WARSAW
BUSINESS JOURNAL S i n c e 1 9 9 4 Po l a n d ’ s l e a d i n g
business magazine in English
JULY 2020 ~ No. 7 (58)
For daily news visit us at wbj.pl
VASTINT'S RIVERVIEW REVOLUTION
Roger Andersson, managing director, reveals ambitious and innovative plans for the Polish housing market
IN FOCUS Polish retail industry THIRSTY? Poland’s beer and cider market evolution POST-COVID Industry insights sensing and shaping the era
JULY
6 In Review
News Black Lives Matter Demonstrations in Poland Ambassadors’ page Business across borders
17 In Focus
Retail marketing opportunities More shoppers in malls Community spirit
22 Features
40 47
25
Poland’s cider and craft beer industries Teaching in trying times Covid-inflicted unemployment
35 Tech
News Interview Mateusz Olejarka, an IT consultant
40 Talking Points
Interview Marek Borowski, a Polish senator Interview Caroline Gleeson, CEO, Occupop Interview Jacek Giedrojć, a Polish economist
51 Lokale Immobilia 22
News Interview Roger Andersson, managing director, Vastint Poland
62 Opinions
Growth in Poland by Morten Lindholm Covid diary by Morten Lindholm
65 Life + Style
Interview Aleksandra Szol-Tułecka, e-commerce director, Moliera2.com Restaurant Review Restauracja FORTY, Warsaw
28
70 Events Past and future
W B J JULY 2020
1
PUBLISHER'S NOTE Morten Lindholm Editor-in-Chief/Publisher mlindholm@valkea.com
Sankhyayan Datta Managing Editor
sdatta@valkea.com
Krzysztof Maciejewski Business & Web Editor
kmaciejewski@wbj.com
Kevin Demaria Art Director
kdemaria@valkea.com
OF COURSE, a crisis generates many discussions and points of view of right and wrong. As discussions include “unprecedented times,” “living in times of history being made” and so on, the descriptions of what we have experienced during the last few months are many. So are the expectations for what’s next. ‘NEXT NORMAL’ OR THE BEGINNING OF SOCIETY 4.0? Facts are more people than ever have: • s hopped online, and some behaviors and consumer habits have changed •w orked from home and held video-conferences • o verseen how the education system is finally integrating tools like computers and online systems/skills learning • n ot traveled: neither for leisure nor for business A BETTER WORLD? No, I don’t think so. I think we humans need contact with each other. We need to be impacted by nature, experiences and emotions that you can’t generate through isolation and online contacts. Have we learned something from the disruption? I have for sure and I hope others have as well. Surely many of the tools we have been “forced” to use during the last couple of months will be integrated into our lives and will improve life quality because of efficiency and convenience they deliver. WHAT’S NEXT? As it is with all crises, they stimulate innovation and Darwinist adaptations. I am optimistic and positive that we will see a rise of many new companies and services that will improve life in terms of services, health and climate, and hopefully enhance at least basic support for the weakest in our society. Throughout this issue, we look at how Poland is standing in the aftermath of the Covid-19’s first wave. We look at how the Polish retail situation will be adjusting to the new consumer habits. We take a look at what we have learned from the changed education system for school kids. We dig into what impact the crisis will have on unemployment. We talk to business leaders about new products in the real estate market. And last but not least, we look into cider, craft beer and restaurant markets. I hope you will enjoy the read and I wish you a great summer. Despite the limited options for travel, take a break and come back empowered to ensure you make an impact this autumn that will bring new exciting business times to Poland.
MORTEN LINDHOLM
Ewa Boniecka Klaudia Górska Konrad Krzysztofik Sergiusz Prokurat Beata Socha James Turner Alex Webber Anna Zachara-Widła Adam Zdrodowski Anna Zhuravleva Sales
Adam Fogler afogler@valkea.com Magdalena Klimiuk mklimiuk@valkea.com Katarzyna Pomierna kpomierna@valkea.com PR & Marketing
Dominik Grudziński dgrudzinski@valkea.com Print & Distribution
Krzysztof Wiliński dystrybucja@valkea.com Event Director, Valkea Events
Magda Gajewska mgajewska@valkea.com Contact: phone: +48 22 257 75 00 fax: +48 22 257 75 99 e-mail: wbj@wbj.pl
WBJ.pl To subscribe: Contact us at wbj@wbj.pl
WarsawBusinessJournal
@wbjpl
All photographs used in this issue are courtesy of partners and companies unless specified otherwise.
Copyright © 2020 by Valkea Media SA All rights reserved. This publication or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permissionof the publisher. Published by
ul. Jerzego Ficowskiego 15
Valkea Media S.A.
01-747 Warszawa
Tomasz Opiela, CEO
NIP: 525-21-77-350
www.valkea.com
To subscribe through RUCH SA: www.prenumerata.ruch.com.pl, prenumerata@ruch.com.pl, 801 800 803
2
JULY 2020 W B J
PORTRAIT BY PIOTR NAREWSKI
The new normal or not so new?
Contributors
THE BEST PLACE TO MOVE YOUR BUSINESS FORWARD Located in the western part of the Warsaw City Center Right at the entrance to the subway station with excellent accessibility by car, trams, busses and bicycles
195 m of height 47,200 sqm total GLA 30 office levels 4 retail and service levels Completion - Q1 2021
www.skylinerbykarimpol.pl
June 4, 2020 People left placards and candles outside the US embassy in the capital Warsaw to commemorate George Floyd, a 46-year-old African American man. The death of Floyd sparked worldwide demonstrations and protests against police brutality. He died in Minnesota during an arrest after Derek Chauvin, a Minneapolis police officer, knelt on his neck for nearly nine minutes as three other officers looked on. PHOTOGRAPH BY KEVIN DEMARIA
4
JULY 2020 W B J
W B J JULY 2020
5
NEWS HIGHLIGHTS OF THE PAST MONTH FROM WBJ.PL
My first legislative initiative as [Poland’s] president will be the law on increasing healthcare financing to 6 percent of GDP … The money that goes today to propaganda, [PiS] party television, should be allocated to health, our hospitals … In place of the current television, a new public television will be created, without TVP Info, without ‘Wiadomości’ [TVP’s main news program], without political journalism, without everything that poisons our lives today, because, unfortunately, television, which was supposed to be public television, was completely discredited by PiS Poland’s main opposition Civic Coalition’s (KO) presidential hopeful Rafał Trzaskowski, a former MEP and current Warsaw mayor, said at a conference on May 17
Presidential election heads for second round Poland’s President Andrzej Duda has topped the first round of voting but must still go into a run-off vote in the presidential election. Duda, a loyal ally of the country’s governing right-wing nationalist and populist Law and Justice (PiS) party will face off against liberal Warsaw Mayor Rafał Trzaskowski on July 12. Most opinion polls have shown the vote is likely to be extremely close and the result will be decisive for the country’s political trajectory. The turnout in the first round of the presidential election held on June 28 was almost 65 percent according to data from over 99 percent of electoral districts and incumbent Duda took just under 44 percent of the vote and Trzaskowski slightly over 30 percent. Meanwhile, international observers from the election quality monitor OSCE’s Office for Democratic Institutions and Human
6
JULY 2020 W B J
Rights (ODIHR) said in a statement, after the results came through, that Poland’s presidential election was administered professionally despite the lack of legal clarity as solutions were sought to hold the election during the Covid-19 pandemic. The campaign was characterized by intolerant rhetoric and a public broadcaster [TVP] that failed in its duty to offer balanced and impartial coverage. Inflammatory language by the incumbent and his campaign was at times xenophobic and homophobic, says OSCE, adding that in the run-up to the election, the public broadcaster became a campaign tool for the incumbent, while some reporting had clear xenophobic and anti-Semitic undertones. PiS won power in 2015 and embarked on an agenda that has mixed right-wing populist rhetoric on social and cultural issues with increased government spending. Duda has been signing off on almost all of the PiS legislative program, as the government has
been accused of democratic backsliding and weakening the rule of law by European officials and civil society organizations. Duda came under fire recently during campaigning, including for a speech in which he said LGBT rights were an “ideology” more destructive than communism. Poland picked June 28 as a new date for the presidential election that was canceled in May following a bungled response from the ruling party amid the coronavirus pandemic. Planning for the election had plunged Poland into political turmoil after the ruling Law and Justice (PiS) party abruptly called it off four days before the original May 10 date. POLITICS
Main opposition chooses presidential candidate Warsaw Mayor Rafał Trzaskowski was chosen as the candidate representing Poland’s Civic Coalition (KO) group in this year’s
>>>
SHUTTTERSTOCK
POLITICS
WBJ
In Review | DOMESTIC NEWS presidential election after Małgorzata Kidawa-Błońska resigned. This decision was unanimously made by the coalition on May 15. Before the KO board meeting, former candidate Kidawa-Błońska announced in the lower house (Sejm) of the parliament that she had withdrawn from the presidential race. At a conference on May 17, indirectly rapping the governing PiS party by slamming the public television TVP that is largely taxpayer-funded, KO’s presidential hopeful said that “my first legislative initiative as [Poland’s] president will be the law on increasing healthcare financing to 6 percent of GDP … The money that goes today to propaganda, [PiS] party television, should be allocated to health, our hospitals … In place of the current television, a new public television will be created, without TVP Info [a 24-hour news channel], without ‘Wiadomości’ [TVP’s main news program], without political journalism, without everything that poisons our lives today, because, unfortunately, television, which was supposed to be public television, was completely discredited by PiS.” In March, President Andrzej Duda signed an act under which almost PLN 2 billion were allocated to state-run media, the lion’s share for TVP. Reporters Without Borders, a leading international non-profit NGO that safeguards the right to freedom of information, stated in April that in Poland “partisan discourse and hate speech are still the rule within state-owned media, which have been transformed into government propaganda mouthpieces.” Meanwhile, the financial statements of TVP show that during PiS’s rule TVP Info’s budget has been growing year by year. In 2019, TVP spent nearly PLN 170 million on the rolling news channel. From 2016-2019, TVP Info, which has been around since 2007, consumed over PLN 570 million. Adam Bodnar, Commissioner for Human Rights of Poland, said in early May that public media is failing to fulfill their tasks envisaged for the presidential campaign, giving much more airtime to the incumbent Duda SOCIETY
Poland more popular with foreign workers: data The number of work permits issued to foreigners in Poland increased by over 38 percent year-on-year in 2019 and amounted to 444,700, Poland’s Central Statistical Office (GUS) reported on May 20. Work
8
JULY 2020 W B J
permits for foreigners are most often issued to Ukrainian citizens (over 74.3 percent) and they concerned mostly the Mazowieckie region. In 2019, the largest number of permits after the Mazowieckie region (19.4 percent) was issued in the Wielkopolskie province (11 percent). Taking into account the number of work permits issued according to the occupation, data shows that in 2019 in Poland the biggest group comprised industrial workers and craftsmen – 38.7 percent of the total number of work permits issued. In a separate report published in early June, GUS estimated that as of December 31, 2019, over 2.1 million foreigners lived in Poland. Most of them were Ukrainian nationals (over 1.35 million). SOCIETY
Poland most homophobic in EU: index After three years of hugging the penultimate spot in terms of LGBT+ equality and rights, Poland’s rank has plummeted to the absolute bottom in the European Union, according to the latest ILGA-Europe index, with a score of 16 percent. While Malta (89 percent) tops the ranking for the fifth year in a row, Azerbaijan (2.3 percent) is at the opposite end of the spectrum. Belgium and Luxembourg (both 73 percent), Denmark and Norway (both 68 percent) and Spain (67 percent) follow Malta in the list. Turkey (3.8 percent), Armenia (7.5 percent), Russia (10 percent) are above Azerbaijan, states the index. Since 2009, ILGA-Europe has compiled an annual Rainbow Map ranking of 49 countries in Europe based on each country’s commitment to LGBT+ equality and rights. In the ranking, each country is assigned a percentage point based on its standing in six key areas: equality and non-discrimination, family, hate crime and hate speech, legal gender recognition and bodily integrity, civil society space and asylum. ILGA-Europe announces on their website that they are “working towards equality and human rights for lesbian, gay, bisexual, trans and intersex people in Europe and Central Asia.” Meanwhile, the latest survey conducted by the non-partisan American think tank Pew Research Center has found a rise in tolerance toward the LGBT+ community in Poland with almost half of Poles (47 percent) declaring that Polish society should accept homosexuality as compared to the 2002 edition of the survey in which 40 percent of Poles expressed acceptance.
ART AND CULTURE
Public radio faces boycott after censoring political song Government-owned Polish Radio censored a song ridiculing the country’s political leader, prompting artists to call for boycotts of the station and stoking comparisons with communist-era crackdowns on free speech. The conflict began when aging punk rocker Kazik Staszewski’s new single, lampooning ruling party chairman Jarosław Kaczyński, topped the weekly chart of most popular songs on the radio. The radio network swiftly deleted the weekly rankings from its website, accused the Top 30 program of manipulating the rankings. The host, who had run the show for 35 years, quit in protest. “Your pain is better than mine,” Staszewski sings about Kaczyński’s visit of his family graves at a time when a government-ordered virus lockdown forbid Poles from making any non-essential trips. “You can soothe the pain alone, everyone else is too poor. One, two limousines, the whole cemetery is yours. Better than mine.” Some of the country’s biggest artists called for a boycott of public radio’s Trojka channel while ruling party officials criticized Staszewski and denied suggestions that the broadcaster was censoring criticism. ART AND CULTURE
Clerical child abuse documentary casts shadow on JPII centenary A documentary on child abuse by Catholic clerics has put a damper on centenary celebrations of the late Pope John Paul II’s birth. After the film “Hide and Seek” was seen by almost 80,000 people on YouTube immediately after its release, Polish archbishop Wojciech Polak called on the Vatican to “launch proceedings” into the cases in question. It is the second documentary by Tomasz Sekielski on child abuse within the church and focuses in detail on two brothers who are alleged victims of a priest who was protected by a bishop. In May 2019, Sekielski released “Tell No One,” a similar documentary that has been viewed over 23.5 million times on YouTube and sparked a national discussion of sex abuse by the Catholic clergy. The issue then faded, however, and neither film explores a lack of action by Saint John Paul II, who was pope from 1978 to 2005 and who is widely venerated in his native Poland. Sekielski has already said however that he will release a third documentary on the “role of John Paul II in the dissimulation of crimes committed by priests.” Born Karol Wojtyła on May 18, 1920, in Wadowice, southern Poland, John
>>>
How to survive the 'new normal'? Upskill, upskill, upskill Upskilling provides a futureproof plan of action for businesses and employees alike— delivering increased agility and a competitive edge.
T
echnology has been the driving force behind some of the biggest corporate and societal transformations over the past several decades—providing innovative and new approaches to many long-standing challenges. And, as COVID-19 rages on and a ‘new normal’ sets in, technology will once again become a clutch player as businesses rethink and revamp everything from operating models to workplace culture. But, in order to unlock the true potential of what technology can do, it requires both human ingenuity and new skills. For a truly re-imagined business, it’s mission critical that employees can utilize tools and technologies, such as cloud and artificial intelligence (AI), in order to become the true agents of change. The business world has recognized the importance of upskilling and the benefits it provides, not only for the business itself but for employees as well. Upskilling ensures employee skillsets won't become obsolete and those that have training and development opportu-
nities are also happier in their roles and have a brighter outlook on their future with a company. A good example of this is Microsoft’s recent partnership with EPAM Systems, a leading global provider of digital platform engineering and software development services. Together, they have developed the largest Microsoft cloud skilling program of its kind in Central and Eastern Europe. In the last year alone, more than 2,200 engineers and architects from 14 countries have participated and EPAM expects another 400+ new Azure certifications will be successfully completed by summer 2020. Certifications include: Azure Fundamentals, Azure Developers, Azure Administrator, DevOps Engineer, Solution Architect, Data Engineer, AI Engineer and Security. As a result of this program, EPAM was able to apply their expertise in Azure to a partnership with The Philadelphia Youth Network (PYN), an organization that serves as the managing partner for two of the city's most comprehensive campaigns focused on improving the
AI and skills in Central Europe Microsoft recently undertook a global survey to investigate the skills needed to thrive as businesses increasingly adopt artificial intelligence. This survey revealed many actionable insights some of them being especially noteworthy.. In Central and Eastern Europe (CEE), companies experiencing the greatest value from AI are those that focus on developing the skills of their people as they shift deployments. 60% of employees at ‘AI-leading’ firms have been a part of skilling programs and 65% of those say their company is preparing them to be successful in the age of AI – compared to only about a third of people at companies slower to adopt AI. As a result, almost
three quarters (73%) of senior executives from mature AI businesses say they are already seeing business value from AI deployments, compared to less than a half (49%) of companies that are at earlier stages of AI usage. It’s clear from these findings that there is tangible value in giving employees the right skills to be able to reimagine the way in which they use technology—AI or otherwise—in order to shape how businesses, operate and compete. Microsoft offers a number of free courses, like Microsoft Learn, with more than 80 hours of content that covers a variety of critical technology solutions. Learn more.
BROUGHT TO YOU BY
educational and economic outcomes of the city's youth. Since 1999, the organization has been committed to helping young people who are disadvantaged because of their living conditions—providing an opportunity to complete their basic education and prepare for the challenges of the labour market. But, in order for PYN to be as efficient as possible, they have to take advantage of the abundance of technology available. And, when the time came to make some much needed improvements, EPAM, was the perfect partner to help. “As a non-profit, every dollar we spend has to be squeezed and maximized for the greatest impact and value. Our technology investments are no different. EPAM helped PYN overhaul our enterprise applications from an outdated Oracle stack built on ColdFusion to a modern suite leveraging .Net and Azure SQL services. They also helped empower our business users to make data driven decisions faster, by enhancing our PowerBI dashboards and reports, thereby making Business Intelligence an operational function within our organization,” said Michael Pompey, CIO of Philadelphia Youth Network. “By integrating these Microsoft tools into our Azure/O365 environment, PYN can meet the ever-changing demands of youth workforce, while maintaining our operations during the COVID-19 crisis.” Microsoft and EPAM Systems are committed to making their customers and partners more futureproof, efficient, and competitive. The success reached by Microsoft upskilling program gives evidence that such cooperation with customers across the region can ensure that employees at every level can unlock the skills they need to put both themselves and their companies on a path to digital success, especially in a postCOVID world.
In Review | DOMESTIC NEWS Paul II was elected pope on October 16, 1978. He died on April 2, 2005. He was beatified on May 1, 2011, and canonized on May 27, 2014. BUSINESS AND ECONOMY
Poland could gain over $8bn a year on relocation of production On moving part of the production from China to other countries, Poland could gain over $8.3 billion per year in the form of additional value added, experts from the Warsaw-based Polish Economic Institute (PIE) have estimated. In PIE’s assessment, relocation processes should be fostered by, among others, improving the condition of infrastructure, while barriers may be the availability of qualified staff and rising labor costs. “EU countries could benefit the most from the relocation of production from China in the scenario combining national patriotism and the strengthening of new member states from Central Europe – the Czech Republic, Poland, Slovakia, Hungary, Romania and Bulgaria – as a factory for EU countries. In absolute terms, Poland could benefit the most,” the PIE reported on May 19. In business and economics, the difference between the sale price and the production cost of a product is the unit profit, and the sum of the unit profit, the unit depreciation cost and the unit labor cost is the unit value added. FINANCE
Post-Covid: Poland third best country to invest in Poland has been adjudicated the thirdbest country to invest in the world in 2020 by the leading business magazine, CEOWORLD. Last year, it was ranked second. “Perhaps an unexpected entry for many, the Eastern European nation was found to be one of the top-tier places for investment, ranking highly for market potential and institutional framework,” informs the magazine. The study analyzed 80 countries according to business and investment environments. Corruption, freedom, workforce, investor protection, infrastructure, taxes, quality of life, red tape and technological readiness were among the factors taken into consideration. Singapore topped the list for the 2020 edition as the most attractive nation for investors and businesspeople as the UK stood second. Iran was ranked 80th on the list.
10
JULY 2020 W B J
INTERNATIONAL
Black Lives Matter supporters show solidarity across Poland Candles were lit and bunches of flowers were laid to express solidarity with people of color, especially the African-American community, outside the US embassy in Warsaw and consulate in Kraków, as participants lay on the floor in a square close to Poznań’s main train station with their arms crossed behind their backs. “Let’s lay flowers and light candles in the memory of George Floyd, thus expressing our solidarity with his family and loved ones and with hundreds of thousands of Americans who have been walking on the streets of their cities for several days, demanding justice. We will show that we do not have our consent for the state’s racist activities,” appealed Kraków’s Americans and their friends on Facebook. The demonstrations were part of an ongoing series of protests and unrest which began in Minneapolis, Minnesota, on May 26. The protests began as a response to the killing of Floyd, 46, an African American man who died during an arrest after Derek Chauvin, a police officer, knelt on Floyd’s neck for nearly nine minutes as three other officers looked on. The unrest that began as local protests in Minnesota quickly spread nationwide and in over 60 countries internationally in support of the Black Lives Matter movement. By June 13, over 2,000 cities and towns in the US and around the world saw protests and demonstrations. While the majority of protests have been peaceful, demonstrations in some cities descended into riots and widespread looting, with more being marked by street skirmishes and significant police brutality, notably against peaceful protesters and reporters. At least 200 cities in the US had imposed curfews by June 3, while at least more than 30 states and Washington DC, activated over 62,000 National Guard personnel due to the mass unrest. By June 3, at least 11,000 people had been arrested across the US, including all four police officers involved in the arrest which led to Floyd’s death. The protests have also been associated with the removal and destruction of monuments and statues internationally. A number of monuments and memorials were destroyed or removed, or plans to remove them were announced, during the riots. In the United Kingdom, activists targeted monuments to people involved in the trans-Atlantic slave trade and British imperialism. In Belgium, one statue and two busts of King Leopold II were removed and many were defaced. In New Zealand, a statue of John Fane Charles Hamilton was removed.
Curated from: abcnews.go.com, afp.com, apnews.com, bbc.com, businessinsider.com.pl, buzzfeednews.com, fakt.pl, freedomhouse.org, interia.pl, isbnews.pl, nytimes.com, nzherald.co.nz, pap.pl, pbs.org, reuters.com, theceomagazine.com, theguardian.com, usatoday.com, washingtonpost.com, wyborcza.pl, wsj.com
SHUTTTERSTOCK
WBJ
Ambassadors’ Corner Top diplomats in Warsaw told the WBJ about...
trade during the ongoing pandemic
?
12
Rolf Nikel German ambassador
How have the border restrictions affected trade between your country and Poland?
For many years, trade between Poland and Germany hit new records literally every year. In 2019, it stood at more than €123 billion. For decades, Germany has been Poland’s most important trading partner by far. Even if we do not have reliable figures yet, 2020 will probably be the first year in many in which we cannot expect to see new records in Polish-German trade. However, this is more due to the general economic development than to the introduction of border controls, since, fortunately, goods continue to flow. There is solid ground for hope that as economy rebounds and all border restrictions are abolished, the trade will bounce back again.
How have the restrictions affected the lives of migrant workers between the countries?
For migrant workers, it was temporarily very difficult to visit friends and relatives in their home countries, due to the introduction of border controls, quarantine rules and cancelation of international connections. As for workers commuting regularly to their respective neighboring countries, border controls and quarantine measures made their lives very difficult in the beginning. Some of them were not able to continue working. However, the situation is gradually improving, with quarantine rules being suspended for migrant workers and border procedures becoming more workable for commuters.
What can be done to boost trade, and improve workers’ lives and the situation once the risk has subsided?
We need the EU economy to recover as fast as possible and in a sustainable way. German Chancellor Angela Merkel and French President Emmanuel Macron as well as the European Commission have made important propositions in this direction recently. At the same time, we need to fully return to the rules and procedures of the common European market which was the primary source of wealth for many years before the pandemic. Thus, I hope that the dynamic development of PolishGerman trade will quickly lead to new records!
JULY 2020 W B J
Eduardas Borisovas
Andrii Deshchytsia
Despite the continuous flow of goods, the crisis has had some impact on our bilateral trade volumes. Poland was Lithuania’s second-largest export market in 2019. In Q1 2020, when compared to the same period last year, export decreased by almost 21 percent: from €430 million to €340 million. The overall bilateral trade turnover in Q1 2020 dropped by 6.9 percent: from €1.4 billion to €1.3 billion. Declining purchasing powers within our countries is the main reason why bilateral trade amounts have decreased. It is understandable that during difficult times local consumption falls as customers buy only necessary products and postpone the purchase of more expensive or less necessary goods.
Poland is Ukraine’s strategic partner both in economic and geopolitical terms. For the last several years, Poland remains our fourth largest trade partner and the second-largest market (after China) for Ukrainian exports. In 2019, we succeeded in reaching over $8 billion of bilateral turnover. We never imposed any restrictions on our bilateral trade during the pandemic. None of the rail or airfreight connections were restricted. Moreover, at least two border crossings for trucks were always active. Our bilateral turnover in Q1 2020 grew slightly. Of course, we anticipate a decrease in bilateral trade volumes in Q2 2020, but hopefully, the second half of the year will demonstrate a prompt recovery.
Travel restrictions and compulsorily 14-day quarantine were obstacles that decreased mobility significantly. An agreement was reached in early May, according to which people traveling for the purpose of work or studies between Poland and Lithuania were exempted from the mandatory isolation. It settled all problems regarding the free movement of labor. However, unfortunately, some jobs in certain businesses were lost permanently. Restrictions caused inconveniences but they proved that people are quick to reorient and adapt their activities to the new reality of changing environment and work conditions.
Our workers make a significant contribution to the Polish economy and are an essential part of its 30year non-stop economic growth success story. About 200,000 Ukrainians decided to leave Poland during the quarantine. It’s roughly Poland’s total need for seasonal workers in agriculture. Our key priority is to continue improving economic conditions in Ukraine and to encourage Ukrainian workers to stay and work at home. Our European aspirations have become stronger. Moving part of export production facilities from Poland to Ukraine could be a win-win strategy both.
Lithuania managed to avoid the worst-case scenario of the pandemic. The virus spread was quickly contained. Lockdowns were milder and shorter. We started lifting restrictions earlier. We have reopened all business activities with all the necessary precautions. Measures implemented by our government aim to safeguard jobs, solve business liquidity problems and stimulate the economy. Steps undertaken are important to ensure economic recovery in the shortest possible time. Acceleration of investment projects, reallocation of funds to the health sector, employment and business areas have brought positive effects.
Protection of Ukrainian citizens’ rights in Poland, the facilitation of Ukrainian exports to Poland and other EU countries, and attracting Polish investments to Ukraine, are our top priorities. Nobody knows how the restrictions will affect international trade, national economies and businesses, besides unemployment and investment plans. The top priority for us in order to boost bilateral trade is the development of logistics and infrastructure (including border). Poland is our main gate to the EU. Hopefully, we’ll be able to overcome the recession and recover soon.
Lithuanian ambassador
Ukrainian ambassador
W B J JULY 2020
13
EXCLUSIVE
Delivering quality Katarzyna Jaeger, head of sales and key account management, Raben Group, explains how the Dutch logistics giant has been moving ahead during the trying pandemic-infused times. INTERVIEW BY SANKHYAYAN DATTA
WBJ: How is the current inter-
national flow of goods like? How have the pandemic and the border restrictions affected deliveries? Katarzyna Jaeger: Since the beginning
of the pandemic, we have been observing very high fluctuations in our customers’ volumes. Therefore, it’s essential to focus even more on the flexibility of our services. We serve customers from the automotive industry, among others, who have been heavily affected by the ongoing crisis. But our customers from the food sector experienced peak sales in March. The DIY industry is also doing well. However, the overall market volume is smaller. So far there have been no delays or stoppages in domestic deliveries and warehousing. Only right after border restrictions were imposed, there were huge queues at the borders during the first week, which resulted in prolonged international deliveries. However, our customers were informed about it on a regular basis. Thanks to the cooperation with various institutions, we can safely say that the flow of goods is normal again. How does Raben – employing a diverse set of employees, including
14
JULY 2020 W B J
drivers – deal with the organization of work during the pandemic?
A crisis management team was appointed to coordinate activities in all companies of the Group. They monitor the situation and take appropriate actions. In this non-standard situation, we are making every effort to ensure that deliveries are run as safely as possible. For this purpose, we have introduced a number of safety measures, such as temperature checks and disinfectants at the entrances to our facilities, protective gloves and face masks for our employees and drivers, 30-minute breaks between warehouse shifts, new procedures for drivers staying in the Group premises and additional disinfection of social rooms. Wherever it was necessary, glass or plexiglass barriers were installed in order to minimize personal contact. In our offices, we have introduced a system of remote working. We have switched to electronic communication and virtual meetings. What has Raben implemented to minimize contact between the consignee and the driver or courier? How does a sender get affected?
In the new reality, the feeling of safety has become particularly important. At the same time, consumers have significantly changed their habits and behaviors. Having in mind the safety of the consignees and in order to keep the recommended distance between people participating in the delivery, we have launched a new service – PCD (Picture Confirming Delivery) – for groupage shipments. It’s a touch-free confirmation form of delivery by using a photo. It’s enough for the customer to enter an order into the myOrder system on the myRaben website in which they confirm the use of the free additional PCD service. Then the driver, while making the delivery, leaves the goods in the place indicated by the consignee and takes three photos: of the label, of the shipment and of the shipment with the label. They confirm the delivery without the need for the consignee to sign it. Thanks to this solution it is possible to keep the appropriate distance between the driver and the consignee. The photos are automatically saved on the driver’s mobile device and processed into a delivery note. The document also records the registration number of the truck, date, time and geographical coordinates of the
ADVERTORIAL
Raben Group supports the fight against Covid-19 by organizing charitable road transport of medical equipment. Among others, the company supported the Doctors to Doctors Foundation by transporting 1 million surgical masks, 1.5 million FFP2 N95 masks and 100,000 suits, visors and goggles each.
we have a number of additional services regarding advice and time deliveries that allow us to adapt to the availability of a consignee in the current situation. How is it possible to conduct tender processes in contract logistics during the pandemic when the client cannot be invited to a warehouse?
place where the photos were taken. The customer can immediately see the proof of delivery on the myRaben platform in the myTrack&Trace module. Of course, the consignee can always choose the traditional method of delivery confirmation, i.e. signature on the driver’s mobile device or the transport document. Is it possible to collect shipments in quarantine? Tell us more.
With the introduction of the PCD, a remote collection is possible even while being quarantined. The service is intended to facilitate the process of delivery also in case a consignee doesn’t want to, or for some reason cannot, confirm the delivery with a signature. This solution enables a completely touch-free delivery, without contact and interaction between a consignee and driver. No signatures or stamps are required. Thanks to the automatic registration of data, not only regarding the appearance of the shipment, but the date, time and place of delivery, and even the registration number of the truck, PCD offers greater certainty to a consignor and consignee that a delivery has been completed. On top of PCD,
We have adjusted our warehouse processes in terms of the implemented safety precautions. We haven’t yet introduced any restrictions on our operations or the coverage of our transport network and we don’t have such plans in the nearest future. I believe that the current situation shouldn’t put our activity on hold. On the contrary, we must act to ensure that negative consequences of the current state of affairs are experienced as little as possible by all economic operators. The key issue is to ensure business continuity of every company in the market. After all, each crisis opens up new possibilities. This whole situation doesn’t prevent us from conducting tender processes. Meetings take place in the form of videoconferences. We show potential customers our warehouses in a virtual way. How the pandemic caused faster development of e-commerce and how it influenced the change of distribution in some logistics clients from B2B to B2C?
We see many changes in the final consumer’s behavior. A lot of people work remotely and they rarely go out. Therefore more often, deliveries are not made to companies or shops, but directly to private
“ The key
issue is to ensure business continuity of every company in the market
homes. It’s especially visible in the DIY market sector, where we recently noticed a very large increase in orders. Consequently, the number of groupage shipments to end consumers has increased in our network. Even now, when shopping centers are open, we still do not see many people visiting them. This trend will probably stay with us. Our warehousing and transport processes are ready for that. We propose our customers complex solutions both for B2C and B2B logistics. Why delivery notification is so important during the pandemic? And why is the ETA (estimated time of arrival) solution so important?
Time is money. Thus, information about the delivery time of a shipment becomes invaluable, especially now, when the safety of all people involved in the delivery process is particularly important. Thanks to our innovative shipment monitoring system based on an ETA parameter, we are able to provide an estimated delivery time of a shipment in the form of a two-hour time window. What distinguishes our solution from others on the market is that ours is based on real-time data. In case of the situation which may affect the time of delivery, the system automatically changes the estimated time of delivery and sends updates to the customer. We provide our customers with tools such as ETA and PCD free of charge. We secure the business of our customers regardless of the situation. We want to build their competitive advantage, give them a service better than before, and we strongly believe we can change the market.
W B J JULY 2020
15
FREE
E NTR Y!
Includes
· City Tours & Kids’ Zone · With Adventure Warsaw · Outdoor Cinema · · Classical Music Concerts · · Fireside conversations at Koneser Grill · · Courtyard Family Games Tournaments · · Garage Sales · · Workshops and Performances you We inviteay! every d Place:
a r e s e n o K . Pl From: July 2 am *the progr
For Kids · For more details see:
www.koneser.eu
m
may change
PRAGA / PARKING FROM UL. BIAŁASTOCKA / ENTRY FROM UL. ZĄBKOWSKA & BIAŁOSTOCKA /
24/7, FIRST HOUR FREE
IN FOCUS
RETAIL INDUSTRY
“Summer Chillout Zone,” Galeria Malta in Poznań.
Poland went into lockdown around March 12 around the time WHO announced the Covid-19 outbreak a pandemic. Economies around the world followed suit and shut themselves down. The retail industry, among others, bore the brunt of the shutdown. However, after governments began lifting or easing restrictions, retailers – large and small – began seeing the faint light at the end of the tunnel. The following section of the magazine spotlights the retail industry: a Warsaw-headquartered marketing agency head talks about how retailers can benefit from certain consumer behavior and attitudes, a trade body manager provides insights about the rising number of shopping center visitors and a property investment firm director encourages to shift the focus toward the community.
>>>
W B J JULY 2020
17
IN FOCUS RETAIL INDUSTRY
RETAIL MARKETING OPPORTUNITIES AFTER LOCKDOWN
Tomasz Opiela, CEO of Valkea, a marketing agency, discussed with the WBJ consumer behavior and attitudes, and how retailers and shopping centers can use this to their advantage. INTERVIEW BY MORTEN LINDHOLM
18
JULY 2020 W B J
“Our research and analysis show that consumers don’t buy things they don’t really need right now. They check prices. They look for promotions. They like to get more for the same price.”
WBJ: We have been locked down for months. What are your observations
so far? Tomasz Opiela: When the announcement was made that shopping malls could open again, it didn’t give – neither asset managers nor tenants – much time to prepare as it was communicated just before long May 1 weekend. [May 1 and 3 are national holidays across Poland.] Fortunately, most of the malls we cooperate with have been continuing a solid social media presence and online customer service. So these channels were key contributors in providing communities of malls’ customers with information about opening hours and shops with delayed openings. They also provided all key information regarding safety, social distancing, number of visitors per sqm, parking space, etc. There were many prognoses about the number of footfalls and transactions when “business is back.” In general though, in my opinion, the numbers were higher than feared and lower than hoped. We were presumably down by an average of 30 percent year-on-year in May. No one, probably, guessed correctly. We have seen huge differences and interesting patterns between local-community shopping areas and big-city malls. This is something we are analyzing to provide guidance to our clients in terms of their marketing investments. What are the key consumer attitudes and behavior changes? What do you advise the marketeers to do? There are currently no formal restrictions holding back owners to increase the number of clients to their shopping complexes anymore. [As of June 3, gyms and cinema are yet to open to the public.] Despite that the first and worst part of the Covid-19 pandemic is over, people are still seeking safety. Something we call “smart
PRO-sale (smart sale-enhancing) actions with carefully selected prizes. While organizing them we have to make sure they are customer-focused – safe, easy, quick, touchless: four pillars of success, given the current situation.
Founded over 20 years ago, Valkea is a Warsawheadquartered marketing agency with a strong foothold in the shopping center marketing field.
shopping” – an extremely important issue. So what is it? Our research and analysis show that consumers don’t buy things they don’t really need right now. They check prices. They look for promotions. They like to get more for the same price. And they are willing to drive longer to go to shops/shopping centers where you can get some extra benefits with your purchase. All that said, premium brands are still attractive in these times. It is the recognition effect where wearing a brand gives you a status symbol and also the feeling that you bought good quality products that can last longer. The conclusions give us answers on how to effectively use this mindset in marketing in the coming months. We have spent time analyzing how this new behavior can be combined with the needs for marketing that malls have. Valkea is now ready to launch a new innovative product, based on online channels, that presents offers of almost all tenants of a shopping complex, content in video, photo and text formats, individual pricing and incentives, and guaranteed and measurable reach of potential clients. We also recommend our partners to organize
What media selection do you recommend to shopping centers? First of all, their activities right now need to be agile and swiftly adjustable. We are still and will be for some time in a changing and new reality. Therefore, the solutions we choose need to be easy and fast to implement. They need to be measurable and adaptable. So success can be quickly attained while campaigns less effective can be scaled down. Naturally, digital and social media campaigns that can be tailored to reach 100 percent of a shopping center’s potential customers is something we recommend and work a lot with. Valkea provides solutions that give our clients a guarantee of reaching people they want to communicate with. For example, using mobile phone data we can target campaigns at everyone who shopped in shopping complexes in the last six months. We can then invite them back using special offers. We can also adjust the campaigns based on demographics, behavior and online users’ patterns, giving us great insights for how communication must sound and look. We have to remember that people still spend more time at home than ever before. They analyze and prepare shopping more carefully than before the coronavirus times because they have more time to do it. Malls and retailers must use this opportunity to influence consumers at the time they plan their shopping. There is a great opportunity for home-delivered custom magazines that can present offers from all tenants of a shopping complex and inspire “smart shopping.”
W B J JULY 2020
19
IN FOCUS RETAIL INDUSTRY
RISING FOOTFALL
A
t the beginning of May, shopping centers, under the decision to defrost the economy, had little time to prepare for reopening after several weeks of inactivity. The facilities had only two days to prepare for active sales again. On May 2, a regulation was issued which contained a number of detailed guidelines on opening rules aimed at ensuring the safety of customers and employees. Guidelines have been By Anna Zachara-Widła introduced regarding the principles of disinfection, maintainAnna Zachara-Widła is a research and education manager at ing the distance between clients and the limit on the number the Warsaw-based non-profit trade organization Polish Council of people per sqm. Shopping centers adapted to these of Shopping Centers (PRCH). principles with full responsibility and awareness by introducing a number of risk mitigation solutions for customers Average footfall in shopping centers in individual weeks of May and employees. compared to the same period last year. Data collected from 90 The next stage of defrosting took shopping centers (25 percent of the Polish market in terms of space) place on May 18. Gastronomy joints Source: PRCH as well as cosmetics and hairdressing services could restore their activities. 100% Research shows that this is what cus90% tomers had been waiting for the most. 80% According to a survey conducted in the 70% first half of May by the Inquiry research 60% agency, 68 percent missed the visit to 50% the hairdresser or beautician the most and a further 38 percent missed gas40% tronomy. We clearly noticed this trend 30% in the footfall that we have been track20% ing from the beginning. The first week of 10% reopening shopping facilities surprised 0% everyone a bit. Footfall ranged from 53 Monday Tuesday Wednesday Thursday Friday Saturday Sunday percent to 68 percent depending on the day of the week compared to the same 11-17.05.2020 vs 13-19.05.2019 04-10.05.2020 vs 06-12.05.2019 period last year. The footfall recorded 25-31.05.2020 vs 27.05-02.06.2019 18-24.05.2020 vs 20-26.05.2019 in the following week was successively
20
JULY 2020 W B J
SHUTTTERSTOCK
As more than a month passes since the reopening of shopping facilities after they were all shut down due to the coronavirus lockdown, more and more visitors say they feel safer inside malls.
EXPERT OPINION
higher – the average level of visits in shopping centers on May 11-17 was already between 60 percent and 68 percent of the level a year before. We were very impatiently waiting for the results after the opening of food zones and cosmetic services. The next two weeks showed that customers had really missed such facilities. In the week of May 18-24, the average footfall in the surveyed facilities depending on the day was already at a much higher level – from 73 percent to 79 percent. The last week of May, due to, among others, Mother’s Day, recorded significantly higher results compared to the first three weeks (on average depending on the day of the week from 68 percent to 93 percent of last year’s level). The record turnout was on Monday, May 25, when the shopping centers were visited by an average of 93 percent of customers compared to last year. During the first two weeks after reopening, we observed significant differences in the number of visits between small or medium centers and those classified as large or very large. The number of visits to smaller centers was at a significantly higher level. The opening of the gastronomic and services part has, however, evened out these differences in favor of larger centers (usually new generation facilities), for which the gastronomy and service categories are an important factor determining the visit to the facility. The activities of shopping centers in ensuring customer safety have proved effective. In a survey conducted by the Inquiry agency in cooperation with PRCH, it is clear that Poles feel safe in shopping centers: 81 percent of respondents who visited any shopping center in May felt safe in it. This is a very important signal for the industry and proof that it is worth actively working for the sense of security of customers and employees of the facilities. The important question we have to ask ourselves today is how long until the shopping center industry will come out of this crisis? To what extent will these good footfall results, compared to other countries, translate into tenants’ turnover? There will be time for these answers, and certainly, PRCH will track these phenomena on an ongoing basis and inform you about important data.
The ‘C-word’: neither Covid nor conflicts on leases but the community So many articles dwell on retailer vs landlord standoffs, but where is the “community” headed toward in all this? Shopping centers provide ultimate focus on one of the key basics of society – the interaction of people with people.
C
ovid-19 has irrevocably changed the nature of how we interact with our commercial spaces. Offices, shopping centers, hotels and leisure space, all have changed. What the future holds is for us to determine and, personally, I think it is positive. Real estate satisfies a simple premise: people interacting together within buildings and communal spaces. With social distancing, and the fear and trepidation it brings, this both breaks down the actual human interaction but simultaneously engenders the greater desire for the real community. Pre-Covid, Sierra Balmain was developing a framework evaluating the future of the commercial real estate. An ideally built environment should supplement living with retail, entertainment, leisure, lifestyle, culture, workspace and embrace multi-channel logistics. With significant repositioning and repurposing of many buildings ahead of many of us, we believe that this need is more relevant now than ever. It’s time we looked at our real estate with fresh eyes. Unfortunately, it isn’t as simple as adding a few food trucks, dusting one’s hands and walking off with a smug “job done” face. Physical communities will be far more adaptive and responsive in real-time, interacting with people frequently and with relevance. It is not just the real estate that will need to change, it is the way we look after it and look after each other. Landlords, lenders and retailers, this is our goal. Let’s bring back the simple essence of what we own and manage. For what other purpose were the residential estate, the office complex, the hotel, the conference center and the shopping facilities built other than to accommodate the needs of the community, or indeed facilitate it? James Turner is the managing director of Sierra Balmain, a Warsawbased property investment firm.
W B J JULY 2020
21
FEATURE
Future apple of Poland’s eye?
The World Cider Day is celebrated on June 3 and it symbolizes the beginning of the apple cider season all over the world. By Anna Zhuravleva
THE HISTORY of cider in Poland, a refreshing alcoholic drink made from apples, dates back to the 16th century but the new chapter started about seven years ago when modern consumers rediscovered it. Cider sales in 2013, when the drink was still perceived as a novelty, amounted to 2 million liters. Back then, the analysts forecasted a gradual sales growth to as many as 80 million liters per year. By 2015, the sales reached 11 million liters, and then, contrary
CIDER – LEADING MARKETS
Poland is on the sixth place among leading cider markets in Europe but its ranking includes an apple beer drink, which is not cider by definition UK
Spain
France
Ireland
Germany
Poland
Finland
Ukraine
Russia
Czech Rep.
Sweden
1.93%
0.24%
0.01%
-3.61%
33.39%
37.69%
121.13%
2.31%
751.05
714.58
691.20
561.50
365.22
229.23
200.43
185.08
172.10
1.12
14.75
0.83
1.47
6.60
0.51
0.14
1.75
1.68
5yr CAGR 2013-2018 -0.56%
3.18%
-3.03%
Volume in '000 HL
10,037.84
1,141.45
Per Capita 15.09
22
2.45
JULY 2020 W B J
to the optimistic views, they dropped owing to the competition with beer and regulatory issues that hurt sales. There is a big influence of beer revolution on the entire market of alcoholic beverages not only in Poland, says Robert Ogór, CEO of Ambra – wine and Cydr Lubelski producer. “For beer drinkers, new interesting beer types are for sure more attractive than cider. Craft beers have dominated consumers’ attention and have pushed cider to a second place,” he adds. Differently from beer, producers cannot advertise cider in Poland, because from the legal perspective the drink belongs to the wine category. “When cider-like beers entered the market, it gave them easier access to consumers,” Magdalena Zielińska from Polish Wine Council claims. In 2018, cider production fell to just 5 million liters, and last year, as the consumption of beer continued growing, cider producers reported a further decline. Ogór, however, does not see advertising as a solution. “The question is for whom the cider market is. The key is involving gardeners, not huge concerns,” he underscores. Advertisements, in turn, may open the market for big foreign producers that make affordable cider from juice concentrate. And, as small producers do not have the money to advertise, they would have even fewer chances, he warns. In his opinion, a way to reach consumers is a constant quality improvement and establishment of programs to support local producers and distributors. “If we want to create a flagship Polish cider based on the rich variety of apples, it is only possible with the support of natural cider production,” he emphasizes.
Tip-top tips - Although cider tastes great alone, they can be a perfect match for the main dish or dessert - Cider goes well with meat, for example, steak or baked chicken, but can also be served with vegetables such as potatoes or eggplants - Cider is one of the few alcohols suitable for people on a diet. Still, it is worth to read the label as mass-produced ciders may contain additional ingredients to enhance taste and add calories - The drink is served at about 10-12C in a tall glass or a short stem glass that widens upward (source: Cydr Lubelski)
W B J JULY 2020
23
FEATURE
TOP-QUALITY DRINK Another obstacle for Polish ciders is the lack of unified drink definition in the European Union. There are two models of cider markets in Europe, according to head of Ambra. In the first one, cider is a regional natural product and is closer to wine rather than beer, like, for example, in France and Spain. The second consists of markets with big consumption dominated by industrial ciders with their prices comparable to beer. In Poland, ciders must contain a minimum of 60 percent apple juice, while in the UK, it is only 35 percent, and in Denmark or Sweden, even 15 percent is acceptable. The higher requirements contribute to the quality of Polish ciders but, at the same time, lift the price. Zielińska says, to become a success, cider needs to be affordable as this would drive a wider demand. On the other hand, Ogór sees cider as a premium drink with a loyal group of consumers. “In Poland, at first, there was a wide range of consumers buying cider, but with time it narrowed down. For example, some young people dropped. Nowadays, cider consumer profile is similar to winedrinkers: people from big cities, with high income, well-educated, and mostly women,” he points out. Half-liter bottle of cider costs more or less PLN six. For beer, even with the new types like white or porter, the segment priced PLN six or more is very small. NATURAL BY DEFINITION In Poland, cider is restricted to traditional apple flavor, and the only alternative is perry – an alcoholic beverage made from fermented pears. Polish Wine Council applied for widening cider definition, referring to growing sales of flavored ciders with a taste other than apple. According to Zielińska, they account for as much as 20 percent of the market but Polish producers cannot make them. “We have applied to the agriculture ministry regarding changes in the legislation. The new Wine Act is under development, and we hope that the [cider] definition will be broadened, which will give Polish producers the possibility to make flavored ciders as well,” Zielińska says. Ambra CEO, however, resists the idea of flavored ciders. Polish consumers see cider as a regional natural product, Ogór says, referring to polls conducted by the com-
24
JULY 2020 W B J
pany. “I believe that for the development of Polish cider, the regulations should allow cider production only from fresh juices,” he states. “The biggest trend in the entire food and beverage market is a clear product content without additives. In Poland, there are hundreds of apple types, and each gives a slightly different cider taste. What is missing now is the support of gardeners who can create recipes and make ciders from various apple types.” Polish Wine Council forecast that, without additional government support, declines in cider production are likely to continue. Polish Prime Minister Mateusz Morawiecki in 2017 promised to introduce a zero-excise duty for cider, like in Spain, but this has never happened. Still, the government excluded cider and perry from a 10-percent tax hike for alcoholic beverages, which came into force in January. Cider and perry remain subject to a preferential excise tax rate of PLN 97 per hectoliter “to develop the market and indirectly support
fruit production, which is one of the pillars of Polish agriculture,” the bill says. Ogór says, with the work on quality and natural cider varieties, there is a chance to return to steady growth as early as this year. The category has just started developing and cider already has its loyal consumers. For those who don’t like beer, cider is the only natural alternative of a low-alcoholic drink. “If we have patience and consistently work on quality, the consumers will start gathering,” the Ambra head reassures. Craft cider maker Cydr Chyliczki shares a cautiously optimistic view, though. “Natural ciders are slowly developing, there is no decline in sales,” Dariusz Koroś, a co-founder of the family-run company that sells ciders to restaurants, pubs and liquor stores, claims. Craft ciders, priced PLN 7-10 per bottle, however, account for a very small fraction of the market and due to complex regulations and high excise duty, not many decide to enter this niche, Koroś adds.
MYTH-BUSTERS: As cider remains a novelty for Polish consumers, there are common misbeliefs about it. Myth 1: Cider is like beer but from apples Even though consumers often see cider as an alternative to beer, the ingredients and production techniques are totally different. One of the few similarities is the alcohol content, which for cider varies from 1.2-8.5 percent. While almost all beers are made from malted barley through brewing, cider is fermented, like wine.
***
Myth 2: Cider is a low-priced fruit wine Jabol (from the Polish word “jabłko,” for apple) – an inexpensive fruit wine popular in Poland – is not cider. For cheap wines, producers usually use low-quality ingredients to offer attractive prices. For ciders, on the contrary, apples are carefully selected and the taste is natural, while cheap wines are based on artificial aromas.
***
Myth 3: Cider is fast and cheap to make Making good-quality cider requires specific types of apples that are often more expensive compared to those we eat. Apple trees can take up to a decade before they fructify. And cider fermentation also takes time as the slow process ensures a rich taste.
***
Myth 4: Cider is a sweet drink Not always. Just like wine, cider comes in various levels of sweetness. In France, ciders with higher alcohol content are mostly dry, while those with less alcohol are naturally sweeter. German cider called “Apfelwein” is often dry. Spain has two popular cider types: “Sidra” – a sparkling wine-like fruity drink, half dry to sweet, and “Sidra natural” – a still cider with a dry finish. In Poland, producers mostly go for semi-sweet. The use of dessert varieties of apples makes the drink delicate in taste.
PLEASE BEER WITH ME!
SHUTTERSTOCK
With many a legends of Poles hooked on the gut-warming vodka, some may be surprised that the country is in the midst of a golden age of craft beers. BY KLAUDIA GÓRSKA
WHERE AS IN 1990 beer consumption per capita was 32 liters a year, it increased to as much as over 99 liters by 2015. Some call it a true revolution, others just a temporary trend, but regardless of the future of Polish craft beers, their present has been better than ever. It is safe to say that Polish beer enthusiasts have no reason to complain. In fact, in mid-2019, Warsaw featured on CNN’s list of world’s best beer cities along with some of the US cities with a much longer tradition of brewing. But it wasn’t always that way, and Poland has come a long way before the era of highquality beer abundance dawned.
LONG WAY BEFORE THE COMEBACK Let’s start at the very beginning. The popularity of beer in Poland dates back to ancient times. Bolesław I the Brave, the first King of Poland in 1025, was famous for enjoying this drink, which even earned him a nickname “Tragbier” (German for avid beer drinker). In the 12th century, however, beer gave way to vodka as a result of lower quality and higher price of brews. That was also the time when vodka was produced on a greater scale, outnumbering other alcoholic beverages. The beer comeback was observed toward the end of the 20th century. But there’s a great difference
between beer and good quality beer, and in the 1990s the whole market was controlled by commercial brands. The reason for the lack of well-brewed drinks for some lies in using hop extracts instead of standard hops, a thing that the biggest commercial breweries do. According to Zofia Jochemska, a business development manager from Hoplala brewery, adding hop extracts may be the way to go to keep the production flowing, but it’s simply at odds with their policy of sticking to natural ingredients. This being said, some craft breweries have been inclined toward the extract to a great effect which should discard the concerns
W B J JULY 2020
25
FEATURE
TOP OF THE TOP The brewing of Atak Chmielu (Polish for “attack of the hops”) – the first commercial American India pale ale, also known as AIPA – in Poland marks for many a symbolic start of the beer revolution. Although the brewery Pinta’s history is relatively short, it is indeed sweet. They have brewed almost 60 different beers since the very first AIPA was created. Lagers, ales, sour beers, imperial stouts. You name it, they have it. Another successful Polish craft brewery, and one of the most-prospering ones, is Ziemia Obiecana – the absolute top brewery in terms of the number of new brews in the last few years. They launched 39 and 63 new ones in 2018 and 2019 respectively.
26
JULY 2020 W B J
BEER, BEER EVERYWHERE … Craft brewing sector is at its prime not only because the well-established breweries are thriving but because new players are constantly conquering the market. Three years ago, 51 new craft breweries mushroomed in the Polish market. That number grew to 68 in just one year. Many of them are growing constantly. Hoplala, for example, was set up only four years ago, and during the last 12 months, their sales rate tripled that of the previous year. The company offers a selection of brews with natural ingredients, and the whole brand was created for women. “Each of our beers has been crafted with a specific archetype of a woman in mind. Hoplala was created by women of different personalities and interests and we aim to reflect this female diversity in our products. Darling, I love you – a blackcurrant hoppy ale – is a perfect drink for incurable romantics and dreamers. And girls who love watching sunsets surrounded by a group of friends
inspired us to launch our pineapple IPA, PoraNaNas. We started our journey four years ago, and we are keeping the pace,” says Jochemska excitedly. HOPPING THE BORDERS Polish craft beers are not only conquering the local beer market. Breweries from Poland eagerly cooperate with their foreign counterparts. The number of new beers created through such collaboration has been steadily increasing in the last years. Whereas in 2015, Polish breweries combined entered only 12 cooperations with breweries from abroad, it rose to 22 in the following year. This number almost doubled in 2017 with 40 collaborations, and only last year there were twice as many cooperations that resulted in 80 beers obtained with the contribution of Polish brands. What countries does Poland make most deals with? No year has been the same in this respect,but it turns out that Polish
SHUTTERSTOCK
about poor quality. Regardless of who is right, it cannot be denied that commercial beer is notorious for its inferior quality, and it was not until the early noughties that real beer made a comeback in Poland triggered by the beer revolution.
Beer tally – Beer consumption in Poland grew from 32 liters a year per capita in 1990 to over 99 liters per capita in 2015 – All craft breweries in Poland combined produced 140,000200,000 hl of beer in 2018 (1 hectoliter = 100 liters)
ANNUAL BEER PRODUCTION IN POLAND Year
1939
1950
1970
1990
1995
2000
2005
2010
2015
Beer production (in million hl)
nearly 2
3.8
10.0
11.8
15.3
25.2
31.6
36.7
39.4
ANNUAL BEER CONSUMPTION IN POLAND Year Beer consumption (liter/capita)
1939
1950
1970
1990
1995
2000
2005
2010
2015
almost 4
14
31
32
39.3
66.0
80.0
90.4
99.1
INTERNATIONAL COOPERATIONS OF POLISH BREWERIES Year Number of international cooperations
2017
2018
2019
40
54
80
NEW BEERS IN POLAND
breweries collaborate most with fellow brewers from Spain, Denmark and the Netherlands. Last year, they expanded the number of countries by partnering up with Romania and Ukraine for the first time. But it goes way beyond European collaborations. Pinta, for example, last year crossed paths with 8 Wired from New Zealand, and five new beers were brewed through Polish-Canadian collaboration. TRENDS, TRENDS, TRENDS Traditional beer for some is a classic they would not change for any flavored pint. According to Juliusz Wągrodzki, head of Beerlab brewery – owner and producer of Beerlab and Piaseczyńskie brands – classic brews with natural ingredients and good taste are still the ones in the highest demand. This is because more and more people look for well-brewed drinks that offer excellent quality, as opposed to shocking and unusual flavors. What is more, consumers’ awareness plays a
Year
2017
2018
2019
Number of new beers
1,655
2,013
2,457
significant role in the market’s shaping and impacts the purchasing decision to a great extent. “People are becoming more and more ingredient-conscious and are inclined toward high-quality products that include eco ingredients,” remarks Wągrodzki. “That’s why pilsners, wheat beers as well as milder American pale ales and AIPA are for many the top choices.” However, creativity in terms of flavor combinations has been in demand too, as breweries strive to satisfy customers of all palates. In fact, adding flavor components makes another important trend. Bubble gum, jelly bears, bacon, pigs ears and tobacco, and many more were used over 1,600 times in almost 100 Polish brews in 2019. Those with a sweet tooth would be happy about the trend that emerged in 2019 – the so-called “pastry beers.” Those are a combination of beer and dessert. So if you fancy something sweet, Chocolate Birthday, brewed together by Stu Mostów
brewery and Basqueland Brewing, or Pastry Stout with a meringue flavor, brewed in cooperation by Maryensztadt Brewery and the Russian Yohoho Brewery in Novosibirsk, maybe the answers. As for the bottles, who would have thought that those will be considered a worse option compared to cans? Although many Poles still associate beer cans with cheap, poor quality brews, it’s no longer the case, and the belief is becoming rather obsolete. A lot of breweries have gone for, or switched to, cans that are light, budget-friendly and that reduce exposure to light and oxygen, which helps to keep the beer fresh. But there’s more to trends than flavors and packaging. Some of the breweries have already started to search for environment-friendly solutions. “We are constantly seeking ways to reduce our carbon footprint, as well as to diminish waste production that impacts our planet,” affirms Jochemska.
W B J JULY 2020
27
FEATURE
C for Coronavirus
Is the Polish school system a victim of the pandemic or did it fail to prepare for the national remote teaching test? BY KONRAD KRZYSZTOFIK
28
JULY 2020 W B J
F
SHUTTERSTOCK
ollowing the prime minister’s announcement, all educational institutions closed nationwide on March 16 due to the Covid-19 outbreak. Overnight, all teachers were expected to conduct online lessons, use e-learning and communication platforms. The education ministry shared teaching material via its website as a temporary aid for teachers. TV channels broadcast a series of educational videos intended for various age groups. Global technology corporations allowed teachers and students to use their products for free. Although content and tools came from many directions, not everyone on the ground level was ready to use them efficiently. LEFT TO THEIR OWN DEVICES The Covid-19 outbreak took everyone by surprise. Closing of schools resulted in inconvenience and confusion as neither teachers nor students or their parents were prepared to deal with these new circumstances. “Nobody was ready for schools to close down. Teachers started to panic and students took it as extended winter holidays in the beginning,” says Aneta Cygan, a parent of a primary school pupil. From the technological perspective, however, Poland should have been prepared to switch to online teaching considering the education ministry invested PLN 16 million in a teaching platform in fall 2018. Regretfully though, the tool isn’t fully operative yet. As a result, teachers in Poland resorted to video-conferencing solutions including Zoom, Microsoft Teams or Google Meet where most of the services are free. Although teachers had access to tools, and theoretically, they could conduct lessons remotely, they weren't prepared or trained to use them right off the bat. “It wasn’t a guided process where we would first get a chance to test new platforms, check which ones are the best and prepare our teaching plans accordingly. At our school, quite frankly, we actually asked our students to set up the first video conferencing lessons because we, the teachers, had cold feet about it,” pointed out Renata Radzikowska, an English-language teacher at a Liceum Ogólnokształcące (Polish for “high school”). It is not all about technical challenges but also privacy, though. More skeptical teachers are still reluctant to use online platforms or social media. They are the ones who avoid showing their faces in video conference calls for the fear of becoming memes. It was never okay to photograph teachers without permission. The same rules should apply online where screenshots can be taken at any moment. Those who choose to stay away from social media and video conferencing need to stick to the electronic grade book and emails. Handling hundreds of attachments or marking the images of handwritten exercises can be daunting. “Grading home-
W B J JULY 2020
29
FEATURE
work submitted online is usually more time-consuming and may require back-and-forth exchange of information especially if the sent image is blurry or the text is cropped. Such issues aren’t that uncommon,” explains Angelika Szulc, an elementary school teacher. Parents are required to get involved too more often than before in supporting their children. Some struggle to find the right balance between doing the tasks for their children and simply assisting them. “My 9-year-old son started receiving long emails with tasks to be done in the first weeks of the lockdown. It was overwhelming. He wanted to do everything at once, in one go, which caused frustration, mental and physical exhaustion. That’s why we introduced a daily checklist,” confides a parent on condition of anonymity.
30
JULY 2020 W B J
who don’t feel creative enough to keep their students attentive choose to share more of some catchy educational content made by YouTubers or other charismatic teachers. BLENDED LEARNING On May 29, the ministry of education stated that it was difficult to predict how the new school year would look. “The safety of students, teachers and headteachers is key for us. We’ll do anything for them to stay safe and adjust their teaching and learning to the circumstances,” claimed Anna Ostrowska, a ministry spokesperson. Children’s health and safety is what parents put first when talking about coming back to school. However, for some parents keeping their children at home for an extended period of time is not an option especially when both parents work in essential services. “I would probably let my son go back to school provided that everyone follows their hygiene regime and an effective vaccine is available,” a parent requesting anonymity declared. A class of thirty-something students is a common occurrence and it would probably need to be split up and spaces between students increased for classrooms to resume again. Alternatively, blended learning could be introduced where some lessons are carried out online and others onsite. “We shouldn’t turn our back on technology once this pandemic is under control. Schools may need to close down again due to a heatwave or dangerous smog levels,” Radzikowska informs. Remote teaching is likely to become the new norm sooner than we think. This summer holiday is when the ministries should get their act together, listen to the needs of the teachers, students and parents, and thoroughly prepare everyone for the new school year. Students and teachers have become the new target groups for many businesses as blended learning opens up new opportunities in technology support services, productivity apps development, remote teaching methods design, internet safety solutions and cyber law support.
THIS SPREAD SHUTTERSTOCK
LIKE CHALK AND CHEESE It became apparent in May that remote teaching would continue until the end of the school year if not beyond. Teachers sought support from their partners and colleagues, and browsed through social media in search of useful webinars, app tutorials and blogposts. As they became more familiar with the tools, they started focusing on the execution of the teaching material. “Things changed for the better as classes on Teams were introduced. Once we all dealt with the technical trouble, we could observe a tremendous excitement of the kids who finally got to see and talk to each other,” adds the parent. Setting standards and taking personal circumstances into account was the next step for teachers to gain control. They began setting timetables for online lessons to ensure their students and partners knew of their daily plans. Teaching from home plugs into their personal lives. “My husband, who also teaches English but in another school, puts his school sticker on the living room door when he’s conducting his lessons. When it’s my turn to teach, I knock on the door, ask him to vacate the room and put my school’s sticker on the door. We keep our school shift plan hanging outside the entrance to the living room,” Radzikowska emphasized. The element of social interaction and other psychological aspects constitute the challenges that need to be addressed in remote teaching. Lack of human contact is what students and teachers seem to miss the most by the end of the school year. Teachers try to fill the void by arranging class get-togethers and letting their students chat as long as they follow the netiquette. Additionally, there are students who need highly entertaining content in order to stay focused during online lessons. Some turn up for online classes and stop listening as soon as they mute themselves. Without any eye contact, it is a challenge to keep all students actively involved or paying attention to online lessons. Teachers
UNEMPLOYMENT TSUNAMI
Just as tsunami waves are preceded by shocks at the bottom of the sea, the Covid-19 epidemic and restrictions on economic activity imposed by the government have led to dramatic changes in the labor market. We are currently observing relative calm but only because we do not have the right tools. Unemployment statistics from the Central Statistical Office (GUS) and family, labor and social policy ministry are not capable of demonstrating the speed at which the wave is moving or its size. Meanwhile, the tsunami has already started and is approaching at an enormous speed. BY SERGIUSZ PROKURAT
W B J JULY 2020
31
R FEATURE
estrictions on businesses and movement of people as well as concerns related to the development of the pandemic have reversed the observed-in-recentyears positive trend in the labor market. Poland has entered a period in which enterprises seek savings by reducing remuneration and working time and, as a last resort, through redundancies, both individual and collective. This has upped unemployment. In the first half of 2020, a significant number of employees did not work or worked shorter hours, according to data published by GUS. The registered unemployment rate is quite stable – 5.8 percent at the end of April as against 5.4 percent in March – states GUS. However, the data does not fully reflect the situation on the labor market.
SHIELD.0
Government officials boasted – after introducing several laws, the so-called “shields” (1.0, 2.0, 3.0, 4.0) – that they have provided assistance to enterprises in the form of numerous packages of loans, co-financing and exemptions from paying social security contributions, aimed primarily at preventing redundancies in companies. It was supposed to be simple but the government’s plan is full of understatements. The devil is in the detail, i.e., additional restrictions, preventing many companies from benefiting from the support. Meanwhile, the prime minister and the labor minister keep claiming that low unemployment is proof that the shields are working. Only the scale is changing over time. At the beginning of April, officials declared that they had “saved” 250,000 jobs. Currently, the number has risen to 4 million, and in some media reports even to 5 million (30 percent of all employees). Interestingly, the unemployment breakdown is unnoticeable in statistics for other reasons. Some people who lost their jobs will appear in the labor office statistics only after their notice periods in accordance with their employment contracts have passed (1-3 months). Therefore, the full picture of the labor market condition lacks information on how many people are currently serving their notice periods. Decisions on dismissals will be more visible in registers of the unemployed only after June, depicting the mark of a huge and destructive tsunami wave. There is also a group of people who, for various reasons, will decide not to register at labor offices and
32
JULY 2020 W B J
will try to find a job on their own. Especially, given that the amount of the unemployment benefit is small – with 5-20 years of employment, it is PLN 861.40 net for the first three months and PLN 676.40 thereafter. Most of them are self-employed or those who work on the basis of civil law contracts with practically no social benefits and are, as a result, used to relying on themselves. Also, the statistics shown by labor offices do not include foreigners who have either traveled back to their countries of origin where they have health care provided, or have not registered, or do not meet the criteria, or do not believe in the illusory aid offered by the Polish state. Labor offices themselves do not know of an institution that would help those foreigners find a job. In addition to all that, the registration process of the unemployed is currently delayed. Applications can be submitted online or sent by post, which is problematic for some people. Moreover, according to internal procedures, registration is ineffective upon application submission and when any information in the application is missing, its completion (done electronically) and the registration process are delayed. It is widely believed that the impact of Covid-19 on the labor market is not immediate. It isn’t true. We just do not see it in the statistics. Therefore, the government, without having accurate data, is not able to properly respond to the deteriorating situation on the labor market.
OUR ECONOMIC PROGRAMS ARE CONSIDERED ONE OF THE BEST IN THE WORLD – THEY PROTECT COMPANIES FROM GOING BANKRUPT Polish Prime Minister Mateusz Morawiecki claimed on May 19 supporting his government’s anti-crisis economic measures
‘SAVE’ JOBS
The problem does not concern Poland only but many countries in Europe too. On the one hand, social achievements in the field of labor law are considered part of the European social model to prevent the situation experienced by the US recently where
people immediately after being made jobless queued up for benefits amounting to about $600 per week and resulted in over 40 million registered unemployed people and an unemployment rate of almost 15 percent in April – the highest level since the Great Depression in the 1930s. On the other hand, it seems that as maintaining jobs becomes more important for the government than the negative consequences of “forced” maintaining of employment in enterprises, a concern arises whether this solution will be effective and who will bear the costs of the crisis. In times of crisis, a flexible labor market, as it is in the US, means less burden on enterprises and larger fluctuations in employment, but also a rapid increase in employment when the crisis is over. In Poland, it is widely considered that jobs should be “saved” at all costs, but it is the entrepreneur who is responsible for implementing this “idea,” sometimes equipped with some support from the government. Meanwhile, only every fourth entrepreneur has the financial liquidity to survive slightly more than the stipulated three months. Loss of liquidity will result in abandoning development plans and even limiting the scale of operations (downsizing). Maintaining unproductive jobs only makes the situation of companies worse. In March and April, entrepreneurs delayed employee dismissals, counting on the anti-crisis shield adopted on March 31. Therefore, the statistics-based unemployment rate is still moderate. However, the solutions proposed in subsequent versions of the “anti-crisis shields,” including no programs for the unemployed, will, at most, delay the wave of dismissals by providing financial support to employers who will maintain employment during the period of financial support. This means that only after this period the employers will estimate to what extent the conditions of conducting business activity will allow them to maintain the current level of employment. The government claims that the shield has already saved many jobs, but it is not certain that it is not just delaying the tsunami of unemployment. In the coming months, the unemployment rate may rise to around 8 percent and may cross over 10 percent by the end of the year, which means that over 2 million could be unemployed across the country. Paradoxically, the announced increase in dole payments may contribute to an increase in registered unemployment – it will mobilize some unemployed people to register and discourage some from looking for a job. This is why raising the amount of dole is at the very end of the government’s priority list.
Poland’s economic resilience to cripple Covid-19? –O n March 31, the Polish government announced its “anti-crisis shield,” that includes the “financial shield,” to battle the coronavirus pandemic –O ver PLN 312 billion has been budgeted for the “anti-crisis shield” which is based on “five pillars” – job protection and employee safety, financing entrepreneurs, healthcare, strengthening the financial system and public investments – Worth PLN 100 billion, the “financial shield” aims to aid microenterprises – employing at least one worker (PLN 25 billion), SMEs (PLN 50 billion) and large firms (PLN 25 billion) – Warsaw-based state-owned financial group the Polish Development Fund (PFR) is responsible for managing the “financial shield” – For microenterprises and SMEs, the “financial shield” is operated by their respective banks, while for large companies, the program is operated by PFR – As of June 10, the “financial shield” has “benefited” 257,085 companies that employ 2,467,976 workers and has paid through banks PLN 48,210,880,479 to microenterprises (PLN 14.1 billion) and SMEs (PLN 34.1 billion) – As of May 19, the “anti-crisis shield” claims:
• PLN 10.5 billion paid to entrepreneurs
• 4.1 million applications submitted to the Polish Social Insurance Institution (ZUS) and job centers
• 2 million jobs covered
• PLN 3.2 billion from the Guaranteed Employee Benefits Fund (FGŚP)
• PLN 1.8 billion total value of exemptions from ZUS contributions
• PLN 3.3 billion paid to entrepreneurs as microloans
• 670,000 microloans
• PLN 1.2 billion paid as “downtime” benefits
• 628,000 “downtime” benefits
Sources: gov.pl, pfrsa.pl, premier.gov.pl
W B J JULY 2020
33
POLAND IS FACING A RECESSION FOR THE FIRST TIME IN 30 YEARS!
Don’t miss key Polish economics and business insights Buy Warsaw Business Journal daily newsletter Poland A.M. Go to WBJ.PL/REGISTER TO SIGN UP
TECH i n s i g h t s TECH NEWS Microsoft, Google to invest combined billions in Poland Tech giants Google and Microsoft will be investing a combined $3 billion in Poland in the coming years, the head of the Polish Development Fund (PFR) has announced. According to a tweet of Paweł Borys, the head of PFR, the declared investment means that the country will become a “digital hub” for Central and Eastern Europe. Google will be building a new data center in Poland worth $2 billion starting in 2021, Polish business newspaper Puls Biznesu has reported. The company will also train 10,000 staff in the country while building a cloud team here. Talking to the paper, Magdalena Dziewguc, Google Cloud’s business development director in Poland and Central and Eastern Europe, said that the regional cloud will consist of three cloud regions. “Each of those infrastructures will be independent, technically and in terms of software.” Microsoft publicly announced its $1 billion investment at the start of May. It will include a hyper-scale data center, as well as support for further development of digital skills and digital transformations.
SHUTTERSTOCK
>>>
W B J JULY 2020
35
TECH
‘Biotech discoveries are answers to today’s challenges’
Over 90% of Polish firms use tech during pandemic More than 90 percent of Polish companies use modern technologies during the pandemic, 70 percent of companies were forced to turn toward modern forms of communication with clients and 10 percent of large companies have implemented remote work management systems (without having used them before), according to the report of the Polish Economic Institute (PIE) named “Modern technologies in enterprises before, during and after the Covid-19 pandemic.” After the pandemic, 69 percent of companies intend to continue to communicate with customers using modern technologies and 45 percent plan to use online sales and customer service channels. Over one in four enterprises surveyed (27 percent) still want to use remote work monitoring systems.
36
JULY 2020 W B J
Cyberpunk 2077 delayed again Cyberpunk 2077 is going to miss its planned September release date. CD Projekt has announced that the game is finished, “both content and gameplay-wise,” but it wants to take more time for balancing, fixing bugs, and polish, and so has decided to delay it to November 19. “The quests, the cutscenes, the skill and items, all the adventures Night City has to offer – it’s all there,” the studio wrote. “But with such an abundance of content and complex systems interweaving with each other, we need to properly go through everything, balance game mechanics and fix a lot of bugs. A huge world means a huge number of things to iron out and we will spend the additional time doing exactly that.” Cyberpunk 2077 is an upcoming role-playing video game developed and published by CD Projekt – a Polish video game developer, publisher and distributor based in Warsaw, founded in May 1994 by Marcin Iwiński and Michał Kiciński. Iwiński and Kiciński were video game retailers before they founded the company, which initially acted as a distributor of foreign video games for the domestic market. CD Projekt recently became Europe’s most valuable video game company with a market capitalization of $8.13 billion.
Over 70% of companies see rise in revenue after investing in digitization Over 70 percent of Polish industrial companies have recorded an increase in revenues as a result of investments in digitization, and nearly a third of all respondents said that this increase was significant, show results from the report “Successes and challenges in the digitization of Polish industrial enterprises” made at the behest of the Future of the Polish Industry Initiative run by Autodesk, an American multinational software company. Among the biggest benefits of implementing solutions in the field of
the fourth industrial revolution (Industry 4.0), the most common were the improvement in overall process efficiency (88.1 percent), work efficiency (84.2 percent), as well as the time to market the product (83.1 percent). According to the survey, 44.5 percent of respondents admitted that the lack of sufficient financial resources is the reason why the introduction of Industry 4.0 solutions in micro and small industrial enterprises is limited. Noticeable deficiencies can also be seen in the employment structure – 44 percent of respondents pointed to the problem of the lack of properly educated employees in the company.
Curated from: isbnews.pl, pap.pl, pcgamer.com, reuters.com, xinhuanet.com
PRESS MATERIAL
Biotechnology discoveries used in medicine, agriculture and industry give hope for solving the most important contemporary challenges, experts of the Polish Economic Institute (PIE), a Warsaw-based think tank, stated in a report recently. The authors of the report estimated that Polish companies spent $240 million on R&D in biotechnology in 2017, i.e., 200 times less than their counterparts in the US and six times less than those in Germany. “No Polish company in the biotechnology and pharmacy sector was included in the 2019 EU Industrial R&D Investment Scoreboard ranking,” they wrote. “Poland needs an ambitious biotechnology development strategy, which will be followed by a coordinated investment of public and private funds in selected areas of medical, industrial and agricultural biotechnology,” they added.
BROUGHT TO YOU BY SYGNIS
Exponential growth of ideas
T
he strangeness of the moment hit me like a sudden, waking sound of the alarm clock while I was walking through Pole Mokotowskie in Warsaw. So many people went outside without their masks on their faces it made me curious how in the hell are we going to fight this 21st-century curse of urbanization. In my workplace the “new normal” means full integration of new sanitation rules, frequent hand washing, wearing masks, using disinfectants, implementing limits of social connections. If we were creating software products or simply dealing with services, we could all sit in our homes and connect via Whereby or Zoom. But we are dealing with production here. No amount of online communicators could replace simple face-to-face brainstorming session of an interdisciplinary team of specialists at the Faculty of Chemistry, University of Warsaw. Together, they have decided to work closely with their machines and each
other in order to fully grasp all contexts of the discussed issues. Despite the current epidemiological situation they continue to focus on coordinating multiple ongoing R&D projects. This is the shortest description of the everyday struggles of the engineers at the Sygnis Technological Group. Even when Covid-19 explodes on the planetary scale and scatters over every corner of Earth, the science and technological research has to move on. To adapt in order to survive. There are no true innovations without empirical science that groundbreaking ideas could fall back upon. This is the veracious reason that our company cooperates so closely with the scientific community. Being an agile enterprise full of different yet aligned individualities situates us in an ideal position to accelerate scientific business projects. Sometimes, the projects we participate in seem unearthly, like the innovative 3D printing technologies – creating the world’s first low-temperature glass 3D
Sea Anemones Generative, 3D printed jewelry project
printer from scratch or building a dedicated machine for 3D printing from ceramic pastes for the Institute of Power Engineering – or fascinating international partnerships regarding, e.g. designing intelligent air intakes for aircrafts, or personalized gynecological pessary projects. What’s interesting is that it’s not about the project’s size. It’s all about the idea’s capability of reshaping the present. Be it rapid prototyping of specialized laboratory stands for coronavirus test tubes or unique restoration of forgotten Polish baroque orders, at Sygnis these ideas grow. There are moments at which I recognize this strange contrast between the grandiose of new technologies of which we are part and the commonly-known mundanity of simply being at work every day. It’s no mystery that crises crush daily routine, and with it, the greyscale of ordinary life. And it makes me realize that at Sygnis we are not going back to normal, we’re taking a leap forward.
W B J JULY 2020
37
REMOTE BUT SECURE WITH A GLOBAL SHIFT TO WORKING FROM HOME, A LOT OF SECURITY ISSUES HAVE ARISEN. THE WBJ TALKED TO MATEUSZ OLEJARKA, AN IT EXPERT, TO DISCUSS THE MOST COMMON VECTORS OF ATTACK IN TELECOMMUTING, THE HAVOC THEY CAN WREAK ON A COMPANY AND WAYS TO PROTECT AGAINST THEM. INTERVIEW BY BEATA SOCHA
38
JULY 2020 W B J
WBJ:
With the massive switch to remote working across the globe, concerns have arisen whether some of the conferencing software is secure enough for employees and officials to use for crucial meetings and briefings. Taiwan, for instance, has banned official use of Zoom by its state agencies for fear that some conferences may be “overheard.” Is this a new threat and how serious do you think it maybe? Mateusz Olejarka: This is nothing new. Concerns about the security and privacy of different communicators like Messenger, Skype, WhatsApp, etc. were discussed widely in the media in recent years. The current situation just puts the video conferencing tools in the spotlight. It is hard to decide which tool is less secure than others without running exten-
sive security tests on all of them. One way to do it is to compare security features available in those tools. I believe though that from the end user’s perspective tool configuration is crucial. If it is insecure, there will be unwanted guests disturbing important business meetings. I recommend taking time to make sure everything is set up with best security practices in mind – recently there were plenty of new publications on this topic. If your real concern is Orwell’s “1984” Big Brother watching, maybe you should not be doing video conferencing at all. Zoom received a lot of press coverage lately due to its vulnerabilities, but serious security flaws were also found in other conferencing software (e.g. Microsoft Teams in April, Cisco Webex in January). If you are anxious about using an external
SHUTTERSTOCK
TECH
IT / CYBERSECURITY & TELEWORKING
WHEN WORKING REMOTELY, WE WILL EXTEND TRUST TO OUR VIRTUAL CONTACTS WITH PEOPLE, SO WE ALL SHOULD STAY CAUTIOUS AND DOUBLE-CHECK EACH EMAIL WE GET video conferencing tool, you may want to consider hosting a video conferencing tool on a company’s server internally, behind a corporate VPN. Unfortunately, there are only a few options available here and it can be used only for employee meetings (no external guests). For decades since teleworking became a possibility, companies resisted it for several reasons, including e.g. data security (client data, sensitive information). Now, being forced to adapt to remote working, these concerns seem as valid as ever. Do you think we may see a new wave of cybercrime, using the vulnerabilities of telecommuting? What are the possible vectors of attack? Topics like Covid-19 and teleconference tool setup are already used in ongoing phishing campaigns. [Phishing is a form of fraud in which an attacker masquerades as a reputable entity or person in an email or other communication channels.] Vishing [voice phishing] will be also on the rise, where an attacker during a video meeting or simply on the phone will try to mimic the voice of a CEO or senior manager and force some action or decision profitable for the attacker. Some tools allow you to input whatever name you want and join a meeting, and nobody verifies it. Moreover, we will see more automated attacks trying to exploit known security misconfiguration or vulnerabilities in various video conferencing tools like the recent Zoombombing attack, where students were sharing URLs and passwords to meetings online and the internet trolls invaded and disrupted online classes. On the bright side – there will be more security research and serious security testing of various video conference tools and platforms, so they will all become more secure in time. Where should companies’ priorities
lie in terms of cybersecurity now? How should they educate their employees? Phishing attacks will definitely increase in frequency, so companies need to train their employees on how to detect such attempts and alert their peers about ongoing attacks. We as humans generally trust others. When working remotely, we will extend that trust to our virtual contacts with people, so we all should stay cautious and double-check each email we get. I recommend employees take a free Phishing Quiz provided by Google. If a company is considering more advanced tests that simulate real, targeted phishing attacks, it should consult a security company such as the one I work for. Moreover, I recommend companies do security testing of the video conferencing tool used, including its setup – to make sure all security mechanisms available are used properly. How much damage can being “overheard” cause? What should we remember? Let me emphasize it again: as a meeting host, make sure you have used all security mechanisms available in a certain tool during setup. As a meeting’s guest, make sure that you know all other participants and report your concerns and doubts to the meeting’s host from the very beginning. Ask a suspicious guest to show camera feed, if disabled for example, and make sure that this is the person you expect. When a meeting has unwanted guests, I see three consequences. First, you may be eavesdropped on, your meeting may be recorded and leaked online. Second, you may have to end and reschedule the meeting due to the bad behavior of unwanted guests (either audio – abusive language, curse words, noise, etc. or video – use your imagination). At SecuRing, we created a free guide for teachers who conduct online classes to prevent such scenarios. Third, the chat which is avail-
able in some tools may be used to send some phishing links or share files infected with malware. Are there any other risk factors that have been exacerbated by the global pandemic and the switch to teleworking? There is an idea of moving a company’s assets from internal network to the cloud, of a rapid build-up of the company’s infrastructure to handle an increased number of VPN connections, as well as the issue of total remote onboarding of a new employee just to name a few. We, as a security testing company, see a spike in customers’ requests regarding not only web applications security tests but also requests regarding IT infrastructure security and security tests of various video conferencing and collaboration tools, which give us the big picture of today’s security needs. Speed is the enemy of security so we should remember to follow best security practices also when facing rapid changes.
MATEUSZ OLEJARKA
Mateusz Olejarka is a Senior IT Security Consultant at SecuRing – a Kraków-headquartered security testing firm founded in 2003. Olejarka is one of the speakers at Infoshare 2020 – the biggest tech conference in CEE – that will be streamed online from Gdańsk on September 23-25 and 28-30.
W B J JULY 2020
39
Talking Points
POLLING AMID PANDEMIC Andrzej Duda, Poland’s president and an ally of the ruling right-wing nationalist and populist Law and Justice (PiS) party, is seeking reelection. He has been accused of gaining an unfair advantage over other presidential hopefuls during the ongoing coronavirus pandemic. Marek Borowski voices his thoughts on the election in these challenging times rife with epidemiological risks. INTERVIEW BY EWA BONIECKA
prevailing condition won’t last forever but if the situation doesn’t change soon, the election date should be moved.
Marek Borowski: An election means the possibility of organizing political campaigns. Meetings of people across the whole country and in the media. Currently, such a campaign is only being conducted by the incumbent president [Andrzej Duda] whose activities are presented all the time by the government-run public television [TVP]. An election requires that the voters aren’t under some threat of negative consequences linked with their participation in it. And now people are afraid of leaving their homes because of the risk of infection from the coronavirus. Of course, the
The upper house (Senat) of parliament is controlled by the opposition. How do you as an opposition senator assess Senat’s chances of getting the government to retract from the deeply harming situation of holding an election in such times? According to Poland’s law, Senat cannot block decisions of Sejm [the lower house]. So Sejm, in which the governing coalition has a majority, PiS and its partners can suppress any discussion. This situation has turned into a limitation of our parliament. However, Senat is showing Poles how debates on acts should take
40
JULY 2020 W B J
place. Senat also prepares acts which then go to Sejm where they may be rejected. Senat can force a public debate. But the government is trying to avoid such debates. PiS has attacked Tomasz Grodzki, the speaker of Senat, and to gain control of Senat, they seek members of the opposition to defect to their side. How do you work in such a situation? I work with determination. The opposition majority in Senat is small but is congruent. The majority of voters voted for opposition parties in the last parliamentary elections [October 2019]. Only the specificity of electoral law assured PiS over half of the seats in Sejm. In Senat, we feel the support of the majority of the electorate and their hope that we [opposition]
DISCLAIMER: This interview was conducted in March 2020
SHUTTERSTOCK
WBJ: The coronavirus outbreak has paralyzed the Polish public life. Should the presidential election date be changed?
W B J JULY 2020
41
Talking Points remain united. So I don’t think that anybody from the opposition in Senat will switch their allegiance and move to PiS. We will continue our work in Senat which is important for our constituencies. I would like to remind you that we were elected in single-member constituencies.
backsliding in Poland? I think that if the EU will deny its essence if it doesn’t react to the authoritarian inclinations of the governing party. The EU isn’t only a common market but a community of shared values. The methods of counteracting the striking violation of the rule of law must be
and the Court of Justice of the European Union (CJEU). How will the coronavirus influence PiS’s political position? Does it affect the chances of Duda’s reelection? Every crisis situation is an opportunity for the rulers. Obviously under the condition that they don’t start the
The victory of the opposition in Poland showing that shared values are very important would lead to a stronger integration with the EU and this will lead to the growth of Poland’s importance in the world
After the coronavirus threat subsides, will the European Union assess the legal, judicial and democratic
42
JULY 2020 W B J
discussed but should be effective and draw up fast. Senat should assist the EU? Senat and senators are part of the EU institutions and also the Council of Europe and OSCE [the Organization for Security and Co-operation in Europe is the world’s largest security-oriented intergovernmental organization. Its mandate includes issues such as the promotion of human rights, freedom of the press and fair elections]. We present to them the real status and threats to the rule of law in Poland. Senat adopted a resolution regarding the independence of judges and courts and calling on the government to respect the constitution, the judgments of the Polish Supreme Court
crisis, as is in case of coronavirus. Other matters, such as the mistakes the government made throughout its tenure are receding into the background. So Duda’s chances are rather growing which is why he wants the election to be held as early as possible. However, if the society will share the view of the opposition, his stubbornness might act against him. How do political crises shape Poland’s future development? There are political crises in many new as well as established democracies. In my opinion, it’s the consequence of two factors – the economic crisis from 2008-2013 and some
SHUTTERSTOCK
What influence do you have as an opposition senator in the fight for the presidency during the coronavirus epidemic? I’m the vice-chairman of the club of senators of Civic Coalition caucus that includes senators from Civic Platform (PO), Modern (Nowoczesna), Green (Zieloni) and the Polish Initiative (iPL) parties. In that position, I have a certain influence on the actions taken in Senat. However, currently in the conditions of real-life emergencies, the political activity of the opposition is strongly limited.
degree of moral spoiling of democracy in many countries such as corruption, nepotism and using power for private goals. Add to these the exodus of refugees, which inflamed all those emotions that serve anti-immigrant tendencies and raise the number of people who want a “strong man in power.” Such situations are being used by extreme and authoritarian movements. The answer to these situations, in my opinion, should be to move to authentic democratic values, fully transparent and honest methods of running power with guarantees that methods, people and politicians that are not honest will be removed from public life and ruling power. Very important is also the elimination of language of hate, so present in public space today. How do you see the future of the EU as the situation around the world changes. What chances does Poland have in obtaining a good position in the EU while being under PiS’s rule? The EU must strongly stress its roots – the com-
munity of shared values. The victory of the opposition in Poland showing that those values are very important would lead to a stronger integration with the EU and this will lead to the growth of Poland’s importance in the world. Such a position of Poland will allow us to play the role of one of the leading players in the EU and lead to quicker development of our country. The victory of PiS, that is opting for “Europe of homelands” will lead to the gradual marginalization of our country, especially when the vast majority of the EU member states want closer association on various levels. And that would mean damage to our economic and political interests. [“Europe of homelands” is one of the visions of the EU, establishing economic unions while maintaining the political separateness of united countries. A distinctive feature of this concept is the emphasis on respect for state sovereignty and the development of intergovernmental rather than transnational cooperation. Nowadays, it is supported by eurosceptics.]
Born in 1946 in Warsaw, Marek Borowski is a wellknown Polish politician and economist. He is a senator – a member of the upper house (Senat) of parliament – and a member of the largest opposition Civic Coalition grouping.
W B J JULY 2020
43
Talking Points
PEAK PERFORMANCE Finnish Prime Minister Sanna Marin recently advocated for a four-day workweek comprising sixhour workdays in entire Finland. Described by the world’s youngest PM as being the “next step” in working life, many were happy with the suggestion. But some were not. Caroline Gleeson, a recruitment pundit, explains. INTERVIEW BY KRZYSZTOF MACIEJEWSKI
44
JULY 2020 W B J
which would ultimately put a lot of pressure. Also, for example, in Ireland, government benefits are all pro-rata – any kind of sick leave, holiday entitlements, maternity leave or paternity leave. If you reduce the time spent in the workplace, you reduce the benefit allowance. That’s why the benefits system would need to be adjusted alongside any significant change in the workweek in order to ensure that no employee is suffering as a result. Finally, a company may be obliged to open, particularly in some industries that are open 24/7. Therefore, they may be faced with hiring more staff or contractors to make up for the time deficit in a four-day workweek. That would result in overtime and contractor expenses that could prove quite costly for the business. So, to my mind, these are the core disadvantages of implementing a four-day workweek. Are there any benefits of a four-day workweek?
In my opinion, as the current corporate structure working week is set up, the disadvantages outweigh the advantages. For certain organizations that could implement a four-day week – if they have the flexibility to do that – the advantages would be, I would argue, a happier workforce because it would give their employees greater flexibility, more time to spend with their families, more time to spend on hobbies, health, exercise, and so on. I think, in the end, that would have a positive impact on productivity. People would come into work feeling valued, feeling they have a good work-life balance. They’d be happy to be there, they’d be more efficient with their time, as opposed to procrastinating, wishing they were somewhere else. Is there a way to reconcile both these options? I think there are alternatives to the four-day workweek that could have an equally
SHUTTERSTOCK
WBJ: Research for The Workforce View in Europe 2019 shows that as few as 38 percent of Poles want to work four days a week rather than five. Why? Caroline Gleeson: Probably because they may end up working overtime as a result. The volume of work may not change on a week-to-week basis just because the hours changed. What this could result in is more pressure on employees and the need to work overtime on the days that they are actually in the office … which could lead to an unbalanced work-life because they’re having to work late to make up for the day that’s lost during the week. If you think about it, a company’s commitments to a client aren’t going to change overnight. There will still be a certain workload and deadlines ahead. Therefore, just because a day is dropped from a workweek, doesn’t mean the workload in that sense is going to change,
W B J JULY 2020
45
Talking Points positive impact while not so much having the negative impact that comes with it. My suggestion would be to try moving toward a projectbased time management system as opposed to clockwatching. That means giving employees clear projects with set deadlines, which would allow employees to shape their own workweek to fit their lifestyle, but still meet their commitments
have a bit longer weekend. That is given as a perk that the company is offering on their time, which we have found so far has not affected productivity in a negative way. In fact, we feel that our workforce is much happier and more productive, particularly on a Friday. We found that Friday was the least productive day while usually Wednesday and Thursday being the most productive,
We also find with the sales team being in the office, there’s that element of friendly competition. There’s more energy. Therefore, we prefer having the sales team work in the office. Our employees that are parents utilize telecommuting the most. I’m a parent. Sometimes my daughter gets sick. So for me the option to work from home – I can complete my workday while
Tuesdays, Wednesdays and Thursdays are high productivity days. Mondays can be slower. Friday is typically the least productive day to the business. That’s something we are looking at in our company. In Ireland, we rolled it out recently because what we could do is assess the most productive and the least productive business hours. We could encourage peak performance during the productive hours, in addition to looking at our net productive hours. We could then offer a longer break, time off or an alternative activity that could be used as a company perk or motivation for a happier workforce. We found in our Ireland office that Friday afternoons are the least productive hours. As a result, we decided to give our employees the option to finish from 3:30 p.m. on a Friday, just to allow them to
46
JULY 2020 W B J
with Monday being slightly slower. We have seen that Friday mornings are definitely a lot more productive than they were previously with the option of employees being able to finish up that bit earlier on Friday afternoons. It is something we are considering rolling out in our Polish office. What do you think about telecommuting? We fully support it. We provide all our employees globally the option to work from home. Obviously, certain departments work better in the office. For example, we prefer our sales team to be in the office. They are on the phone the majority of the time. They’re also talking about deals and contacts.
simultaneously looking after my daughter – is really valuable. And that is something available to our employees in Poland who have children. Often, if a child is sick, they work from home. I think it is something that is valued because you can be there for your child, and also meet your work commitments.
How do you evaluate business productivity in Poland? Some environments are a lot easier to evaluate than others. Typically, I suppose, Tuesdays are high productivity days. Mondays can be slower. Friday is typically the least productive day. But ways to specifically evaluate for your business will be through KPI – key performance indicators. For a sales environment, it is quite black and white, easy to measure. You have metrics like call volume, minute volume and deal schedules. You can measure the output on a daily basis to assess when the most productive and least productive hours are. With fewer metrics-focused roles, like marketing or finance, a good way to evaluate would be to liaise with employees on their day-to-day focus and measure the days where there is greater output. Also, alternatively, ask your employees when they feel they are their most and least productive. Because every employee is different and it can be good to establish a broad perspective on your team’s productivity processes, you can have a full assessment to feed into how you want to action that.
Caroline Gleeson is the CEO and co-founder of Occupop (formerly BidRecruit) – a recruitment software startup that’s headquartered in Dublin and has offices in London and Warsaw.
ECONOMICS IN PANDEMIC Jacek Giedrojć walks the WBJ through the economics that might help Poland battle the ongoing pandemic. INTERVIEW BY KRZYSZTOF MACIEJEWSKI
WBJ: What are your forecasts for the Polish and global economy considering the ongoing crisis? Jacek Giedrojć: I will not make macroeconomic forecasts. A lot depends on how the pandemic develops. I will point toward a few trends. Tax increases seem inevitable, especially for the wealthiest and global firms that have been evading or avoiding taxes so far. Saving households and companies in a crisis caused by the pandemic comes at the expense of a drastic increase in public debt, which will need to be paid back. Fiscal spending increases as revenues fall. The pandemic has made us aware of the neglect in public services. This is the main reason for the expected tax increase. The second trend is related to the effects of remote work. In recent weeks, wanting or not, we’ve learned to do things remotely that we would not have thought of before. These new skills will stay with us. This raises
various opportunities and threats for technology companies renting offices, healthcare and, in the long run, urban planning and transport. Finally, it is worth discussing deglobalization. We have been observing this trend for some time. The pandemic has clearly shown the risks of long, global supply chains and dependence on dubious partners in sensitive areas such as medicines and medical equipment. Recent weeks have also shown that offshoring, especially offshoring R&D, is a way to transfer critical know-how and the achievements of a free society to people who imagine a good life differently and do not necessarily wish us well. I hope this will not end in a trade war – everyone against everyone else – but rather in a mild form of a cold war in which western countries sharing common values will find themselves in one camp. This is a potential opportunity for us. However,
W B J JULY 2020
47
Talking Points given the current situation, the question remains as to which side of the curtain we will be in. Some say that the Covid-19 pandemic is worse than the last financial crisis. Do you think it’s time to change the economic model? Global warming or inequality poses a bigger threat than the pandemic, which, hopefully, will soon be overcome. The epidemic struck us suddenly and painfully, closed all the rich and poor in their respective homes for weeks. This may, therefore, be a stimulus for profound changes. I hope that it will be a stimulus for a mental change, new goals, the inclusion of capitalism beyond fast fashion and addictive smartphone apps. The pandemic has made us aware of the failure of private strategies. How does it help that I can afford the best health services, if, when I go to a shop, restaurant or round of golf, I get exposed to infection from employees who do not have access to such private services? In your most recent book, you criticize the economic thinking that harms not only the economy but also society. Why does this happen? [Economic thinking is a way of looking at and analyzing the way the world works by comparing the cost of an action with the benefit generated.] Economic thinking is a changed version of the neoclassical theory, the most dominant pattern in economics today. In economic thinking, it is most important
48
JULY 2020 W B J
to allocate resources efficiently or optimally. Simplifying, we prosper when we don’t waste anything. The resources are to be earmarked to those who value them the most. Those who can pay the most for them. This is a very simplified approach. While efficiency is, of course, an important economic dimension, at least two things are equally important: fairness and progress. Let’s start with progress. Innovations are by their very nature experimental. They require the use of resources in projects whose future is uncertain. Many of these projects end up in failure and thus lead to wasted resources. However, in perfect competition, such failures lead to bankruptcies. Businesses are supposed to optimize. In the book, I show a way of thinking that has led to a system where the degree of innovation is low. Even experiments that fail from someone’s point of view often contribute to progress. Failed experiments show where dead-ends are. Or how some ways to achieve meaningful goals are not working. Other innovators come to conclusions from such failures and try to make things work differently. Resources have been wasted, but as a society, we have profited. What about “fairness”? The main observation is that if a social group feels permanently excluded from the fruit of economic growth, the members of that group do not have an interest in maintaining the existing
Global warming or inequality poses a bigger threat than the pandemic, which, hopefully, will soon be overcome social order. This is one of the reasons for populism. Economic thinking is geared to raise GDP and neglect inequalities. Unfortunately, when everything is decided on the basis of purchasing power, those who start with nothing are left with nothing. Economic thinking legitimizes a number of views that argue with common sense and basic moral judgment. For example, any profitable activity must be socially beneficial. Price is the ultimate measure of value. The most absurd is to adopt such thinking in politics. Is economic thinking also visible in Poland and the EU? There are 30,000 official lobbyists in Brussels. According to a recent Transparency International report, more than half of the former commissioners and 30 percent of former MEPs worked in corporations or
organizations registered as lobbying bodies in the European Union institutions after the end of their term in office. Contrary to the views, the EU competition policy is robust. It’s closer to what was in force in the US until the 1980s. We see this in the examples of the EC’s loud proceedings against Apple and Facebook. When competition rules are agreed between different countries, the field is more leveled and it is more difficult for lobbyists to fight for exceptions. It has traditionally been considered that dominance by one or more companies is a cause for concern for the state of competition in the relevant market. After all in Poland, we are slaves of economic thinking. When Poland joined the West, economic thinking was already a dominant theory. It’s a fact that in today’s Poland we cannot imagine capitalism without economic thinking.
Jacek Giedrojć is the founding partner and chairman of the Warsaw Equity Group, one of the oldest private equity firms in Poland. He is also the president of Liberalna Edukacja, a foundation dedicated to promoting liberal education in Poland and its eastern neighbors.
ADVERTORIAL
‘PHO-ANTASTIC!,’ SAY LOVERS Located in the heart of Warsaw, Nguyen Xuan Son’s restaurant Pho Lovers has caused quite a stir amongst gourmands seeking epicurean Vietnamese delights. Owing to impressive recipes, the restaurant has received many outstanding reviews from gourmets and has been a beloved homely destination for the Polish and Vietnamese communities in Poland.
Tell us your story. Nguyen Xuan Son: I originally hail from Vietnam. I migrated to Poland in 2007 with the hope to find a good job to financially support my family back home. I had my very first jobs as a kitchen assistant. I got promoted to be the chef in a few restaurants by 2011. After saving up for several years, I resigned from my job and opened my first restaurant. However, it wasn’t a successful venture and I went bankrupt. I was back to square one, working for someone else and saving up again. I realized that it is not an easy task to own and run a business. I was inexperienced in business management.
If there is a need in the future, I will always be ready to join and support the Polish government and doctors to fight Covid
How did you come up with the idea of Pho Lovers? In November 2018, I returned to the Polish market and opened a new restaurant called Pho Lovers located on ulica Tamka 45A [withing spitting distance – less than 80m – of the Fryderyk Chopin Museum in Warsaw] with a vision to introduce restaurantgoers to Asian cuisine and culture. I have have been taking online marketing and business management courses while running my business daily. I keep extremely busy but I’m highly motivated and passionate about what I do. I feel proud that my restaurant has a very good reputation and opinions in Warsaw. I’m fairly proud that we are one of the best Vietnamese restaurants which serves the best Pho (a Vietnamese soup consisting of broth, rice noodles, herbs, and meat) in Poland. Our goal is to serve the best quality food at a reasonable price. In addition to maintaining strict hygiene, constantly considering customer feedback is also our objective to keep the business sustainable.
How is your restaurant aiding the fight against the coronavirus? The Covid-19 virus has been threatening people’s health and the economy. As an immigrant who lives and does business in Poland, I feel from my heart that I need to join the community to support the fight against the virus. And as a result, I organized a “food tour” with my food truck that gave away free meals to doctors who are working in the Central Clinical Hospital of Ministry of the Interior and Administration in Warsaw and taking care of Covid victims. May was the most meaningful month of my life. The reproduction number of the virus in Poland seems under control currently. However, if there is a need in the future, I will always be ready to join and support the Polish government and doctors to fight Covid. In the future, I would like to open a few more restaurants in Warsaw and continue to serve top quality food and contribute to the Polish economy. I also aim to diversify culturally, especially Asian culture, through cuisine.
W B J JULY 2020
49
strategia strategia / kreacja / kreacja / social / social media media / digital / digital / custom / custom publishing publishing / events / events / PR / PR
NEWS PRESS MATERIAL
NOBU HOTEL WARSAW to check in guests from August A new five-star hotel at a stone’s throw from the iconic Palace of Culture and Science in the heart of the Polish capital will be part of the storied hotel chain Nobu founded by Hollywood actor Robert De Niro, celebrity chef and co-founder Nobu Matsuhisa and film producer Meir Teper. The facility is slated to open its doors on August 3 after a slight delay due to the coronavirus pandemic. It will offer 117 guest rooms, large meeting and event spaces, a fitness center and a restaurant. The Warsaw project marks the chain’s first hotel business in Poland and its 12th worldwide.
W B J JULY 2020
51
LOKALE IMMOBILIA | NEWS
district, adjacent to the city center, at the intersection of Wschowska and Ordona streets.
“Co-living projects can be an interesting alternative to traditional forms of living, they will also be a response to the problem of decreasing land supply in central parts of large cities” Małgorzata Dziubińska, associate director, Cushman & Wakefield, a global commercial real estate services firm
OFFICE BRIEFS Poznań Planning Office (WBPP) has leased 720 sqm of office space in Kwadraciak, an office building neighboring Poznań’s landmark Okrąglak. The landlord was represented in the lease transaction by real estate advisory firm Savills while the tenant was advised by Cushman & Wakefield. WBPP carries out zoning tasks assigned under statutory legislation to voivodeship authorities such as feasibility studies, local land use plans, planning documents and zoning consultations. Okrąglak and Kwadraciak are located in the very center of Poznań, at the junction of 27 grudnia and Seweryna Mielżyńskiego streets. Both properties are owned by Benson Elliot and Sharow Capital. Real estate advisory firm Savills is the sole letting agent.
52
JULY 2020 W B J
CAPGEMINI MOVES IN CZ OFFICE PARK IN LUBLIN
Capgemini, a global leader in consulting, technology services and digital transformation, has leased nearly 900 sqm of space in the Lublin CZ Office Park. The tenant was represented by the international consulting company Cushman & Wakefield. “The high attractiveness of Lublin in terms of access to qualified employees combined with the availability of class A office buildings has recently attracted many companies from the modern services to the business sector. Undoubtedly, the biggest event in 2019 on the local market was the opening of a new branch by Capgemini. I am convinced that CZ Office Park will meet the expectations of the tenant and its employees regarding an effective and comfortable workplace,” Michał Grabowiecki, negotiator, Cushman & Wakefield, said.
Xella Polska, a manufacturer of modern construction materials, extended its lease agreement and leased another 200 sqm expanding its office space totaling 1200 sqm in GreenWings Offices in Warsaw. The Knight Frank team advised the tenant in the process of renegotiations and further expansion. The building’s owner, OKRE, was represented by Corees Polska. “We are happy that Xella Polska relied on our advisory services in the process of extending its lease agreement and leasing the additional office space.
GORĄCO POLECAM IN NEW OFFICE PREMISES
WARSAW EQ2 OFFICE BUILDING TOPS OUT
Tenants are to move into the EQ2 office building in Q1 2021. The office building has already reached its target height, and the completion of construction work has been celebrated with a symbolic topping off ceremony. Walter Herz is responsible for the commercialization of the project. EQ2 is another office investment implemented in Warsaw by Waryński Holding Group. The exclusive office building is under construction in the part of Wola
Gorąco Polecam (Polish for: warmly recommend), a Poland-based bakery, has joined the tenants of the Chmielna 89 office building in Warsaw. The bakery franchise, managed by the ENATA BREAD group, will occupy 141 sqm of commercial space. The tenant transaction was advised by the international consulting company Colliers International. Gorąco Polecam Nowakowski is a brand with nearly a hundred years of history – the first craft bakery was established in 1925. A network of premises combining the function of a bakery and cafe operates in Warsaw, the Tri-City and Kraków.
PRESS MATERIAL
KWADRACIAK IN POZNAŃ FULLY LET NOW
XELLA EXPANDS ITS OFFICE SPACE
INVESTMENT BRIEFS AUREC HOME COMPLETES LAND PURCHASE IN WARSAW URSUS
Coronavirus changes our approach to building houses Coronavirus has transformed the current approach to buying real estate. We want to turn compact apartments into investments with more space and access to green areas. In the construction industry, talks about returning to multi-generational housing are becoming louder and louder, claimed Rafał Buczek, an expert at Awilux, windows and doors producer. Multi-generational housing is the most popular in Southern Europe. In Poland, it works well in rural areas and in smaller towns. Many Poles definitely choose the Western trend – early removal of adult children and self-employment. Quarantine and insulation, which hit millions of people, showed that staying permanently in small apartments, which do not always guarantee access to light and do not allow creating different living zones for all household members, is not a good solution for everyone.
580,000
sqm
Global real estate advisory firm Savills has been appointed as sole office and retail space letting agent for Giant Office, a newly-completed office development in Poznań. Giant Office is one of the largest recent office completions in Poznań and the only new office building delivered to the Poznań market in 2020. According to Savills data, thanks to the Giant Invest project, Poznań’s office stock reached over 580,000 sqm.
Aurec Home – part of the international capital group Aurec Capital – has finalized the purchase of over 2.5 ha of land at Dyrekcyjna Street in Ursus, where the company plans to build about 800 apartments, as well as commercial, food, and service spaces. The land purchased by Aurec Home has unique values. In the place where the developer intends to build a housing estate are unique remains of the former "Ursus" factory, which are under the protection of a building conservator. Aurec Home intends to include it in the planned housing, which will be a large project, but it will help to preserve that part of the district's history.
OKAM TO RENOVATE, REBUILD WARSAW PRAGA NORTH
A subsidiary of the OKAM Group responsible for the implementation of the Bohema investment – Prague Zone – has completed negotiations lasting several months with the Warsaw City Road Authority regarding the renovation and reconstruction of Szwedzka Street. Comprehensive renovation and reconstruction will cover the entire section bordering the Bohema investment area. In total, over 550m of the street will undergo reconstruction. The works will include replacement and reconstruction of pavements, replacement of street lighting and traffic lights at the intersection of Szwedzka and Strzelecka (at Szwedzka metro station). The street in this section will also receive new signs. The reconstruction of this area of Warsaw's Praga will significantly improve the comfort of using Szwedzka Street and provide future residents with security and trouble-free access to the investment area.
W B J JULY 2020
53
LOKALE IMMOBILIA | RESIDENTIAL A graduate of IHM Business School in Stockholm, Andersson has been at the helm of Vastint Poland for a total of 18 years. He has more than 30 years of experience in the industry and previously worked in senior positions at several construction and development companies in Sweden.
GOING AGAINST THE STREAM
Developer Vastint will build thousands of apartments in Poland within the next few years. The company will offer some innovative solutions in the Polish residential market, says Vastint Poland’s managing director Roger Andersson. INTERVIEW BY ADAM ZDRODOWSKI
54
JULY 2020 W B J
WBJ:
Vastint has just completed its first residential project in Poland. Why did you decide to enter the country’s housing sector and is the decision part of a broader investment strategy? Roger Andersson: We have been present in Poland for almost three decades now and are well known for our office and hotel developments. We decided to enter the residential market a long time ago and Riverview is the first visible result of that. The residential market has always been of interest to us – we acquired the first plot more than 10 years ago. Sales of apartments in your Riverview project in Gdańsk have started only now when construction work on the scheme has finished. This is not a common practice among residential developers in Poland… Indeed, such an approach is very rare in Poland, but it is actually quite common in many other
we are going upstream here and we are convinced that our product will be very popular in all our projects
European markets. We wanted to offer something different in the Polish market where people are used to buying apartments at an early stage of the construction process. We believe that many customers will be very happy to have an opportunity to see the final product before they make their decisions. There are many added values for a customer buying a ready apartment. For example, you can select your apartment depending on your needs, expectations and price level. You also have the possibility to see what really fits you in terms of size, location, views, layout, design, etc. All of the apartments on offer in Riverview are ready-to-movein units, another non-standard policy in the Polish market. Are Polish home buyers interested in such solutions? Yes, clients are very much interested in this. We are seeing a very positive response to Riverview. Again, we are going upstream
here and we are convinced that our product will be very popular in all our projects. Riverview comprises apartments that offer a turn-key standard and are ready to move in. As a client, you can choose from several different styles, all with a very high standard. Buying a finished apartment from Vastint means many advantages for the customer. Firstly, you do not risk time and money dealing with contractors as you have one partner in Vastint. Secondly, we give a two-year warranty on both the finishing and the home appliances provided by us. Another advantage is that you do not have extra costs for “double living” and you can securely plan your moving. Will you also implement this strategy in your future housing schemes in Poland? Yes, we will. We are also putting a lot of emphasis on green building solutions. Green certificates may still be relatively rare in the residential market com-
W B J JULY 2020
55
LOKALE IMMOBILIA | RESIDENTIAL pared to the office sector, but we will want to secure them for our housing developments. We hope to get Poland’s first residential LEED certificate for Riverview despite the fact that such a decision requires considerably bigger construction efforts. We are a socially responsible company and we also see that more and more buyers want to live in “green” homes.
OFFICE GIANT One of Poland’s biggest office developers, Vastint has to date been arguably best known in the Polish market for its Business Garden-branded projects in Warsaw, Wrocław and Poznań. The company, whose portfolio also includes hotels, is currently working on commercial schemes including Nova Silesia in Katowice.
What is in the pipeline when it comes to Vastint’s residential projects in Poland? We are going to build more than 5,000 apartments in Poland in the next few years. We are planning new investments in locations such as the Tri-City (another phase of Riverview in Gdańsk with approximately 700 apartments plus over 120 apartments in Gdynia planned as part of the Gdynia Waterfront scheme) and Poznań (around 1,600 units within the Portowo development and some 520 units within the Stara Rzeźnia investment). In the future, we will also probably be active in Warsaw and Wrocław where we already have commercial projects. All of the projects mentioned by you will be large-scale schemes. Is building big also part of your business strategy as far as your development activity in the Polish residential property market is concerned? Yes, we are interested in building large residential projects, as well as in building apartments within large-scale mixed-use schemes. In the office market, we are known for our big office parks that have transformed entire neighborhoods of Polish cities. In the residential market, too, we want to develop placemaking investments which will contribute to the revitalization of neglected urban areas and offer numerous additional amenities for both apartment buyers and the entire local community.
56
JULY 2020 W B J
Are you focused on one particular segment of the residential market? No, our strategy is to offer several types of apartments in one location so that a given project can attract both a buyer looking for a moderately priced unit and a buyer looking for an upscale home. The prices in Riverview vary a lot depending on the rating of the particular apartment. Will you buy more land for residential projects in Poland this year? We are currently looking at a number of sites, but it is hard to say if we will make any acquisitions this year. It is not that we have to spend a certain amount of money on land purchases in a given year, we rather wait to find the right opportunities. Has the coronavirus pandemic had any impact on your development plans in Poland? No, the current situation has not changed our plans in Poland’s residential sector. Riverview was completed on time and we have already sold half of the apartments in that project. Preparatory work on the planned schemes is proceeding according to schedules.
We are a socially responsible company and we also see that more and more buyers want to live in “green” homes
Do you think the market will suffer in the long term because of the current crisis? We still do not have a sufficient amount of empirical data to properly assess the situation and accurately predict possible future trends, but it seems that the market remains resilient. It will certainly be more difficult to get loans for home purchases in Poland in the near future, but many apartment buyers do not actually use bank financing at all. There is a lot of cash in the market and it is worth remembering that in uncertain times the property market is always a good place to allocate capital. We are optimistic about the prospects for the market’s future.
W B J JULY 2020
57
PA RT N E R H I G H L I G H T
HOME STRAIGHT: WELCOME TO THE HUB OF BUSINESS AND BEYOND Works on one of the largest office complexes in the new business center of Warsaw at Rondo Daszyńskiego are about to finish. The Warsaw HUB will open to its tenants this summer.
58
JULY 2020 W B J
T
he new Ghelamco investment looks impressive: three towers from 86-130m joined by a common five-story foundation. The project goes far beyond the traditional concept of an office complex. At 113,000 sqm, it offers state-ofthe-art office space, a conference center, two hotels, shops, restaurants, a fitness club and a coworking space. “The Warsaw HUB has everything which is needed for
employees will receive up-to-date information, instructions and rules of conduct. Moreover, chatbots and AI will be used for communication with the tenants. Finally, the application will provide, among many other features, access to the office, guest invitation and a room booking possibility. The pandemic mode in The Warsaw HUB will enable prevention technologies to diminish the spread of the viruses. The airconditioning system will work with the use of fresh air exclusively in order to prevent the mixing of the extract air with the exhaust air in the building. What is more, UV lamps will be installed in lifts to effectively disinfect the space. The building will be also equipped with a car recognition system and a charging station for electric cars.
PLACE FOR INDUSTRY LEADERS
the modern business to operate and at the same time will be open to the city and its residents. The skyscrapers will have direct access to the Rondo Daszyńskiego metro station via The complex an underground tunnel which was built will take you right to the ‘conven- in the heart of ience’ center. Warsaw residents the new busiwill be able to do everyday shopness center ping there, have dinner or work of Warsaw out in the gym,” says Jarosław at Rondo Zagórski, commercial and busiDaszyńskiego ness development director, Ghelamco Poland.
NEW TECHNOLOGIES WILL HELP ENSURE SAFETY AND COMFORT
The Warsaw HUB will provide its tenants with numerous sophisticated solutions, including a mobile application designed by Ghelamco’s internal innovation department. One of its functions could be also used during the state of epidemic threat. The feature will inform building users whether the premises are operating in the so-called pandemic mode, which implements emergency and safety rules. The
The Warsaw HUB will be the headquarters of many prestigious and well-known Polish and international companies, such as Getin Noble Bank, Standard Chartered, The Heart Warsaw, GATX, Atradius, Elanco, WeWork and Cushman & Wakefield. Tower A of the complex will house Crowne Plaza and Holiday Inn Express hotels. The tenants from the retail and service sector include Biedronka supermarket, Zdrofit fitness club, Rossmann drugstore and McDonald’s restaurant.
PRIME LOCATION
The new Ghelamco project takes pride in its excellent location. The complex was built in the heart of the new business center of Warsaw at Rondo Daszyńskiego. In its direct vicinity, there is an intersection of the most important roads and a transfer hub, which includes the M2 metro line along with tram and bus stops and suburban trains station.
W B J JULY 2020
59
EXCLUSIVE
With 14 years of experience in the real estate market, Daniel Radkiewicz, CEO of INWI, has completed 47 purchase/sale transactions of lands and buildings on the Polish market. Previously, he held the position of development director at Bouygues Immobilier Polska and also worked for Yareal Polska. Radkiewicz graduated from Skema Business School in Lille and Kraków University of Economics. He has finished postgraduate studies at the Warsaw University of Technology, Kozminski University and the Warsaw School of Economics (SGH). He also received a certificate from the Royal Institution of Chartered Surveyors (RICS).
How badly has the coronavirus pandemic affected the Polish sale and leaseback market? Any silver linings?
Huge gains
The total transaction value of over €1 billion has been generated in Poland through sale and leaseback, says Daniel Radkiewicz, CEO of INWI – a company that deals with land and building investments in Poland. INTERVIEW BY SANKHYAYAN DATTA
WBJ: In numbers, how big is
the sale and leaseback market in Poland and EU? Tell us more about some of the deals done in Poland. Daniel Radkiewicz: Sale and leaseback
transactions have been around for a long time in Poland. Numerous companies have decided to sell and lease their Polish assets in the last 15 years. This includes Danone, Orange, Philips, Metro Cash & Carry, OBI, Inalfa Roof Systems and Greenyard. They have generated a total transaction value of over €1 billion. However, currently, sale and leaseback
60
JULY 2020 W B J
transactions in Poland are not as popular as in Western Europe or the US. The reason of that unpopularity is due to common myths about this type of transaction. Entrepreneurs have concerns about losing control of their facilities. However, in practice, the company uses its facility on its own terms without any interference from the investor. There are numerous guarantees in the sale and lease agreements in order to protect the seller and the future tenant. In the meantime, it generates capital that the seller can use to grow its business.
During a crisis, companies are looking for alternative financing because banks today are very restrictive. So we presume the number of sale and leaseback transactions will increase. According to CEO World research, Poland has been ranked the third-best country to invest in the post-coronavirus world. And according to an economic forecast by the European Commission, the Polish economy is set to be the least affected in the EU by the Covid-19 pandemic. What does it mean for the sale and leaseback market?
Yes, I think it is worth mentioning that according to CEO World research, Poland has been ranked the third-best country to invest in the post-coronavirus world. Less affected economy resulting in less affected companies. From an investor’s point of view, it’s good to have a strong and stable tenant. From an owner’s perspective, it is important to retain cash-flow. Most companies are affected by the lockdown. We are convinced that the sale and leaseback market is currently at its prime. To learn more you can contact Daniel Radkiewicz at daniel.radkiewicz@inwi. com.pl, or check www.inwi.com.pl
ADVERTORIAL
Funds worth €100m seek to invest in Polish real estate Poland’s property market has witnessed a phenomenal boom ever since the Central and Eastern European economic powerhouse joined the European Union in 2004. And the market is still growing. The total value of transactions amounted to €7.8 billion in 2019 as compared to €7.2 billion in 2018, according to an investment report. This, in turn, translates into a huge potential for sale and leaseback in the country. European investment funds – that specialize in sale and leaseback transactions – represented by INWI, a Warsawheadquartered real estate firm, want to invest in the property market in Poland in the form of sale and leaseback transactions. The firm and its financial partners are looking to buy existing manufacturing, logistics, warehouse and office properties for up to €100 million per transaction. However, sellers do not have to move out. The investor is counting on long-term (10 – 20 year) lease agreements that will bring in a steady income. The funds have already carried out transactions for several hundred million euro in Poland, Germany, Spain and Italy. The purchases have included logistic assets, warehouses, manufacturing buildings, headquarters and office properties. “Together with these funds, INWI plans to acquire these facilities in Poland to provide its investors with stable and long-term returns. For the sellers, this is an opportunity to quickly obtain the necessary capital for the development of their business. Most transactions concern existing buildings,
however, we are also able to finance the construction of new buildings based on a build-to-suit agreement,” says CEO Daniel Radkiewicz. While the lack of in-depth knowledge about sale and leaseback might act as a hindrance, he emphatically states that Poland has much to offer in that respect considering the rising number of investments. “According to INWI, there is a lot of potential for this type of transaction in Poland. The lack of understanding about this system of fundraising may be an obstacle, but this has been changing from year to year, which is confirmed by the number of transactions concluded in this investment model in Poland,” Daniel Radkiewicz adds. Sale and leaseback is a financial transaction in which the owner sells an asset and leases it back for the long term, and therefore, the owner becomes a tenant and continues to be able to use the asset. Taking into account Poland offers great potential for fabrics and logistics centers, in order to diversify the distribution and production networks that are currently focused on Asia, the EU nation may gain over $8 billion yearly on the relocation of production from China. “The European Bank for Reconstruction and Development indicates that this year Poland will see a decrease of 3.5 percent of GDP and next year a rapid 4 percent rebound will occur. Estimates for all other European countries are much worse,” emphasizes Radkiewicz.
W B J JULY 2020
61
Opinion ECONOMY
This could be the beginning of the next big step for Poland
As the number of coronavirus cases continues to surge globally while many countries start easing lockdowns, the Polish economy is set to be the least affected in the EU by the Covid-19 pandemic, according to a recent forecast by the European Commission. BY MORTEN LINDHOLM
Y
ou probably remember what happened roughly a decade ago. As lockdown restrictions get lifted across the world, your immediate thought probably concerns the last financial crisis that led the stock market to crash by 50 percent. Unemployment hit double-digit figures. A 24-month recession closely accompanied. Poland, fortunately for many and surprisingly for
62
JULY 2020 W B J
some, fared significantly better in this respect with no recession and used the time and the following decade to catch up with its Western European peers by approximately 10 percent. However, my thoughts aren’t related to the crisis. Rather they are connected to the amazing year of 2007 – the so-called “year that changed marketing forever.” Apple launched its first iPhone, Netflix expanded its services to intro-
duce streaming, Facebook started group pages and advertising tools, and Google acquired DoubleClick and unveiled Android. Going through the current times, it is natural to draw parallels between now and the end of the last economic boom culminating in a dramatic crash. Therefore, it is interesting to look at the predictions for what the world will look like in 2030 and whether we will look
THIS SPREAD SHUTTERSTOCK
WBJ
Only a few countries have been so openminded and ready to adapt to new situations like Poland
Covid chronicle back at 2020 with no dry eyes or smiles, in addition to acknowledging that this year of disruption helped us focus, and probably force, 3-5 years of development of technology, climate and healthcare solutions through 3-6 months. So, how can Poland, its companies and inhabitants, use the ongoing crisis to their benefit? In many ways, I believe. Only a few countries and nationalities have been so openminded and ready to adapt to new situations like Poland. And with the recent experiences of disrupted supply chains, increasing trade taxes between the dominating world powers plus a generally broken trust in information authenticity, this is the chance for Poland. I see Poland not only strengthening its position in the international supply chain and becoming a central and hyper hub for production for Europe and beyond but as the brain and powerful destination for whitecollar work in technology, R&D and back-office business intelligence. But it will not come easy as it demands leadership and hard work. This is where my biggest fear for Poland is because the country is clearly divided into two nearly equal parts in several key segments – city vs. country, young vs. old, staunchly religious vs. non-devout. I hope that the ones that are responsible for shaping and developing Poland’s future, will have a more impactful non-partisan view of the country and its direction. They will take initiatives and enhance systems to assist entrepreneurs, businesses and leaders.
How I felt during the period between the end of February and mid-June. BY MORTEN LINDHOLM
Surprise:
Shock and negative emotions. Both towards politicians and unknown foreign forces were absolutely crazy. When you are a medium-sized company co-owner and board member, you focus on saving what can be saved and make sure your key people and most of the company’s staff are safe job-wise. We had 100 employees in March. 2019 is our best year yet. Before the outbreak, we were investing in people, hiring more talents and building pipelines for securing business relationships. We were preparing for expansion.
Chaos: It was a mad world and few had an overview. Nobody had a protocol for communication or action in this special situation.
Hysteria: Everyone was in survival mode preparing for the worst. We had to let some of our staff go. We tried to be fair.
Trust:
Who could you trust? No one knew anything about what was going on at that moment. We were all babies learning to live again.
Passing the buck:
Blame game became the new norm. Look what they did in Sweden. No lockdowns. “Super smart!” Why’s Italy so unsafe? Brits, Americans, Chinese? There was an opinion and a solution for everything right or wrong. But still, no one really knew.
Respect and help:
When did we believe the worst was behind us? After the Polish government decided to open shopping centers after the May weekend, we saw light at the end of the tunnel. It started a new fight in the retail realm though: who should pay for the lack of sales and visitors? All this while – we were still uncertain about – our company’s future. Here I must commend the Polish government’s efforts despite that I don’t share their political views. They rolled out packages to support many SMEs. I am sure not everyone will agree with me. It did take a lot of time but it did help some of the market players survive and move forward. It’s still early. We need to learn to live with the new virus but the panic is somehow over. I think we can start planning again and focus our attention on building a bright future for our employees and the world.
W B J JULY 2020
63
BOOK OF LISTS 2019/2020
A GUIDE TO POLISH BUSINESSES AND INDUSTRIES
25
years on the market
70
rankings and alphabetized list
WWW.BOOKOFLISTS.PL
1,000+
firms included
PRESS MATERIAL
Life + Style
Posh purveyor
Currently, like the entire fashion industry in Poland, Moliera2.com – a luxury multibrand boutique’s online store – is feeling the effects of the coronavirus pandemic that is sweeping the world. Aleksandra SzolTułecka, its e-commerce director, talks about e-commerce and sales ideas.
W B J JULY 2020
65
Life+Style
WBJ: Have you noticed a rise in sales in your online store during the
pandemic? Aleksandra Szol-Tułecka: In our online store we noticed a correlation that at the time when our salons were closed, e-commerce sales recorded a significant increase. We think because of the current pandemic this trend will continue. Therefore, we focus on modern and technologically advanced solutions best suited to the needs of our clients, which have changed dramatically in recent months. So the current situation has forced you to introduce changes to increase sales in e-commerce? Our main goal is to embrace modern e-commerce tailored to customers. That is why we are currently implementing a technologically advanced service – the first Virtual Advisor in Poland. It will be possible to connect via WhatsApp or FaceTime applications with one of five assistants in boutiques. This is a great solution for people wanting to check the size, color or simply wanting to consult specialists without leaving home. Will offline shopping change in the pandemic era? Of course, the way of shopping in brickand-mortar stores will change. We will miss the intimate atmosphere of luxury
66
JULY 2020 W B J
boutiques even more. However, we aren’t slowing down the pace and we are expanding the network to another salon in the heart of Sopot [by Poland’s Baltic coast in the north], which will be opening soon. In this innovative place, you will be able to see the entire range of the online store and place an order. This place will meet the requirements of even the most demanding customers. During quarantine, you initiated the unique #Moliera2iPrzyjaciele (Polish for “Moliera2 and friends”) campaign. On your website, you offered competing boutiques having financial difficulties due to the ongoing crisis an opportunity to sell. Where did the idea for such a noble action come from? Moliera2.com is an online store with over 10 years of tradition. We have our own brick-and-mortar stores but we [the website] are still responsible for a significant part of the sales. Unlike many companies, the current crisis has not affected us so much. However, we do not want to take advantage of the difficult situation in the entire market. We want to share the space on our platform with others. We offer our help especially to stores that do not yet have the possibility to sell their goods through e-commerce, which is why they are struggling with financial problems. Often this involves the need to dismiss
we focus on modern and technologically advanced solutions best suited to the needs of our clients, which have changed dramatically in recent months staff or cut salary. Thanks to our help, the economic crisis does not hit these brands so much. Has the campaign met with great interest from brands? Yes! We are extremely proud that the project is such a huge success. The interest among entrepreneurs has exceeded our initial expectations, but thanks to the great organization and work of our team, we have joined forces already with over 80 boutiques and we are not slowing down. We accept applications all the time and we remain open to new brands.
Life+Style
Table For... Forty?
Fort meets thought at Restauracja Forty… BY ALEX WEBBER
N
ot often, but it happens, that along comes a restaurant that fills your world with dazzling new colors – and God knows, don’t we need a bit of that following the lockdown in Spring. Of course, that Forty would be good was kind of expected. Fired out from the same canon as Ale Wino and Kukułka, the latest project from this celebrated team was well on its way to conquering Warsaw when along came that virus whose name we shan’t speak – and dammit, just as we were preparing for our inaugural visit. The best things, though, are well worth the wait…
A Sense Of Place
If you’ve not visited Fort Mokotów before, shame on you. Like entering a secret world, a potholed lane flanked by scraggly bushes opens up to reveal a Tsarist era complex whose battered brick fortifications have since been turned over to house ad agencies, art studios and assorted creative think tanks. There are restaurants, as well, in fact, it’s a thriving little hub of hangouts and suchlike. And among them, there’s Forty. It’s not so much a garden that Forty has, but a whole bloody park. But while it’s the size that impresses it’s the quality that makes the impact – so perfect that it registers as unreal, on quieter days, say a weekday afternoon, the silence is broken only by the rustling leaves. Exquisite in its greenery and immaculate on the eye, it’s impossible to believe that all this awaits just minutes from the center.
Looking In
Quite literally everything has gone wrong this year, so it’s safe to assume that the weather will as well. That being the case,
68
JULY 2020 W B J
PHOTOGRAPHS BY KEVIN DEMARIA
Looking Out
shift indoors when the inevitable summer tornado strikes to find yourself enjoying a gorgeous interior designed by Studio Rygalik. Effortlessly soothing, what could have ended up as just another post-industrial cavern instead comes across as something original and fresh. Sure, you’ve got the peeling plaster ceilings and great big iron girders, but these work in tandem with personalized signature features such as an elaborate glass installation hovering over the chef’s table and tables crafted from demolished old barns. Despite the enormity of the place (and yes, it is BIG), there’s a harmony at work that’s unusual for Warsaw.
The Important Stuff
Food! On first look, you wonder what the hell the chef, Daniel Uliczny, has done with the menu – of the mains, there are just two. This though is not a plunge into madness, but a clever trick to divert guests towards exploring the portfolio of starters. Moderately priced on our visit between PLN 12 and PLN 34, these are a beautiful adventure that marry seasonal produce with unexpected forays down uncharted paths: oyster mushrooms, for example, served inside pillowy bao with rice mayonnaise, a sorrel soup so vivid and refreshing as to defy expectations, and a strip of barbecued trout glistening with a teriyaki sauce and accompanied by an artsy pinch of greens. Neither is this a chef too clever for his own good. When it comes to asparagus, the product is left to sing for itself – cooked perfectly, it’s sensitively elevated with the addition of a chimichurri sauce and a discreet dab of labneh: simple and effective. The same sentiment applies to dessert: lime sorbet on a bed of granola – easy peasy on the face of it, but executed to such a high level as to elicit squeaks of pleasure.
Drink Me
The typical Warsaw restaurant feeds you, then can’t wait to chuck you out: “We’ve got your money, now see ya’ next time, sucker.” Forty is one of the very few where customers are likely – and encouraged – to hang around for more. And you certainly will want to. The wine, as expected for a place with familial ties to Ale Wino, is a key component of their offer, and here you’ll find around 150 bottles and thirty by the glass. But really, forget them. Instead, saddle up to the circular bar and get personal with a cocktail list that stands chin-to-chin with the best in town. At PLN 39 a pop they’re
also among the most expensive, but created to this standard you’re unlikely to give a hoot. Our faves: Brother Scoby (homemade kombucha, bergamot and lemongrass and ginger gin) and the Hazelnut Fashion (bourbon, cedar nuts, Capuchin balm): whichever you choose, it’s quite a finish to an extraordinary experience.
Final Word
Schooled under the brilliant Sebastian Wełpa at Ale Wino, head chef Daniel Uliczny has already proven himself as one of the
finest upcoming talents in the country and for that reason alone you really must visit. Yet for all of that, Forty is about more than just the food. And it’s about more than the drinks and the beautiful design. That the waiters appear so emotively connected to the project in itself says much. And it’s through these unsung foot soldiers one senses the mood, vibe and passion on which Forty thrives. A sanctuary from the complete s**t we’ve all been through over the last few months, it’s a place to escape and feel good about the world.
W B J JULY 2020
69
EVENTS
Warsaw Business Journal relives the most important recent business and industry events
TECHNOLOGY IN A NEW NORMALITY The last MIT Sloan Management Review Polska conference was held recently. Polish and world-famous experts in the field of digital transformation met on a virtual stage. The event was a response to the current challenges and problems of Polish businesses, which can be successfully solved with the support of technology and appropriate tools. The opening speech was given by Dr Witold Jankowski, head of ICAN Institute. In his presentation he spoke about how the real digital transformation differs from the simulated transformation, he warned against ad hoc measures that can only aggravate the crisis in a company. The sum of shocks – supply and production – has led to a recession, but one has to remember that a positive aspect can be found in every crisis. This is the chance of digital acceleration. A host of specialists got to share the stage. Aleksander Jarosz, director at Simon Kucher & Partners, talked about the use of technology for flexible budget management and agile pricing. According to Jarosz, companies in the new normality will have to be more agile and the cooperation between the IT department and other departments will be key. The post-Covid era will be the time when company silos must disappear. Monika Ferreira, managing partner and strategic advisor at I’GS In Good Strategy, talked about the scalability of franchise models. In her presentation, she emphasized the importance of technology in the process of model scalability. Thanks to modern solutions, it is easier to transfer various processes regardless of the scale of the company and the type of business. Ryszard Hordyński, director of strategy and communication at Huawei Polska, talked about the benefits for businesses resulting from the implementation of the 5G network. During
the presentation, he mentioned strategic possibilities, including fuller use of the Internet of Things. In Hordyński's opinion, the 5G network can be a real breakthrough that will significantly develop Polish businesses. Later in the conference, Dr Anna Topol, CTO of the global IBM Research THINKLab, joined the users from New York. She focused on the possibilities pandemic time can bring paradoxically. She emphasized that it is during crises that innovative solutions appear and companies changing the business landscape are born. Antoni Pomykała, digital transformation manager, and digital and cloud services country lead at T-Systems Polska, talked about permanent changes brought about by the epidemic and related isolation. He showed how much the perspective of remote work changed and, more generally, the issue of business meetings. What used to be a sensation, e.g. virtual recruitment, is now standard. Pomykała noticed, however, that the conferences of the future will be hybrid solutions, i.e., they will be partly offline and partly online. A special moment of the conference was the expert discussion that was moderated by Andrzej Jacaszek, managing director of the ICAN Institute. Guests included Dr hab Piotr Wachowiak, SGH vice-rector and professor, Rafał Kozłowski, VP and CFO of Asseco Poland, Witold Wiliński, CEO of GPW Tech. The topic was the development of the IT industry in the face of macroeconomic changes caused by Covid-19. All the panelists gathered agreed that the main, lasting effect of the coronavirus would be the dynamic acceleration of technology development, and technology companies as well as those digitally mature can benefit from these difficult circumstances.
upcoming events 4th Pan European Credit Management Congress in Qubus Hotel in Kraków on August 26-27, 2020 During economic turbulences, liquidity management and trade receivables, management in particular is a key aspect of the secure functioning of any enterprise. The 4th Pan European Credit Congress, scheduled to happen in Kraków on August 26-27, will give attendees a lot of opportunities to exchange experiences and gain competencies in this key area of their organizations. The event is brought to you by the Polish Institute of Credit Management (PICM) and the Federation of European Credit Management Associations (FECMA). For more, visit www.congress.fecma.eu/home
70
JULY 2020 W B J
10th Polish Real Estate Forum (Forum Rynku Nieruchomości) in Sheraton Sopot Hotel on August 24-25, 2020 An overview of the residential and commercial market after the first wave of the coronavirus epidemic. How to survive, who will survive and who will benefit from the changes. The first substantive “un-Zoomed” meeting of the Polish real estate community! August 24-25, Sheraton Sopot Hotel. For more, visit www.biznesowi.pl/konferencje/forumrynku-nieruchomosci/
ADVERTORIAL
an interior photo. an important moment or detail. good light, colors, interesting composition. FOR US, it is a different story every time. We are curious to
find out who created the interior that we visit and why. A spa salon, barbershop, restaurant, hotel or an atelier of a wellknown artist. Their owners implement their plans for the future, nurture their passion or fulfill their dreams. We enclose their stories in frames. We help them dress in the most beautiful shots and show them to the world. We are an intimate team but we do not reject the possibility of working in locations not associated with intimacy: inspiring office spaces, cultural facilities in Warsaw, city squares and parks, behind which stand wonderful and often extraordinary stories of people visiting them. The city inspires us, gives us new ideas constantly. We are very lucky to meet people who entrust their stories to us. If you are the owner or host of an interesting interior, planning communication activities or looking for a partner – we invite you to a delicious coffee anywhere in our beloved Warsaw, to discuss. The story entrusted to us by you can come to life as an interior design session (as it is or stylized), but we are open to any format, which meets your communication needs, be it a/an: • portrait session • company/corporate session • product session • open-air session (buildings, architecture, outside public areas)
For more information, contact: Małgorzata Stankiewicz yellowdotstudio@yellowdotstudio.pl +48 532 392 525
Frozen ad infinitum?
72
JULY 2020 W B J
ALTHOUGH THE AVID FILM BUFF in me who enjoys binge-watching animated movies would like to take a sharp guess at the next odyssey of siblings Elsa and Anna in the third installment of the musical fantasy Frozen, to keep up with the current times I’m going to stick to writing about the partially unfrozen economy. And before I go any further, I must unashamedly admit that I was never a straight-A student of economics. If, however, for a minuscule fraction of a second the headline misled you to believe that this column could provide you with a sneak peek into the possible adventures of the sisters until you spotted the seemingly innocuous question mark, then my sincere apologies for dashing your hopes. To understand the term “freeze” better, I didn’t have to check any erudite books or ask an economist. While, among others, countries went into lockdown, companies laid off staff and salaries got slashed, I lived the “freeze.” My routine changed. I began failing to run regularly. I read less. An unseen force clipped the wings of the social butterfly that I used to be. I experienced a few sporadic bouts of writer’s block. I was forced to accept a panoply of changes at work – some imposed and others reluctantly embraced. Everything around me seemed to shrink bar my pot belly. But that merits a separate column if not a novella. So there’s that! And then, even as the coronavirus death toll hit over 500,000, markets started opening up, restrictions were relaxed or lifted, flights resumed, masks got shunned, among other things. Keeping the economy shut wasn’t a sustainable option. A news report in May informed that the lockdown continuity could add 20,000 additional deaths by suicide on top of the estimated 48,000 Americans who already die by suicide each year. And another media organization reported that roughly 265 million people around the world could face starvation by the end of the year. “Hunger will kill us instead of the coronavirus,” an Indian was quoted as saying by a well-known newspaper. There are at least a few questions I’m yet to find answers to. Will world and industry leaders say so far and no further at any point? Will we try to find a balance between deaths and debts, and check if the middle ground offsets both? Will we live in a more just society and an environment-friendly world once the threat has subsided? The economy will not remain closed forever but with heightened levels of paranoia will some of us be forced to live in fear of the virulent virus forever? - SD
SHUTTERSTOCK
LAST WORD