WBJ #47 2011

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Since 1994 . Poland’s only business weekly in English

VOLUME 17, NUMBER 47 • NOV 28 – DEC 4, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

A new flavor COURTESY OF MARIA PA¸KA

Reagan in Warsaw

A statue of former US President Ronald Reagan was unveiled in the capital last week 4

Undeterred by the country’s harsh winters, several producers are trying their hands at making wine in Poland 12-13

REAL ESTATE

SHUTTERSTOCK

Lokale Immobilia

• Special GRI issue • UBS skyscraper • Polish commercial market 15-19

In this issue

Russia’s missile threat

Tax hikes coming

Dmitry Medvedev has said Russia will deploy missiles on the Polish border if it doesn’t receive US guarantees over the missile defense 3, 11 shield in Europe

Searching for billions to balance the budget, Donald Tusk’s government plans to increase taxes on minerals, fuel and 5 cigarettes

Corruption at the top

Shale gas rush

Five people were detained last week in an investigation into corruption that took place during the privatization of state assets

Could shale gas prove a boon for the country’s poorer eastern regions?

SHUTTERSTOCK

News . . . . . . . . . . . . . . . . . . . . . . .2-4 Business . . . . . . . . . . . . . . . . . . . .5-7 Energy . . . . . . . . . . . . . . . . . . . . . . .8 Finance & Economics . . . . . . . . . . .9 Law . . . . . . . . . . . . . . . . . . . . . . . . .10 Opinion & Analysis . . . . . . . . . . . .11 Cover Story . . . . . . . . . . . . . . .12-13 Interview . . . . . . . . . . . . . . . . . . . .14 Lokale Immobilia . . . . . . . . . .15-19 Markets . . . . . . . . . . . . . . . . . . . . .20 The List . . . . . . . . . . . . . . . . . . . . . .21 Lifestyle . . . . . . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

NEWS

www.wbj.pl

z∏.7.4 billion

Hungary’s finances

Hungary has become the latest country in Europe to receive a thumbs-down from Moody’s, which downgraded the country’s credit rating to junk status last Thursday. Moody’s cut the rating on Hungary’s government bonds from Baa3 to Ba1, keeping its outlook negative and saying the bonds now possess “speculative characteristics.” The markets wasted no time in reacting, with Poland feeling the pain too. Yields on Hungarian five-year bonds rose to 9.3 percent, up 60 basis points, while yields on 10-year bonds were around

9.4 percent, up 45 basis points. The z∏oty, which had been losing value even before Moody’s decision (despite an earlier intervention by the Polish central bank), tanked even further on the news. At the end of Friday, the z∏oty was trading at z∏.3.43 to the dollar and z∏.4.54 to the euro, its lowest point against those two currencies since June 2009. Many analysts fear continuous bad news coming from the euro zone coupled with problems in Hungary could continue to weaken the z∏oty. The ratings agency said its main reason for downgrading

Hungary was “the uncertainty surrounding the Hungarian government’s ability to meet its targets on fiscal consolidation and public-sector debt reduction over the medium term, in view of higher funding costs and the low-growth environment.” Hungary was the first member of the European Union to benefit from an international bailout during the financial crisis, having been rescued from default in 2008, with a €20 billion loan from the International Monetary Fund, the World Bank and the EU. Then, in 2010, Hungarian Prime Minister Viktor Orban said his country was “a world champion in cutting spending,” and wouldn’t need the IMF’s help again. But in the face of rising borrowing costs, Mr Orban has now had to eat his words and yield to market pressure by announcing that Budapest was prepared to negotiate a new agreement with the IMF and the European Union. Ratings agency Standard & Poor’s has already said it will wait on its next decision concerning Hungary’s credit rating until the outcome of those negotiations is known. Remi Adekoya

was the loss in value incurred by copper giant KGHM after Prime Minister Donald Tusk announced the planned new tax on minerals. That’s about $2.2 billion.

100 billion is the number of cubic meters of gas that Poland could potentially produce per year by 2030, according to the latest estimates by Polish firm Orlen. Currently, domestic gas production amounts to 4 billion cubic meters.

1.5% is the predicted decrease in Poland’s advertising market during 2012. This is despite the boost the industry should receive from the country’s hosting of the Euro 2012 soccer championships in June next year.

15 million will be the number of metric tons of coal imported into Poland in 2011, a one-million-ton increase on 2010, according to predictions made by Polish coal exporting company W´glokoks.

Quote of the Week “My last years in PiS seemed to me like a penal colony combined with a pre-school” Former Law and Justice member Jacek Kurski, describing the atmosphere in the party, ruled with an iron fist by leader Jaros∏aw Kaczyƒski

Figures in focus Heavy numbers Total percentage of obese men and women (over 18), selected EU27 countries, 2008 or 2009

On WBJ.pl

Men

Poland admonishes Belarus for arrest Poland’s Ministry of Foreign Affairs said in a statement that it “unequivocally deprecates the unjustified and harsh prison sentence of four and a half years along with the seizure of property” imposed on Ales Belyatsky, head of the Viasna Human Rights Center, by Belarus. “Poland and the European Union appeal to Belarus to immediately release Ales Belyatsky and other political prisoners as a precondition for the European Union’s dialogue with the Republic of Belarus,” reads the statement. ●

*Data for persons aged 16+ **Data for 2009/10

Women

25 20 15 10 5

a tvi La

ry ng a Hu

nd Po la

ny *

nc e

rm a Ge

DATELINE

Fra

Tough battles ahead On the eve of the United Nations climate change conference in Durban, South Africa, the European Environment Agency revealed Poland is the bloc’s second biggest air polluter. Meanwhile, the EU says it is committed to sign an ambitious and legally binding treaty on climate action, but the US and China are not. WBJ.pl takes a look at what can be expected from the summit.

Ro m

Belarusian President Alexander Lukashenko is reportedly willing to replace his country’s currency with the Russian ruble. He has already been rewarded with cheaper gas supplies from Russia for his signing of an agreement towards deepening integration with Moscow. Mr Lukashenko recently joined the presidents of Russia and Kazakhstan in signing a declaration for the establishment of a Eurasian Economic Union (EUG). After the signing Mr Lukashenko told Russian television that Belarus is interested in taking part in a hypothetical EUG union with the Russian ruble as its currency.

Numbers in the News

Ita

Russian ruble for Belarus?

IN THE SPOTLIGHT

Jaros∏aw Kaczyƒski, the leader of Poland’s main opposition party, Law and Justice, told journalists last Friday that his party would soon submit an amendment to the penal code calling for the reinstatement of the death penalty. “We would like to reinstate the death penalty for exceptionally cruel murders,” Mr Kaczyƒski said. He added that there is no law in the EU which forbids the death penalty. Poland has signed and ratified Protocol 6 of the European Convention on Human Rights which forbids the death penalty in times of peace.

NOV 28 – DEC 4, 2011

Death penalty in Poland?

SHUTTERSTOCK

Source: Eurostat

November/December NOVEMBER 28 POLISH RESIDENTIAL MARKET Event: This annual meeting of the residential real estate industry aims to provide independent and reliable information about Poland’s market. Location: Novotel Centrum Hotel, Warsaw konferencje.nowyadres.pl

accaglobal.com/cfoeuropeansummit

EUROPAPROPERTY OCCUPIER FORUM

Event: This real estate conference ends with a networking evening and the CEE Green Building Awards presentation. Location: Marriott Hotel, Warsaw europaproperty.com

DECEMBER 1 CFO EUROPEAN SUMMIT Event: This event will bring together top CFOs and financial executives from across the region to exchange views, discuss key industry concerns and share best practices as they contend with the increasing challenges facing their organizations. Location: Westin Hotel, Warsaw

NEW EUROPE GRI

Event: This event offers a forum where senior players meet each other and build friendships in a setting devoid of selling pressure. Location: Hyatt Regency mygri.com/neweurope

1-2 30

Company index Accor ..........................................18 Info-TV-FM ..................................6 Polska Grupa Energetyczna ....8, 8

CONSUMER FINANCE CONGRESS

Event: An inspiring and interesting debate about the challenges and problems of the consumer finance market. Location: WSE, Warsaw gab.com.pl

Alior Bank ....................................9 Jones Lang LaSalle ............18, 19 Polska Telefonia Cyfrowa ............6 Amica Wronki ............................19 Joshoclock ................................23

Bank Millennium........................10 NieruchomoÊci ..........................16 Bank Zachodni WBK....................9 KBC Securities ............................6

WIND ENERGY FORUM

Event: This event will be dedicated to a discussion on the methodology of a recent assessment of wind farms’ impact on birds and bats. Location: Marriott Hotel few2011.psew.pl

POLISH INVESTFORUM

Event: This meeting is the third edition of the Polish Investforum. Location: Sheraton Hotel roadshowpolska.pl

Centertel ......................................6 Project Syndicate ......................11

Best Western..............................18 KGHM ....................................2, 20 Prologis ......................................16 Biedecki......................................10 Lehman Brothers ......................17 PwC ..............................................7 BNM ..........................................17 Lion’s House ..............................18 PZU ............................................10 BNP Paribas ................................9 Lot ................................................3 Raiffeisen Bank............................7 BZ WBK ........................................9 Louvre ........................................18 Retail Provider ..........................15 CBRE ..........................................18 Marathon Oil ............................8, 8 Chevron ........................................8 McKinsey & Company ................7 Ruch ..........................................16 Citigroup ......................................7 Moody ....................................2, 20 RWE Polska..................................3 Colliers International ..........16, 17 Neinver Polska ..........................17 Schmidt Hammer Cushman & Wakefield ........17, 18 Opus Trust....................................7

Polska Telefonia Komórkowa

Atrium European Real Estate ..15 Kancelaria Brochocki

Danone ......................................16 Orlen ............................................2

Lassen Architects ......................15 SDU Technika Z∏àczeniowa ......16

Droidhen ....................................23 P4..................................................6 Everest Group ..............................7 Peter Nielsen & Partners ......6,10

STRATFOR ..................................11

Exxon Mobil ..................................8 PGE ..............................................8 ThyssenKrupp Energostal ........16 Fitch............................................20 PGNiG ......................................8, 8 TVP ..............................................6 Fortis ..........................................15 Philips Lighting Poland ............19 UBS ............................................15 Ghelamco ..................................17 PKN Orlen ................................8, 8

Vantage Development ................17

Globe Trade Centre....................17 PKO BP ......................................10 Goodman Group ........................19 PKP ............................................15 Grupo Lar ..................................16 PKS ............................................15

W´glokoks ....................................2 X-Trade Brokers

H&M ..........................................16 PMR ............................................19 Dom Maklerski SA ................9, 20 HP ................................................7 Polkomtel ....................................6 Zeptolab ....................................23

NEWS

NOV 28 – DEC 4, 2011

www.wbj.pl

Missile shield

Russia once again threatens to deploy missiles on Polish border Moscow wants legal guarantees that a USbacked missile shield in Europe will not be directed against Russia

COURTESY OF KREMLIN.RU

Russian President Dmitry Medvedev has said that Moscow will deploy missiles in the Kaliningrad oblast, which borders Poland, to target the planned US-backed missile defense shield in Europe unless it receives legal guarantees that the shield will not be aimed at Russia. The US says it is building a missile defense system in countries throughout Europe, including Poland, to protect itself and its allies against ballistic missile threats from Iran. President Medvedev stated in a television broadcast last Wednesday that if the US did not provide solid guarantees that the shield would not be aimed at Russia, Moscow would deploy “modern offen-

deployment plans for Europe.” He added, however, that Washington would continue “to work with Russia to define the parameters of possible cooperation.” Russia fears that the deterrence potential of its nuclear arsenal could be blunted by the shield. “Legislators in some countries openly state that the whole system is against Russia,” said Mr Medvedev. Russia has been particularly vocal in its opposition to the missile interceptors that Romania and Poland have agreed to host from 2015 and 2018 respectively, and has in the past threatened to site missiles in Kaliningrad. “The European missile defense program is already underway and work on it is, regrettably, moving rapidly in Poland, Turkey, Romania, and Spain. We find ourselves facing a fait accompli,” said the Russian president. “There is still time to reach

President Medvedev wants Russia to be able to “take out” the US missile defense system sive weapons systems in the west and south of the country, ensuring our ability to take out any part of the US missile defense system in Europe. One step in this process will be to deploy Iskander [ballistic] missiles in

the Kaliningrad region.” US and NATO partners have so far refused to comply with Moscow’s demands. A spokesperson for the US National Security Council told the AFP that “we will not in any way limit or change our

an understanding,” Mr Medvedev said, emphasizing that Russia has the political will to do so.

‘Very disappointing’ NATO Secretary General Anders Fogh Rasmussen said the suggestion that missiles could be deployed in areas neighboring the alliance’s territory was “very disappointing” and “reminiscent of the past.” “NATO’s missile defense system … is designed to defend against threats emanating from outside Europe and is not designed to alter the balance of deterrence,” he said. Mr Medvedev also threatened to quit the New START nuclear arms reduction pact, which it signed recently with the US. The threats come days before Russian parliamentary elections, planned for December 4. Alice Trudelle

Corruption

Former state officials charged with bribe-taking, money laundering Five people have been detained in Katowice in connection with an investigation into bribe-taking and money laundering that allegedly took place during the privatizations of Lot Polish Airlines and energy company Stoen (now RWE Polska). Millions of z∏oty were reportedly involved. Gromos∏aw C., the former chief of Urzàd Ochrony Paƒstwa (Office for State Protection), a now-defunct state intelligence agency, was arrested in his Warsaw apartment last Tuesday in connection

with the investigation. Under Polish law, only the first name and the first letter of the surname of a suspected criminal may be written out in full in an article appearing in the press. Four others were also arrested, including persons who worked for or advised the Ministries of Treasury and Finance. The accused were taken to Katowice’s Appellate Prosecutor’s Office, where they are facing charges of corruption and money laundering. Gromos∏aw C. was charged last week with jointly taking a €1.4 million bribe with other public officials in connection with the privatization of Stoen, court spokesperson Leszek Go∏awski told local media. About $1 million in bribe

money, meanwhile, is alleged to have changed hands during the privatization of Lot. Certain companies interested in the privatization of both firms reportedly offered bribe money during the respective privatization processes. Rzeczpospolita reported that investigators found that bribes were indeed given in the final purchase of Stoen and Lot. The investigation has been ongoing for several years, but newly discovered evidence has allowed prosecutors to launch proceedings. The breakthrough was made thanks to evidence given by a Swiss banker. A Swiss bank has also sent a Warsaw prosecutors’ office a selection of bank statements that relate to the invesGareth Price tigation.

Five people have been charged with corruption

Markets losing trust in German bonds? After weeks of panic over the financial situations of Greece and Italy, a German government bond auction caused further anxiety in the markets last week after attracting weak investor demand. The German government was able to sell only €3.6 bil-

lion of the €6 billion in 10-year bonds it offered at auction. They were sold for an average yield of 1.98 percent. Some interpreted the low demand as a signal of decreasing investor appetite for what, up until now, were considered the safest euro-zone bonds.

Interest rates on the country’s 10-year bonds rose sharply after the auction, to 2.18 percent. The German bond auction sent shockwaves through markets as investors, reeling from a spate of bad news out of Europe over the last few

Kubica to miss F1 start Polish racing driver Robert Kubica has announced that he will not recover in time to race at the start of the 2012 Formula 1 season. Kubica suffered horrific injuries in a crash in February this year when a rally car he was driving veered off the road at high speed and smashed into a barrier. It was expected that Poland’s only F1 driver would be fit enough to take the wheel for his Renault team at the Australian Grand Prix on March 18 2012, but Mr Kubica has now decided to announce publicly that this will be impossible.

Wajda to begin Wa∏´sa movie Acclaimed Polish film director Andrzej Wajda will begin shooting a film about Nobel Peace Prize winner and former leader of the Solidarity trade union Lech Wa∏´sa in Gdaƒsk on December 1. “This will be the most difficult movie I have made in my life,” the Oscar-winning director said at a press conference on Thursday. The director said that documentary footage of the strikes, which took place at the Gdaƒsk shipyard, as well as Mr Wa∏´sa’s negotiations with communist authorities would be woven in to the film, which is planned for release in autumn 2012.

The Polish eagle returns

SHUTERSTOCK

The former head of a Polish intelligence agency has been arrested as part of the investigation

months, initially interpreted it as a sign that the crisis had reached the core of the euro zone. However, after the initial shock, most analysts seem to agree that it’s still too early to say whether the mood has now turned against German bonds

and whether the country’s yield rates will continue to rise. Some argue that with all the gloomy news emerging about the immediate future of the European economy, rates on German bonds should go lower as investors search for safe Remi Adekoya returns.

The Polish Football Association (PZPN) has bowed to public pressure and decided to reinstate the white eagle as the emblem on the shirts of Poland’s national soccer team. Earlier this month the PZPN had announced that the eagle, Poland’s national emblem, would be replaced by the federation’s own symbol, a decision which led to widespread criticism from fans and politicians. The new shirts, which feature an eagle in the center of the shirt, are expected to be ready for the team’s friendly match against Turkey on December 16. ●

NEWS

www.wbj.pl

NOV 28 – DEC 4, 2011

The Solidarity movement

US-Polish relations

Lech Wa∏´sa slammed in wife’s autobiography

Reagan statue unveiled in Warsaw Lech Wa∏´sa did the honors and recalled Mr Reagan’s role in the fall of communism

EAST NEWS

Danuta Wa∏´sa, the wife of Nobel Peace Prize winner and former Solidarity leader Lech Wa∏´sa, released her tell-all autobiography “Dreams and Secrets” last week, shedding light on the private life behind Poland’s first post-communist leader. The 550-page book recounts Ms Wa∏´sa’s role as The Wa∏´sa’s home in the 1980s was “complete chaos,” the wife of the trade union according to Ms Wa∏´sa activist and former president, while also revealing details of politicians, journalists and nurse, I had no time to do anyher loneliness during some of lunatics pouring into our apart- thing else,” she said. In the book, she also critithe most significant moments ment from dawn until late at night,” she writes. It was “com- cizes her husband for not conin modern Polish history. The 62-year-old, who was plete chaos instead of a normal sulting her on major decisions in his life, including his choice Poland’s first lady from 1990 home,” she added. Ms Wa∏´sa recounts how to run for the presidency in to 1995, tells how she struggled to hold together her she was expected to deal with 1990. In an interview with the home life and bring up eight all domestic chores, including children while her husband cooking for the family and any Polish edition of Newsweek was at the forefront of the other visitors who came to her magazine, Mr Wa∏´sa reacted anti-communist Solidarity home, a task which she says by saying, “My wife has told no eventually led to a breakdown. lies, but you have to put everymovement. “I was a mother, a teacher, thing into context.” “We had crowds of labor David Ingham,Veronika Joy union members, advisors, a cook, a cleaning lady, a

Former Polish President and Solidarity leader Lech Wa∏´sa unveiled a statue of late US President Ronald Reagan in Warsaw last week. The 3.5 meter bronze statue, located on Al. Ujazdowskie, opposite the US Embassy, depicts the historical moment when Mr Reagan stood at a podium at Berlin’s Brandenburg Gate in 1987 and implored to then-General Secretary of the Communist Party of the Soviet Union Mikhail Gorbachev: “Mr Gorbachev, tear down this wall.” In Poland, Mr Reagan is revered by many as one of the greatest leaders of the 20th century because of his hard-line stance against the Soviet Union and his vigorous support for democracy in Europe. “I wonder whether today’s Poland, Europe and the world would look the same without President Reagan,” Mr Wa∏´sa said at the unveiling of the statue. “As a participant in those events, I must say that it’s inconceivable.” In his 1981 Christmas address Mr Reagan spoke

In a letter to Poland, US President Barack Obama said, “President Reagan had a gift for inspiring hope in people facing difficult circumstances. He helped restore a sense of optimism in America during a period of economic and global challenges, and did the same for the Polish people through his unflinching support for the Solidarity movement.” Mr Reagan, who served as US president for two terms between 1981-1989, died in 2004 at the age of 93. David Ingham

COURTESY OF MARIA PA¸KA

Poland’s former first lady recounts her struggles during her husband’s leadership of the Solidarity movement

about the situation in Poland and in particular about the persecution of the oppositional Solidarity trade union by the Soviet-imposed communist government. “The target of this depression [repression] is the Solidarity movement, but in attacking Solidarity its enemies attack an entire people. ... By persecuting Solidarity the Polish government wages war against its own people. I urge the Polish government and its allies to consider the consequences of their actions,” he said.

Ronald Reagan is admired by many in Poland

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BUSINESS

NOV 28 – DEC 4, 2011

www.wbj.pl

Industry

Advertising market to shrink

Polish copper- and silvermining giant KGHM saw its stock drop by more than 20 percent last week after Prime Minister Donald Tusk proposed a new tax on minerals in an address setting out his government’s priorities for the current parliamentary term. KGHM already pays around z∏.90 million in taxes per year, according to the Financial Times, with the tax on copper set at z∏.3.1 per metric ton.

“Although the exact level of the new tax is still unknown, it will definitely be higher than the current level,” said Piotr ¸opaciuk, head of Polish equity research at Erste Securities Polska. “To the investors, this means a loss of income, and that explains the drop in stock market value.” A spokesperson for the finance ministry told WBJ that it “does not have a finalized project, but Minister of Finance Jacek Rostowski estimates the new tax will bring in about z∏.2 billion.” Regardless of the exact increase, it is unlikely that

COURTESY OF KGHM

Proposed mineral tax hits copper giant hard Miner KGHM’s stock price plunged last week on fears a new tax will erase value

KGHM’s stock fell by more than 20 percent after the news broke KGHM’s share price will return to levels seen prior to

Mr Tusk’s announcement, according to Artur Iwaƒski,

an analyst at the PKO Dom Maklerski brokerage. “The stock market value of KGHM will return to where it was prior to the Prime Minister’s address only if either the finance ministry abandons the plan to raise taxes or the price of copper increases by 30 percent – but these two scenarios are very unlikely,” Mr Iwaƒski said. Mr ¸opaciuk added that he predicts the economic crisis will cause a decrease in the price of copper in 2012 and this will also have a negative effect on the value of KGHM stock.

According to forecasts from media house Equinox Polska, the value of the Polish advertising market is set to fall by 1.5% in 2012, despite the upcoming Euro 2012 soccer championships. Analysts expect the market to drop to z∏.7.1 billion in 2012, from this year’s z∏.7.21 billion. According to Maciej Malec, managing director at Equinox Polska, the trend of cutting expenditure on advertising in large companies and the deepening economic crisis in Europe and in Poland will lead to “significant decreases in advertising expenditures.”

Izabela Depczyk

Tax increase

Tax on tobacco and fuel set to increase Prime Minister Donald Tusk’s new government has put forth proposals which could see price rises on both fuel and cigarettes. The government has made the decision in an attempt to raise approximately z∏.2.45 billion for the 2012 budget. The proposals involve increases to excise tax on both fuel and tobacco, which would come into effect on January 1, 2012. It is expected the proposed increase to tax on fuel could bring in z∏.2.2 billion. Urszula CieÊlak, an analyst at fuel-market consulting firm Reflex said that any increase in gas prices would come to less

than z∏.0.19 per liter. She added that fuel companies would, at least initially, absorb part of the cost. Ms CieÊlak said she wasn’t surprised by the government’s plans. “Under the existing law, which takes effect January 1, 2012, Poland is obliged to comply with a new EU minimum taxation on diesel fuel,” which she said will increase from €302 per 1,000 liters in 2011, to €330 in 2012. She also added that the tax increase results from the changes in the EUR/PLN exchange rate. The government also predicts the proposed 4 percent tax increase on tobacco could add another z∏.245 million to the government’s coffers, but only if sales drop no less than 2.5 percent. Joanna Grabowska, a PR

representative for Imperial Tobacco Polska, one of the largest tobacco companies in Poland, said in a press release that the company was “firmly opposed” to the proposed tax increase on tobacco products, saying it will have “severe consequences for the tobacco market.” The company is concerned that the rise in taxes will increase trafficking of illegal tobacco, thereby reducing revenue for the state as well as Polish tobacco farmers. “The level of taxation of tobacco smoking in Poland is already very high compared to EU requirements,” the company said, adding that it, “is extremely concerned that the value of the illicit market in tobacco products is increasing.”

Already, “the aggregate losses in the last four years have amounted to about z∏.9

EU warns Poland

billion,” Ms Grabowska claimed in a press release. Ella Pa∏ka

SHUTTERSTOCK

The government aims to raise z∏.2.45 billion for next year’s budget through the tax hike

The proposed tax on fuel could bring in z∏.2.2 billion

The European Union has sent a warning to countries which in its opinion may not meet the common fiscal criteria for 2012. Poland was among the five countries which received the warning last week. European officials worry that Poland’s ballooning national debt could mean it won’t be able to fulfill the criteria. This is despite a raft of planned reforms to the Polish tax and social security system that were announced by Prime Minister Donald Tusk recently to help cut the deficit. ●

BUSINESS

www.wbj.pl

Market regulation

Media patronage

Poland’s four major telecoms fined z∏.113 million

COURTESY OF WIKIMEDIA COMMONS

The regulator’s investigation found the firms colluded against mobile-TV services provider Info-TV-FM Poland’s anti-monopoly regulator, UOKiK, has fined Poland’s four largest telecom firms a total of z∏.113 million after concluding that they restricted competition in Poland’s market for digital TV services (DVBH) for mobile phones. UOKiK found that the companies colluded against Info-TV-FM, which provides DVB-H services, after the consortium they had formed failed to win a tender to provide the services. The companies are accused of conspiring to restrict Info-TV-FM’s business activities and of publicly questioning the legitimacy of the company’s offers on various websites. Of the total amount, P4 (operator of the Play network) was fined z∏.10.7 million, Polkomtel (Plus) was fined z∏.33.4 million, Polska Telefonia Cyfrowa (T-Mobile) z∏.34 million and Polska Telefonia Komórkowa Centertel (Or-

NOV 28 – DEC 4, 2011

Telekomunikacja Polska was fined z∏.35 million ange) z∏.35 million. In a press statement UOKiK representative Ma∏gorzata Cieloch said the four parties had entered into an “unlawful agreement” that “lasted for over two and a half years and ceased the development of the DVB-H wholesale television market. Additionally, consumers lost the opportunity to enjoy mobile TV services on the phone.” Piotr Janik, an analyst from KBC Securities, said that UOKiK’s decision was expected. He added that for Polska Telefonia Komórkowa Centertel, which operates as a subsidiary of incumbent telecom Telekomunikacja Polska, “the

market reaction was neutral. The stock price did not react, because given the scale of profits, a fine of z∏.35 million is negligible.” Katarzyna Meller, a PR representative for Polkomtel, said in a statement that the company disputed UOKiK’s decision. “Polkomtel did not participate in any such agreement,” she said, adding that the company will appeal the decision. Wojciech Jabczyƒski, a spokesperson for Telekomunikacja Polska, said that the company did not participate in any “conspiracy,” saying it has always made business decisions independently.

‘Ambassadors of Sport’ awarded at second Warsaw Olympic Evening gala The event’s aim is to integrate the world of sport and business Polish foundation Stamm Sport Promotion held its second Warsaw Olympic Evening gala, the aim of which is to integrate the world of sport and business by lobbying for young talent and to encourage businesspeople to invest in the foundation’s sport projects. During the event awards for the Ambassador of Sport were handed out to the people who have been supporting the foundation’s initiative. W∏odzimierz Szaranowicz, the manager of TVP Sport, received the award in the “Media” category. Andrzej KraÊnicki, the chairman of the Polish Olympic Committee, received the award in the category “Sport Activist,” Andrzej Supron, a Polish Olympic wrestler, received the award in the category “Athlete” and Marek Goliszewski, chairman of the Business Center Club, received the award in the “Business” category. Almost 250 people filled out the room which was provided by Mr Goliszewski. The evening was hosted by Przemys∏aw Babiarz, a journalist and sports commentator for Poland’s public television station TVP, as

well as by Mr Supron. The event included a concert of Pawe∏ Stasiak with the Papa D band, and a 100kg cake from the Polish confectionery company Marta Grycan. There was also an auction of objects offered by sports stars, and a exposition of artworks by the famous, Oscar-winning Polish film director, Andrzej Wajda. According to organizers, the friendly atmosphere created a great opportunity for networking. ●

Legal News

Ella Pa∏ka

Contact: Miros∏aw Stefanik ms@pnplaw.pl

Insurers to pay lease costs for substitute vehicles

Municipalities responsible for waste

Pursuant to the resolution adopted by the Supreme Court on November 17, 2011, insurance companies are now obliged to cover justified and economically reasonable expenses for the lease of a substitute vehicle in cases involving damage or destruction of an individual’s vehicle. In the Supreme Court’s opinion, in a situation where a private individual’s vehicle has been damaged and the vehicle was not being used for a business activity, the insurance company should cover the costs of leasing a replacement vehicle. The insurance company’s liability is not dependent on whether the insured party is able or not to use public transport. Thus, even if the insured party was, after the accident, able to use public transport, they may still be entitled to a refund of costs incurred for leasing a substitute vehicle provided that the expenses were justified by the circumstances. Further reasons for the Supreme Court resolution will be known after the justification is published.

From January 1, 2012, new provisions under the act on keeping municipalities clean become binding. The amendments are important as they delegate the full responsibility for waste management to local authorities. This means it is the municipalities who will now be responsible for reducing the amount of garbage deposited at waste disposal sites and for organizing the system of selective waste collection for inhabitants. Municipalities will choose the companies which will take care of waste management through tenders. They will also collect the relevant fees from inhabitants, from which they will finance further waste-management activities. Those municipalities which fail to reach the prescribed levels of recycling for a given year will be forced to pay penalties.

St. Nicholas Day packages for employees exempt from tax St. Nicholas Day (December 6th) gift packages are exempt from personal income tax if they have been financed from the employer’s social benefits fund and if they are meant for the employees. For such a release to be applicable the value of the package may not exceed z∏.380 per tax year.

Employment contract for definite term Pursuant to the resolution adopted by the Labor Chamber of the Supreme Court on November 17, 2011, any employee whose fixed-term contract was terminated by the employer with notice is only entitled to compensation if the parties had not previously agreed on the possibility of termination with notice. The compensation will be attainable if the time by the end of which the contract was to continue has already passed or if reinstating the said employee to work would be inadvisable due to the shortness of the period left until the expiry of that term. ●

BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE

BUSINESS

NOV 28 – DEC 4, 2011

www.wbj.pl

Business services

Tough times spell opportunity for Polish business services sector Business leaders say Poland has what it takes to lure increasingly sophisticated business service investments, but it has to lay the groundwork first “Crisis? What crisis?” asked Marek Grodziƒski, vice president of BPO at Capgemini Poland and vice president of the board at the Association of Business Service Leaders in Poland (ABSL), in a recent report, pointing out that the Polish business services sector has grown impressively over the last two years. According to Everest Group research, the business services market in Poland has

grown between 10 and 11 percent annually since 2008, reaching a total value of $1.5 billion in 2010. This could rise to $1.7 billion by the end of 2011, the firm says.

Booming business “I think we need to learn from what happened in 2008-2009 when the last crisis hit,” said Jacek Levernes, vice president of HP global business services for Europe, Middle East &

At your service Poland's global services market (in $ billions) 2.0

1.70* *Top end of forecast

1.5

1.52 1.32

1.22

1.0

0.5

$ bln

2008

2009

2010

2011 Source: Everest Group

Africa, and president of the management board of ABSL. As the crisis put pressure on sales and revenue growth, companies started to adjust their cost structures, he explained. “That’s why we saw a wave of investments in the business services sector, which we are still benefiting from today,” he said. ABSL estimates that between 2008 and 2011 employment almost doubled in the sector, growing by an average of 22 percent annually, from 46,500 to a projected 75,500 jobs by the end of this year. Mr Levernes said that growth over the next few years could be similarly strong, saying he knows of 10 to 15 projects whose investors are currently looking at Poland as a potential investment destination. “Unless this becomes a huge depression, which I don’t think it will, then we will see another wave of investments and I think that will speed up growth to 100,000 jobs in the sector,” he said. As for his own company’s plans, however, Mr Levernes said he is not sure if HP will open a new center in Poland any time soon, although the idea has been discussed recently.

A changing mix The possibility that some of the most basic services used by companies in the West, such as IT and BPO, may move further offshore could also prove to be an advantage for Poland, said Mr Levernes. “Poland will never win a global competition in terms of the lowest cost. But Poland can top the list in terms of the best value provider, and I think we will see many more of these more complex investments in the future,” he said. By transitioning from simple transactions and administrative processes to more complex knowledge-based, decision-support and analytic types of services, the business service sector could gain longterm stability, believes Mr Levernes. “It’s in Poland’s best interest to build capacity to take on more complex types of services and centers, because those are very tough to find and build, but also very tough to change compared to basic services, which are easy to shift,” he said. The Everest Group, which is advising investors to consider Poland for higher-order engineering services and R&D support, notes that the

trend has already started. One example is Citigroup’s planned R&D center in ¸ódê, which will employ researchers, banking experts, system architects, software programmers and business analysts.

The right marketing Examples of more complex services range from finance, HR, procurement, marketing, legal, and R&D, to medical services and even film production. But if Poland can’t market itself “none of this is going to work,” warned Mr Levernes. Poland is getting some recognition, with the Everest Group recently upgrading the country to its elite group of “maturing locations” for service investments, along with Brazil, China, India and the Philippines. But many people, including in Poland, still don’t realize Poland is number one in Europe and number five globally,” said Mr Levernes. “I think Poland can be much better at marketing itself.” And if Poland manages to do that, opportunities to bring in more advanced businesses will flourish, he said. Alice Trudelle

Business

Polish SMEs must expand their horizons For Poland’s dynamic economic growth to continue, the country’s small and mediumsized firms need to become more active in foreign markets It’s essential for Poland’s small and medium-sized businesses to begin to venture more into markets abroad if the country is to continue its strong economic growth as living standards rise, experts said last week at a conference dedicated to encouraging the foreign expansion of Polish SMEs. There are about 3.9 million registered SMEs in Poland, of which 1.8 million are considered “active” according to the Central Statistical Office. SMEs make up 99.9 percent of all economic entities registered in Poland and employ about 6.6 million people, 70 percent of the active labor force. The experts were unanimous in their agreement that getting these engines of Poland’s economy to expand

their reach into foreign markets is essential to the country’s growth. Witold Or∏owski, chief economist at PwC and a former presidential economic adviser, said Poland is able to draw foreign investors “largely due to its low labor costs,” but that when Poles start to earn wages closer to their Western European counterparts, the country would become less attractive. “The only chance for future growth is for Polish SMEs to expand into other markets,” he said, adding that the Polish market is too small to create big firms. “So if we want to create our own strong brands, we either expand or we will be left behind.”

Held back In 2010, Polish firms invested €4.1 billion in foreign countries, bringing the total value of Polish investments abroad to €29.1 billion, according to figures from the National Bank of Poland. However, most of these were invest-

ments made by large firms, not SMEs, the experts said. Several barriers are holding Poland’s small and mediumsized firms back, including limited access to capital, poor knowledge of other markets and cultural differences, the experts said. Agnieszka Rzepecka, the CEO of Opus Trust, a fiduciary services firm, said that Polish entrepreneurs can be divided into three groups when it comes to expanding their firms abroad: “those who actively attempt to enter foreign markets, those who are interested but hesitant to commit themselves and those who have no interest whatsoever in venturing out of Poland.” “The last group is very poorly-educated about the possibilities in other markets and approach talk of entering foreign markets highly suspiciously as if expecting some foul play,” she added. Bo˝ena Lubliƒska-Kasprzak, the head of the statefunded Polish Agency for Enterprise Development

(PARP) said that language barriers can also play a role.

Partner needed The experts also agreed that a key prerequisite to entering a foreign market was to have a local partner on the ground who understands the realities and complexities of the particular country’s market. Agencies such as PARP and the commercial sections

of Polish embassies and consulates offer assistance with this, and the Polish Information and Foreign Investment agency (PAIiIZ) this month announced plans to implement a pilot program supporting Polish investors in six countries: the Czech Republic, France, Germany, Russia, Ukraine and the UK. Remi Adekoya

Raiffeisen Bank record profits From January to the end of September, Raiffeisen Bank Polska made a net profit of z∏.247 million, an increase of 42% y/y. The result was a record for the company, Parkiet wrote. At the end of September, the total value of loans given by the bank amounted to z∏.18.54 billion – a 19.9% increase on the same period a year earlier. The value of deposits grew even more strongly (26.8%), reaching z∏.18.59 billion.

Polish banking growth potential Banking sectors in Eastern Europe are expected to grow faster than those in Western Europe, Rados∏aw Przyby∏, a partner at McKinsey & Company, told Parkiet. According to a report by the company, the banking sectors in Poland and Russia have the highest growth potential, given that they are the region’s largest economies and their banking markets are still far from saturated. The banking sectors in both countries also have large amounts of capital and liquidity.

Rostowski third-best finance minister Polish Finance Minister Jacek Rostowski has been ranked the European Union’s thirdbest financial minister by the Financial Times. Mr Rostowski was beaten to the top two places by Sweden’s Anders Borg and Germany’s Wolfgang Schäuble, who were ranked first and second respectively.

Bouncing back?

Poles buying German apartments

Polish direct investments abroad (total in € bln)

7.0

7 6 5

3.9

3.7

4.1

2.7 3

1.9 2 1 € bln

2005

2006

2007

2008

2009

2010

Source: National Bank of Poland

Polish citizens are purchasing increasing amounts of property in Eastern Germany, reported Dziennik Gazeta Prawna. In certain locations, Poles account for as much as 50% of the local population. That’s because apartments there are often priced up to 50% lower than in Poland. ●

ENERGY

www.wbj.pl

NOV 28 – DEC 4, 2011

Lubelskie voivodship

In shale gas gold rush, a view from Poland’s east WBJ sits down with Mariusz Sagan, director of the department of strategy and investor services for the city of Lublin, to discuss how shale gas could transform the Lubelskie region Situated on Poland’s eastern border, the Lubelskie voivodship has been through some hard times in recent years. Known for having high unemployment rates and one of the lowest per capita GDPs in the country, the region has benefited less from Poland’s recent economic transformation than others located closer to Western Europe. But this might just be about to change. The region is sitting on what experts say could be one of the biggest reserves of shale gas in Poland. Companies including some of the world’s biggest oil firms have started prospecting, with some already striking lucky. According to the Environment Ministry, there are currently eight firms that own a total of 24 concessions to search for shale gas in the Lubelskie region. These include Exxon Mobil, Chevron, and Marathon Oil , as well as Polish giants PGNiG and PKN Orlen. Mariusz Sagan, director of the department of strategy and investors services for the city of Lublin, says he hopes that

the development of shale gas will provide an opportunity for dynamic economic growth in eastern Poland. Alice Trudelle: Has Lublin City Hall been promoting the region for exploration? Mariusz Sagan: Not in a direct way. We haven’t conducted any promotional campaigns as such, nor have we spoken to shale gas producers. However, we targeted the support services companies to encourage their settlement in Lublin. In that way we aim to create a favorable environment for the actual shale gas producers in the region. How would you say local communities have reacted to the prospect of shale-gas exploration and production? Have there been protests? So far, we haven’t seen protests from the local communities. Their attitude is positive and optimistic. People hope that shale gas production will provide jobs and improve their living standards. They see it more as an opportunity than a threat.

Are people in the city or region already profiting form shale gas exploration? Let me emphasize that shale gas exploration is not foreseen in the city of Lublin, and so the municipality does not take profit from the drilling process. As far as local communities are concerned, they will benefit more when the gas resources are located. For the time being, it is individual property owners who benefit from the research through lending their land to companies. They can also claim compensation for land damage. Do you think local communities could benefit from shale gas production in Lubelskie? Yes, in many ways, although direct benefits will not be significant according to the binding legislation. First of all, shale gas producers are obliged to pay taxes on hydrocarbon exploration. This influences the communal budget in a direct way and allows for more investment in local infrastructure. With the significant financial influx, existing plans to boost local infrastructure in the region could finally be realized. Secondly, a new company could increase the communal revenues through the growth of [tax] inflows and thus

Looking for shale gas in Lubelskie

improve social support and living standards in the region. Thirdly, it could activate the communities in the towns and regions located close to a well, since a new company translates into new jobs. Finally, it could attract more visitors and new investors to Lubelskie through the continued presence of the region in the media.

Concessions given by the Environment Ministry in the Lubelskie voivodship for shale gas prospection

Cuadrilla Polska ExxonMobil

Orlen Upstream

Do you foresee an increase in the number of jobs linked with the shale gas industry? Yes, certainly. Up to 100,000 new jobs are anticipated in Poland thanks to the shale gas industry. Those will be connected with the gas extraction process. However, they will also entail the support services related to the industry, construction works connected with the infrastructure development and general facilities such as hotels, restaurants and other retail services resulting from the economic growth. In the future, if gas resources prove sufficient for extraction on an industrial scale, large energy projects could be considered, such as the construction of gas power plants or chemical industry plants based on cheaper gas supply.

Marathon Oil Poland

Dart Energy Poland

Lublin Orlen Upstream

ExxonMobil

Silurian DPV Service

Chevron Polska Energy Resources

Chevron Polska ExxonMobil

PGNiG

Concession for shale gas prospection voivodship border Source: Environment Ministry

shale gas? Our relationship remains good. There is an exchange of information going on. We also put forward our suggestions regarding new legislation favorable for local governments. In my humble opinion, the central governments should implement laws and regulations which would

How would you describe City Hall’s relationship with the central government with regards to

enable the local governments of the regions where shale gas is produced to set up special-purpose entities. In that way local governments would become coowners of the gas-extracting companies operating in their region and could influence the gas producers. Alice Trudelle

Poland’s first nuclear plant Shale gas reserves to be built on Baltic coast PGNiG estimates vast shale of PGE’s management board, said that 92 locations were considered before the choice was narrowed down to the three locations on the Baltic coastline. “The final decision on the site will be made in 2013,” said Jacek Cichosz, the deputy head of PGE’s nuclear unit. Environmental and geological

criteria, as well as access to water, which is crucial for cooling elements of the plant’s system, are among the criteria set to be used to select the final location. A tender to pick a technology supplier is expected to be launched by the end of the year. Izabela Depczyk

Be∏chatów tops list of biggest EU polluters According to the European Environment Agency’s (EEA) new report “Revealing the costs of air pollution from industrial facilities in Europe,” PGE’s Elektrownia Be∏chatów power plant in Rogowiec produced 29.5 million metric tons of CO2 in 2009, and caused air pollution with a total economic cost of up to €2.5 billion. This means the Be∏chatów plant, Europe’s largest conventional power plant, created more pollution than any other plant in 2009. Two other Polish power plants made the

EEA’s top 20 list: PGE Elektrownia Turów (11.7 million metric tons of CO2, up to €1.3 billion worth of damage, 10th place) and Enea’s Kozienice power plant (10.9 million metric tons of CO2, up to €1.2 billion worth of damage, 13th place). In terms of country rankings, however, German facilities are responsible for about a fifth of the cost of industrial air pollution in Europe (€34 billion) which makes Poland’s neighbor the number-one polluter in Europe. Poland came in second, with €19 bil-

lion in damage done. The EEA estimates the total economic cost of damage caused by emissions from industrial facilities in 2009 at “at least” €102-169 billion. A small number of industrial facilities cause the majority of damage to both the region’s citizens and its environment, with 50 percent of the total damage costs coming from just 2 percent of the 2,000 facilities registered in the European Pollutant Release and Transfer Register. Alice Trudelle

gas reserves at its Polish sites The energy company also plans to start drilling at a new concession from 2012 Polish gas monopolist PGNiG may have up to 900 billion cubic meters (bcm) of shale gas at its 15 licensed concessions in Poland, Przemys∏aw Krogulec, the company’s shale gas project manager, said last week. He added that this was an optimistic assessment, based on information from the US Energy Information Administration (EIA). The EIA said in April 2011 that Poland could have as much as 5.3 trillion cubic meters of technically recoverable shale gas, more than any other country in Europe. Despite PGNiG’s announcement, ¸ukasz Cioch, general director of the Centre for Energy Studies at Tischner European University, is more cautious about the company’s shale gas predictions. He told WBJ that in PGNiG’s announcement, the word ‘may’ (have 900 bcm of shale gas) is crucial for the entire shale gas

debate in Poland at this early stage. “There is quite a lot of pressure from multiple stakeholders, including the media, hence speculation and wishful thinking precede fact-based assessment,” Mr Cioch said. “It is certainly too early to speak in [terms of] re-defining geopolitical or economic [realities],” he added. PGNiG is now moving ahead with plans to drill at Tomaszów Lubelski, a new concession in the Lubelskie voivodship, at the beginning of next year, to add to the two operational concessions it

already has at Markowola, also in Lubelskie, and Lubocin, in northern Poland. The company has said production of shale gas at the latter site could start in 2014. A spokesperson for PGNiG said the firm could spend more than z∏.200 million between 2012-2013 on developing its wells in Lubocin. The company is also planning to drill up to five test wells, mainly in the north of Poland, in the search for shale gas reserves. “We are planning on intensifying our work,” the spokesperson said. Izabela Depczyk

COURTESY OF KPRM

State-owned energy company Polska Grupa Energetyczna (PGE) announced last Friday that it had picked three cities – ˚arnowiec, Choczewo and Gàski, all on the Baltic coast – as the three potential locations for the construction of the country’s first nuclear power plant. Tomasz Zadroga, president

A flare burns at PGNiG’s Lubocin concession

FINANCE & ECONOMICS

NOV 28 – DEC 4, 2011

Economic indicators

Weak z∏oty dampens effect of low euro-zone demand Anemic euro-zone demand is hitting Polish industry, but the weak z∏oty is softening the blow

Poland’s producer-price inflation (PPI), often seen as a barometer for future inflation readings, grew to 8.5 percent y/y in October, mainly due to

Gareth Price

Slipping back? Industrial production y/y growth in percentage 12 10 8 6 4 2

er tob Oc

pte

y2 Jul

Jun

y2 Ma

20 ril

11 Ma

rch

20 ry rua

20 ry ua

Jan

Feb

cem

01 r2

be vem

tob

Inflating fears? Poland's producer-price inflation (PPI) y/y growth in percentage 10

No ve

tob

er 2

mb 0 e De r 201 cem 0 be r2 01 0 Jan ua ry Feb 2011 rua ry 20 Ma 11 rch 20 11 Ap ril 20 11 Ma y2 01 1 Jun e2 01 1 Jul y2 01 1 Au gu st 20 Se 1 pte mb 1 er 20 1 Oc tob 1 er 20 11

Source: Central Statistical Office

NBP intervenes, to minimal effect The National Bank of Poland stepped in for the fourth time since September to defend the depreciating z∏oty. At first, the exchange rate to the euro fell from z∏.4.48 to z∏.4.44. But the effect was short-lived, as a prevailing grim mood in the euro zone, along with a failed German 10-year bond auction, pushed the Polish currency down, sending the PLN/EUR cross to z∏.4.5. The scope of intervention may have been in the area of €150 million to €200 million, a large amount for the market, Bartosz Gruszczyƒski, a currency dealer at Alior Bank told Wyborcza.biz. The frequent intervention of the NBP in the currency market is difficult to under-

the weaker z∏oty. The consensus prediction had seen PPI at 8.3 percent for October, following 8.4 percent the month before. Largely because of the expected weakening of the economy, analysts don’t see October’s PPI growth as part of a long-term upward trend that is putting pressure on prices. “In the environment of economic slowdown, the upward trend in PPI should reverse soon and the scope of transmission of high production costs to consumer prices will be limited,” BZ WBK analysts wrote.

Producer prices up

Poland’s industrial output grew year-on-year in October but nevertheless came in lower than expectations as the crisis in the euro zone reduced demand for Polish exports. Industrial output increased by 6.5 percent y/y in October. The reading was below the 7.2 percent predicted in a Bloomberg survey of analysts. In September industrial output grew by an annualized 7.7 percent. Despite the dampening of demand in the euro zone, analysts say the recent weakness of the local currency has helped Polish exporters. “Polish manufacturing seems to continue to benefit from the z∏oty’s depreciation and higher competitiveness of domestic products. Thus, so far, it neutralizes the effect of weaker foreign demand, [but only] to some extent,” Bank Zachodni WBK analysts wrote in a research note. The z∏oty has declined in value by almost 11 percent in H2 this year, increasing the attractiveness of Polish exports. However, BZ WBK’s economists expect industrial output growth to continue slowing due to weakness in the economies of Poland’s main trading partners. “One should expect that in the coming months the deceleration of economic growth abroad will become more visible. Consequently, that will

have a negative impact on Polish manufacturing,” BZ WBK’s analysts wrote. Forecasts for Polish economic growth have been revised downwards on signs that demand from Germany, the country’s biggest trading partner, is shrinking. Poland’s Finance Ministry said in November that its best-case scenario for GDP growth next year is 3.2 percent, down from a previous forecast of 4 percent.

stand, said Przemys∏aw Kwiecieƒ, chief economist at XTB brokerage house, in a market analysis statement. In his view, the central bank should refrain from action until the situation is truly critical, otherwise the market will grow accustomed to its moves. Nevertheless, a report prepared by BNP Paribas suggests that this may not be the end of the NBP’s intervention. In the short term, though, the region’s currencies can expect depreciation. In a comment to the Polish Press Agency, Witold Koziƒski, NBP vice president, suggested that actions targeted against disadvantageous tendencies on the currency market are still quite MO possible.

Core inflation jumps to 2.8 percent The National Bank of Poland reported core inflation (excluding food and fuel prices) for the month of October at 2.8 percent y/y in Poland, much to the surprise of analysts. The general market consensus predicted a range of 2.5 percent to 2.7 percent, closer to the 2.6 percent y/y recorded for September. The central bank also reported that inflation excluding administered prices jumped to 3.9 percent y/y from 3.5 percent y/y the previous month. MO

www.wbj.pl

LAW

www.wbj.pl

Chinese eye Bank Millennium parent

NOV 28 – DEC 4, 2011

Legal View

Establishing a company in 24 hours

According to Portuguese weekly Expresso, three Chinese banks are interested in purchasing a stake in Millennium BCP, the majority shareholder of Polish lender Bank Millennium, reported Gazeta Prawna. The probability of a Chinese investor completing such a deal is reportedly highly likely, although the size of the potential stake was not revealed.

Individual retirement accounts

Pawe∏ Nowak Legal advisor, Peter Nielsen partners

Shameful records One of the maladies which hinder the conduct of business in Poland is the long process of establishing a company. According to the World Bank’s “Doing Business” report, in 2009 it took no less than 32 days to establish a company in Poland. On January 1, 2012 a number of crucial acts will be amended, including the Commercial Companies Code and the law governing the Polish entrepreneurs register. The intention of the legislation is to shorten the length of time it takes to establish a business.

Electronic articles of association

The first Polish financial institutions have been given the green light to offer individual retirement accounts. Poland’s financial regulator has already given the go-ahead for PKO BP Bankowy PTE and PTE PZU to establish such accounts starting in 2012. But these institutions will first have to change their charters to allow them to offer the service to consumers. ●

The amendments will introduce an alternative way of creating and registering a limited liability company. Potential investors will be able to choose between the traditional procedure and an electronic one – the so-called S24. Articles of association of a company established by electronic means will be concluded on the basis of a ready-made draft of the articles. A visit to the notary for the purpose of preparing a notarial deed will no longer be necessary. Instead, investors will be able to fill out a form of the articles and send it

longer need to be certified, since this with an electronic signature. It will not be possible to tamper requirement has not been a success. with the contents of the draft of the The detailed technical issues will be articles. Thus, founders of the compa- settled in the regulations ordinance of ny will have to agree to the provisions the Minister of Justice. The procedure for entering a comof the draft articles, and only choose the admissible variations or supple- pany into the entrepreneurs register ment some of the provisions of the will also take place electronically, while the necessary attacharticles. The detailed ments will also be subdraft of the articles will be provided in “Not even the electronic mitted the same way. Finally, the most the ordinance of the Minister of Justice. method of establishing a crucial stipulation as far as the speed of proWe can already company will save ceedings go is that the assume that the entrepreneurs from a registration court will Minister will probe required to recogpose standard limitnumber of timeeach application ed liability articles of consuming activities” nize for registration within associations for comone day. panies, in which the Thanks to the changes, those setfounders will be able to choose, for example, the amount of capital held ting up a company will be able to pay by the firm or the number of members the initial capital payment within of the management board. After the seven days of the date of entrance of a company has been registered, share- company into the register. Today comholders will be able to make amend- panies are obliged to make the payments, but only through the tradition- ment before the company has been registered. al route. Conclusion of the articles of association under the amendment will Can it really take require that an electronic signature be only 24 hours? supplied to the articles. A significant Of course this does not mean an end change is that the signature will no to all formalities connected with

establishing a company. Within seven days of the registration of a company it will be necessary to submit signatures of members of the management board to the registration court. Thus, the visit to a notary office or a court will still be unavoidable. It should also be remembered that newly created companies also need to register with the statistical and tax offices and also, usually, with ZUS [the Social Insurance Institution]. The management board of the electronically registered company will be obliged to turn to the relevant authorities and perform the formalities in the normal way. Without a doubt, the new method for establishing a company will provide entrepreneurs with an interesting option. Investors who decide to use this course will save some time and money. The only basic pre-condition will be that they will have to agree to the standard provisions of the articles of association. However, not even the electronic method of establishing a company will save entrepreneurs from a number of obligatory written, and time-consuming, activities. This is not to mention the bureaucratic obstacles which await fully registered companies. ●

Legal Forum

A step-by-step guide to the process of terminating an employment contract Katarzyna Zwierz-Wikocka Attorney Undoubtedly, one of the most difficult parts of being an employer is terminating employees’ contracts. All employers hope the people they hire will enjoy a successful period of employment, but sometimes under unexpected circumstances, such as low productivity, a lack of ability, loss of trust, or poor performance, the employer has to make the difficult decision to dismiss an employee. Although the procedure of terminating a contract may seem quite straightforward and the legal requirements relatively well-known, employers can still make mistakes that may result in an appearance in court. So what should employers pay attention to and which mistakes should they avoid in order to lawfully terminate an employment contract for an indefinite period with notice? To answer these questions, the procedure for lawful termination can be described in five simple steps. 1. The first step in the termination

process is to answer a basic, but very important question – can the employee be dismissed? To answer this question in the affirmative the employer should make sure that the employee is not under special protection against dismissal, that he or she is not within four years of retirement, pregnant, on maternity leave or in the process of organizing maternity leave, or that the employee is not a protected member of a trade union. Furthermore, the employer should check that none of the situations where it is impossible to terminate an employment contract are applicable (e.g. if the employee is not in the middle of a period of leave or any other authorized absence from work). 2. The second step is preparing a letter of notice. The notice letter should specify reasons justifying the termination of employment, the length of the notice period, the date on which employment will end and informa-

tion on the employee’s right to appeal to the Labor Court. Furthermore, the notice letter should include the number of unused vacation days due to the employee. The employer may grant leave to the employee during the notice period or pay the employee a cash equivalent for each day of unused leave. It should be emphasized that the reasons for the termination should be specific. This means that the employer needs to provide the employee with clear, legal, and understandable reasons for his or her being fired. A lack of specific, real and justified reasons for termination may incite the employee to sue the employer for wrongful and unjustified dismissal. It is important to note that during a court dispute the employer may not raise other reasons for termination than those included in the notice letter. For this reason it is advisable to include and describe in detail all the reasons for the decision in the notice letter.

3. The next step is a consultation regarding the planned termination with trade unions (if any) who represent the employee. The employer should provide trade unions with a written notification of the intention to terminate a contract with notice, stating the reason for dismissal. Trade unions may state their objections if they consider that the decision is unjustified. 4. The next procedure should be to provide the employee with a letter of notice. During a meeting with the employee, the employer should carefully explain the information in the letter of termination and ensure that the employee understands all the details. The employee should provide a signature and date confirming that they have received the letter of notice. Although termination is not a negotiation process the parties may, during the notice period, decide to change the way the employment

Legal Forum is a paid-for module which gives law firms in Poland an opportunity to discuss and inform readers about important developments in the market. The content is created in consultation with Warsaw Business Journal's editorial staff.

contract in question is being terminated and reach a mutual agreement on termination. However, the employer may withdraw his statement on termination of the employee’s contract with notice only with the consent of the employee. 5. The final step in finalizing the procedure of termination consists of respecting the notice period, paying the employee his or her remuneration during this notice period, granting unused leave or paying a cash equivalent for unused leave to the employee (if any is outstanding) and issuing to the employee a certificate of employment. Observance of these five steps does not guarantee that the employee will not make a claim against the employer due to an unjustified or unlawful termination. It does, however, guarantee that the employer’s actions were consistent with the Labor Code. ●

OPINION & ANALYSIS

NOV 28 – DEC 4, 2011

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Russia’s significant warning R

ussian President Dmitry Medvedev last week ordered his country’s military to prepare to deploy mobile, short-range ballistic missiles to the Russian enclave of Kaliningrad, which borders Poland. Though Russia has threatened to deploy missiles to Kaliningrad in the past, this is the first time it has used this threat since the so-called reset in relations between the US and Russia in 2009. Mr Medvedev’s public announcement on the issue is the latest in a long line of developments which suggest the reset was nothing more than a temporary truce allowing each side to focus on other issues without addressing the countries’ fundamental geopolitical differences. The order was handed down to a missile brigade equipped with the Iskander-M, Russia’s most modern and accurate tactical ballistic missile, with the explicit directive of countering the planned US ballistic missile defense (BMD) shield in Central Europe, Mr Medvedev said. He went on to state that Russia could also base long-range strategic weapons in southern and western Russia, an apparent reference to intermediate-range weapons banned under the Intermediate-Range

Was there a reset?

Nuclear Forces Treaty. Such weapons would be able to strike European targets in minutes. Mr Medvedev also mentioned intercontinental-range delivery systems capable of penetrating the US BMD system. In reality, Russia’s opposition to both the George W Bush administration’s BMD plans for Poland and the

In recent years Russia and the US backed away from their traditional hostile stances towards each other when the US proposed a reset of relations. However, this did not mean that either Washington or Moscow believed relations would be warm; rather, both were buying time in order to take care of other concerns. The United States needed time to wrap up its obligations in Afghanistan and counter a resurgence in Iranian power – and to do this, it needed Russia’s help. Russia, meanwhile, needed time to continue its resurgence into its former Soviet states, by pushing out the encroaching influence from the West. Though Washington is still preoccupied with other parts of the world, Russia has been fairly successful in its goals. The next problem Moscow wants to address is the countries just beyond the former Soviet border in Central Europe and Washington’s intentions to deploy US forces in those countries. Russia has been very forward in telling the US that if it does not agree to let Moscow take part in missile defense in Europe, then Russia will respond by undermining the US’s plans. Since August, Russia and the

“Moscow wants to portray the US’s BMD plans in Europe as destabilizing the nuclear balance” Czech Republic and the current “phased, adaptive approach” actually has nothing to do with BMD. Rather, Moscow wants to portray the US’s BMD plans in Europe as destabilizing the nuclear balance between the two countries in an attempt to block the deployment of US military forces into former Warsaw Pact countries. One angle Russia has pursued has been integration, by which Russia intended to limit the need for US military systems to be located in Central Europe.

United States have been in negotiations about finding a role for Russia in such a program, though Washington has not shown any sign of backing down. STRATFOR sources in Moscow have indicated that the Kremlin believes the United States is dragging out these negotiations in order to keep buying time. The BMD dispute is only one indicator of the ephemeral nature of the reset in relations between Washington and Moscow. On November 22, the US State Department said it would stop providing Russia with data on its military forces in Europe – the Conventional Forces in Europe (CFE) treaty calls for the exchange of this information. Russia suspended its observance of the treaty in 2007, when tensions between the United States and Russia were escalating quickly. The United States said it would not work with Russia on sharing such information until Russia returned to the table to negotiate the CFE treaty. Moreover, the US Senate has stalled a vote on appointing an ambassador to Russia. As a result, Republican senators have said the United States needs to reconsider whether there truly ever was a reset in relations.

Reasserting Soviet dominance Another indicator of Russia moving away from the reset was Mr Medvedev’s pronouncement on November 21 that the Russian military intervention in Georgia was about pushing back against NATO’s intentions to expand to the former Soviet states. Until then, Russia had said the 2008 Russo-Georgian war was about preventing “genocide” in South Ossetia (though it was quietly understood that the war was a signal to the West that Russia was going to reclaim its dominance over its former Soviet sphere in any way it saw fit). Now Moscow has moved even further away by ordering preparations for the most overt deployment of Russian military force since Georgia in 2008. At this time it is still just preparation, but it is meant as a signal to the United States about Russia’s next step. Although Russia has made similar threats in the past, last week’s warning that they could move missiles to Kaliningrad is significant. ● This edited version of “Russia’s latest move to stymie US efforts in Central Europe” is reprinted with permission of STRATFOR. stratfor.com

The economics of strategic containment Sanjaya Baru

their recent summit in Cannes, the G20 shelved, if not buried, the World Trade Organization’s moribund Doha Development Round of multilateral trade negotiations. Crisis-weary Europe and America face a rising tide of protectionism at home, and are trying to find ways to blunt the edge of China’s non-transparent trade competitiveness. Turning his attention from the Atlantic to the Pacific, US President Barack Obama – with his eye, once again, trained on China – has now unveiled a new regional trade initiative. Why was the US unwilling to move forward on the Doha Round, but willing to pursue a regional free-trade agreement?

Better growth The answer lies in the fact that the Trans-Pacific Partnership (TPP), launched by Obama and the governments of eight other Pacific economies – Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam – is not just about trade.

While President Obama chose to stick to the economic factors driving the TPP, US Secretary of State Hillary Clinton, on the eve of the just-concluded Asia Pacific Economic Cooperation gathering in Hawaii, laid out the initiative’s wider strategic context. “The United States will continue to make the case that … [the region] must pursue not just more growth, but better growth,” which “is not merely a matter of economics,” Clinton said. “Openness, freedom, transparency, and fairness have meaning far beyond the business realm,” she continued. “Just as the United States advocates for them in an economic context, we also advocate for them in political and social contexts.” Following up on these remarks, President Obama drew attention to persistent US concern about China’s exchange-rate policy, inadequate protection of intellectual property, and impediments to market access. “For an economy like the United States – where our biggest competitive advantage is our knowledge, our innovation, our patents, our copyrights –

for us not to get the kind of protection we need in a large marketplace like China is not acceptable,” he observed. The TPP initiative should be viewed against this background, and not just in the context of the collapse of the Doha Round.

A three-pronged attack The TPP’s agenda is divided into three categories: core, cross-cutting, and emerging issues. The core agenda is to stitch together a traditional free-trade agreement focused on industrial goods, agriculture, and textiles. The agreement would also have provisions for intellectual-property protection and what are dubbed the social and environmental issues. In short, the TPP’s core agenda will offer the region a “Doha Round-type” agreement that includes the social and environmental agenda that developing economies have been resisting within the WTO. Going beyond the core, the crosscutting issues include investor-friendly regulatory systems and policies that enable “innovative” or “employment-

creating” small and medium-size enterprises to operate freely across borders within the TPP region. Finally, the TPP seeks to bring into the ambit of a trade and investment agreement “new and emerging” issues. These include “trade and investment in innovative products and services, including digital technologies, and ensuring state-owned enterprises compete fairly with private companies and do not distort competition in ways that put US companies and workers at a disadvantage.”

Chinese influence In short, the US has moved to bring together all of the economies in the region that are worried about China’s beggar-thy-neighbor trade and exchange-rate policies. For the US, the eight other TPP countries, with a combined population of 200 million, constitute its fourth-largest export market, behind only China, the European Union, and Japan. If Japan joins, the TPP’s importance would rise dramatically. While the economics of the TPP is

important, the strategic component is even more so. This is the second leg of America’s new “Pacific offensive,” aimed at offering nations in the region an alternative to excessive and rapidly growing dependence on a rising China. The first leg of the offensive was the idea of the “Indo-Pacific” region, which Clinton developed a year ago and followed up this year with an essay called “America’s Pacific Century.” There, she defines the new region of US strategic engagement as “stretching from the Indian subcontinent to the western shores of the Americas.” Extending east from the Indian Ocean and west via the Pacific, the US is creating a new strategic framework for the 21st century. The TPP is just one of the pillars of that new edifice. Sanjaya Baru is Director for GeoEconomics and Strategy, International Institute of Strategic Studies (IISS), and the author of The Strategic Consequences of India’s Economic Performance. Copyright: Project Syndicate, 2011.project-syndicate.org

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COVER STORY

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Szymborska recovering from surgery Polish poet Wis∏awa Szymborska, who received the 1996 Nobel Prize for Literature, is recovering well after surgery, her secretary Micha∏ Rusinek told a press conference last week. Ms Szymborska was awarded the Nobel Prize “for poetry that with ironic precision allows the historical and biological context to come to light in fragments of human reality.”

No fines for illegal vendors Polish law enforcement officials cannot yet fine vendors who illegally conduct trade in prohibited places. Such vendors usually set-up ad hoc shops on city streets without a permit and while the government is looking to crack down on such endeavors, enforcement officials have to wait for it to adopt appropriate regulations. A change to Poland’s criminal code introducing fines was proposed in midSeptember and was recently passed into law, but it has yet to be enforced in practice.

Faster trains When Poland’s new train timetables come into force on December 11, train connections between seven Polish cities are expected to be faster than they are currently. As a result it is hoped that 2011 will see a reversal in the multiyear trend that has seen train connections in Poland becoming less efficient. “This year, PKP Polish State Railways, the company responsible for upgrading and maintaining the tracks, has completed 430 km of railway lines,” said Andrzej Paw∏owski, a member of the board at PKP Polish Railway Lines, reported Rzeczpospolita. ●

NOV 28 – DEC 4, 2011

Poland’s wine industry

Better with age Roberto Galea Winemaking in Poland is a tough business, but enterprising growers are finding ways to produce quality vintages In Poland, a country more famous for its vodka than its vineyards, wine production is a small-scale industry that is still in its infancy. However, despite numerous obstacles, the country’s winemakers are starting to find ways to promote their produce and show that it is possible to produce a quality tipple from Polishgrown grapes. Kraków’s Enoexpo Wine Trade Fair, the latest edition of which took place in late November this year, featured a large number of Polish vintners, many of whom are now producing bottles considered to be of a quality standard. This is a considerable achievement considering the wine industry in Poland only really took off in 2008, after Polish producers were finally allowed to apply for a permit to sell their own wine. However, the industry is still in its infancy, wine critic Wojciech Boƒkowski, who was in attendance at the Kraków fair, told WBJ. “There are only four or five professional wineries around the country that produce wine of an international quality,” he said. “The rest are amateur operations.” Mr Boƒkowski, who presented several Polish wines to a number of foreign winemakers at the fair, added that they were “all very impressed by the quality.”

COURTESY OF MIKE WHITNEY

The Adoria vineyard in Zachowice makes wine from the same type of grapes used in some California wineries ter of a hectare. “There is a potential profit of around z∏.6,000 per year from a quarter of a hectare of land,” said Marek Nowiƒski, the head of the Podkarpackie Winemakers Association, adding that this figure is higher than the potential income from other traditional crops such as beets and cabbage. In spite of the large number of wine makers, who produce a total of around 500 hectoliters per year, only a handful have a license to sell their produce. Mr Boƒkowski estimates there are fewer than 10 who have obtained a license.

Grapes of wealth? The lay of the land There are around 450 wineries scattered throughout Poland, a large number of which are located in the Podkarpackie voivodship, in the country’s south. Nevertheless, wine production facilities can be found as far north as the Baltic coast. The majority of these are small-scale operations, with vineyards sized around a quar-

The majority of Polish winemakers are not farmers, but small-scale entrepreneurs hoping to tap into a growing market, which Mr Nowiƒski said is expanding by around 5 percent annually. Growth is strongly associated with Poles’ changing drinking habits, as they consume fewer hard spirits like vodka, and more wine. The International Wine

and Spirit Research group predicts that annual consumption of wine in Poland will rise to 107.6 million liters by 2016. This would be a 25 percent increase on 2010. But at present the average Pole still only drinks 2.7 liters of wine annually, compared to around 40 liters in France and Italy. “Polish wine is still a kind of a novelty, so [when] consumers take their first step, I am afraid that the majority can be disappointed,” said Grzegorz Jach, marketing director at Centrum Wina, a wine distribution company. “[Polish] producers need to quickly learn and implement efficient practices, enlarge the scale of production and work hard on improving quality. In my opinion this is the way to build a [stronger] image of Polish wine among public opinion, as Austrians achieved over the last 20 years,” he added. According to a recent report by market research firm Euromonitor International, “grape wine sales will benefit

from the expected sophistication and diversification of the model of alcoholic drinks consumption. Poles are traveling more widely, discovering new tastes and new cuisines, and want to replicate these experiences at home, thanks to

enjoying wine drinking. The shift towards grape wine will also be strongly dependent on the purchasing power of Polish consumers.” Poles’ spending power will be key if Polish winemakers are to be successful, because in

Growth areas Poland’s wine-growing regions

Gdańsk Olsztyn

Toruń

Zielona Góra region

North Poland region Warsaw

Zielona Góra

Wrocław

Wisła Banks region

Lower Silesia region Kraków Vineyards Małopolskie region

Podkarpackie region Source: Rzeczpospolita

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NOV 28 – DEC 4, 2011

Opening up a winery Paul Fogo is a senior attorney with Miller, Canfield, W. Babicki, A. Chelchowski & Partners. fogo@pl.millercanfield.com The number of commercial wine producing vineyards in Poland numbers less than 10, but less than 10 years ago the number was zero. Since joining the European Union in 2004 the rules governing the production and sale of wine in Poland have been harmonized with those of the rest of the region, resulting in part in the current growth in the number of vineyards in Poland. This is because owners are now able to sell their wine on the same terms and conditions as other producers throughout the EU.

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Battling with the best

Hybrid varietes of grapes are the most successful at surviving harsh Polish winters view that Polish winemaking is still in its early stages. “This is a new wine region. Wine was produced here in the past, but the people who made the wine were either driven out after World War II or died off 300 years ago, so none of the knowledge remained,” he said.

have “spicy, vegetal and herbaceous” notes. He added that the Pinot Noir produced in Poland is also “very promising.” Andrzej Strzelczyk, the sommelier at Warsaw’s Mamaison Hotel Le Regina, said that Polish wines are

“The shift towards grape wine will also be strongly dependent on the purchasing power of Polish consumers” “Everyone is learning, from how to make wine to what grows well where.” Despite the difficulty in growing warm-weather grapes in Poland, the results are well worth the effort, according to Mr Whitney. “Our 2010 Pinot Noir has black cherries and red fruits notes, our 2011 Riesling has peach, pineapple lemon and lime notes.” Wine critic Mr Boƒkowski said that hybrid wines tend to

“acceptable,” adding that they could be compared to Slovakian or German wines in terms of their high level of acidity and complexity.

A difficult profession Obtaining the permits to make wine and sell it legally is a long and difficult process, with the government offering little or no assistance. Mr Whitney of Adoria Vineyards said that “the government in Warsaw

does not help, but the local government in Wroc∏aw [with which his winery is associated] helped by not getting in the way.” And the reason for the lack of state assistance, according to Renata Kania, a spokesperson for the Ministry of Agriculture, is “Because Poland is a small wine producer” and as a result “it does not provide access to funds from national support programs.” This means that many of Poland’s professional winemakers have to supplement their income from other sources. This goes some way to explaining why many wineries have opened their doors to both local and foreign tourists. But most Polish wine producers share the same dream – to be able to support themselves through wine sales alone. Marcin P∏ochocki, who also runs seminars and a hotel to supplement his income, said “I often tell my wife that we could be the first Polish winemakers to do this full time.” ●

Hybrid grapes Common hybrid grape varieties in Poland Name

Wine

Legal Eye

comparison to many imported wines, Polish bottles are often on the pricey side. The better examples can sell for as much as z∏.50-90 – the same price as a decent Bordeaux. “My wines sell for anything between z∏.48 to z∏.70,” said Polish winemaker Marcin P∏ochocki, whose wines are sold at several shops and top hotels around the country. “I would prefer the price to be as low as possible so that as many people as possible are able to taste my wine.”

One reason why it may seem surprising that Poland produces any wine at all is the harshness of its winters. This makes traditional grape varieties (such as Merlot, Cabernet Sauvignon and Pinot Blanc, which grow in warmer climates such as France, California and Chile) notoriously hard to grow. But local producers have adapted well, using hybrid varieties developed in Germany that can be grown in more temperate climates. One Polish firm that has achieved success using hybrid grapes is Winnica P∏ochockich. The company almost exclusively grows hybrid vines and currently owns active vineyards sized at a combined 2.5 hectares. Its 2010 Blanka vintage, a wine blending Seyval Blanc (54 percent) with other hybrid grapes, won the gold medal at this year’s Enoexpo in Kraków. Owner Marcin P∏ochocki expressed his satisfaction at winning the prestigious award, pointing out that 2010 was not even a particularly good year for Polish wines. “The short, wet autumn did not help the vintage,” he said. However, not all Polish wines are made from hybrid grapes. Mike Whitney, a Californian who runs Adoria Vineyards in Zachowice, makes wine in the same style as those he grew up with, using grapes commonly grown across the Atlantic. His wines include Chardonnay (aged in American oak barrels) and Pinot Noir, while his 2010 vintage also includes a steel-vat-fermented Chardonnay and a Reisling. Mr Whitney reiterated the

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Regent

Rondo

Seyval Blanc

Red

White

Acidity

moderate

low-moderate

moderate-high

Palate

full bodied, Bordeaux style

full-bodied

neutral, slight citrus

Cross

Seibel 5656 x Rayon d'Or

Silvaner x Müller-Thurgau

Zarya Severa x St. Laurent

Setting up shop The production and bottling of wine in Poland is regulated by the “Wine Act.” The production of wine is deemed to be a “regulated activity” within the Act on Freedom of Economic Activity. As such, a wouldbe vineyard owner has to satisfy various administrative requirements in order to produce and sell wine on a commercial scale. To begin with, the entrepreneur will need to register himself as a wine producer with the Ministry of Agriculture. To be recorded on the official list of wine producers, the entrepreneur will need to prove that he or she has satisfied the following requirements: (i) established a written plan of the production process; (ii) designated a person responsible for quality control; (iii) obtained proper planning for a production facility; and (iv) fully constructed the production facility with proper bottling equipment. Once the wine producer is recorded as a producer of wine, they will need to apply again to the Ministry of Agriculture to be recorded on yet another list, this time as a producer of wine specifically made from grapes grown in Poland. In this case the entrepreneur must renew his registration on an annual basis. Additionally, the bottling process will be subject to periodic inspection by “Sanepid,” Poland’s Office of Sanitary Control. But the obligation to register oneself with the Ministry of Agriculture in order

to produce wine only applies if the annual production of wine exceeds 5,000 liters per year. If less than this amount is produced, the owner of a vineyard does not need to register in order to produce wine in Poland.

Labeling requirements Labeling requirements are set forth by EU Directives 2000/13 and 2003/89. Information must include the type of product, a list of ingredients in descending order of weight, the quantity, name and address of bottler/producer and/or importer, country of origin, region of origin, alcohol content, lot identification, allergen information and sugar content (if sparkling wine). Optional information includes the variety of grape and vintage year, provided that at least 85 percent of the grapes were harvested in the same year. A popular misconception is that labeling must be in Polish. While this may have been true in the past, today wine labels may be in any one of the EU’s official languages, with the single exception that allergen information must always be presented in Polish. Allergen information refers to the amount of sulfur dioxide and sulfites, if any, that exceeds 10 mg per liter.

Quality of grapes In order to produce wine, the grapes used must satisfy minimum requirements that apply equally throughout the EU, as established by EU Council Regulation 1234/2007. Moreover, overall wine making standards are set forth by EU Council Regulation 606/2009.

Selling abroad Wine approved for sale in Poland may be sold throughout the EU without any additional obligations, other than possibly providing allergen information on a bottle’s label in the local language. The United States and the EU agreed in 2008 to recognize each others’ winemaking practices. As such, both Poland and the US are required to allow the import of each others’ wine without additional registration obligations. ●

INTERVIEW

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NOV 28 – DEC 4, 2011

Indonesia

Darmansjah Djumala, Indonesia’s ambassador to Poland, talks to WBJ about Indonesia’s role in the G20, his views on the global financial crisis, Indonesia’s approach to fighting terrorism and relations between Indonesia and Poland

Darmansjah Djumala Ewa Boniecka: As a member of the G20, how is your country approaching the present global financial crises? Darmansjah Djumala: As the only Southeast Asian country in the G20, we play the unique role of bridge-builder between the Southeast Asian region and the rest of the world, including the West. Our foreign policy, being based on principles of independence and being active, is well suited to that task. In the G20 we play the role of

bridge-builder in the sense that we represent the voice of Asian developing countries in economic relations with the developed countries of the West. Due to the fact that our economic position is quite strong, that we rank 18th in the world in terms of [nominal] GDP, and our democracy is well established, we can also, if necessary, play the role of political bridge-builder between Asia and the West. While Indonesia is not affected by the present global financial crisis, we look with concern at the situation in the European Union and through the G20 we are always active in trying to find solutions to deal with the crisis. And what are your thoughts on the cause of the present crisis in Europe? From an Indonesian perspective, it seems that the cause of the crisis in the euro zone lies in the bad economic management of particular countries.

Moreover, the roots of the crisis are also more conceptual, by which I mean that there is no integration among the countries between two aspects of the economy: fiscal policy and monetary policy. In Indonesia these aspects are integrated and we have the authority to establish our own monetary and fiscal policy, which must run on different tracks but at the same speed. But if you are a member of euro zone, you only have authority in fiscal policy, not in monetary policy. As the country with the largest Muslim population in the world, how do you see Indonesia’s role in the fight against terrorism from radical Muslim groups? Indonesia is a country with thousands of islands, inhabited by 350 ethnic groups, speaking 5,000 languages and dialects. We are a country of many religions, although 87 percent of the population is Muslim. The [2005] terrorist attack on the island of Bali was carried out by outside groups. We admit that there are small [numbers of] radical Islamic groups in Indonesia. Whenever one of

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A Southeast Asian powerhouse

Jakarta, capital of Indonesia these small groups performs a terrorist activity, they are going to be caught and put on trial. I assure you that Islam does not allow one to kill people. It also condemns violence. Muslims in Indonesia are peaceful and practice moderate Islam. We called it “Islam as a cultural value system, not a political movement.” Related to how to deal with terrorism, the government’s policy is based on four pillars. First we use legal enforcement towards terrorist groups. The second track is the democratization of society and the involvement of Muslims in political activities, including their participation in the establishment of Islamic parties, to give them freedom of choice in demonstrating their aspirations. The third is the promotion of human rights and education of people to increase their respect for other people’s faiths and differences. And the fourth track uses a religiousbased approach. As I told you before, the majority of Muslims in Indonesia are moderate and very tolerant, but they are a silent majority. Now the government is empowering them to be more vocal, so that their voices and aspirations can be heard by the world community. What do you see as the main factors for the development of mutual relations between Poland and Indonesia? We are located very far from one another and our cultures and ways of life are very different, but we share some very important values. We pioneer democracy in our respective regions and both nations have a majority religious group. Poland was a pioneer in promoting democratization in Eastern Europe; likewise Indonesia in Southeast Asia. We can compare those roles and make democratic values a basis for our understanding and cooperation. Our two governments have recently been involved in supporting the processes of democratization in North African countries such as Egypt, Tunisia, and Libya.

How do you view PolishIndonesian economic relations? Our total trade volume stands at about $680 million, with Poland importing around $614 million, and exporting only around $66 million. But these figures still do not represent our potential cooperation. As I mentioned before, there are two main challenges regarding our current economic relations: distance, and the fact that our two markets have only interacted for the last 20 years. So to promote better relations and cooperation in this field, our two governments try to work on two fronts. The first is governmental. This means that our two governments must strongly involve themselves in developing their own mutual relations. The second is business-to-business relations. Last September a delegation of 28 Polish businessmen led by an official from the Ministry of Economy visited Indonesia, and as a result a letter of intent related to mining and energy was signed. Polish businessmen are very interested in investing in the development of wind turbines as an alternative energy source, and cooperating in coal mining in Indonesia. We hope that Poland’s enormous success and expertise in coal mining could have a positive impact on Indonesia’s mining sector. There is also cooperation in the defense industry. Polish defense products can be purchased by Indonesia via an export credit mechanism. Moreover, there is also technology cooperation with regards to certain items, and joint ventures. Other sectors of cooperation between our two countries are textiles, furniture, rubber, and chemical products. Figures showing the level of trade between Indonesia and Poland are not very impressive in comparison, for example, with those for Polish trade with China. How do you see the situation? China has much longer trade relations with Poland, dating back to the period when the

two countries were still under the communist umbrella, while Indonesia developed relations with Poland approximately 20 years ago. Traditionally, Indonesia’s biggest trading partner in Europe is the Netherlands, due to our historical ties, and Germany because of its technological capacity. So in comparison with those countries our economic cooperation and trade with Poland is still at quite an early stage. But it is a big challenge for me as Indonesian ambassador to Poland to invigorate them and I am very optimistic that our mutual trade will grow. How do you view the possibility of developing PolishIndonesian relations in fields such as education, culture and tourism? I acknowledge the importance of the development of mutual human contacts in order to promote understanding and friendship. The Indonesian government is running and financing special programs to introduce our life and culture to Poles. It is provided by the Indonesian Ministry of Education and it is addressed toward Polish students who are interested in studying at our universities for periods of one to two years. Basically, the students would learn the Indonesian language and culture. In total, 243 Polish students have participated in this program. We also have an Indonesian art and culture scholarship, lasting for two months, addressed at providing scholarships for Polish artists. A third program is for Polish mid-career diplomats. It offers training in the Diplomatic Academy of Indonesia, and focuses on diplomacy, international affairs, culture and Asian Affairs, among other things. There is also an opportunity for Polish diplomats and others to participate in an international program for foreign diplomats, where they can learn the Indonesian language. ●

Special GRI issue:

» Polish market overview » Interviews with market players » Analysis of retail, residential, office & hotel sectors

WBJ discussion group: Retail, Resi, Offices, Hotels – what sector is worth looking at? Dec. 1, 10:30, Turkus Room, Hyatt Regency Warsaw

LOKALE IMMOBILIA

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

Developer Atrium European Real Estate has failed to reach an agreement with Fortis for the purchase of Stary Browar, a commercial, cultural and business center in Poznaƒ, local media reported. Atrium says it is not commenting on the reports. Fortis, a development company owned by Gra˝yna Kulczyk, the ex-wife of Polish billionaire Jan Kulczyk, said earlier that it was selling Stary Browar to raise funds to buy an international firm. Media reports say, however, that Ms Kulczyk wanted to sell the property due to her ill health, and that now she has recovered and no longer intends to sell.

Jantar extension opens The Jantar shopping center in S∏upsk, Pomorskie voivodship, has announced the opening of the first phase of the mall’s extension, which comprises 7,000 sqm of retail space. The retail center, which will comprise 46,000 sqm once extension work is finished, is due to have all work completed by the spring of 2012. When it first opened in 2008, the Jantar project housed 22,500 sqm of reatil space. ●

In this issue UBS tower in Warsaw . . . . . . . .15

New skyscraper

UBS plans 188m Warsaw skyscraper to replace Ilmet The architect says the structure will combine a modern style with an historic location Swiss financial services firm UBS has decided to have its 103-meter Ilmet building knocked down and replaced with a new 188-meter tower. UBS says the Ilmet building, located at Rondo ONZ in central Warsaw, is neither tall nor modern enough. The new, 60,000-sqm highrise building is to stand out as a modern landmark “in the Warsaw skyline while at the same time capturing the full potential of the outstanding historic location,” John Lassen, a founding partner of Schmidt Hammer Lassen Architects, the company that designed the new structure, said in a statement. A company representative declined to reveal the cost of the investment. The new building will comprise three connected but individually stepped rectangular volumes, whose heights will increase the further east they are positioned. The structure will also feature an open lobby that will

GRI inteview . . . . . . . . . . . . . . . .16 Polish commercial market . . . .17 Sector analyses . . . . . . . . . . . . .18 Industrial construction . . . . . . .19 New Goodman projects . . . . . .19 Property-related stocks . . . . . .19

The new building will boast 60,000 sqm allow people to pass into and through the building, connecting the plaza and park in front of the structure with the courtyards of the historical tenement houses to its south. The building is designed to be energy efficient, with the architect hoping that it will be able to qualify for sustainabili-

ty certificates. “The modular facade system, with floor-to-ceiling glass elements, provides high levels of transparency as well as full integration of sun shading and light reflection shutters. The sloped rooftops are equipped with photovoltaic cells and elements for harvesting rainwater. The total sustainability

approach is a combination of intelligent building management and minimizing technical installations by using passive elements,” Schmidt Hammer Lassen Architects wrote in a statement. According to the architect’s website, the building’s construction is to take place between 2012 and 2016. UBS

has not revealed when the investment will launch. When contacted by Lokale Immobilia, City Hall was unable to reveal if UBS had already received administrative permits that would allow the demolition of Ilmet and the construction of the new building. Izabela Depczyk

Shopping centers

Retail Provider to build a 45,000 sqm mall in Olsztyn The developer plans to integrate the scheme with the city’s bus and railway transport links

New Olsztyn mall . . . . . . . . . . . .15 Grupo Lar interview . . . . . . . . .16

NOV 28 – DEC 4, 2011, LI 16/47

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Fortis not selling Stary Browar?

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Polish developer Retail Provider plans to build a 45,000-sqm retail center in the city of Olsztyn, northeastern Poland, and to integrate it with the city’s bus

and railway networks. The company was due to discuss zoning plans last week with Piotr Grzymowicz, the mayor of Olsztyn. If the city authorities approve the plans, the developer expects to complete the retail facility by the fourth quarter of 2014. Once completed the building will house approximately 180 stores. Tomasz

Andryszczyk, spokesperson for Retail Provider, said that, “the final budget for the investment is currently being prepared and it should certainly be in the [range of] eight figures.” Retail Provider, which purchased the city’s bus network operator PKS Olsztyn earlier this year in a privatization process, is also in partnership talks with PKP

Olsztyn, the local railway operator. “We are in the process of creating a modern city that combines transit, shopping and entertainment facilities based on the models implemented in Katowice and in Poznaƒ,” Mr Andryszczyk said. The linking of the retail center with the city’s transit systems will make the for-

mer more accessible for inhabitants of the region, the developer says. The mall will also cater to the millions of foreign tourists who visit the city each year, and increase local employment opportunities. The scheme is planned to be located around two kilometers from Olsztyn’s city center. Ella Pa∏ka

Warsaw Business Journal presents Real Estate weekly newsletter • Know about the newest projects before they’re on the market • Keep up to date on the latest tenders and auctions • Learn the latest trends in Poland’s dynamic office, residential and retail sectors • Find out who’s who in Polish real estate To subscribe: e-mail subscribe@wbj.pl or call +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription

Special GRI issue Foksal 18 commercialized Real estate agency Kancelaria Brochocki NieruchomoÊci has finished the commercialization of the Foksal 18 office building in central Warsaw. The main tenant at the facility is H&M which has leased over 2,300 sqm. Other companies which will be present in the project include a leading advertising agency which has taken up 445 sqm. Foksal 18 is a four storey tenement house which has undergone thorough renovation and currently comprises 4,080 sqm of office and retailservice space.

Prologis leases 15,000 sqm Industrial developer Prologis has leased a total of 15,000 sqm of space in its several distribution parks in Upper Silesia to Danone (Prologis Park Chorzów), ThyssenKrupp Energostal (Prologis Park Sosnowiec), ABRA (Prologis Park Dàbrowa) and SDU Technika Z∏àczeniowa (Prologis Park B´dzin II). “Silesia is an essential juncture for all regional and nationwide distribution and we are fortunate to have a significant portfolio to fulfill the distribution space needs of our customers,” said Micha∏ Czarnecki, vice president of leasing and development at Prologis in Poland.

Ruch in three new locations Press distributor Ruch has leased a total of 24,350 sqm of warehouse and office space in modern logistics parks in Warsaw, Mys∏owice, Silesia voivodship, and Modlniczka, Ma∏opolskie voivodship. In the process of negotiating all three transactions the tenant was represented by Colliers International. In Warsaw, Ruch has leased 10,000 sqm of warehouse and 2,000 sqm of office space in Annopol Logistics Park. In Silesia, the company took up 6,500 sqm at Panattoni Park Mys∏owice. ●

LOKALE IMMOBILIA – REAL ESTATE

NOV 28 – DEC 4, 2011

WBJ discussion group: Retail, Resi, Offices, Hotels – what sector is worth looking at? Dec. 1, 10:30, Turkus Room, Hyatt Regency Warsaw

Polish residential market

Stable in the storm Lokale Immobilia speaks to Jorge Pérez de Leza, managing director Europe at Spanish developer Grupo Lar, about the Polish residential market in the context of the European financial crisis Adam Zdrodowski: Could the present economic uncertainty in Europe be a major threat to the residential markets in Poland and Central and Eastern Europe? Jorge Pérez de Leza: The Polish residential market has proven to be quite stable during Europe’s first recession and I expect the same behavior as the second dip comes into force. The residential market fundamentals in Poland are strong and the financial entities are well capitalized, so I do not see a major decline in demand coming. Furthermore, the market offer (in terms of number of apartments) has not outgrown demand like in other CEE markets, showing that the Polish market is mature and is able to adjust with the necessary speed. Other CEE markets are behaving worse and there will be two speeds of recovery, for example markets like Romania and Hungary where the macro economy will recover at a slow pace and the financial system is loaded with overleveraged/overpriced assets, will take a while to come back, whereas markets like the

tainty has just appeared with the new “client protection law,” which immediately affects profitability and also has many implementation details that are still unclear.

Baltic States are already in a (slow) growth mode.

One result of the global economic crisis for Poland was the problems of a number of other Spanish companies which had bought very expensive plots in Warsaw and then failed to develop them. What are the prospects for that land? The inflation in land prices that we suffered in the 2006-2008 period was not only due to Spanish developers, but also due to other international players coming into the market with “deep pockets” and high growth expectations. Many of those developers have exited the market due to their inability to finance the development of new projects. Plots that were financed by banks will sooner or later come back to the market with a price adjustment and will be attractive buys.

Could what is happening in Europe right now present an opportunity for investors in the residential market? The economic uncertainty may help to speed up a market adjustment, in which assets are finally forced to be valued at real market prices. Initially this will mean market stagnation and the death of small developers, but in the long run this is what we need to come back to a realistic market. Do international developers view Poland as a safe market, at least in comparison to some Western European markets? Western European markets are behaving very differently, so a general comparison cannot be made. What I can say is that Poland is viewed as a stable and attractive market with room for growth. As long as financing for developers and for final clients remains available, this market will continue to be attractive. As an international developer I would like to see some administrative procedures to be simplified, and also an interim uncer-

Which cities in Poland and which types of residential projects will be the most attractive in the near future? In general, all markets in Poland are attractive for residential. However, in order to be successful, a local knowledge and local presence are needed. It is not possible to run a project

COURTESY OF GRUPO LAR

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Mr Pérez de Leza does not expect a major decline in demand in Poznaƒ sitting in an office in Warsaw. The general trend of smaller and more affordable apartments is true across the country. Which residential projects are you working on in Poland at the moment and which are still being planned? The focus of Grupo Lar Polonia is currently Warsaw, where we have three projects representing around 800 units on sale or to be launched within the next three months (in Bielany, Mokotów and Tarchomin), and

another 1,000 units under different stages of development. On its Polish website, Grupo Lar says it also has some commercial projects in the pipeline. Can you reveal any details concerning those? It is too early at this stage to reveal the details, but I can say that Grupo Lar is one of the top five shopping center developers and managers in Spain and Mexico, and we are on our way to expanding that knowledge to other markets where we are operating. ●

Real estate in the region

Poland stands out in CEE Henri Alster, chairman of the Global Real Estate Institute (GRI), talks to Lokale Immobilia about the future of the real estate market in CEE and Poland. GRI is hosting New Europe 2011, a real estate conference for investors and developers, in Warsaw on December 1 Ella Pa∏ka: New Europe 2011 was originally scheduled to be held in Budapest this year, but in the end the location was changed to Warsaw. Could you explain why that decision was made? Henri Alster: Poland is the star country of Central Europe and it is increasingly seen by many as the bellwether of Central and Eastern European economies. It is the fastest growing of European economies, save perhaps for Turkey, but with a much sounder financial underpinning. Do you feel there is a renewed focus on CEE because of the crisis in Western Europe? Investment in some CEE

What else can we expect in the next two years as the slowdown begins to affect Poland? Ironically Poland may benefit. As the failure of financial profligacy becomes ever more apparent, it is countries like Poland that may turn out to be the recipients of monies running away from the Mediterranean countries.

countries has resumed for good reason, Poland and the Czech Republic among them. Others are still waiting and the wait may be longer rather than shorter. Do investors still view Poland as a safe haven? No country is safe today, but Poland is one of the few that continues to attract investors’ interest and cash. Which countries in CEE have the best prospects for growth in the upcoming years? It’s the usual suspects: Poland, the Czech Republic, and possibly the Baltics. Russia is vulnerable because of its dependence on high energy prices. Ukrainian Presi-

Which projects are more likely to be put on hold as a result of the crisis, if any? The dearth of bank resources will impact all sectors but will likely impact residential projects more than any, as buyers will need much more equity than in the past.

COURTESY OF GRI

Mr Alster says Poland is the star of the CEE region dent Viktor Yanukovych is isolating Ukraine, managing to offend Russia and the West at the same time – a unique feat. Hungarian Prime Minister Viktor Orbán is chasing foreign investors

away from Hungary. There is no surprise: conservatively run countries that facilitate free private-sector initiative will benefit the most and the future will be more of the same.

How does Poland compare to other CEE countries? And for how long do you believe it will remain competitive? Poland will remain competitive as long as its government continues to respect the maturity of its people and gives them the freedom to be the best they can be. ●

LOKALE IMMOBILIA – REAL ESTATE

NOV 28 – DEC 4, 2011

Special GRI issue

A safe haven in CEE?

Adam Zdrodowski

The Polish commercial property market remains robust in the face of Europe’s economic troubles

rently said to have the best prospects and that in addition the Tri-city area, as well as Katowice, Poznaƒ and ¸ódê are all markets with substantial growth potential.

“Poland definitely stands out in comparison to the other countries in the region. It is a stable market and the latest crisis showed that it is more resilient to macroeconomic turmoil than the rest of the region’s countries due to its large domestic market. Warsaw has the best development

SHUTTERSTOCK

Potential hazards

Key market

WBJ discussion group: Retail, Resi, Offices, Hotels – what sector is worth looking at? Dec. 1, 10:30, Turkus Room, Hyatt Regency Warsaw

Commercial property

The commercial property market in Poland has so far resisted the economic turmoil affecting other parts of Europe, and as a result the segment is now regarded as one of the most attractive for investments in the CEE region. Major commercial developers active in Poland claim the sector warrants stable investment but at the same time they also point to several potential dangers. “The uncertain economic situation is causing a return to investments which generate stable revenues secured by long-term deals, and commercial real estate is certainly one such investment,” said Eli Alroy, president of the supervisory board at developer Globe Trade Centre. He added that there is now plenty of interest in Poland from commercial property market investors.

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Warsaw has the best development prospects when it comes to commercial space, developers say prospects, both when it comes to retail and office space,” Mr Alroy said. John Banka, partner, CEE investment services at Colliers International, confirmed this view when he told Lokale Immobilia that “Poland has remained a key market for investors throughout the financial crisis that began in CEE with the fall of Lehman Brothers in 2008.” He added that despite ongoing economic concerns, Poland – and particularly Warsaw – continues to attract strong interest from institutional and private property investors alike. The development market is also active across all sectors due to good tenant demand. “While overall future growth of the Polish economy – and therefore stability of the property sector – depends in large measure on prospects for the European

economy, Poland has arrived on the European stage as a ‘core’ property market and is likely to remain so into the future,” Mr Banka said. Moreover, according to Jeroen van der Toolen, managing director for CEE at developer Ghelamco, Poland is currently one of the most attractive economic areas in Central and Eastern Europe because of its growth potential and stable economy. Despite the economic uncertainty in the euro zone, the country’s commercial market remains stable from the point of view of developers and tenants alike. This has already been reflected in increased leasing activity in the Polish capital. “Warsaw invariably remains the strongest market in Poland, steadily developing and beating, in terms of its growth dynamics, cities such as

Budapest and Prague which more strongly felt the results of the global economic crisis,” Mr van der Toolen said.

Office market growth He went on to quote Cushman & Wakefield data saying that the volume of leased office space in Warsaw amounted to over 324,000 sqm in the first half of 2011, which was approximately 36 percent more than the same period average for the last five years. “According to forecasts, there will be large demand for office space in the 2013-2014 period,” Mr van der Toolen said. “That Poland is a country which is worth investing in is also testified to by the fact that more and more developers are interested in the country’s regional markets,” he added. He also pointed out that Kraków and Wroc∏aw are cur-

According to Agata Brzeziƒska, leasing director at retail space provider Neinver Polska, key factors which could potentially lead to a renewed slowdown in the Polish commercial market include the decreased willingness of financial institutions to finance developer activity and their increasingly strict requirements towards loanseeking developers, which are meant to minimize banks’ investment risk. The potential decrease in purchasing power, currency exchange risks and rising costs are also factors which have to be taken into consideration. Ms Brzeziƒska noted that developers are still paying for unwise decisions they made in the 2007-2008 period. “The last few years were characterized by caution when it comes to development and this trend will undoubtedly continue in the near future.” Ms Brzeziƒska added that it is well-located projects with the highest potential for securing tenants that will have the greatest chance of being developed. Experienced developers with a thorough know-how, necessary for coming up with the right commercialization strategies, will have a decisive competitive edge. ●

Warsaw apartments 19th-most expensive According to Global Property Guide’s latest survey, Warsaw ranks 19th in Europe in terms of average prices for city center homes sized 120 sqm or more. The average price for such a unit in Warsaw is z∏.15,000 per square meter. Monaco tops the ranking as the most expensive city in Europe, where a square meter of apartment space comes in at a staggering z∏.173,000. London and Paris show prices of z∏.66,800 and z∏.59,000 per square meter, respectively.

Centauris phase II contractor Vantage Development and BNM have selected Kajima as the general contractor of the second phase of their Centauris residential project in Wroc∏aw, Lower Silesia voivodship. The project, which will comprise 109 apartments sized 28-93 sqm, is scheduled for completion at the turn of 2012 and 2013. Centauris is being built in the Krzyki-Borek neighborhood of Wroc∏aw, near the intersection of ul. Âl´˝na and ul. Armii Krajowej. The investment is expected to comprise 13 buildings with a total of some 450 apartments when completed. ●

LOKALE IMMOBILIA – REAL ESTATE

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Special GRI issue

NOV 28 – DEC 4, 2011

WBJ discussion group: Retail, Resi, Offices, Hotels – what sector is worth looking at? Dec. 1, 10:30, Turkus Room, Hyatt Regency Warsaw

Looking at the sector – WBJ asked the experts to explain what they see investment opportunities

Looking at the sectors – WBJ asked the experts to explain where they see investment opportunities

Hotel market Currently Poland offers more than 2,000 officially licensed hotels which provide around 100,000 rooms. Twoand three-star properties dominate the market, with a relatively low number of one- and five- star hotels. In the first half of 2011 two- and three-star facilities accounted for 75 percent of the hotel supply in the Polish hotel market (87 facilities). In this group only two hotels operate under an international brand (Best

Western in Rzeszów and in Osjaków, ¸ódzkie voivodship). The new hotel room supply in 2012 is expected to be mostly focused on three- and four-star hotels, and centered in Warsaw, Wroc∏aw and Kraków. However, smaller cities such as Toruƒ, Suwa∏ki and Bia∏ystok will also see a number of additions. Oneand two-star developments are not likely to take a significant market share but on a positive note, this

group will comprise a substantial number of branded hotels. Ibis and Ibis Budget (Accor) hotels will open in both Warsaw and Kraków; Campanile and Premier Class (Louvre) in Wroc∏aw. This growing share of branded budget hotels in the total hotel room supply shows that the Polish market is reaching maturity. On the investment side, hotel investors are taking a cautious approach to their purchase decisions – as is the case in other property sectors – focusing on well-branded hotels with stable cash-flow and hybrid or lease contracts. The old say-

ing “location, location, location” is still very much applicable. We anticipate that hotels in Warsaw and in prime locations in other cities will continue to attract investor interest. Given the attractiveness of hotel portfolios for institutional investors, Accor/Orbis properties could be a good potential target due to the group’s continuing pursuit of the sale and leaseback, as well as management leaseback, strategies.

The construction of the second subway line is helping to generate significant occupational interest in Wola and the area immediately to the west of Towarowa, with the developments here set to be boosted by immediate access to the new subway station at Rondo Daszyƒskiego. This has already generated investor interest in the new projects currently being delivered there. In addition to this, the new fast-track tram link to the airport will connect numerous office locations in Ochota with the city center

and Warsaw’s Chopin Airport. This will inevitably make these locations more attractive to office tenants. Finally, the new S2 Warsaw and S79 north-south expressways will greatly lessen congestion on the major thoroughfares in the city and give a number of schemes in Ochota and Mokotów greater access and visibility, which is vital to tenants and will ultimately improve the city’s perception in the eyes of investors.

Dorota Malinowska, hospitality consultant, valuation & advisory, Cushman & Wakefield

Office market The resilience that the Polish economy demonstrated during the global financial crisis has compelled many investors to treat the Polish office market seriously, and as a result it is now considered as one of the core European locations for investment after the UK, Germany and France. While Polish regional offices are attractive to an increasing number of investors, the focus for the majority is Warsaw, due to the fact that it has proven to be the most liquid market sector in the entire CEE region and the fact that the occupation rate

there is one of the best in Europe. After Warsaw’s city center, the capital’s Mokotów business district has proven to be the most attractive office location for investors in recent years. This is due to its proximity to the airport and its excellent public transport links. However, infrastructure improvements across Warsaw are not only benefiting Mokotów but also helping promote other office locations such as Wola to the west and Al. Jerozolimskie in the Ochota district, in the southwest of the city.

Sean Doyle, associate director in the capital markets team at CBRE

Residential market There are approximately 50,000 new apartments available for sale in the five largest cities in Poland, of which only 20 percent are ready to be occupied. Many of the unsold but completed units are in projects which were designed during the boom in the real estate market. They are also large, but with only two or three rooms. Among investors buying for rent, these

apartments are rather less popular than small two-room apartments. Nowadays smaller apartments are also easier to resell than big apartments. In Warsaw, we can still see demand for new, quality apartments located close to the largest business centers. However, these projects are also popular among regular investors and are sensitive to the situation in the market.

Investors who can spend more and can wait a bit longer often look for unique opportunities like a new extra floor built on top of an existing building, or luxury apartments in tenement houses that are being renovated, located in the best locations of a particular city. For one thing, such apartments are few in number and despite the market situation there is still strong demand for

them. For another thing, these properties are located in historical buildings which are always appreciated by investors. Last but not least, investing in such an apartment while it is still being built or renovated can get you a nice premium when construction work comes to an end.

mentals but lacking professional asset management, requiring capital expenditures, remodeling, improvements or offering further development potential remain the most attractive. For this particular type of product, competition amongst investors continues to be strong. Interestingly, for the same asset various investors may have different business plans and visions. In addition there is a group of investors who are strongly interested

in acquiring less-sophisticated, singleasset let properties; in this group the food anchor assets are the most sought-after category. More importantly, with the development of high street retail in Poland we would expect more assets from this category to be traded in the future.

Artur Wach, director, Lion’s House

Retail market We believe that the retail sector will remain a very strong investment category in the Polish market in 2012. Positive macroeconomic fundamentals with a particularly strong retail sales growth forecast (cumulatively approximately 20 percent until the end of 2015) give us reason to believe that good shopping centers will continue to perform and attract retailers. Furthermore, new international retailers are confirming their decisions to enter the Polish market or continue

expansion, providing an additional boost to market confidence. The latest market entrants include GAP, Toys “R’’ Us, Jula, Desigual, Bottega Veneta, Loopy’s World, G-Star Raw and Gucci. Within the retail sector, core prime shopping centers remain safe and sustainable investments. However, these are the most expensively priced. For more opportunistic investors seeking higher returns, shopping centers with strong funda-

Agata Seku∏a, director, retail investment CEE, Jones Lang LaSalle

LOKALE IMMOBILIA – REAL ESTATE

NOV 28 – DEC 4, 2011

Construction market

Industrial construction to drive growth

New investments in the power, gas and production sectors are set to give a boost to the industrial construction market in Poland, with the total value of output expected to rise from last year’s z∏.15.3 (€3.8) billion to z∏.27 (€6.7) billion in 2014, according to a recent PMR report. The power sector is expected to be the growth engine for industrial construction in Poland in the next few years, with planned investments including the development of power units at plants in Opole, Kozienice, Jaworzno, Turów, Stalowa Wola, W∏oc∏awek and Ostro∏´ka. Several large schemes in the gas sector are also planned. Moreover, a large number of production plants, most of which are located within special economic zones, are being built or are planned to be built. PMR noted that special economic

zones are expected to see the value of new investment increase this year. In addition, the previous downward trend in the number of building permits granted for industrial structures seems to have been reversed, with H1 2011 having already seen a 2.3 percent year-on-year increase. “We expect that the industrial construction sector will maintain positive growth of several percent in 2012 and 2013 to accelerate strongly in 2014. The upturn will be largely driven by the rapid delivery of the first

contracted power units,” Bart∏omiej Sosna, head construction analyst at PMR and author of the report, said in a statement. This should have a major impact on the Polish construction market in general. “Consequently, the industrial construction sector may reach a value of up to z∏.27 (€6.7) billion by 2014, thus taking the place of road construction as the key engine for the construction market in Poland,” Mr Sosna said.

Goodman to build new warehouse projects in Poznaƒ, ¸ódê areas Industrial developer Goodman Group will build a 30,000sqm warehouse facility for Amica Wronki in Niepruszewo, Wielkopolskie voivodship. The transaction, in which the tenant was represented by Jones Lang LaSalle, is one of the largest deals ever in the warehouse-space market in the Poznaƒ area. “The undertaking which we will carry out with Amica is of large significance to us. This is one of the largest warehouse

transactions concluded in Poland this year, which gives us an opportunity to have a presence in the Poznaƒ market,” B∏a˝ej Ciesielczak, country manager at Goodman, said in a statement. In other news, Goodman announced it would build a warehouse in Pabianice near ¸ódê for lighting equipment producer Philips Lighting Poland. Construction on the scheme has already started, with Philips expected to occu-

py 9,200 sqm of warehouse and 300 sqm of office and staff space at the property. “The warehouse for Philips Lighting at the ¸ódê Logistics Centre is our fifth pre-committed development in Poland this year. This latest development underlies our continued expansion in Poland and we believe the ¸ódê market is another promising market for Goodman,” Mr Ciesielczak said. Adam Zdrodowski

Adam Zdrodowski

Assembly line Structure of the industrial construction market in Poland by major types of construction, 2010

29%

29% Complex constructions on industrial sites Industrial buildings and warehouses 42%

Long-distance pipelines, telecommunication and electricity lines

Source: PMR

Property-related stocks Security

Closing price on Nov 24

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏. mln)

BUDIMEX

69.90

-8.33

64.00

109.20

-30.10

25,530,098

1,784.55

CELTIC

18.00

-2.44

15.55

60.55

N/A

34,068,252

613.23

DOMDEV

34.20

-5.00

23.50

50.80

-18.57

24,560,222

839.96

ECHO

3.22

-5.01

3.22

5.55

-38.90

420,000,000

1,352.40

ELBUDOWA

97.95

0.98

97.00

170.00

-39.16

4,747,608

465.03

ENERGOPLD

2.30

-6.50

2.30

4.10

-36.11

70,972,001

163.24

ERBUD

16.00

-15.79

14.70

61.00

-71.88

12,644,169

202.31

GANT

6.35

-9.29

6.35

17.91

-62.97

20,499,953

130.17

GTC

8.81

-1.01

8.64

24.98

-62.98

219,372,990

1,932.68

HBPOLSKA

0.79

-13.19

0.70

3.20

-73.67

210,558,445

166.34

JWCONSTR

5.41

-10.58

5.40

17.45

-67.80

54,073,280

292.54

LCCORP

0.89

-12.75

0.85

1.69

-43.31

447,558,311

398.33

MARVIPOL

8.16

-11.50

7.22

11.99

-25.95

36,923,400

301.29

MIRBUD

2.12

-8.23

2.10

4.75

-48.29

75,000,000

159.00

MOSTALWAR

20.80

-9.53

19.70

62.95

-66.88

20,000,000

416.00

MOSTALZAB

1.29

-18.35

1.07

3.37

-57.00

149,130,538

192.38

ORCOGROUP

15.79

-0.06

15.50

40.00

-46.47

17,053,866

269.28

PBG

70.25

-11.08

56.05

223.00

-67.48

14,295,000

1,004.22

PLAZACNTR

1.99

-7.87

1.80

5.15

-56.55

297,174,515

591.38

POLAQUA

6.37

-12.38

6.37

20.60

-63.52

27,500,100

175.18

POLIMEXMS

1.36

-6.21

1.23

4.15

-66.83

521,154,076

708.77

POLNORD

15.60

-0.83

11.03

35.89

-55.43

23,798,439

371.26

RANKPROGR

8.70

-5.23

8.64

13.60

-16.75

37,145,050

323.16

ROBYG

1.12

-5.88

1.04

1.58

-41.05

257,390,000

288.28

RONSON

0.92

0.00

0.92

1.58

-38.26

272,360,000

250.57

TRAKCJA

1.28

-15.79

1.28

4.35

-70.23

232,105,480

297.10

ULMA

61.30

-0.08

57.00

88.00

-27.02

5,255,632

322.17

UNIBEP

5.25

0.77

4.47

10.30

-43.85

33,927,184

178.12

WARIMPEX

4.53

0.67

4.41

10.89

-52.81

54,000,000

244.62

ZUE

7.78

-0.26

7.45

14.90

-47.07

22,000,000

171.16

COURTESY OF NBS COMMUNICATIONS

The sector is expected to replace road construction as the key driving force in the industry

www.wbj.pl

The Pabianice warehouse will comprise 9,500 sqm of space and will be occupied by Philips Lighting Poland

MARKETS

www.wbj.pl

NOV 28 – DEC 4, 2011

Stocks report

world stock indices DJIA

NASDAQ

11,257.55 (Nov 23 close)

S&P500

2,460.08 (Nov 23 close)

-5.44% (for the week)

FTSE100

1,161.79 (Nov 23 close)

-6.80% (for the week)

DAX

5,127.60 (Nov 24 close)

-6.07% (for the week)

-5.45% (for the week)

Stocks continue to slide

NIKKEI225 5,428.15 (Nov 24 close)

8,165.18 (Nov 24 close)

-7.21% (for the week)

-3.71% (for the week)

CHANGE: -2.76%

CHANGE: -8.09%

CHANGE: -7.62%

CHANGE: -13.09%

CHANGE: -22.16%

CHANGE: -21.13%

(year to Nov 23)

(year to Nov 24)

52-week high: 12,928.50

52-week high: 2,887.75

52-week high: 1,370.58

52-week high: 6,105.80

52-week high: 7,600.41

52-week high: 10,891.60

52-week low: 10,362.30

52-week low: 2,298.89

52-week low: 1.074.77

52-week low: 4,791.00

52-week low: 4,965.80

52-week low: 8,157.39

Andrew Nawrocki, WBJ market analyst The week of November 2125 proved once again the precarious state of the world economy. Shares on both sides of the Atlantic were hit hard as investors grew increasingly worried that the European debt crisis is slowly taking its toll on the world economy. Monday saw stocks hit six-week lows with markets throughout Europe hit hard. The WIG fell by more than 2.5 percent, with shares in KGHM losing close to 10 percent, and further extending the firm’s losses from the previous week. Continuing their recent rise were bond yields, with yields on Spanish bonds increasing following the election of a new government in the indebted nation. Tuesday saw the IMF announce a new six-month

Major indices WIG

37,607.27 (November 24 close)

WIG20

2,164.88 (November 24 close)

24.11

23.11

22.11

21.11

18.11

17.11

16.11

15.11

14.11

10.11

09.11

08.11

07.11

24.11

23.11

22.11

21.11

18.11

17.11

16.11

15.11

14.11

10.11

2,100

09.11

37,000

08.11

2,180 07.11

2,260

38,000

04.11

39,000

03.11

2,340

02.11

40,000

31.10

2,420

28.10

41,000

27.10

2,500

26.10

42,000

04.11

52-week low: 2,089.84

03.11

Change year to November 24: -21.41%

02.11

52-week low: 36,549.47

31.10

52-week high: 2,932.62

Change year to November 24: -21.07%

28.10

Change for the week: -5.60%

27.10

52-week high: 50,371.74

26.10

Change for the week: -5.50%

Top 5 ATLANTIS FON ELKOP PTI HERMAN

Closing 1.12 0.42 0.36 10.64 0.80

% change (week) 52-week high 103.64 1.92 100.00 0.85 56.52 0.49 20.36 12.00 12.68 1.62

52-week low 0.35 0.15 0.17 6.51 0.71

Top 5 PGE TPSA TVN PEKAO GTC

Closing 20.30 18.00 9.70 135.00 8.81

% change (week) 3.15 2.04 1.25 -0.81 -1.01

52-week high 25.07 19.19 18.53 189.90 25.19

52-week low 15.98 14.30 9.00 115.10 8.56

Bottom 5 BOMI KGHM WIKANA KREZUS MNI

Closing 2.47 126.00 0.45 6.00 1.50

% change (week) -26.27 -24.55 -23.73 -23.57 -19.35

52-week low 2.47 115.40 0.06 2.03 1.46

Bottom 5 KGHM LOTOS PBG GETIN POLIMEXMS

Closing 126.00 25.01 70.25 6.80 1.36

% change (week) -24.55 -13.55 -11.08 -9.33 -6.21

52-week high 200.30 49.50 226.90 15.29 4.18

52-week low 115.40 22.32 53.70 6.22 1.19

52-week high 9.38 200.30 0.77 8.39 3.76

Currency report

Currencies tumble

Other indices sWIG80

8,513.06 (November 24 close)

WIG-Banki

5,254.45 (November 24 close)

24.11

23.11

22.11

21.11

18.11

17.11

16.11

15.11

14.11

10.11

09.11

08.11

07.11

24.11

23.11

22.11

21.11

18.11

17.11

16.11

15.11

14.11

10.11

5,200

09.11

41.0

08.11

5,380 07.11

41.6 04.11

5,560

03.11

42.2

02.11

5,740

31.10

42.8

28.10

5,920

27.10

43.4

26.10

6,100

04.11

52-week low: 4,944.19

03.11

Change year to November 24: -24.53%

02.11

52-week low: 41.56

31.10

52-week high: 7,387.49

Change year to November 24: -34.76%

28.10

Change for the week: -3.89%

27.10

52-week high: 64.07

26.10

Change for the week: -2.68%

44.0

Adam Narczewski, X-Trade Brokers Dom Maklerski SA

24.11

2 23.11

2 22.11

21.11

18.11

17.11

16.11

15.11

14.11

52-week low: 8,483.22

10.11

0 08.11

0 07.11

0 04.11

0 03.11

02.11

31.10

28.10

27.10

26.10

24.11

23.11

22.11

21.11

18.11

17.11

16.11

41.37 (November 24 close)

52-week high: 12,932.00

SOURCE: WSE

NewConnect

15.11

14.11

10.11

8,500

09.11

2,000

08.11

8,660 07.11

2,080

04.11

8,820

03.11

8,980

2,160

02.11

2,240

31.10

9,140

28.10

2,320

27.10

9,300

26.10

2,400

Change year to November 24: -30.50% 3

52-week low: 2,081.49

Change year to November 24: -25.86%

Change for the week: -5.45%

52-week high: 2,987.72

2,081.49 (November 24 close)

09.11

mWIG40 Change for the week: -6.61%

liquidity line to help countries with solid fiscal policies that may be at risk from the euro-zone crisis. Despite this, shares throughout Europe fell further with the WIG closing flat. On Wednesday further decreases occured with the WIG falling 1.7 percent as poor economic data in both China and the US dented sentiment. Not helping the situation was a weak German bond sale, sparking fears that the debt crisis was even beginning to threaten Berlin. Thursday November 24 started well, but gains were trimmed in early afternoon, although the WIG managed to close 0.37 percent up. On Friday stocks returned to the red, with the WIG shedding 0.02 percent. ●

The situation in Europe is far from being resolved, with investors constantly being bombarded with more pessimistic news. The Fitch ratings agency lowered Portugal’s rating last week, while Moody’s downgraded Hungary’s debt to junk on Thursday. The Hungarian downgrade in particular came as a surprise to the market since the previous Friday the government had applied for financial aid from the IMF and the EU. To add more tension, yield premiums on various government bonds kept soaring in Italy and Belgium, making the cost of debt in those countries more expensive. The biggest surprise of the week was the failure of the German 10-year bond auction, where the Bundesbank had to become a buyer of the unsold

bonds. Despite the Thanksgiving holiday in the US on Thursday, volatility was high in the currency market. The EUR/USD dropped from $1.35 all the way to $1.32 and was on the path to reach $1.30. Emerging market currencies were also hit hard. The z∏oty tumbled, despite intervention by the National Bank of Poland. The EUR/PLN climbed all the way to z∏.4.52 while the USD/PLN advanced from z∏.3.30 to z∏.3.41, its highest since June of 2010. That makes it very possible that the central bank will intervene once more, but next time with a larger amount. The Hungarian forint was hit hard following suggestions that the country’s minister of economy, György Matolcsy, could resign. ●

currency rates 4.3937 25.11

SOURCE: NBP

4.3416

4.2735 22.11

4.3086

4.2934 21.11

24.11

4.2654 18.11

0.1067

0.1076 25.11

23.11

PLN-100JPY

24.11

0.1059

0.1064 23.11

22.11

21.11

0.1060 18.11

3.6460

3.6739 25.11

0.10

0.1061

PLN-RUB

0.12

24.11

3.6233 23.11

3.5985 22.11

21.11

3.5812 18.11

5.2096

5.2614 25.11

3.5

3.5841

PLN-CHF

4.0

24.11

5.1735 23.11

5.1375 22.11

21.11

5.1820 18.11

3.3486

3.4001 25.11

5.1775

PLN-GBP

24.11

3.3191 23.11

3.2880 22.11

21.11

3.2718 18.11

4.4855

4.5130 25.11

3.0

3.2984

PLN-USD

3.5

24.11

4.4637 23.11

4.4447 22.11

21.11

4.4283 18.11

4.4366

PLN-EUR

THE LIST

NOV 28 – DEC 4, 2011

www.wbj.pl

Corporate Services

Advertising Agencies Listed alphabetically

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

www.bookoflists.pl

Revenue split

ATL / BTL / PR

DM / MH

Cooperating media house

Creative / Production / Media planning and buying

BTL / PR / Other

Services offered

Selected clients

Number of new budgets gained in 2010 / 2011

Number of employees / Year founded

Ownership: Polish / Foreign

Top local executive / Title

ABK Grupa ul. Bogus∏awskiego 19/95, 01-923 Warsaw 22 401-2216/22 401-2219 biuro@abkgrupa.pl www.abkgrupa.pl

✓ ✓ ✓

✓ -

WND

20% 10% 10%

40% 20% -

Marketing communications agency; integrated activities

US Pharmacia; Arval; Vattenfall; Eveline Cosmetics

WND WND

23 1991

Roman Fedorczuk 100% None

Roman Fedorczuk

Adcon Sp. z o.o. ul. Gilarska 39, 03-589 Warsaw 22 687-0511/22 678-3484 adcon@adcon.com.pl www.adcon.com.pl

✓ ✓ ✓

WND

WND WND WND

WND

Polmos; Coca-Cola; Nestle

WND WND

4 1996

Hanna Polak-Welfle None

Hanna Welfle

Agencja Reklamowa Anny Turkiewicz Al. Powstaƒców Wielkopolskich 33, 70-111 Szczecin 91 812-1656/91 483-6550 at@at.com.pl www.at.com.pl

✓ ✓ -

✓ ✓

WND

WND WND WND

Agencja Reklamowa Orpha Sp. z o.o. Al. Jaworowa 39, 53-122 Wroc∏aw 71 355-0304/71 341-9000 biuro@orpha.pl www.orpha.pl

✓ ✓ -

WND

WND WND WND

Brain ul. S∏oneczna 29, 00-789 Warsaw 22 845-0982/22 845-3892 brain@brain.com.pl www.brain.com.pl

✓ -

WND

60% 10% -

Effectica Agencja Reklamowa Sp. z.o.o. ul. Âwidnicka 12-16, 50-066 Wroc∏aw 71 374-6230/71 374-6231 agencja@effectica.pl www.effectica.pl

✓ ✓ -

Brand Connection

GPD Advertising Sp. z o.o. Sp. k. ul. Roosevelta 18, 60-829 Poznaƒ 61 845-1050/61 845-1051 office@gpd.com.pl www.gpd.com.pl

WND WND WND

WND WND

ID Agencja Reklamowa ul. S´czkowa 115H/14, 03-986 Warsaw 22 616-3399/22 201-2178 info@aidi.pl www.aidi.pl

WND WND WND

JWT Warsaw Sp. z o.o. ul. ˚urawia 45, 00-680 Warsaw 22 440-1200/22 440-1201 office@jwt.com.pl www.jwt.com.pl Leo Burnett Sp. z o.o. ul. Wo∏oska 9, 02-583 Warsaw 22 448-9800/22 448-9801 info@leoburnett.com.pl www.leoburnett.com.pl

President

Branding services: brand design; brand strategies; Decora; Home.pl; visual identification; NordGlass; Tikkurila; Zott package design; rebranding

WND WND

29 1990

Anna Turkiewicz; Andrzej Turkiewicz; Karol Mikutowski; Micha∏ Kozie∏; Arkadiusz Moroz; Agnieszka Chaiƒska; Arkadiusz Sówka None

Strategic planning; design; ATL, BTL, PR

KGHM Polska Miedê; Grupa Kruk; Bank Gospodarstwa Krajowego; Grupa Orbis; PGE Polska Grupa Energetyczna

WND WND

5 1991

Henryk Koczan - 50%; Beata LeÊniewska-Polak - 50% None

20% 10%

ATL; BTL; internet; production

ING Bank; HBO; Hoop; Leroy Merlin; Renoma; Woseba

2 4

53 2001

Jakub Kamiƒski - 40%; Asiya Malinowska 40%; Roman J´drkowiak - 20% None

WND WND WND

WND

Kruk; Saint-Gobain Polska; Polska Sieç Handlowa Lewiatan; Echo Investment; Western Union

4 8

21 1994

Dariusz Franckiewicz None

WND

50% 15% -

35% -

WND

WND WND

100 1991

Mariusz Radecki 33.3%, Arkadiusz Wróbel - 33.3%, Leszek Zalewski - 33.3% None

WND WND

WND

30% 60% -

WND WND WND

WND

Mercedes-Benz; Mercedes Leasing; Berlin-Chemie; Nycomed; Kraft-Foods

2 1

WND 1999

Marcin Filipowicz 100% None

Marcin Filipowicz

✓ ✓ -

✓ -

WND

WND WND WND

Full service

Nokia; Kraft; Nestle; Unilever; Bayer

WND WND

40 1991

None JWD Worldwide - 100%

Andrzej Zawadzki

WND WND WND

WND WND

Starcom; StarLink

WND WND WND

WND

Fiat Auto Poland; Procter&Gamble; PTK Centertel; Philip Morris; Grupa ˚ywiec

WND WND

WND 1991

None Publics Groupe Holdings - 100%

Mr. Bloom Sp. z o.o. ul. Grunwaldzka 22/5, 81-758 Sopot 58 550-4050; 58 550-7013/58 550-7011 mrbloom@mrbloom.com.pl www.mrbloom.com.pl

✓ ✓ ✓

✓ -

WND WND WND

WND

PORTA KMI Poland; ZT Kruszwica; Dr. Oetker Polska; Stena Line; IKEA Gdaƒsk

4 7

15 1996

Zuzanna Horeczy - 97% None

On Board Public Relations Sp. z o.o. ul. Wolska 88, 01-141 Warsaw 22 321-5100/22 321-5101 onboard@onboard.pl www.onboard.pl

✓

10% -

Corporate PR; media relations; crisis management; M&A; Adamed; Coca-Cola; CSR; public affairs; Canal +; Douglas investor relations; Polska; AETN Networks employer branding; IPO; UK consumer communications

WND WND

Over 40 2000

WND

Norbert Ofmaƒski

San Markos Agencja Reklamowa Sp. z o.o. ul. Wolska 88, 01-141 Warsaw 22 321-5100/22 321-5101 sanmarkos@sanmarkos.pl www.sanmarkos.pl

✓ ✓ -

Media On

WND WND WND

Strategy & concept development; new ¸aciate; product development; Kropla Beskidu; Budimex brand & multimedia NieruchomoÊci; Vectra; design; CSR concepts; RWE experimental marketing; corporate marketing

WND WND

20 2000

WND

Magdalena Czaja

Stanford Pl. Przymierze 1/5, 03-944 Warsaw 22 408-9328/22 617-8146 biuro@stanford.com.pl www.stanford.com.pl

✓ ✓ -

70% 20% -

10% -

Creative services; production management

6 5

4 1998

Mateusz Nawrot - 100% None

Notes: WND = Would Not Disclose, ATL = Above The Line, BTL = Below The Line, PR = Public Relations, DM = Direct Marketing, MH = Media House. Research for The List was done in November 2011. Number of employees and ownership structure are as of October 2011. All information pertains to the companies’ activities in Poland. Companies not responding to our survey are not listed.

Procter&Gamble; Kolastyna; UPS ; Samsonite

Karol Mikutowski President

Beata LeÊniewskaPolak President

Jakub Kamiƒski; Asiya Malinowska Creative Director; Partner

Dariusz Franckiewicz President

Leszek Zalewski President

Owner

CEO

Tomasz Hilt CEO Leo Burnett Group Poland

Zuzanna Horeczy President

President

Mateusz Nawrot Owner

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

LIFESTYLE

www.wbj.pl

NOV 28 – DEC 4, 2011

Chef Janusz Korzyƒski

Spicy fried ice cream All this refinement comes at a price, and faced with strong competition from cheaper alternatives in the neighborhood, Fusion targets upper management as its client base. In case your budget should prevent you from trying Mr Korzyƒski’s creations on a regular basis, you can choose the buffet (z∏.99

COURTESY OF THE WESTIN

Fusion Al. Jana Paw∏a II 21 Warsaw restauracjafusion.pl

pean, to create single dishes. At Fusion, appetizers such as the popular coconut milk and almond soup with fried scallop and the beef carpaccio, wrapped around asparagus and fresh Parmesan cheese, topped with foie gras mousse, are par for the course. The boldness of the combinations is matched by the elegance of the presentation. Although the menu includes vegetarian options and several fish dishes for mains, Fusion is a great place to eat red meat. The sizable ribeye beef steak, the oriental roast duck and the lamb cutlets are all hefty enough to satisfy any meat lover. Original sides should also please the gourmets. One also shouldn’t leave without trying one of the restaurant’s fabulous (tasting and looking) deserts, such as the trilogy of creme brûlée (pistachio & strawberry, ginger & cherry, and cinnamon & banana) or the spicy fried chocolate ice cream with South-American carica fruit and chili.

nary experience. Under the energetic leadership of chef Janusz Korzyƒski – who prides himself on having introduced fusion cuisine to Poland – Fusion is a bit of a culinary fashionista. The cuisine combines techniques and ingredients used in a variety of cooking traditions, including oriental and Euro-

COURTESY OF THE WESTIN

A new restaurant review feature from WBJ

Fusion, located in the Westin Hotel in the heart of Warsaw’s central business district, defies clichés about dining out in Poland. Those who really can’t go without ˝urek or pierogi for one meal will find those and other traditional Polish dishes on offer, but that would be missing out on a unique culi-

COURTESY OF THE WESTIN

East meets West without limit) or log on to the akademia-kulinarna.pl blog, where together with colleagues from Le Méridien Bristol and Sheraton Hotels across Poland, Mr Korzyƒski answers questions and shares recipes. Alice Trudelle

Reservations: 22 450 8631 warsaw@westin.com

Goat cheese rolls

Concert

Back to the old school Electronic time describe their new album as being influenced by their fascination with 80s pop, Far Eastern culture and film director Orson Welles. ● For more information log on to stodola.pl

COURTESY OF STODO¸A

promote their latest record “It’s All True.” Their sound brings together elements of early synth electronica and more modern, chilled-out beats. Members Jeremy Greenspan and Matt Didemus

Junior Boys

COURTESY OF GO AHEAD

Junior Boys December 3, 6.30 pm Stodo∏a, ul. Batorego 10 Warsaw Canadian electro-duo the Junior Boys are coming to Poland for the third time to

Metronomy December 4, 6.30 pm Stodo∏a, ul. Batorego 10 Warsaw Metronomy, an indie-electronic group from the UK, was formed by frontman Joseph Mount after he became fed up with the bands he played for being torn apart by arguments

Metronomy over girls. Since forming in 1999 the band has released three albums, with their 2011 record “The English Riviera” being their most successful, reaching 17 in the UK charts. As well as releasing original material, Mr Mount has also remixed tracks by numerous other artists, including The

Klaxons, Roots Manuva, Lady Gaga and Kate Nash. Their live performances are known for their light shows and dance routines, with band members wearing lights attached to their chests. ● For more information log on to stodola.pl

LAST WORD

NOV 28 – DEC 4, 2011

www.wbj.pl

Tech Eye

The difficulty level of the game is set fiendishly high, encouraging players to make liberal use of the cash shop. Techeye can attest that it’s possible to get to level 100 without splashing out, but it’s tiresome. And physically painful. That’s the other issue. Game play nominally involves “tapping” the screen, but this quickly devolves into a form of corporal punishment for your phone. By the time the fourth wave of gruntbugglies rolls out, a kind of stiff-armed epileptic fit occurs. One friend likened it to “an interpretive dance performed by a yowling Red Bull-snorter.” Then she asked to have a go and was politely

“Cut the Rope”

COURTESY OF ZEPTOLAB

Incensed. Crimson with rage. Filled with fury to the point that it’s about to burst forth in a furious explosion of righteous lactation. That pretty well describes Techeye’s state of being right now. We’re not the angry type. Irritated, sure; that’s pretty much our default emotion. But the last time we experienced genuine rage was in the 9th grade, during swim class, when some punk stuck his leg out and sent us flying, face first, into the swim-team captain’s speedo. Eventually we learned to accept our new nickname – “the Grape Snuggler” – but not before the aforementioned punk had suffered a mysterious overdose of laxatives. The current object of our ire is unlikely to find itself incontinent any time soon, though, as it’s a mobile-

COURTESY OF DROIDHEN

“Defender”

phone game. It’s called “Defender.” We’re not talking about the twopixel spaceship game from the 1980s. This “Defender” is a newish Android OS game from DroidHen (droidhenapps3.appspot.com). You might recognize that developer as the creator of such classics as “Fishing Diary,” “Hit Penguin” and “Drag Toilet Paper.” Or you might not, because those games suck. “Defender” is a different sort of beast. The premise is this: waves of cute monsters toddle across the screen, presumably with the intention of gnawing your face off, and you repel them using a giant trebuchet (otherwise known as a medieval catapult) and a couple of handy spells. It’s addictive – as expected, from a game with a giant trebuchet – but there are two sources of irritation. First, while “Defender” is free to play, there’s a cash shop where you can buy in-game currency in order to upgrade your spells and trebuchet.

told to @#%$ off. The bottom line: “Defender” is entertaining, but designed to vex you into spending cash. Be prepared to rage at it. After a few rounds of sweaty phone-stabbing, Techeye likes to cool off with something a little less frustrating, like ZeptoLab’s “Cut the Rope” (chillingo.com). Unlike “Defender,” it’s available for iOS as well as Android phones, and there are both free (with fewer levels) and paid ($0.99) versions. “Cut the Rope” is a puzzle game in which you make copious use of the titular rope, along with bubbles and bellows, in order to feed candy to a frog named Om Nom. There’s no explanation given for all the Rube Goldberg machinations (Techeye doesn’t spend much time in nature, but is sure frogs were getting on just fine without bubbles, bellows or rope last we heard), so we like to pretend Om Nom is a benevolent

“Burn the City” alien who kindly won’t destroy the universe as long as he gets fed in the most roundabout manner possible. There’s one other game we play when it’s time to cool off – “Burn the City” by JoshOClock (joshoclock.com). As with “Cut the Rope,” there are free (with ads) and paid ($0.99) versions on both iOS and Android phones. Game play involves guiding your monster’s fiery belches toward various cityscapes. There are puzzles here and there, but mainly it’s about raining doom and destruction on unsuspecting civilians. Very relaxing, that. ●

Ever snuggled a grape? Let us know: techeye.wbj@gmail.com

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

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

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

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

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

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

Warsaw Philharmonic ul. Jasna 5 www.filharmonia.pl

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

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

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

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

COURTESY OF JOSHOCLOCK

Rage, relaxation and mobile gaming