WBJ #48 2011

Poland’s public sector is less corrupt, but still has work to do

ArcelorMittal may cut nearly 1,000 jobs in Poland

The Polish ‘national brand’ is getting stronger in the region and globally 7

WWW.WBJ.PL

VOLUME 17, NUMBER 48 • DECEMBER 5-11, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

Russia’s nuclear designs

Since 1994 . Poland’s only business weekly in English

SHUTTERSTOCK

Libya’s riches The war is over, and Polish companies want a piece of the North African nation’s lucrative oil industry

Russian Rosatom wants in on the contract to build Poland’s first nuclear power plant 7

12-13

REAL ESTATE

COURTESY OF HINES

Lokale Immobilia

• Neptun in Gdaƒsk • Mercure to close • Obsolete offices 15-18

In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-4 Business . . . . . . . . . . . . . . . . . . . 5-7 Finance & Economics . . . . . . . . . . .8 Opinion & Analysis . . . . . . . . .10-11 Cover Story . . . . . . . . . . . . . . .12-13 Company Focus . . . . . . . . . . . . . . .14 Lokale Immobilia . . . . . . . . . .15-18 Markets . . . . . . . . . . . . . . . . . . . . .20 The List . . . . . . . . . . . . . . . . . . . . . .21 Lifestyle . . . . . . . . . . . . . . . . . . . . .22 SHUTTERSTOCK

Last Word . . . . . . . . . . . . . . . . . . . .23

Fiscal union?

Red card

Europe may take fundamental steps towards creating a fiscal union this week. Will these reflect changes proposed by Poland? 2, 3, 10, 11

The Polish Football Association’s secretary-general was fired following corruption allegations, but president Grzegorz Lato remains 3

NEWS

www.wbj.pl

€5.8 billion is the latest tranche of aid for Greece that euro-zone leaders have approved. This latest installment is part of a €110 billion package of support.

49.5 points was the November reading for the purchasing managers index for the Polish manufacturing sector, its lowest level in more than two years. Any reading below 50 indicates a downturn in the sector.

Remi Adekoya

Quote of the Week “You may not fail to lead” Foreign Minister Rados∏aw Sikorski, addressing Germany, in his speech “Poland and the future of the European Union” made in Berlin on November 28, 2011

Figures in focus A lost generation? Seasonally adjusted youth (under 25) unemployment rate in October 2011, selected EU27 countries (in percent) 50

40 *Lowest in EU27 **Highest in EU27 30

kia

ain Sp

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Ita

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Fra

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0 Cz Aus t ec h R ria ep ub EU lic 27 av era ge

ment it would likely stand little chance of succeeding. Prime Minister Donald Tusk and President Bronis∏aw Komorowski have both said they back Mr Sikorski’s proposals, although the president noted that “it would have been better to precede the speech with a discussion in Poland,” as then the domestic reaction would not have been “so emotional.” Towards the end of the week, Mr Kaczyƒski decided to raise the stakes even further, saying that on December 13, the anniversary of the introduction of martial law, PiS would organize a march in protest against Mr Sikorski’s Berlin comments. “Poland is in danger of losing its independence,” said the PiS leader. So even though the Berlin speech will likely be quickly forgotten in Europe as major players France and Germany focus on mapping out a new financial framework to ensure the euro zone’s continued existence, Mr Sikorski’s words are sure to remain a topic of debate in Poland for a while to come.

Source: Eurostat

Company index Aedas..........................................15 Jabiva DOO ..................................6 Polimex-Mostostal ....................12 Allegro Group ............................16 Jones Lang LaSalle ..................17 Polish Oil and Gas Company ....12

On WBJ.pl

ArcelorMittal ................................7 KBC Group ..................................5 Praktiker ....................................16 Areva ............................................7 KPBP Budus ..............................15 Project Syndicate ......................11 Banco Comercial Portugues ......5 KPM Agata ................................15

Experience Marie Sk∏odowska-Curie As 2011 winds down, so does the international year of chemistry, which also honored arguably the world’s greatest female scientist, Marie Sk∏odowska-Curie. Check out the final events celebrating the Polish-born, two-time winner of the Nobel Prize by logging on to WBJ.pl to see what Warsaw has to offer before the end of December.

Emergency landing investigated The emergency landing of a Lot Polish Airlines Boeing 767 at Warsaw’s Chopin Airport on November 1 may have been caused by a circuit breaker being in the “off” position, a preliminary report published by the State Commission on Aircraft Accident Investigation revealed last week. However, the report did not officially determine the cause of the emergency landing, which saw 231 people escape uninjured. ●

received by the audience, with former German President Horst Köhler saying that, as someone who was born in Poland, he was “happy that a Polish minister had made such a speech.” The European press also generally reacted positively to the speech, as did many in the Polish media. But some opposition politicians in Poland wasted no time in berating Mr Sikorski, with Joachim Brudziƒski of the conservative Law and Justice (PiS) party saying the foreign minister “longed for the Fourth Reich.” PiS leader Jaros∏aw Kaczyƒski declared that Mr Sikorski should be put before the State Tribunal for breaching the constitution. He said that when Poles voted for EU accession it was for the membership of a “sovereign Poland in an international organization of equal nations,” and not for membership of a federation “where one nation would dominate the rest.” PiS also said it would file a no-confidence motion against the foreign minister, although given the composition of parlia-

Foreign Minister Rados∏aw Sikorski caused a political uproar in Poland last week following a speech he made in Berlin in which he proposed the creation of a European federation whose members’ national sovereignty would be limited in order to allow the powers of existing EU institutions to be enhanced. Mr Sikorski suggested that this would be the only way to ensure Europe could adequately deal with the difficult challenges it faces. His proposals include increasing the powers of the European Commission, electing a number of seats in the European Parliament from a pan-European list of candidates and combining the positions of president of the European Council and European Commission, with the holder of the new office possibly being elected by citizens. Mr Sikorski ended his speech by appealing to his hosts to save the euro zone, adding that he “feared German power less than German inactivity.” The speech was well-

A Belarusian court has sentenced two men to death for carrying out a bomb attack in the Minsk subway in April that killed 15 people and injured around 200 others. Dmitry Konovalov and Vladislav Kovalyov, both 25, were arrested three days after the attack. Belarus is the only European country that still carries out executions.

is the number of basis points by which the US Federal Reserve and five other major central banks lowered the interest rate on dollar liquidity swap lines last week, sending markets higher worldwide.

lan

Death sentence for Minsk bombing culprits

Polish President Bronis∏aw Komorowski visited Ukraine last week, where he asked for a “realistic” solution to the imprisonment of former Ukrainian Prime Minister Yulia Tymoshenko, who was sentenced to seven years in prison in October for abuse of power. Her trial and imprisonment are putting in jeopardy the signing of a UkraineEU free trade area deal and an association agreement, a key priority of the Polish presidency of the EU Council, which ends in December.

Rados∏aw Sikorski

eth

Poland seeks Tymoshenko solution

Numbers in the News

After a new section of the A2 highway reaching the German border opened last week, only 92 km remains to be built before Warsaw is linked to the roadway. The remaining section is expected to be ready in June for the 2012 European soccer championships and will decrease travel times between Berlin and Poznaƒ significantly.

IN THE SPOTLIGHT

A2 reaches Germany

DECEMBER 5-11, 2011

COURTESY OF THE MINISTRY OF FOREIGN AFFAIRS

Bank Handlowy ..........................20 Kredyt Bank ................................5 Bank Millennium ........................5 Kristensen Group ......................15

PZU ..............................................5 Rafako ........................................12

Bank Pekao ................................20 Kury∏owicz & Associates Repsol YPF ................................13 BNP Paribas ................................5 Architecture Studio ....................16 Rosatom ......................................7 BP ..............................................13 LHI ..............................................16 BRE Bank ..................................20 Louvre Hotels ............................18 Budimex ....................................15 Makrum......................................16 Budner........................................16 Manta..........................................14 Bulanda, Mucha Architekci ......16 Millennium Bank........................16

DATELINE

Projektor Architekci ..................15

S+B Gruppe ................................16 Samsung ....................................16 Santander ....................................5 Starwood Capital Group ............18

Citigroup ......................................8 Milwaukee Golf Caddy ..............23 STRATFOR ..................................10 Cushman & Wakefield ..............16 Mostostal Warszawa..................12 Tesco ..........................................16 Dragados ....................................12 Multikino ....................................16 Toshiba ........................................7

December

Echo Investment ........................16 Narev Inwestycje........................16 Total ............................................13 Eiffage Budownictwo Mitex ......18 National Oil Corporation ....12, 13 TVN ..............................................8

WIND ENERGY FORUM

Event:

The Wind Energy Forum will be dedicated to a discussion on the methodology of a recent assessment of wind farms’ impact on birds and bats. Location: Marriott Hotel few2011.psew.pl

POLISH INVESTFORUM

Event:

This meeting is the third edition of the Polish Investforum.

Location: Sheraton Hotel roadshowpolska.pl

JEWELRY AUCTION

Event:

This event is an opportunity to buy unique, precious jewels for a loved one for the coming holidays.z Location: DESA Unicum Marsza∏kowska 3450, Warsaw desa.pl

ENI..............................................13 OMV ............................................13 UBS ............................................17 First Byte......................................6 Orbis Group ................................16 Union Investment ......................16 GE Hitachi ....................................7 pbb Deutsche Pfandbriefbank ..15 Graf ............................................15 Pekao............................................5 Grupa Lotos ..............................12 peter nielsen & partners ............7

Vienna Stock Exchange ............18 vsf-creative ................................15 Warimpex ..................................18

Helaba ........................................15 PGB ............................................12 Warsaw Stock Exchange ......8, 18 Hines ..........................................15 PGE ..............................................7 Westinghouse ..............................7 Hitachi ........................................12 PGNiG ........................................12 Immofinanz Group ....................15 PKN Orlen ............................12, 13 Intesa Sanpaolo ..........................5 PKO BP ........................................5 Investors TFI ..............................16 Pol-Aqua ....................................12

Wintershall Holding ..................13 X-Trade Brokers ....................8, 20 Zdrojowa Invest ..........................15

NEWS

DECEMBER 5-11, 2011

www.wbj.pl

Euro-zone crisis

Fiscal union gaining momentum German Chancellor Angela Merkel has laid out her country’s plan for saving the euro zone

COURTESY OF THE EUROPEAN COMMISSION

In a speech to the Bundestag last Friday, German Chancellor Angela Merkel announced that her country and other European nations were moving towards the creation of a “fiscal union” which would have rigorous budgetary oversight to combat the sovereign debt crisis currently raging in the euro zone. “We are not only talking about a fiscal union, we are beginning to create it,” Ms Merkel said, adding that the last few months of turmoil had changed what people thought was possible in terms of redesigning the architecture of Europe’s financial structures. “Anyone who said a few months ago that we, at the end of 2011, would be making very serious and concrete steps toward a European stability union, a European fiscal union, toward introducing budgetary intervention in Europe would have been considered crazy,” she said. The German chancellor said

A day before Ms Merkel’s speech, French President Nicolas Sarkozy’s thinking appeared to be in sync with the German chancellor’s, at least when it came to the broader picture. “France is fighting with Germany for a new treaty. More discipline, more solidarity, more responsibility … true economic government,” said Mr Sarkozy, who urged members to adopt a “Golden Rule” that would oblige them to balance their budgets.

No euro bonds

Ms Merkel opened the door for Poland to join a future fiscal union Indeed, last week, Prime Minister Donald Tusk presented Poland’s suggestions on how to strengthen the European Union and the euro zone. These include amendments to the EU Treaty, the introduction of tighter financial management, and a strengthening of the roles of the European Commission and the European Central Bank. “Nothing will be like before

that countries outside the euro zone should also be able to join the fiscal union, specifically mentioning Poland in her speech. “Poland has clearly stated that even though it hasn’t yet adopted the euro, it wants to take on stronger obligations. In talks we have had, Poland has also stated clearly that it wants to embark on this path to a stable union,” said Ms Merkel.

the crisis anymore,” Mr Tusk said. The PM emphasized that if Europe fails to find the strength in itself to prevent the breakdown of the euro zone, Poland’s efforts to keep its economy in good shape could come to nothing.

Franco-German agreement? At the EU summit due to be held this week, it is expected

Corruption in soccer

that Germany and France will jointly push for a new European Union treaty that would impose tough new financial rules needed to combat the euro-zone crisis and move it towards greater fiscal integration. Some observers have billed the summit as the last chance to restore the credibility not only of the euro zone, but of the European Union as a whole.

But Ms Merkel remained opposed to the recent French push for the European Central Bank to become the euro zone’s lender of last resort. The Chancellor said in her speech that the ECB’s role was “different to that of the American Fed or the Bank of England. Its role is to stabilize the euro and it is doing that.” Ms Merkel also rejected the idea of introducing euro bonds as a way of fighting the current crisis. Under current circumstances, “joint liability for the debt of others is unthinkable,” she said. Remi Adekoya

Euro 2012

Football Association secretary-general Poland gets favorable 2012 draw fired following corruption allegations Euro The host nation has

The Polish Football Association (PZPN) was once again caught up in controversy last week when secretary-general Zdzis∏aw Kr´cina was removed from his position following a vote by the association’s board. The announcement, which was made by former Polish international and current PZPN president, Grzegorz Lato, followed the release of video footage which seems to show Mr Lato and Mr Kr´cina engaged in a conversation about the distribution of money. Grzegorz Kulikowski, a property developer and former sponsor of the PZPN, who sent the tapes to Poland’s new minister of sport, Joanna Mucha, said the two men were discussing bribes relating to a tender for a plot of land for the association’s new headquarters. In total 14 PZPN members voted in favor of dismissing Mr

Kr´cina from his position, while three voted against the decision. Ms Mucha had earlier put pressure on PZPN when she said that those caught up in the scandal should resign. “Following such situations, which are clear and obvious to any normal person, then yes, certainly those participating in the recordings [should hand in their resignations]. On the other hand I expect dismissals will take place,” Ms Mucha said at the time. Last Thursday, Mr Lato and other senior members of the board were summoned to the Sejm, the lower house of Poland’s parliament, to discuss the issue with Ms Mucha and the Committee on Culture, Sport and Tourism.

Damaged reputation But Mr Lato, an Olympic gold medal winner and the leading scorer at the 1974 World Cup, has refused to resign despite calls for him to step down. He said the only circumstance which could force his exit is if Poland failed to get out of the group stage at next summer’s 2012 European soccer cham-

been drawn in Group A along with the Czech Republic, Greece and Russia

REPORTER

The body’s president, Grzegorz Lato, remains in his position despite involvement in the same scandal

Grzegorz Lato stays on as head of the PZPN pionship, which is being cohosted by Poland. Micha∏ Zachodny, a Polish journalist and author of the site “Polish Football Scout,” told WBJ that for now he expects Mr Lato to remain head of PZPN. “His reputation, which was won as a famous footballer in the 1970s, is now gone, but the problem is that there is no one in the background to replace him, since the Polish Football Association is corrupt to its core.” This is the latest in a long

line of scandals to rock Polish soccer. An investigation into match-fixing of professional soccer games which began five years ago is still ongoing, while in November the PZPN reversed its decision to replace the eagle on the national team’s shirts with its own logo, following widespread criticism. “They sacrificed Zdzis∏aw Kr´cina as it’s a small price to pay … it’s the same situation as with reinstating the eagle, they’re just hoping that the scandal will go away,” said Mr David Ingham Zachodny.

Euro 2012 co-host Poland landed in arguably the best group it could have hoped for at the draw for the tournament in Kiev last Friday. The draw, which took place at Kiev’s Palace of the Arts, saw Poland selected in Group A alongside 1967 winners the Czech Republic, Russia and 2000 champions Greece. Poland has won 10 of its previous 15 meetings with the Greek side, and will be hoping for more of the same when the team faces

Greece in the tournament’s opening match in Warsaw on June 8. This is only Poland’s second appearance in the final stages of a UEFA European Football Championship (originally called the European Nations Cup). Previously, the team featured in the 2008 championships in Austria and Switzerland. Group B is arguably the “group of death” of the 2012 tournament, with three-time winner Germany pitted against 1988 champions the Netherlands and 1992 winner Denmark. Portugal, captained by Real Madrid star Cristiano Ronaldo, is the other team in the group. David Ingham

Euro 2012 group tables Group A Poland, Greece, Russia, Czech Republic Group B Netherlands, Denmark, Germany, Portugal Group C Spain, Italy, Republic of Ireland, Croatia Group D Ukraine, Sweden, France, England

NEWS

www.wbj.pl

DECEMBER 5-11, 2011

Corruption

Independence Day clashes

Poland improves corruption score

Alleged left-wing violence to be investigated

David Ingham

Selected countries’ CPI scores (10 = highly clean, 0 = highly corrupt) 10

9.5 8.9 7.8

7.1 5.5

4.4 3.9

3.6

3.4 2.4 1.8

1.0

q Ko rea

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ia Ru ss

ina

ece Gre

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dS Un

ite

ing dK

ite

tat es Po l a Cz ech nd Re pu blic

s nd Un

the

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lan

Source: Transparency International, Corruption Perceptions Index 2011

The government is launching a probe into comments on an “antifascist” website that describe attacks against nationalists An investigation is to be launched into messages posted in a closed forum on the Polish website of the anti-fascist group Antifa which describe violent attacks on people deemed to be right-wing nationalists, Irena Lipowicz, Poland’s Human Rights ombudsman, said in a statement. An investigative reporter from Polish daily Rzeczpospolita gained access to the closed “Antifa Skins” forum on which Antifa Poland activists allegedly prepare and discuss attacks. The journalist’s findings include messages recounting violent attacks carried out by forum users. “Threw a few punches, a couple of kicks, and the Nazi was down,” is one example of an entry posted on the forum. The forum also contained numerous entries detailing attacks on people who, because of their short hair and militarystyle dress, were considered to

COURTESY OF WIKIMEDIA COMMONS

banners be they rich or poor. Whether in a Europe hit by debt crisis or an Arab world starting a new political era, leaders must heed the demands for better government.” Transparency International managing director Cobus de Swardt added, “High-scoring countries show that over time efforts to improve transparency can, if sustained, be successful and benefit their people.”

The clean and the corrupt

wZ ea

Transparency International’s 2011 Corruption Perceptions Index (CPI) gave Poland a score of 5.5 on a scale from 0 (“highly corrupt”) to 10 (“highly clean”), up from 5.3 last year. The organization uses the scoring system to measure the extent of public-sector corruption in a given country. However, despite improving its score, its rank among 182 countries remained the same as last year’s, at 41st. That put Poland on equal footing with Cape Verde. In the regional section judging 30 EU and Western European countries, Poland ranked 21st, above the likes of Lithuania (50), Hungary (54), the Czech Republic (57), Italy (69) and Greece (89). Russia, which was included in the Eastern Europe and Central Asia section, was ranked in 123rd place, alongside countries including Nigeria and Belarus, with a rating of 2.4. New Zealand was deemed

the least-corrupt country in the world, with a score of 9.5, closely followed by Denmark and Finland, which both scored 9.4. North Korea and Somalia came in joint-last place in the ranking with scores of 1, just ahead of Afghanistan in 180th place, with a score of 1.5. Huguette Labelle, chairman of the board at Transparency International, said in a statement, “This year we have seen corruption on protestors’

Nevertheless, its ranking among 182 countries remains the same as it was last year

The police made 210 arrests on Independence Day be nationalists. One forum-user wrote that he had joined an attack on three men because “they looked like nationalists.” These entries were posted after the violent Independence Day clashes in Warsaw on November 11, which saw extreme left- and right-wing supporters fighting with police. The incidents led to 210 arrests. “The first step is to take this issue to the attorney general to carry out the investigation,” a spokesperson for Ms Lipowicz’s office told WBJ. The authors of the forum posts could, through their

actions, have violated article 255 of the penal code, which forbids public encouragement or praise for crimes. Since the Independence Day clashes occurred, information has emerged that shows Attorney General Andrzej Seremet had already commenced an investigation into Antifa prior to November 11. The investigation was launched following the discovery of a message published on Antifa’s website which included instructions on how to attack police and opposing demonstrators. Izabela Depczyk

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BUSINESS

DECEMBER 5-11, 2011

Nation-brands

Brand ‘Poland’ ranked most valuable in Eastern Europe

Poland is the most valuable nation-brand out of all the excommunist Eastern European countries and the 10th-most valuable in the EU, according to a 2011 survey prepared by Brand Finance, an international consultancy firm. Poland, which came in 24th in the ranking of the top 100 nation-brands, outperformed European nations including Finland (27th), Norway (30th) and the Czech Republic (45th). Last year, Poland came in 25th place overall. The ranking is based on an aggregate of a nation’s score in the fields of infrastructure, efficiency, economic performance, ability to attract foreign talent, perceptions on quality of life and projected future GDP growth. While euro-zone members’ brand value on the whole fell by six percent, Eastern Europe’s brand value grew by 9.7 percent, with Poland’s increasing by an impressive 17.1 percent. In the region, only Hungary saw the value of its national brand slide.

SHUTTERSTOCK

Poland may soon have what it takes to beat out countries like Belgium, Austria and The Netherlands

Poland came 24th in a ranking of 100 top nation-brands ception of a country? “It has a huge impact, if an investor hears about an investment opportunity in Poland, his first reaction will reflect what he thinks about the country in general, whether in his belief it’s a good place to do business in,” said Mr Ashbourne. “If people hear about a product from Germany or Switzerland, they will automatically assume it to be of good quality because the general perception of those countries is that they produce high-quality products,” he added. The US is considered the most valuable nation-brand, followed by Germany, China, Japan and the UK.

“Poland has made huge progress in our ranking. If things continue going for the country the way they are, then I think Poland could start outperforming countries like Belgium, Austria or Holland,” said John Ashbourne, an analyst at Brand Finance. The whole Eastern Europe region saw its brand value rise from last year, largely as a result of the strong performance of many of its economies during the crisis. “As a whole, Eastern Europe’s growth was faster than that of any region in the world, including East Asia,” the researchers wrote in their report. But how important for investors is their general per-

Remi Adekoya

Banking

No buyers for Bank Millennium The euro-zone crisis has discouraged potential buyers from making the z∏.3 billion purchase

COURTESY OF WIKIMEDIA COMMONS

No binding offers were submitted by the late November deadline for the purchase of a 65.51 percent stake in Polish Bank Millennium owned by Banco Comercial Portugues (BCP), Polish media reported last week, citing unnamed sources close to the transaction. Polish lenders PKO BP and Pekao, French BNP Paribas and Italian Intesa Sanpaolo all

reportedly filed preliminary bids in September, with BCP then shortlisting three of the companies. The sources reportedly said the shortlisted companies are presently too focused on their own capital positions to buy Bank Millennium, because of the crisis in the euro zone. BCP’s share in the Polish lender is valued at around z∏.2.9 billion. The company declined to comment on the reports. Under pressure to improve its solvency ratios, BCP said it wants to conclude the deal by the end of the year.

Millennium Bank is valued at z∏.2.9 billion

Belgian KBC Group, also keen to raise capital to meet requirements in its home market, is attempting to sell its 80 percent stake in Polish unit Kredyt Bank. Spanish lender Santander recently submitted a lower-than-expected offer for the stake. Troubles in the euro zone have forced several banks there to put their non-core assets – including those in Poland – up for sale. This has lead analysts and commentators in the Polish press to suggest PKO and insurer PZU are in a prime position to team up to buy Polish financial assets being offloaded by distressed Western owners. Prominent public figures also came out in support of the idea, including former Prime Minister Jan Krzysztof Bielecki. Mr Bielecki has now backtracked on that idea, however, telling a recent forum, “Now I think that such an ideological approach is strange to me. … Maybe the opportunity will come back when the situation of the euro zone worsens … but then it will not so much be business, as a rescue mission.” Gareth Price

www.wbj.pl

BUSINESS

www.wbj.pl

DECEMBER 5-11, 2011

Investment destinations

Macedonia offers opportunities for Polish investors

Macedonia, a landlocked country nestled in the Balkans, has never really managed to get on Polish investors’ maps. But the country is making a push to be seen as a businessfriendly destination, and Polish businesses looking to expand in Southeast Europe might be well-served to give this EU candidate country a second look.

Business-friendly For one, Macedonia’s newly elected prime minister, Nikola Gruevski, has made attracting foreign capital – in the form of investment and tourism – his number-one focus, Ljupco Mihailovski, head of the Agency for Foreign Investments and Export Promotion at the Macedonian Embassy in Warsaw, told WBJ.

He added that while the country’s small size – its two million inhabitants roughly equal the population of Warsaw – could be seen as a negative, it is an important advantage when it comes to providing a good environment for foreign investment. One advantage of Macedonia’s diminutive market is that investors can get access to decision makers with ease. “If a construction permit is not issued in two weeks’ time, the investor can call and speak to a minister. In Poland, that same investor would have to go through a lot of administration before figuring out what went wrong.” The country’s claim to business-friendliness is supported by numbers from the World Bank’s “Doing Business 2012” ranking. In terms of the ease of doing business, Macedonia ranked 22 out of 183 economies. That’s up 12 places on the previous year and compares to Poland’s ranking of 62. The World Bank found that it takes only three days to start a business in Macedonia.

A steep plunge Polish-Macedonian trade turnover from 2008 to Q3 2011 (in € millions) 200

150

Balance Imports

100

Exports 50

2008

2009

2010

Q1-Q3 2011

Source: Polish Ministry of Economy

In Poland it takes 32. Tremors in the euro zone, especially in neighboring Greece, with which Macedonia has close trade links despite the ongoing name dispute (see box), still pose a threat to growth, in particular when it comes to demand for Macedonian exports. Nevertheless, the World Bank forecasts GDP will grow by 3.5 percent this year and reach 4-4.5 percent over the medium term.

Trade ties Why is it then that bilateral trade figures between Poland and Macedonia, which were already rather modest, have been declining since 2008? According to Poland’s Ministry of Economy, the economic situation in the Balkans, along with the global economic crisis, are to blame. Nevertheless, the ministry says it sees “an increased interest of Polish companies in establishing contacts with Macedonia.” Currently, the overwhelming majority of Polish exports to Macedonia are metals (81 percent), while Macedonian exports to Poland are more diversified between agri-food products (50 percent), metals (18 percent), engineering and light-industry items (26 percent), according to numbers from the Economy Ministry.

Opportunities abound Marjana Todorova Georgieva, CEO of Jabiva DOO, a consultancy that helps companies establish themselves in Macedonia, said now is a good time to invest in listed Macedonian firms. “Due to the global climate, Macedonian companies at the

COURTESY OF WIKIMEDIA COMMONS

The small southeast European country ranks high in business-friendliness and is pushing its investment attractiveness

Macedonia PM Nikola Gruevski has made attracting foreign investment his main focus grocery stores to supermarkets and shopping malls developed immensely in the last five years. I would advise Polish companies to check whether their business model is already there, and if not, expand to Macedonia, and then to the Veronika Joy region.”

Poland this year, and the government provides attractive conditions for automotive companies, including tax breaks and investment grants, he said. Ms Georgieva added that Polish investors should look to export new business formats. “The migration from small

Macedonian Stock Exchange are immensely undervalued and are a quick pick for the prospecting investor,” she said. According to Mr Mihailovski, the automotive sector is ripe for more investment. Car parts are among the most exported products from Macedonia to

What’s in a name? Much like Shakespeare’s Juliet and her rose, those unfamiliar with the longstanding dispute between Greece and Macedonia over the latter’s official name may wonder what’s in a name. Greek opposition to the former Yugoslav state’s name of Macedonia, which coincides with the historical Greek region of Macedonia, has been since the breakup of Yugoslavia in 1991, and re-

mains one of the major obstacles to Macedonia becoming an EU member. Poland, like many countries, uses the constitutional name Republic of Macedonia in their bilateral relations, while the EU and most international organizations refer to the country as the former Yugoslav Republic of Macedonia (FYROM). A possible breakthrough could take place on December

5, when the Hague-based International Court of Justice is expected to deliver its judgment in Skopje’s case against Athens for blocking Macedonia’s accession to NATO in 2008. But observers remain skeptical. With the nationalistic opposition having gained more influence since the resignation of Prime Minister George Papandreou in November, Greece shows little sign of softening its stance. ●

A solution for a more efficient business? Polish IT company First Byte has developed a software tool that it says will go a long way towards eliminating time-consuming, manual data-entry tasks used in a range of business processes. Called WizLink, First Byte’s new tool performs specific, repetitive data-entry tasks. Maciej Zagórowski, one of WizLink’s creators, told WBJ that it helps reduce mistakes caused by human error and frees up employees

to focus on decision-making and more creative tasks. The software integrates applications used for storing data, allowing it to carry out data-sharing between a large number of applications. It can also be programed to perform a range of different tasks, increasing productivity “in a measurable way,” according to the company. Customer service centers which process data manually have to use, on average, seven

different data storage applications, First Byte says. This means employees such as call-center workers have to enter the same information into several different data applications, which can be extremely time consuming, said Kasjan Kajrunajtys, another of WizLink’s creators. Instead of entering a customer’s name seven different times in seven different applications, WizLink allows a single entry to be replicated in

all the applications simultaneously, he added. “WizLink enables data transfer between applications and automation of routine tasks, which eliminates the senseless copying and pasting of customer data between applications,” Mr Kajrunajtys said.

Cost-cutting The problem with most dataentry integration systems currently in use is that they

require all data-entry applications used by a company to be removed and replaced with compatible versions. “This is expensive and entails the training of employees to operate a new application, which can take from three to four months,” Mr Kajrunajtys said. WizLink, its creators say, is the first program that does not require firms to replace old applications with new ones. Moreover, training in its

use takes just a couple of weeks, Mr Kajrunajtys said. The company has already offered the program for a trial period to a Polish bank and a Polish insurance company. The biggest problem it has come across so far is in persuading businesses that the program actually works. “WizLink is so proficient that people think it is too good to be true,” Mr Kajrunajtys said. Izabela Depczyk

BUSINESS

DECEMBER 5-11, 2011

Steel industry

www.wbj.pl

Nuclear power

Silesia is steeling itself for job losses

The steel producer has reportedly said around 1,000 jobs will go. Unions say many more are on the line Steel giant ArcelorMittal could lay-off nearly 1,000 employees at a furnace in the city of Dàbrowa Górnicza, in Silesia voivodship, at the beginning of next year, the company has been reported as saying. Local media wrote that ArcelorMittal Poland’s management board sent a letter to the labor office in Dàbrowa Górnicza saying it will carry out collective redundancies

involving about 980 people. The company is planning to shut down the blast furnace “to adapt capacity utilization to demand levels,” it said in a statement. ArcelorMittal says it will re-open the furnace as soon as market conditions allow it to. It has not publicly announced the number of job cuts that will result from the closure, which is expected to take place early next year. A meeting to discuss the situation in the local steel industry was organized last week by the Silesia Voivodship Commission for Social Dialog (WKDS). Representatives from ArcelorMittal Poland and the com-

pany’s unions took part. Union members said closing the furnace could actually result in 3,000 people losing their jobs by the end of 2012. They are worried this will have a “negative effect on the employment structure in the region, and will drive a further 5,000 layoffs in positions related to steel production,” the Silesian Voivodeship Office, which conducted the meeting, wrote in a statement. This could result in structural unemployment in Dàbrowskie Zag∏´bie, the region in which Dàbrowa Górnicza is located, the unions said. Andrzej Wypych, a member of the board at ArcelorMittal Poland, said at the meeting that he would not comment on the number of layoffs until appropriate economic analyses had been completed. However, Mr Wypych said the company plans to present six motions to the minister of economy, the implementation of which would improve the economic conditions of the steel industry. The motions concern Poland’s fiscal policy, carbon dioxide limits, excise on electrical energy and changes to the employment code. Izabela Depczyk

Legal News Contact: Miros∏aw Stefanik ms@pnplaw.pl

Ski helmets made obligatory From December 31, 2011 provisions of the Act on Safety and Rescue in Mountains and Ski Resorts will come into force. The act specifies rules regarding the entities which have the right to conduct mountain rescue operations, the scope of their duties and rights, as well as obligations of persons staying in mountainous regions and in ski resorts. Any person under 16 years of age who intends to ski downhill or to snowboard at a ski resort in Poland will now be obliged to use a protective helmet. In the past, helmets were obligatory in Poland, but later those provisions were changed. Pursuant to the act, a fine may be imposed on a person who is taking care of persons who, in turn, fail to use helmets. The same will apply to persons who practice winter sports while intoxicated with alcohol or illegal substances.

Retirement age to be increased Prime Minister Donald Tusk announced during a recent speech on proposals for this parliamentary term that his government plans to raise the retirement age in

Poland. Pursuant to the planned changes, the retirement age will eventually be increased to 67 years of age for both men and women. However, women will retire at the age of 67 from 2040 whereas for men it will be from the considerably sooner date of 2020. Retirement age increases will be implemented gradually. Draft legislation with respect to the planned changes is expected soon.

Taxpayers may apply for refund on delayed interest The Constitutional Tribunal has questioned some provisions of the Act on Fiscal Control with its judgment of October 18, 2011 (court ref. no. SK 2/10). The general rule of the Polish law on tax protects taxpayers against excessive interest charges for a delay in tax settlements. If an authority conducts prolonged proceedings, no interest for the delay for that period should be charged. For many years this rule did not apply to control proceedings conducted under the Act on Fiscal Control. The taxpayers who in the period between 2003 and 2010 paid unduly charged interest on tax delays will be able to apply for the refund. ●

BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE

PGE is expected to launch a tender for the project this month, with a deal set to be inked in 2013 Russia’s state-owned corporation Rosatom will join French Areva, Japanese-American GE Hitachi and Westinghouse, a US-based unit of Japan’s Toshiba, in bidding to provide nuclear technology for the country’s first nuclear power plant, a spokesperson at Rosatom confirmed to WBJ. “Discussions are currently ongoing. Yes, Rosatom will bid alongside the others for Poland’s first nuclear power plant,” the spokesperson said. State-owned Polska Grupa Energetyczna (PGE), charged with overseeing the project, is expected to launch the tender before the end of this year and make a choice by 2013. The news came as a surprise to some, since one of the priorities of Poland’s energy security policy, including its decision to build two 3,000-megawatt (MW) nuclear power plants by 2030, is to gain independence

from Russia, which currently provides most of its natural gas. There are no restrictions as to who can bid for the tender, but it is improbable that Poland would choose the Russian firm, said Thomas Chmal, an energy expert at the Sobieski Institute, a Polish think tank. “As far as I know there is no other Rosatom project in the EU, and it seems unlikely that Poland would be the guinea pig,” he said. In 2010, Rosatom inked agreements on the construction of the first nuclear power plants in Turkey and Vietnam.

Last month the company, which built Iran’s first atomic plant, said it might help the country to build more in the future. The Polish project, described by PGE management board president Tomasz Zadroga as “one of the largest infrastructure development projects in the history of the Polish economy,” is valued at between €18-21 billion. Mr Chmal said he believed the current economic turmoil in the euro zone should not affect Poland’s nuclear proAlice Trudelle gram.

SHUTTERSTOCK

ArcelorMittal may lay off Rosatom to bid for thousands of workers nuclear plant project

Rosatom has built numerous power stations in Russia, as well as one in Iran

FINANCE & ECONOMICS

www.wbj.pl

WSE investors

DECEMBER 5-11, 2011

GDP

conomy shows Polish investors: young and restless E strong growth, but slowdown lies ahead

Ella Pa∏ka

Surfing for shares SHUTTERSTOCK

The main sources used by Polish investors for investment information

100

81.9

It may be only a matter of time before it starts to lose steam

62.7 60

36.5

28.7

27.9 19.4

19.2

io Ra d

s site

s ort

an yw mp

mp Co

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an yr ep

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Source: Association of Individual Investors

The Polish economy grew by 4.2 percent year-on-year during the third quarter of 2011, the Central Statistical Office (GUS) announced last week. The growth was stronger than the market consensus forecast of 4 percent, but analysts believe it won’t be long before the crisis in the euro zone starts to negatively impact growth. “If a global economic recovery was taking place, this would be great data, suggesting the likely acceleration of growth in subsequent quarters,” said Przemys∏aw Kwiecieƒ, chief economist at X-Trade Brokers. Unfortunately, the main factors behind last quarter’s strong growth are not sustainable given the current situation in the euro zone.” For example, net exports, which contributed as much as one percentage point to GDP growth in Q3 2011, partly due to a weak z∏oty, are expected to weaken. And while a weaker z∏oty may have helped exports, it has already taken its toll on consumer spending, especially for households holding foreign-currency debt. This, together with forecast

high fuel prices and slower employment growth, is expected to curb Poles’ appetite for spending in coming quarters. Lower levels of public spending, due to the government’s ambitious fiscal consolidation plans, are also only beginning to be felt. “Fiscal tightening, including a cap on government spending, is taking its toll. We expect this will become more evident in the coming quarters as the government is trying to reduce the general government deficit to 3 percent of GDP in 2012,” Citigroup Global Markets analysts wrote in a report. Analysts say third-quarter data suggest GDP growth for full-year 2011 could reach 4 percent or slightly higher, while clearer signs of a slowdown should be visible during the first and second quarters of 2012. Last week, Finance Minister Jacek Rostowski said the state budget for 2012 will likely assume GDP growth in 2012 of 2.5 percent. The figure is the more moderate of three proposed by Mr Rostowski at the beginning of November. The other two foresaw growth of 3.2 percent and a contraction of 1 percent. Alice Trudelle

Headed back down? Poland's GDP growth per quarter (annualized, in percent)

5 4 3 2 1 0 20 0 Q2 9 20 0 Q3 9 20 0 Q4 9 20 0 Q1 9 20 1 Q2 0 20 1 Q3 0 20 1 Q4 0 20 10 Q1 20 1 Q2 1 20 1 Q3 1 20 11

69.7

Close to 81.9 percent of those surveyed said they use the internet when looking for information about stocks; 69.7 percent consulted newspapers and 62.7 percent watched TV programs to get their investment news. Comments from analysts and blogs (36.5 percent), discussion forums (28.7 percent), company reports (27.9 percent) and company websites (19.4 percent) are other sources of information frequently drawn upon. SII’s report found that investors most often look at the following financial websites: Bankier.pl (36.1 percent), Money.pl (30.9 percent), Parkiet.pl (22.7 percent), Pb.pl (17.6 percent), Stooq.pl (15.8 percent), and Onet.pl (12.5 percent). When it comes to newspa-

Internet generation

about their age. The vast majority of Polish investors (72.5 percent) had completed higher education and 42.4 percent were reported as living in cities with populations of 500,000 or more.

ern

Individual investors trading on the Warsaw Stock Exchange are young, don’t invest for the long-term, hold few stocks and rely most frequently on the internet as a source of investment information, according to findings from a nationwide survey of investors conducted by the Association of Individual Investors (SII). The study surveyed over 7,300 investors throughout Poland. On the whole, those surveyed were not found to be long-term investors, with 46.1 percent holding Warsaw Stock Exchange stocks for up to one year and 19.4 percent for only one month. Meanwhile, 25.6 percent said they hold on to stocks for longer than a year. Some 3.9 percent engage in day-trading, while 4.9 percent hold stocks for up to one week. A sizable share of investors surveyed (42.6 percent) were between the ages of 26 and 35, while 21.2 percent were under the age of 25 and 20.5 percent between 36 and 45 years old. The rest were aged above 45 or did not respond when asked

said they rely on information from companies. The number of individual securities accounts on the Warsaw Stock Exchange surpassed 1.5 million at the end of October, according to figures from the National Depository for Securities. On the whole, 41.6 percent of investors said they owned shares in two or three companies, 38.8 percent said four to seven companies, 11.4 percent eight or more and 8.1 percent had stock in only one company.

pers, investors rely most strongly on Parkiet, at 52.2 percent, but also on Puls Biznesu (29.9 percent), Rzeczpospolita (19.7 percent), and Gazeta Wyborcza at (18.2 percent). Close to 82 percent of those surveyed reported watching TVN CNBC Biznes for financial information. When it comes to making final investment decisions, the majority of surveyed Polish investors – 64.2 percent – said they rely on their own analysis, while 63.5 percent said they rely on their own intuition. Some 54 percent, meanwhile,

Int

A survey has found that Polish investors in WSE-listed stocks are typically young, use the internet for research and don’t make long-term investments

Source: Central Statistical Office

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OPINION & ANALYSIS

DECEMBER 5-11, 2011

Poland’s choice: A stronger Germany STRATFOR

erman Chancellor Angela Merkel and French President Nicolas Sarkozy on Thursday invited Poland and Sweden to be part of a voluntary EU treaty that would seek deeper financial integration and oversight among its members, the German newspaper BildZeitung reported, citing an unnamed source. The special invitation fol-

“Warsaw must weigh the strategic risk it would face from Moscow and Berlin, should the union fall” lows the controversial speech on Monday by Polish Foreign Minister Rados∏aw Sikorski, during which Mr Sikorski described the possible fall of the euro zone as the biggest existential threat to Poland and called on Germany to take a more active role to stabilize the European crisis. “Poland is left with only one course of immediate action: to push for the maintenance of the existing institutional system, which in this case is the European Union.”

Geopolitical challenges Mr Sikorski’s comments and the subsequent reported invitation by Ms Merkel and Mr Sarkozy are indicative of the complex geopolitical challenges that Poland is facing as the euro zone crisis intensifies

and moves toward a potentially devastating climax. Should the euro zone collapse – and especially should the EU project in general fail – Poland would find itself confronting an impossibly dire security paradigm. Warsaw perceives Russia’s resurgence within Moscow’s former area of influence as a grave existential threat – a threat Warsaw has continuously attempted to thwart by engaging in several security alliances and commitments. A strong independent Germany traditionally poses another existential threat to Poland; however, while Germany has been restrained by the institutional binds of the European Union, it actually has acted as one of Poland’s best levers against Russia. The dissolution of the euro zone would remove those binds, requiring the implementation of alternative security guarantees. Meanwhile, there are problems with other traditional security pillars of the Cold War era. NATO, Poland’s traditional and long-standing post-Cold War security guarantor, has been experiencing a continued loss of strategic identity. Most importantly, the political and existential crisis that would arise in Western Europe should the European Union fall would make NATO an even more fractious and unreliable ally – which in many ways Poland and other Central European countries already perceive it to be. In addition, as the United States slowly steps back from more than a decade of conflicts in the Middle

East, its willingness to single-handedly take on a costly security alliance in Central Europe would also likely be diminished by the financial fallout of the euro zone’s dissolution.

Saving the EU Poland, and the other Central and Eastern European countries that find themselves precariously exposed to Russia, have attempted to revitalize alternative security arrangements, including the Visegrad Group and the Nordic Battlegroup. However, these arrangements require a level of political and economic commitment that no party involved has been willing or able to put forth. The very nature of the euro-zone crisis is that it is nearly impossible for any nation to put in motion adequate preparations for the potential failure of the currency union. Furthermore, it is these countries that are most committed to keeping the existing institutional infrastructure at nearly any cost. As Mr Sikorski’s speech points out, if it becomes clear that some EU members are readying contingency plans for a post-euro era, they can hardly expect anyone else to bet on their success. Such regional commitments are likely to only be mustered once the fall of the European Union becomes a reality; they are remedial rather than preventive measures. Therefore, Poland is left with only one course of immediate action: to push for the maintenance of the existing institutional system, which in this case is the European Union. Mr Sikorski’s speech is a

landmark in that it represents the first time a pre-eminent European political figure has stated that the survival of the European Union depends on Germany taking a stronger position within the organization. The speech implied that Poland was prepared to support Germany gaining a measure of financial and political control within the European Union, if it helps avoid the dissolution of the entity.

More integration The integrationist core of the European Union (Ms Merkel and Mr Sarkozy) has caught the hint offered by Warsaw. France and Germany invited Poland and Sweden – another strategic non-euro zone EU bystander – to join a group that will likely support the European Union’s deeper integration. The treaty would be open to any EU member state willing to follow a shared set of financial regulations and oversight. This offer provides Warsaw the opportunity to demonstrate its commitment to the survival of the European project. While it makes little economic sense for Poland to integrate itself further into the European Union – its economy has remained relatively healthy throughout the crisis – Warsaw will have shown its willingness to endure sacrifices in order to prevent the euro-zone crisis from spiraling beyond control. Such an intensification of the crisis, after all, would have disastrous effects for the Polish economy, in great measure reversing the economic gains Warsaw has made.

In an implicit sign that Germany understands the conundrum faced by Warsaw, the German defense minister Thursday invited Poland to join the Eurocorp – a joint EU military contingent that pledges to field up to 60,000 troops – by 2016. While the move bears no immediate tactical relevance to Polish security, it nonetheless sends a clear signal that Berlin is willing to at least symbolically push forward strategic and military cooperation with Warsaw within the EU framework, if Poland is willing to support Germany’s increased influence within the economic governance of the European Union. Warsaw is now at a critical juncture. It must weigh the strategic risk it would face from Moscow and Berlin, should the union fall, against the potential negative implications of a strong Germany sitting at the helm of the European Union. The result of this difficult, yet familiar, existential balancing act for Poland will determine the level of commitment it is willing to put into the preservation of the European Union. So far, Poland seems to have decided that even with freer rein within the European Union, Germany will remain constrained enough – and this is preferable to facing the risk of Russia’s expansion at the doors of a potentially disunited post-EU Europe. ● “Poland’s choice: A stronger Germany” is republished with permission of STRATFOR stratfor.com

Mission accomplished for Poland in Afghanistan? Gareth Chappell

he North Atlantic Treaty Organization has led the International Security Assistance Force (ISAF) for eight years as of last August. By the time the transition in the war in Afghanistan is complete in 2014, it will have surpassed 11 years. The official aim of NATO’s role in Afghanistan remains the eradication of the terrorist threat arising from the country while contributing to a better future for the Afghan people.

Broader goals As a NATO member state and an ISAF troop-contributing nation, Poland shares the alliance’s objectives in Afghanistan. Furthermore, Poland has worked tirelessly towards this end, not least since the Polish military contingent, which today stands at about 2,500 troops, has operated without any national caveats, in contrast to some other national contributions. More recently, Poland has made a greater contribution to supporting development activities in the country as well. Nonetheless, purging Afghanistan of the terrorist threat has never really been the main reason for Poland’s robust contribution to the ISAF. Inter-

national terrorism has never posed a direct threat to the country, despite having been identified as a challenge in the Polish National Security Strategy of 2007. Instead, the main rationale has revolved around the strategic importance of NATO for the country’s security. By making a solid contribution to ISAF, NATO’s most significant mission to date, Poland has aimed to keep the Alliance effective and functional. Also, Poland wanted to demonstrate its value as a provider (and not just a “net consumer”) of security and assumes that if it shows solidarity with its allies, they will reciprocate if and when it becomes necessary. Experts have added the point that in recent years the Polish contribution has been instrumentalized to obtain other political goals. One example was in the use of the Afghan deployment to reinforce Poland’s hand during negotiations on NATO’s New Strategic Concept (NSC) so that the final document reflected Polish priorities and concerns.

Varying degrees of success Poland appears to have enjoyed varying degrees of success in realizing these goals. Granted, NATO is not

without challenges. Still, the alliance remains a powerful and effective political-military instrument. Moreover, the allies have come together and agreed on an ambitious agenda for the future, as set out in the NSC of November 2010. A case could be made that NATO remains in decent shape not because of Afghanistan, but in spite of Afghanistan. The operation has suffered several setbacks that have undermined NATO’s credibility in the eyes of some, as well as diluted the perception of alliance solidarity due to differences in approach, including the issue of national caveats. However, this argument underestimates the scale of the task in Afghanistan and the fact that many national restrictions have been abolished in recent years as insurgent activity has spread throughout the country. Further, all allies have remained engaged in the ISAF mission in some form despite the difficulties. Either way, it would seem vital that Poland remains committed to ensuring an efficient and credible transition as well as be politically in step with the allies throughout the entire process. In short, this means successfully managing the drawdown of Polish troops in

Afghanistan by the end of 2014. Looking at the NSC, Poland’s success is more apparent. Consistent with the Polish stance, the document reaffirms collective defense under Article V of the North Atlantic Treaty as a core task and commits the allies to strengthen capabilities in this regard as well as to carry out necessary training, exercises, contingency planning and information exchange. Moreover, the NSC recognizes the need to provide “visible assurance” for all allies, which reflects a long-standing Polish concern. It should also be added that all existing elements of NATO’s command structure in Central and Eastern Europe remain in place despite a recently announced reshuffle. Finally, the NSC perceives NATO’s relationship with Russia in a way that recognizes the Polish position. Russia is neither referred to as the alliance’s most important partner (as some allies would prefer) nor as its main adversary. Naturally, the significance of Poland’s ISAF contribution in ensuring a favourable document should not be overestimated. Also, the importance of other factors should not be overlooked, such as the similarity of the US position to that of Poland on Article V-related

issues. Looking ahead, much will now depend on whether the NSC is appropriately implemented, which will require Poland’s continued active engagement within the alliance.

“Purging Afghanistan of the terrorist threat has never really been the main reason for Poland’s robust contribution to the ISA” A work in progress In short, Poland’s goals regarding Afghanistan go beyond the mission itself, and have been met with varying degrees of success to date. Given the nature of these objectives, however, much will also depend on the future course of Polish policy, not only on Afghanistan but also towards NATO in general. ● Gareth Chappell is an analyst at The Polish Institute of International Affairs (PISM). pism.pl

OPINION & ANALYSIS

DECEMBER 5-11, 2011

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A Polish answer to the German Question Constanze Stelzenmüller

is German Question Time once more in Europe. Only Germany, the continent’s most powerful economy, that is still miraculously going strong, can lead the way to a recovery. The problem is that the Germans, just delays before an historic EU summit weighs far-reaching treaty reforms to calm the markets and – perhaps – save the euro zone, are still

“I fear German power less than I am beginning to fear German inactivity” debating the wrong questions. Last Monday, however, a Pole came to Berlin and spelled out the question for the Germans. Or rather, he chiseled it in stone, in the starkest possible terms. In doing so, he demonstrated a remarkable grasp of his Western neighbor’s psychology. Polish Foreign Minister Rados∏aw Sikorski began his speech with an astute reference to the tired cliché that Europe has become boring because it is no longer about matters of war and peace. Wrong, he said –

the Balkan Wars began in 1991 with the disintegration of the dinar, the Yugoslav currency. Those wars, lest anyone forget, lasted 14 years and claimed up to 130,000 lives. They caused Germany to offer shelter to 300,000 refugees, and to go to war for the first time in its post-World War II history. It was a reminder guaranteed to get his audience’s rapt attention, and keep it. Mr Sikorski bowed to his German friends, Chancellor Angela Merkel and Foreign Minister Guido Westerwelle, by supporting their calls for automatic sanctions, an elected European president, and more European integration. The framers of the US constitution, he noted, had done something very similar when they decided to make their historic move from a confederation to a real federation. (It’s not every day German leaders get compared to James Madison and Thomas Jefferson.) Even more shrewdly, the minister reminded his listeners that a key element of the deal had been Alexander Hamilton’s brokering of a joint debt guarantee and revenue stream for the 13 founding states – an elegant way of pointing out that euro bonds, and a

stronger European Central Bank (both still officially anathema to Berlin), are the logical conclusion to calls for a stronger EU. Mr Sikorski also thanked the Germans for their “solidarity” with Poland after 1989 – but not without adding that “I hope you appreciate it’s been a good investment.” In 2010, German exports exceeded 1990 levels ninefold. Was there a hint of acid in his subsequent remark that Germany’s trade with Poland is bigger than with the Russian Federation, “although you would not always know it from German political discourse?” Perish the thought. But by then it was time to dispense with diplomatic politesse. Mr Sikorski had already pointed out that Germany has profited more than any other country from exports to the 10 new Eastern European members after 2004: its annual export volume rose from €15 billion to €95 billion in 2010. In the last third of his speech, he bluntly enumerated six reasons why Germany owes its fellow EU members solidarity: • Germany is the biggest beneficiary of the euro zone

• Germany is not an innocent victim of others’ profligacy, having broken the Growth and Stability Pact and let its banks “recklessly” buy risky bonds • Germany has profited from lower borrowing costs • Germany stands to suffer most from a breakup of the euro zone • The danger of collapse is “much bigger” than the danger of inflation • Germany’s size and history give it a special responsibility to preserve peace and democracy on the continent. (Here Sikorski quoted Jürgen Habermas, German secular intellectuals’ answer to the Pope: the last time a German revolution failed, in 1848, it took a hundred years to regain a similar level of democracy.) At this point, the silence in the auditorium was deafening. We were sitting only a stone’s throw from the Brandenburg Gate, Berlin’s graceful symbol of reunification. Recent history has been very generous to Germany; some may have thought redemptive. Not a nice thought that things might go into reverse again. To finish, Poland’s foreign minister reminded the Germans that their country is not an island: “The biggest

threat to the security and prosperity of Poland” … is not terrorism, not the Taliban, not German tanks, nor Russian missiles … but “the collapse of the euro zone.” “I demand of Germany that,” Mr Sikorski continued, “for your sake and for ours, you help it survive and prosper. You know full well that nobody else can do it. I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity. You have become Europe’s indispensable nation. You may not fail to lead.” The applause at the end of Mr Sikorski’s speech was genuinely warm, if permeated by a sense of shock. Perhaps fittingly, it was former president Horst Köhler – himself born in Poland – who stood up and thanked Mr Sikorski: “For you as Polish foreign minister to give this speech here today – I think it’s wonderful.” ● Constanze Stelzenmüller is a Senior Transatlantic Fellow with the German Marshall Fund in Berlin Copyright: German Marshall Fund of the United States

The German hour

series of developments over the last few weeks have set in motion a downward spiral for the euro zone. Unless officials – especially German ones – act fast, the verdict of financial markets is bound to be ruthless. First of all, the euro zone has failed to turn the tide. Mario Draghi, president of the European Central Bank, was right to note that, despite numerous ministerial meetings and three summits, implementation of the decision to increase significantly the firepower of the European Financial Stability Facility (EFSF) is still lacking. There are now growing doubts about the effectiveness of the EFSF. Second, and partly as a consequence, virtually all euro zone countries’ debt is trading at a discount relative to German Bonds. While it was necessary to price risk more accurately, it is difficult to believe that the Netherlands, with a debt ratio nearly 20 percentage points lower than Germany’s, deserves to be assessed as a higher default risk. But now even the mighty Bond has started to suffer from heightened market anxiety. Third, financial-market participants and increasingly real businesses, are pricing in a possible breakup of the euro zone, if not the end of the

euro itself. It is still difficult to think the unthinkable, let alone work out the details of it, but any rational player must now consider the possibility. If expectations of disaster build and a growing number of players start positioning themselves to protect themselves, the consequences could become overwhelming. Not only the euro zone would suffer. Fourth, Germany has become the euro zone’s undisputed leader. Although France continues to play its role as the other half of the European Union’s leading couple, it has lost influence and the ability to take the initiative. A weaker French economy, shakier public finances, and the coming presidential election are all combining to alter the balance with Germany. Political audacity can carry France only so far.

A recurring theme In this context, Germany again finds itself in a situation akin to that of the late 1980s, when the Bundesbank was setting monetary policy for the rest of the continent. At that time, German Chancellor Helmut Kohl wisely concluded that German economic dominance of Europe was not conducive to a stable equilibrium, and that a better

plan for the future was to build on Germany’s weight and influence to create a permanent common monetary order. Kohl’s insight gave birth to the euro. Today, once again, it is in Germany’s best interest to ensure lasting stability in Europe. With foreign assets worth €6 trillion ($7.9 trillion), most of which consist of claims on its euro zone partners, Germany would lose out massively if the euro zone fragments. Claims on entities within partner countries would be redenominated in weaker currencies – or the borrowers would default on them. Obviously, German exporters would be hurt by substantial currency appreciation.

Leading role German Chancellor Angela Merkel has sensibly decided to take the lead on reforming the euro zone. But many Germans feel deceived by some irresponsible euro zone partners, giving rise to the temptation to use Germany’s current strength to toughen sanctions and coerce weaker countries into adopting constitutional changes, especially concerning fiscal policy. This is a risky attitude. To be sure, Germany has far more leverage today

Jean Pisani-Ferry

than it has had at any point in the last 20 years. But attempting to extract unilateral concessions from partners is a recipe for disappointment. It is one thing to be sanctioned for breaching the rules, as with the Stability and Growth Pact; it is quite another thing to permit elected national governments and parliaments to be overruled, and national budgets censored, by an unelected higher authority.

partners is acceptable only if it accompanies their guarantee that they will come to the rescue in case of accident. Germany should be bold and use its leverage to offer a new contract to its euro-zone partners: mutual guarantee of part of their public debt in exchange for strict debt limits and a

“Germany should be bold and use its leverage to offer a new contract to its euro-zone partners”

Give and take The EU’s members are unlikely to agree to major reform unless Germany offers something in return. Absent a more balanced deal, what is likely to emerge from negotiations is simply another layer of largely ineffectual and ultimately divisive sanctions. The natural quid pro quo for ex ante budgetary control is solidarity through the creation of euro bonds. Joint and several liability for public bonds is imaginable only if countries offering their guarantee – and thus potential access to their taxpayers – can exercise veto power and prevent a partner country from issuing more debt. Thus, legally binding ex ante control is a necessary condition for euro bonds. Conversely, surrendering budgetary sovereignty to euro zone

new legal order in which a euro zone authority can veto an enacted budget even before it is implemented. Only such boldness will deliver the certainty that markets need – and it is Germany’s responsibility to be bold. ● Jean Pisani-Ferry is director of Bruegel, an international economics think tank, professor of economics at Université Paris-Dauphine, and a member of the French prime minister’s Council of Economic Analysis. Copyright: Project Syndicate, 2011. project-syndicate.org

Editorials are the opinions of WBJ’s editorial board. Other opinions are those of the authors alone. Comments, opinions and letters should be sent to editor@wbj.pl. Please include a name and contact information and clearly indicate if they are to be considered for publication.

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COVER STORY

www.wbj.pl

Libya

Bids for Ostro∏´ka

Polish businesses lay groundwork for greater influence in free Libya

Nine consortia have submitted offers in the tender for the construction of a 1,000 MW electricity plant in Ostro∏´ka. The contract is valued at z∏.6-7 billion. Among those who submitted tenders are Polimex-Mostostal with Hitachi, Pol-Aqua and Dragados, and a consortium of Rafako, PGB and Mostostal Warszawa.

Liam Nolan Some of Poland’s major energy firms have already paid a visit to the country in an attempt to secure business deals in this potentially lucrative new market On October 23, just days after the death of Libyan dictator Muammar Gaddafi signalled the end of eight months of civil war, Libya’s new authorities announced the final liberation of the country. The next day Polish Foreign Minister Rados∏aw Sikorski arrived, marking the first visit by a foreign politician to the newly free Libya. Interestingly, Mr Sikorski wasn’t alone. Accompanying him on his historic trip were senior executives from four major Polish energy companies – state-owned oil refiners PKN Orlen and Grupa Lotos, state-controlled oil and natural-gas giant PGNiG, as well as privately held oil exploratory firm Petrolinvest. The high-ranking company officials spoke with Libya’s national oil company, the National Oil Corporation, and the Libyan Business Council, an organization that aims to foster partnership deals with foreign companies that want to work in Libya. Earlier this year, while the fighting was still going on, representatives of the then-rebel forces had suggested that they would remember which sides countries had taken during the conflict, and would negotiate business deals in the free Libya accordingly. It seems clear that Poland, which at least diplo-

z∏.50 billion bonds buy-back? Poland’s Finance Ministry is prepared to use around z∏.50 billion in national and foreign currencies to fight the z∏oty’s depreciation and prevent the public debt from surpassing 55 percent of GDP, reported Gazeta Prawna. The ministry has announced an auction to buy back Treasury bonds that reach maturity in 2012 starting on December 19.

Polish companies keep investing Despite uncertainty linked to the euro-zone crisis and a slowdown in Western Europe, Polish companies spent 16% more on investments in the third quarter of 2011 than in the same period last year, reported Puls Biznesu. Meanwhile, SMEs of over 50 employees spent z∏.24.8 billion on development investments, which represents a 16.4% y/y increase, according to the Central Statistical Office.

matically had supported the rebels’ cause from the beginning, was intent on capitalizing on the opportunity.

Oil, oil, oil Indeed, Poland’s Foreign Ministry makes no effort to hide its active role in assisting Polish businesses that want to establish operations in Libya. But it denies that the energy sector is its focus. “More and more Polish entrepreneurs are gradually becoming interested in more distant economies, including the Libyan one. The Polish Ministry of Foreign Affairs and our embassy in Tripoli will take all the necessary measures to provide them with our diplomatic support,” Konrad Zieliƒski a spokesperson for the Polish Ministry of Foreign Affairs, told WBJ. But, he added, “there aren’t any sector preferences regarding our relations with Libya.” Nevertheless, in a country where hydrocarbons accounted for more than 70 percent of GDP and more than 95 percent of exports before the war according to the International Monetary Fund, the sectors which would be most lucrative for Polish companies are obvious enough. PGNiG is the only Polish energy giant to have operated in pre-war Libya. The Octo-

Polish FM Rados∏aw Sikorski arriving in Libya on October 24 ber visit of the other big Polish oil and gas players, who have so far concentrated mostly in European markets, suggests that they too are now tempted to explore sources of income beyond their traditional markets.

After the war Polish Oil and Gas Company (POGC) Libya, PGNiG’s affiliate company, began exploratory work in the Murzuq basin, southern Libya, in 2008. The start of drilling was planned for April this year, but was postponed when the company suspended its operations with the eruption of hostilities in late February. Fighting is estimated to

Where the oil comes from

Poles save big

Crude oil imports to Norway the European Union 13.09% (EU27) in 2010 COURTESY OF THE MINISTRY OF FOREIGN AFFAIRS

The Polish National Bank estimates the combined financial assets of Polish households amounted to z∏.0.99 trillion at the end of September 2011. The figure includes cash, bank deposits, and savings in pensions and investment funds, as well as shares in public companies held by individual investors, reported Rzeczpospolita. ●

DECEMBER 5-11, 2011

COURTESY OF THE MINISTRY OF FOREIGN AFFAIRS

Rados∏aw Sikorski’s first visit to Libya was welcomed by anti-Gadaffi supporters in Benghazi

validity of our existing contract with the National Oil Corporation. Both NOC and POGC declared a common will of further cooperation,” said PGNiG spokesperson Joanna Zakrzewska. Potential new exploration, development and production contracts will be considered and discussed, she added. Without giving a specific time-frame, PGNiG says it will be back operating in Libya as soon as possible. “Libya is one of the strategic countries in the overall exploration assets portfolio of the PGNiG Group because the potential of undiscovered reserves of oil and gas are very attractive,” said Ms Zakrzewska.

have damaged 10 percent of the country’s oil infrastructure and PGNiG’s operations did not escape unscathed. The company confirmed that some of its drilling and office equipment at its exploration base in the Murzuq basin suffered damage during the recent conflict. Waldemar Wójcik, CEO of POGC Libya, was part of the Polish delegation that visited Tripoli and Benghazi in October. There he received confirmation that the firm’s agreements with Libya’s national oil company still held under the new regime. “Mr Wójcik’s meetings were very brief and general and resulted in confirming the

3.30%

Saudi Arabia 6.01%

Iran

15.59%

17.09%

5.66%

Europe

21.62% 42.40% Russia 29.70%

Americas

Former Soviet Union Middle East Libya 10.71%

Africa

Source: European Commission Directorate-General for Energy

COVER STORY

DECEMBER 5-11, 2011

www.wbj.pl

Polish bank tax The Polish government is making progress on a planned bank tax, which aims to constitute a reserve for Poland’s banking system. The Finance Ministry could complete work on the legislative project within a few months, said Deputy Finance Minister Maciej Grabowski last week. The bill would then be submitted to parliament for vote.

“The country is still unstable and unsecured for foreign personnel”

Polish companies are aware that establishing or reestablishing business links in postwar Libya might take some time. PKN Orlen, Poland’s largest oil refiner, says it is eying projects in oil exploration and production as well as in export. “Potential frames of cooperation that the company may be interested in include upstream projects and the sea export of oil products from Libya,” spokesperson Joanna Puskar told WBJ. However, she emphasized the nascent nature of talks with the Libyan Business Council and the National Oil Corporation. “It is hard to expect definite effects of the business talks at this point,” she said. Bertrand Le Guern, president of Petrolinvest’s management board and the company’s representative in Libya during October’s visit, said prospects for doing busi-

ness in Libya are “extremely promising” in the longer term. “This trip was a very interesting and anticipative first step in order to understand what kind of development perspective could open for us in the long run in this region,” he told WBJ. However, the firm is “not in a position to take advantage of opportunities in the short term,” Mr Le Guern added. Investors interested in Libya face logistical challenges in terms of transportation, banking, security and infrastructure, as well as the threat of political instability. According to Mr Zieliƒski from the Foreign Ministry, “All interested parties are waiting for a declaration regarding the model of the new Libyan economic system. Since there are still more questions than answers, the international business community is staying mostly ‘on hold,’ and at the same time is

COURTESY OF WIKIMEDIA COMMONS

Long-term process

Layoffs ahead

Libyan oil fields produced 1.6 million barrels a day before the civil war broke out trying to secure its presence in the Libyan market.” Indeed, over 40 years under the rule of dictator Muammar Gaddafi and eight months of civil war have had a devastating impact on economic activity, and today the task facing the Libyan government, as well as its businesses and citizens, is gargantuan. According to the IMF, real GDP is expected to contract by more than 50 percent in 2011. But if Libya wants a shot at rapid reconstruction, it needs to quickly restore oil production to generate revenues.

COURTESY OF THE MINISTRY OF FOREIGN AFFAIRS

A competitive market

The FM met the chairman of Libya’s NTC in May

Libya accounts for only 2 percent of the world’s oil output, but almost 11 percent of crudeoil imports to the European Union. According to OPEC figures, Libyan oil fields were pumping out 1.6 million barrels per day before the outbreak of this year’s civil war. During fighting, production decreased by over 80 percent, according to estimates by the Energy Invest-

ment Authority. Production levels are now expanding rapidly, but they still represent a small fraction of what was produced prior to the war. Some 840,000 barrels were produced per day at the end of November, according to the NOC. Whatever Polish firms plan for Libya, they will need to take into account the designs of a number of well established Western European companies which will offer stiff competition to newcomers. Those include Italian energy giant ENI, French Total, Austria’s OMV, Germany’s Wintershall Holding, BP of Britain and Repsol YPF of Spain. Robert Zajdler, an energy expert at the Sobieski Institute in Warsaw, believes Polish energy firms could compete with other European players. “More and more Polish companies are showing an interest in the Libyan upstream market. I have the impression that we are in the process of developing the Polish upstream

market in Libya,” he said. But they will have to face competition from French, German and Italian companies which are “trying to divide up the country’s upstream market,” he added. Yet the most unpredictable factor for Polish firms remains the security situation. “The country is still unstable and unsecured for foreign personnel. The resumption of permanent airline operations is the fundamental condition for oil companies to return to normal activities,” said PGNiG’s Ms Zakrzewska. Libya’s first post-revolutionary general election is expected to take place some time in mid-2012, and Polish energy companies are likely to wait until that moment to seriously pursue future exploration contracts with any future Libyan government. ● Note: Both Grupa Lotos and the National Oil Corporation of Libya declined to comment for this article

The total number of employees Polish companies plan to lay off in 2011 is set to reach around 30,900, according to the Central Statistical Office. Most redundancies are expected to come from the public sector, with 16,400 state employees set to lose their jobs. The figures represent a decrease on last year, when 478 employers said they intended to lay off 43,400 employees, including 25,500 from the public sector.

Agricultural property boom Polish government institution the Agricultural Property Agency (ANR) expects to have sold 120,000 hectares of land by the end of 2011, already a sizable increase on the 97,000 hectares it sold for the whole 2010, reported Puls Biznesu. ANR is expected to contribute a total of z∏.3 billion to this year’s state budget. ●

COMPANY FOCUS

www.wbj.pl

DECEMBER 5-11, 2011

Electronics

Poland’s consumer electronics market is changing rapidly, reflecting the evolving lifestyle choices of the country’s consumers Since it began life in 1998 as a maker and retailer of computer-game accessories, Manta has had to adapt to numerous new trends in the consumer electronics market, making significant changes to its business model along the way. As demand in its original market dried-up, the company broadened its portfolio to allow it to compete in Poland’s electronic appliances market. “Computer game products have decreased as a share of our portfolio; the user doesn’t need extra computer game equipment nowadays as everything comes integrated,” said Bogdan Wiciƒski, Manta’s CEO. To survive in Poland’s fastdeveloping electronics market Manta has had to keep a close eye on the evolving demands of consumers, whose everchanging lifestyle choices are strongly reflected in the products they buy. As demand for computer-

game accessories shrunk Manta entered the DVD market, launching its first DVD player in 2003 and selling some five million units between then and 2010. Now, though, the company is once again being forced to change tack due to another major shift in the electronics market. “The DVD player market has been diluted – it is multimedia products from the consumer products range we are now developing,” said Mr Wiciƒski.

Lifestyle products Manta sees TV sets and smartTV boxes, along with tablets, as being its most successful products in the next two to three years. This outlook is in line with forecasts made by Business Monitor International (BMI), which sees computer hardware sales (which accounted for about 47 percent of Poland’s consumer electronics spending in 2010) being driven by demand for notebooks and tablets. The compound annual growth rate (CAGR) of the computer hardware sector in the 20112015 period is forecast at around 7.3 percent.

Flat-screen TV sets are expected to drive demand in the AV devices sector, where sales of video products are declining, BMI said in a report. Poland’s entire consumer electronics devices market is forecast to be worth around $7.4 billion by the end of 2011, and to grow at a CAGR of 6.6 percent, to $9.5 billion, by 2015. Growth is expected to be driven by the increasing popularity of “digital lifestyle products,” such as featurerich mobile PCs and LCD TV sets. The e-reader market is also seen as an area of growth, with Manta poised to dive in. “We are going to enter the e-reader market and already have two products ready and a third in the pipeline,” said Mr Wiciƒski.

Expansion plans Keen to start bringing original projects to market, Manta has set up an innovation incubator, which supports young entrepreneurs entering the market for cutting-edge technology under the auspices of the Manta brand. The company itself has recently launched a multime-

dia player that is able to show three-dimensional movies without the need for the viewer to wear special glasses. This, the company says, is a unique product. Plans for expansion into countries in Eastern and Western Europe are also afoot, with the company due to have its products showcased by the Polish government during CeBIT, an international trade fair for the digital industry, held in Hanover, Germany, in March 2012. “We want to show that we are not just an emerging economy – that we can develop high-end products too,” said Mr Wiciƒski. Gareth Price

COURTESY OF MANTA

Manta eyes multimedia products to drive growth

TV sets, especially flat-screens, are a big part of Manta’s plans for the next two to three years

The bottom line Due in large part to cost-cutting measures, by the end of October 2011 Manta had already exceeded the z∏.4.4 million net profit it achieved for full-year 2010, reporting a bottom line of z∏.6 million for the first 10 months. A profit of somewhere between z∏.6-7 million is expected for fullyear 2011.

A large IT system investment, as well as increased outsourcing and consolidation of production facilities are expected to contribute further to cost-cutting. The company is also creating Polish jobs in the process. “We produce mainly in China, but recently we launched production of certain items in

Poland, including LCD and LED sets,” Mr Wiciƒski said. The company hopes one day to produce its products almost exclusively in Poland. “This would be cost-effective, but it would also allow me to have 100 percent control over quality – to ensure that not one piece of equipment is defective,” Mr Wiciƒski said. ●

Pick up the latest edition of Warsaw Business Journal Group’s popular series of busines guides. The publication features Trendbook Poland, a comprehensive view of the business trends shaping Poland’s market. To order, e-mail kwilinski@valkea.com or call (+48) 22 639-8567 ext. 255

The aging of existing stock will be a major challenge in the office sector in the near future

Billionaire Zygmunt Solorz-˚ak will not develop a shopping mall near Wroc∏aw’s soccer stadium

LOKALE IMMOBILIA

W a r s a w B u s i n e s s J o u r n a l ’s w e e k ly s u p p l e m e n t o n re a l e s t a t e , c o n s t r u c t i o n a n d d e v e l o p m e n t

€210 million mall financing

Hines receives permission to build Neptun in Gdaƒsk

Baltic Park Molo scheme . . . . .15 Mercure hotel closing . . . . . . . .16 Chmielna 25 contractor . . . . . .16 Zebra Tower LEED-certified . . .16 Property-related stocks . . . . . .16 Office obsolescence . . . . . . . . .17 Wrocław mall project scrapped18 Warimpex sells hotels . . . . . . .18

Developer Hines Polska has received a building permit for an office center in Gdaƒsk that will replace the former Neptun department store. The new 18storey scheme, called the Neptun office center, will comprise 15,300 sqm of class-A office space. Before construction on the project can begin, the contractor – Budimex – will have to dismantle the old retail center. The whole investment is expected to be finished by the first quarter of 2014. The development, which was designed by the Aedas architectural studio, will have a reception area, and service and retail space on its ground floor. The first floor will house a restaurant, several conference rooms, a coffee shop and a press lounge. The building will also have

pany hopes to obtain a BREEAM certificate of energy efficiency and environmental

performance for the building. Hines Polska was responsible for the development of the

Quattro Towers residential complex, also in Gdaƒsk. Izabela Depczyk

The Neptun office building is scheduled to be completed in Q1 2014

Zdrojowa Invest to build Baltic Park Molo in ÂwinoujÊcie Developer Zdrojowa Invest has taken over from Danish developer Kristensen Group for a project to build a mixed-use development in ÂwinoujÊcie, a city located on Poland’s Baltic coast. The investment, called Baltic Park Molo, is expected to cost z∏.200-250 million and will comprise at least four buildings, including hotels and apartments. A four-star hotel and a fivestar hotel are planned to be built as part of the development. These buildings will feature a wellness center, a retail, recreation and art space, a water park and a cinema. There will also be parking places for 500-600 vehicles. Two residential buildings, due to offer between 600 and 700 apartments, are also planned. The residences will be priced from z∏.11,000-18,000 per sqm.

Jan Wróblewski, a board member at Zdrojowa Invest, said “this will be one of the largest business hotel centers in the area and one of the largest in Poland.” “We plan for one of the hotels in the complex to function under a well-known international brand,” he added. Construction on the development is slated to begin by the end of 2012, or from early 2013, and be delivered in several phases. It is expected to be completed at some point between 2014-2017. The design of the development will be selected through a competition that will be launched on December 6. The contest will be open to both local and foreign architects. The winner will be selected on March 15, 2012 and announced on March 20, 2012.

COURTESY OF ZDROJOWA INVEST

COURTESY OF VSF-CREATIVE

Hines in Gdańsk . . . . . . . . . . . . .15

elevated floors and suspended ceilings, making it easier to rearrange office space when units are leased out. Micha∏ Samborski, project manager at Hines Polska, said, “We are going to offer an advanced office building which satisfies all the requirements for a class-A building – in terms of the location, technical systems, functionality and professional management.” In a statement, the company said “considering the dynamic growth of the economy and tourism in Tri-city, as well as an increase in the purchasing of apartments, this office building is the answer to the needs of companies from the financial, insurance and consulting sectors.” The company stressed that the project was designed with the environment in mind. “We care about the environment and sustainable energy,” Mr Samborski said. The com-

COURTESY OF HINES

The building will comprise 15,300 sqm of class-A office space

Galeria Bialska design unveiled

In this issue

DECEMBER 5-11, 2011, LI 16/48

Office buildings

Banks Helaba and pbb Deutsche Pfandbriefbank have granted €210 million to Immofinanz Group. The money will be spent on the refinancing and development of its Silesia City Center shopping mall in Katowice. Bought by Immofinanz Group in 2005, the project is the largest mall in the Upper Silesia region.

The Warsaw-based vsfcreative architecture and design practice has designed the concept for a new shopping center which KPBP Budus, KPM Agata and Graf will develop in Bia∏a Podlaska, Lubelskie voivodship. Construction on the project is expected to launch in April next year with the opening scheduled for October 2013. The planned development, which will be called Galeria Bialska, will comprise a total of approximately 25,000 sqm of GLA. The investment will include a shopping gallery with some 70 stores. ●

•

A visualization of the potential future Baltic Park Molo

Ella Pa∏ka

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LOKALE IMMOBILIA – REAL ESTATE

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Hospitality

Multikino in Makrum mall Makrum, the investor behind the eponymous shopping center project in Bydgoszcz, KujawskoPomorskie voivodship, and multi-screen cinema operator Multikino, have signed a letter of intent concerning the cinema’s presence in the planned mall. The parties expect to sign a long-term lease agreement by the end of this year. The development will include a shopping gallery with 180 stores, a 7,900-sqm Tesco hypermarket and a 9,000-sqm Praktiker DIY store.

New Ostro∏´ka mall A new shopping mall called Galeria Bursztynowa will be developed by Narev Inwestycje in Ostro∏´ka, Mazowieckie voivodship. Cushman & Wakefield has been appointed the exclusive leasing agent of the scheme. The Galeria Bursztynowa project will comprise approximately 20,000 sqm of leasable retail space and an additional 8,000-sqm DIY store. ●

Warsaw’s Mercure Fryderyk Chopin Hotel to close The facility will be demolished to make way for a new office tower The Mercure Fryderyk Chopin Hotel in Warsaw will close for good on December 15. The closing of the hotel is related to its acquisition from

ciech Gepner, public relations manager at Echo Investment. He added that early next year the company will present the concept of the planned scheme. The Kury∏owicz & Associates Architecture Studio is working on the design of the skyscraper. This isn’t the first Orbis-

Orbis Group by developer Echo Investment, which is planning to develop a 155meter skyscraper with some 45,000 sqm of office space on the site. “The planned tower will be perfectly located and will add new quality office space to downtown Warsaw,” said Woj-

It is expected to be demolished next year. The scheme joins a growing list of relatively new structures in downtown Warsaw which could soon give way to taller, more modern buildings. Other such projects include the Ilmet and Kaskada office schemes. Veronika Joy

Union Investment’s Zebra Tower office building in Warsaw has been awarded a LEED Gold certificate in the “Shell and Core” category. Features including the presence of energy- and water-saving solutions, finishing materials that do not emit pollutants and preferred parking for low-emission vehicles contributed to the scheme achieving the certification. “LEED certification is becoming one of the top criteria for many tenants today, and it reinforces the strong business case we have made for a costeffective energy solution that lowers tenants’ occupancy costs,” Reinhard Schertler, managing director at S+B Gruppe, which developed Zebra Tower, said in a statement.

“Zebra Tower brought us outstanding renting performance in 2011 and one of the key factors in this process was its sustainability,” Mr Schertler added. He pointed out that the project was one of the few office schemes which were constructed and successfully leased in Warsaw during the last three years. Located on Warsaw’s ul. Mokotowska, the 17-storey Zebra Tower development comprises 18,280 sqm of space, almost all of which is currently leased out to tenants including Allegro Group, Investors TFI, Millennium Bank, Samsung and S+B Gruppe. Union Investment acquired Zebra Tower at the beginning of the year for approximately AZ €76 million.

Zebra Tower is located on ul. Mokotowska and comprises 18,280 sqm of space

% change (week)

52-week low

52-week high

% change (year)

Chmielna 25 contractor chosen Total shares

Market value (z∏. mln)

BUDIMEX

72.55

3.79

64.00

109.20

-26.57

25,530,098

1,852.21

CELTIC

19.00

5.56

15.55

60.55

N/A

34,068,252

647.30

DOMDEV

31.98

-6.49

23.50

50.80

-18.04

24,560,222

785.44

ECHO

3.40

5.59

3.22

5.55

-30.61

420,000,000

1,428.00

ELBUDOWA

95.40

-2.60

94.50

170.00

-40.38

4,747,608

452.92

ENERGOPLD

2.20

-4.35

2.20

4.10

-41.95

70,972,001

156.14

ERBUD

17.40

8.75

14.70

61.00

-68.36

12,644,169

220.01

GANT

5.95

-6.30

5.95

17.63

-66.48

20,499,953

121.97

GTC

9.65

9.53

8.64

24.98

-60.07

219,372,990

2,116.95

HBPOLSKA

0.78

-1.27

0.70

3.20

-73.91

210,558,445

164.24

JWCONSTR

4.85

-10.35

4.83

17.24

-71.74

54,073,280

262.26

LCCORP

0.91

2.25

0.85

1.69

-41.29

447,558,311

407.28

MARVIPOL

9.05

10.91

7.22

11.99

-24.14

36,923,400

334.16

MIRBUD

2.40

13.21

2.10

4.75

-42.58

75,000,000

180.00

MOSTALWAR

20.50

-1.44

19.70

62.95

-65.86

20,000,000

410.00

MOSTALZAB

1.22

-5.43

1.07

3.37

-59.87

149,130,538

181.94

ORCOGROUP

14.96

-5.26

14.19

40.00

-50.53

17,053,866

255.13

PBG

72.85

3.70

56.05

223.00

-66.99

14,295,000

1,041.39

PLAZACNTR

2.00

0.50

1.80

5.15

-59.51

297,174,515

594.35

POLAQUA

6.70

5.18

6.37

20.60

-62.32

27,500,100

184.25

POLIMEXMS

1.35

-0.74

1.23

4.15

-66.25

521,154,076

703.56

POLNORD

14.20

-8.97

11.03

35.50

-59.64

23,798,439

337.94

RANKPROGR

9.00

3.45

8.64

13.60

-17.43

37,145,050

334.31

ROBYG

1.12

0.00

1.04

2.13

-39.78

257,390,000

288.28

RONSON

0.91

-1.09

0.84

1.58

-37.67

272,360,000

247.85

TRAKCJA

1.23

-3.91

1.20

4.29

-70.71

232,105,480

285.49

ULMA

61.25

-0.08

57.00

88.00

-26.20

5,255,632

321.91

UNIBEP

5.36

2.10

4.47

10.30

-44.46

33,927,184

181.85

WARIMPEX

4.05

-10.60

4.05

10.89

-55.74

54,000,000

218.70

ZUE

7.40

-4.88

7.40

14.75

-49.83

22,000,000

162.80

Real estate investor LHI has selected construction company Budner as the general contractor for its Chmielna 25 office and retail project in downtown Warsaw. Construction on the seven-storey, class-A scheme, which will be located on the capital’s ul. Chmielna, is scheduled to launch in December and finish in the second quarter of 2013. “The selection of an experienced and reliable contractor is one of the key decisions in the investment process. In the case of the Chmielna 25 office building, it is all the more important because of the

restrictive procedures involved in the development of a facility which is applying for LEED certification,” LHI CEO Robert Mand˝unowski said in a statement. “We are glad that the investment will be built by Budner, which has ample experience in the development of commercial, including office, projects in Warsaw and other Polish cities,” he added. Designed by the Bulanda, Mucha Architekci studio, the Chmielna 25 development will comprise a total of 7,135 sqm of usable space, including over 3,800 sqm of office and almost

1,800 sqm of retail space. The investment is expected to obtain a LEED certificate of energy efficiency and environmental performance. LHI has until recently been mostly known for its property leasing activity. Now the company is increasingly turning its attention to real estate project financing with Chmielna 25 being the company’s second investment in central Warsaw in recent years, after the Nowy Dom Jab∏kowskich project, which officially opened for business in September.

COURTESY OF LHI

Closing price on Dec 1

Echo deal in Poland. Earlier this year, Orbis Group sold two of its hotels, the Cracovia in Kraków and the Neptun in Szczecin, to Echo Investment Group. The combined cost of the transactions was z∏ 59.5 million. The Mercure Fryderyk Chopin Hotel opened in 1993.

Warsaw's Zebra Tower obtains LEED Gold certification

Property-related stocks Security

DECEMBER 5-11, 2011

COURTESY OF JONES LANG LASALLE

Construction on the scheme is set for completion in Q2 2013

Adam Zdrodowski

DECEMBER 5-11, 2011

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Office properties

The obsolescence opportunity As ever more advanced and more sustainable technologies are employed in the construction of new office developments, the rapid aging of the existing office stock in Europe is bound to become one of the most important issues in the industry by the end of the decade, according to recent research by Jones Lang LaSalle. The postulate is one of the major conclusions in the company’s Offices 2020 research program which was based on topic suggestions made by a number of key office real estate market players. The study found that office space obsolescence, resulting from shortening building life cycles, will increasingly expose office facilities to rental and capital devaluation.

office stock is a few decades old, noted Bill Page, head of EMEA office research at Jones Lang LaSalle. However, he stressed that the problem will ultimately also concern locations with relatively young office stock. In Warsaw, for instance, buildings delivered just a decade ago often do not have the highly advanced specifications featured by the latest office projects and may thus soon prove to be out of touch with current market requirements, said Anna Bartoszewicz-Wnuk, head of research at Jones Lang LaSalle’s Polish office. “In the 1990s, over 1,055,000 sqm of modern office space was delivered in Warsaw. Since 2000, an additional 2,550,000 sqm has hit the market. It can be assumed that the supply delivered in the 1990s, in particular, may become functionally or technologically obsolete and will need adaptation to the future market needs,” Ms BartoszewiczWnuk added.

Europe-wide trend The trend will arguably soon be most acutely felt in mature office markets such as London, where much of the existing

Green drive The drive towards sustainability will be the major factor contributing to the expected

increase in the obsolescence of existing office stock. “The legislative drive towards sustainable construction will increasingly confront property owners with the question of whether their real estate can be used at all,” Mr Page said. Moreover, as tenants become increasingly environmentally-conscious and expectant that the space they rent features environmentallyfriendly solutions, sustainable buildings will gain an ever more competitive edge in the market. In the near future, we may not talk about class-A facilities any more, but about whether a particular scheme is sustainable or not, Mr Page added.

Refurbishment opportunities Does all of this mean we can expect a massive wave of office building demolitions in the upcoming years? Probably not. Admittedly, there has been much talk in Poland of late of relatively new Warsaw buildings being replaced with newer structures, with UBS’s planned demolition of the Ilmet tower one of the most recent examples. However, according to Mr Page, the trend will rather be to upgrade existing stock.

COURTESY OF WIKIMEDIA COMMONS

Changing life cycles of buildings will be both a blessing and a curse in the office sector in upcoming years

The Ilmet office tower in Warsaw is one of a number of relatively young projects in the city due to be replaced by a more modern structure “Office obsolescence will provide opportunities for companies specializing in refurbishment projects,” Mr Page said. He added that

sometimes building green from scratch would be a necessity, but that in the case of projects which already have strong advantages, for

example due to a sustainable location, refurbishment would often be the preferred option. Adam Zdrodowski

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

DECEMBER 5-11, 2011

Retail

His company missed the deadline for making a decision regarding the planned new development

A guide to Polish business and industry

Mr Solorz-˚ak’s company declined to comment on the reasons behind its decision not to submit a final investment decision, but local media have reported that the investor was unable to secure financing for the project on acceptable terms. Wroc∏aw City Hall is now planning to put the location up for sale. “The local development plan means that only a retail center can be built in its place,” Mr Czuma said. Izabela Depczyk

COURTESY OF WROC∏AW 2012

Polish billionaire Zygmunt Solorz-˚ak will not be developing a retail center next to Wroc∏aw’s municipal stadium after a company of his failed to commit to a date to begin the project. Wroc∏aw City Hall invalidated the land-lease contract that had been given to the company. Pawe∏ Czuma, a spokesperson for the municipality, told Lokale Immobilia that the city annulled the project after Mr Solorz-˚ak’s company missed the November 30 deadline for making a final decision on whether it would build the retail center. “We were in talks with the company, yet no final decision was made so we decided to annul the agreement,” Mr Czuma said. The idea to build the retail center was born in 2009. An agreement was signed at that time allowing Mr Solorz-˚ak’s company to develop the project.

Profits made from the investment were to fund the Âlàsk Wroc∏aw soccer club, in which Mr Solorz-˚ak’s companies together hold a majority stake. The four-storey structure was to be built on 6.8 hectares of land. Of the 200,000 sqm of total construction space, 60,000 sqm was meant to comprise retail space which would have included 150 shops, restaurants and service points, as well as a fitness and spa center and a bowling alley.

The planned mall was to be built next to Wroc∏aw’s soccer stadium

Przewodnik po polskim biznesie i gospodarce

The deal includes the sale of two under-construction hotels in Wroc∏aw Austrian real estate development and investment company Warimpex has sold its 50 percent stake in a joint budget hotel development project in Central Europe to its partner on the project, Starwood Capital Group, the company said in a statement. The value of the transaction has not been disclosed. “This decision has a strategic focus. It’s still difficult to raise bank financing for projects and it would have been difficult to continue [at] the development speed that was originally planned,” said Christoph Salzer, press spokesperson and

The 2011 edition of Book of Lists is now available!

• Find key information about the dominant players in the market • Expand your portfolio of contacts • See who’s on top of your sector

To order:

COURTESY OF WARIMPEX

Warimpex sells budget Solorz-˚ak firm won’t build hotel projects to Starwood Wroc∏aw shopping center

Please contact us at +48 22 639 85 68 or kwilinski@valkea.com

regional director for Warimpex. Warimpex and Starwood planned to jointly develop Campanile and Premiére Classe hotels in order to focus and expand in Central Europe, specifically in Poland, the Czech Republic, Hungary and Slovakia. The deal involves the sale of several plots, as well as two under-construction schemes in downtown Wroc∏aw which will be operated by Starwood subsidiary Louvre Hotels and provide 152 and 136 rooms. The two Wroc∏aw projects are sitting on a 14,000-sqm plot

of land near the city’s main railway station and will comprise a total of approximately 6,000 sqm of usable space. They are being built by Eiffage Budownictwo Mitex and are scheduled to open for business in Q1 2012. Warimpex, which is listed on both the Warsaw Stock Exchange and the Vienna Stock Exchange, has so far developed properties worth a total of over €1 billion in the CEE region. The US-based Starwood Capital Group currently has some $16 billion of assets under management. Veronika Joy

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MARKETS

www.wbj.pl

DECEMBER 5-11, 2011

Stocks report

world stock indices DJIA

NASDAQ

12,020.03 (Dec 1 close)

S&P500

2,626.20 (Dec 1 close) 6.75% (for the week)

6.77% (for the week)

FTSE100

DAX

5,489.30 (Dec 1 close)

1,244.58 (Dec 1 close) 7.13% (for the week)

7.05% (for the week)

An up-anddown week

NIKKEI225 6,035.88 (Dec 1 close)

8,597.38 (Dec 1 close) 5.29% (for the week)

11.20% (for the week)

CHANGE: 3.82%

CHANGE: -1.88%

CHANGE: -1.04%

CHANGE: -6.96%

CHANGE: -13.44%

CHANGE: -16.95%

(year to Dec 1)

52-week high: 12,928.50

52-week high: 2,887.75

52-week high: 1,370.58

52-week high: 6,105.80

52-week high: 7,600.41

52-week high: 10,891.60

52-week low: 10,362.30

52-week low: 2,298.89

52-week low: 1.074.77

52-week low: 4,791.00

52-week low: 4,965.80

52-week low: 8,135.79

Andrew Nawrocki, WBJ market analyst After a miserable week for stocks last time up, the start of December proved to be a better one for markets. Though stocks continued to see low volumes throughout Europe, gains were made throughout the region, as well as overseas. Showing some sign of relief, market volatility as measured by the CBOE VIX indicator slumped throughout the week by more than 20 percent. In Poland, the WIG seesawed with solid gains on Monday following on from the previous week’s heavy losses. The relief rally was short-lived; however, BRE Bank and Bank Pekao both saw large gains. On Tuesday, markets dipped, though most of Europe’s largest markets closed positive. On Wednesday markets rallied, posting huge gains

Major indices WIG

39,215.21 (December 1 close)

WIG20

2,265.03 (December 1 close)

01.12

30.11

29.11

28.11

25.11

24.11

23.11

22.11

21.11

18.11

17.11

16.11

15.11

01.12

30.11

29.11

28.11

25.11

24.11

23.11

22.11

21.11

2,100 18.11

37,000

17.11

2,180

16.11

38,000

15.11

2,260

14.11

39,000

10.11

2,340

09.11

40,000

08.11

2,420

07.11

41,000

04.11

2,500

03.11

42,000

14.11

52-week low: 2,089.84

10.11

Change year to December 1: -17.77%

09.11

52-week low: 36,549.47

08.11

52-week high: 2,932.62

Change year to December 1: -17.70%

07.11

Change for the week: 4.63%

04.11

52-week high: 50,371.74

03.11

Change for the week: 4.28%

Top 5 CEDC SOBIESKI KREZUS MIDAS ASBIS

Closing 15.40 166.00 7.33 1.24 1.42

% change (week) 52-week high 54.31 83.50 35.18 285.00 22.17 8.39 21.57 5.19 20.34 4.25

52-week low 9.27 113.00 2.07 0.62 1.03

Top 5 GTC ASSECOPOL BRE PKNORLEN TAURONPE

Closing 9.65 49.64 266.40 39.75 5.40

% change (week) 9.53 9.36 9.00 7.72 6.51

52-week high 25.19 56.60 357.90 58.85 6.92

52-week low 8.56 34.50 203.30 30.33 4.65

Bottom 5 FON ATLANTIS DREWEX ELKOP PRONOX

Closing 0.21 0.67 0.29 0.27 0.18

% change (week) -50.00 -40.18 -27.50 -25.00 -21.74

52-week low 0.15 0.35 0.28 0.17 0.14

Bottom 5 GETIN POLIMEXMS LOTOS TPSA PGNIG

Closing 6.67` 1.35 25.15 18.27 3.97

% change (week) -1.91 -0.74 0.56 1.50 2.06

52-week high 15.29 4.18 49.50 19.19 4.65

52-week low 6.02 1.19 22.32 14.30 3.25

52-week high 0.85 1.92 2.75 0.49 1.76

Currency report

Light at the end of the tunnel?

Other indices sWIG80

8,706.80 (December 1 close)

NewConnect

41.46 (December 1 close)

WIG-Banki

SOURCE: WSE

01.12

30.11

29.11

28.11

25.11

24.11

23.11

22.11

21.11

18.11

17.11

16.11

15.11

14.11

01.12

30.11

29.11

28.11

25.11

24.11

23.11

22.11

21.11

18.11

17.11

5,200

16.11

41.0

15.11

5,360

14.11

41.6

10.11

5,520

09.11

42.2

08.11

5,680

07.11

42.8

04.11

5,840

03.11

43.4

10.11

52-week low: 4,944.19

09.11

Change year to December 1: -20.48%

08.11

52-week low: 41.31

07.11

52-week high: 7,387.49

Change year to December 1: -34.62%

04.11

Change for the week: 5.35%

03.11

52-week high: 64.04

6,000

After weeks of uncertainty and fears about the future of the euro zone, markets got a big boost from central banks last week. The largest institutions (including the Fed, ECB, BoJ, BoE and BoC) decided to launch a joint action to provide liquidity to the markets by decreasing rates on US dollar swaps by 50 basis points. A speech made last Friday by German Chancellor Angela Merkel appealed to investors. Ms Merkel also hopes that troubled European countries will agree on some principles of a sound long-term, more integrated fiscal policy. As reforms towards this end are implemented market confidence will be restored, investors hope. Meanwhile, macro news from the US did not disap-

5,535.82 (December 1 close)

Change for the week: 0.22%

44.0

Adam Narczewski, X-Trade Brokers Dom Maklerski SA

01.12

30.11

29.11

28.11

25.11

24.11

23.11

22.11

52-week low: 8,483.22

21.11

16.11

15.11

52-week high: 12,932.00

14.11

10.11

01.12

30.11

29.11

28.11

25.11

24.11

23.11

22.11

21.11

8,400

18.11

2,000

17.11

8,580

16.11

2,060

15.11

8,760

14.11

2,120

10.11

8,940

09.11

2,180

08.11

9,120

07.11

2,240

04.11

9,300

03.11

2,300

09.11

Change year to December 1: -28.92%

08.11

52-week low: 2,081.49

07.11

Change year to December 1: -22.23%

04.11

Change for the week: 2.28%

03.11

52-week high: 2,987.72

18.11

2,183.45 (December 1 close)

17.11

mWIG40 Change for the week: 4.90%

for stocks throughout Europe and the US. By pledging to lower the cost of existing dollar-swap lines to prevent a liquidity squeeze, the world’s leading central banks calmed investors’ fears. Financials surged, with Bank Handlowy (8.4 percent) and BRE Bank (7.48 percent) leading the way. Thursday saw markets pull back some gains, with average volumes also falling prior to non-farm payroll data being released. The WIG closed 0.73 percent lower, with the WIG20 down 1 percent. Friday, December 2, saw markets once again pick up with the better-thanexpected data on America’s job front. Still, stocks slid in the last hour of trade. The WIG closed down 0.18 percent, while the WIG20 closed 0.31 percent lower. ●

point, although the payrolls reading was a little below market consensus. The unemployment rate declined to 8.6 percent. All these events caused major currencies to react strongly, meaning volatility levels increased this past week. The EUR/USD opened the week just above $1.32 to reach $1.35, after the central banks’ announcement, with the gate to $1.36 now open. The z∏oty reached its highest level since June 2009 against the euro, at z∏.4.55, and June of 2010 against the dollar, at z∏.3.43, before strengthening slightly. The central bank might still be inclined to intervene once again before the end of the year to strengthen the z∏oty, in order to avoid crossing the 55 percent public debt-toGDP threshold. ●

currency rates 4.3538

4.3909

4.2965

29.11

30.11

01.12

02.12

4.3329 28.11

SOURCE: NBP

4.3937 25.11

0.1086

0.1079 02.12

4.2696

PLN-100JPY

01.12

0.1091 30.11

0.1083 29.11

28.11

0.1076 25.11

3.6741

3.6275 02.12

0.10

0.1077

PLN-RUB

0.12

01.12

3.7112 30.11

3.6789 29.11

28.11

3.6739 25.11

5.2498

5.2165 02.12

3.5

3.6654

PLN-CHF

4.0

01.12

5.3234 30.11

5.2804 29.11

5.2402 28.11

5.2614 5

25.11

3.3400

3.3235 02.12

30.11

29.11

28.11

PLN-GBP

01.12

3.4248

3.4001 3.0

25.11

4.4812 02.12

4.5083 01.12

4.5494 30.11

4.5282 29.11

4.5071 28.11

4.5130 25.11

3.3924

PLN-USD

3.5

3.3705

PLN-EUR

THE LIST

DECEMBER 5-11, 2011

www.wbj.pl

Financial Services

Factoring Companies Ranked by revenue from factoring in 2010

www.bookoflists.pl

Services

Rank

Factoring

Company name Address Tel./Fax E-mail Web page

Revenue from factoring (z∏. mln)

Total revenue (z∏. mln)

Full / Partial

Export / Import

Maximum First risk payment covered / due (days) / Collateral asked First pay-out Commission

Sectors serviced

Debt collection / Analysis of debtor’s financial situation

Debt administration / Financial advisory / Ledger maintenance

Number of clients / Total employees / Year founded

Ownership: Polish / Foreign

Top local executive / Title

Andrzej ˚bikowski

1st half of 2011 / 2010 / 2009 / 2008

ING Commercial Finance Polska SA ul. Malczewskiego 45, 02-622 Warsaw 1 22 558-7400/22 558-7490 sekretariat@ingcomfin.pl www.ingcomfin.pl

41.0 82.2 81.0 127.8

44.6 87.2 87.6 132.0

✓ ✓

WND WND

In blanco promissory note witth declarations

WND

✓ ✓

✓ -

75 WND 1994

None ING Lease Holding 100%

Polfactor SA ul. Królewska 14, 00-065 Warsaw 2 22 829-1460/22 829-1499 sekretariat@polfactor.pl www.polfactor.pl

24.1 44.6 43.8 47.0

✓ ✓

100% 70-100%

Max. 2 WND

Promissory note

All sectors

✓ ✓

✓ ✓ -

WND WND 1995

BRE Holding - 100% None

Coface Poland Factoring Sp. z o.o. Al. Jerozolimskie 136, 02-305 Warsaw 3 22 465-0235/22 465-4235 factoring@coface.pl www.coface.pl

WND 42.5 26.6 25.6

WND WND WND WND

✓ ✓

✓ -

80-100% WND

WND WND

In blanco promissory Industries in which firms note; power of attorney sell goods and services to a bank account with a deferred payment

✓ ✓

✓ -

WND 28 2006

Pekao Faktoring Sp. z o.o. ul. Lubartowska 74A, 20-094 Lublin 4 81 445-2000/81 445-2002 biuro@pekaofaktoring.com.pl www.pekaofaktoring.com.pl

WND 36.9 41.7 50.7

WND WND WND WND

✓ ✓

80-100% 80-95%

1 WND

In blanco promissory note; power of attorney to a bank account

All sectors

✓ ✓

WND 54 1998

Bank Pekao - 100% None

Miros∏aw Jakowiecki

BZWBK Faktor Sp. z o.o. Al. Jana Paw∏a II 23, 00-854 Warsaw 5 22 586-8292/22 586-8034 faktor@bzwbk.pl http://faktor.bzwbk.pl

18.2 28.8 31.6 39.1

18.1 28.9 31.9 39.5

✓ ✓

✓ -

90% 70-90%

1-2 WND

In blanco promissory note; power of attorney to a bank account

Pharmaceutical; chemical; cosmetics; telecom; sports; metallurgy; furniture industry; medical; food industry; electronics

✓ ✓

✓ -

484 68 2003

Bank Zachodni WBK Finanse - 100% None

Maurice Tracey

Bibby Financial Services Sp. z o.o. ul. Wo∏oska 9A, 02-538 Warsaw 6 22 545-6123/22 545-6124 info@bibbyfinancialservices.pl www.bibbyfinancialservices.pl

14.6 21.6 19.3 19.0

14.8 21.9 19.6 19.0

✓ ✓

✓ -

90% 70-90%

1 WND

In blanco promissory note; power of attorney to a bank account

Manufacturing; trade; services

✓ ✓

✓ -

WND WND 2002

Arvato services Polska, oddzia∏ Bertelsmann Media Sp. z o.o. – faktoring ul. Kolejowa 150, NR 62-064 Plewiska k/Poznania 61 652-8800/61 652-8755 faktoring@arvato.pl www.faktoring.arvato.pl

WND WND 13.2 12.5

WND WND 145.0 246.0

✓ ✓

✓ -

90% 80-90%

7-180 WND

In blanco promissory note

All sectors

✓ ✓

✓ ✓ ✓

30 25 1994

None Bertelsmann - 100%

Janusz Jankowiak

Raiffeisen Bank Polska SA ul. Pi´kna 20, 00-549 Warsaw NR 22 585-2001/22 585-2585 faktoring@raiffeisen.pl www.raiffeisen.pl/faktoring

WND WND WND WND

WND 1706.4 1407.0 1556.0

✓ ✓

✓ -

Up to 100% Up to 100%

1 WND

Power of attorney to a bank account

All sectors

✓ ✓

✓ -

WND 36 1991

None Raiffeisen Bank International - 100%

Piotr Czarnecki

Notes: NR = Not Ranked, WND = Would Not Disclose. Research for the List was done in November 2011. Number of employees and ownership structure are as of November 2011 unless stated otherwise. All information pertains to the companies’ activities in Poland. Companies not responding to our survey are not listed.

President

Pawe∏ Bry∏a; Dariusz Steç Board Members

None Jaros∏aw Jaworski; Coface Austria Holding Pawe∏ Tobis 100% President; Vice President

WND

President

None Krzysztof Kuniewicz Bibby Group of Factors General Director 99.9%

President

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Joanna Raszka, ul. Elblàska 15/17, 01-747 Warsaw, via fax to (48-22) 639-8569, or via e-mail to wbjbol@wbj.pl. Copyright 2011, Valkea Media SA. The List may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.

LIFESTYLE

www.wbj.pl

DECEMBER 5-11, 2011

Concert

“Women are Heroes”

Film festival

Watching over society Watch Docs – Human Rights in Film December 8-18 Warsaw’s Centre for Contemporary Art Ujazdowski Castle Warsaw Founded in 2001 by the Helsinki Foundation for Human Rights, Watch Docs – Human Rights in Film is now the largest human rights film festival in the world, with over

70,000 people attending the festival every year in Warsaw. This year’s event will feature films such as “Il Castello,” which tells the story of Italy's Malpensa Airport, “This is my Land,” a documentary about the city of Hebron, which lies in the West Bank 30 km from Jerusalem, and “The Redemption of General Butt Naked,” a film about the former Liberian war

lord Roosevelt Johnson. Part of the official selection at the 2010 Cannes Film Festival, “Women are Heroes,” a movie about women sharing their experiences of dangerous situations, will also feature. The majority of films come with audio descriptions for the hard of hearing, and subtitles. ● For more information log on to watchdocs.pl

Frank Turner and The Sleeping Souls December 14, 8 pm Klub Powi´kszenie ul. Nowy Âwiat 27 Warsaw English folk/punk singer-songwriter Frank Turner will make his first appearance in Poland’s capital this month. Since going solo in 2005 following the split of his group Million Dead, Mr Turner has slowly but surely built up an international fan base due to his brilliant lyrics and melodic tunes, which have seen him likened to other great solo artists such as Bob Dylan. Mr Turner, who is currently on tour promoting his fourth studio album, “England Keep My Bones,” will be

COURTESY OF FACEBOOK/FRANKTUNERMUSIC/JAKE OAKLEY

COURTESY OF WATCH DOCS

Folk rock in Warsaw

Frank Turner

accompanied on stage by The Sleeping Souls. The group is set to play songs including “Reasons Not To Be an Idiot,” “Long Live the

Queen” and “Peggy Sang the Blues.” Prior to the Warsaw gig, Frank Turner will also play at Meskalina bar in Poznaƒ on December 13. ●

Concert

Dream a little dream Disney – So Many Beautiful Dreams December 9, 2pm, 5pm and 7:30 pm PKiN Sala Kongresowa Pl. Defilad 1 Warsaw Fans of Disney will be delighted to know that a concert featuring a symphony orchestra,

Warsaw University Choir and live projections of some of Disney’s greatest cinematic moments is set to be performed in December. The concert program will include music from such classic animated movies as “Pinocchio,” “Bambi,” “The Lion King,” “Cinderella,” and

“Beauty and the Beast.” There will be three performances in total on December 9, with a 2 pm matinee specifically geared toward school children. Tickets are priced from z∏.40 to z∏.80. ● For more information log on to kongresowa.pl

LAST WORD

DECEMBER 5-11, 2011

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Tech Eye

The Milwaukee Golf Caddy order company headquartered in Cornsnarf or Doilymuck or some other town nobody’s ever heard of. Or maybe that’s just how it is in our family. Whatever you call it, tradition obliges Techeye to offer gift suggestions during this month. And we’re getting started earlier than usual this year, because our boss is always poncing on about how Christmas gift guides need to be published early, so that “addle-pated, consternated, squinky-faced ‘readers’ actually have time to buy something.” He actually uses air quotes

COURTESY OF JOHN ADAMS

Welcome to the month formerly known as December. As mandated by the United Nations Compulsory Holiday Upliftment and Festivication Force, you must now refer to it as Retail Month or else be sent to Afghanistan to serve as Santa’s special envoy to the Taliban. Not really. Retail Month is just one of Techeye’s pet names for December. Another is Blackmail and Bribery Season, because it’s when parents extort good behavior with threats of Santa’s naughty list, while kids amp up the cuteness, knowing Santa is a total sucker for that. Wives start dropping casual hints like, “Those diamond earrings look lovely, don’t they? Expensive? No more so than divorce, Darling.” Men tend to be the least successful during this season, in our experience. So they eventually start blunting the Christmas melancholy with extra helpings of eggnog and, when the big day arrives, hunker down in stony silence awaiting the annual “unwrapping of the tie” and the inevitable “unboxing of the arcane personal-hygiene gadget” which some elderly relative always orders from a suspicious mail-

COURTESY OF MILWAUKEEGOLFCADDY.COM

Execrable gift ideas for Retail Month

Doggie Doo

in the middle part. And so, dear “readers,” welcome to part one of Techeye’s Christmas gift guide. We’ll start with an idea for the lucky few fellows who won’t be getting paisley ties or elbow-hair trimmers: the Milwaukee Golf Caddy (milwaukeegolfcaddy.com). Let’s be honest – this is a glorified bag rack. It isn’t a great and wonderful gift per se, but it represents a potent union of two manly things: Harley-Davidson motorcycles and golf. The Milwaukee Golf Caddy purportedly installs in under

a minute, has no effect on handling and is tested at up to 95 mph. The downside is that real bikers will probably beat you up for defacing a Harley; the upside is that you’ll have a nine iron handy for selfdefense. There’s a holiday special on now: $489 + free shipping (presumably within the US); the regular price is closer to $600. For the ladies, Techeye has a stellar gift suggestion: rings made from “space gold” (spaceweddingrings.com). Sadly we’re not talking about a precious metal

mined from the moons of Neptune by intergalactic dwarves. Instead, some enterprising soul paid to have a lump of gold sent up with a suborbital research rocket, then used it to make around 100 rings – 50 wedding bands and 50 other rings of a less nuptial style. We’ll admit that Space Rings are kitschy, but they’re also shiny, expensive and unusual, adjectives which usually impress the womenfolk. They were designed by Polish jeweler Apart and cost $12,000. Last but not least, something for the kids – Doggie Doo (johnadams.co.uk). Believe it or not, this scatologically themed game is on a number of “must have” toy lists this year, including The Guardian’s. The rules are simple: first player to scoop three plastic puppy turds wins (in the loosest sense of the word). Will Doggie Doo fertilize your kids’ imaginations or just soil their minds? We figure there’s a 50/50 chance either way, and a 100 percent chance that you’ll pay £21.99 to find out. But pick one up anyway, to support Retail Month and keep China’s manurefacturers in business. ●

Ever visited Cornsnarf? Let us know: techeye.wbj@gmail.com

Museums, galleries and venues in Warsaw Centre for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 www.csw.art.pl Czarna Gallery ul. Marsza∏kowska 4 www.czarnagaleria.art.pl

Katarzyna Napiórkowska Art Gallery ul. Âwi´tokrzyska 32, ul. Krakowskie PrzedmieÊcie 42/44 and Old Town Square 19/21 www.napiorkowska.pl

Galeria 022, DAP, Lufcik Królikarnia National ul. Mazowiecka 11a Gallery www.owzpap.pl ul. Pu∏awska 113a www.krolikarnia.mnw.art. Galeria 65 pl ul. Bema 65 www.galeria65.com Le Guern Gallery ul. Widok 8, Galeria Appendix 2 www.leguern.pl (Praga) ul. Bia∏ostocka 9 www.appendix2.com Galeria Asymetria ul. Nowogrodzka 18a www.asymetria.eu Galeria Foksal ul. Foksal 1-4 www.galeriafoksal.pl Galeria Milano Rondo Waszyngtona 2A (Praga) www.milano.arts.pl Galeria Schody ul. Nowy Âwiat 39 www.galeriaschody.pl Galeria XX1 Al. Jana Paw∏a II 36 www.galeriaxx1.pl Galeria Zoya ul. Kopernika 32 m.8 www.zoya.art.pl Green Gallery ul. Krzywe Ko∏o 2/4 www.greengallery.pl

Museum of Independence Aleja SolidarnoÊci 62 www.muzeumniepodleglo sci.art.pl

Simonis Gallery ul. Burakowska 9 www.simonisgallery.com State Archaeological Museum in Warsaw ul. D∏uga 52 (Arsena∏) www.pma.pl State Ethnographic Museum ul. Kredytowa 1 www.ethnomuseum.we bsite.pl Historical Museum of Warsaw Old Town Square 28-42 www.mhw.pl History Meeting House of Warsaw ul. Karowa 20 www.dsh.waw.pl

National Museum in Warsaw Al. Jerozolimskie 3 www.mnw.art.pl

Warsaw Philharmonic ul. Jasna 5 www.filharmonia.pl

Polish National Opera at Teatr Wielki Pl. Teatralny 1 www.teatrwielki.pl

Warsaw Rising Museum ul. Grzybowska 79 www.1944.pl

Pracownia Galeria Wilanów Palace ul. Emilii Plater 14 Museum and Wilanów www.pracowniagaleria.pl Poster Museum ul. St Kostki Potockiego Rempex Art and 10/16 Auction House www.milanow-palac.pl ul. Karowa 31 www.postermuseum.pl www.rempex.com.pl Royal Castle Pl. Zamkowy 4 www.zamekkrolewski.com.pl

Zachęta National Art Gallery Pl. Ma∏achowskiego 3 www.zacheta.art.pl

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