Poland’s 2010 budget deficit is likely to balloon over this year’s z∏.27 billion gap
In Q2 both of Poland’s oil refining giants managed to recover from firstquarter losses
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WWW.WBJ.PL
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The first Polish-made Black Hawk helicopter is expected to launch in 2010
VOLUME 15, NUMBER 35 • SEPTEMBER 7-13, 2009 . z∏.9.90 (VAT 7% included) . ISSN 1233 7889 INDEX-RUCH-332-127
Since 1994 . Poland’s only business weekly in English
Poland rising
REAL ESTATE
MATEUSZ GO¸ÑB/WBJ
Lokale Immobilia
• Motorway tenders • OP Architekten interview • Orco Property Group results 11-15
Learning from tragedy Of the many lessons offered by 9/11, it seems Poland still has a few to learn 10
A casual chat WBJ talks with AmRest CEO Wojciech Mroczyƒski about the health of the casual dining sector and the success of Starbucks 19
Special Economic Zones
WBJ
2009
The EU’s sixth-largest member state is gaining stature
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In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-3 Industry News . . . . . . . . . . . . . . .4-5 Positive Perspectives . . . . . . . . . . .6 Economic Forum . . . . . . . . . . . . . . .7 Cover Story . . . . . . . . . . . . . . . . .8-9 Opinion . . . . . . . . . . . . . . . . . . . . . .10 Lokale Immobilia . . . . . . . . . .11-15 The List . . . . . . . . . . . . . . . . . . . . . .16 Inside the List . . . . . . . . . . . . . . . .17 Central & Eastern Europe . . . . . .18 Interview . . . . . . . . . . . . . . . . . . . .19 Stocks & Currency . . . . . . . . .20-21 Entertainment . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23
Twenty years after the end of communism and five years after EU accession, Poland has truly rejoined the European fold. Poles now occupy several significant posts within the European Union’s structures and in 2011 the country will hold the bloc’s rotating presidency. All of this adds up to a growing amount of influence in European matters, but some are concerned that lack of political will on the domestic front could have 8-9 international repercussions
Diplomacy in Sopot The region had its eyes on Sopot when the prime ministers of Poland and Russia met after weeks of public debate over interpretations of history. But instead of furnishing more drama, the meeting proved a genuine diplomatic opportunity 3
Airline downed After eight turbulent years, CEE low-cost carrier SkyEurope has filed for bankruptcy. The firm’s financial nosedive left behind frustrated passengers and investors, but it may be the last failure Poland sees for a while in the budget airtravel sector 21
NEWS
www.wbj.pl
GDP to fall in 2010? A growing number of economists are warning that H1 2010 could be worse for the domestic economy than H2 2009. They fear that GDP could see negative growth, pulled down by falling consumer demand, decreased corporate investments and a reduction in the value of net exports. Unemployment, the most likely cause for falling demand, could reach between 12.8-13.8% by the end of this year.
State selling stakes The State Treasury still holds stakes of under 10% in over 100 enterprises and 27 companies listed on the WSE. By the end of 2010 the stakes in all of the publicly traded companies are to be sold. The Treasury feels that stakes under 10% do not offer any influence over the firms and bring no benefit from dividends.
This Friday will mark the eighth anniversary of one of the most sophisticated and deadly terrorist attacks in modern history. On that day in 2001, hijacked planes crashed into the World Trade Center complex in New York City, the Pentagon building in Washington DC and a field in the state of Pennsylvania. Nearly 3,000 people died. The atrocity caused widespread feelings of fear and revulsion, as well as solidarity and sympathy for Americans all over the globe. In Warsaw,
just as in many other capital cities, candles were lit in front of the American embassy. Five Poles were killed in the 9/11 attacks and September 12-14 were days of national mourning in Poland. On September 11, 2002, a memorial plaque commemorating the Polish victims of the attacks was opened in Warsaw. The 9/11 attacks proved seminal not only because of the scale of the damage wrought and the number of people killed, but also through their direct impact on interna-
tional politics. A global “War on Terror” was declared and became a pillar of American foreign policy as well as the defining element of George W Bush’s presidency. In turn, American foreign policy shaped Polish-American relations. Poland joined the so-called “Coalition of the Willing” and became one of the United States’ closest allies in the War on Terror. The country’s military forces officially entered Afghanistan in 2002 as part of Operating Enduring Freedom and in 2003, in contrast to some of America’s traditional Western European allies, took part in the invasion of Iraq. One symbol of the special political and military relationship between Poland and the US in the post-9/11 years was the Bush administration’s plan to site elements of a missile defense system in Poland. However, realization of this plan looks increasingly unlikely under the Obama administration. Adam Zdrodowski
On WBJ.pl
z∏.7 billion is how much Poles spend annually on luxury products, mainly high-end food products
71% was the y/y increase in the value of personal debt in Poland, which has now reached z∏.12 billion
69.3% of companies have generated a profit so far this year, according to Rzeczpospolita
z∏.2.7 billion is being demanded of the Gdynia and Szczecin shipyards by a total of 384 entities
Quote of the Week “We will arrive at the truth together” Prime Minister Donald Tusk comments on recent disagreements between Poland and Russia over the interpretation of World War II history
Figures in focus Missing the target Total employment rate* (persons aged 15 to 64 years) in selected EU27 countries, in 2008 80 Lisbon strategy target (70%)**
Business games Online gaming is going through a renaissance, with hundreds of websites offering free games to while away the time. One company making waves in the sector is Pastel Games – a Polish game developer responsible for such hits as the Submachine series and the Squirrel Family games. WBJ.pl speaks with company founders Mateusz Skutnik and Karol Konwerski about their business model, the state of the industry and developing for the iPhone
DATELINE
70 60 50 40 30 20 10 %
MT HU IT RO PL SK LU BG LT FR EU27 CZ IE LV EE DE CY UK SE DK *employment rates represent employed persons as a percentage of the same age population **to be achieved by 2010 Source: Eurostat
September 7-9 Event:
Sfinks looks forward The worst of restaurant operator Sfinks’ problems seem to be fading away, mainly thanks to the help of Sylwester Cacek, a well-known businessman who invested in the firm. This fall the firm will centralize purchases and supplies for all restaurants. It will also change its franchise contracts to introduce more obligations and to establish longer-term cooperation. The company will carry out a share issue amounting to z∏.62 million, with roughly z∏.30 million to be used to repay a loan from Cacek. (Poland A.M.)
Numbers in the News
The eighth anniversary of 9/11
General to avoid politics General Waldemar Skrzypczak, former head of the Polish Land Forces, will not take up any posts in the President’s Chancellery or the National Security Bureau, although these institutions were purportedly considering employing him. The general declared that he had not received any propositions from the Chancellery and that he did not want to have anything to do with politics.
SEPTEMBER 7-13, 2009
IN THE SPOTLIGHT
COURTESY OF US NAVY
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redNet Property Group, Kraków targi.tabelaofert.pl/krakow
CONFERENCE US-Poland Conference on Innovation, Science and Technology, Gdaƒsk. For more information call (58) 326-8707, or email e.jagodzinska@woj-pomorskie.pl
HR CONFERENCE
Event:
Mi´dzynarodowy Konwent HR – Global HRM Challenges, Polish Human resources Management Association, www.pszk.org.pl, Hotel Marriott, Warsaw
Ararat Bank . . . . . . . . . . . . . .19 Freshpoint . . . . . . . . . . . . . . .19 PM Group Polska . . . . . . . . .13
Company . . . . . . . . . . . . . . . .13 Heitman . . . . . . . . . . . . . . . . .12 Polish Energy Group . . . . . . . .9 Axel Springer Polska . . . . . . .5 Hochtief Polska . . . . . . . . . . .12 Polnord . . . . . . . . . . . . . .12, 15
CONFERENCE
Event:
Konferencja “Obronnà r´kà przez zawirowania na rynku pracy w nieruchomoÊciach, budownictwie i bran˝ach pokrewnych,” Property Professionals, Warsaw
22
BUSINESS MIXER
Event:
“Energizing Polish Retail” Business Mixer, PRCH, www.prch.org.pl, VillaFoksal, Warsaw
ECONOMIC FORUM
22-23 PR CONFERENCE
Event:
19th Economic Forum in Krynica. www.forum-ekonomiczne.pl/index_eng.php
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SEMINAR
Event:
“Chaotics: The Business of Managing and Marketing in the Age of Turbulence,” a seminar conducted by Philip Kotler. Warsaw Marriott Hotel. Organizer: Bigram. www.philipkotler.pl/ang/index.php
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CONFERENCE
Event:
Konferencja Wsparcie unijne na inwestycje w odnawialne Êród∏a energii, Fundusze Europejskie, www.fundusze-europejskie.pl, Mi´dzynarodowe Targi Poznaƒskie, Poznaƒ
19-20 REAL ESTATE FAIR Event:
Targi Mieszkaniowe Tabelaofert.pl. Organizer:
AmRest . . . . . . . . . . . . . . . . .19 Estudio Lamela . . . . . . . . . . .14 PGNiG . . . . . . . . . . . . . . . . . . .3
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9-12
Company index Agora . . . . . . . . . . . . . . . . . . . .5 Enea . . . . . . . . . . . . . . . . . . . . .4 Petrolinvest . . . . . . . . . . . . . .18
Event:
V Kongres Public Relations 2010 – RzeczywistoÊç i perspektywy polskiegorynku PR; Informedia Polska Sp. z o.o, Hotel Polonia Palace, Warsaw
24-25 LAW CONFERENCE Event:
II Forum Dyrektorów Dzia∏ów Prawnych, Informedia Polska, Hotel PoloniaPalace, Warsaw
Applebee . . . . . . . . . . . . . . . .19 Ferrovial Agroman . . . . . . . .14 PKN Orlen . . . . . . . . . . . . . . .21 Asseco . . . . . . . . . . . . . . . . . . .5 Gas Trading . . . . . . . . . . . . . . .3 PolAqua . . . . . . . . . . . . . .12, 15 Astaldi . . . . . . . . . . . . . . . . . .11 Gazprom . . . . . . . . . . . . . . . . .3 Polimeni International . . . . .14 Atlas Estates Limited . . . . . .13 GE Real Estate . . . . . . . . . . .12 Polish Airports State Gremi . . . . . . . . . . . . . . . . . . . .5 Enterprise (PPL) . . . . . . . . . .14 Atlas Management
Bank BPH . . . . . . . . . . . . . . .17 Honda . . . . . . . . . . . . . . . . . . .12 Bank Ochrony Ârodowiska . .15 HP . . . . . . . . . . . . . . . . . . . . . .23 Barylski Olszewski
Infor . . . . . . . . . . . . . . . . . . . . .5
Brzozowski . . . . . . . . . . . . . .13 ITI . . . . . . . . . . . . . . . . . . . . . . .9 Bioton Group . . . . . . . . . . . . . .5 JW Construction . . . . . . . . . .15 Budimex . . . . . . . .11, 12, 13, 14 KFC . . . . . . . . . . . . . . . . . . . . .19 Budimex Dromex . . . . . . . . . .11 Kulczyƒski Architekt . . . . . . .14 Burger King . . . . . . . . . . . . . .19 Lotos . . . . . . . . . . . . . . . . . . .21 Casino . . . . . . . . . . . . . . . . . .12 LPP . . . . . . . . . . . . . . . . . . .5, 14 CB Richard Ellis . . . . . . . . . .12 Maratex . . . . . . . . . . . . . . . . . .5 Cersanit . . . . . . . . . . . . . . . . . .4 Marionnaud . . . . . . . . . . . . . .14 Colony Capital fund . . . . . . . .14 McDonald’s . . . . . . . . . . . . . .19 Comarch . . . . . . . . . . . . . . . .17 Miller, Canfield, W. Babicki,
24-26 TOURIST TRADE SHOW – TT WARSAW Event:
The 17th
International Travel Show TT Warsaw, MT Polska, Warsaw www.mtpolska.com.pl
26-27 REAL ESTATE FAIR Event:
XVI Jesienne Targi Mieszkaniowe Nowy DOM, Nowe MIESZKANIE 2009, COSTorwar, Warsaw
Creative Labs . . . . . . . . . . . . .23 A. Chelchowski & Partners . .8
PolRest . . . . . . . . . . . . . . . . .19 PRD Regionalne Drogi Podlaskie . . . . . . . . . . . . . . . .11 PZL Mielec . . . . . . . . . . . . . . . .4 QInvest . . . . . . . . . . . . . . . . . . .3 Redan . . . . . . . . . . . . . . . . . . . .5 Ronson Development . . . . . .12 RWE . . . . . . . . . . . . . . . . . . . . .4 Ryanair . . . . . . . . . . . . . . . . . .21 Sfinks . . . . . . . . . . . . . . . . . . . .2 Sikorsky Aircraft . . . . . . . . . . .4 SkyEurope . . . . . . . . . . . . . . .21 Société Générale . . . . . . . . . . .4
Cyfra+ . . . . . . . . . . . . . . . . . . . .9 Mix Electronics . . . . . . . . . . . .9 Starbucks . . . . . . . . . . . . . . . .19 Deichmann . . . . . . . . . . . . . .14 Naspers . . . . . . . . . . . . . . . . .18 TVN . . . . . . . . . . . . . . . . . . . . . .9 Deka Immobilien . . . . . . . . . .15 NG2 . . . . . . . . . . . . . . . . . . . . .4 Ultimate Fashion . . . . . . . . . . .5 DSG International . . . . . . . . . .9 Noble Bank . . . . . . . . . . . . . .17 Vattenfall . . . . . . . . . . . . . . . . .4 Dvarcioniu Keramika . . . . . . .4 Norwegian Air Shuttle . . . . .21 Wakoz . . . . . . . . . . . . . . . . . . .11 Edipresse . . . . . . . . . . . . . . . . .5 OP Architekten . . . . . . . .11, 12 Warimpex . . . . . . . . . .11, 12, 15 Egis Poland . . . . . . . . . . . . . .11 Orco Property Group . . . .11, 14 Wiener Börse . . . . . . . . . . . . .21 Egis Route-Scetauroute . . . .11 Pastel Games . . . . . . . . . . . . .2 Wizz Air . . . . . . . . . . . . . . . . .21 Eiffage Budownictwo Mitex .13 PBDiM Miƒsk Mazowiecki . .11 Wojas . . . . . . . . . . . . . . . . . . .14 Empik Media & Fashion . . . . .5 PBL Mazowieckie Mosty . . . .11 WPM Mosty . . . . . . . . . . . . . .11
NEWS
SEPTEMBER 7-13, 2009
www.wbj.pl
2010 budget deficit
A thaw in the Poland-Russia chill?
Battle of the bulge
Polish and Russian PMs discussed the opening of historical archives and gas contracts
Poland’s budget deficit could grow to a whopping z∏.40 billion in 2010 and economic safeguards could be triggered
Prime Minister Donald Tusk hosted his Russian counterpart Vladimir Putin in Sopot last week. Prior to taking part in events commemorating the outbreak of the World War II, both had a chance to talk about bilateral relations. During the visit Putin was bombarded by questions from journalists about his view of WWII history, especially relating to the Katyƒ massacre, in which some 22,000 Poles were killed by Soviet soldiers. When asked if Russia would open its archives relating to Katyƒ, Mr Putin, seemingly irritated, replied, “In international practice there is one principle in these cases. All actions of this kind are fulfilled mutually.” Prime Minister Tusk took these comments in stride. “I treat this declaration [of readiness to open archives to historians] very seriously and
accept the proposal to respect it as mutual,” he said. Both PMs underscored the importance of economic cooperation between the two countries and praised their intensifying bilateral trade despite the global crisis. However, the question of Poland’s gas supply was not resolved. Poland imports seven billion cubic meters of Russian gas every year – half of its demand. Warsaw is ready to extend the contract for purchasing gas from the Russian state-owned Gazprom until 2035, but the Russian side demands private Polish company Gas Trading be relieved of its four-percent stake in the operator of the section of the Yamal-Europe pipeline on Poland’s territory. The other stakeholders are (Polish state-owned) PGNiG and Gazprom. Putin and Tusk also oversaw the signing of three international agreements – on free access to the Vistula Bay, cooperation in transporting nuclear fuel and cultural cooperation from 2009 through 2012.
COURTESY OF GRZEGORZ ROGI¡SKI / CIR
Polish-Russian relations
The meeting between the PMs was cordial Import-ant to Poland Polish exports to Russia (z∏.5.2 Polish imports from Russia billion after 5 months of 2009) (z∏.13.8 billion after 5 months of 2009) 1.1% 1.6%
12.7% 9.7%
35.8%
11.8%
6.9% 3.8%
10.3% 74.8% 10.8%
20.7%
Agricultural and food products
Paper products
Wooden and paper products
Electric and machinery
Metallurgy products
Chemical products
Chemical industry products
Metallurgy products
Electric and machinery equipment
Natural gas and oil
Others
Others
Marcin Poznaƒ
Source: Ministry of Economy
Prime Minister Donald Tusk said last week that the government would work to bring the budget deficit back under control in 2011, admitting that the 2010 deficit would balloon from this year’s already upwardly revised z∏.27 billion figure. According to daily Rzeczpospolita, the draft budget for next year envisages a deficit of over z∏.40 billion, up nearly 50 percent y/y. Meanwhile, a Reuters poll of analysts elicited a deficit forecast of z∏.32 billion. This poll also predicted that the overall state deficit – including local governments and many state agencies – will amount to 6.1 percent of GDP next year, double the EU’s deficit ceiling. This is expected to complicate Poland’s plans to adopt the euro, which have already suffered setbacks. The government is expect-
ed to adopt an initial draft of the 2010 budget at a meeting on September 8. Rzeczpospolita also claimed that Poland’s public debt could exceed 55 percent of GDP if the Treasury fails to earn z∏.3035 billion on privatizations scheduled for this year. Were this to be the case, the government could face a serious challenge in 2011. In contrast to most EU countries, Poland has a built-in debt-containment mechanism which kicks in if public debt exceeds any of three safety levels: 50, 55 and 60 percent of GDP. Thus, if public debt breaches the first threshold this year, then the government would be forced to maintain the 2011 budget at no higher than the level of the 2010 budget. If the 60 percent level were breached, according to the rules the government would be obliged to create a balanced budget. However, a growing number of economists are saying that the economy will rebound within the next two years. This will hopefully allow Poland to avoid severe budget-deficit JJ scenarios. (Reuters)
Shipyard sale
International relations
Sunk without a trace
Poland commemorates the 70th anniversary of World War II
The Gdynia and Szczecin shipyard investor has mysteriously disappeared, leaving Poland to sort out the mess The Polish government was unable to secure an investor for its loss-making Gdynia and Szczecin shipyards by the August 31 deadline set by the European Commission. First a Dutch Antilles-registered fund backed by Qatari investment bank QInvest failed to pay its z∏.381 million commitment for the shipyards by August 17. Then the government tried to prevent the loss of face by negotiating with the Qatar Investment Authority. But this state agency failed to transfer funds before the end of August. “We have informed the European Commission that the
money was not transferred. We are filing for permission to reopen the [tender] procedure for selling the assets,” Treasury Minister Aleksander Grad told reporters during a press conference last week. The State Treasury will keep the €8 (z∏.33.4) million bid bond from the first tender as compensation.
“We have informed the European Commission that the money was not transferred. We are filing for permission to reopen the tender” Now Poland will have to find another investor. This will be an uphill battle, since the shipbuilding industry is in trouble worldwide. “There are really three strong players: South Korea,
Japan and China, where labor costs are lower. This is especially true in China. Materials and components are also cheaper than in Europe, and these countries allow the kind of public assistance which is banned by the EU,” Janusz Steinhoff, a former economy minister, told Gazeta Wyborcza. “The last Danish shipyard is in bankruptcy proceedings, and German shipyards are also on the edge. So it is clear that it won’t be easy to find anybody interested in buying Polish shipyards,” he added. PM Donald Tusk had threatened that Treasury Minister Grad would lose his job if he didn’t finalize the sale of shipyards in time. “I have a clear conscience,” Mr Grad explained during the press conference. The PM said he would decide on the treasury minister’s fate in the coming days. Marcin Poznaƒ
Commemorations of the start of World War II took place in Westerplatte last week, with representatives of 31 countries in attendance Poland commemorated the outbreak of WWII on September 1 with world leaders gathered at the Westerplatte peninsula in Gdaƒsk, where first shots of the war were fired in 1939. Polish leaders began the commemorations at Westerplatte with a ceremony at daybreak to mark the 4:45 am German attack on the Polish garrison. Both President Lech Kaczyƒski and Prime Minister Donald Tusk delivered speeches. The main part of the ceremony, later that afternoon, was attended by delegations from 31 countries, including Israel,
the UK and the US. While 20 countries were represented by their prime ministers, the UK sent Foreign Minister David Miliband and the US delegation was led by National Security Advisor General James Jones. The most anticipated speeches of the day were by Lech Kaczyƒski and Vladimir Putin. The Polish President touched upon several issues in the dispute over WWII history between Poland and Russia. Vladimir Putin fleetingly acknowledged Russia’s role in the beginning of the war, but stressed that other countries had also signed morally unacceptable treaties with Hitler before the war. Some say Mr Putin said too little, as he failed to apologize for the Soviet Union’s invasion of Poland in September 1939 and for the massacre of Polish officers by Stalin’s secret police in Katyƒ in 1940.
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Others, however, judge that condemning the Molotov–Ribbentrop Pact – which divided Poland between the Soviet Union and Nazi Germany but which many Russian historians deem was a necessary defensive measure – was enough of a shock for the Russian public. German Chancellor Angela Merkel, on the other hand, fully acknowledged Germany’s responsibility for the atrocities of Nazi aggression and paid homage to the victims. Despite the clash between the visions of history presented by Poland and Russia, most commentators described the commemorations as a big step forward in the fraught PolishRussian relations, because by sending such a high representative as Vladimir Putin, Russia finally acknowledged when and where the war truly began. Martyna Olik
INDUSTRY NEWS
www.wbj.pl
Klich in Afghanistan Defense Minister Bogdan Klich traveled to Afghanistan last Wednesday in order to officially present a plan to purchase equipment for the Polish army. However, the unofficial reason for the visit was to improve the morale of military officials after the resignation of the head of the land forces, General Waldemar Skrzypczak.
Vodka rejection The main creditors of vodka producer Belvedere have rejected a restructuring plan proposed by the firm. The rejection was backed by the argument that the projected improvement in the company’s financial results would be impossible to achieve.
EU foots NG2’s bill NG2, the owner of the CCC and Boti shoe brands, has received z∏.38.8 million in subsidies from the European Union. The funds will be used for the construction of an automated logistics center.
PO’s anniversary plan A team of Civic Platform (PO) party members is preparing a plan for the anniversary of the party’s second full year in power. The politicians are planning a series of meetings between October and November with deputies, senators and MEPs.
Phallic protest Some complaints last week about Russian PM Vladimir Putin hit below the belt. A former Sopot city councilman, Jakub Â, was taken into custody for insulting Putin while dressed as a giant phallus.
Posting a profit Independent postal operator Integer.pl generated a H1 net profit of z∏.5.5 million, an 104% increase over the result in H1 of 2008. The group’s revenues rose by almost 45%, reaching z∏.56.4 million. (Poland A.M.)
Aerospace
SEPTEMBER 7-13, 2009
Coal
Black Hawk, made in Poland Quick, dirty, and The first Black Hawk not going away produced by PZL Coal is here to stay, says Deputy Economy Minister Szejnfeld
Mielec is expected to launch next year PZL Mielec, a Polish subsidiary of Sikorsky Aircraft, has entered the final stages of the production of its first S-70i Black Hawk helicopter. The news was announced last week during the International Defence Industry Exhibition held in Kielce. The first unit, which is intended for international military use, is expected to be ready in 2010. “The startup of the production line in Poland is a defining moment for the S-70i helicopter program,” Bob Kokorda, Sikorsky’s vice president for corporate strategy and synergy, said at a press conference. “This platform will accommodate customer demand with an affordable, capable, and adaptable aircraft that remains true to the Black Hawk helicopter’s legendary combatproven heritage. Now, this proven, dependable aircraft will extend its capabilities to customers around the world, bringing robust performance and the latest in rotorcraft technology,” he added. PZL Mielec also produces cabins for Black Hawk helicopters. To date four cabins
COURTESY OF SIKORSKY
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The first Polish-made S-70i Black Hawk is expected to roll off the production line in 2010 have been completed, three of which have been sent to the UH-60M helicopter assembly line at Sikorsky’s main manufacturing facility in the US. The fourth cabin has been incorporated into the soon-tobe-completed S-70i. During a briefing in Kielce, Mr Kokorda underscored that the designation of PZL Mielec as a final assembly center for its latest helicopter project testified to the role that the Polish company plays in Sikorsky’s CEE expansion plans. Janusz Zakr´cki, CEO of PZL Mielec, said that since his company had been acquired in
March 2007, Sikorsky had delivered on each of its commitments. “The company has invested millions of dollars in fixed assets, environmental remediation, human resources training and transfer of technical expertise. In addition, the company has initiated a broad social package for PZL Mielec employees,” he listed. Since the acquisition, employment at PZL Mielec has increased by 22 percent to 1,800 full-time personnel. The plant also continues to manufacture its M28 Skytruck and M28B Bryza planes. Marcin Poznaƒ
Cersanit reports z∏.1.4 million loss in Q2 2009 The leading bathroom fittings manufacturer in Poland, Cersanit, has announced an unexpected loss in Q2. The company cited an asset sale in Lithuania as one cause for the loss. Cersanit shares fell 5.5 percent on the news. The firm, which is controlled by Polish tycoon Micha∏ So∏owow, turned in a Q2 loss of z∏.1.4 million, marking a major y/y drop from its z∏.41 million net profit in Q2
2008. They caught the market off guard, as analysts had expected a net profit of z∏.32 million. However, it still marked an improvement over the firm’s z∏.48 million loss in Q1 of this year. In that period Cersanit’s clients slashed spending because of growing concerns of a stall in construction. The depreciation of the Polish currency in Q1 also had an effect.
The main problem in the second quarter was a surprise cost of z∏.25.3 million, which was related to the sale of its stake in Lithuanian ceramics producer Dvarcioniu Keramika. Cersanit has plans for foreign expansion, but details had not been released as WBJ went to press. Last month the firm was awarded a €20 (z∏.83.35) million credit line for its Ukranian operations. JJ (Reuters)
Speaking at a coal industry conference on September 2, Deputy Economy Minister Adam Szejnfeld said that despite a push to increase the amount of energy Poland gets from renewable and environmentally friendly sources, coal will remain the country’s primary source of power. Mr Szejnfeld told the conference of the state’s plan to budget z∏.800 million in government aid for investment in new coal deposits, but said the investment would only last until the end of 2010. If so, the money would need to be included in the 2010 budget, a feat that may prove difficult. “The government had to revise the budget this year due to the economic slowdown, but we must remember that next year is also going to be tough. We will, however, try to support the mining investments,” he said. The minister was optimistic about the future of Poland’s
energy policy, but admitted that coal would still play a central role. “The government plans diversification in terms of energy sources,” Mr Szejnfeld told the conference. “We are planning to build nuclear plants, we are encouraging a push toward renewable energy, but despite all of this, coal will remain the prime source of energy,” he added. In an effort to end Poland’s near complete dependence on coal, the government is pushing ahead with plans for a nuclear power station, which is scheduled to come online by 2020. That same year, an EU regulation will come into force which dictates that 20 percent of the country’s energy should come from renewable sources. If the government’s nuclear plan moves forward without major setbacks, tender negotiations could be held next year and construction would begin around 2014. French bank Société Générale has been named as a possible investor in the project. (Reuters) Jon Jackson
Enea sees earnings surge Enea, Poland’s only bourselisted energy group, announced on September 1 that its net profit for the first half of 2009 nearly quadrupled as a result of financial gains and a surge in electricity prices. The group saw a consolidated profit of z∏.391.2 million, up from z∏.90.9 million in H1 2008. The group also achieved an 18 percent y/y rise in revenues, which it attributed to the hike in electricity prices and funds raised from its November 2008 IPO. The state floated 23.5 per-
cent of its Enea shares at that time, with Vattenfall acquiring the stake for z∏.1.7 billion. The state is now in exclusive talks with German utility provider RWE regarding the sale of its remaining 67 percent stake in Enea, which is valued at around $2 (z∏.5.84) billion. On the same day it reported its results, Enea dismissed management board member Czes∏aw Koltermann. The group’s supervisory board did not disclose the reason for the dismissal. (Reuters) JJ
INDUSTRY NEWS
SEPTEMBER 7-13, 2009
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Clothing industry
Paper cuts
Dressing down
An ailing market is experiencing cost cuts, mergers and acquisitions
Clothing sales in Poland where hit hard in H1
The face of the print media market is changing as a result of poor ad sales and other financial issues. A prominent example of this will be the appearance on September 14 of a new title called Dziennik Gazeta Prawna, a daily born from the fusion of Axel Springer Polska’s Dziennik and Infor Biznes’ Gazeta Prawna. The daily will have three main sections – news and politics content will be created by the former Dziennik team, while the economic and legal sections will be handled by Gazeta Prawna staff. The new entity is owned by Infor Biznes, which is part of the Infor PL capital group. Axel Springer Polska retains a 49 percent stake, although analysts regard this as the German publisher’s tacit acknowledgment of its failure to conquer the Polish market with Dziennik, which launched in April 2006. According to trade magazine Press, 33 Dziennik journalists have been fired by the new owner and over 100 have already moved to Infor Biznes’ headquarters. Their salaries will be cut by 20-30 percent to the
Daily reading National readership of Polish dailies in H1 2009
14.97% 36.71% 14.79% 7.77% 0.25% 0.40% 0.87%
3.80% 3.77% 4.09% 2.61%
7.21%
2.76%
Fakt
Dziennik
Puls Biznesu
Gazeta Wyborcza
Przegląd Sportowy
Parkiet
Metro
Echo Miasta
Other
Super Express
Gazeta Prawna
Rzeczpospolita
Gazeta Podatkowa Source: Millward Brown SMG/KRC
standard wage levels at Gazeta Prawna. Consolidation is just one tactic being employed in the market. Publisher Agora slashed employment earlier this year, a move which saw some top journalists fired from its flagship title, Gazeta Wyborcza, and others moved to other entities within the media group. Presspublica, which publishes Rzeczpospolita, Parkiet and ˚ycie Warszawy, was forced to lay off dozens of journalists. Some content produced for Parkiet has also been printed in
Rzeczpospolita, and vice-versa, as a method of cutting costs. Acquisitions are another solution. Apart from the Dziennik and Gazeta Prawna deal, another popular title has recently changed hands. Weekly Przekrój was sold by Edipresse to Grzegorz Hajdarowicz, a Kraków businessman and owner of film production group Gremi, in late August. “I want to make something like The New Yorker out of it,” he said during his first meeting with the Przekrój team. Marcin Poznaƒ
Bioton more than doubles net loss while restructuring Polish insulin maker Bioton Group announced last week it that has made a net loss of z∏.42.8 million in the first half of this year. In the same period last year the company, one of a handful of human insulin makers in the world, recorded a loss of z∏.19.3 million. The firm’s Q2 sales rose over first quarter sales by z∏.5 million, to z∏.79 million. But total sales in the first half of
2009 – z∏.152.6 million – were eight percent lower compared to last year’s z∏.165.7 million. Chairman of the board Janusz Guy explained in a statement that last year’s high revenues were due to a one-off rights and equipment sale in Russia in the amount of z∏.30 million. Bioton reported an operating loss of z∏.49 million in the first six months of 2009. In the analogous period a year ago,
the company posted a profit of 23.7 million. “The loss noted in the first six months is due to management’s implementation of a restructuring strategy for the group,” explained Mr Guy, who became chairman in January. Bioton shares have surged 50 percent since the start of the year, compared to a 24percent gain for Warsaw’s benchmark WIG20 index. MO (Reuters)
The clothing industry had a rough first half. H1 results from the sector reflected the effects of a depreciated z∏oty, which pushed up import prices and rents in shopping malls. Companies were forced to counter narrowing sales margins by cutting costs. The fashion and beauty division of Empik Media & Fashion – which distributes brands like Hugo Boss, Esprit and Mango on the domestic market (through subsidiary Ultimate Fashion) and the Ukrainian, Russian and Kazakhstani markets (through Maratex) – registered a six percent y/y fall in sales in H1. Other fashion firms were harder hit. LPP, owner of brands such as Reserved and Cropp, announced that its net profit for the period had fallen by almost 60 percent y/y, to z∏.22 million, although rev-
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Print media
5
Clothiers had trouble hanging on to profit in H1 enues rose by 37 percent, to z∏.954 million. Although sales remained stable at Redan – owner of the Top Secret and Troll brands, as well as operator of the Textil Market discount store chain – profit margins fell by 6.5 percent, which resulted in a loss on sales of z∏.8.5 million and a net loss of z∏.16.2 million. “Our main goal was to maintain financial liquidity,”
said chairman of the board at Redan Piotr Kulawiƒski. However, the company is optimistic about its future, with a new investor and hopes for profit margin growth. Indeed, the industry saw some relief in July, when clothing sales shot up by 19.6 y/y percent, according to Central Statistical Office data. Perhaps profitability will arrive fashionably late this year. Martyna Olik
Information technology
Byte-sized growth Poland’s leading software manufacturer, Asseco, still has an appetite for European expansion Asseco CEO Adam Góral last week outlined his company’s plan to continue expansion, based on consolidation of smaller competitors. These acquisitions will take place in various countries around Europe. “We don’t have large financial barriers. I’m not afraid to invest to the tune of $400 million over the course of twothree years. I don’t exclude interest in bourse-listed firms from other markets. We want to build strenuously and we’re not abandoning this strategy,”
Mr Góral said at a press conference. The IT firm has already risen to the top of the pile in the CEE region, following a spate of acquisitions. It is now in acquisition talks with 17 firms from Austria, Hungary, Italy and Spain, as well as firms from Southeastern Europe and Scandinavia. However, the company is not ready to strike deals with larger competitors for the moment. “We won’t change our strategy of building around small companies, “ Mr Góral said. “We started to analyze very big entities, but we are not ready for that now,” he added. Asseco surpassed analysts’
expectations to post a 17 percent y/y net profit growth in H1. Operating profit rose to z∏.138 million, from z∏.120 million last year. Despite the success attributed to the company’s takeover strategy, sales of Asseco’s own software accounted for more than 50 percent of sales, due to the high profit margins. The firm’s revenues fell to z∏.707 million, from z∏.753 million last year. With the news of continued expansion and strong financial results, Asseco’s share price rose 4.2 percent on the day, making it the top performer on Warsaw’s WIG20 index. The firm’s share price reached its highest point in in 11 months. Jon Jackson (Reuters)
6
POSITIVE PERSPECTIVES
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Constitutional Council? Representatives of the Democratic Left Alliance (SLD) have proposed the establishment of a Constitutional Council, which would encompass former presidents, prime ministers, Sejm speakers and deputy speakers and current heads of parliamentary clubs as well as independent experts. The group would be responsible for evaluating the current Constitution and preparing a draft bill on possible amendments.
Interest in Ciech Service Over a dozen companies have declared interest in acquiring Ciech Service, a company controlled by chemical concern Ciech which specializes in human and property protection, cleaning services and real estate management. Interested investors have received financial data concerning Ciech Services which generated revenues of z∏.6.9 million in 2008. (Poland A.M.)
Not all the news is bad. In “Positive Perspectives” WBJ takes a look at the companies, industries and trends beating the global economic crisis
SEPTEMBER 7-13, 2009
Back on track? Poland's GDP growth, q/q (%) Q1
Economy
2.5
Poland in recovery?
2.0
Poland’s economy may grow faster than previously envisaged, according to a Reuters poll of analysts, but testing times still lay ahead
1.0
A survey of 28 economic analysts conducted on September 1 by Reuters has revealed a high level of confidence about the Polish economy’s growth this year. The experts see the economy growing by one percent in 2009, up from the previously predicted 0.6 percent. The forecast for next year is just as positive, with analysts now predicting 1.9 percent growth, increasing from the previously expected 1.7 percent. The predictions come after economic data was released in recent weeks showing Poland’s situation improving. The data has been so convincing that the analysts now believe the country to be entering a recovery phase. This view is shared by
Nordea Bank. “It seems clear that the recovery has begun and that recession has been avoided. The speed of the expected recovery is uncertain, but the starting point is certainly decent,” the financial institute said in a September 2 report. “This is because of the faster-than-expected recovery in the euro-area economies, and in the German economy in particular, and because of the weak z∏oty that is helping the competitiveness of exporters.” The data for manufacturing PMI in August revealed it is also on the rise, increasing in the fourth consecutive month to 48.2 points, the highest level it has reached in 15 months. These facts point toward a bright outlook for the economy, and that has been echoed in the Q2 GDP growth rate, which reached 1.1 percent, doubling analysts predictions, and resulting in higher z∏oty and stock prices after the data was released. Such is the confidence in the nation’s economy, it is now believed that the central bank
will not reduce borrowing costs anytime soon. The bank’s key rate currently stands at 3.5 percent, an all time low. Despite all-this encouraging data, there are reasons to be cautious. Exports, while boosted by the weak z∏oty, are not yet anywhere near what they were before the crisis began and domestic demand, particularly in the investment sector, is extremely low. The government also has a huge financial headache in the form of the state budget, which is in danger of topping 50 percent of GDP by the end of this year. Marcin Mróz, chief economist at Fortis Bank, believes
Q3
Q2
Q4
1.5
0.5 % -0.5
2007
2008
2009
Source: Central Statistical Office
the recovery process is underway, but that it won’t be without it’s problems. “When it comes to the numbers, I am an optimist as well. I now think that full-year GDP will be at about one percent. But the recovery has a strange form. We have weak domestic demand, yet a positive net contribution of exports
plus a modest rise in consumption,” said Mr Mróz. “This could be maintained in the short term, hence better forecasts, but as long as domestic demand or exports do not show permanent signs of a recovery, I still see current GDP data in a negative light,” he added. (Reuters) Jon Jackson
Millions of z∏oty for e-businesses Starting on October 26, Polish entrepreneurs will be able to apply for EU funds to run an online business. Small businesses which have existed for less than a year and involve the internet or other electronic distribution channels – mobile phones, for example – will be eligible for the funding. According to Gazeta Prawna, small-businesspeople will compete for z∏.150 million in the grants under the Innovative Economy operational program, which supports
innovative entrepreneurial undertakings. Companies can apply for a maximum of z∏.1 million each, but they are required to cover at least 15 percent of the investment value from their own pockets. Most applications involving e-tail are expected to be excluded because government officials have decided to focus on service providers. According to data from the Ministry of Interior and Administration, which is involved in the distribution of EU funds, Polish entrepre-
neurs generally respond to such funding initiatives with alacrity. During three previous e-business development grant competitions, involving a total sum of z∏.2 billion, the ministry received over 2,600 applications. Around 473 entrepreneurs won grants in these competitions, receiving a total of z∏.250 million. Applications can be sent to the Polish Agency for Enterprise Development (PARP) from October 26. Martyna Olik
legal news Management of greenhouse gas emission in Poland
Settlement of monies from training funds
On September 18, 2009, an act is to come into force relating to the management system of emission of greenhouse gases and other substances. The purpose of the act is, among other things, to make it possible to use the surplus of emission quotas to which Poland is entitled under the Kyoto Protocol (through the so-called Green Investment Scheme). Funds raised from the trading in emission credits may be used to finance investment projects aimed at air and climate protection.
On July 29, 2009, the President of the Republic of Poland signed the Act of July 1, 2009, on Mitigation of the Consequences of the Economic Crisis for Employees and Entrepreneurs which, among other things, introduced changes relating to settlement of monies from training funds. The Act allows taxpayers to recognize contributions to a company’s training fund as tax deductible. However, this recognition is allowed provided that the monies from the fund have been used in the tax year in which they were collected or, at the latest, in the following year.
No more additional technical inspections On September 22, 2009, an amendment to the Road Traffic Act comes into force. Pursuant to the amendment, in a case where a vehicle is brought to Poland from other EU countries, Switzerland or EFTA member states, no additional technical inspection will be required in Poland. In order to register the vehicle in Poland, it will be sufficient to present a certificate of technical inspection performed in country from one of the aforementioned groupings.
False invoices will not reduce VAT Pursuant to the judgment of the Voivodship Administrative Court in Gdaƒsk, a taxpayer who issues false VAT invoices for goods or services has no right to deduct the VAT of such invoices as the actions documented by the invoices have not actually been performed. ●
Compiled by Peter Nielsen & Partners Law Office Contact: Miros∏aw Stefanik, ms@pnplaw.pl
ECONOMIC FORUM
SEPTEMBER 7-13, 2009
The Economic Forum in Krynica
This year’s Economic Forum the biggest yet
Every year at the beginning of September, CEOs, politicians, entrepreneurs, analysts, consultants and opinion leaders gather in Krynica-Zdrój for the Economic Forum, an event that has grown both in size and significance since it first began in 1992. This year is no exception, with organizers boasting that an unprecedented number of debates will be held during the forum – over 140. These debates will be held along 12 thematic “tracks” – Macroeconomics, Business & Management, International Politics & Security, Regions, Society, Fuels & Energy, the European Union & its Neighbors, New
7
Economic Forum in KrynicaZdrój, 2009 schedule Wednesday, September 9
Economy, the Nation & Reforms and Science & Culture. Also included will be two new themes: Non-governmental Organizations and Investment, Privatization & Economic Development. The forum will open with the presentation of a new PricewaterhouseCoopers report describing the effects of the global economic crisis on Central and Eastern Europe. This will be followed by a debate moderated by Professor Witold Or∏owski, who served as an economic advisor to former President Aleksander KwaÊniewski. Three awards will also be given out, in the categories of Man of the Year of Central and Eastern Europe, Company of the Year of Central and Eastern Europe and New Culture of New Europe. Organizers have also planned a number of recre-
Debates galore There are a huge number of interesting discussions and debates taking place at this year’s Economic Forum. Below is a section of the over 140 that will be held • 1989 – Year of Change • Afghanistan – The Biggest Challenge for World Security? • Attractiveness of Investment in the Region. The Economic Outlook for Poland and the Region • Central Asia: Energy Supplier or Test Area for EU Foreign Policy? • Energy Security – Common Target of the EU and Russia. Problems, Solutions. • Establishing a Secure and Efficient Gas Market in Central Europe • Fighting the Economic Crisis: Is There a European Way Out? • Doing Business 2010 – New EU Countries and Poland • European Agricultural Policy – Today and Tomorrow • Post-Soviet Countries’ Elites and Territorial Integrity of Newly Independent States • The Euro in Central Europe – Elusive Dream or Imminent Reality? • Europe in the Face of the Financial Crisis: A Light at the End of the Tunnel? • Europe after the Crisis – New Agenda for the European Union • Central and Eastern Europe towards Russia: Searching a New Way of Communication • Global Security Architecture of Europe • European Regional Policy – Directions of Development After 2013 • European Social Model as a Stabilizer of the On-Going Crisis • European Dilemmas: Europe in the Face of an Economic Crisis • Financing of the Major Infrastructure Projects by the Financial Institutions in Times of Recession • European Funds: Entrepreneurship and Development. Experiences and Recommendations • Where is Polish Football? Achievements and Challenges of the Professionalization of Polish Football Clubs • Geopolitics of the Evolving Global Gas Market: What Are the Implications for Europe? • Global and Regional Security Challenges in the Baltic Sea Countries. Rational Answers to New Global and Regional Security Threats: The Way Ahead • Eastern Europe Economies at a Crossroad: Can They Avoid Meltdown?
4 pm . . . . . . . . . . . . . . .Inauguration with a plenary session 5:30 pm - 8 pm . . . . . . .Discussion panels 9 pm . . . . . . . . . . . . . . .Economic Forum Awards Ceremony
Thursday, September 10 9 am . . . . . . . . . . . . . . .Plenary session 10 am - 6 pm . . . . . . . .Discussion panels 10 am - 8 pm . . . . . . . .Recreational events 6 pm . . . . . . . . . . . . . . .Cultural events 9 pm . . . . . . . . . . . . . . .Economic Forum banquet
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The annual gathering of leaders and opinion makers will be the largest in its 19-year history
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Friday, September 11 9 am . . . . . . . . . . . . . . .Plenary session 10 am - 4 pm . . . . . . . .Discussion panels 10 am - 8 pm . . . . . . . .Recreational events 6 pm . . . . . . . . . . . . . . .Cultural events
The Economic Forum has a distinct CEE flavor ational events, including picnics and trips around the city, as well as horse riding. There will be cultural events as well, including concerts and movie projections. Two other forums will be held in conjunction with the main Economic Forum in Krynica. The first is the Invest-
ment Forum, to be held in Tarnów on September 8 and 9, while the second will be the Regional Forum in Muszyna, which takes place from September 9 through 11. The Economic Forum in Krynica this year takes place September 9-12.
Thematic tracks • Macroeconomics • Business & Management • International Politics & Security • Regions • Society • Fuels & Energy • The European Union & its Neighbors • New Economy • The Nation & Reforms • Science & Culture • Non-governmental Organizations • Investment, Privatization & Economic Development
Andrew Kureth
• The Idea of the Russian National Security and Perspectives of relations with EU untill 2012. • How Much Is Your Money Worth? How Business Can Effectively Support the NGOs? What Role Should the Government Play? • Opening plenary session: European Solidarity 20 Years After the Revolution • Innovative Customer Demand Management Solutions for Energy Sector • Infrastructure Investments Under Crisis Conditions: a Barrier or a Chance? • How Does the Decision Making of the State Authorities Influence Long-Term Investments? • 20 Years of Economic Freedom in CEE – Successes and Failures • CE TOP500 Or How Central European Champions Are Doing • What Kind of Future for Ukrainian Economy? • What Future for Democracy? • What Kind of Public Media do We Need? European Models of Public Media Financing • What are the Requisites of a Fair Public Debate? • How to Benefit from the Intellectual Capital of the Elderly? • Southern Caucasus - Region of Geopolitical Interests of United States, Russia and EU. Is Cooperation Possible? • Communication Has To Be Dialogue - Building New Platforms of Co-operation for NGOs • Crisis as an Opportunity for Deep Restructuring • Culture vis-á-vis Market Turmoils – 20 Years After... • The International Economic and Financial Crisis, Political Extremism and Antisemitism • International Supervision of Financial Markets vis-á-vis Economic Crisis • Science Energizing Economy – Vision of Post-Crisis Development • Illicit Money Flows and Their Influence on the Political Decision Making • New technologies and sustainable development – a new chance for the European industry? • Modern Regional Policy as an Instrument of the Regional and National Development • Environmental Protection and Economic Growth: How to Ensure a Region’s Sustainable Development • From Brand to Passion: Brands’ Strategies Over the Recession • From Identity to Reality. How to Create the Image of Countries, Cities and Regions to Make Them Feel Proud and Self-Confident? • Will Economic Crisis Make Russia Become More Cooperative or More Offensive? • Partnership of the European Countries in Building Regional Energy Security • Eastern Partnership 2009: Role of Regional and Local Governments in Creating Cooperation • Tax Policy as a Tool for Combating Recession
• Foreign Policy of Russia Towards the EU and the EU Member States – Cooperation or “Divide and Rule?” • US Foreign Policy Under Barack Obama: Implications for Europe • Poland’s Path Towards the Euro – Where Do We Stand? • Poland in the European Union: A Poor Cousin or A Rising Star? • Attracting Investments in Times of Crisis: Competitiveness of the CEE Region • Pragmatism or Wishful Thinking – European Union’s Eastern Policy? • The President, the Pope, and the Prime Minister: Three Who Changed the World • Private or Public? Advantages and Disadvantages of State Ownership in the Economy • Private Health Insurance as Part of the Health Care System in Europe • Opposite Poles? Health Care Systems in “Old” and “New” Europe • Future of Nuclear Energy in Central Europe • Future of Gas & Oil Supplies to the EU via Southern Caucasus • Points for Origin – Regional Brands in a Borderless Word • The Role of Media in Central Eastern Europe: Challenges and Opportunities • Russian Gas and the European Market. Rules of the Game • Corporate Social Responsibility in Times of Crisis • Turkish Relations with the Western World: A Breakthrough? • The World After the Crisis. A New Economic Order • The Swedish EU Presidency • Czech and Slovenian Experiences with the European Presidency • The Energy/Climate Transformation of Central and Eastern Europe • The Weimar Triangle: Is Common Eastern Policy Possible? • Hard Landing. Central & Eastern Europe Facing Global Crisis • UEFA EURO 2012 – What Impact Can a Great Sports Event Have on The Economy? • The Fall of The Empire. 20 Years Later. • Five Years of the CEE Region in the EU – beneficiary of the European Funding – Conclusions and Perspectives • Information Wars in Central and Eastern Europe. Based on the Example of Russia and Ukraine • Impact of the Financial Crisis on East and South Eastern Europe • Present-day Reality and Positioning of Ukraine in the World • Regional Cooperation - Experience and Opportunities • The European Elections of 2009 – is European Democracy Possible? • Managerial Remuneration Packages and Management Effectiveness • Political Power and Business in New Democracies: Risk of Interlacing • The Power of Cities in the Global Economy • Sustainable Development of The 21st Century’s Cities
COVER STORY
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Legal Eye
Poland’s political clout Paul Fogo is a senior attorney with Miller, Canfield, W. Babicki, A. Chelchowski & Partners. fogo@pl.millercanfield.com In June of this year, voters in the EU elected their representatives to the EU Parliament. In total 736 parliamentarians were elected, representing more than 492 million citizens from across 27 member states. Poland elected 50 Parliamentarians. Germany, the EU’s most populous member state, elected 99, while Malta, the smallest, elected just five. A month following the parliamentary elections, the newly seated Parliament elected Jerzy Buzek, a member of the Polish delegation, as President of the Parliament. Mr Buzek, a former Prime Minister of Poland, has served in the European Parliament since the moment Poland joined the European Union in 2004. In addition, Micha∏ Kamiƒski, also a member of the Polish delegation and a former spokesperson for Polish President Lech Kaczyƒski, was elected to head one of the seven political parties inside the European Parliament. The selection of these two Polish nationals to such high profile positions within the European Parliament raises the question of just how much influence Poland can expect to exert in the EU in the coming years. Let’s take a look at the reality, as well as the perception.
Council At present Poland enjoys a “weighted” voting power of 27 within the Council, just two votes less than France, the United Kingdom and Italy, each of which have populations exceeding 60 million compared to Poland’s 39 million. In other words, the reality is that Poland has exerted from day one an elevated degree of power within the Council, the EU’s main decision-making body, at the expense of more populous member states.
Commission Each member state is assigned one seat on the Commission, putting Poland on par with other member states. The Commission serves as the EU’s executive branch, responsible for drafting legislation and managing the dayto-day business of the EU. The reality is that Poland does not enjoy a voting advantage or disadvantage within the Commission. Under changes included in both drafts of the Constitution, however, the number of Commissioners would be reduced, meaning that not all member states would be represented on the Commission.
SEPTEMBER 7-13, 2009
Poland in the EU
Taking the world stage
Marcin Poznaƒ
Parliament The perception is that the election of Jerzy Buzek as President of Parliament will, at the very least, give Poland a front row seat to all legislative initiatives. The reality is that Jerzy Buzek now represents the Parliament vis-à-vis the outside world and the other EU institutions. Within the Parliament, the president is charged with upholding Parliament’s rules of procedure, as well as signing into law the EU’s budget, among other responsibilities. The selection of Micha∏ Kamiƒski as head of the European Conservatives and Reformists Group, one of seven political groups within the Parliament, should in reality increase Poland’s influence within the Parliament. Why? The leaders of the seven political groups, in cooperation with the president, form the Conference of Presidents, which is charged with setting the overall agenda of the Parliament’s plenary meetings. Two of the eight members of the Conference of Presidents setting the Parliament’s agenda will now be Polish nationals. Other MEPs would be smart to take Polish lessons. ●
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8
Jerzy Buzek is the newly elected president of the European Parliament
Poland, the European Union’s sixth-largest country, is growing into a force to be reckoned with. A Pole currently presides over the European Parliament and the nation itself will take over the bloc’s rotating presidency in less than two years. But is Poland really up to the task of leading the union? The European Union is facing perhaps the greatest challenges it has ever confronted . The economic crisis has shaken national governments throughout the bloc and the fate of the Lisbon Treaty – whose ratification is necessary if the EU is to evolve as a single entity – hangs on a second Irish referendum slated for October 2. More hurdles lie ahead in the longer term and European leaders are divided on how to approach them.
Helping to steer the EU’s legislative efforts in this difficult time is Jerzy Buzek, a noted Polish expert in energy matters and scientific research chosen in July to head the European Parliament. The former prime minister is not the only Pole in Brussels occupying a leadership role. So how much of a hand will Poland have in the European Union’s successes – or failures – in the future? If the growing number of Poles entering the bloc’s structures is
anything to go by, the answer could be plenty.
A ‘personnel’ touch Nevertheless, politicians from Poland with name-recognition aren’t a dime a dozen. There are plenty of well-qualified Polish politicians and staffers in Brussels, but relatively few high-profile positions. Aside from Mr Buzek, the Pole best known in Brussels is probably Danuta Hübner, the EU commissioner for Regional Policy during the EP’s 20042009 session. She was elected an MEP in this year’s elections and will head the European Parliament Committee for Regional Policy, overseeing distribution of funds for poorer EU regions. The new composition of the European Commission should
be revealed this month and, like all member states, Poland will appoint one politician to serve as a commissioner. Media reports have so far suggested that the frontrunner is economist Janusz Lewandowski, an experienced politician, former MP and minister of privatization, and an active MEP since 2004. He is well known for his work as chairman of the EP Budget Committee. “Several leaks from the Polish government lead us to think Poland will take a commission associated with economy, probably the budget commission. If this is really the case, and a Pole indeed heads one of the most important commissions, then Poland’s significance in the EU will grow even more,” said Katarzyna Pisarska, an expert on EU issues at the Casimir
COVER STORY
SEPTEMBER 7-13, 2009
Pulaski Foundation and the director of the European Academy of Diplomacy. Poland’s MEPs also have a chance to have a major impact on future EU law. In the 20092014 session of the European Parliament, a number of Polish MEPs will turn their attention to legislative activity. “Work in legislative committees is thankless, because it doesn’t bring any easy media attention, but requires serious dedication and deep knowledge,” Konrad Szymaƒski, an MEP from the Law and Justice party, told the Polska daily. He added that this is the area in which the EP’s most important decisions are born. “The participation of Polish politicians in these committees shows how confident Poles feel in the European Parliament,” he said.
Presidential potential Observers say that it is extremely important right now for Polish representatives to appear strong and capable, so they can help overcome the current leadership crisis within the EU. “In a tough global economy, the EU should have strong leadership which will be focused on exiting the crisis, ending the danger of protectionism and making sure the deadlines on the EU presidency’s calendar are heeded on the eve of the new European Commission,” Miko∏aj Dowgielewicz, head of Poland’s Office of the Committee for European Integration (UKIE), the body responsible for preparing the Polish government for its 2011 EU presidency, told WBJ. Poland’s EU presidency, according to Dowgielewicz, will give the country a chance to present its own priorities and suggest its own ideas and initiatives. Other major European countries have their own prob-
lems: the UK is preoccupied with its own exceptionalism, Italy is struggling as always with its own domestic issues, and the EU’s German-French engine is sputtering. In other words, a strong presence in the European Parliament and a well-prepared presidency offer Poland the chance to take a leadership position in the EU. “Well-prepared,” however, is the key phrase. Memories of the Czech Republic’s disastrous presidency in the first half of this year are fresh and will hopefully serve as a lesson for Poland. Przemys∏aw ˚urawski vel Grajewski, an associate professor at the University of ¸ódê’s International and Political Studies Department, calls for optimism. He rejects the idea that the EU should fear another CEE member state’s presidency simply because the Czech Republic bungled the job. “Slovenia was the first new member to hold the presidency and it is just a nation of twomillion. I don’t see why Poland would not be able to cope,” he explained. The experience of the Czech presidency was punctuated by a number of serious events, including the economic crisis and the collapse of the Czech government. Another example of that presidency’s failure was the Ukrainian-Russian gas conflict, which eventually affected several member states. “The Czechs withdrew from any attempts to resolve [the gas conflict],” said ˚urawski vel Grajewski. “Of course the youngest EU members are still in the process of learning certain things,” Ms Pisarska said. She noted, however, that Poland will probably preside over the EU after the matter of the Lisbon Treaty is decided. “I don’t expect any major turbulence during Poland’s six-
month presidency, unless another crisis hits,” she said. Thus, barring catastrophe, Poland’s turn at the head of the bloc could be used to pursue its own projects, such as the development of the Eastern Partnership program, which seeks to foster close cooperation between the EU and countries east of its border. Mr ˚urawski vel Grajewski considers this a natural choice for Poland, since many of the country’s policies are naturally directed eastward. Katarzyna Pisarska under-
Not everyone agrees that such massive undertakings are the key to improving the bloc’s fortunes, though. According to Mr ˚urawski vel Grajewski, Poland should focus on tasks that are achievable in the short-term, rather than engaging in big long-term projects. “It is much better to set pragmatic goals which are possible to achieve. We should team up with the EU countries that precede and succeed our EU presidency to work together on getting results, and we should start to talk about it with them right now,” he said. Miko∏aj Dowgielewicz of UKIE admitted that preparations are underway to improve the Polish presidency’s itinerary. “We want to connect it with the preparations of the other two countries of our ‘trio’ – Denmark and Cyprus,” he said, referring to the two presidencies following Poland’s. The Casimir Pulaski Foundation’s Katarzyna Pisarska stressed the importance of foreign policy for the union. “What the EU needs right now is a global political perspective, like the US or China have. There is a lack of vision at the moment,” she said. “The solution can only originate from strong personalities, not EU institutions. Polish politicians have a role to play here. Instead of sticking with their own ideas, they should present an openness to other EU members’ concepts,” Ms Pisarska added. “Poland’s success in the EU in the coming years depends on the will and persistence of the Polish political elite.” Indeed, Poland’s own foreign policy will also be closely watched by its EU counterparts in the coming years to gauge the tone it will set during its presidency. “Poland has
“There is this unacceptable dualism resulting from the ongoing conflict between the president and the prime minister about who leads in foreign matters” scored, though, that while the Polish presidency is expected to be easier than the Czech Republic’s, Polish parliamentary elections planned for autumn 2011 could complicate matters. “If they are not moved forward, our presidency could be turned into a disaster. We will have election campaigns instead, and a feeling of political uncertainty,” she said.
Political will wanted In a July report entitled “Europe can do better. A New Agenda for the European Union”, think tank demosEuropa-Centre for European Strategy stressed that the EU needs to undertake a demanding new integration project, like the creation of the single market in 1980s or the adoption of the single currency in 1990s. “The stagnation has to be broken,” the authors of the report stated.
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traditionally had a tough attitude towards Russia, which raises eyebrows among some older EU states. If we maintain this during our presidency, Poland could be accused of using the EU’s authority to fix Polish-Russian problems,” Mr ˚urawski vel Grajewski cautioned. He also criticized the current paralysis of Polish foreign policy. “There is this unacceptable dualism resulting from the ongoing conflict between the president and the prime minister about who leads in foreign matters. As a result, the Polish government is completely passive in this area of policy. This has to be changed, because during its presidency. Poland will be expected to be a creator of policies rather than a mere subordinate,” said Mr ˚urawski vel Grajewski. The conflict between president and PM may or may not be solved by next year’s presidential election. Regardless, the adoption of a forwardlooking, proactive approach to foreign policy and intra-EU policy will be necessary if Poland’s presidency is to be a success. And this, like so much else, depends on the politicians. ●
Relay race The EU's rotating presidency 2008
Jan-Jun
Slovenia
Jul-Dec
France
2009
Jan-Jun
Czech Rep
Jul-Dec
Sweden
2010
Jan-Jun
Spain
Jul-Dec
Belgium
2011
Jan-Jun
Hungary
Jul-Dec
Poland
2012 2013 2014
Jan-Jun
Denmark
Jul-Dec
Cyprus
Jan-Jun
Ireland
Jul-Dec
Lithuania
Jan-Jun
Greece
Jul-Dec
Italy
9
PGE to boost capital The management of Polish Energy Group (PGE), declared that its November IPO would bring more revenue than expected by analysts. Forecasts anticipate a figure of between z∏.4-5 billion, although PGE hopes to raise z∏.6 billion. The group wants to issue shares which will amount to up to 15 percent of the total capital, which means around 220 million shares could be sold.
€1 for Electro World It was confirmed last week that British company DSG International, operator of the Electro World network of stores, is withdrawing from the Polish market. The network was sold for a symbolic €1 to Mix Electronics, as the Electro World network in Poland is far from profitable.
“n” development plans Representatives of the “n” digital television platform, which belongs to TVN and ITI, have presented the company’s plans for the remainder of this year. The digital platform is still working on a multi-room service, which was already introduced by market rival Cyfra+ several weeks ago. (Poland A.M.)
10
OPINION
www.wbj.pl
SEPTEMBER 7-13, 2009
9/11: three lessons for Poland
T
here will be a lot of talk this week about the September 11, 2001 attacks on the United States. Some of the coverage of the event will be meaningful, perhaps even insightful. But most will not. Ignore the emotional rehash offered by the international media. Instead, take a private moment on 9/11 to reflect upon and perhaps mourn the nearly 3,000 people murdered eight years ago. Take a moment to consider the iniquity behind this and other terrorist attacks. And then pause for a second to consider the lessons that should have been learned from the event, but haven’t. The list which results will obviously vary from person to person and could, in some cases, fill an academic treatise. This is certainly true if you consider the lessons Poland hasn’t quite learned. So, for brevity’s sake let’s boil it down to three prime examples.
Stay calm Don’t let emotion guide your foreign policy. In the aftermath of 9/11, the Bush administration, filled with righteous anger, launched two largely conventional wars against unconventional enemies. Judging by most qualitative measures so far, it seems unlikely that the US, Iraq or Afghanistan will have much profit to show from these engagements in the near future. In the Polish context, this lesson is most relevant in the way the country deals with Russia and Germany. Many politicians – in particular the excitable Jaros∏aw Kaczyƒski, head of the opposition Law and
Justice party, and his brother Lech, Poland’s president – have an unfortunate habit of flinging historical wrongs in the faces of modern German and Russian politicians. Past injustices should be addressed, that is part of the healing and restitution processes. But simply fanning old flames does not solve problems. Nor does reacting angrily and without sufficient planning, as the US case shows.
Assume nothing Don’t assume your allies’ gratitude will translate into tangible reward. When 9/11 occurred, Poland cleaved to the US and offered what sup-
“Poland appears to have officially demanded little in return from the US for its support. Perhaps next time it should ask for more” port it could. Polish troops were part of the War in Afghanistan from the beginning, and later, as the US sped pell-mell into Iraq, Poland followed right behind. This should not necessarily suggest that Poland took a wrong step in joining the “War on Terror,” particularly if its participation was based on principle. However, years of complaints from Polish politicians about matters such as tourist visa requirements and lack of military support from the US suggest that the country’s involvement was accompanied by expectations of reciprocation.
If so, it has yet to materialize. During the Bush years Poland at least enjoyed lip service from America. It got a pat on the head now and again, if nothing else. But since the Obama administration took over, it has been increasingly obvious that Poland is very low priority on the US agenda. This fact was vividly illustrated by the US sending its National Security Advisor to last week’s WWII commemorations, which stood in sharp contrast to the toplevel delegations sent by most European nations. Poland appears to have officially demanded little in return from the US for its support. Perhaps next time it should ask for more.
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Stay vigilant Don’t let your guard down. This is the most obvious lesson of 9/11 and the most difficult to learn. The September 11 attacks themselves are a perfect example of this – just eight years earlier, the same terrorist organization that perpetrated 9/11 had attacked the same location. Despite its staunch support for the American “War on Terror,” Poland has thus far avoided incident. Of course it’s impossible to tell whether this is due to heightened security measures or to the fact that Poland is a low-priority target, but the permeability of its intra-EU borders and the length of its eastern border make for a security nightmare. Disciplined vigilance may not guarantee safety, but it works rather better than than political fear-mongering. Let us hope that Poland’s politicians have taken note of this, at least in part. ●
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weekly supplement on real estate, construction and development
LOKALE IMMOBILIA SEPTEMBER 7-13, 2009, LI 14/35
Miƒsk Mazowiecki ring-road The construction of the Miƒsk Mazowiecki ringroad was launched last week. The road, which will eventually constitute part of the A2 motorway between Warsaw and Kukuryki, will provide traffic relief for the city; currently all long-haul transport runs directly through it. Construction work is being performed by the consortium of PBDiM Miƒsk Mazowiecki, Astaldi, PRD Regionalne Drogi Podlaskie, PBL Mazowieckie Mosty and WPM Mosty. The contract is worth z∏.567.4 million and investor supervision will be performed by Egis Poland and Egis RouteScetauroute.
Motorway tenders
Roads to ruination?
Budimex Dromex, in a consortium with Wakoz, will revamp the Arka Gdynia soccer stadium, which is located on ul. Olimpijska in Gdynia (Pomorskie voivodship). The value of the contract is z∏.64.3 million and workers will enter the site on December 1, 2009. The existing stadium will be largely dismantled to make way for a new 15,000-seat arena. The deal also includes delivery of roofing over the stands, a new soccer pitch and lighting, sound and monitoring systems. The new venue will be ready by October 18, 2010. (Real Estate Newsletter)
In this issue OP Architekten interview . .12 US investment in Europe . . .12 Property-related stocks . . . .12 Motorway tenders . . . . . . . .13 Orco results . . . . . . . . . . . . . .14 Sports center plan . . . . . . . . .14 Wilanów Office Park . . . . . . .15 Warimpex results . . . . . . . . .15 JW Construction results . . . .15
COURTESY OF GDDKIA
Budimex’s Tricity stadium
Some experts worry that undercutting may lead to poor-quality roads
Poland’s preparations for the Euro 2012 soccer championships, bolstered by European Union funds, are accelerating the pace of motorway construction in the country. At the same time, road contractors are engaging in cutthroat competition for tenders, a phenomenon which has some industry watchers worried. Is the “lowest bid wins” model lowering the quality of construction of new highways in Poland or is it simply the only fair way to go about the 13 tendering process?
Capital planning The quality of architecture and urban planning in Warsaw is improving, but the city still needs to focus on consistency and create a more coherent vision of its future, Wojciech Pop∏awski of Vienna’s 12 OP Architekten tells Lokale Immobilia
Crisis-stricken Orco Property Group posted a €199.9 million loss in H1 2009, triggering speculation that the company could be liquidated. The developer has denied the allegations however, claiming its operations are not in danger 14
LOKALE IMMOBILIA – REAL ESTATE
www.wbj.pl
Hochtief builds for Honda Hochtief Polska’s Poznaƒ branch has signed an agreement to build a 23,277-sqm logistics center for Honda in Pniewy. The value of the investment was not disclosed. Work will commence in September 2009, and the complex is scheduled to be completed in April 2010. Honda Logistics Center Central-Europe, as the scheme is called, will supply spare parts to Honda dealerships in Poland, the Baltic states and eastern Germany.
Ronson’s H1 profit Ronson Development reported revenues of z∏.42.1 million and a net profit of z∏.6.1 million in H1 2009, marking significant y/y increases on its H1 2008 results (z∏.22.9 million and z∏.2.5 million, respectively). In the first half of 2009, the company completed its Galileo residential estate in Poznaƒ and Imaginarium II in Warsaw. It sold 118 apartments in the period. (Real Estate Newsletter)
SEPTEMBER 7-13, 2009
Urban architecture
A tale of two cities Lokale Immobilia sits down with Wojciech Pop∏awski, co-founder of Vienna-based architectural studio OP Architekten, to talk about the state of architecture in Warsaw and how to improve it, as well as the differences between the Polish and Austrian capitals in terms of urban planning Adam Zdrodowski: As a Pole living and working in Vienna, what’s your perspective on the process of development here in Warsaw? Wojciech Pop∏awski: I have been observing the process of development in Warsaw and the way it has been changing for over 10 years now. At the very beginning, the process was certainly very dynamic and often not properly controlled by city authorities. Some of the locations of high-rise buildings constructed in the 1990s, for example, were rather arbitrary. When we were working on the design of the InterContinental hotel in the city center, the rules pertaining to where skyscrapers should be located and what the city center should look like already seemed to be clearly defined. I have the feeling that, with more zoning plans being drafted, the authorities’ control over the city’s development is
improving every year. It is going to be a long, slow process, but Warsaw will ultimately be like Vienna – where the rules of the game are very clear and investors can find practically all the necessary information concerning the requirements for planning an investment online. How can urban planning in the Polish capital be improved? On one hand, there is a need for more zoning plans and for those plans to be more detailed. On the other hand, however, zoning plans in Warsaw are often the result of many compromises and a lack of a unified urban vision that would let the city realize its major goals. Projects such as the arguably successful revitalization of [Krakowskie PrzedmieÊcie near the Old Town] are still too few in Warsaw. Competitions for [architectural studios to propose] spatial
development plans for particular areas – some of which have already been seen in the city – would certainly help, although the realization of ambitious visions would undoubtedly have to involve the resolution of difficult proprietary issues. You have designed a number of buildings in downtown Warsaw and have proposed a master plan for the area around the intersection of ul. Marsza∏kowska and Al. Jerozolimskie. What is your vision of the central part of the city? In my opinion, the city authorities’ current vision, which allows for high-rise development around the Palace of Culture and Science, is correct. The new buildings would provide a background for the palace and justify its existence, but at the same time would not obstruct the view of the structure. To the east of the palace these plans call for low-rise, publicly accessible buildings with cultural and other functions, which is also proper. What’s your assessment of the quality of modern developments in Warsaw, architecturally speaking? Certainly many new buildings
MATEUSZ GO¸ÑB/WBJ
12
Architect Wojciech Pop∏awski sees Warsaw’s development as a long, slow process in Warsaw are of European or even global standards. However, when we compare Vienna with Warsaw, or Austria with Poland, we must say that in the former, modern architecture is generally of a much higher quality. This results from many factors, including sociological ones, such as the fact that Vienna’s development has been more harmonious than that of Warsaw. Citizens’ awareness of architecture is also much higher in Vienna. In Poland, and particularly Warsaw, there is still a big discrepancy between very good and very poor designs, while in Vienna the quality of the city’s projects is more consistent. Warsaw’s downtown has recently seen the development of a number of top-quality buildings, but some residential districts in the southern part of
the city exemplify architecture and urban planning that the capital cannot be proud of. What will you be working on in the future in Warsaw? We are currently working on the adaptation of famous tenement houses on ul. Pró˝na to serve office functions. The buildings will feature unique, high-quality office space as well as reconstructed, late 19th-century interiors, while the original functions of the ground floors will return, with cafes, restaurants and small stores. In this way, this last “authentic” street in the city’s very center will have a chance to return to life. We are also keeping an eye on architectural competitions in Warsaw, waiting in particular for those which will allow the delivery of new urban structures, in the broader urban planning sense. ●
Foreign investment
Property-related stocks Security
Closing price on Sept 03
% change (week)
52-week low
52-week high
% change (year)
Total shares
Market value (z∏.mln)
08OCTAVA
2.34
9.35
1.22
2.61
-10.00
125,843,667
294.47
ATLASEST
3.40
-7.36
1.81
7.39
-51.08
50,322,014
171.09
BUDIMEX
70.90
-1.66
50.65
84.50
-16.09
25,530,098
1,810.08
DOMDEV
42.70
2.89
14.80
45.70
15.41
24,560,222
1,048.72
ECHO
4.43
-5.74
1.70
4.91
-11.75
420,000,000
1,860.60
ELBUDOWA
184.00
2.28
121.00
202.50
-5.15
4,747,608
873.56
ENERGOPN
14.00
-3.45
6.20
15.40
30.84
23,827,044
333.58
ERBUD
49.00
-4.85
19.88
62.00
-19.67
12,571,025
615.98
GANT
24.00
4.35
7.70
28.70
5.26
15,329,900
367.92
GTC
25.00
-4.94
10.85
27.10
-7.34
219,372,990
5,484.32
HBPOLSKA
4.22
-12.08
4.14
7.90
-44.47
210,558,445
888.56
IMMOEAST
13.30
-7.32
0.88
15.72
-9.83
833,824,125
11,089.86
JWCONSTR
12.00
-11.11
4.02
17.00
-35.14
54,698,280
656.38
LCCORP
1.46
-12.57
0.51
1.77
-21.51
447,558,311
653.44
MARVIPOL
15.00
-19.35
10.25
26.10
2.04
35,914,200
538.71
MOSTALWAR
73.30
-2.91
36.34
79.00
35.12
20,000,000
1,466.00
MOSTALZAB
4.81
-9.42
2.18
6.43
-23.16
149,130,538
717.32
NAFTA
23.48
-14.62
12.35
28.00
-6.83
5,903,203
138.61
ORCOGROUP
34.31
-23.00
15.70
98.30
-63.88
10,943,866
375.48
PANOVA
27.79
-3.37
12.20
38.00
-26.68
8,000,000
222.32
PBG
213.00
-4.05
175.30
257.90
-19.92
14,295,000
3,044.84
PLAZACNTR
5.21
-8.60
2.10
6.09
14.00
292,431,381
1,523.57
POLAQUA
25.80
-2.27
10.49
53.95
-52.22
27,500,100
709.50
POLIMEXMS
4.11
-5.08
2.02
5.64
-28.52
464,355,625
1,908.50
POLNORD
45.00
-4.26
19.80
59.80
-18.77
22,153,881
996.92
PROCHEM
24.49
-8.28
13.03
58.90
-56.15
3,900,000
95.51
RONSON
1.39
-0.71
0.49
1.82
-28.72
226,966,667
315.48
TRAKCJA
3.91
4.27
3.40
5.62
-30.18
160,105,480
626.01
UNIBEP
5.75
-7.26
3.00
10.66
-44.92
33,927,184
195.08
WARIMPEX
11.44
-12.00
4.85
16.52
-28.05
36,000,000
411.84
Uncle Sam, where art thou? American investors are now practically absent from the European commercial property market
Land of opportunity? American investment in the European property market, 2006-2009
4%
Other 1% Belgium
The disappearance of American investors over the last two years has been one of the most significant changes in the structure of the European commercial property market, according to research by CB Richard Ellis. In the first half of 2007, American companies were involved in European commercial property acquisitions worth over €20 billion and sales valued at €9.5 billion. In contrast, in H1 2009 US firms bought and sold properties whose values amounted to only €400 and €700 million, respectively. The decline in American investment has been most acutely felt by the German market, which accounted for almost a half of all American investment from 2006-2009. Also strongly affected were the UK and France, which received 23 percent and 14 percent of all American investment in the period, respectively. Poland saw two percent, or €1.5 billion, of American investment between 2006 and
Sweden 2% Russia 1%
UK 14%
Germany
Poland 2%
48% France 23% Spain 2%
3% Italy
Source: CB Richard Ellis
2009. US firms were involved in a number of major transactions during that period, including GE Real Estate’s purchase of Casino’s retail portfolio and Heitman’s acquisition of Mokotów Business Park in Warsaw. So far this year, however, Americans have not invested in a single commercial project in the Polish market. According to Ray Torto, global chief economist at CB Richard Ellis, the trend could soon see a reversal. “Looking forward, there are signs that US investors will start to become more active in Europe in the
fairly near future. US opportunity funds that are currently raising capital are increasingly identifying Europe as a potential investment target,” Mr Torto said in a statement. “In Poland, representatives of US investors which have not been involved in transactions in the country before, but which belong to the group of the largest funds in the world, are also appearing,” added Joanna Mroczek, head of the research and consultancy department at CB Richard Ellis Poland. Adam Zdrodowski
SEPTEMBER 7-13, 2009
LOKALE IMMOBILIA – REAL ESTATE
Motorway tenders
www.wbj.pl
Long road to modernity
Low-price traps?
Motorway construction in Poland, in kilometers*
800
Construction of vital motorways in Poland looks to finally be speeding up, offering profitable opportunities for hungry firms. However, some market players warn that cutthroat competition will impact the quality of the final product The number of motorway tenders being called in Poland is on the rise, a clear sign that the process of preparing for the Euro 2012 soccer championships is finally gathering momentum. Approximately 88.9, 48.4, 193.7 and 642 kilometers of motorways are scheduled for delivery in Poland over the consecutive years from 2009-2012, according to the General Directorate for National Roads and Motorways (GDDKiA). The host of motorway projects that Poland has to complete in the upcoming years has understandably piqued construction companies’ interest and led to fierce competition between contractors, predominantly in terms of bid prices. That has enabled tenderers to boast of major savings, but some voices in the industry now warn that the quality of the new motorways will
inevitably be compromised if contractors begin to offer prices that are far lower than the originally planned investment costs. Experts retort that this does not have to be the case, arguing that the price criterion may actually be the only one that guarantees genuine competition in the market.
tions so that it can stay within a minimal budget. A change of the technology employed, meanwhile, can lead to lower durability of the project,” Ms Goêdzik said in a statement sent to the media. To give an example of the fierce undercutting occurring in recent tenders, Ms Goêdzik cited a tender for a stretch of the A2 motorway in which a consortium of Chinese companies offered a price that was more than 50 percent lower than the project’s cost estimate.
Undercutting common Quality compromised? According to Ma∏gorzata Goêdzik, director of road investments at PM Group Polska, the selection of the lowest bid without considering the quality is a pathology resulting from Poland’s public procurement law. “This rule leads to the investment process being carried out improperly, resulting in a road or bridge not meeting the specifications defined at the onset of the investment process. After winning the tender, the contractor changes the technical solu-
According to Marcin Hadaj, deputy spokesperson at GDDKiA, however, it’s common practice for companies to submit bids which are lower than the cost estimate and this has no impact on the quality of the finished road. “In each particular case, the project is checked to make sure it is in accordance with all the technical requirements and good engineering practices,” said Mr Hadaj. Addressing example given by Ms Goêdzik, Mr Hadaj said that the GDDKiA had asked the contractor for clarifica-
tions and had been satisfied with the consortium’s explanation concerning the areas in which it would cut costs.
700
642
600 500 400
The prime criterion According to Andrzej Olszewski, a legal advisor at law firm Barylski Olszewski Brzozowski, tenderers often overestimate cost calculations. This results from the fact that the market was long dominated by a relatively small group of contractors and tenderers had no choice but choose from a group of high bids. Mr Olszewski said that while it would be reasonable to combine the criteria of price and duration of construction work, for example, adoption of other criteria, such as a company’s financial capability or the number of kilometers of motorway it has designed and contracted for, would lead to controversy and accusations of discrimination. “It seems that the price criterion is actually the only one which stands the test of fair competition. There are many criteria which limit competition between the contractors during tender proceedings but the bid price cri-
300
193.7
200 100 km
32.6
66.7 88.9 48.4
2007 2008 2009 2010 2011 2012
*2009-2012 estimated
Source: the General Directorate for National Roads and Motorways
terion is not one of them. In fact, the price criterion intensifies the competition,” he said. As long as competition is kept within reasonable limits, of course. “An offer that is over 20 percent lower than the other offers should automatically be rejected by the tenderer,” Krzysztof Kozio∏, a spokesperson at Budimex, told Lokale Immobilia. “No one will believe that all the participating firms but one are wrong and [that these firms] do not want to realize the contract responsibly, according to business rules,” he added. Adam Zdrodowski
13
Eiffage’s public projects Eiffage Budownictwo Mitex will build a swimming pool in Wo∏omin (Mazowieckie voivodship) and expand a school complex in Gomulin (¸ódzkie voivodship). Together, the value of both contracts totals z∏.25 million. The 4,400 sqm swimming pool complex will include a laned swimming pool, a recreational pool with a 60-meter slide, a sauna, a jacuzzi, a spa, a gym and a tanning salon. Under the second deal, Eiffage will expand a school in Gomulin, adding new middle school and kindergarten buildings.
Atlas moves This month Atlas Management Company (AMC) is relocating its Polish headquarters from Atrium International Business Center to the 19th floor of Millennium Plaza, an office scheme in Warsaw. AMC will occupy 650 sqm of the building. Millennium Plaza belongs to Atlas Estates Limited. (Real Estate Newsletter)
LOKALE IMMOBILIA – REAL ESTATE
www.wbj.pl
Warsaw airport bidders Nine bidders have submitted offers to “Polish Airports” State Enterprise (PPL) for the completion of Terminal 2 at Warsaw’s Frederic Chopin International Airport, involving completion of the southern concourse and construction of the central one. Construction of the former concourse was originally started by a consortium of Ferrovial Agroman, Budimex and Estudio Lamela, but because of delays in delivery, PPL ended the contract.
Deichmann in Jastrz´bie Shoe retailer Deichmann will join other tenants at Galeria Jastrz´bie, a shopping center in Jastrz´bie-Zdrój (Silesia voivodship) which is under development by Polimeni International. Other fashion brands already at the retail center include the LPP clothing group, Wojas and CCC. The list of tenants also includes a Delima upscale supermarket and a Marionnaud perfumery. Galeria Jastrz´bie will feature about 17,000 sqm on four floors and is scheduled to open in Q1 2010. (Real Estate Newsletter)
SEPTEMBER 7-13, 2009
Development on the Vistula
Financial results
A sporting chance
Orco posts huge H1 loss
An anonymous company has put forward a development concept that would rejuvenate the Spójnia sports club and put land on the Vistula to use Plans are afoot to develop a long-neglected strip of land along the Vistula River in northern Warsaw. The area is home to the Polish Olympic Center as well as the dilapidated Spójnia sports club. Now it seems that an unnamed developer is interested in constructing a large, modern sports center at the location, which sits on ul. Wybrze˝e Gdyƒskie. The plan also calls for the renovation of Spójnia’s facilities. An architectural concept for the development, designed by architects from the Kulczyƒski Architekt studio, has existed since June of 2008, according to daily Polska. The anonymous investor has offered City Hall a deal: the company will renovate Spójnia’s stadium and facilities in exchange for public consent to construct commercial and possibly residential buildings nearby. The total cost of the projects remains unknown, as do possible dates for the start of construction and delivery of the facilities.
But the developer has denied rumors of a possible liquidation
MATEUSZ GO¸ÑB/WBJ
14
The new sports center will neighbor the Polish Olympic Center Lokale Immobilia contacted several people concerning this investment; all declined to comment on the identity of the developer. City Hall has long planned to construct a new bridge, called Most Krasiƒskiego, across the Vistula River at this location. The developer’s concept takes this into account, although it’s not yet certain when work on the bridge will move forward. According to Polska, on September 17 the city is to decide on whether Most Krasiƒskiego fits into the
municipal investment plan, which runs until 2012. The idea of redeveloping Spójnia’s land – which includes facilities on the east side of the Vistula – has been warmly greeted by a number of experts. “Warsaw always had problems connecting the two sides [of the Vistula]; therefore methods aiming to do so are welcome,” Tomasz S∏awiƒski, president at Warsaw’s branch office of Society of Polish Town Planners, told Lokale Immobilia. Kamil Pe∏ka
Luxembourg-based developer Orco Property Group has reported a €199.9 (z∏.829.9) million loss for the first half on revenues amounting to over €132 (z∏.544) million. The value of the company’s real estate portfolio decreased by 12 percent over the period, from €2.13 (z∏.8.79) billion to €1.83 (z∏.7.55) billion. The negative financial result was mainly influenced by non-cash valuation adjustments on properties and developments, the company said in a statement. “Despite very adverse conditions, Orco Property Group is committed to refocusing its business, restructuring its financial profile and improving its operations. The decision to freeze some projects and sell non-strategic assets is impacting our results and net asset value this [period], but we are confident that, with the support of our long-term partners, notably bankers, the debt restructuring will be achieved,” commented JeanFrançois Ott, CEO of Orco Property Group. The company’s H1 results have led to speculation in the
Polish media about the future of the developer’s projects in Warsaw of and the firm itself. Last week ˚ycie Warszawy wrote that Orco Property Group could actually be liquidated. The company’s accumulated loss has already exceeded 75 percent of its share capital value and a general shareholders meeting in mid-September will decide the firm’s future, said the newspaper. The developer has vehemently dismissed the speculation, claiming that it is operating as usual and that liquidation is not being considered. The company is implementing a restructuring plan under the protection of safeguard proceedings, Orco Property Group said in a statement. “As a result of the [restructuring] work, Orco Property Group has come to an agreement with a new investor, the Colony Capital fund, which is going to capitalize the company.” A vote on the raising of Orco’s capital is expected to take place on September 15. The issuance of additional shares, if accepted by the shareholders, could bring Orco up to €80 (z∏.329.9) million, the company said. Adam Zdrodowski
Advertisement OFFICE SPACE
OFFICE/WAREHOUSE SPACE
Name/District/Address
Total space/ Available Space
ILMET Office Building Warsaw, Al. Jana Paw∏a II 15
Available space: 50 sqm – 1700 sqm
IPC Business Center Warsaw, Ul. Koszykowa 54
Available space: 50 sqm – 1300 sqm
Name/District/Address
Year completed
Net price monthly
Service charge
Amenities
Contact
on application
on application
Air conditioning, 24h security, Building Management System, smoke/heat detectors, sprinkler system, fibre optics, PABX, CCTV surveillance, wall partitioning with plaster-carton walls, outside and underground parking
IIC Polska Internationale Immobilien Consulting Sp. z o.o. tel.+48 22 656 25 25
1993
on application
on application
Air conditioning, 24h security, Building Management System, smoke/heat detectors, sprinkler system, fibre optics, PABX, CCTV surveillance, wall partitioning with plaster-carton walls, outside and underground parking
IIC Polska Internationale Immobilien Consulting Sp. z o.o. tel.+48 22 656 25 25
Total space/ Available Space
Year completed
Net price monthly
Service charge
Amenities
Contact
Lexar Distribution Park Kostowiec 18, 05-832 Rozalin
Available space - warehouse space 15 000 sqm - office area 2000 sqm
2004
on application
on application
air conditioning, 24h security, property management, ample parking places, PABX, CCTV surveillance, smoke/heat detectors
Marek Kwiatkowski tel. +48 (0) 798 329 522 lexarspzoo@wp.pl
Parkur Tower Ursynów Warsaw, ul. K∏obucka 25
Available space: 500 sqm office, 780 sqm warehouse
2006
on application
on application
Air conditioning, reception, security, access control, suspended ceiling, building management system, parking spaces
1997
+48 663-741-988
SEPTEMBER 7-13, 2009
LOKALE IMMOBILIA – REAL ESTATE
Office development
COURTESY OF POLNORD
Work on a major office project in Warsaw is expected to kick off soon After languishing for years in the planning stage, construction on the large-scale Wilanów Office Park scheme will commence at the end of 2009. The general contractor for the first building in the scheme is PolAqua. In total, the Wilanów Office Park design calls for the construction of 18 buildings with a total area of 150,000 sqm on 17 ha of land. The structure to be erected by PolAqua will have an area of around 15,000 sqm and delivery is scheduled for just over 14 months after the investor behind the project, Pol-
nord, turns over the land. Construction was supposed to begin in Q1, but financial problems forced Polnord to push back its schedule. “We are living in the kind of economic environment which did not allow us to start the construction as initially scheduled,” Bo˝ena Wawrzewska, a spokesperson for Polnord, told Lokale Immobilia. She added, however, that financing problems had been overcome with the help of a z∏.42.5 million loan from Bank Ochrony Ârodowiska. Twelve of the buildings will be dedicated for office space, but there is little information yet as to the function of the remaining six. “The initial assumption is that in the [six buildings] there
will be restaurants, a post office, and a bank. We also expect that there will be a kindergarten in [one of the buildings]. Yet nothing is certain, as the plan may be modified,” Ms Wawrzewska noted. Polnord wants to deliver the final building in the complex within five years. In August, it received permission for the second building in Wilanów Office Park. This structure is expected to be the largest of the scheme’s office buildings, comprising over 20,000 sqm of leasable space in three storeys. It is tentatively scheduled for delivery in Q3 2011. According to Gazeta Wyborcza, the total cost of the investment has been estimated at KP around a billion z∏oty.
15
Warimpex posts a €98.6 million H1 loss as occupancy plummets
Big plans in Wilanów
The project will be the first large-scale office development in Wilanów
www.wbj.pl
Vienna-based property investor and developer Warimpex recorded a €98.6 (z∏.406.46) million loss in the first six months of this year following write-downs on its properties as well as serious declines in occupancy levels and hotel room rates. The developer’s total revenues in H1 2009 amounted to €37.8 (z∏.155.63) million, marking a 15 percent y/y fall. However, according to Warimpex, the last few months
have shown some indications of an upcoming recovery in the hotel market and a possible rise in the volume of property transactions at the end of the year. “Compared to 2008, the numbers at our hotels in May, June and July were already notably better than in February and March. Advance reservations for conferences and seminars are already higher this year than at this point in 2008. All of this makes us opti-
mistically believe that we have the most difficult times behind us in the hotels and resorts sector,” Franz Jurkowitsch, CEO of Warimpex, said in a statement. The Warimpex capital group’s portfolio currently comprises 18 hotels. In H1 2009, the company opened Andel’s hotel projects in Berlin and ¸ódê, and on September 2 it announced the sale of the Andel’s Kraków hotel to Deka Immobilien. Adam Zdrodowski
JW Construction profits grow 41 percent y/y, revenues decline Despite seeing its revenues decline 1.6 percent y/y to z∏.331.2 million in H1, Polish developer JW Construction noted a 41 percent net-profit growth, earning z∏.49.4 million. “Despite the limited availability of mortgage loans, the results, as well as increasing sales, are a definite sign that the market has been recovering,” said Ma∏gorzata SzwarcSroka, director of the economic department at JW Construction. Ms Szwarc-Sroka also
noted that JWC’s customers are showing more interest in turn-key apartments these days as well as in purchasing units once construction on a building has reached an advanced stage. “The crisis has changed customers’ preferences. They are mainly deciding on [buying] turn-key apartments today and JW has these types of apartments on offer,” she commented. The company, long associated with the residential sec-
tor, has now diversified into commercial space. It recently received building permits for two structures designed for office space. One of them is the five-storey Jerozolimskie Point project, which will offer class B+ office space in Warsaw at the corner of ul. Badylarska and Al. Jerozolimskie. The other scheme, Nowa Dana, is located in Szczecin. It will be a modern 22-storey office building with class A office space. Kamil Pe∏ka
16
THE LIST
www.wbj.pl
THE BOOK OF LISTS
SEPTEMBER 7-13, 2009
The Book of Lists is a comprehensive, detailed and constantly updated guide to more than 2,000 companies operating in the Polish market. Key enterprises are divided by sector into 60 ranking lists that include information such as the names of top managers, major clients, activities, the number of employees, completed projects and full contact details. This week’s edition examines special economic zones in Poland. For more information about the Book of Lists contact Agnieszka Gamdzyk, tel. 022 639–8567; agamdzyk@valkea.com
Special Economic Zones in Poland Special Economic Zone
Managing entity Address Tel/Fax E-mail Web page
Agencja Rozwoju Przemys∏u S.A. Oddzia∏ w Mielcu EURO-PARK MIELEC ul. Partyzantów 25, 39-300 Mielec Special Economic 017 788-7236/017 788-7769 Zone europark@europark.com.pl www.europark.com.pl
Total value of Total investments Top investors in terms of value of number of Year (billion) / investment new established Number of workplaces investors
Voivodship
Subzones (main cities)
Total area for investment / Available area for investment
Podkarpackie; Ma∏opolskie; Lubelskie
D´bica, Gorlice, Jaros∏aw, Le˝ajsk, Lubaczów, Lublin, Mielec, Ropczyce, Sanok, Zagórz
998 ha 275 ha
Metal working; automotive sector; plastic component production; aviation; IT services
z∏.4.04 99
Polskie Zak∏ady Lotnicze (aviation) - US; MTU Areo Engines Polska (aviation) Germany; Lear Corporation (automotive) US; Firma Oponiarska D´bica (automotive) Cyprus; Kronospan Mielec (wood processing) - US
12,321
1995
Ingmar Wycza∏ek, deputy director marketing & developmment: iwyczalek@europark.com.pl; 017 788-7236 ext. 202
Industries the SEZ specializes in
Contacts
Kamienna Góra Special Economic Zone for Medium Business
Special Economic Zone for Medium Business S.A. ul. Jana Paw∏a II 11 A, 58-400 Kamienna Góra 075 645-1503/075 744-2017 strefa@ssemp.pl www.ssemp.pl
Lower Silesia; Wielkopolskie
Jawor, Jelenia Góra, Kamienna Góra, Kowary, Lubaƒ, Ostrów Wielkopolski, Piechowice
368.8 ha 161 ha
No specialization, companies from many branches
z∏.1.36 41
BDN (printing) - Germany; Takata Petri Parts Polska (automotive) - Japan; POLCOLORIT (ceramics) - Poland; Wepa Professional Piechowice (paper manufacture) Germany/Poland; Dr Schneider Automotive Polska (automotive) - Germany
4,037
1997
Danuta Lewandowska - project manager: d.lewandowska@ssemp.pl; 075 645-1503; Anna Komorowska - project manager: a.komorowska@ssemp.pl, 075 645-1503
Katowice Special Economic Zone
Katowicka Specjalna Strefa Ekonomiczna S.A. ul. Wojewódzka 42, 40-026 Katowice 032 251-0736/032 251-3766 ksse@ksse.com.pl www.ksse.com.pl
Silesia; Ma∏opolskie; Opolskie
Bielsko-Bia∏a, Bieruƒ, Cz´stochowa, Dàbrowa Górnicza, Gliwice, Jastrz´bie-Zdrój, Katowice, Kietrz, Knurów, Lubliniec, Rybnik, Siemianowice Âlàskie, S∏awków, Sosnowiec, Strzelce Opolskie, Tychy, Zabrze, Zawiercie, ˚ory
1,544 ha 586 ha
Automotive
z∏.14.1 180
GM Opole (automotive) - US; Fiat - GM Powertrain Polska (automotive) - Italy; NGK Ceramics (automotive) - Japan; Delphi Polska Automoive Systems (automotive) US; Duda Bis (food industry) - Poland
35,000+
1996
Aleksandra Zajusz-Wayda - marketing specialist: a_zajusz@ksse.com.pl, 032 251-0736 Wojciech Rusek - marketing specialist: wrusek@ksse.com.pl, 032 251-0736; ¸ukasz Ciep∏y - marketing specialist: lcieply@ksse.com.pl; 032 251-0736
Kostrzyn-S∏ubice Special Economic Zone
Kostrzyn-S∏ubice Special Economic Zone S.A. ul. Or∏a Bia∏ego 22, 66-470 Kostrzyn nad Odrà 095 721-9800/095 752-4167 info@kssse.pl, www.kssse.pl
Lubuskie; Zachodniopomorskie; Wielkopolskie
Gorzów Wielkopolski, Gubin, Kostrzyn nad Odrà, Nowa Sól, Poznaƒ, Zielona Góra
1,258.32 ha 707.15 ha
Electronics; optics; automotive industry; chemicals; furniture; machinery and paper
z∏.3.44 WND (174 permits)
ICT Poland (paper manufacture) - Italy; Barlinek Inwestycje Poznaƒ (timber industry) - Germany; TPV displays Poland (electronics/wood) - Taiwan; Arctic Paper Kostrzyn (timber industry) - Sweden
13,956
1997
Andrzej Kail - general project manager: kail@kssse.pl, 095 721-9818; Izabela Fechner senior project manager: fechner@kssse.pl; 095 721-9835
z∏.1.29 73
Comarch (IT) - Poland; MAN Trucks (automotive) - Germany; Nidec Motors and Actuators Poland (automotive) - Japan; Motorola Polska Electronics (telecommunications) - US; RR Donnelley Europe (printing) - US
4,040
1997
Jacek Bielawski - investor services: jbielawski@sse.krakow.pl; 012 640-1949
1997
Iwona Exner - manager: exner@strefa-legnica.com; 076 727-7481; Kamila Harmala - project manager: harmala@strefa-legnica.com; 076 727-7480; Maciej Rojowski - project manager: rojowski@strefa-legnica.com; 076 727-7483; ¸ukasz Maciejewski - project manager: maciejewski@strefa-legnica.com; 076 727-7482
Ma∏opolskie; Podkarpackie
Kraków, Krosno, Nowy Sàcz, OÊwi´cim, Tarnów
528.84 ha WND
All sectors of traditional industry; with the exception of manufacturing that requires state licenses, other sectors include ICT, research and development in natural and technical sciences; accounting and audits; bookkeeping and call centers
Legnica Special Economic Zone
Legnicka Specjalna Strefa Ekonomiczna S.A. ul. Kardyna∏a B. Kominka 9, 59-220 Legnica 076 727-7470/076 727-7474 lsse@strefa-legnica.com www.strefa-legnica.com
Lower Silesia
Chojnów, G∏ogów, Legnica, Lubin, Z∏otoryja
457 ha 140 ha
Automotive industry; electronics; plastic parts; machinery
z∏.4.09 50 (91 permits)
VW Motor Group (automotive) - Germany; CCC (shoe producer) - Poland; Sanden (automotive) - Japan; Winkelmann (boiler systems) - Germany
¸ódê Special Economic Zone
¸ódzka Specjalna Strefa Ekonomiczna S.A. ul. Ks. Tymienieckiego 22/24, 90-349 ¸ódê 042 676-2753/042 676-2755 info@sse.lodz.pl, www.sse.lodz.pl
¸ódzkie; Wielkopolskie; Mazowieckie
Be∏chatów, Ko∏o, Konstantynów ¸ódzki, Kutno, ¸´czyca, ¸ódê, Ozorków, Piotrków Trybunalski, Radomsko, Rawa Mazowiecka, Sieradz, Tomaszów Mazowiecki, Turek, Warszawa, Wieluƒ, Zduƒska Wola, Zgierz, ˚yrardów
1,162 ha 350 ha
White goods; packaging; pharmaceuticals; plastics; construction materials
€2.5 145
DELL (IT industry) - US; Procter&Gamble (personal care products industry) Germany; Euroglas (construction industry) Germany; BSH (white goods industry) Germany; Indesit (white goods industry) Italy
18,670
1997
Agnieszka Sobieszek - director: agnieszka.sobieszek@sse.lodz.pl; 042 275-5052; Marcin W∏odarczyk - director of investor service department: marcin.wlodarczyk@sse.lodz.pl; 042 275-5060
Pomorskie; KujawskoPomorskie; Zachodniopomorskie
Gdaƒsk, Grudziàdz, Kwidzyn, Malbork, Stargard Szczeciƒski, Starogard Gdaƒski, Tczew
1,162 ha 320 ha
Electronics; pharmaceuticals; paper industry; open to all investments, especially to BPO services, new technologies and innovative companies
z∏.3.7 62
Flextronics International Poland (telephone production) - US; Bridgestone Stargard (tire production) - Japan; Sharp Manufacturing Poland (LCD panels) - Japan; International Paper Kwidzin (celllose and paper production) - US; Mondi Packaging Paper Âwiecie (packaging production) - UK
16,508
2001
Jaros∏aw Szponarski - project manager: j.szponarski@strefa.gda.pl; 058 555-9715; Anna Ró˝ycka - senior specialist: a.rozycka@strefa.gda.pl; 058 555-9717
401 ha 178 ha
Plastics processing; transportation and warehousing; production of metal goods, car windows, canned fish and wood-based materials
z∏.0.7 48
Kronospan Polska (chipboard and paneling production) - Cyprus; Nordglass II (car windows production) - Poland; Przetwórstwo Rybne “¸OSO” (fish canning) - Poland; Ozen Plus (charcoal and energy production) - Poland; Jakob Hatteland Development (electronics) Norway
WND
1997
Leonard Ferkaluk - investment director: ferkaluk@parr.slupsk.pl; 059 840-1174
580.44 ha 215 ha
Precision mechanics; automotive industry; metallurgy; electronics; wood manufacturing; building materials
z∏.1.38 76
MAN Bus (automotive) - Germany; RR Donnelley Starachowice (printing) - US; Fabryka Kot∏ów SEFAKO (industry heating boilers) - Poland; Air Liquide Polska (technical gases) - France; Cersanit II (bathroom furniture) - Poland
3,416
1997
Cezary Tkaczyk - vice president; Anna Jaworska marketing specialist: 041 275-4445; Jolanta Nowak: sse@sse.com.pl; 041 275-4101 ext. 403
342 ha 112.87 ha
Various industries including plastics, wood and construction materials
z∏.1.39 60
Pfleiderer MDF (furniture chipboards) Germany; Rockwool Polska (insulation materials) - Denmark; Porta KMI Poland (doors) - Poland; PP Cezar (tiles and paneling) - Poland; Aquael (aquarium equipment) - Poland
WND
1996
Marek Koprowski - investor assistance: m.koprowski@ssse.com.pl; 087 565-2217
1,336.44 ha 276.2 ha
Construction; pharmaceuticals; plastics; metal; electronics; chemicals
z∏.5.0 115 (180 permits)
LG Philips LCD Poland (electronics) - South Korea; ATS Stahlschmidt&Maiworm (automotive) - Germany; Sanfarm (pharmaceuticals) - Poland; LG Electronics Wroc∏aw (electronics) - Poland; Heesung Electronics Poland (electronics) - South Korea
15,912
1997
Monika Puzio - marketing specialist: monika.puzio@tsse.pl, 015 823-6688
1,651.52 ha 480+ ha
Automotive industry; white goods production; metal processing; construction industry; engineering and plastic production
z∏.9.9 128 (142 permits)
Toyota Motor Manufacturing Poland (automotive) - Japan; Toyota Motor Industries Poland (automotive) - Japan; Electrolux Poland (white goods industry) Sweden; Cadbury Polska (food industry) UK; Faurecia Wa∏brzych (automotive) France
30,924
1997
Wojciech Morel - marketing department manager; wojciech_morel@invest-park.com.pl; Hanna S´dziak - promotion and development department manager: hanna_sedziak@invest-park.com.pl; Krzysztof Or∏owski - senior project manager: krzysztof_orlowski@invest-park.com.pl; 074 6649164
z∏.2.53 55
Michelin Polska (tire manufacturing) France; LG Electronics M∏awa (TV and monitor production) - South Korea; Swedwood Poland (furniture and wooden goods manufacturing) - Sweden; Wydawnictwo Bauer (publishing) Germany; Wójcik Fabryka Mebli (furniture manufacturing) - Poland
4,837
1997
Krzysztof Gàsior - head of zone infrastucture: gasior@wmsse.com.pl; 089 535-0241; Pawe∏ Lulewicz - head of investor recruitment and promotions: lulewicz@wmsse@com.pl; 089 5350241
Krakowski Park Technologiczny Sp. z o.o. Kraków Technology Al. Jana Paw∏a II 41 L, 31-864 Kraków Park Special 012 640-1940/012 640-1945 Economic Zone biuro@sse.krakow.pl www.sse.krakow.pl
Pomorska Specjalna Strefa Ekonomiczna Sp. z o.o. Pomeranian Special ul. W∏adys∏awa IV nr 9, 81-703 Sopot Economic Zone 058 555-9700/058 555-9711 headoffice@strefa.gda.pl www.strefa.gda.pl
S∏upsk Special Economic Zone
Pomorska Agencja Rozwoju Regionalnego S.A. ul. Poznaƒska 1A, 76-200 S∏upsk 059 841-2892/059 841-3261 office@parr.slupsk.pl www.sse.slupsk.pl; www.parr.slupsk.pl
“Starachowice” Special Economic Zone
Specjalna Strefa Ekonomiczna “Starachowice” S.A. ul. Radomska 29, 27-200 Starachowice 041 275 41 01/041 275 41 02 sse@sse.com.pl, www.sse.com.pl
Suwa∏ki Special Economic Zone
Suwalska Specialna Strefa Ekonomiczna S.A. ul. Noniewicza 49, 16-400 Suwa∏ki 087 565-2217/087 565-2217 ssse@ssse.com.pl www.ssse.com.pl
Tarnobrzeg Special Economic Zone “EURO-PARK WIS¸OSAN”
Agencja Rozwoju Przemys∏u S.A. Oddzia∏ w Tarnobrzegu ul. Zak∏adowa 48, 39-405 Tarnobrzeg - Machów 015 822-9999/015 823-4708 biuro@tsse.pl, www.tsse.pl
Wa∏brzych Special Economic Zone “INVEST-PARK”
WSSE “INVEST - PARK” Sp. z o.o. ul. Uczniowska 21, 58-306 Wa∏brzych 074 664-9164/074 664-9162 invest@invest-park.com.pl www.invest-park.com.pl
Lower Silesia; Opolskie; Wielkopolskie; Lubuskie
Boles∏awiec, Dzier˝oniów, K∏odzko, Kudowa-Zdrój, Leszno, Nowa Ruda, O∏awa, Opole, Âwidnica, Âwiebodzice, Wa∏brzych, Wroc∏aw
Warmia-Mazury Special Economic Zone
Warmiƒsko-Mazurska Specjalna Strefa Ekonomiczna S.A. ul. Kasprowicza 1, 10-219 Olsztyn 089 535-0241/089 535-9002 wmsse@wmsse.com.pl www.wmsse.com.pl
WarmiƒskoMazurskie; Mazowieckie
Bartoszyce, Ciechanów, Elblàg, I∏awa, Lidzbark Warmiƒski, M∏awa, Moràg, Mràgowo, Nowe Miasto Lubawskie, Olsztyn, Ostro∏´ka, Ostróda
Pomorskie; Zachodniopomorskie; Wielkopolskie
Koszalin, S∏upsk, Szczecinek, Wa∏cz
Âwi´tokrzyskie; Mazowieckie; Ostrowiec Âwi´tokrzyski, Pu∏awy, Opolskie; ¸ódzkie; Skar˝ysko-Kamienna, Starachowice Lubelskie
Podlaskie; WarmiƒskoMazurskie; Mazowieckie
Bia∏ystok, E∏k, Grajewo, Suwa∏ki
Podkarpackie; Mazowieckie; Jas∏o, Pionki, PrzemyÊl, Przeworsk, Âwi´tokrzyskie; Radom, Siedlce, Stalowa Wola, Lubelskie; Lower Tarnobrzeg, Tomaszów Lubelski Silesia
Notes: Notes: NA = Not Applicable, NR = Not Ranked, WND = Would Not Disclose. Research for The List was done in June and July 2009. All information comes from Special Economic Zones and the Polish Information and Foreign Investment Agency.
738.8 ha 268.1 ha
Manufacturing of furniture, electronics and tires
8,049
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. Agnieszka Gamdzyk, ul. Elblàska 15/17, 01-747 Warsaw, via fax to (48-22) 639-8569, or via e-mail to wbjbol@wbj.pl. Copyright 2009, 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.
INSIDE THE LIST
SEPTEMBER 7-13, 2009
www.wbj.pl
Investment incentives
Big money in banking
Poland’s special economic zones ulations regarding investment and the benefits thereof vary according to the investor and the special economic zone, but in all cases the prospective investor needs to apply to the SEZ’s management board for an operating permit. In general, the minimum value of an investment entitled to public aid in a special economic zone is €100,000. The investor needs to agree with the SEZ authorities on how many jobs will be created through the investment and must later fulfill this agreement. Large enterprises are required to conduct their economic activity in the SEZ for a period of five years (three years for SMEs), during which time the ownership of the investment cannot change hands. The rules also stipulate that a certain percentage of an investment (generally 25 percent) must come from the investor’s own funds, meaning not from public aid. These are, it should be noted, only general descriptions of the rules governing SEZ investment. Interested
COURTESY OF POMORSKIE SPECIAL ECONOMIC ZONE
This week WBJ looks at some of Poland’s most attractive locations for investments, its special economic zones Seventeen special economic zones (SEZs) were conceived in Poland in the mid-1990s as a means of encouraging investment in various areas of the country, of which 15 were opened and 14 remain today. The idea was elegantly simple: create administratively independent zones which work to satisfy the needs of investors and local regions alike. For the latter group, the business relationships formed through the framework of Poland’s SEZs have meant a net increase in entrepreneurship as well as the creation a large number of new jobs. And for qualifying investors, both foreign and domestic, the incentives offered by investment in a special economic zone have helped to boost competitiveness. Incentives for investing in an SEZ include corporate or personal income tax exemptions, sites already developed with infrastructure and utilities, as well as the assistance of authorities trained to ease the often complicated task of setting up a new venture in Poland. The reg-
One of the Pomorskie Special Economic Zone’s many subzones parties should consult with the Polish Information and Foreign investment Agency (www.paiz.gov.pl) or with the zones themselves. Poland’s SEZs were originally sanctioned to exist for a period of 20 years, but a 2008 amendment to the regulations extended this and now all 14 zones are scheduled to close on December 31, 2020. In the meantime, they remain attractive and accommodating locations in which to do business.
Learn more about Poland’s special economic zones, as well as its prospects for investment, its regional investment attractiveness and incentives, and its macroeconomic profile in Investing in Poland 2010, a new annual publication by Warsaw Business Journal for anyone interested in potential investment opportunities in Poland
E Blake Berry
17
The largest remuneration among directors of publicly listed banks in H1 was paid out by Bank BPH and amounted to z∏.12 million, as compared to z∏.5.1 million a year earlier. However, in terms of the highest payments per management board member, the number one company was Noble Bank, where the average monthly salary was z∏.420,000.
Privatization pains The privatization agreements signed so far this year will ensure revenues amounting to almost z∏.4 billion for the Treasury Ministry. This is less than 30% of amount originally forecast for the year.
Comarch’s China center Kraków-based IT firm Comarch has announced plans to open a data center in China, which will support the company’s Asian projects. (Poland A.M.)
2010
15th edition
Over 2,500 firms in the Polish market get exposure in Book of Lists Is your company one of them? Get listed - and see your firm ranked against others in your sector Promote yourself - top-ranked firms are distinguished at the Book of Lists launch gala Get to know the Polish market - order a copy of Book of Lists 2010
Contact Book of Lists today! ul. Elbląska 15/17, 01-747 Warszawa tel: +48 22 639 85 68
Advertising department: Katarzyna Pinkiewicz: kpinkiewicz@wbj.pl +48 22 639 85 68 ext. 218 Print & distribution coordinator: Krzysztof WIliński: kwilinski@wbj.pl tel: +48 22 639 85 68 ext. 208
18
CENTRAL & EASTERN EUROPE
www.wbj.pl
Czech budget woes
Petrolinvest records loss Petrolinvest, which specializes in oil exploration and LPG sales, recorded a dramatically low H1 result. It had a consolidated net loss of over z∏.283 million. The firm’s management, however, claims that the loss was largely an accounting matter, and that it will not happen again. Analysts agree that the result should be considerably better in H2. Despite this confidence, the company’s share price fell 5% on the news to z∏.44.17 per share.
No quick Bankier profit South African giant Naspers spent z∏.50 million on the acquisition of Polish financial internet portal Bankier.pl, but the company’s H1 results do not envisage a quick return on investment. The firm turned an H1 profit of z∏.0.93 million as compared to z∏.1.64 million a year earlier – a y/y drop of 43%. (Poland A.M.)
Hangover in Bulgarian wine industry
Worst deficit since 1993 By August 31, the Czech budget deficit was already more than double its full-year target The Czech Finance Ministry announced last week that the budget deficit stood at CZK89.6 (z∏.14.4) billion at end-August, far exceeding the CZK38.3 (z∏.6.1) billion fullyear gap forecast in the 2009 budget. The January-August result was the worst seen since 1993, the ministry said. In comparison, at end-August 2008, the budget showed a surplus of CZK5.3 billion (z∏.853 million). The budget for this year was approved on the basis of now unrealistic estimates of economic development. Due to the economic crisis, the ministry now expects a budget deficit of around CZK165 (z∏.26.5) billion for the full year. In particular, a shortfall in tax revenues is the main reason for the rising deficit. Some analysts say that if the current difference between planned and real development of tax revenues is not immedi-
ately addressed, the state coffers may be short of CZK190 (z∏.30.6) billion by the end of the year. Total budget revenues at the end of August were down CZK47.5 (z∏.7.6) billion compared to last year. “The year-on-year fall was mainly caused by [lower] revenues from taxes and fees and revenues from social security insurance,” the ministry said. Revenues from taxes and fees decreased by over 10 percent, to around CZK305 (z∏.49.1) billion, whereas the official budget had reckoned a growth of over nine percent. Corporate income tax revenues sank by nearly 35 percent to CZK48.6 (z∏.7.8) billion, compared to an official budget forecast of 2.5 percent growth. The CZK38.3 (z∏.6.2) billion budget deficit forecast for this year was based on expected economic growth of 4.8 percent. The ministry’s latest forecast, however, puts this year’s economic contraction at 4.3 percent. ● This is an edited version of an article which originally appeared in Czech Business Weekly
SEPTEMBER 7-13, 2009
Exports of Bulgarian wine were down 70 percent y/y in the first half of 2009, while at the same time domestic sales of wine fell by 35 percent. This picture of the industry emerges from separate statements by the country’s National Vine and Wine Chamber (NVWC) and by Branimir Botev, head of the supervisory board at the Rozova Dolina winery. According to the NVWC, quoted by Bulgarian daily Standart, exports in 2008 had also been lower than in 2007. The chamber also noted
that exports of bottled wines decreased by 21 percent y/y in H1 2009, and draught-wine exports fell by 30 percent. Going by the chamber’s figures, Russia and Poland were the industry’s main customers – 63 percent of exports went to Russia and 19 percent to Poland. Meanwhile, Rozova Dolina’s Botev told daily Pari that domestic sales in H1 2009 had dropped 35 percent and imports of wine by 15 to 20 percent. Unsold quantities of wine were likely to make their
way to the “gray” market, Botev said. A statement by National Vine and Wine Chamber head Plamen Mollov on September 1 seemed to concur with this. He noted that a huge share of the grape output was used for unlicensed production of alcoholic drinks. Mollov said that only half of the grape output was purchased by legitimate producers. Clive Leviev-Sawyer
This is an edited version of an article which appeared in The Sofia Echo
Joint Visegrad embassies possible The governments of Poland, the Czech Republic, Slovakia and Hungary are weighing a plan to establish joint embassies. The first of these would appear in Mongolia and Uruguay, according to Gazeta Wyborcza. Were the idea to be successfully put into practice, buildings bearing the name “Embassy of the Visegrad Group” could soon appear across South America, Asia and sub-Saharan Africa. The proposal to form joint embassies is primarily based on financial considerations; the global financial crisis has
led to some hard choices regarding diplomatic missions. “This year I have had to close four embassies and eight consulates. The same was done by my colleagues from Poland, the Czech Republic and Slovakia. In a number of important corners of the world, we are losing representation,” Hungarian Foreign Affairs Minister Péter Balázs told Gazeta Wyborcza. “No visas are being given, there are no contacts. Black holes are appearing on the map.” Top diplomats from the four Visegrad nations are expected
to meet in Sopot to discuss the details of the project. However, Polish Foreign Ministry spokesperson Piotr Paszkowski has already commented that Poland endorses the idea. The notion of sharing embassy space is not unprecedented. The nations of Scandinavia have had joint embassies for some time, and not only in far-flung nations. They share space in places as close to home as Berlin, where representatives from Denmark, Sweden, Finland, Iceland and Norway conduct diplomatic business in one building. Jon Jackson
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INTERVIEW
SEPTEMBER 7-13, 2009
www.wbj.pl
Casual dining
Ararat to float on WSE
Marcin Poznaƒ: There are two recently opened Starbucks in Poland, here in Warsaw and also in Wroc∏aw. Are you satisfied with their results so far? Wojciech Mroczyƒski: Both locations are great, and sales results from the first months have given us reason to be satisfied. [The brand’s] novelty has certainly also helped. Thus it is encouraging to think about expansion in Poland. We will focus on the largest cities, but at the moment I can’t give you more details. Yet it seems that you missed the best moment to launch Starbucks here. A number of other coffee-shop networks have put down roots in the market. It wasn’t solely dependent on us. We are just a franchisee. But I agree that it took a while between signing the contracts to open Starbucks in Poland,
the Czech Republic and Hungary, and actually putting [the deal] into effect. The introduction of the brand was far smoother in the Czech Republic. You already have nine Starbucks there… This was one of the reasons we started there. Conducting business in the Czech Republic is far easier than it is in Poland. [Since] there were fewer bureaucratic obstacles to overcome, it was relatively easy to find locations. For different reasons the launch of the first Starbucks in Poland [on ul. Nowy Âwiat in Warsaw] had to be postponed for a year. But I have a feeling that other locations will be opened at a faster pace. The financial crisis has lowered real estate prices, helping us to obtain attractive locations. It seems that AmRest has benefitted from the crisis. The firm’s Q2 sales revenues almost doubled y/y, while growth of H1 sales revenues has been forecast at over 106 percent. Have you experienced a major migration from premium restaurants to casual and fast-food restaurants?
There is a global trend that chains are doing better than individual restaurants. The quality of service is usually better, the standards are high and predictable. So when people have to limit their budgets, it is not surprising that they choose something they already know rather than risk something new. So yes, I agree that in this case the crisis has helped chains. A trend in the US shows that after a few boom years in the casual dining segment, people have rediscovered quickservice restaurants [QSRs]. McDonald’s has clearly benefitted from this, although it might have been considered a tired brand. Through marketing [McDonald’s] has reminded customers that its assets are value and accessibility. This drew back customers, despite the crisis. Our QSRs [KFC, Burger King, Freshpoint] are also doing far better than our casual dining restaurants. This is surprising given that our Pizza Hut lunch menu provides a choice of meals for z∏.15, but people would still go to quickservice establishments where they can buy food at the same price. It is perhaps because
MATEUSZ GO∏ÑB/WBJ
Hot profits WBJ sits down with Wojciech Mroczyƒski, chief operating officer at AmRest, a Warsaw Stock Exchange-listed operator of fast-food and casual dining outlets
19
AmRest’s Wojciech Mroczyƒski is optimistic about Starbucks’ expansion in Poland QSRs provide quicker service. From an investment point of view, the QSR segment is safer for us, but I hope the casual dining segment still has its best times ahead of it. You operate the Applebee’s chain in the US. What are your plans for this chain? The market for casual dining in the US is highly saturated. We don’t plan to open any new restaurants there, but rather to consolidate by possibly acquiring other subjects and transferring all that the best casual dining segment has to offer in the US to our casual dining restaurants in CEE. There is still a hope of launching Applebee’s in Europe, but the current circumstances don’t allow us to do it now.
Recently PolRest, operator of the Rooster, Invito and other restaurants, announced it is looking for investors. AmRest was rumored to be among the candidates... We are not involved in this transaction in any way. How do you see the future of the Polish restaurant market? The market it is still in its primary stage. The new restaurants popping up represent different strata of the market – some of them are very good, while others are miserable. There will still be a lot of room to grow in the market for many years to come. We have to remember that after the crisis there will be prosperity, and position on the restaurant market isn’t built in a day – now is a good time to find profitable locations. ●
Armenia’s Ararat Bank has announced that it will float on the WSE in 2010. The value of the offer is currently being determined. The bank’s shares are already listed in Armenia and last year it had a net profit of z∏.11 million. The move is part of a strategy to act as an intermediary for Armenian companies raising capital through share or bond issues in Poland.
School for six-year-olds September 1 marked the first day of the new school year and the first time six-year-old children had the opportunity to join first graders. This opportunity was not taken advantage of by many parents, however. According to the Education Ministry, only 5% of six-year-olds across the country who could choose to attend a grade school actually did so. Compulsory education will begin for six-year-olds in 2012. (Poland A.M.)
20
STOCKS & CURRENCY
www.wbj.pl
SEPTEMBER 7-13, 2009
Stocks report
world stock indices DJIA
NASDAQ
9,344.61 (Sep 3 close)
S&P500
1,983.20 (Sep 3 close)
-2.46% (for the week)
FTSE100
1,003.24 (Sep 3 close)
-2.20% (for the week)
DAX
4,796.75 (Sep 3 close)
-2.69% (for the week)
-1.49% (for the week)
A down week
NIKKEI225 5,301.42 (Sep 3 close)
10,187.11 (Sep 3 close)
-3.09% (for the week)
-3.29% (for the week)
CHANGE: 6.47
CHANGE: 25.76%
CHANGE: 11.07%
CHANGE: 5.15%
CHANGE: 6.60%
CHANGE: 12.65%
(year to September 3)
(year to September 3)
(year to September 3)
(year to September 3)
(year to September 3)
(year to September 3)
52-week high: 11,577.50
52-week high: 2,318.43
52-week high: 1,274.42
52-week high: 5,541.70
52-week high: 6,482.16
52-week high: 12,671.80
52-week low: 6,469.95
52-week low: 1,265.62
52-week low: 666.79
52-week low: 3,460.70
52-week low: 3,588.89
52-week low: 6,994.90
Tomasz Jerzyk, technical analyst DM BZ WBK SA Polish stocks finished down last week, as all the indices lost slightly more than five percent. The negative mood was created by a US market sell-off at the beginning of the week, and indices suffered the most on Wednesday, when 329 stocks fell and only 25 stocks managed to advance. Such negative market breadth suggests a stronger corrective move in the offing. Chemicals, food and oil companies led the market down. All stocks from the blue-chip WIG20 lost on the week and PKO BP was the hardest hit – its price lost more than nine percent. This occurred after the company announced the delivery of its prospectus for a huge secondary public offering to the securities watchdog. Some institutional investors proba-
Major indices WIG
36,009.43 (September 3 closure)
WIG20
2,121.32 (September 3 closure)
52-week high: 41,389.15
Change for the week: -4.22%
52-week high: 2,647.78
Change year to September 3: 32.25%
52-week low: 21,274.28
Change year to September 3: 12.99%
52-week low: 1,327.64
2,400
38,800
2,320
37,600
2,240
36,400
2,160
35,200
2,080
34,000
2,000
31.07 03.08 04.08 05.08 06.08 07.08 10.08 11.08 12.08 13.08 14.08 17.08 18.08 19.08 20.08 21.08 24.08 25.08 26.08 27.08 28.08 31.08 01.09 02.09 03.09
40,000
31.07 03.08 04.08 05.08 06.08 07.08 10.08 11.08 12.08 13.08 14.08 17.08 18.08 19.08 20.08 21.08 24.08 25.08 26.08 27.08 28.08 31.08 01.09 02.09 03.09
Change for the week: -4.83%
Top 5 IRENA BORYSZEW ZPUE ZNTKLAPY EMCINSMED
Closing 6.00 4.79 123.90 3.19 17.05
% change (week) 52-week high 49.25 6.50 26.39 5.02 21.47 173.30 18.15 40.50 16.07 17.99
52-week low 1.65 1.85 42.50 2.40 12.88
Top 5 TPSA ASSECOPOL CYFRPLSAT PEKAO KGHM
Closing 16.40 60.00 15.72 142.00 83.00
% change (week) 2.50 0.76 -0.51 -0.77 -1.19
52-week high 23.39 64.80 18.10 178.20 95.75
52-week low 14.39 40.00 12.00 67.85 21.40
Bottom 5 ELKOP ANTI DROP ORCOGROUP APLISENS
Closing 0.01 4.61 26.71 34.31 6.65
% change (week) -50.00 -48.32 -23.47 -23.00 -20.83
52-week low 0.01 4.61 14.52 15.70 5.80
Bottom 5 PGNIG CERSANIT BIOTON PKOBP AGORA
Closing 3.71 15.60 0.27 32.30 21.88
% change (week) -10.39 -10.34 -10.00 -9.01 -8.83
52-week high 4.57 18.60 0.49 47.79 29.65
52-week low 2.98 8.30 0.19 18.90 10.98
52-week high 0.03 10.70 42.35 98.30 8.60
Currency report
A corrective movement?
Other indices 2,173.83 (September 3 closure)
sWIG80
10,881.95 (September 3 closure)
Change for the week: -5.55%
Change year to September 3: 43.84%
52-week low: 1,228.69
Change year to September 3: 58.80% 12,000
2,320
11,600
2,240
11,200
2,160
10,800
2,080
10,400
2,000
10,000 31.07 03.08 04.08 05.08 06.08 07.08 10.08 11.08 12.08 13.08 14.08 17.08 18.08 19.08 20.08 21.08 24.08 25.08 26.08 27.08 28.08 31.08 01.09 02.09 03.09
2,400
NewConnect
46.03 (September 3 closure)
52-week high: 11,641.55 52-week low: 6,017.25
WIG-Banki
4,816.46 (September 3 closure)
52-week high: 56.92
Change for the week: -5.44%
52-week high: 6,745.15
Change year to September 3: 20.53%
52-week low: 34.33
Change year to September 3: 9.69%
52-week low: 2,435.50
47.4
5,200
45.8
5,000
44.2
4,800
42.6
4,600
41.0
4,400
31.07 03.08 04.08 05.08 06.08 07.08 10.08 11.08 12.08 13.08 14.08 17.08 18.08 19.08 20.08 21.08 24.08 25.08 26.08 27.08 28.08 31.08 01.09 02.09 03.09
5,400
31.07 03.08 04.08 05.08 06.08 07.08 10.08 11.08 12.08 13.08 14.08 17.08 18.08 19.08 20.08 21.08 24.08 25.08 26.08 27.08 28.08 31.08 01.09 02.09 03.09
Change for the week: -3.30%
49.0
Adam Narczewski, X-Trade Brokers Dom Maklerski S.A.
31.07 03.08 04.08 05.08 06.08 07.08 10.08 11.08 12.08 13.08 14.08 17.08 18.08 19.08 20.08 21.08 24.08 25.08 26.08 27.08 28.08 31.08 01.09 02.09 03.09
52-week high: 2,558.11
SOURCE: WSE
mWIG40 Change for the week: -5.50%
bly preferred to sell now in order to buy new shares, hopefully at a later discount. Cersanit and Getin were also under selling pressure. On the broader market, Techmex lost nearly 20 percent, primarily because of uncertainty about the company’s financial liquidity. Boryszew, meanwhile, was the best-performing stock; it rose by 25 percent. It was not pleasant week for stockholders, but as I noted a week ago, the main WSE indices have gained nearly 100 percent from their February lows, so profit-taking was to be expected. On the other hand, investors in Eastern Europe ignored the sharp fall in China a few weeks ago, so perhaps this time global investors chose our region to withdraw their money from. ●
This past week investors experienced high volatility and uncertainty about the future. The news spread that some financial institutions in the US might be having problems, such as Citigroup and AIG. And, because the stock market was overbought, investors began selling in order to realize their profits. Better-than-expected macroeconomic publications from the US (the ISM and PMI indices) did not help financial markets. Increasing risk aversion and the fear of a deeper corrective movement caused the EUR/USD to decline below the $1.42 level. When markets bounced back (to $1.4340), so did the EUR/USD, but on Friday after the better-than-expected non-farm payrolls publi-
cation, the main currency pair declined sharply, finishing the week at $1.4210. As usual, the Polish currency experienced big swings. Stock market fluctuations were the main factor driving the local currency: when markets dropped, the z∏oty lost value all the way to z∏.4.18 against the euro (which began the week at z∏.4.09) and z∏.2.94 against the dollar (which started at z∏.2.86 on Monday). After bouncing back, the EUR/PLN finished the week at z∏.4.1150, while the USD/PLN stood at z∏.2.8945. Much will depend on how the stock markets react. If a corrective movement has really begun, the z∏oty could drop sharply, to well over z∏.4.20 (EUR/PLN) and z∏.3.0 (USD/PLN). ●
currency rates 3.1102 04.09
SOURCE: NBP
3.1319 03.09
3.1727
3.0683 01.09
02.09
3.0845
3.0
28.08
3.0270
0.0914 04.09
03.09
02.09
01.09
31.08
0.08
28.08
04.09
03.09
02.09
01.09
31.08
28.08
2.5
31.08
PLN-100JPY
3.5
0.0913
0.0920
0.0899
2.7337
0.0903
0.10
0.0902
PLN-RUB
0.12
2.7193
2.7578
2.7065
2.6889
4.7212 04.09
4.7351
2.7037
PLN-CHF
3.0
03.09
4.7488 02.09
4.6487 01.09
31.08
4.6459 28.08
2.8936
2.8872 04.09
4
4.6546
PLN-GBP
5
03.09
2.9401 02.09
2.8598 01.09
31.08
2.8460 28.08
4.1387
4.1221 04.09
2.5
2.8675
PLN-USD
3.0
03.09
4.1823 02.09
4.1025 01.09
31.08
4.0854 28.08
4
4.0998
PLN-EUR
5
STOCKS & CURRENCY
SEPTEMBER 7-13, 2009
Air travel
COURTESY OF WIKIMEDIA COMMONS
SkyEurope grounded
SkyEurope’s rough landing has left behind many angry ticket holders
The low-cost carrier filed for bankruptcy on September 1, leaving passengers stranded Low-cost carrier SkyEurope filed for bankruptcy on September 1, citing financial difficulties. All flights were immediately suspended, leaving hundreds of passengers stranded without assistance and unsure of whether they will get their money back. The WSE has suspended trade of the firm’s stock, as has the Vienna’s Wiener Börse. The Slovak airline has been having problems for years. Founded in 2001, it had never managed to turn a profit. To cut costs, it first dropped connections from Warsaw and then Kraków, before pulling out of Poland altogether in
2007. Airports in Vienna, Bucharest and Paris refused to handle the company’s flights in recent months, due to its alleged debts. In June, SkyEurope decided to relocate its base to Bratislava, where it obtained credit protection and a new investor, but this proved insufficient to keep the airline aloft. Marek S∏awatyniec, PR advisor for Norwegian Air Shuttle, a low-cost rival of SkyEurope, was not surprised by the news. “The end of SkyEurope should be a warning to all the still numerous carriers who are fighting for their share of the market, disregarding the profitability of connections,” he said. S∏awatyniec added that airlines such as Norwegian and Wizz Air have a future to look forward
to, as they closed 2008 with a profit and are doing well despite the crisis. According to Grzegorz Sobczak, editor-in-chief of industry title Skrzydlata Polska, the crisis in the airline industry is mainly to blame for SkyEurope’s bankruptcy. “If the situation on the market had been better, the airline would have had a chance to bounce back. In my opinion, it was not a question of bad management, but of poor financial backing,” he said. There are now three lowcost carriers left in Poland: Ryanair, Wizz Air and Norwegian and, according to Mr Sobczak, none of them are likely to fail. He predicted that the airline sector should pick up next spring. Martyna Olik
Oil refining
Back in the black Poland’s oil giants have managed to recover from their first quarter losses Both PKN Orlen and Lotos posted positive results for H1 2009. The former was able to close H1 with a net profit of z∏.77 million on revenues of z∏.31 billion, thanks to a net income of z∏.1.2 billion and an operating income of z∏.661 million in Q2, which made up for its Q1 loss. “The main reason for the better results was a significant increase in sales volume and income in the retail segment, as well as the effect of inventory revaluation and the impact of exchange-rate differences,” Orlen CEO Jacek Krawiec said at a press conference last week. The rising price of crude oil helped the company, as did the appreciation of the z∏oty. The latter also helped to finance Orlen’s debt, 90 percent of which is denominated in euro and US dollars. “The results for Q2 2009 were under strong influence of macroeconomic factors and
charged by the financial effect of planned and unplanned maintenance shutdowns in [Orlen’s] refineries in Poland, the Czech Republic and Lithuania,” added S∏awomir J´drzejczyk, deputy chairman of the board for finance. He underlined that retail sales had been boosted by the fact that many Poles spent their summer vacations in Poland, rather than going abroad, and had thus purchased more gasoline than in the previous years. Lotos, meanwhile, also managed to recover from a Q1
loss. The firm’s net profit in Q2 2009 amounted to z∏.739.3 million, which helped the company to close H1 with a net profit of z∏.89 million. “In [Q2] we witnessed an exceptional rise in demand for diesel fuel, of which we supplied almost 230,000 tonnes more than in the previous year,” said Maciej Szozda, deputy CEO and director for trade at Lotos Group. Thanks to a cost-cutting plan, the company managed to save around z∏.360 million Marcin Poznaƒ in H1.
Polish oil giants H1 revenues, in z∏oty billions Orlen
Lotos
50 40
H1 net profits, in z∏oty millions 2500
40.03
2,414
2000 31.47
30
1500
20
1000 664
10
7.78
6.16
500 77
z∏. bln
89
z∏. mln H1 2008
H1 2009
H1 2008
H1 2009 Sources: Orlen, Lotos
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22
ENTERTAINMENT
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Eating out
Museums, galleries and venues in Warsaw
A taste of Paris Bistro de Paris Pl. Pi∏sudskiego 9 tel: 022 826-0107 www.restaurantbistro deparis.com Closed Sundays
Centre for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 Csw.art.pl
Galeria Zoya ul. Kopernicka 32 m.8 Zoya.art.pl
Royal Castle Pl. Zamkowy 4 Zamek-krolewski.com.pl
Czarna Gallery ul. Marsza∏kowska 4 Czarnagaleria.art.pl
Green Gallery ul. Krzywe Ko∏o 2/4 Greengallery.pl
Simonis Gallery ul. Burakowska 9 Simonisgallery.com
Galeria 022, DAP, Lufcik ul. Mazowiecka 11a Owzpap.pl
Katarzyna Napiorkowska Art Gallery ul. Âwi´tokrzyska 32, ul. Krakowskie PrzedmieÊcie 42/44 and Rynek Starego Miasto 19/21 Napiorkowska.pl
State Archaeological Museum in Warsaw ul. D∏uga 52 (Arsena∏) Pma.pl
Królikarnia National Gallery ul. Pu∏awska 113a Krolikarnia.mnw.art.pl
Historical Museum of Warsaw Old Town Square 28-42 Mhw.pl
Galeria 65 ul. Bema 65 Galeria65.com
BARTOSZ BAJERSKI
It turns out Warsaw fares quite well when it comes to cosmopolitan food – if you believe the Michelin team. Of course, all the usual suspects were in this year’s guide: Tradycja, Ró˝ana, AleGloria, Belvedere, Dom Polski and U Fukiera. But then there were a few surprises too, like U Szwejka, which serves up cosier fare than the others, and Qchnia Artystyczna, which is apparently more than just a café behind an art museum. With Biblioteka, meanwhile, Michelin definitely missed the mark – the place had already closed down before the 2009 guide went to print. Among the other unusual names on the list was Bistro de Paris, whose kitchen is guided by the culinary vision of Michel Moran, a Frenchman with reputedly unlimited talent and ambition. Intrigued by Michelin’s selection of the restaurant, the Warsaw Insider
SEPTEMBER 7-13, 2009
French flair – Michel Moran’s Bistro de Paris decided to see if its reputation was grounded in fact. As is the case with the majority of the restaurants getting a Michelin entry this year, Bistro de Paris is a rather fancy spot. Upmarket French restaurants can be intimidating anywhere in the world and this is especially true in Warsaw, where class lines are clearly defined among eateries. The meal started off with a dozen oysters, drizzled with a delicious shallot vinegar. Cold and fresh – it had exactly the right flavor and texture. This savory prelude was followed by a Scottish salmon tartar, which also had the ideal con-
sistency and was so fresh it melted on the tongue. Then came the grilled scallops – firm, hot and satisfying. The service was impeccable, with water bowls replaced like clockwork by servers whose moves were only slightly less choreographed than dancers’. A light white Vacherin cheese chosen by the waiter accompanied the meal. Next up was some meatier fare, in the form of brilliant grilled duck and beef fillet. Both were firm, tender, juicy; pink on the inside and appropriately browned on the outside. A glass of red wine served as a fine accompaniment.
Galeria Appendix 2 (Praga) ul. Bialostocka 9 Appendix2.com/pl Galeria Asymetria ul. Nowogrodzka 18a Asymetria.eu Galeria Foksal ul. Foksal 1-4 Galeriafoksal.pl Galeria Milano Rondo Waszyngtona 2A (Praga) Milano.arts.pl Galeria Schody ul. Nowy Âwiat 39 Galeriaschody.pl Galeria XX1 Al. Jana Paw∏a II 36 Free.art.pl/xx1
There’s absolutely no question that Michel Moran deserves the praise his kitchen has received. And with another bistro just opened in Wola, there are even more opportunities to appreciate his fare. ●
Le Guern Gallery ul. Widok 8, Leguern.pl National Museum in Warsaw Al. Jerozolimskie 3 Mnw.art.pl Pracownia Galeria ul. Emilii Plater 14 Pracowniagaleria.pl Rempex Art and Auction House ul. Karowa 31 Rempex.com.pl
Warsaw Rising Museum ul. Grzybowska 79 1944.pl Wilanów Palace Museum and Wilanów Poster Museum ul. St Kostki Potockiego 10/16 wilanow-palac.pl Postermuseum.pl Zachęta National Art Gallery Pl. Ma∏achowskiego 3 Zacheta.art.pl
Content provided by the Warsaw Insider. For more information on culture and entertainment in Warsaw this month, pick up the September issue.
LAST WORD
SEPTEMBER 7-13, 2009
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23
Tech Eye
Knowledge that sears the mind Techeye really, really wanted to write about a monitor this week. Really. We’ve never featured one and recently, while trawling the internet for “Angela Merkel + bikini,” we stumbled across a romantic little unit from HP by the name of w2558hc. It’s got a 25.5 inch LCD display (1,920 x 1,200 max resolution), a built-in webcam and microphone, five USB ports and a builtin “digital photo frame tool.” The thing even has a night light, not that we need one anymore, thank you very much. Anyway, as you can plainly see, we were looking forward to featuring the w2558hc in our column. But then we started to think – never a good idea, that – and it occurred to us that there’s a reason we’ve never written about any monitors before.
They’re dull. And not dull in a “banal yet functionally pleasing” kind of way. Monitors are dull like an aunt who insists on talking you through her doily collection every time you visit. Or a balding man who develops his own cartographic system to survey the locations of his remaining hairs. That’s simply not the kind of stuff Techeye should be writing about (although we’d consider featuring a doily that doubled as, say, a ninja weapon). Thus, faced with a
so many awful things. Techeye was unaware of the existence of any perversions involving jai alai equipment, for example, and we preferred it that way. And the knowledge that our boss cherishes gerbils? It burns our cereCOURTESY OF CREATIVE LABS brum. We did get lucky, however. One looming deadline, we snooped through our co-workers’ browser of our colleagues – one of the guys histories in the hope of finding chained under the stairs – had been browsing for a new portable music some inspiration. Our eyes are now red and player, having dropped his old one scratchy from all the soap we used into the gaping crevasse that runs on them, trying desperately to unsee through the middle of the office.
Thus we present Creative Labs’ Zen X-Fi2, a relatively swank touchscreen music player. It’s got a three-inch TFT LCD screen, comes in eight, 16 and 32GB options, and supports a number of file formats, such as AAC, mp3 and the oh-so exciting FLAC. As for battery life, Creative claims that its product offers 25 hours of audio or five hours of video playback before it dies from exhaustion. If we ever find any videos of bikini-clad chancellors, we’ll definitely pick up an X-Fi2. The gadget’s release date varies by model, but all three will apparently be available by September 25. The 32GB version is naturally the priciest and will set you back around £199.99 (z∏.946.9). ●
Ever surveyed the topography of a balding cranium? Let us know: techeye@wbj.pl
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