WSE Nowadays, the Warsaw Stock Exchange is one of the fastest growing stock exchanges among European regulated and alternative markets and the biggest domestic stock

exchange in CEE. “We became the largest market in the region in capitalization, ahead of Vienna, in the middle of the crisis,” points out Ludwik Sobolewski, the President of the WSE Management Board. Despite the difficult situation on the global financial markets, 2011 was very successful for the WSE. It was the world’s number one stock exchange by growth rate in the number of listed companies and number seven by growth rate in the value of shares traded, according to the World Federation of Exchanges (WFE). The number of companies listed on the WSE increased by 33% to 777 in comparison to 2010, which is the best proof of attractive conditions created by the WSE for domestic and foreign investors. While indices on most global exchanges were falling, session trading in shares on the WSE increased by 25% (converted to USD) in view of a 0.1% decrease of the total turnover in shares on the global exchanges, which demonstrates the strong growth potential of the WSE. Last year, it also consolidated its position in Central and Eastern Europe by generating 50% of trade in shares of companies from the region and representing 45% of the capitalization of the exchanges in the region. The WSE may be already considered as an international market as it has a good reputation among not only Polish, but also foreign investors, financial institutions and issuers. Foreign investors comprise an important shareholder group in WSE-listed companies. In 2011 they had a dominant share in equities trading on the WSE Main Market, generating 47% of all equities trading in 2011. Moreover, they recorded growing share in derivatives trading, generating 24% of trading in options in 2011. The WSE also expanded its international footprint by attracting issuers from Bulgaria, Lithuania and Slovenia. The Warsaw bourse is attractive for foreign issuers as it provides, among others, the possibility to enter the region’s largest economy and to increase liquidity of existing shares through dual-listings across many exchanges. Foreign investors also appreciate access to substantial capital of Polish Pension Funds and Open Ended Investment Companies as well as to an active group of individual investors. The WSE was also one of the strongest IPO markets in Europe and world-wide in 2011. “We ended the year as number one in

Warsaw financial hub

Europe in terms of number of IPOs – 47% of all initial public offerings on European securities exchanges in 2011 took place at the WSE,” says Sobolewski, who adds that “In total, 203 companies were newly listed on the WSE Main Market and New Connect.” Moreover, due to its growing importance and international recognition the WSE attracts remote members, which strengthens additionally its international status. At the end of 2011 it had 30 domestic and 31 foreign stock exchange members and the number increased from 21 foreign investment banks and brokers. All of this confirms the rationale of many initiatives taken by the WSE and WSE Group companies in 2011. These include in particular the extension of the trading hours which was one of the main drivers of growing investor activity in 2011.

Looking ahead “We are still broadening our operations,” Sobolewski ensures. At the beginning of 2012, the WSE issued its own bonds on

Catalyst market. Demand was much greater than the value of placed bonds, PLN 245 million nominal value, while the yield of the bonds at WIBOR + 117 basis points demonstrated that investors consider the WSE to be among the Polish companies in the best financial condition. Retail and institutional investors who participated in a public offering of WSE bonds acknowledged the market achievements and the stable financial position of the WSE. What is more, the funds raised in the bond issue allowed the WSE to enter 2012 with new assets in the Group: commodity trading assets (Polish Power Exchange) and clearing assets on the commodity market (Warsaw Commodity Clearing House). “These changes, combined with the implementation of a new trading system, will drive further dynamic growth of the Group and diversify its sources of revenue,” Sobolewski says. “As a result, they will be an important factor in increasing the attractiveness of the national financial market and building shareholder value of the WSE.”

“We have a great chance to become a regional financial hub, not through acquisition of other operators, but through working to enlarge our network of intermediaries and attracting interesting companies to Warsaw,” Sobolewski adds. “Our policy is to enlarge our network. This is a place where capital is flowing from different areas, from various investors. We are attracting global players to the market.” What are the WSE’s key advantages compared with other exchanges in this part of Europe? “This is a complete market, with a market for equities and a large range of companies since we launched a new platform in 2007. Our offer is addressed to investors with different appetites for risks — both big and small, early-stage investors. We offer equities and derivatives for more sophisticated investors. We have launched a market for municipal and corporate bonds. Our range of financial instruments is very broad and it is our strategy to have such a compound market. This is unique. WSE is a big boutique with many financial instruments,” Ludwik Sobolewski says. :: ADVERTISEMENT

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Warsaw Stock Exchange

From good to great Polish Market talks to Tomasz Witczak, Vice-President of the Management Board and Head of Equity and Capital Markets at UniCredit CIAB Poland, about the privatization and the selling points of the Warsaw Stock Exchange.

How would you evaluate the execution of the privatization program in Poland? The Ministry of the Treasury has had a very good and realistic privatization program. Former treasury minister Aleksander Grad and the incumbent Mikołaj Budzanowski have both carried out a well-balanced privatization policy, with selected big companies privatized through listing their stock on the Warsaw Stock Exchange. It turned out that it has worked extremely well. The IPOs of insurance company PZU, the coal holding JSW and the power holding PGE were one of the largest transactions in Europe. Thanks to the privatizations, the capitalization of the Warsaw Stock Exchange increased significantly and WSE became the market for the region. Just look at the numbers. In 2011 the London Stock Exchange had 39 IPOs worth EUR 13 billion in the aggregate. The WSE at the same time had 31 IPOs worth over EUR 2 billion. The largest transactions were provided by the Ministry of the Treasury. Again last year, the WSE was the third largest trading floor when it comes to the total value of IPOs after the London Stock Exchange and the Spanish Stock Exchange. When it comes to the number of IPOs, however, the WSE was the second largest bourse in Europe. So with all that the WSE, together with the Treasury, not only have come to the spotlight of the international investment community but also became important parts of the international capital markets. Giant deals attract the attention of investors like a magnet. The good work of the Ministry of the Treasury has turned out to be a great marketing for Poland on the European level. Today, when it comes to the money invested in the shares traded at the WSE, nearly 50% comes from foreign institutional investors. Some people claim the time of the global economic crisis is not a good time to sell... You have to privatize state-owned companies regardless of the global economic situation because the state is not meant to handle commercial enterprises—private owners

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are. Privatization, in principle, works well for those companies. On the other hand, the realm of politics should stay away from commercial activities. The antagonists of privatization will never say there is a good time for privatization. They will always have arguments against it regardless of the global economic situation. The economy is one thing, the politics are another thing. They best be separated. One should look at the privatization program in a broader context. It is not only to meet budgetary needs but also to improve Polish economy. Privatization was also a key component of Polish economic success of recent years. Economic success in the middle of global crisis. The Warsaw Stock Exchange is popular in Poland... The fact is that there are very many Polandbased individual investors. There are millionand-a-half individual investor accounts at the WSE. In this respect Poles are very different from individual investors in Central and Eastern Europe. In such countries as Hungary, the Czech Republic, Romania or Bulgaria, investing in company stock just has not taken in. This is a phenomenon indeed. What may be the reasons? There are many. One is that since its inception the WSE has adhered to stringent rules governing trading. This is now safeguarded

by the Financial Supervision Commission, the equivalent of the US Securities and Exchange Commission. When it comes to the admission of companies to the main floor, the highest industry standards and best practices have been a must since the beginning too. It is so demanding that if the shares of your company are listed at the WSE your company gets a lot of credibility, which obviously is important with investors both individual and institutional. And the fact that some of the biggest offers are delivered to the WSE by the Treasury, a government ministry which adheres to the most stringent standards and regulations, only reinforces investor confidence in the Polish capital market. At the and, information is the key. Both brokerage houses as well as authorities make a lot of effort to educate individual investors. Just to mention Civic Shareholding sponsored by the ministry as a very important initiative. Working for an investment bank you talk to many different companies abroad to persuade them to float their stock at the WSE. What are the WSE selling points for potential issuers? Foreign companies view the WSE as Poland’s big success story. They obviously look at data and the data for the WSE are very good. The market has a strong and stable base of institutional investors—the pension and mutual funds—who guarantee a demand for new stock. Individual investors are very active traders too, which boosts the liquidity of the Warsaw bourse. Stable local investors base attracts also foreign investors to trade on the WSE. Both institutional and individual investors comprise a stable trading base, which makes the volatility of trade at the WSE relatively low comparing to other emerging markets. I mentioned already about high standards of market regulation boosting investors‘ confidence. It has proven a good tool and I think will continue to be a good tool for years to come. As a part of the investment banking community, we promote heavily Warsaw as a listing venue through our Investors Conferences as well as one on one meetings with companies during the Roadshows in Warsaw. It is also a good moment to advertise CEE IPO Summit which will take place in Warsaw at the end of May. The event is co-hosted by the Warsaw Stock Exchange, the National Depositary for Securities, the largest investment banks and law firms advising on IPOs. The summit is supported by Poland’s Ministry of the Treasury and Warsaw municipal authorities. It will be an excellent platform for exchanging experience and knowledge between issuers and investors. ::

Financial market

Volume is not enough The Warsaw Stock Exchange will need to ensure it has the characteristics of a preferred listing venue of the future Filip Gorczyca, PwC The last few years have been a period of success for the Warsaw Stock Exchange (WSE), which has established itself as a true regional capital markets centre. Not only has it become Europe’s most active market in terms of Initial Public Offerings (IPOs) volume, but it has also become a preferred listing venue for companies from across Central and Eastern Europe (CEE). The WSE ended 2011 in first place among all European exchanges with 203 new listings (47% of all IPOs in Europe), ahead of the London Stock Exchange with 101 new entrants and NASDAQ OMX with 30 IPOs. It also attracted as many as 15 IPOs of foreign issuers during the year, most of them coming from other CEE countries. Considering the importance of the markets that were left behind (including London and Frankfurt as well as the NYSE Euronext and NASDAQ OMX stock exchange alliances), it is indeed a huge accomplishment. It has also further strengthened Warsaw’s position as the undisputed leader in CEE, with a market capitalisation of EUR 121 billion as at 31 January 2012, more than the next three exchanges in the region—Vienna, Prague and Budapest—combined.

Privatisation offerings a key success factor A key factor in Warsaw’s success have been the large IPOs of state-owned companies, which have significantly boosted the exchange’s fast growth for most of the last two decades. However, it is becoming more and more clear that the WSE will need to find other ways to facilitate its future growth and continue to establish itself as a regional financial centre, as the list of large companies controlled by the government which could still get privatised through the stock exchange has become very short, with just a mere few remaining.

Drawbacks Maintaining a large IPO volume is not enough. While all new issuers bring value to the market, to its continued development IPO value is more important than IPO volume. In this area Warsaw lags behind the leading European exchanges, especially when looking at the listings of privately-held companies. Most of the private sector IPOs in Warsaw in recent years related to small entities. In 2011 as much as 85% of all new listings were conducted on the

of companies from abroad, most notably from Ukraine, which is seen as the main source of new foreign issuers also in the upcoming years. IPOs of companies from other Eastern European countries can also contribute to extending the WSE’s market capitalisation, as a number of entities from countries like Georgia or even Russia have been mulling about a listing in Warsaw already for some time. Another group of potential new issuers which the WSE has to continue to attract are companies from other CEE countries that for certain reasons will be trying to reach out for capital outside of their home market; the most obvious reason being insufficient size and development of the local capital market, which is a major issue in all CEE countries save for Poland. A large number of such companies are looking to add to an already impressive list of 51 foreign issuers from 19 different countries that have listed in Warsaw to date.

A broader picture

alternative market NewConnect, where the typical IPO value ranges from a few hundred thousand to a few million euro, a size normally not encountered in more developed capital markets. Naturally, some of those small entities may rapidly grow and in the future become pillars of the Polish capital market. However, it is hard to imagine that they can make up for the inevitably diminishing number of large stock-exchange privatisations. The traditional capital demand drivers, including private equity exits, deleveraging and spin offs by diversified businesses, coupled with secondary public offerings of companies already listed, will continue generating capital market opportunities. What is more, with time, those transactions will relate to larger and larger entities, as the regional consolidation of CEE businesses will probably gain pace during the next few years. However, even those factors will not suffice to fulfil the WSE’s and the Polish capital market participants’ ambitions for rapid growth, especially as a considerable part of large businesses in Poland are already listed.

Strategy for the future This leads to the obvious conclusion that the only choice for the WSE is to direct its efforts towards attracting further foreign issuers. In the last couple of years this strategy has begun to pay off, as Warsaw has seen a growing inflow

To achieve those goals and to continue to successfully attract foreign issuers, the WSE will have to compete with other European markets. This will be a huge challenge, as in the forthcoming years, due to the further globalisation of financial markets, companies from all over the world looking to go public will have more choice than ever before. However, as PwC’s Capital Markets in 2025 survey shows, Warsaw along with other emerging markets, is in a position to successfully compete with the more developed stock exchanges. Almost threequarters (74%) of respondents in the survey, in which 387 senior executives at companies from around the world and across a range of sectors expressed their views on the future of global capital markets, said that in the next 15 years emerging market companies will look to another emerging market for a listing. Where the companies from emerging markets once eschewed their often small and illiquid local exchanges, aspiring rather to list in the global financial centers of London or New York, now local centers are emerging as sophisticated financial centers in their own right and competing successfully for more of their domestic listing business. This is true to few markets in the world as much as it is to Warsaw. For that to happen, however, Warsaw will need to ensure it has the characteristics of a preferred listing venue of the future. Our survey shows that liquidity is by far the most important characteristic when choosing a stock market, followed by a sizable investor base and good analyst coverage, initial listing and ongoing legal requirements, and infrastructure. In all of those areas the WSE and the Polish government will need to continue their efforts to improve Warsaw’s competitive position. :: 5 /2012 :: polish market :: 69

Economy

Economic Monitor

May 2012

The economy is only a step away from recession Jan Mazurek

Worrying signals

Chief analyst, Towarzystwo Funduszy Inwestycyjnych SA

While most economic indicators do not cause any headaches there are some that may suggest that the Polish economy may not be doing as well as it did in April last year. The number of companies that filed for bankruptcy protection grew by 18% in March 2011 to March 2012, according to the market research firm Hermes. Despite that, deputy prime minister Waldemar Pawlak has spoken in high spirits about the robustness of the Polish economy. The head of the Ministry of the Economy is confident that the 2012 growth of Poland’s gross domestic product will reach 4%.

Inflation off target As reported by Poland’s Central Statistical Office, the inflation rate in March was 3.9%, a drop by 0.3 percentage points from February. This is, however, still below the inflation target set at 2.5% give or take one percent. For Poland, the “healthy” level of the inflation rate should oscillate between 2.5 to 3.5%. Yet, it is not certain what the Monetary Policy Council members will do. The last time the members of the Monetary Policy Council (RPP) convened, the head of Poland’s central bank NBP, Marek Belka, did not hint on any change in the base interest rate. Again, the current rate of inflation is nothing to be afraid of, according to deputy prime minister Pawlak. While the base interest rate is 4.5%, some RPP members may be considering some tightening of monetary policy if inflation continues unabated.

Prices One of the important factors impacting inflation are the prices of food and fuels. The prices of fuels, however, are shaped by international markets while the złoty/dollar exchange rate only adds to the uncertainty. In turn, food prices are in direct relation to the prices of fuels.

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So the threat of economic slowdown is real. The Purchasing Managers’ Index, which reflects the levels of acquisition of goods and services, in March reached 50.1 points which is at the border line between recession and growth. This is why the GDP growth forecasts vary depending on who makes them. None of them, at this point, seem credible.

Unemployment The relatively high unemployment has been Poland’s problem for years. In March, the unemployment level climbed by 0.3% vis-a-vis February, to 13.5%. But seasonal jobs are being created, which will push the unemployment rate down for the summer.

Money supply The money supply in March measured in broad sense (M3) went up to 9% versus March 2011. The current account deficit for February was PLN 1.58 billion, due to, mainly, foreign trade. Polish exports in current prices was PLN 93 billion while imports PLN 102.7 billion. Measured against the same period of 2011, Poland’s exports grew by 14.1%, and imports by 12.8%. With this Poland’s foreign trade deficit in January and February grew by PLN 8.7 billion, which is similar result as in Jan.Feb. 2011.

Budget deficit The good news for the government is a lower than expected budget deficit at the end of 2011. The execution of the 2012 budget is not that happy, however. In March the deficit reached PLN 22.9 billion which is already over 60% of the 2012 plan. In Q1 2012 government’s revenue was PLN 63.5 billion which was mere 21.6% of the plan. For the same period the government expenditure reached PLN 86.5 billion. With this the Polish central bank NBP is determined to come to the government’s rescue. Sitting on a pile of cash, NBP can brag about 2011 record profit of PLN 8.6 billion, a 32% growth vis-a-vis the 2010 numbers.

A bulk amount of that total will go to help the government budget. The NBP record earnings stem from the weakening of the Polish currency in late 2011. The government may also count on dividends from companies in which it has controlling stakes, such as the copper producing giant KGHM Polska Miedź, which cranked out the net profit of PLN 11 billion in 2011.

Public debt and foreign loans Poland’s public debt grew in 2011 by 1.5 percentage points to 54.6% of the country’s GDP. The government plans to compress the debt to 52.4% of GDP this year. The process will be painful for both taxpayers as well as those who will be affected by cuts of budget expenditures. The need to lower Poland’s public debt has been voiced by many. In March, the Finance Ministry paid back an equivalent of EUR 794.6 million on Poland’s debt capital and shouldered the payment of EUR 306.8 million through the interest on the debt. At the same time the value of the US government debt in the hands of the Polish government equalled USD 27.4 billion. By the end of March Poland’s foreign currency reserves totalled the value of USD 99.73 billion. ::

The Polish central bank NBP is determined to come to the government’s rescue. Sitting on a pile of cash, NBP can brag about 2011 record profit of PLN 8.6 billion, a 32% growth vis-a-vis the 2010 numbers. A bulk amount of that total will go to help the government budget.

Mergers & Acquisitions

Exemplary privatization scheme Polish pharma company buys Polfa Warszawa and is ready to buy more. Maciej Proliński

Elżbieta Dzikowska, Artur Woźniak

The process of the privatization of Polfa Warszawa, the largest company in the pharmaceutical group of Polski Holding Farmaceutyczny (PHF), has been completed. On April 19, 2012 Artur Woźniak, president of PHF, and Elżbieta Dzikowska, member of the Supervisory Board of Polpharma, signed in the presence of Jan Bury, deputy Treasury Minister, an agreement for the sale of an 85% stake in Polfa Warszawa to Polpharma. The value of 100% of shares in Polfa Warszawa is PLN957 million. “Today’s development means quite substantial revenue from a very successful privatization scheme,” said Jan Bury. “The offer submitted by Polpharma turned out to be the most attractive one of those made by the companies which responded to the invitation to tender in

this privatization process.” The Polish company, Polpharma, offered not only the best price but also an investment plan for the expansion of Polfa Warszawa and employment guarantees for its staff. The 85% stake that Polpharma acquired in Polfa Warszawa had been owned by PHF and the state. Polpharma is Poland’s leading pharmaceutical company and the largest Polish producer of generic drugs. It operates actively on foreign markets, especially in Central and Eastern Europe and Central Asia. Polfa Warszawa is one of the main companies operating in the Polish pharmaceutical sector in terms of employment and the amount of products sold. The company’s product line is composed of over 140 drugs, which are distributed in Poland and exported to dozens of countries across the world. The strategic alliance between the two important Polish companies is supposed to benefit both of them. PHF was set up in 2004 as the group of companies made up of three leading Polish pharmaceutical producers: Polfa Pabianice, Polfa Tarchomin and Polfa Warszawa. The goal of PHF was to pursue the government’s strategy for the pharmaceutical industry until 2008. PHF was to take over the operating functions of the three companies. But at the beginning of 2009 the Treasury Ministry decided to privatize the three Polfa companies and then liquidate the group. “Polfa Pabianice has already been privatized. Now, the privatization of Polfa Warszawa puts an end to a certain stage in the state’s experience – as the owner - with the pharmaceutical sector in Poland,” said PHF President Artur Woźniak. “We still have one privatization scheme to carry out —that for Polfa Tarchomin. The restructuring of the company’s assets is now underway. As part of it, we will settle the issue of land, of which 96% is already in our hands. The most important thing is that Poland’s best private firms are taking over another strong Polish company and investing in its development. The Polfa companies have been acquired by firms which guarantee their development. The workers of Polfa Warszawa have employment guarantees until December 22, 2014 under the welfare package which is in force in the company. The welfare package ensures many additional privileges and provides more security to the workers than the provisions of the labor law. At the same time, I wish to stress that under the agreement to sell shares in Polfa Warszawa signed by Polski Holding Farmaceutyczny and the Treasury Ministry with Polpharma, the investor has to carry out many development projects worth millions of zlotys in the company. This is the best way to guarantee that Polfa Warszawa continues to develop fast to the benefit of all the interested parties.” :: 5 /2012 :: polish market :: 71

Cultural Monitor

Peter Gabriel in Poland again

Peter Gabriel, one of the most important contemporary rock and folk musicians, is to visit Poland for the second time. The British artist will be the star of Life Festival to be held in the southern city of Oświęcim on May 10-13. Gabriel is an indefatigable musical and visual experimentalist. Once the pillar of the Genesis band, he is a composer, author of lyrics, singer and music producer at the Real World record company. He does not merely capitalize on his previous successes but is constantly searching and venturing into uncharted musical territory. He was in Poland for the first time in May 2003 as part of his Growing Up Tour and gave a concert at the Lech Poznań soccer stadium. This year, the musician will be promoting his latest album New Blood, which features orchestral re-recordings of various tracks from throughout his career, with the orchestra directed by Ben Foster. ::

Book Fair The 3rd Warsaw Book Fair will be held at the Place of Culture and Science on May 10-13. The Republic of Armenia, which last year celebrated the 500th anniversary of its book printing tradition, will be the special guest of the fair. The program of the fair includes more than 10 exhibitions, awarding ceremonies and nominations for literary awards, like for example the most important Polish literary award Nike. One of the highlights of the fair will be the presentation of books nominated

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Tomasz Stańko

Tomasz Stańko, the Polish trumpeter and composer whom The New York Times and Down Beat call one of the world’s best jazz improvisers, is preparing an album dedicated to the memory of Wisława Szymborska, the Polish Nobel Literature Prize winner who died this year. The album will be recorded at New York’s Avatar Studio in June. Its producer is Manfred Eicher and it will be released by the prestigious German company ECM, with which Stańko has worked for several decades now. The album is meant as a continuation of the project Stańko and Szymborska carried out a few years ago by giving joint performances organized by the Znak publishing house. Stańko has invited three New York jazz musicians – David Virelles (piano), Thomas Morgan (double bass) and Gerald Cleaver (drums) – to work with him on the album. ::

for the Ryszard Kapuściński Award for literary reportage. As in the previous year, new technologies, including a forum on e-books, will feature prominently at the fair. The fair will also provide an opportunity for readers to meet their favorite authors. Canadian journalist Carl Honoré will be a guest of Drzewo Babel, the Polish publisher of Paulo Coelho’s books. Jean-Pierre Verheggen, a Belgian prose writer and poet will arrive to the fair at the invitation of the Belgian Embassy in Warsaw. And Frank Cascio, the author of Michael Jackson’s biography entitled My Friend Michael, will be the special guest of the Akcent publishers in connection with the book’s publication in Poland. ::

Courtesy of ECM

Stańko in Tribute to Szymborska

Polish Oscars Distributed Since 1999 the Polish Film Academy, composed of over 500 members, has honored the best films with the Eagles awards, an equivalent of French Cesars and American Oscars. Róża (Rose) directed by Wojciech Smarzowski has won the Eagle award as the best film of 2011. The film, set in Mazuria soon after World War II, tells a harrowing story of survival. Eagle statuettes were also awarded to Smarzowski as the best director, Michał Szczerbiec as the best screenwriter and Agata Kulesza for her part as the Mazurian woman Rose. Jacek Braciak received the award for the supporting male role and Katarzyna and Jacek Hamela for the sound. :: Róża

Photo courtesy of Monolith Films

Photo by Andrzej Marzec Concerts

Peter Gabriel

Cultural Monitor Maciej Proliński recommends:

To watch and listen Grzegorz Ciechowski; Martyna Jakubowicz, Icons of Polish Culture, Agora Ciechowski, 1957-2001, the front man of the Republika band, was one of the most interesting Polish rock musicians of the 1980s and 1990s. The album, composed of two CDs and two DVDs, released to mark the 10th anniversary of his death, presents the phenomenon of this artist. The CDs feature Ciechowski’s own music and the product of his work with other Polish artists. The DVDs contain a recording of Republika’s 1999 concert and a 2002 documentary about Ciechowski. Jakubowicz is one of the most important Polish female singers whose musical interests focus on rock ballad, blues and world music. The three CDs contain her three albums released in the 1980s. The DVD features her 1992 concert in the company of outstanding instrumentalists including Wojciech Waglewski, Mateusz Pospieszalski and Jerzy Piotrowski. I recommend it to those who like true emotion, subtlety and originality in music. Big Bang directed by Andrzej Kondratiuk – Vision – DVD Andrzej Kondratiuk is a distinct figure in the Polish cinema industry. He has won recognition as a comedy director and created his own unique film style, taking full responsibility for many of his films as their director, screenwriter, cinematographer, editor and set designer. His early films, including Big Bang of 1986, which is one of the funniest Polish comedies, have gained a cult following over the

In theaters - poetry and smile The first-night performance of Woman with Matches, a stage adaptation of a novel by Russian writer Klim, was held March 24 at Warsaw’s Narodowy Theater. The play’s director is Aleksandra Konieczna, who is also the author of the script. “The play is something between a drama and psychological thriller. The background for the developments taking place in the home of a married couple is the family history of the female protagonist and details of her relations with her father. They help us understand the complex motives behind a murder,” says Konieczna. The role created by Magdalena Cielecka, one of the best Polish actors, is the play’s great asset. In a compact poetic form, she is able to render a full range of emotions – from innocence and helplessness to despair and anger, grotesque and joke. Wojciech Malajkat has directed a new theatrical version of Le Placard by Francis Veber, a funny story known from Veber’s French film with Daniel Auteuil and Gerard Depardieu. Malajkat’s play has been on at Warsaw’s Syrena Theater since March 15. Tomasz Sapryk as Pignon, an accountant and loser who fears to lose his job and so starts the rumor that he is gay, Piotr Szwedes as a self-confident and homophobic HR worker, and Piotr Polk as the company boss, make a hilarious trio. ::

years. In Big Bang, in which a UFO lands in a Polish village, the director “paints” portraits of several people who contemplate the deficiencies of earthly existence.

Penderecki/Greenwood – Nonesuch/Warner – CD The CD features early compositions by one of the greatest contemporary composers Krzysztof Penderecki, including Polymorphia for 48 string instruments, and variations on his music by Jonny Greenwood, a member of the English rock band Radiohead. Greenwood holds a musical dialogue with Penderecki but does not imitate him. The Aukso Chamber Orchestra under Marek Moś and Krzysztof Penderecki is the third pillar of the disc.

Wymyk – Greg Zgliński – Best Film – DVD Greg Zgliński, a former student of Krzysztof Kieslowski in the Łódź Film School, tells a story of two brothers. When one of them is beaten and thrown off a moving train, the other fails to stand in his defense. The part of the other brother, played by Robert Więckiewicz, is the focus of the drama. Just like Kieślowski, Zgliński refrains from moralizing. He is concentrated on metaphysics and interested mainly in its human and interpersonal dimension. The key to understanding the film, one of the best Polish productions in recent years, is to look carefully at one’s own life. ::

150th anniversary of the National Museum in Warsaw The National Museum in Warsaw, set up in 1862 as the Museum of Fine Arts, is one of the oldest art museums in Poland. It holds 830,000 Polish and foreign works of art in its collections, which span the period from antiquity to the present day, including paintings, sculptures, drawings, prints, photographs and decorative art pieces. The museum is now undergoing an unprecedented change to become a modern institution with a rich tradition. The celebrations of its 150th anniversary, under the auspices of Polish President Bronisław Komorowski, begin on May 17. The museum plans to hold two more exhibitions this year - The Elevated. From the Pharaoh to Lady Gaga and In the Shadow of a Master. Sara Lipska. The first one will show the mechanisms used to build the prestige of people who exercise power or aspire to it, from former hierarchical societies to today’s media-based civilization. The latter will present the art of Sara Lipska, 1882-1973, a Polish artist living in Paris. She dealt with sculpture, painting, stage design and fashion. Among the clients she designed for was Helena Rubinstein. ::

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Culture

The power of song Warsaw’s Grand Theater - National Opera will stage The Nightingale by Igor Stravinsky, a production of the famous Mariinsky Theater that counts among the most important opera houses in the world. The Polish premiere is scheduled on May 26, 2012. Maciej Proliński never studied at music schools but graduated in law from the University of St. Petersburg. He began composing The Nightingale - his first musical spectacle - at the age of 26 (the first draft of the opera was made in 1908). Like most of Stravinsky’s musical performances, The Nightingale is a kind of “choreo-image”. The composer used various terms that suggest the affinity with burlesque and opera buffo, or with the theatrical genres in which the story is told through words and gestures. Stravinsky was the inventor of the themes for many of his stage pieces and the author or co-author of the librettos which consistently touch upon the universal moral dilemmas. Stravinsky’s performances are also notorious for featuring parallelism between goodness and beauty (embodied in music), so firmly rooted in European culture. The nightingale’s wondrous song is just what fascinates people - purifies and overjoys. The production of the St. Petersburg Mariinsky Theater, reputed for the beauty of visual images and perfect performance, has been a permanent item in the Mariinsky’s repertoire for many years. “Russian music is strongly represented in the current theatrical season, as opposed to the previous, more ‘Italian’ one. Situated on the border between opera and ballet, Stravinsky’s fairy tale Nightingale will certainly build a solid bridge linking the eastern and western sensibility in Warsaw. Co-productions with major opera houses around the world, eminent directors, singers and conductors, partnership with the largest opera houses - we have been planning and implementing all these for a few years. We also intend to constantly enrich the repertoire with the 20th century opera classics. One of the key titles that correspond with this strategy is The Nightingale, says Waldemar Dąbrowski, General Director of the Grand Theater - National Opera in Warsaw.

This unusual opera - a lyric tale in three acts - was based on the tale under the same title by the Danish storyteller, Hans Christian Andersen. It is a story of the marvelous bird whose beautiful singing entertains, moves and heals. “And the nightingale sang so beautifully that tears came into the emperor’s eyes, and when they flowed down his cheeks the nightingale sang even more delightfully, and it went straight to his heart,” wrote Hans Christian Andersen in his book. Igor Stravinsky is one of the most famous Russian composers of the 20th century. Though born into a family with musical traditions, Stravinsky

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The performance is directed by Alexander Petrov. The Orchestra and Chorus of the Grand Theater will be conducted by Modestas Pitrenas, a distinguished young Lithuanian maestro, the music director and chief conductor of the Latvian National Opera in Riga. In the vocal parts,the Polish premiere of The Nightingale will feature: Katarzyna Dondalska, one of the most sought-after coloratura sopranos of her generation, Izabella Kłosińska, an outstanding soprano of international acclaim, Rafał Bartmiński, hailed “the most promising Polish tenor” at the Stanisław Moniuszko International Vocal Competition in Warsaw, and Adam Kruszewski, an experienced baritone soloist of the National Opera. ::

Culture

All that jazz Mariusz Adamiak, one of the most influential promoters of jazz in Poland, talks to Maciej Proliński about the 21st edition of Warsaw Summer Jazz Days.

Warsaw represents a bold market for contemporary jazz. Many musicians from around the world perfectly know WSJD, at which, contrary to the prevailing trends, you can share daring pieces of music. The objectives of the festival remain unchanged – the promotion of contemporary jazz irrespective of its country of origin, presentation of all that is the most creative in contemporary jazz. Suffice it to recall that over the past 20 years the festival hosted such celebrities as: John Zorn, Pharoah Sanders, Vernon Reid, Bill Laswell, Michael Brecker, Bobby McFerrin, James Blood Ulmer, Branford Marsalis and Wayne Shorter. To sum up, it should be said that our festival has certainly the largest budget, compared to other national events of this type, but also a very rich program. And we play new, modern jazz, even at the expense of attendance.

Poland seems to be “a land flowing with jazz.” Every year, some 50-60 high-level events are organized in Poland. In what way does Warsaw Summer Jazz Days distinguish itself among other festivals? I reckon that from the very beginning it has been strongly marked by its creator. Certainly, Warsaw Summer Jazz Days is a unique project which, while preserving its pioneering or even avant-garde character, has over the years become the most important initiative dedicated to presenting the world jazz music in Poland. The worldwide position of Warsaw’s festival is currently unquestionable.

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W hat do you say when it comes to inviting jazz artists? The market looks quite saturated, it seems that all the great names have already been at Warsaw’s festival. I remember when we first met in the early 1990s, you dreamed of having Prince and Peter Gabriel. Both have already performed in Poland. Do you have any other concert-related dreams? Attracting artists is no longer a problem today. And I rather stick to exclusively jazz. You have the choice either to be a more courageous organizer and focus on artists who are difficult to reach or to invite those who are easily accessible. You can also maneuver somewhere in between. There is one big name who has not been to Poland yet. I mean the legendary producer and arranger, Quincy Jones. The thing is I am not a big fan of his, so it is not a dream.

W hat attractions are waiting for jazz fans at this year’s 21st edition of WSJD? It is going to be a great treat for jazz fans. This year’ WSJD will last from 9 to 16 July. Our star will be Herbie Hancock, one of the world’s greatest jazz pianists and a person with an amazing sense of production, for several decades, blazing new trails in jazz, but at the same time not too aloof from the music genres seemingly very different from jazz. Dave Douglas, a great trumpeter, one of the “young wolves” of the contemporary American jazz, and Joe Lovano, one of the greatest tenor saxophonists, will perform together. We will also hear Ambrose Akinmusire, an almost 30-year-old trumpeter and a scholar at New York’s Manhattan School of Music, who was under the age of 18 when he already performed alongside such stars as Joe Henderson, and Steve Coleman. The Bad Plus, one of the most important American progressive jazz bands, will perform with another great jazzman – a saxophonist and composer, Joshua Redman. We will listen to Miguel Zenon – this Puerto Rico-born artist, whose record includes a couple of very interesting albums, is a member of the paramount SF Jazz Collective, and used to be part of the bands of such celebrities as Charlie Haden, Steve Coleman. There will also be a performance by Tim Berne, a saxophonist and an extremely interesting representative of the middle-generation New York avant-garde. A concert by Mary Halvorson promises to be very intriguing too. As a guitarist, she collaborated with Anthony Braxton. Less than two weeks later, on July 29, there will be a concert by Melody Gardot held as part of “WSJD Post Scriptum”. Gardot is probably the most desired contemporary jazz vocalist, ranked alongside the likes of Norah Jones. This year’s festival will be held in three locations: the Congress Hall of the Palace of Culture and Science, the SOHO Factory (most of the concerts) and the Jazzarium Café (from July 9 most of the evening solo concerts will take place there). The Congress

Culture

Hall will serve to accommodate only the large, commercial events. Today, that new music does not reach people broadly. You do not hear it on the radio, in shopping malls. In general, the media are heading strongly toward commercialization, and that’s sad. The jazz market is there, it does exist, even if it is not visible in the leading Polish magazines. Does WSJD cooperate with other European institutions and festivals? An important part of this year’s WSJD will be workshops and concerts for young improvisers. This project is run in cooperation with jazz festivals in Rome and The Hague, and with the support of the EU grants. These workshops will be conducted by the teachers from the New York’s School for Improvisational Music – Ralph Alessi, Jim Black, Matt Mitchell and Mark Helias. Young bands from Poland, Italy and the Netherlands will also have their concerts in July. Then, the workshops’ participants will go to Rome and The Hague to share their music. It is meant to inaugurate the future cooperation between Polish and European musicians. Who will represent the young Polish jazz during these workshops? Dominik Strycharski who plays and composes contemporary jazz pieces in many electric and acoustic variants, in his own highly appreciated Silesian band “Pulsarus”; “Daktari”, a trumpeter Olgierd Dokalskiled Warsaw group of improvisers, whose music is a combination of rock energy with jazz improvisations and folk songs; Kamil Szuszkiewicz, the

rising star of the avant-garde improvised music, a very intriguing Warsaw composer and trumpeter. W hat role does the festival play in the promotion of Warsaw and in shaping Poland’s image in the world? The 20 years of the festival have shown that Poland can host important musical events that attract jazz fans from across Poland and abroad. Every year, WSJD gains new listeners. Culture has always been Poland’s showcase. It is especially in these economically difficult times that we should not forget that. Speaking of which, has the global financial crisis spared the festival? Of course, culture is not an island that happily skips the economic problems or global financial turmoils. Some cultural institutions have already been affected, other will probably not feel them yet. It is easier for the initiatives that boast a long tradition, earned prestige and represent a high artistic level – in such cases sponsors do their best to maintain the current financial commitment. This is mainly because the promotional effect of the support by private companies is multiplied by public funds. WSJD receives funds of the Ministry of Culture and National Heritage, the City of Warsaw and the EU. We also have loyalprivate sponsors. Yet I must say that the sponsorship market has recently somewhat collapsed, even when it comes to the so-called higher culture. Our festival will be organized in an almost unchanged format, and with the program planned long before. ::

Melody Gardot Herbie Hancock

Mariusz Adamiak Photos: Akwarium Agency

started a career as jazz animator in Poland, taking over the direction, in 1988, of the Warsaw Jazz Club Akwarium – the oldest jazz club in Poland. Under his leadership, the club quickly became one of the most famous jazz clubs in the world, visited by, Joe Zawinul, Chick Corea, James Blood Ulmer, Bill Laswell, and John Scofield. In 2000, Akwarium was shut down due to the construction of the InterContinental hotel. Another turning point in Adamiak’s career was the creating of a prestigious festival – Warsaw Summer Jazz Days. In July 2012 it will be held for the 21st time. ::

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Culture

Zygmunt Krasiński, a Polish national bard and Romantic poet, and his Opinogóra Jan Kowelski

Opinogóra Castle

One of the most interesting spots in Mazovia is Opinogóra – a village of medieval origin that lies approximately 110 km north of Warsaw and 8 km east of Ciechanów. Opinogóra is home to Poland’s unique Museum of Romanticism – picturesquely situated on three hills, with a palace and park complex covering the area of approximately 24 ha. It is a remnant of the former splendor of the Krasiński family of the Ślepowron coat of arms. The palace complex is distinguished by the neo-Gothic castle from 1843, offered by general Wincent Krasiński (1783–1858) as a wedding gift for his son Zygmunt Krasiński (1812–1859), a great Romantic poet, playwright and philosopher. 18 February 2012 marked the 200th anniversary of his birth. Zygmunt Krasiński was born in Paris. His mother, Maria Urszula Radziwiłł, originated from a Lithuanian noble family. He was baptized in the Notre Dame de Lorette parish church on the day of his birth. One of his godmothers (he had two pairs of godparents) was Maria Walewska, Napoleon’s lover famous for her beauty. Both his place of birth and the honorable ceremony of baptism are attributable to the position of his father,

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a devoted partisan of Napoleon and the commander of the 1st Light Cavalry Regiment of the Imperial Guard. At the time, count Krasiński also held Opinogóra, once a royal possession which had been administered by his ancestors and lost as a result of the partitions of Poland. It was regained in 1811 thanks to Napoleon who donated it to Krasiński, considered to be one of his best soldiers. Zygmunt’s childhood and young adult years passed between Warsaw, where he lived with his parents in a palace at Krakowskie Przedmieście, and Opinogóra, an idyllic holiday destination, but also a place where he suffered a major trauma. Here, in the basement of the newly built church, his beloved mother was buried when Zygmunt was ten. A beautiful gravestone from white marble sculptured by Luigi Pampaloni commemorates her. From the early childhood, the poet received a solid education and was very talented artistically. At the age of six, he performed in a charity concert along with little Frederic Chopin. At the age of fifteen, he already knew several languages, including classical, and he was a law student at Warsaw University. Since 1828, Zygmunt continued his studies in Geneva. At that point, he could already boast a number of serious literary attempts. From that time on, he lived abroad, mainly in Italy and France. As a son of a wealthy family, he was financially independent and associated with international aristocratic circles. During his stay in Switzerland, he became familiar with the literature and the idea of European Romanticism. His views were influenced by Adam Mickiewicz as well as French and German thinkers of the time. In 1835, his masterpiece Nie-Boska Komedia (“The Un-Divine Comedy”) was published in Paris. This metaphysical drama was translated into several languages and staged in Prague, Budapest, Vienna and other cities. He authored writings of various

genres: poetry, drama, prose and epistolography. They are of historical and philosophical nature, with Messianism and love for major themes. He died in Paris, but was buried in the family pantheon in the basement of the church in Opinogóra. The nearby cemetery, founded in 1824, is one of the most interesting necropolises in northern Mazovia. There can be found graves associated with the Krasiński family, including soldiers from Napoleon’s regiment. After the historical turmoils and destructions of World War I and World War II, a Museum of Romanticism was established fifty years ago to preserve the memory of the great Pole and European. Exhibition halls in the neo-Gothic castle remind visitors of Krasiński’s aristocratic roots, and help learn about his childhood and early adult years, his closest family, the wife and children, friends and the women of his life. Showcased are first editions of the poet’s works, including those in English, Czech and Arabic. Due to the role Zygmunt’s father played in the French emperor’s military campaigns, there are also souvenirs of the Napoleonic era, among which is Napoleon’s briefcase, taken by the Cossacks during the crossing of the Berezina. The nearby manor outbuilding, dating from the first half of the 19th century, presents the history of the Krasiński family and houses temporary exhibitions. In 2008, the Opinogóra museum was extended to a new building. It is a mansion built on the basis of an uncompleted project from before a century – the one which won the first prize in the competition launched by the poet’s grandson, Adam Krasiński. Its exhibition halls are filled with the spirit of Romanticism. Finally, it is worth mentioning monthly concerts that have been organized there for over forty years, gathering the best artists. Likewise, meetings are held with scientists, writers and businessmen. ::

Events

Business and art – in one room... The Bank Pekao SA Project Room is a brand-new initiative by two partners: The Centre for Contemporary Art (CSW) in Warsaw and Bank Pekao SA. The idea behind the project is to support young artists – every second Monday a special room inside the Centre will host exhibitions presenting the feats of contemporary visual arts, including innovative artistic techniques, new media, and also concerts. Maciej Proliński

Luigi Lovaglio, President of Pekao SA

The project will initially focus on Polish artists, later also introducing foreign works. It will be launched on 23 April with an exhibition of works by Aleksandra Waliszewska (born in 1976 in Warsaw). A graduate of the Academy of Fine Arts in Warsaw, she is a painter, and the creator of gouache paintings, drawings, graphics, and illustrations. In 2003 she was granted a scholarship from the Ministry of Culture and Science, and in 2010 she reached the finals of the Polish section of the Henkel Art Award. From June 2012, to mark the cooperation between Poland and Ukraine during the European Football Championships, the Bank Pekao SA Project Room will also be hosting five Ukrainian artists. “Besides the project’s artistic value, which, I hope, will be ensured by inviting the best young artists out there on the Polish and international scene, I believe a very important aspect of the project is the signal of openness that this will be from CSW. Although the Bank Pekao SA Project Room is a small space, we wish to open its doors wide for everyone, who – when properly

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prepared – wants to enter the world of contemporary art. The added value of this undertaking is that it is supported by a bank. I feel that the involvement of individuals is very important for the development of Polish culture, and that, in this time of great changes, their actions will contribute to future development in a measurable way,” said Fabio Cavallucci, Director of CSW. “We’re pursuing a project that we really care about. At Pekao we believe in the young generation of artists. We are glad to give them a place in which they can exhibit their works. It’s always a joy when we can get people closer to art. We see it as a good way to develop. Why are we doing this? Investing in art and culture has always been an integral part in our bank’s growth. Art is not just about reproducing reality, it’s supposed to leave its mark on it, to facilitate the exchange of ideas, to foster progress and innovation. Our bank’s participation in this project confirms our commitment, as a leading financial institution, not only to economic development, but also to the promotion of art. I believe that artists’ exhibitions

in this Room will, as cultural events, become a regular feature in the Polish year in arts,” declared Luigi Lovaglio, President of Pekao SA. The Centre for Contemporary Art (CSW) is one of the most active art centres in Central and Eastern Europe. For over 20 years it has been a place where contemporary art is created and exhibited in all its manifestations. Fabio Cavallucci, an Italian art critic, who was the Director of the Municipal Gallery in Trident and of the International Sculpture Biennale of Carrara, has been CSW’s director since June 2010, and also the first foreign head of a Polish art institution. His contract expires at the end of 2014. Bank Pekao has for years participated in social and cultural initiatives, both from the financial and organisational side, which found recognition in the “2011 Patron of the Year” award from Bogdan Zdrojewski, the Minister of Culture and National Heritage. The events supported by Pekao included the trademark Polish festivals – the International Festival Wratislavia Cantans and the Shakespeare Festival. ::

Aleksandra Waliszewska, In the sky

Events

14th Wind Energy Forum The Ministry of the Economy presented a new draft law on renewable energy sources at the 14th Wind Energy Forum held in Warsaw in April. “We hope it will be conducive to the development of green energy in Poland,” said Krzysztof Prasałek, president of the Polish Wind Energy Association (PSEW) and the organizer of the Forum.

Under EU Directive 2009/28/EC, by 2020 Poland is required to raise the share of energy generated from renewable sources to 15%. Wind power generation is the fastest growing renewable sector in Poland. The Ministry of the Economy projects that in 2030 wind power will account for 13% of electricity produced in the country. According to a report published by Ernst & Young in March 2012, Poland is the 10th most attractive market for wind power generation. The country has a large potential for the development of this kind of green energy. However, Poland’s installed wind power capacity accounts for a mere 2% of the total capacity of European wind farms. Wind turbines in Poland have an installed capacity of 1,616MW, compared to 29,060MW in Germany and 21,674MW in Spain. In 2011, the capacity increased by 437MW, much less than had been expected – some operators projected an increase of as much as 2,000MW. The pace of increase is slowing, despite hundreds of millions of euros having been spent from European Union and national sources to develop wind power. Most of the power capacity is installed in the largest 40 wind farms, most of them located in northern Poland. As Krzysztof Prasałek said, there are many barriers to exploiting this potential. Problems with connecting the generating sources to the power grid are among the most important barriers. The existing system designed to support wind power energy is much less conducive to large projects than was initially expected. Until 2007 the sector was developing very slowly in Poland. Apart from a few wind farms, only small projects

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were carried out and in most cases the investors installed used turbines imported from Western Europe. Some acceleration was noted after 2005, but investors were still very cautious and the first projects relied on subsidies and preferential loans. After 2007 investors started to locate their wind power projects not only in northern but also in central and southern Poland. The largest project implemented in 2011 is the 70MW wind farm in the village of Korsze in north-eastern Poland. The first larger projects are also underway in southern Poland. One example is the farm in the village of Lipniki in southern Poland. Twenty projects with a combined capacity of 330MW, funded under the EU’s Infrastructure and Environment program, are to be carried out by 2013. Piotr Łuba, partner at PicewaterhouseCoopers (PwC) Sp. z o.o., pointed to regulatory instability and the existing support system, which poses a risk to the investor and is treated skeptically by financial institutions, as the main reasons behind the slowdown in the growth of wind power capacity in Poland. The analysis conducted by PwC determined quite precisely the financial parameters needed to ensure profitability for different variants of wind farms in Poland and for different operating conditions. It showed that financial support should ensure a price per 1MWh not lower than PLN530. In November 2011, the Ministry of the Economy published its draft of a new law on renewable energy sources and invited opinions on it. In response, the ministry received 1,300 pages of comments submitted by almost 100 organizations. At the 14th Wind Energy Forum, Janusz Politowski, director

of the renewable energy department at the Ministry of the Economy, reported about the ministry’s work on the draft law and the scope of proposals submitted and taken into account in successive versions of the draft. In its latest version, the draft restores the obligation for companies selling and distributing energy to buy energy from renewable sources. Additionally, the draft introduces mechanisms to deal with the oversupply of green certificates, that is certificates proving that the energy comes from renewable sources, to regulate problems caused by the inability to sell green electricity on the market. The ministry promised that the existing level of support for the wind farms which are already in operation will be maintained while new projects will receive regular support for 15 years to ensure security to the investors. “We want the law on renewable energy sources to be transparent and clear,” said Andrzej Czerwiński, head of the parliamentary energy committee. “This is why we have decided to separate it from the general Energy Law. It will contain support mechanisms and will be stating clearly what should be done to invest and have a decent return on the capital invested in a decent time.” “The new law will be supporting the development of wind power generation in Poland more actively,” Krzysztof Prasałek said to sum up the debate. “Keeping the obligation to buy green energy, maintaining the existing level of support for the wind farms which are already operating and ensuring a 15-year steady level of support for new projects are the most important changes from the previously presented draft.” ::

Events

10th jubilee of Polish Exporters Association Organization celebrates its 10th birthday; Minister of Agriculture and Minister of Economy extend their congratulations.

Discussion panel: Mieczysław Twaróg, president of the board, Polish Exporters Association; Adam Fura, director of the Farmers Consultation Point in Świętokrzyskie region; Wojciech Dzieciuch, deputy head of Sandomierz county; Janusz Stasiak, president, the Sandomierz Association of Regional Development

Handling the crisis Economists look for the best ways to manage economic growth in the years to come.

Uncertainty and Instability in the Economy is the title of a new book by Prof. Władysław Szymański from Warsaw School of Economics (SGH) who presented it during a debate sponsored by the Lech Wałęsa Institute, organized by the Polish Economic Society (PTE). Another speaker was former finance minister Prof. Grzegorz Kołodko, the author of many books on economics including some, such as Truth, Errors, and Lies: Politics and Economics in a Volatile World published in the US. While Prof. Szymański focused on the history of capitalism arguing that crisis is an innate part of this economic system, and it is up to the politicians and business leaders how we will handle the current crisis, Prof. Kołodko said that we have to review the values that govern our economic growth because those values which underlined it in

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The Polish Exporters A ssociation held a jubilee 10th anniversary meeting at the Warsaw Sofitel Victoria in late February. Among the honorary guests were Prof. Jerzy Osiatyński, economic advisor to the Polish President; Edmund Borawski, MP and president of the Mlekpol dairy cooperative; Andrzej Buta, undersecretary of state at the Ministry of Agriculture and Rural Development; and Waldemar Broś, president of the National Association of Dairy Cooperatives. During the meeting the Association’s founding members and regional coordinators received congratulatory letters from the Minister of Agriculture and Rural Development. In addition, Edmund Borawski and Waldemar Broś received jubilee, congratulatory diplomas. Prof. Osiatyński extended his congratulations to the association’s members. Together with a representative of the Ministry of Economy, Prof. Osiatyński passed to Edmund Borawski a congratulatory letter and the Grand Prix Statuette from the Minister of Economy. ::

2008-2012 will not function well in the years to come. He said that politics should play the role of a servant to economy, “but today it is hard to define how this role should look like.” “The scale of (the economic) instability is huge today,” Prof. Kołodko said, “but it is nothing that we would not be able to control,” he concluded. :: Prof. Grzegorz Kołodko; Prof. Elżbieta Mączyńska, chair of PTE; dr. Roman Malinowski, Lech Wałęsa Institute

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The King of Pierogi Waldemar Sadowski Poland is the country of pierogi. Do not think that you can find really good pierogi outside Poland, although stuffed dumplings appear on the tables in other countries as well. They call them pelmeni in Russia, vareniki in Ukraine, ravioli and tortellini in Italy, wonton, guo tie and jiaozi in China, and Maultaschen in Germany. But every gourmet of Polish cuisine will say: “These are not genuine pierogi.” The best pierogi are made in Poland. And the King of Pierogi is Maciej Rudziks, an entrepreneur, raconteur, reveler, lover of Polish cuisine and expert on it. “I made my first pierogi when I was five,” Maciej Rudziks says. “I was helping my mum in the kitchen.” It was just fun then, but it is clear that Maciej Rudziks has had to do with pierogi since he was a child. “But it was somewhat later, when I started

Recipe recommended by Maciej Rudziks Pierogi stuffed with buckwheat Ingredients Dough: 50 dag plain flour, 5 eggs, 2 tablespoons oil, 1 tablespoon water if needed Stuffing 20 dag buckwheat, 15 dag lean smoked bacon, 10 dag dried plums, marjoram, salt, pepper, 2 eggs, oil for deep frying Directions Cook the buckwheat according to the directions on the packaging. Knead the dough using the ingredients listed above, wrap it in food wrap and put in the fridge for at least 1 hour. Cut the bacon into cubes and fry it on a dry pan. Cut the dried plums into cubes and add them to the buckwheat together with the fried bacon and eggs. Add marjoram, salt and pepper to taste. Roll out the dough thinly, cut rounds and place the stuffing in the center of each round. Press and seal the edges and deep fry. ::

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a family and cooked dinners for fun from time to time, that I really mastered the art of making pierogi,” he adds. “I copied many tricks from my wife. Then, when we were starting up our business, we already had most of the recipes.” The King of Pierogi is always smiling and has an anecdote or an apt joke suitable for every situation. Maciej Rudziks is 63. He is a graduate of the Warsaw University of Life Sciences (SGGW). The family business which he has run together with his wife Krystyna is now undergoing deep restructuring. But pierogi, a pillar of Polish cuisine, will remain in the product line, offering hope that the good old-Polish tradition will not disappear among culinary immigrants, like hamburgers and kebabs. To be honest, one has to admit that pierogi is not a fully Polish dish since it also immigrated to Poland - in the 13th century via Ruthenia, where it had probably been brought to from the Middle East. Legend has it that the first Pole to develop a taste for pierogi was Bishop Jacek Odrowąż, who brought them to Poland from the Ruthenian capital Kiev. Pierogi are dumplings of unleavened dough, which is rolled out thinly and then stuffed with various fillings. The dumplings are then cooked by boiling, baking or frying. In Poland pierogi are most often stuffed with meat, sauerkraut, mushrooms, curd cheese, buckwheat, fried onion and potatoes. Pierogi stuffed with lentils are popular in eastern Poland. One can also use eggs, fish, spinach, vegetables, marmalade, chocolate and honey to stuff pierogi. Maciej Rudziks has brought this old culinary tradition to the highest level of sophistication. The pierogi he produces are made with the use of only certified organic ingredients: meat, cabbage, mushrooms, cheese and flour. No chemicals are added at any stage, from grain production in the field to the production of the animals whose meat is used to stuff the

pierogi to the final production process in the Rudziks plant - no pesticides, artificial fertilizers, improving agents, anti-caking agents and so on. The family business dates back to 1992 when Maciej and Krystyna Rudziks launched a small plant to produce ready-made food. Then, the family set up the Bracia Rudziks (Rudziks Brothers) company. It is a truly family business – modern but rooted in Polish tradition. This is why Maciej Rudziks can say today: “We are pierogi.” The Bracia Rudziks company was later renamed Brex and the family decided to depart from highly processed conventional foods. Instead, after restructuring, the small family company will focus on the production of organic pierogi and ready-made dietetic foods. In order to carry out the ambitious plans and exploit its potential to the full, the company started to look for an investor. Maciej Rudziks invites prospective investors to negotiate, but is not going to move quickly. He will be waiting for the right partner to turn up. Apart from the dietetic foods and pierogi, the Rudziks will soon add game pâtés to their line of organic products. The recipes, developed by Maciej Rudziks, are inspired by the rich tradition of old-Polish cuisine. The pâtés will be made in cooperation with Jasiołka, a producer of organic meat and cold cuts. Made in a small plant to a brilliant recipe and using organic ingredients, the pâtés will appeal to the palates of the most picky gourmets. Maciej Rudziks is sure that his pâtés will make it to the most distinguished tables in Poland and Europe. In the past, Poland was a country of pâtés. And the smell of the Rudziks pâtés make one think of the larders in the traditional small country houses of the Polish nobility. Those present at the official Christmas-Eve reception at the Butchers and Meat Processors’ Guild had an opportunity to get familiar with their exquisite taste, with Maciej Rudziks serving his delicacies to the guests himself. I also had the pleasure to taste this masterpiece of old-Polish culinary art – the fine pâté, with a delicate note of juniper berries or fruit, melted in the mouth. After the first bite it was obvious to me that Maciej Rudziks should soon receive a new title - the King of Pierogi and Pâtés. ::

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4th Easter Meeting of Butchers and Meat Processors Bożena Skarżyńska The Association of Butchers and Meat Processors (SRW RP), whose mission is to integrate the trade community, has a tradition to hold joint meetings on special occasions. For more than 10 years butchers and meat

Andrzej Butra, deputy agriculture minister, presented awards to the best producers.

Reception tables were full of traditional Easter dishes.

The 4th Easter Meeting was an opportunity to distribute medals commemorating the 90th anniversary of the association. Janusz Rodziewicz, president of the association, presented one of the medals to Andrzej Butra, deputy agriculture minister.

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processors have held New Year’s meetings in Warsaw in January. And for four years the association has organized the National Easter Meetings of Butchers and Meat Processors under the slogan Easter Meat Holidays - Polish Tradition. The venue for the latter meetings is the mid-western city of Poznań in the region of Wielkopolska. There is a good reason why Wielkopolska has been chosen for the Easter Meetings. It is Poland’s largest pig raising and meat processing region, with old and cherished traditions in cured meat production. Wielkopolska has the largest number of animal farms and meat-processing businesses - both small family-owned and large modern processing plants. For nearly 20 years Poznań has been the venue for cured meat competitions organized by the association at the International Polagra-Food Fairs. The Easter Meetings also provide an opportunity for producers to compete with their best traditional meat products. Processors from across Poland submit for the Easter contests their hams and other smoked meats, pâtés and sausages, especially white Polish sausage, which is traditionally eaten at Easter. All the products are made according to traditional regional recipes. The head of the jury, composed of research workers, specialists and consumers, is Prof. Włodzimierz Dolata of the Poznań University of Life Sciences. He has drafted the rules and regulations for the Eastern contests. After completing the assessment of the products delivered for the 2012 contests, Prof. Dolata said with satisfaction: “This competition was a real pleasure for the members of the jury. The taste and quality of the meats were excellent.” This view is shared by secretary of the contests Jerzy Mróz, who said: “The high level of the competition is reflected in the fact that only one product received a 4 on a scale from 1 to 9. We have rated over 100 products. It was a real

satisfaction. Let me add that differences in individual ratings were measured in fractions of a percent, which shows clearly that the level of the competition was even.” This year, the Easter contests were held for the first time at the premises of the Poznań International Fairs, which is the venue for the Polagra-Food fairs. The Easter contests and the 4th Easter Meeting of Butchers and Meat Processors were held under the auspices of the minister of agriculture and rural development, who also funded cups for the producers of the best cured meats. Present at the Easter Meeting, held just before Easter, were members of the Association of Butchers and Meat Processors, officials of the agriculture ministry and government agencies, and representatives of other trade associations and institutions supporting the association’s activities in Wielkopolska. The winners of the contest received certificates of distinction and cups. This year, the Association of Butchers and Meat Processors will be celebrating its 90th anniversary. The official celebrations will be held in the southern city of Częstochowa on June 23, but each of their meetings this year includes some anniversary accents. At the Easter Meeting, it was medals commemorating the 90th anniversary of the association. They were awarded to several people from the Wielkopolska region who had rendered special services to the association. One of the medals went to Andrzej Butra, deputy agriculture minister, who said: “It is a great idea to hold a contest which shows Polish consumers, just before Easter, products of high quality and traditional taste, products which are worth buying and putting on the Easter table. Polish processing plants are among the most modern in Europe and Polish cured meat producers, while modernizing their plants and seeking innovation, remember about tradition and take special care to preserve typical Polish tastes. The reception tables prepared for the 4th Easter Meeting in Poznań were full of Easter dishes, including cured meats, roast meats, eggs and tureens with żurek, the famous soup made from fermented rye flour with white Polish sausage. In keeping with the Polish custom, participants in the meeting shared egg wedges and wished prosperity to each other. ::