December 2014 – January 2015 vol. 7 no. 9(47) Price: 20 zł
Special Economic Zones: The Beginning of the End
Military:
Advisory:
Leadership:
Poland buys $250 million missiles
Foster on Tax
Wozniak swims the English Channel
CEE Shared Services and Outsourcing Awards 5 February 2015, Hotel Intercontinental, Warsaw Poland – Czech – Hungary – Slovakia – Estonia – Latvia – Lithuania – Romania – Bulgaria 27 Awards categories, including: New-entrant SSC of the Year (new) | Shared Services Firms of the Year | BPO Firms of the Year | IT Services Firmx of the Year | Most Unique Services Provider | Employers of the Year - BPO and Shared Service
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Table of Contents Cover Story: (4) The Beginning of the End BPO/Shared Services: (8) Bumper year for BPO and Shared
Dec. 2014 – Jan. 2015 vol. 7 no. 9(47)
Service centre openings and expansions; List of New SSC/ BPO/IT outsourcing centres opened (or announced) in 2014
Finance: (11) Peer-to-Peer (P2P) Lending growing fast – and a Portrait of Kokos.pl
Published by: BiznesPolska sp.z o.o. ul. Długa 44/50, bud. D, lok 704, 00-241 Warszawa tel.: 022 831 7062
Advisory: (12) Taxes: Christmas cheer (13) Corporate Risk: A
General Manager and Editor: Thom Barnhardt (tb@bizpoland.pl)
Awards & Distinctions: (16) Lynch awarded The Golden
Editorial staff and writers: Leon Paczyński, Monika Tutak Advertising Sales: Wiktor Gliński (wglinski@biznespolska.pl) Barbara Kwiatkowska (bkwiatkowska@biznespolska.pl) tel.: 022 831 7062 Project Manager of EEC - Łódź Report and Luxury Brands Poland: Wiktor Gliński Graphic Design: Sławek Parfianowicz (sparfianowicz.wordpress.com)
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formidable nemesis (14) Energy: Renewable Energy Act finishes its work (15) Politics: Local Difficulties For Poland’s Parties
Cross of Merit – Poland’s highest civilian honor
Energy: (17) PKP Energetyka spin-off attracts buyers; WYG secures contract for work on new nuclear plant in Poland (18) Polish Coal mines need billions in aid as debt deals fail; Belarus – Poland energy cooperation grows (19) EBRD launches €200m clean energy facility in Poland; British firm alleges Poland squeezed it out of mining permit
Infrastructure: (20) EU funds help Poland build ‘ghost’ airports Equities News: (22) Catalyst bond market to boost listings (23) 3rd Chinese company listed in Warsaw; Fenghua SoleTech IPO
FDI Investment News: (24) Military: (28) Poland agrees $250 million JASSM missile purchase City News: (29) Poznań (30) Gdańsk (32) Wrocław (33) Katowice; Kraków (34) Eastern Poland
Chambers of Commerce News: (35) ICC; Austria; Belgium; Bulgaria (36) Croatia; France; Germany (37) India (38) Ireland; Italy; Japan (39) Lithuania (40) Mexico; Portugal; Scandinavia (41) Taiwan; U.S. (42) UK
Events: (44) ABSL Krakow Networking party (45) UAE celebrates annual event; Miss Polonia is back – 20 December
Leadership & Discipline: (46) The Power of Persistence
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Cover Story
The Beginning of the End New regulations in 2014 and a looming expiration date spurred nearly 100% growth in permits for Special Economic Zones this year. But the clock is ticking on the tax breaks.
4
With more than 100 billion pln already invested in Poland’s 14 Special Economic Zones over the last 20 years, foreign investors are speeding up their plans to take advantage of tax breaks before their expiration in 2026. A key change in regulation in 2014 extended the expiration an additional 6 years from the original 2020 date. Combined with the soon-to-be-unleashed flood of nearly 100 billion euro in EU funds for Poland, the zone tax-breaks have created a sort of “feeding frenzy” that should carry over into 2015 and 2016. In mid-2014, the Council of Ministers adopted the draft law made by the Ministry of Economy amending the law for the 14 Special Economic Zones. The draft law allows large companies to apply to the Minister of Economy to provide investments under SEZ regulations on plots that are not covered by the SEZ yet. The law also introduces unified rules of the amendment of an authorization, regardless of the date of its issue. Also under new regulations, the list of tasks allowed by SEZ managements will be extended, to include cooperation with high-schools and universities for adapting their education programmes to meet the needs of employers. A further consequence is that the development of cluster structures will be easier. Most of the SEZs have developed special industry focuses, which is conducive to the further development of clusters. For example, the Katowice SEZ is dominant in automotive and autoparts manufacturing, while the Warminsko SEZ has a strong position in furniture manufacturing.
The Ministry of Economy also changed the procedures of covering certain land by zones, in order to further support those regions with higher unemployment. In districts where the unemployment rate is equal or lower than the national average, the minimum eligible costs were reduced by only 20%, while in other areas the level of minimum eligible costs went down by 30%. This change allows SMEs which make investments on a smaller scale to benefit from SEZs and develop their business there. It is a particular help to firms with Polish capital. Ministers had originally planned to shut down the tax-advantages of the Zones by the end of 2020.
Editor’s Note: We have excerpted extensively from KPMG’s recent report on Poland’s Special Economic Zones, and would like to especially thank them for their substantial contributions.
Kiejstut Zagun, Grants & Incentives, KPMG
While the eventual expiration of benefits in 2026 means investors operating production facilities in the Zones will lose preferential tax treatment, the six-year postponement is seen as a good move for those looking to put money into the region’s economies. “The extension of the functioning of the zones is a very positive signal sent to investors who are currently evaluating the possibility of investing in Central and Eastern Europe,” said Rafał Prusakowski, senior manager in the public aid unit of consultants
PwC Poland. “This will provide the investors with a possibility to benefit from tax exemption on revenues generated in the special economic zones until 2026.” Special economic zones – the balance of last 20 years KPMG recently released its authoritative and exhaustive report on Poland’s Special Economic Zones, summarizing their development and impact on local economies. According to the report, 20% of companies doing business in zones are Polish, 15% of them have come from Germany while 12% originated in America. “After two decades of SEZs in Poland we can say that they have become a flywheel of change and modernisation for the country’s economy. Special economic zones are not simply a place where companies get tax exemptions and foreign players receive incentives, but they are also an excellent way to support local businesses”, said PAIiIZ president Sławomir Majman. Special Economic Zones have become a good basis for formation of industrial clusters, specializations or science and technology parks. At the end of 2013, the total value of invested capital in all zones reached PLN 93,1 billion. By the end of 2014, it may exceed PLN 100 billion. According to the forecasts made by zones’ management, the employment in Polish SEZs will reach over 287,000 people. The KPMG report focused on potential investors interested in starting their business activity in special economic zones in Poland. In addition to the description of available incentives and grants offered, the guide contains basic information about all 14 zones. Publication is under the auspices of the Ministry of Economy and PAIiIZ. According to the study, which gathered opinions from 234 investors, most companies positively evaluate the SEZ program in Poland and are satisfied with the business in their area. According
December 2014 – January 2015
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Cover Story
Table 1. Capital expenditures incurred (cumulative; million zł) SEZ
2011
2012
2013
Percentage of total expenditures 2013 (%)
Change (previous year = 100%)
2012/2011
2013/2012
1
Kamiennogórska
1,667.2
1,856.1
1,909.1
2.1
111.3
102.9
2
Katowicka
18,154.6
19,593.2
21,109.5
22.7
107.9
107.7
3
Kostrzyńsko-Słubicka
4,215.5
4,719.0
5,312.1
5.7
111.9
112.6
4
Krakowska
1,773.8
1,786.3
1,964.4
2.1
100.7
110.0
5
Legnicka
4,889.0
5,483.8
6,302.4
6.8
112.2
114.9
6
Łódzka
9,033.1
9,980.2
10,815.5
11.6
110.5
108.4
7
Mielecka
5,097.0
5,636.5
6,059.0
6.5
110.6
107.5
8
Pomorska
7,298.9
7,313.7
7,862.2
8.4
100.2
107.5
9
Słupska
1,106.5
1,176.3
1,231.9
1.3
106.3
104.7
10
Starachowicka
1,621.0
1,641.2
1,744.8
1.9
101.2
106.3
11
Suwalska
1,596.7
1,581.6
1,608.2
1.7
99.1
101.7
12
Tarnobrzeska
6,792.9
7,363.0
7,575.5
8.1
108.4
102.9
13
Wałbrzyska
13,095.0
14,599.3
16,342.8
17.5
111.5
111.9
14
Warmińsko-Mazurska
3,328.9
3,103.0
3,303.8
3.6
93.2
106.5
79,670.1
85,833.2
93,141.2
100.0
107.7
108.5
Total
to the estimates of Zone management teams, expenditures incurred by investors in 2014 in the zones will be about 7.5% higher than in the previous year – about 7.8 billion zł. Given the absolute values, it would be the best result for five years. At the end of 2014 the total value of investments made by investors in the zones from the beginning of their operation could reach as much as 100 billion zł. In 2004, when Poland joined the European Union, the total investment in the areas was about 20 billion zł. Record number of new permits The year 2014 was clearly a record for the SEZs for new operating licenses. For the period January to June 2014, 438 permits were issued, while in the full year 2013, SEZ authorities issued 253 new licenses, which itself was the best result for 10 years. According to the report by KPMG, this result relates in part to the new rules lowering the maximum amount of public aid, effective from 1 July 2014, said Pawel Baranski, director of the Tax Department at KPMG in Poland. Obtaining authorization
2014 December – 2015 January
before that date meant the opportunity to benefit from aid under the old rules, which could lead some investors to accelerate investment planned for the coming years. According to the
SEZ managers, the number of permits issued in the second half of 2014 will amount to a maximum of about 50, bringing the full-year results to nearly 500. Investors high praise for SEZs In the KPMG survey, as many as 86% of respondents evaluated their experiences as “good” or “very good”, and those with negative
feedback (“poor” or “very poor”) was at a negligible level – only 3%. Investors also evaluated four subcategories associated with operating conditions in the SEZ. In the case of infrastructure, business environment and the availability and qualifications of employees, over 60% of the respondents had positive assessments, while the share of negative reviews in each of these categories was less than 13%. Cooperation with the authorities was rated good or very good by 80% of investors, and only 5% rated it as “poor” or “very poor”. of companies surveyed answered “yes” or “definitely yes”. “The survey results show that the SEZs remain an attractive destination for investment. Investors in the SEZs benefit not only from public assistance, but also developed transport network, or proximity to major markets. And industry clusters have begun to form. Zones are also becoming increasingly attractive for innovative companies, especially small and medium enterprises. Today, most areas have their own business incubators and technology parks or
work in close cooperation with them”, says Kiejstut Żagun, director of tax advisory department, and team leader for Grants and Incentives at KPMG in Poland. Of the capital invested in the zones, 74% has come from just six countries: Poland, Germany, US, the Netherlands, Italy and Japan. The largest share of the accumulated value of the investment were
5
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Cover Story
from the automotive industry (26.4%), followed by manufacturers of rubber and plastic products, mainly tires (10.7%) and companies producing products of other nonmetallic mineral products (9.2%). The SEZs of Legnica and Katowice are dominated by the automotive industry, with nearly 60% from this sector, while in the Warmia-Mazury SEZ the manufacture of rubber and plastic products accounts for 51% share. The resulting clusters of companies operating in the same and related sectors provide a natural basis for the creation and development of successful clusters. In 2013, management of SEZs allocated more than 7 million pln to their promotion. On the other hand, the construction of infrastructure in areas of the zones consumed 322 million pln.
6
Development of the zone area as of December 31, 2013 At the end of 2013, the land capacity usage of all SEZs reached nearly 61%. The greatest degree of land use zone was by the Suwalska SEZ (77.7%), while the smallest was Legnica (30%). In absolute terms, the largest increase in investment compared
with 2012 was in Wałbrzych, which brought in more than 1.7 billion pln in 2013. The largest capital expenditures have come from such companies as: Table 2. Employment in SEZs as of 31.12.2013: SEZ
Total
Nowe
Kamiennogórska
4,864
4,413
Katowicka
52,575
37,680
Kostrzyńsko-Słubicka
22,630
12,369
Krakowska
16,779
6,229
Legnicka
10,237
9,046
Łódzka
28,882
18,091
Mielecka
23,562
14,565
Pomorska
15,394
15,110
Słupska
3,515
2,586
Starachowicka
6,380
4,087
Suwalska
5,425
5,264
Tarnobrzeska
27,230
20,847
Wałbrzyska
36,164
24,520
Warmińsko-Mazurska
13,063
7,239
266,700
182,046
Total
Sumika Ceramics Poland, RONAL Wroclaw Poland and 3M. Activity in Katowice, Łódź and Legnica were particularly robust. In the area of Katowice investments increased by more than 1.5 billion pln, mainly due to NGK Ceramics Poland, General Motors Manufacturing Poland, TRW Braking Systems Poland and Nexteer Automotive Poland. On the other hand, in the areas of Łódź and Legnica, investment growth exceeded 0.8 billion pln, with Łódź attracting such companies as: UMA Investments, Haering Poland, Hamburger Pini and Indesit Company Poland. IN the Legnica SEZ, the biggest expenditures are coming from Volkswagen Motor Poland, BASF Poland and Sanden Manufacturing Poland. The Katowice SEZ had the largest market shared in total employment of all the Zones, accounting for approximately 20%, thanks to investments from companies such as TRW Poland (4398 employees), General Motors Manufacturing Poland (2989), NGK Ceramics Poland (1427) and Lear Corporation Poland II (1312). The second best was the Wałbrzych SEZ, whose share of employment
December 2014 – January 2015
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Cover Story
Table 3. Net financial results of SEZ management companies (years 2009–2013; in 000s pln)
Management company
Specjalna Strefa Ekonomiczna Małej Przedsiębiorczości S.A.
2009
2010
2011
2012
2013
146.2
300.2
492.1
409.5
347.1
4,039.9
5259.5
6,018.1
7304.4
7615.7
1,897.1
300.7
6,483.0
1566.6
1094.5
184.0
451.7
488.3
288.2
988.5
Legnicka Specjalna Strefa Ekonomiczna S.A.
1,373.9
1417.6
2897.8
3251.3
3,919.6
Łódzka Specjalna Strefa Ekonomiczna S.A.
7,391.6
6405.8
6234.8
5830.3
5788.2
Agencja Rozwoju Przemysłu S.A w Warszawie Oddział w Mielcu
5,206.1
6345.1
7623.8
4723.6
6581.1
Pomorska Specjalna Strefa Ekonomiczna Sp. z o.o.
1,336.1
22863.0
1708.6
553.8
315.7
Pomorska Agencja Rozwoju Regionalnego S.A.
896.7
1547.0
1434.7
1168.8
513.5
Specjalna Strefa Ekonomiczna "Starachowice" S.A.
249.3
132.8
438.0
406.0
619.0
Suwalska Specjalna Strefa Ekonomiczna S.A.
-1,261.3
-1847.6
-1,295.5
322.5
504.3
Agencja Rozwoju Przemysłu S.A. w Warszawie Oddział w Tarnobrzegu
4,897.7
4802.1
8852.7
10818.6
7238.7
Wałbrzyska Specjalna Strefa Ekonomiczna INVEST-PARK Sp. z o.o.
5,940.7
22708.4
8575.5
14166.9
7753.5
Warmińsko-Mazurska Specjalna Strefa Ekonomiczna S.A.
2,640.6
245.1
219.8
799.0
81.0
Katowicka Specjalna Strefa Ekonomiczna S.A. Kostrzyńsko-Słubicka Specjalna Strefa Ekonomiczna S.A. Krakowski Park Technologiczny Sp. z o.o.
in the zones was 14%, mainly due to investment from companies such as IBM Wroclaw (3489 employees), Electrolux Poland (2675), Mahle Poland (2640) and Faurecia Wałbrzych (2068). In third place was the Lodz area, with nearly 11-percent share, largely thanks to Indesit (2039 employees), Infosys (1945), Haering Poland (1423) and Hutchinson (1398). The above-mentioned areas also had the largest share in the number of new jobs. Combined with the SEZs of Mielecka and Tarnobrzeska zones, these five zones accounted for 65% of new jobs. Polish businesses also took first place in terms of country of origin: Krakow (with a share of 37.6%, largely thanks to Comarch and Grupa Onet.pl), Mielec (with 34.5%, thanks to companies BRW, Blek-Furniture and Bury) and Lodz (29%), with more than 3.1 billion pln investment, including from Ceramics Paradyż, Correct, Ceramics Tubądzin, and HTL. n
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BPO/Shared Services
Bumper year for BPO and Shared Service centre openings and expansions Poland’s cities competed fiercely in 2014 to win new investments in the fastgrowing SSC/Outsourcing sector, in the process cementing Poland’s place on the map globally. With India and Philippines strong competitors in voice and lower-cost outsourcing, Poland continues to build its reputation as the “go-to” location in Europe for more sophisticated, value-added business services and shared services centres.
Global giants like IBM, Mars, Carlsberg and Staples all chose Poland in 2014, shutting out worthy competitors such as Hungary, Romania and Czech Republic. Poland’s SSC/BPO sector now employs nearly 150,000 people, in increasingly-sophisticated business services areas, like hedge fund and investment fund accounting. The sector’s political clout is growing, and has now become the second largest employer, with only the automobile sector larger. The coal industry, by contrast, continues to contract and drain resources from the economy and Poland’s national budget. Industry associations such as Association of
Business Service Leaders (ABSL) and ASPIRE have lobbied the government successfully to make adjustments to the labor code to make it easier for large foreign investors to set up operations in Poland, particularly for the financial sector, which has special disclosure requirements. While the most idiotic constraint in the Polish labor code – the inability of a large financial employer to do a criminal background check for new employees – remains unfixed, industry insiders say change is in store for 2015. In the meantime, existing operators continue to expand employment, sometimes at a
List of New SSC/BPO/IT outsourcing centres opened (or announced) in 2014 Białystok
Employment plans: wnd
Intitec Sales Group Sp. z o.o. Sector: BPO. Outsourcing sales force, direct sales, financial intermediation, training sales forces; specializes in the sale of financial services. Planned Opening: 2014 Employment plans: 26 new jobs by mid-2015
Bydgoszcz
Sector: ITO Planned Opening: 2014 Employment plans: wnd
Kemira Sector: BPO/SSC Planned Opening: 2014 Employment plans: wnd
MOL Sector: BPO/SSC Planned Opening: 2014 Employment plans: wnd
PGS Software Atos IT Services Sector: IT Sector (information technology)/BPO. Will establish an IT Processes Support Centre, to employ at least 850 new people. Planned Opening: 2014 (expansion) Employment plans: 2850
Gdańsk / TriCity
Sector: ITO Planned Opening: 2014 Employment plans: wnd
Powel Sector: ITO Planned Opening: 2014 Employment plans: wnd
Schibsted Tech Sector: ITO Planned Opening: 2014 Employment plans: wnd
SMT Software Epam
8
Sector: ITO Planned Opening: 2014
Sector: ITO Planned Opening: 2014 Employment plans: wnd
Staples
Employment plans: 250
Sector: SSC Planned Opening: 2014 Employment plans: wnd
Thyssen Krupp Sector: SSC Planned Opening: 2014 Employment plans: wnd
Unifeeder Sector: BPO/SSC Planned Opening: 2014 Employment plans: wnd
Katowice
SMS Metallurgy Sector: SSC. Planned Opening: 2014 Employment plans: 36
Teleperformance Sector: Contact Center - technical, IT support Planned Opening: October 2014 Employment plans: 250
Kielce PKP Informatyka
IBM Sector: IT outsourcing/IT Shared Services Planned Opening: September 2013 Employment plans: 2000
Perform Media Sector: SSC, R&D Planned Opening: 2013 Employment plans: 65
Sector: IT services dedicated Planned Opening: May 2014 Employment plans: 30
Transition Technologies Sector: IT.Technological and information solutions Planned Opening: September 2014 Employment plans: 100
Sii Sector: IT outsourcing Planned Opening: February 2014
December 2014 – January 2015
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BPO/Shared Services
torrid pace as evidenced by Atos in Bydgoszcz and State Street in Krakow. And new investors continue to pour into Poland, with the United States leading the pack, followed by France. German investors, particularly mid-market firms, represent a next wave of investment in the sector, according to Rafal Szajewski of PAIZ. Another trend likely to gather pace in 2015 is coming from large Polish companies and the public sector, which are increasingly outsourcing non-core activities or setting up centralized Shared Services centres in lower-cost locations outside of Warsaw. As companies continue to rationalize and reorganize, the appeal of outsourcing is two-pronged: lower costs and better organized processes. City mayors across Poland are keenly aware of the multiple benefits of landing new large investors in the SSC/BPO sector:
Kraków
these investors are often global brand names that pay higherthan-average wages, the new jobs are not only new jobs but also jobs that are attractive to welleducated young people, and the employment expands the city’s tax base. Furthermore, these investors drive development of modern office buildings. The very competition amongst Polish cities to land a significant investor, like the constant friction of sand within a shell, has produced Poland’s strong position. Poland now stands out as the “number 1” choice in Europe, and is well-regarded within the boardrooms of large global corporations as a sensible location for shared services centres. One of the next challenge’s for the industry is to attract more investors from the mid-marketsized firms in the United States and western Europe, as well as
Elettric 80
Selvita
from Japan, Korea and India. The City of Lodz, for example, recently led a delegation to Japan to target large Japanese firms that already have some operations in Europe. The annual CEE Shared Services and Outsourcing Awards Gala, scheduled for early February in Warsaw, is deliberately aiming to draw investors from these regions and to showcase the benefits of both Poland and the wider CEE region. A new media partnership with the American City Business Journals, the largest business media group in the United States, boosts the awareness in the U.S. among mid-market firms in major U.S. cities, including Silicon Valley, of the attractiveness of Poland as a destination for shared services centres. Driving investment in offices With the sector maturing and accounting for more than 60% of
Employment plans: 550
Infosys ABB
EPAM Systems
Serco
ACS of Poland
Ericpol Telecom
Software Mind
AFS
ESET
Tesco Poland
Antenna Volantis Sytems
Evolving Outsourcing
Wyse Technology
Avereast Group
Exult
Xerox Business Services
BNP Paribas Securities
FQS Poland
Capita
Hitachi Data Systems
Capnor Poland
HSBC Service Delivery
CBB Call Center
HTS-Comarch
CGI
IFS
CH2M Hill
Iloop Mobile
Chatham Financial
Kenexa
Cisco
Lurgi Poland
Clifford Thames
Luxoft
Delta Vista Poland
Metrosoft Poland
DreamLab Onet.pl
Rolls Royce
2014 December – 2015 January
Łódź Accenture II Sector: IT Planned Opening: 2014 Employment plans: 100
AMG.net Sector: IT, Customer Care Planned Opening: 2014 Employment plans: 100
Clariant II Sector: SSC, księgowość AR Planned Opening: 2014 Employment plans: 30
Faurecia Sector: IT help desk Planned Opening: 2014 Employment plans: 50
Fujitsu III Sector: SSC: Finance & Accounting Planned Opening: 2014
Sector: BPO/SSC: F&A/IT/ HR/Management Planned Opening: 2014 Employment plans: 500
McCormick Shared Services Sector: SSC: Finance & Accounting Planned Opening: 2014 Employment plans: 100
Nordea Operations Centre (Stage II) Sector: SSC: Finance & Accounting Planned Opening: 2014 Employment plans: 200
PGE Obrót S.A. Sector: SSC: Electrical power Planned Opening: 2014 Employment plans: 120
PKO BP Sector: SSC: Banking Planned Opening: 2014 Employment plans: 200
Prudential Sector: SSC: Finance & Accounting Planned Opening: 2014 Employment plans: 100
Rule Financial Sector: IT, Finance Planned Opening: 2014
9
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BPO/Shared Services all office development in Polish regional cities (excluding Warsaw), office investors are pouring in. Earlier hesitations have been swept aside as investors realize that SSCs are not fickled, low-cost seeking employers. Skanska’s sale in November 2014 of a Krakow office development (Kapelanka 42) to Reino Partners for €29 million is evidence of the growing appetite among funds for long-term leases backed up by solid SSC tenants (in this case Tesco). Institutional investors have moved on from Warsaw, in search of assets in Krakow, Katowice, Poznan, Gdansk and Wroclaw. “For the first time this year, Krakow will have a higher volume of transactions than previous regional leader Wroclaw,” says Pawel Debowski, a partner at law firm
Employment plans: 150
Sanitec SSC Sector: SSC: Finance & Accounting Planned Opening: 2014 Employment plans: 25
Tax Care Sector: BPO: Call center, accounting, sale Planned Opening: 2013 Employment plans: 700
TomTom I Sector: IT: VP Customer Care, CS Support Services Planned Opening: 2014 Employment plans: 150
TomTom II Sector: IT: Call center Planned Opening: 2014 Employment plans: 50
UPS Sector: SSC: Finance & Accounting Planned Opening: 2014 Employment plans: 300
Lublin Convergys Sector: BPO. Planned Opening: 2014 Employment plans: 250-400
Poznań
10
ADM
Dentons. “Investors need longterm leases with high-quality tenants, and those buildings will find five to 10 buyers per property. We are looking at a record year for investment activity, it is busier than 2007, and at that time I thought it wasn’t possible to be busier.” Fishing in the Ukraine As well-documented in the November edition of BizPoland Magazine, the violent clashes between Russia and Ukraine have led many Ukrainian IT and BPO firms to immediately relocate to Poland. Cities such as Rzeszow, Krakow and Wroclaw are getting a steady trickle of new investors from Ukraine, and AR AW (the investment promotion agency for the region of Wroclaw) is actively recruiting
Planned Opening: 2014 Employment plans: 100-250
Carlsberg Shared Services Sector: SSC: F&A , logistic, controlling, procurement processes Planned Opening: 2014 Employment plans: 250-500
Ciber Sector: SSC: F&A Planned Opening: 2014 Employment plans: <100
Ciber Sector: ITO Planned Opening: 2014 Employment plans: 100
Cleeng Sector: R&D: IT, e-commerce, media Planned Opening: 2014 Employment plans: <50
Enea Sector: SSC Planned Opening: 2014 Employment plans: 1000
Finnchat Sector: BPO: online chat Planned Opening: 2014 Employment plans: <50
Intitek Sector: IT: engineering, R&D, IT Planned Opening: 2014 Employment plans: <50
Mars Sector: SSC: F&A, HR Planned Opening: 2014 Employment plans: 100-250
firms from Kiev and Lwow to relocate to Wroclaw. Some industry insiders believe Poland can be a beneficiary of the conflict, pointing out that Poland’s legal and political situation is stable, and its EU and NATO membership provides a “blanket of security”. The adjacent tables provide a nearly-complete summary of new SSC/BPO investments in Poland in 2014. The information was gathered directly from the investment promotion officers of these cities during late November. While BizPoland Magazine is aware of nearly 10 additional international investors in the sector soon to be announced, the information is still confidential until formally announced by the cities and/or the investors. n
OEX Business Services
Szczecin
Sector: BPO Planned Opening: 2014 Employment plans: <50
REC Global
Owens-Illinois Sector: SSC: F&A Planned Opening: 2014 Employment plans: <100
Sector: BPO/IT: R&D Planned Opening: 2014 Employment plans: 50
Wrocław
Polaris Sector: R&D: chemical analysis Planned Opening: 2014 Employment plans: <50
3M Sector: SSC (ITO, HR, F&A) Planned Opening: 2014
Axiom Law
Rzeszów
Sector: Legal advisory Planned Opening: 2014
Mobica Ltd
Cogniance
Sector: SSC: IT (software engineering) Planned Opening: January 2015 Employment plans: up to 150
PKO BP Call Center Sector: SSC: Banking Planned Opening: March 2015 Employment plans: 150-250
Randstad
Sector: IT Planned Opening: 2014
Fresenius Kabi Sector: Medical (BPO F&A, IT) Planned Opening: 2014
Gorilla Group Sector: IT/help desk, software development Planned Opening: 2014
kCura
Sector: SSC/BPO Planned Opening: 2014 Employment plans:
Reslogistic Sector: TSL (Logistics, Transport) Planned Opening: 2014 Employment plans:
Sector: IT Planned Opening: 2014
SoftServe Sector: IT Planned Opening: 2014
UNIT 4 TETA Sector: IT Planned Opening: 2014
Sector: SSC: F&A
December 2014 – January 2015
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Finance
Peer-to-Peer (P2P) Lending growing fast – and a Portrait of Kokos.pl This is a guest post by Krystyna Mitręga-Niestró University of Economics in Katowice.
P2P lending develops quickly in the world in recent years. The platform Kokos.pl was the beginner at social lending in Poland in February 2008. The following portals began to operate shortly thereafter: Finansowo. pl, Monetto.pl (both in March 2008, however Monetto is not operating any more) and Smava.pl (equivalent to German Smava.de platform). During the first four years of the Polish p2p lending market the value of loans was estimated at PLN 130 million. It consisted only a small number comparing to the value of consumer loans granted by banks – more than PLN 127 billion, as of February 2012. Almost half of this amount (PLN 61 million) was borrowed through the platform Kokos.pl, which so far has more than 180 thousand users. After five years (situation at the beginning of 2013) from launching the first p2p platform approx. half a million the Polish residents borrowed approximately PLN 250 million (5 lat pożyczek społecznościowych, 2013). The owners of the p2p platforms earn money mainly on fees charged for transactions. It should be noted, that the information about the p2p lending market in Poland is limited
and current, comprehensive data are lacking. The most important players on the Polish social lending market are: Kokos.pl (with almost 80% share in invested funds through p2p lending platforms), Finansowo, Sekrata, Pożycz, SzybkoiPewnie, Bilonko, Zakra (Zestaw Narzędzi Pożyczkodawcy, 2013). The situation on p2p lending market in Poland is dynamic, however there is more positive tendencies associated with entering of the new players on the market, than the bankruptcies of the p2p platforms. The two examples of the latter are the collapse of Monetto. pl and Ducatto.pl. The Polish peerto-peer lending market seems to be interesting for foreign p2p platforms (for instance the entrance of Swedish TrustBuddy in 2013). Taking under consideration the information from the largest p2p platform Kokos.pl (the data include the 5 years period, from the launching of the platform) we can state that the statistical investor and borrower came from Masovian Voivodeship (is the largest, the most populous and the wealthiest voivodeship in Poland), are on average 34 and 33 years old. The statistical borrower borrows on average PLN 2,026 for 11 instalments. The average salary is equal to PLN 2,723. At the beginning when first p2p lending platforms have launched
a great part of Polish society was skeptical about such form of investing and borrowing. The threat of fraud and bankruptcies of p2p platforms hampered the development. However, thanks to changes and refining methods of verification the p2p platforms have became safer. The popularity of social lending is growing steadily in Poland. This trend is, among others, influenced by more attractive offer and promotions of p2p lending platforms. Kokos.pl was the first p2p lending platform in Poland. The idea of the platform was established in 2005, but the concept was implemented in 2007. The work on the website began at the same time. After the legal and tax audits were completed the Kokos.pl started to operate in February 2008 and the provider of the largest social lending service at the very beginning was Blue Media. Blue Media is a highly innovative company that specializes in providing transactional services and delivering IT systems for institutions from telecommunications and financial sector (also banks) as well as for companies working within e-commerce and m-commerce (2013). Kokos was a breakthrough and first-of-its-kind p2p lending service on Polish financial market. Now Kokos.pl is the largest social lending platform in Poland, which brings together investors and borrowers.
CEE ENERGY AWARDS 28 May 2015 www.ceeEnergyAwards.com 2014 December – 2015 January
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Taxes
Christmas cheer Having been somewhat critical of Polish
You may wonder why introducing a tax charge is good news and there are two reasons for this. Firstly, it actually seems to be a perfectly reasonable amount. Secondly, it’s not a new area of taxation anyway, but a welcome simplification of a messy issue that nobody really knows how to properly deal with. So a reasonable amount and a welcome simplification. If we all keep our fingers crossed, perhaps it will stay that way. However, I fear there may already be trouble brewing in the form of a mad idea that “use of a car” may be interpreted as making available a car – without any fuel.
tax developments in recent months, I was determined to find lots of positive things to report in this season of festive cheer.
ADVISORY
It wasn’t the easiest task that I could have set myself, but I have managed to unearth some good news to share with you.
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Enjoy the Christmas party Last year the tax authorities were rubbing their hands in delight with the thought that they had got away with the perfect Yuletide tax scam. They would collect income tax on a deemed benefit in kind – the benefit of being invited to the office Christmas party. Everyone would be deemed to have enjoyed the same benefit, even if the boss got quietly drunk in the corner on the last bottle of wine without sharing any of it. What’s more, and I promise you I’m not making this up, they even wanted to tax the poor colleague who was stuck at home on baby-sitting duty with nothing but a cup of tea and a ham sandwich. The benefit, you see, was the honour of being invited and it didn’t matter whether or not you could make it. This year, thankfully, common sense reigns supreme. Back in July the Constitutional Tribunal decided that a benefit in kind does not arise unless a few basic tests are met, one of which is that employees should either receive some sort of asset value, or should avoid expenditure that they would otherwise have to incur by themselves. So as long as your staff don’t get to take home a designer doggy bag (which no doubt would have more enduring value than its contents), it would seem that they are now in the clear. What about deductibility of the cost to the employer? Unfortunately in most cases this is not such a cheerful situation. The accepted practice appears to be that if the primary purpose of the event is to eat, drink and be merry, it’s not acceptable. On the other hand if the objective is integration and motivation of staff, this should create a deductible cost. In order to understand this logic, you need to understand that eating, drinking and generally being merry is not very helpful for integration and motivation. What your staff really need is a good motivational speech, preferably with a prepared presentation on the company’s achievements and plans that takes their mind off their pierogi and motivates them to stay sober and get to work on time the next day. Company cars More good news is the introduction of scale charges for the private use of company cars from January. The taxable benefit is fixed at PLN 250 per month for an engine capacity up to 1,600 cc and PLN 400 per month for bigger engines.
By Steven Foster Process Solutions www.ps-bpo.com Steven.Foster@ps-bpo. com
VAT and partial exemption Next year will see the introduction of more flexible rules applicable to partial exemption. The plans are delayed and won’t be enacted before 1st April, but that gives us more time to plan for them. When a business has both taxable income (such as most letting of commercial accommodation) and exempt income (such as letting of residential accommodation), it can only recover VAT paid to suppliers (input tax) on costs which relate to the taxable income. All other input tax paid by the business is not recoverable and becomes an extra business expense. A method is required in order to decide how much residual input tax can be recovered (the VAT on general overheads which does not relate directly to either taxable or exempt income). The only method currently allowed is to recover the proportion of residual input tax which agrees with the proportion of taxable income to total income. Still with me? If so, you’ll be pleased to hear that during next year (probably April), businesses will be able to choose an alternative method for dealing with partial exemption which better reflects their particular circumstances. Factors which can be used include turnover (as now), headcount, working hours, floor space and whatever other ideas the Minister of Finance dreams up in regulations that he will be authorised to issue. Taking a hypothetical example of a consulting firm which also generates a large amount of exempt financial income from a disproportionately low number of staff (because most financial income arises from existing contracts), switching to a headcount-based method could significantly increase its residual input tax recovery rate. So the good news keeps on coming. Or does it? These new rules were inspired by the CJEU case of BLC Baumarkt, where the German authorities imposed a scheme based on floor area in a mixed-use development. The effect was a significant shift in allocation of input tax towards VAT-exempt rent income, reducing the amount of VAT that could be recovered. The current wording of the VAT bill suggests that taxpayers are required to choose an apportionment basis which is most suitable for their particular business. If you don’t have the same complete faith in the fairness and reasonableness of our tax authorities that I have, you might be concerned that “most suitable method” will be taken to mean “maximises the VAT cost.” Happy Christmas to you all! n
December 2014 – January 2015
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Corporate Risk
Last month we discussed the often and awfully proven “sole-proprietorship silverback” issue. This month we’ll cover just what to do when that proven elder of a sales pro turns out to be the king of By Preston Smith CEE Consulting Group; preston.smith@ceecg.com
backhanders, bribes and more. First, however, we shall briefly digress—if only because, following a lecture on scams and Foreign Corrupt Practice (FCPA) issues—I was accosted with the following question: why, Preston, do you consider the “elder generation” to be such a threat? Now, now, let’s behave ourselves. I suppose I have drawn this upon me with the convenient stereotype, but allow me to first turn this argument on its head. Take your typical young investment professional (and yes, I shall stereotype yet again). His background likely is as follows: 1) He is a top graduate from an upstanding business school. 2) He has interned and then been first-blooded at a big-four firm. 3) After five challenging years he has proven himself and moved to private equity, a hedge fund or perhaps into some other sector such as real estate. Now let’s compare the typical investment target in the region. 1) The business was begun in the rough-and-ready 1990s by a couple of guys who literally begged, borrowed and stole to get their dream off the ground. I know of cases where the seed money came from picking strawberries in Norway. Other businesses began with mysterious suitcases of money, political favors or worse. 2) That was likely the easy part. As favors (or a suitcase of money was owed), it’s not as if profits could be invested straight into the business. So corners were cut where they were cut—even while the accounting was done by hand and the business environment (and governing laws) changed by the day. In some regions of CEE you have mini-revolutions, bank collapses, issues with organized crime, yet our tragic and nefarious heroes manage to survive it all. 3) They also survive cutthroat competition and rather dramatic shifts in political winds even in rather stable countries, such as Poland. Perhaps you see where I’m going - or perhaps you don’t. But by the time our new investment manager is negotiating his first deal, he is facing off against a 20year veteran who has seen and done it all. Unless he’s
2014 December – 2015 January
exceptionally bright (and here I must say that many of the private equity pros I have met are extremely bright), he is frankly over-matched. Add in the fact that the silverback in question knows his business inside and out; that he knows how to cheat and where to bump the numbers because he has run and computed them himself for two decades, and the virgin private equity pro is actually in a fight for his life whether he knows it or not. In short, he must be highly intelligent, diligent to the point of insanity, absolutely objective, a sharp-ashell negotiator and finally, in the face of so many demands, he must, after all, retain his charm. Considering the fact that this may literally be only the second job he has ever held in his life, this is a tough task indeed. Thankfully, there are those that rise to the task, and often they do benefit from pros within their ranks who have also fought the hard battles for the past 20 years. But hopefully you see that yes, such a badly-intentioned silverback is indeed a threat—just as he is a threat to your business if he happens to turn up as a sales manager or “marketing king” in your pharmaceutical or manufacturing group. In short, he may well know the game better than you ever will. Moreover, if he has sales and distribution locked up within his own network, he poses a risk to your business that may go beyond even tarnishing your business’s interest with a bribe. So what do you do? I mentioned at the end of last month’s articles that the answers are legion—and they are. There are negotiating tactics. You may attempt to reform the silverback by showing him the error of his ways. Perhaps you can attempt to install a new manager to watch him night and day. Or you can call him on the carpet, deduct from his salary or even attempt to nullify temptation by giving the violator a raise. Unfortunately, none of the above will work. Which means there are plenty of answers but only one that offers a future for your business—which is this: cut him clean and quick. Grab the bull by the horns and remove the cancer from your business while you still have a business left to run. Sounds painful? It will be. Sounds simple? Maybe, but it will probably be difficult. Why? The answer lies in the fact that this same silverback is almost certainly a battle-scarred veteran who has been here before. He knows how to adapt and how to survive, so very likely he will be prepared to leave, but only after a fight. Which leads us to the final trick: plan your move to the nth degree and execute equally professionally—i.e. do not leave your nemesis with room to maneuver or dig in, for he will likely do both. And how exactly do you do this? As you might have guessed, we’ll get into set-up and firing strategy next month. n
ADVISORY
A formidable nemesis
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Energy
ADVISORY
Renewable Energy Act finishes its work
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The RES Sub-Commission of the Parliamentary Special Commission for Energy finished its work beginning of December. Generally only the Ministry of the Economy’s Renewable Energy department’s improvements have been implemented. Some further improvements to align the RES Act with relevant EU legislation may take place in the Senate, presumably beginning of February, so that the RES Act may enter into force beginning of second quarter 2015. The following major changes have been implemented: • inclusion in the definition of agricultural biogas as biogas produced by biomass collected from areas other than agricultural and forest areas, i.e. from municipal areas – this gives further benefit for most efficient use of municipal waste from public parks, etc; • clarification of the definition of municipal waste as biomass – that it must consist of biomass animalorigin and plant-origin, and that, to avoid circumvention of legislation, no further origin is allowed; • the definition of high-efficient co-firing requires that a licence and an additional documentation proving the technical capacity to achieve a high energetic share of biomass must been issued by end of June 2014 – by this date 14 installations have been qualified as high-efficient co-firing with a production capacity not exceeding 2 TWh/a; • clarification that the obligation of obliged sellers to purchase entire electricity from RES generators does not include fees for commercial balancing – this clarification is in line with the European guidelines and decides recent disputes; • specification that the obligation for utilities and large consumers to purchase green certificates according to the quota includes electricity purchased for own use – this further clarifies uncertainties over the purchase obligation; • continuation of a quota of 20% of net consumption until the year 2020; however, the Minister of Economy has the right to set a lower quota by means of regulation; • the percentage will be published for the coming year on 31 August (previously in October); green certificates will be redeemed by the 30th June a year later (previous version: 31st March); the quota for 2015 and 2016 stays at the current level of 14% and 15%, respectively - this will give the green certificate system more stability at least for the coming years as the first RES generators to be connected to the grid will not show up before end of 2017; the Ministry of the Economy is therefore not expected to decrease the current quota at least until 2018 – all measures should lead to a faster decrease of green certificate oversupply; • substantial increase in the reference price for existing RES generators to switch to the auction system;
by Christian Schnell
the RES Act specifies that the basis for calculation is PLN 239.83/MWh and the quarterly ERO price – the calculation basis has been therefore set at a higher level as supposed, i.e. to an amount of PLN 430 – 440/MWh; for instance, in 2013 the quarterly ERO price amounted to PLN 195/MWh instead of PLN 181/MWh for the yearly ERO price (which does not include prices inside utility groups); • for projects with up to 500 kW the bid price is a Feed-in tariff – the “obliged supplier” will take the contracted volume at the fixed strike price and will resell the electricity; it has been specified that the Feed-in tariff includes costs for balancing, so if in the same auction “basket”, depending on the size of the installation, RES-E generators compete against each other based on two different support systems – feed-in tariffs below 500 kW and contracts for difference from 500kW to 1MW – smaller RES generators have a competitive advantage; • announcement of the first auction should be within 90 days of the entry into force of the new support system; • the prequalification for the auction system should start before the new support system enters into force,
from the moment the RES Act enters into force; all grid connection contracts will have to be adopted within six months or can otherwise be terminated”
dr Christian Schnell, Partner, Solivan. 22-209-5500 cschnell@solivan.pl More information about the Polish power market forecast in “Renewables Investments in Poland. A Market Outlook for investors”, Frontier Economics, September 2014.
i.e. by 1 July 2015 – according to the draft, the support system should enter into force by 1 January 2016; • implementation of substantial changes to grid connection contracts: according to a new clause in the Energy Law act (sec. 7 para. 2a ) the date for first feed-in cannot go beyond 48 months (72 months for offshore wind) from conclusion of the contract, as otherwise the contract can be terminated – however, as this clause does not work retroactively, it will apply only from the moment the RES Act enters into force; all grid connection contracts will have to be adopted within six months or can otherwise be terminated; • previous regulations will apply for issuing certificates of origin if based on RES production before the entry into force of the RES Act, and not only for applications which have not been finished – this clause gives further clarity mainly for hydropower and non-dedicated co-firing, which will be phased out from the support system or receive only half of green certificates under the new regulations. n
December 2014 – January 2015
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Advisory
Following long delays in vote counting, Poland’s State Electoral Commission finally announced the official results of the first round of local government elections held on November 16th. By Marek Matraszek
By Marek Matraszek CEC Government Relations
Marek Matraszek is the Founding Partner of CEC Government Relations. He can be contacted at mm@cecgr.com
Despite most ballots being cast for main opposition party Law and Justice (PiS), the ruling coalition parties Civic Platform (PO) and Polish Peasants Party (PSL) emerged as winners, capable of controlling 15 out of 16 regions. The run-off races on November 30th for mayorships of major towns and cities underlined the key trend of the elections: PiS had done well, but not well enough to secure key victories. In major cities, PO candidates won the runoffs against PiS candidates, with only a few exceptions. However these victories were achieved with narrower margins than in 2010, and may point to more turnover in the next local elections in 2018. PiS received nearly 26.85% of the votes cast, while PO won nearly 26.3%. Immediately after exit polls were announced, which showed a much more convincing PiS lead over PO, the PiS leadership was triumphant – they had won the first popular vote against PO since 2005. On election night, PM Kopacz was clearly stunned by the weak result, improvising during her speech on the need for hard work required to restore voter confidence. However, it quickly turned out that despite winning the vote nationwide, Law and Justice was able to secure fewer seats in regional councils than Civic Platform. PO, despite achieving their worst result since 2005, won most seats at the regional level and maintained its grip on most cities – the party’s candidates secured victories in Łódź and Lublin, and also won run-offs on November 30th in Warsaw, Gdansk, Wroclaw and Poznan. PO also emerged victorious in eight regional assemblies. Still, the election results are a warning signal for PO. After seven years of continuous victories, without its formidable leader Donald Tusk, mired in internal rivalry between contenders for the party leadership, Civic Platform faces a difficult parliamentary election year in 2015. Losing its hitherto core electorate of the urban educated middle class, PO will - in an attempt to regain them - avoid any radical or populist measures in the coming year and once again adopt a moderate, pragmatic face. It is the PO’s junior coalition partner, however, the Polish Peasants Party (PSL), who made the biggest
2014 December – 2015 January
gains. Janusz Piechociński, PSL chairman since 2012, was delighted with the best ever election result for his party – 23.68% of votes, securing 157 out of 555 seats in regional assemblies. Once considered as a narrow representation of Polish farmers, PSL in recent years became increasingly perceived as a “party of common sense”, opposing populist legislation and capturing footholds in towns and cities across Poland. One reason for the PSL success is a rebellion by weary and disillusioned PO voters who had lost confidence that Civic Platform remains dedicated to free market principles. PSL has become a party of choice for small entrepreneurs, believing that on a local level they can rely on commitments to support domestic business. Given the specificities of local elections, PSL stands little chance of repeating these results in the 2015 general election. Still, a double-digit vote is very likely – in which case PSL will establish itself firmly as the third political force in Poland. The (post-communist) Democratic Left Alliance (SLD) experienced severe punishment at the polls, scoring only 8.78% of the vote and finishing distant fourth with barely 28 seats. A disastrous result in the race for the Warsaw mayorship – only 4% of the vote – augurs ill for the future. However, the details of the results were overshadowed by controversy surrounding the election itself. A massive crash of the State Election Commission (PKW) electronic vote counting system exacerbated the overall impression of chaos. The PKW struggled to resolve the crisis, postponing announcements of the official results for an entire week. The media broadcast startling images of unguarded piled bags of ballots, invoking claims of vote rigging. The post-election crisis proved the incompetence of responsible electoral authorities, and will likely trigger future reform of election organisation. Within a week, all members of PKW had resigned, bowing to the pressure of public opinion. This was a Godsend to Law and Justice’s leader Jarosław Kaczyński, who accused the coalition partners of vote-rigging and demanded elections be made invalid. With the local elections bringing a virtual stalemate, in order to mobilise its electorate and eventually win the parliamentary elections next year, PiS will try to polarise the political scene once again. PiS will most likely continue on the narrative of rigged elections and a dysfunctional state, in hope of discrediting the government. In contrast, PO will most certainly try to portray itself as the only force able to guard the country against an irresponsible opposition. In other words, back to the default debate in Polish politics. Which narrative carries more weight with Poles will be clear a year from now, after the autumn elections – and after a politically exciting 2015 to come. n
ADVISORY
Local Difficulties For Poland’s Parties
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Awards & Distinctions
Lynch awarded The Golden Cross of Merit - Poland’s highest civilian honor Poland’s Medal of Honor, the highest civilian honor in the country, is awarded each year by the President of the Republic of Poland to a select number of individuals. On November 3rd, 2014 at the Presidential Palace in Warsaw, John P. Lynch was awarded the Golden Cross of Merit, bestowed
Awards & Distinctions
by the President of Poland Bronislaw Komorowski.
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John Lynch was nominated for the Golden Cross of Merit awards on behalf of the Polish-American business community, on the 25th anniversary of Poland’s freedom. John was recognized for his talent and entrepreneurship, inspiring action and work for Poland, including his founding the American Chamber in Kraków in 1994, and his role in attracting American investors to Poland over the past 23 years. Moreover, through his company Lynka, John has hired, trained and developed hundreds of Polish employees over the years. The medal was presented on behalf of Polish President Bronislaw Komorowski at the Presidential Palace by Minister Olgierd Dziekoński, Secretary of State at the President’s Chancellery. John was accompanied by his family. About the Gold Cross of Merit The Cross of Merit (Polish: KrzyżZasługi) is a Polish civil state award established on June 23, 1923, to recognize services to the state. The Order has three grades: Gold, Silver & Bronze. At the time of its establishment in 1923, the Cross of Merit was the highest civilian award in Poland. It is awarded to citizens who go beyond the call of duty in their work for the country and society as a whole. Under the 1992 act, the order is awarded to foreigners or Poles resident abroad for distinguished contribution to international cooperation or cooperation between Poland and other countries. Background to the 2014 Awards: 2014 is the 25th Anniversary of Poland’s Freedom after the
collapse of communism in 1989. The Polish President decided that this would be a good year to honor the people who played a key role in both the fall of communism, but also to honor the people who played an important role in the transformation of Poland from a communist, central-planned economy to a free market democracy.
In early 1991, John joined a US AID volunteer program - MBA Enterprise Corps – created to help launch the new Polish economy. Since then, John has lived in Poland and has never stopped contributing to the development and economic growth of the country he now calls home. Among his many contributions to Poland are:
While the majority of people honored were Poles, the Polish President decided that the United States itself, including a number of US Citizens were key contributors to Poland’s economic miracle of the past 25 years. So President Bronislaw Komorowski’s staff contacted the US Ambassador to Poland and the American Chamber of Commerce and asked to prepare a list of nominees of Americans and Polish-Americans who contributed to this success. The Nominations were reviewed by the Presidential Chancellery, and in September, the President announced those who would receive various Medals of Honor from the Republic of Poland. Lynch’s contributions to Poland over 23 years:
• In 1992, as Director of Marketing, he helped develop one of the first private banks in Poland, First Polish American Bank in Krakow, owned by the Polish American Enterprise Fund. • He founded the American Chamber of Commerce in Krakow. He attracted numerous American investors to Southern Poland, and still today is widely recognized as “the Ambassador of American business interests” in Malopolska representing AmCham. • He launched Lynka in 1993, a corporate apparel and business gifts company, which today employs 200 Poles in Krakow, and exports to 20 EU countries. n
December 2014 – January 2015
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Energy News
PKP Energetyka spin-off attracts buyers Poland’s top two utilities, PGE and Tauron, said they would look at buying Polish railways’ energy arm, setting up a four-way race after expressions of interest from two other utilities, Enea and Energa. Last month, state-run railway PKP said it planned before the end of this year to invite potential bidders for its fully-owned
subsidiary, PKP Energetyka, as part of its programme to pay off debt by selling non-core assets. PKP Energetyka is Poland’s No.5 utility by the amount of energy sold and the only Polish energy company with a countrywide distribution network. Poland’s energy sector, mostly state-controlled, is
struggling to modernise and expand its network, while operators are fighting for clients. PKP Energetyka closed 2013 with a net profit of 90 million zlotys and earnings before interest, tax, depreciation and amortisation (EBITDA) of 185 million. It sold 6.6 terawatt hours (TWh) of energy last year. n
WYG secures contract for work on new nuclear plant in Poland Engineering consultancy WYG has been named as a key partner on a major new nuclear plant in Poland. The Leeds-based firm has signed a contract with Amec Foster Wheeler, which has been appointed by Polish state-controlled Polska Grupa Energetyczna to develop Poland’s first nuclear power plant over the next 10 years. The contract is expected to be worth a minimum of £6.2m to WYG over the next three years, rising to up to £35m if all optional work is undertaken over the 10-year period.
WYG will provide a broad spectrum of technical support services including contract administration, engineering support, licensing and permitting, management systems, site infrastructure, quality assurance and vendor and supply chain oversight. Paul Hamer, chief executive officer of WYG, said: “I am delighted that we now have a firm contract in place to work together with Amec Foster Wheeler to deliver one of the most significant projects in Poland’s infrastructure programme. We will be drawing on our experience built
up over more than 20 years working on nuclear sites in the UK to help the Polish government achieve its long-term objectives. The appointment is also a major advance in our aim of building a significant presence in the wider energy sector through our model of collaborative working with major, blue-chip partners.” Analyst Nick Spoliar said: “WYG has announced confirmation of a major win in Poland, where it has been chosen from a strong field to partner with AMEC to deliver energy independence to Poland in the shape of a major new nuclear plant.” n
17 2014 December – 2015 January
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Energy News
Polish Coal mines need billions in aid as debt deals fail Poland’s government will need to provide “several billions of zloty” of funding to rescue its unprofitable coal producers in the next two years, according to Standard & Poor’s. The country, which relies on coal for 90 percent of its electricity production, is seeking to revamp the stateowned industry after its two biggest producers, Kompania Weglowa SA and JSW SA, failed to sell Eurobonds
this month. Falling coal prices deepened losses at the companies, triggering labor unrest amid the threat of restructuring to cut costs. “Unless coal prices recover, which we don’t expect in the coming years, the government will need to provide funding to the industry to the tune of several billions of zloty in 2015 and 2016,” said Elad Jelasko, a London-based analyst at S&P. Low thermal coal prices and high costs create “formidable financial challenges” for Polish mines, which are seeking new liquidity sources to make up for their “ongoing cash flow deficits,” according to the ratings company. Deep Restructuring The industry is “at a crossroads” as a necessary deep restructuring would involve closing unprofitable mines and laying off miners, while the industry is a “key source of jobs,” which weighs “heavily” on the government’s decisions on how to overhaul it, Jelasko said.
Kompania, the European Union’s biggest coal producer, is in talks with state-owned coal trader Weglokoks SA to sell four mines for about 2.5 billion zloty to gain cash for financing operations. In April, Kompania sold a mine to JSW for 1.49 billion zloty, while utility Tauron Polska Energia SA earlier bought out its stake in a venture for 310 million zloty. Other state-controlled electricity generators, which also include PGE SA and Enea SA, could buy mining assets from coal groups “if it addresses solutions good for Poland’s energy security or stability of supplies,” Treasury Minister Wlodzimierz Karpinski said last week. Coal mines, which employ more than 100,000 people, posted a combined 772 million-zloty net loss in the first half of 2014, compared with profit of 16 million zloty a year earlier, according to data from Poland’s Economy Ministry. Source: Bloomberg
Belarus – Poland energy cooperation grows
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The Belarusian-Polish energy cooperation is entering a new level, Deputy Energy Minister of Belarus Mikhail Mikhadyuk and Deputy Economy Minister of Poland Tomasz Tomczykiewicz told media following the meeting of the Belarusian-Polish working group on 21 November. The two countries set up a working group on energy cooperation in 2008. The contacts, however, have been almost frozen in the recent four years. According to Tomasz Tomczykiewicz, over the time a lot of issues have accumulated, which should be addressed in cooperation with the Belarusian counterparts. The Polish side has initiated the resuming of the
activity of the working group. The parties were happy with the results of the meeting that was attended by both government bodies and business entities. The participants of the meeting discussed the most important issues for the companies of the energy sector. In particular, the parties talked over the intensification of the bilateral trade in electric energy and assistance in accidental situations with the use of the existing infrastructure. At present the 110kW Ross-Bialystok and 120kW Brest 2- Wolka Dobrynska power grids are not used in electricity exports. The parties looked into the ways of resuming the operation of these cross-border connections.
The meeting also highlighted the development pace of nuclear power in the two countries. The Belarusian delegation updated the Polish part on the construction of the nuclear power plant in Ostrovets. According to Tomczykiewicz, the Belarusian experience in the area is very interesting for Poland as the country is planning the construction of its own nuclear power plant. The heads of the delegations also took note of the prospects for mutually beneficial cooperation in renewable power resources and the mining industry. The delegations agreed to develop a joint earlywarning system in case of oil and natural gas supply shortages. n
December 2014 – January 2015
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Energy News
EBRD launches €200m clean energy facility in Poland The European Bank for Reconstruction and Development (EBRD) has launched its second Polish Sustainable Energy Financing Facility (PSEFF) with a fund of €200m which will be lent by local banks to small and medium-sized enterprises (SMEs). The loans will finance investments to replace or upgrade heating, cooling, electric and related systems in order to lower companies’ energy bills and decrease carbon emissions. The framework will be complemented by investment grants provided by the Polish National Fund for Environmental Protection and Water Management (NFOSiGW) and technical cooperation provided by the European Commission. PSEFF builds on the highly successful first stage of the programme that enabled hundreds of Polish businesses over the past three years to invest in energy efficient solutions.
Polish authorities are joining the effort through the participation of NFOSiGW for the first time. Established in 1989, NFOSiGW is involved in co-financing large investments with nationwide significance. The Fund will provide investment grants of approximately €14.2m under its new programme “Improving energy efficiency and energy saving investments in SMEs.” Director of EBRD for Poland, Grzegorz Zieliński said: “Small and medium-sized businesses are the engine of our economy. Projects like PolSEFF are of paramount importance for the long-term energy sustainability in Poland and good for business. We are extremely pleased to be cooperating with NFOSiGW and see it as a crucial element for the success of the second version of PolSEFF.” PSEFF is implemented through Polish commercial banks. Their role is critical for reaching out to
local SMEs clients. BNP Paribas Bank Polska SA will be the first bank to join the initiative. “Targeting energy-saving investments by SMEs is fundamental for the economic development in Poland, but it is also crucial for achieving our country’s goals in environmental protection,” said Małgorzata Skucha, President of NFOSiGW. “This new programme will demonstrate the financial and environmental viability of investing in the best available energy efficiency and renewable energy technologies across all Polish SME sectors.” To date, the EBRD – with financial support by the European Commission – has financed more than 2,000 energy efficiency projects in Polish SMEs worth more than €190m, resulting in total annual energy savings of 342 GWh and total emission reduction of 102,000 tonnes of CO2.
British firm alleges Poland squeezed it out of mining permit British firm Darley Energy has lodged an appeal against Poland’s decision to deny it a potash mining concession, alleging the government dragged out the bidding process in such a way that the permit went instead to Polish mining giant KGHM. Darley said it submitted an appeal to Poland’s Environment Ministry, which oversaw the bidding process, and has also instructed lawyers to prepare a complaint to be submitted to the European Commission, the executive arm of the European Union. The ministry denied giving preferential treatment and said KGHM won the concession because it had the strongest bid. The ministry and KGHM declined to comment on the allegations. KGHM is one of Poland’s biggest companies, as well as being Europe’s No.2 copper producer and the world’s biggest silver miner. The Polish state holds a 31.8 percent stake in KGHM.
Darley bid for the concession in the Baltic coast town of Puck, in 2012. Since there were no other bidders, Darley said that according to Polish law it should have been granted access to the deposit by May 2013. But the process was stretched to give KGHM time to join the bidding and win the concession. “We know and understand that the mining rule in Poland is not ‘first in, first served,’” said Philip Jeffcock, whose family founded Darley. “But if the ministry had adhered to the timetable established under Polish procedural law, there would have been no other claimants and Darley would have been awarded the concession long before other parties joined the race.” Darley has instructed law firm Freshfields Bruckhaus Deringer to prepare a formal complaint to the European Commission, Jeffcock said,
2014 December – 2015 January
adding it should be submitted to the Commission “shortly.” A ministry spokesman said KGHM’s offer was chosen because it envisaged a wider scope of geological study and also because it planned to mine copper, silver and salt at the site, in addition to potash. The spokesman declined to comment to Reuters about Darley’s allegations, but did say that the fact that KGHM often loses in bid rounds showed the ministry did not favour any one company. “We treat all parties equally when awarding each concession,” the spokesman said. Artur Tarnowski, KGHM’s investor relations chief, said he had no comment about Darley’s allegations. “If there are questions from the EC (European Commission), there will also be our answers,” he said. “If there are charges, we’ll address them decisively.” Source: Reuters
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Ifrastructure
EU funds help Poland build ‘ghost’ airports The European Union has given Poland more than 100 million euros to build at least three “ghost” airports in places where there are not enough passengers to keep them in business.
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The result is gleaming new airport terminals which, even at the peak of the holiday season, echo to the sound of empty concourses and spend millions trying to attract airlines. Poland is not the only country in Europe to have built airports that struggle to attract flights. Around 80 airports in Europe attract fewer than 1 million passengers a year, and about three-quarters of those are in the red, according to industry body Airports Council International. Some cost much more to build than the Polish projects. One airport in eastern Spain, open for three years, has so far received not a single flight. But Poland is striking because the country received so much money for its projects from EU funds. Poland received 615.7 million euros in EU support for airports between 2007 and 2013, according to figures supplied to Reuters by the European Commission. That was almost twice as much as the next biggest recipient, Spain, and more than a third of all member states’ money for airports. The government declined to provide all the information on which it based its decisions to invest in the
airports, but Reuters has reviewed data on three sites where traffic fell dramatically short of forecasts. Poland is often touted by Brussels as one of the most efficient users of EU aid, and there is no suggestion the country used EU airport money corruptly. European help has been vital in improving Poland’s aviation infrastructure, only a small share of the country’s airport spending has been on white elephants, and passenger shortfalls may have been exacerbated by the 2008 global financial crisis. Spokespeople at some airports said the projects could be considered a success because they were creating jobs, bringing in tourists, and driving investment in the regional economy. But it is clear mistakes were made in Poland, planning officials and aviation executives say. The whole experience raises questions about how the government will handle the next big injection of EU money, which it expects to be 82 billion euros over the next seven years. The problem is most striking at the recently rebuilt Lodz passenger terminal, where passenger numbers in 2013 fell almost one million short of forecasts, according to European Commission documents examined by Reuters. Where there aren’t enough passengers to make an airport viable, local governments keep them on life support through subsidies, according to a report by CEE Bankwatch Network, a non-governmental watchdog. The beneficiaries have often been the airlines that use them. Jacek Krawczyk, the former chairman of the board of Polish national airline LOT who sometimes advises the European Commission on aviation policy, said Poland was no worse than other EU countries at building airports, but the sheer volume of EU money it was trying to absorb in a short space of time explained some problems. Krawczyk, who was not directly involved in planning any of the airport investments, said
that in those Polish cases where things did go wrong, “there was no corruption, just wrong priorities”. The European Union has now tightened up the rules on state aid that airports can receive. Faulty forecasts Between 2007 and 2013, the European Union promised funding to help build and upgrade 12 Polish airports. Some of the projections underlying the plans were highly ambitious. The government declined to detail its predictions for passenger numbers. But figures for three of the airports – Lodz, Rzeszow and Lublin – are contained in letters on a related topic sent by the European Commission to the Polish foreign minister. The letters show Polish authorities projected combined passenger numbers for the airports to be more than 3 million passengers a year. In 2013, the actual number was just over 1.1 million. Together, the investments in the three airports totalled about 245 million euros. Around 105 million of that came from the European Union. The rest came from central government in Warsaw, local governments and the airports themselves. The airport with the biggest projected traffic was in Lodz. In its heyday, the city was a thriving textile manufacturing centre. Jerzy Kropiwnicki, mayor of Lodz between 2002 and 2010, wanted to attract foreign investment and tourists. The city had a small airport that handled domestic flights; but Kropiwnicki felt a big international terminal would revive the local economy. “I used to endlessly answer questions like: ‘How do we get to you?’ and ‘How do we fly there?’” Kropiwnicki told Reuters. To get the funds, the country had to prepare a strategic plan for civil aviation. At the Transport Ministry, this task fell mainly to Andrzej Korzeniowski. He was given three months to draft the plan and meet
December 2014 – January 2015
www.bizpoland.pl the EU funding deadline. “I slept on a camping mattress under my desk,” Korzeniowski, now retired, told Reuters. “I had no time to eat.” Looking back on the 160-page document he drafted, Korzeniowski says it was, under the circumstances, a good programme. But it had a big shortcoming: It let local governments decide where new airports should be built, and how big they would be. “That was the biggest mistake, for which we’re now paying the price,” he said. “The local governments decided, ‘I’m a prince in my domain, the government doesn’t tell me what I’m supposed to do, we do what we want’.” By 2005, passenger numbers in Lodz were shooting up. Wojciech Laszkiewicz, an adviser to the mayor who went on to be deputy chief executive of the airport, said the team decided to rebuild the terminal entirely. The airport commissioned a feasibility study from advisory firm Ernst & Young (EY), published in November, 2009. EY predicted a minimum of 1.042 million passengers in 2013 for Lodz. That was less than the government forecast but many more than the 353,633 who actually passed through the airport last year. ‘Cannibalisation’ The problem, say aviation industry officials and consultants, is that passenger numbers for any individual airport are impossible to predict with confidence. Even if national forecasts hold true, local factors can pull passengers away from one airport and attract them to another. Lodz quickly became a victim of this “cannibalisation”, as the airline industry calls it, because Warsaw airport was also upgraded, and a new highway built which brought the capital within 50 minutes’ drive of Lodz. “To have an airport in Lodz from that point of view makes no sense at all,” said Krawczyk, the former airline chairman. He is now president of the Employers’ Group of the European Economic and Social Committee, a Brusselsbased consultative body that advises on EU decision-making. In a statement, a spokesman for the Ministry of Infrastructure and Development said it could issue guidelines, but could not directly influence local authorities: “A decision
2014 December – 2015 January
Ifrastructure on expanding or building an airport for a particular region is the prerogative of the local authorities.” Under EU rules, though, the initial cash for airports comes from national governments. They are reimbursed by the EU when it approves a scheme. Only investments worth over 50 million euros have to seek the Commission’s prior approval, and many of the Polish airport investments were below that threshold. The Commission has since said its approach to funding the airports will undergo a radical change. In February, it introduced
Poland is not the only country in Europe to have built airports that struggle to attract flights. Around 80 airports in Europe attract fewer than 1 million passengers a year, and about three-quarters of those are in the red, according to industry body Airports Council International.”
stricter criteria, and said lossmaking airports will be forced to wean themselves off state aid. It did not name any countries. Payments to airlines For now, the Polish airports still need help, and that can be expensive. Senior managers in the Polish aviation industry said the cost of running a small regional airport would be at least 3 million euros a year. At the moment in Europe, they are often propped up through financial injections from local authorities, which are often their biggest shareholders. The state also has indirect methods of helping the airports, in particular by giving money to the airlines – mainly low-cost carriers like Ryanair. “In practice, these payments serve as an incentive for airlines,” CEE Bankwatch
Network, the non-governmental watchdog, said in its report. Lodz and Rzeszow airports did not respond to questions about how much they pay airlines. A spokesman for Lublin airport said only that it was successfully boosting communications to help the local economy. But public records for Podkarpackie, the mountainous, forested region where Rzeszow airport sits, show that between 2011 and 2014 its government paid 5.7 million euros to Ryanair in exchange for advertisements promoting the region, which appeared on Ryanair’s web site and in its in-flight magazines. Podkarpackie spent another 3 million euros to advertise with Polish carrier Eurolot over a threeyear period. In all, 70 percent of the region’s 2013 promotional budget went to airlines that fly into Rzeszow airport. These payments are problematic, say several people involved in Polish aviation, because the airports are at the mercy of the airlines. With so many airports to choose from, airlines can easily shift routes. “The relationship between the local airports and low-cost carriers is suicidal,” said Krawczyk, the former airline chairman. For low-cost carriers, he said, “nothing will ever be enough. ... At some point they will say, ‘If you don’t give us more, we’ll go.’ And they go.” A spokesman for the region where Rzeszow is located said the deals were good value because they allowed it to target the kind of travellers it wants. He said tourist numbers in 2013 were double the level in 2010. Ryanair chief executive Michael O’Leary told Reuters such advertising was a good deal for local governments because the Ryanair website reached a huge audience. He said Ryanair brought economic benefits to places that are off the beaten track, in part by flying in tourists. But “if the airport doesn’t want me, that’s fine. I’ve 80 other airports in Europe who want the growth. We don’t force any airports” to pay. “If Rzeszow has enough low fares, Rzeszow can grow to 1 million visitors, 5 million visitors, 10 million visitors,” said O’Leary. “They provide – well, I don’t know what Rzeszow is famous for, but it’s famous for something.” Source: Reuters (BDNews)
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Equities News
Catalyst bond market to boost listings Five years after being started, the Catalyst bond market continues to make progress in attracting private company debt listings to its bond-trading platform. Recent listings include Alior Bank and Ghelamco, which is currently raising debt via Catalyst to finance its real estate development activities in Warsaw.
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Alior Bank, which recently announced plans to buy smaller local rival Meritum Bank, raised 322 million zlotys via a bond issue in October to help finance the takeover. The bond issue is for 10-year floating rate subordinated bonds that pay a semi-annual interest of 3.14 percent over the 6-month interbank lending rate, the bank said. Alior plans to list the bonds on the Catalyst bond market at the Warsaw Stock Exchange. Ghelamco is raising 50 million pln to “test the market”, with terms of 3.5% over the WIBOR benchmark rate and a 4 ½ year maturity date. Yet the Catalyst market has a nagging problem: it’s hard to distinguish the credit risk of one listed Polish company from another. The stock exchange plans to provide its own credit assessments from the second half of 2015, to fill a hole left by the big ratings agencies who only cover the largest companies. With two-thirds of the Catalyst trading system’s 351 listed debt securities valued at less than $10 million each, most fall under the radar of the global rating companies. “Our service will help investors differentiate the notes and better understand issuer credit risk,” said Maja Goettig, chief executive officer of in-house ratings provider Instytut Analiz i Ratingu SA.
“Our challenge is to strengthen the market’s creditworthiness.” Assigning ratings to corporate debt listed on Catalyst could boost secondary-market trading, which has struggled to build volumes since the platform was begun in 2009. At the same time, risks for investors and the exchange include the possibility that a company goes bankrupt shortly after being given an investment-quality grade. Deposit Alternative Corporate bonds have been gaining popularity as an alternative to record-low interest rates on bank deposits. The exchange’s strategy envisages expanding Catalyst to 1,000 listed corporate securities by 2020, with focus on bond sales of more than 100 million zloty.
The last years showed that even global rating agencies have problems with adequate risk assessment, therefore investors should make final decisions based on their own analysis” Grzegorz Chlopek, CEO of ING PTE SA
With 97 notes due next year as the Catalyst platform matures, problems are starting to build. StockWatch.pl, an investment website, reported 44 delays relating to interest payments or redemption of bonds last year and 30 such cases this year, said Daniel Packowski, an analyst at the company. “Isolated instances” of payment delays show that a credit company
may play an “important complimentary role in setting ratings and screening the market, especially in the small- and medium-issuers’ segment,” said Goettig, a former chief economist for BPH Bank SA. She expects half of the traded bonds will be rated in two or three years, with Instytut covering between 30 and 70 percent of them. The Warsaw bourse is considering rebates in listing fees for companies that want to rate their bonds, Goettig said. Before Instytut starts evaluating issuers, it needs to register with the European Securities and Markets Authority, she said. ‘False’ Security “An independent institution created by the Warsaw Stock Exchange may resolve a conflict of interest embedded in relations between rating agencies and clients who pay for the rating,” Wojciech Kwasniak, a deputy head of the Polish Financial Securities Authority, said on Sept. 29. “If the bourse proposes an affordable fee mechanism for smaller issuers, it may increase rating coverage and that will be beneficial for the market.” “The last years showed that even global rating agencies have problems with adequate risk assessment, therefore investors should make final decisions based on their own analysis,” said Grzegorz Chlopek, CEO of ING PTE SA, Poland’s largest pension fund. “The Warsaw bourse’s patronage over a rating agency may cause a false sense of security among retail investors. That generates a new reputation risk for the exchange.” Poland’s sole rating company, EuroRating Sp. z o.o., said issuers aren’t interested in credit assessments because “investors don’t ask for ratings,” said CEO Miroslaw Bajda. “We need several dozen assessments of smaller companies to convince the market that it’s an important tool.” Source: Bloomberg
December 2014 – January 2015
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Equities News
3rd Chinese company listed in Warsaw: Fenghua SoleTech IPO In early November, Fenghua SoleTech was listed on the Warsaw Stock Exchange. The initial listing price was €10.40; the issue price €10.00, at the low-end of the scale of 10-12 euro. This is the 3rd Chinese company to be listed in Warsaw in 2014. The consortium of banks involved were Germany-based ACON Actienbank AG and Poland-based Dom Maklerski DF Capital Sp. z o.o. A German firm, Scheich & Partner Börsenmakler GmbH, was the specialist. Fenghua was founded in 2004 and is a technology-driven Chinese producer of shoe soles. Fenghua produces more than 40 million pairs of shoe soles per year. The soles are designed for performance sports shoes as well as for leisure and casual sports shoes. Fenghua targets primarily shoe manufacturers in the
mid- to high-end product segment in China and for international brands. The company generated sales of €90.1 million in financial year 2013, up from 2012’s level of €83,58 million euros. The company’s net profit reached 18,75 million euro in 2013 compared with 15,49 million euros a year earlier. Net profit margin rose to 20.8% from 18.5% in 2012.
Revenues for the first 6-months of 2014 were 42,47 million euro (versus 37,41 million euros a year earlier). Net profit increased for the 6-months to 9,55 million euros. Proceeds of 10 million euro derived from the new shares provide for the expansion of its manufacturing plant, including product design, technical development, and for development of prototypes and testing. The company reported that net proceeds of the offer are not enough to fulfill the above plan, so Fenghua plans to finance the rest with its own cash resources. All the soles are manufactured in its own factories in the Jinjiang region, which is one of the leading centres of Chinese production of footwear. The company is controlled by the General Manager of Fenghua, Mr. Weijie Lin, who owns more than 60% of shares. n
FDI Poland Investor Awards Gala 2015
A Black-tie Awards Gala and Forum recognizing top Foreign Direct Investors in Poland. 15 October 2015, Warsaw, Hotel Intercontinetal
www.fdipolandawards.pl/ 2014 December – 2015 January
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FDI Investment News Euro-Park Mielec expanded Mielec Special Economic Zone has been expended by new investment plots. The zone wishes to intensify the usage of SEZ incentives for acquiring new investments. Basing on the results obtained by the Mielec SEZ in 2013 regarding the creation of new jobs, the zone estimates that in the recently added plots about 5,722 new jobs will be created while to total value of investments should reach almost PLN 1,481m. Due to the expansion, the zone will get bigger by over 1,460 hectares.
PAIZ praises results in 2014 50 completed investment projects with a total value of €1,809.74m which will create 8,513 new jobs in the nearest future - it’s a preliminary result of investments supported by PAIiIZ in 2014. Recently, four new investment projects have appeared in PAIiIZ portfolio. The total value of 153 investment projects currently serviced by PAIiIZ is €2,836.59m. There are also 30,579 new jobs planned due to ongoing FDI projects. Undoubtedly, the leader in terms of country of investors’ origin is still US. The value of 51 American investments is €780.95m; 7,315 new jobs are planned by companies from the US. Investors from Germany are on the 2nd place (21 investment projects with worth €289.65m and 4,443 new jobs planned). On the podium, there are also investors from France (11 investment projects worth €197.7m, 2,606 new jobs planned). Following position have been taken by investors from the UK (8 projects), India and South Korea (7 projects each). In terms of sector, the most popular is BPO (36 investment projects worth €36.25m, 10,155 new jobs planned). The leader is followed by automotive sector (32 investment projects. worth €586.25m, 7120 new jobs planned), food (14 projects worth €57.2m, 1,766 new jobs planned) aviation (12 projects), wood (12 projects) and electronics and ICT (6 projects each).
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EBRD steps up promotion of renewable energy in Poland The EBRD is stepping up support for the development of renewable energy in Poland, particularly in wind power generation. The EBRD is stepping up support for the development of renewable energy in Poland with a series of measures aimed at increasing private sector investment in this crucial sector of the economy. The Board of Directors of the Bank has approved an Integrated Approach to Polish Renewables which combines investments with policy dialogue that promote reforms and technical assistance funding. In the coming decade, Poland faces a major challenge of switching from a reliance on carbonintensive fuels to a more diverse, clean and sustainable energy mix. Poland has already made good progress, by reaching a renewable energy capacity of 5.5 GW of renewable capacity by the end of 2013. However, an estimated additional €10 billion (US$12.4 billion) investment in renewable energy will be needed to double Poland’s capacity and to achieve national and EU targets for share of renewables in Polish energy consumption by 2030.
The key objectives of the EBRD’s Integrated Approach to Polish Renewables are to promote the private sector investment in the Polish renewable energy sector, particularly in wind power generation. It also aims to support electricity distribution network operators in building both the physical and operational capacity to connect new renewable energy generators, and to conduct policy dialogue to support efforts to establish a stable and sustainable regulatory regime for renewable energy. It is expected that this approach will translate into financing of additional 500 MW of renewable energy capacity and at least 1 million tC02 savings in Poland from now until the end of 2018.
Polish buses ride to Italy Eco-friendly buses – 15 to be exact – named InterUrbino designed and produced by Solaris were bought by the city of Biella in Italy. This is the next order that has come from Italy to Solaris. Teh buses will be delivered by the end of 2014. In addition to the order for the city of Biella, Solaris has signed a contract with Ferrovie Appulo-Lucane S.r.l. from Bari for supplying an additional 5 InterUrbino buses. Polish bus producer delivered about 350 buses (including 40 InterUrbino busses) and trolleybuses to such Italian cities as:
Ancon, Bari, Bologna, Cagliari, Genoa, Napoli, Parma and Rome.
December 2014 – January 2015
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FDI Investment News
Trade missions to Germany and Japan bring results 635 new jobs and nearly €28 millio this is the expected result of a recent investment mission to Germany that was held recently by PAIiIZ in cooperation with Deustche Bank. Separately, a PAIiIZ investment mission to Tokyo has enticed two companies to invest in Poland. During the mission to Japan (attended by PAIiIZ and representatives of the Pomeranian and Łódź SEZs), PAIiIZ representatives met with 12 Japanese companies. Due to that, two of them were already added to the list of projects provided by the Agency.
Meanwhile, under the investment mission to Germany a meeting with clients of Deustche Bank in Dusseldorf and Stuttgart that are interested in investing in Poland was held. A similar meeting with three German companies was arranged in the headquarters of NRW Bank. PAIiIZ representatives also met with companies representing engineering and food industries gathered in the association of companies operating in the region of Lübeck in Northern Germany. Moreover, the Agency’s delegation met representatives of the Chamber of Commerce of city and the land of Bremen. This region is described as the German hub of heavy industry and specialises in the manufacturing of fibreglass. The bilateral talks were focused on Polish potential investments in Bremen. It is worth to mention that membership in chambers for is mandatory all companies operating in Germany.
GE opens a “brilliant” factory in Poland
GE has broken ground on $54 million “brilliant” factory and Customer Experience Center in Bielsko-Biala. GE’s new Bielsko-Biala facility is to become one of the company’s first “global” brilliant factories with advanced manufacturing to better serve its customers globally and bring products to market faster. The Bielsko-Biala facility will enable GE to accelerate product development and manufacturing by combining
2014 December – 2015 January
engineering, development, testing and manufacturing operations in a centralized, high-tech environment. The brilliant factory will leverage digital fabrication technology, lean manufacturing methods, rapid prototyping, advanced materials sciences, supply chain efficiency and open innovation. The new facility will be one of the largest in the region, capable of employing up to 1,200 employees.
Poland to receive more Italian investments Italian companies are interested in making further investments in Poland. Four big new Italian investments are in the cards for 2015, including one in the first quarter of 2015, according to Slawomir Majman, head of the Polish Information and Foreign Investment Agency PAIiIZ. During his visit to Italy in November, Polish President Bronislaw Komorowski took part in a Polish-Italian Economic Forum co-organised by PAIiIZ. Some 220 Italian businesses took part in the forum including chemical, automotive and aerospace companies. Slawomir Majman said “PAIiIZ is currently running five large Italian investments but I think that the forum talks have attracted at least four more, including one probably in the first quarter of 2015. This could translate into investments amounting to 300 million euros and 1,500 new jobs in total. Still, it is too early to go into details.” Italian companies are also interested in special economic zone investments, Majman added. Italy is the fifth biggest investor in Poland. “The share of Italian undertakings in the total value of FDI in Poland is about 6 percent. Its total value exceeds EUR 10 billion and I expect this figure to grow,” Majman said. In Poland, Italy’s businesses mainly invest in the automotive, white goods, paper, food, chemical, construction and meat sectors, and in services. The pharmaceutical, automotive, construction, trade and transport sectors are popular for Polish investors in Italy. Italy is Poland’s third biggest trade partner among EU member states, with a 5 percent share in the country’s total trade with the EU. The value of Poland-Italy trade topped 14.6 billion euros, in 2013, with EUR 6.5 billion in Poland’s exports and EUR 8.1 billion in imports.
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FDI Investment News
Secretariat 16+1 in Warsaw Warsaw hosted the inauguration of the Permanent Secretariat for Cooperation between China and Central Eastern Europe Countries. “Never before has the relationship between China and Poland as well as China and Central Eastern Europe been so advanced”, argued PAIiIZ president Sławomir Majman. “All countries of CEE are interested in the increase of the investment inflow from China. We welcome especially projects that will deliver new jobs and new technologies as well as those which increase the innovative potential of our region”, said deputy prime minister Janusz Piechociński. The establishment of the Secretariat will lead to the increase of the inflow of Chinese
investment to Europe. “We expect that in few years the total value of Chinese investments will grow tremendously”, said Liu Dianxun, director of CIPA. As it was said by ambassador of China, Xu Jian, under the so called “Secretariat of 16+1” soon new methods in the two-way investments as join venture projects should be introduced. “Each of the 16 CEE countries can offer something unique to China. We all are ready to develop the mechanisms that will increase our activity in China”, added Filip Grzegorzewski director for Asia and Pacific in Ministry of Economy. In addition to Poland, among the European participants of the Initiative there are: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Montenegro, Czech
Republic, Estonia, Lithuania, Latvia, Macedonia, Romania, Serbia, Slovakia, Slovenia and Hungary. Poland is the largest European country participating in the Initiative.
US trade mission hits East Coast Between 10-14 November, PAIiIZ arranged an investment mission to the US lead by deputy president Anna Polak-Kocińska. The aim of the mission: to encourage American business to invest in Poland and to look for new investment opportunities for Polish business. During a few-days study tour PAIiIZ representatives visited Atlanta, Washington, Pittsburgh, Chicago, New York and Farmington. They took part in meetings with American companies considering
Poland as a investment place and those who have already entered Polish market. American companies appreciate good condition of doing business in Poland. Reinvestments performed by American investors during the last decade confirms that. According to KPMG, more than 69% of companies opened another branch, factory, business or research and development centre in Poland. The participants of PAIiIZ mission have also made the analysis of investment potential in some
locations in US paying special attention. They defined that American high-tech, ICT and 3D print sectors are the best areas for the development of Polish business in America.
Lower Silesian Automotive Cluster
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Dolnośląski Klaster Motoryzacyjny (the Lower Silesian Automotive Cluster) was created in Legnica Special Economic Zone. This is the first type of such initiative in the region. DKM consortium has been created together by Wrocław University of Technology and automotive companies active in the Legnica Special Economic Zone such as: Sanden, Sitech,
Winkelmann i Viessmann. The official inauguration of the project took place in the presence of deputy minister Ilona AntoniszynKlik and PAIiIZ deputy president Monika Piątkowska. DKM has been designed to provide permanent cooperation between local companies, science institutions and local authorities. Legnica SEZ was chosen intentionally as the majority
of investors active in the zone represent automotive sector. The establishment of the Cluster should lead to the improvement of the innovation potential of the automotive sector in Legnica SEZ and the whole region of the Southern and Western Poland. As one organization, all parties gathered in the Cluster do their best to create the strong position of Polish automotive sector on global market.
December 2014 – January 2015
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FDI Investment News
Barry Callebaut to expand chocolate factory The Lodz-based chocolate plant of Barry Callebaut, the world’s leading manufacturer of high-quality chocolate and cocoa products, is soon to be expanded to include two additional modern production lines for chocolate manufacturing. The planned investment worth nearly PLN 96m will create 80 new jobs over the coming two years. The plant which was built nearly twenty years ago is located in the Special Economic Zone.
The ground-stone laying ceremony took place in November and was attended by representatives of Barry Callebaut’s Regional Management Board and the City of Lodz Office, including the Mayor of Lodz, Hanna Zdanowska. The first new production line will be operational in the summer of 2015. The whole investment will be completed by the end of 2016 and create 80 additional jobs, bringing up the total number of jobs to 200. “The expansion of our plant in Lodz is a vital element in Barry Callebaut’s growth strategy in Central and Western Europe. Our operations in Poland are a cornerstone in our mid- and long-term plans and the expansion of our production capacity and development of modern methods for chocolate production are key to maintaining our leading market position,” said Philipp Schoeller, Vice President
FM Europe Central, Member of the Management Board of Barry Callebaut Manufacturing Polska. Barry Callebaut’s investment project in Lodz operates within the city’s Special Economic Zone, which is recognized as one of the most dynamic SEZ in Poland. Barry Callebaut’s plant expansion is one of the largest projects among all investments approved for implementation in SEZ in 2014. With annual sales of about EUR 4.0 billion, the Zurich-based Barry Callebaut Group is the world’s leading manufacturer of high-quality chocolate and cocoa products from sourcing and processing cocoa beans to producing the finest chocolates, including chocolate fillings, decorations and compounds. The Group runs more than 50 production facilities worldwide and employs a diverse and dedicated global workforce of over 9,000 people.
Pasta factory in Opole Europe’s most modern factory of frozen lasagna has just been opened in Opole by the Pasta Food Company. The factory is owned by a joint venture of two European companies operating in the ready made food sector Stefano Toselli from France and Ter Beke originated in Belgium. The total value of investment reached €80 milion. The total production of the company will be distributed in the CEE market. Currently, the company employs 50 employees.
Zone, 4 new production facilities have been build for investors. Not only production hall but also public aid is offered for new tenants by “Invest Park”. From January, the production space of one hall will be leased by a producer of metal parts for automotive industry as the offer of “Invest-Park” focuses especially on this sector. Already five automotive companies are operating in Bolesławiec that is covered by “Invest-Park”. Together they have invested about PLN 200 m and hired 450 employees.
New production facilities in Wałbrzych SEZ In Bolesławiec, under the Wałbrzych Special Economic
Dąbrowa Górnicza targets automotive investments Dąbrowa Górnicza hosted the conference on automotive
investments. During the meeting, cooperation agreements between Silesia Automotive Cluster and local science institution, universities and R&D centers specializing in automotive business was signed. Participants of the conference talked about how to increase the competitive advantages of Polish automotive companies on the global market. The importance of the development of vocational training as well as the increase of the number of R&D centers in Poland were also discussed. Majority of automotive businesses in Poland develop new technologies outside Poland, thus the development of local R&D base is essential, for the sector and for the whole Polish economy.
FDI Poland Investor Awards Gala 2015 15 October 2015, Warsaw, Hotel Intercontinetal 27 2014 December – 2015 January
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Military
Poland agrees $250 million JASSM missile purchase Lockheed Martin Corporation received a
Poland is adding a standoff cruise missile capability to its air force, signing an agreement to buy the Lockheed Martin AGM-158A Joint Air-to-Surface Standoff Missile (JASSM) on 11 December. This
Tomasz Siemoniak, Polish minister of national defence and deputy prime minister, stated during the signing ceremony at the 31 Tactical Air Base at Krzesiny that “never in Poland’s history have we had such a modern weapon”. Poland is purchasing the new capability as part of an effort to increase its airborne, naval, and landbased long-range strike assets. This is combined with new defensive missile programmes and is intended to deter hostile actions against Poland. These efforts have been given new impetus by the crisis in Ukraine and concerns about Russia’s intentions.
installation of retrofit kits and new software for the aircraft to MidLife Update tape M6.5 standard. Beginning in 2015 two Polish F-16s will have the new software integrated and will conduct flighttrials in the United States. The remaining 44 aircraft will receive the software upgrade and retrofit kits at Polish air bases from the second half of 2016 onwards, when the country also expects to receive its first batch of missiles. When the US Defense Security Co-operation Agency notified the possible sale of the JASSM to Poland on 17 September it estimat-
deal was approved by the U.S. Congress in October. Poland has agreed to buy the JASSM in order to increase its long-range strike capabilities. The programme will also include upgrades to allow Poland’s F-16C/D Block 52 Fighting Falcon fighter aircraft to carry the missile. In addition to the purchase of the missiles, the programme will also include the upgrade of 46 Polish Air Force Lockheed Martin F-16C/D Block 52 Fighting Falcon fighter aircraft to carry the missiles.
Following the governmentto-government letter of offer and acceptance on 11 December, a contract is expected to be awarded to contractor Lockheed Martin in the first quarter of 2015, a company statement said. The agreement to buy the JASSM follows US Congress approval on 2 October of the sale of up to 40 of the stealthy cruise missiles and the F-16 upgrade package. According to the Polish Ministry of Defence (MoD), the upgrade process for its F-16s will include the
ed the maximum cost of the programme at USD500 million: a figure that Polish sources previously described as “unacceptably high”. However, Polish deputy defence minister Czeslaw Mroczek, responsible for negotiating the purchase, stated that the price of the contract “was negotiated for a long time, but we received a very good price and the contract includes not only the acquisition of JASSM missiles, but also the development of customised software and training”.
contract from Poland’s Ministry of Defence to supply joint air-to-surface standoff missiles (JASSMs) for its fleet of 48 F-16 fighter jets.
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City INews
Poznań Poznań to host World Dental Congress in 2016 Poznan is to host the 2016 FDI Annual World Dental Congress (AWDC) in September 2016. The agreement between FDI and local organizing team was signed recently between all parties. FDI President Dr Tin Chun Wong said: “The decision to hold the 2016 AWDC in Poznan demonstrates FDI’s determination
to ensure a good worldwide balance alternating in the last decade between the Americas, Asia-Pacific and Europe. I congratulate the Polish Dental Association on their successful bid and look forward to yet another must-attend FDI event.” Speaking on behalf of the congress organizing committee,
Polish Dental Society President Prof Bartlomiej W. Loster said: “We feel honoured and privileged to be chosen as the host country for the 2016 FDI Annual World Dental Congress. We look forward to welcoming delegates from all over the world to Poznan, a city of history and style, in September 2016.”
Why Germans are moving to Poland to do business It is midday in Poznan, and a large gaggle of tourists has gathered beneath the clock of the 16th Century town hall, to witness a bizarre daily ritual that has been going on for centuries. As the clock strikes 12, two metal goats emerge from a small window high up on the wall and begin to lock horns. In the market square below Chris Pedersen is on hand to explain to a group of rather bemused tourists exactly what is going on. Apparently it is all to do with cooking, and a feast that took place long ago. Chris is a former restaurant owner from Berlin who has been living in Poznan for the past four years. He now makes his living providing culinary tours of the city. He shows people the sights, then cooks them dinner. He is one of a growing number of Germans who have decided to live and work in Poland. Some are employed by the many large German corporations, such as Volkswagen, which have a major presence in the city. Many others though have come here to start businesses - and see Germany’s eastern neighbour as a land of opportunity. “The market in Germany is so crowded,” says Chris. “Everything exists already, so if you have a good business idea you’ll find many other people are doing exactly the same. There’s so much competition. “In Poland it’s different. People are still curious
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and if you have a new idea there’s plenty of room to develop it.” Poznan is only the fifth largest city in Poland, but because it is relatively close to the German frontier - a mere three hours from Berlin along an arrow-straight motorway - it has become a favourite destination for a new wave of German entrepreneurs. A short tram ride from the town centre, a number of plush new hotels have been built to cater for the foreign influx. The manager of the Sheraton, Marco Foelske, is himself German. He says at least a third of his guests are business travellers from his homeland. But he believes that for many of them a trip to Poland remains a journey into the unknown. “I think quite often Poland is still perceived as - behind the Iron Curtain, out in the East, the unexpected. Then people come here and they’re really surprised. They say, ‘Oh it’s so modern’. About 60% of Germans have never been to Poland. So there is still this resistance from people who haven’t seen the unknown yet!” The German business community in Poznan is relatively close-knit and regular meetings are hosted by the German-Polish Business Circle - a kind of club for executives and entrepreneurs in the city. Angelika Menze, who organises its events, says that Poland is a natural home for German investment. “You find conditions which are just the same as at home, and
you can also count on very good workers who will identify with your company,” she says. “And you can win an enormous market people are interested in German products. German products have a good name in Poland.” You might think that the turbulent relationship the two countries have had in the past would make it difficult for Poles to accept the growing influx of German workers - but in fact that does not appear to be the case. According to Jan, a sushi chef in his thirties, young people at least are willing to forgive and forget. “Because of the eurozone crisis, people have started to change their attitudes,” he says. “They’re going to be happy if it helps them find a job. So young people, they just cut the history and don’t think about it. It might be a bit different for older people though.” Germany and Poland have a strong business relationship, says Marco Foelske. In fact, concerns about the amount of investment heading eastwards are more likely to be heard in Germany itself, particularly in the former German Democratic Republic. Much of the region is still struggling to attract new investment, to replace the state-owned industry which collapsed in the wake of German reunification two decades ago. “Businesses are leaving east Germany and there’s a lot of unemployment there,” says
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City INews Grzegorz Glowacki, a Polish banker who lives and works in Berlin. “Meanwhile investors are moving to Poland - and the Polish government is very happy about that.” While the growing relationship between Germany and Poland is widely seen as the inevitable consequence of the latter joining the European Union, there
are other factors at play as well. Among them, say analysts, is the close relationship between the German Chancellor, Angela Merkel, and the Polish prime minister, Donald Tusk. Chef and tour guide Chris Pedersen has some advice for his fellow Germans. “The challenge is to accept the difference between
German and Polish mentalities,” he says. “The clocks tick a bit differently here, you could say. I had to learn that in Poland, everything you want done will be done, but always at the last minute. “For someone brought up in Germany, that’s very difficult to get used to.” Source: BBC
Gdańsk First Jazz Duo delivered to Gdańsk The first of five Pesa Jazz Duo trams was officially presented to the city of Gdańsk on November 12. It is expected to enter passenger service in December. Operator ZKM Gdańsk signed a contract for five Jazz Duo trams in September 2013, having selected Pesa as preferred bidder in July. The 54m złoty cost is being co-financed from EU funds.
These are the first Pesa Jazz cars to be put into service outside Warsaw. The bi-directional vehicles will initially operate services on an extension to the Piecki-Migowo district, which is under construction for opening next year, as this will not have a turning loop. The five-section 100% low-f loor trams are 29·7 m
long and 2 400 mm wide with capacity for 203 passengers, including 32 seated; there are also wheelchair spaces. The trams feature an audiovisual passenger information system, air-conditioning and real-time diagnostics software. Maximum speed is 70 km/h, and the vehicles can handle gradients of up to 6%.
Gdansk port in T2 expansion
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DCT Gdansk has finalized the financing process for this expansion work to start through a group of commercial and development banks financing the investment with up to €290 million for the project. The major container DCT Gdansk received its first vessel in June 2007. Since then it has continued expansion and by 2010 the terminal was receiving 8.000 TEU container vessels on a weekly basis, mainly from the Far East. A new era for DCT opened in May 2011, when the facility started handling the Maersk Line’s E-type class container vessels with a capacity of 15.500 TEU, which were the world’s largest container ships at that time. By 2012, the container terminal handled its second millionth TEU since the operations started, and by the end of that year yet another annual volume record of approximately 900.000 TEU was established. In August
2013 DCT Gdansk received its first Triple E class vessel, Maersk McKinney Muller on its maiden voyage from the Far East and that year the container terminal handled more than 1,150,000 TEU. This record of continued expansion created the demand for expanded facilities at the port and the contract has recently been signed for construction to begin on a new 650 metre long berth. The construction work will be carried out by the Belgium Group Besix, through its subsidiary NV Besix. This will be the second facility at DCT Gdansk, and it will be fully operational by 2016 and allow the terminal to meet the growing demand for deep-sea services in Central-Eastern Europe. Much of the container movements at Gdansk are focussed on the Polish hinterland and on into Russia and Eastern Europe. The new 650m long berth will increase DCT’s
annual handling capacity to 3 million TEU annually in the first stage of construction and the new berth has been designed to handle Ultra Large Container Vessels with a capacity exceeding 18000 TEU. It will be equipped with 5 STS cranes which will be supplied by Liebherr Container Cranes Ltd plus 16 RTG cranes and the required additional yard equipment. “We are approaching the completion of the project’s initial phase which directly precedes the construction works”, said DCT Gdansk CEO Maciek Kwiatkowski. “The decision to develop the existing DCT Gdansk container terminal is a result of growing need for more efficient and economic transport solutions in the Baltic region, making it able to effectively compete with the Northern European container ports’ services. We are proud to be the market leader in bringing about innovation in the CEE region’s trade patterns.”
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An overview of the past ten months – up 4.7% October has proved to be a consecutive highly successful month in the Port of Gdansk after September, with the attained throughput of 2,910,065 tonnes, Port of Gdansk Authority says. The total throughput realized over the first ten months of 2014 has amounted to 26,489,411 tonnes, the result that is 4.7% higher as compared to the corresponding period of the record-breaking year 2013.
of this cargo group combined with the global trend prevailing on the market for several months now, it can be expected that in 2014 the result of around 12 million tonnes should be reached, which remains in accordance with the outlooks. Upon the fist ten months of the current year, the record handling volume of general cargo has been achieved (9.2 million tonnes), with the main share of containerised break-bulk pro-
corresponding period of the previous year. The growing volumes of “other bulk” is mainly driven by the handling of aggregates, which in October alone accounts for half the amount of this cargo group. The structure of “other bulk” has changed in line with the situation of the construction industry influenced by the rapidly developing road building and the implementation of infrastructure investment projects. Continued growth
October has also been a record month for the Port of Gdansk in terms of the handling of liquid fuels. The amount of 1.4 million tonnes is the highest monthly result posted since September last year. The volume of imported petroleum (1.1 million) is the consequence of the dropping price of crude oil, which is now the lowest in 4 years. Since the beginning of this year, the Port of Gdansk has handled more than 10 million tonnes of liquid fuels, which indicates almost 11% growth as compared to the corresponding period of the last year. Bearing in mind the seasonal nature typical
cessed by the DCT terminal. The key importance should be noted of the Maersk company which maintains its leading position in the industry thanks to its quality services and timely delivery. Throughput rates of general cargo over the past ten months have slightly exceeded the forecasts, and there is no indication suggesting that this trend might change in the nearest future. It is also interesting to examine the throughput of bulk cargo, which at this time of the year stands at 2,952,473 tonnes, which is almost 37% more than in the
in the handling of this type of cargo in the Port of Gdansk can be expected in the coming years. Spectacular growth has been achieved in the handling of fruit. This cargo is handled by a terminal operated by Cargofruit and situated in the Port Free Zone. The volume of bananas reloaded in the first ten months of 2014 amounts to 22,090 tonnes, which indicates a threefold increase as compared with the entire year 2013. By the end of this year, the Port of Gdansk expects to have handled 26 thou. tonnes of this fruit.
2014 December – 2015 January
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Wrocław
Nokia expands its R&D labs to Wroclaw Nokia Networks has signed an agreement to lease 14,000 square meters of office space in Wrocław. The new office will feature a research and development laboratory, which includes a center for software engineering. At the new
facilities, the company will conduct research and the testing of new telecommunications technologies. The laboratory will be equipped for testing of base stations, spectrum analysers and radio signal generators. The project also involves new
job opportunities (Nokia already has hired 750 people for the project). And the company is still looking for new employees. The center is scheduled to open April 30, 2015.
New rail line to Wrocław Airport receives EU support The European Union’s (EU) TEN-T Programme will invest over €600,000 for studies on a new rail connection between the airport
and the city centre of Wroclaw. This new line is expected to trigger increased air traffic and promote green passenger and freight transport to and from the gateway. The EU says the project will contribute to the airport’s development into an important transport node connected by different, interoperable transport modes. Other benefits include increasing the accessibility of Lower Silesia and improving its traffic capacity to enhance the region’s economic growth.
The study will come up with the environmental documentation, construction and execution designs, as well as legal, financial and quality procedures preparing the rail line’s construction. EU financers came up with the funding with the assistance of external experts under the TEN-T Annual Call 2013, priority ‘Multimodal transport’, and its implementation will be monitored by INEA, the European Commission’s Innovation and Networks Executive Agency. The project is to be completed by December 2015.
Schweiker starts construction of new Polish factory Schweiker, one of Germany’s leading producers of windows and doors, has launched the construction of its new production facility in Komorniki, in Poland’s south-west. The factory will make a wide range of windows and doors with the use of PVC and aluminium, the firm said. Under the plan, Schweiker’s plant in Komorniki is to be fitted with an output capacity enabling the firm to produce about 100,000
windows per year. The investment is to be completed by the end of June 2015, the statement said. According to earlier estimates, the project was expected to be worth some PLN 25.5m. The production facility, which is to have a total floorspace of 13,000 square metres, will be located in the Legnicka special economic zone (LSSE) on a site of 50,000 square metres. This
will enable Schweiker to obtain preferential tax treatment for its manufacturing project. The plant is to be located about 30 km from Wrocław. Schweiker is currently the third largest player in Germany’s door and window market. In addition to Poland, the company also owns subsidiaries located in Hungary and Bosnia and Herzegovina, according to data from the firm.
Wroclaw National Museum previews pavilion
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Renovation is ongoing at Wroclaw’s historic Four Domes Pavilion, which is being transformed into a gallery of modern art for the National Museum. The National Museum’s administrative director Tadeusz
Nestorowicz confirmed that 80 percent of the work is now done. He envisages that the renovation will be completed in June 2015, and that the new gallery will open in 2016, chiming in with Wroclaw’s tenure as European
Capital of Culture. The gallery will have 6500 square metres of exhibition space, providing extensive possibilities for the museum’s vast collection. The Warsaw branch of the National Museum currently has over
December 2014 – January 2015
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20,000 pieces of modern art at its disposal, many of which are languishing in warehouses. The entire investment will cost 79 million zloty, over half of which came from EU coffers. The Four
Domes Pavilion was built in 19121913, when Wroclaw belonged to Germany as Breslau. The pavilion is part of a UNESCO-listed complex of buildings focused on the celebrated Wroclaw Centennial
Hall. After World War II, when Poland’s borders were shifted west, the pavilion was used by filmmakers from a municipal film studio. Source: Polskie Radio
Katowice EmiTel wins tender for radio broadcasting in Katowice EmiTel won the tender organised by Polish Radio, Regional Broadcasting Station in Katowice for provision of the broadcasting of Radio
Katowice. Services will be provided via the five sites RTCN Czestochowa/Wreczyca Wielka, RTCN Katowice/Kosztowy, TSR Raciborz/ul. Cmentarna, RTON
Wisla/Skrzyczne and KatowiceBytkow seven days a week for a period of 24 months. The contract amount is PLN 2.82 million.
Kraków Starwood Capital Group buys 500,000 sf office complex in Krakow Starwood Capital Group, a leading global private investment firm, announced that it has acquired, on behalf of Starwood Distressed Opportunity Fund X, Quattro Business Park in Krakow, Poland’s second-largest city. Terms of the transaction were not disclosed. The complex of four 14-story buildings totals approximately 500,000 square feet of gross leasable area and 1,128 parking spaces, all of which was completed between 2010 and 2014. The Quattro Office Park acquisition follows Starwood’s purchase in August
2014 December – 2015 January
2014 of two prime office properties in Warsaw and one building in Katowice from Ghelamco. “We are pleased to invest in top-quality office space in a premier location within one of strongest office markets in Poland,” said Keegan Viscius, Vice President at Starwood Capital Group. “We remain bullish on the country, which we believe boasts one of the fastest-growing economies in Europe. Poland has proven to be a magnet for multinational corporations attracted by its highly skilled labor force, central European location, modern infrastructure, stable political and economic environment, and cultural compatibility. Krakow is particularly well-positioned, with the highest number of professionals employed by the business services sector backed by foreign capital of any city in Poland—even ahead of the capital, Warsaw. We believe that these positive trends will persist, thus continuing to spur demand for modern office properties such as Quattro Business Park.”
The complex is 97% occupied, with its top tenants including national and international bluechip companies such as Capgemini, Google, Oracle, Samsung, FedEx and Citibank. All four of the buildings in Quattro Business Park feature state-of-the art amenities, including raised floors, suspended ceilings, movable partitions, glass facades that ensure optimal natural light penetration, five highspeed passenger lifts, VRV cooling and heating systems, and 500-LUX lighting. Three of the buildings received BREEAM Very Good certification, while the fourth garnered BREAM Excellent designation. “We look forward to making additional investments in burgeoning markets such as Poland’s regional cities, as Starwood Capital Group continues to expand its presence in Europe,” added Mr. Viscius. Starwood Capital Group received property advice on the transaction from CBRE, legal advice from Dentons and technical advice from Turner & Townsend. Acquisition financing was provided by Bank Pekao.
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Eastern Poland Academic consortium signs contract with GE Healthcare for neurological research
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ECOTECH-COMPLEX, a consortium of five leading academic institutions in southeastern Poland (Medical University of Lublin, Institute of Agrophysics Polish Academy of Sciences in Lublin, University of Rzeszow, Rzeszow University of Technology, led by Maria Curie Skłodowska University) and GE Healthcare are working to address the challenge of neurological research needs and announced that they had signed a contract for delivery of an ultrahigh field GE 7.0T MRI scanner for research. This is the first 7.0T MRI scanner in Poland. The scanner will be installed at the consortium’s new imaging centre at the ECOTECHCOMPLEX in Lublin, and will be used for scientific and medical research into diseases and disorders of the brain. The US$10 Million scanner, which is planned to be operational in 2015, may allow researchers from the consortium to study tissues and anatomical differences of the brain. At 7.0 Tesla, the ultra-powerful magnet is almost five times stronger that magnets found in the majority of MRI scanners today, and 140,000 times stronger than the Earth’s magnetic field. The scanner is planned to help researchers in Poland investigate some of the most challenging brain diseases and disorders ranging from cancer, stroke and Alzheimer’s to Parkinson’s, autism, epilepsy and brain trauma. Hundreds of millions of people worldwide are affected by neurological disorders. More than 50 million people in the world suffer from epilepsy. It is estimated that there are globally 35.6 million people with dementia with 7.7 million new cases every year Alzheimer’s disease is the most common cause of dementia and may contribute to 6-70% of cases. The prevalence of migraine is more than 10% worldwide.
‘We are delighted to announce that the very first 7T MR scanner in Eastern Europe is coming to campus of Maria Curie-Skłodowska University in Lublin. This innovative research technology will help us drive advances in our understanding of these most difficult diseases. It will also establish Lublin as a centre for advanced imaging research which we hope will lead to increased levels of collaboration with research institutions and entrepreneurs across Europe”, said Andrzej Stępniewski, Managing Director & Project Manager, ECOTECH-COMPLEX consortium. Anna Kasprzak, General Manager, GE Healthcare Poland said, ‘We’re delighted that ECOTECH-COMPLEX has chosen GE Healthcare’s 7.0T scanner for its new research facility here in Lublin. This technology puts Poland at the forefront of brain imaging research and also means that the region will be part of the GE7.0T community, a group which includes some of the world’s leading hospitals,
universities and research institutions in the US, Europe and Asia. GE Healthcare has a ten-year history of innovation in this field.’ The GE 7.0T MRI Scanner is for research use only and is not intended to be used for any medical purpose, such as the prevention, treatment or diagnosis of a disease or medical condition Globally, there are about 45 human-sized ultra-high field (7.0T or higher) MR scanners and about 20 of those are in Europe. About the consortium ECOTECH-COMPLEX consortium as well as project of the same name have been created in response to a call for big investments in the infrastructure research within the Innovative Economy Operational Programme, Development of high research potential. The project aims at increasing the competitiveness of the science by consolidation and modernization of research infrastructure in south-east Poland. The consortium now consists of five research institutions located in the respective region.
December 2014 – January 2015
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ICC
Chambers of Commerce News
ICC Christmas Mixer 18 December 2014 at Warsaw Tortilla Factory The annual ICC Christmas Mixer will be held at the Tortilla Factory on Thursday 18th December, starting at 7pm. An
opportunity to catch up with friends and business acquaintances, and to perhaps make some new ones, in a convivial, informal atmosphere. First Mixer evening featuring new Chairman Mark Lowry.
Austria Austrian and Swiss companies get ready for new European funding opportunities The Commercial Section of the Austrian Embassy together with the Polish-Swiss Chamber of Commerce organized a seminar on the new European funding period 2014-2020 in Poland on November 18th. The event took
place in the form of a business breakfast and was attended by representatives of Austrian and Swiss companies or their Polish subsidiaries. Experts from Crido Taxand, a Polish consulting firm, provided the audience with the latest information and practical advice on how to successfully participate in upcoming projects
(co-) funded by the EU under its cohesion policy. Poland is the biggest beneficiary of EU aid under the new financial framework, receiving a total of more than EUR 80 billion from 2014-2020. Foreign companies can also apply for financial support from the EU budget, provided they have a subsidiary in Poland.
Belgium Belgian Days From 15th November to 3rd December 2014, the Belgian Business Chamber organised the annual Belgian Days, in cooperation with the Embassy of Belgium in Warsaw and the Economic Representations of the Regions: Brussels, Flanders and Wallonia. This year, the Belgian Days were held in two cities: Warsaw and Wroclaw.
Bulgaria President Plevneliev invites Polish businesses to invest in Bulgaria Potential Polish investors can find attractive investment opportunities in Bulgaria's hi-tech industry, car making, energy, agriculture, food production and tourism, Bulgariaâ&#x20AC;&#x2122;s President Rosen Plevneliev said in a recent economic exchange. Bulgaria is reestablishing its traditions in the information and
communications technologies (ICT), having created 35,000 new jobs in the sector only in the past 10 years, Plevneliev said during a presentation of investment opportunities and economic potential of Bulgaria held at the Warsaw Stock Exchange, part of his official visit to Poland in December. Bulgaria has attracted world leaders in the ICT sector such as HP, Oracle, IBM. The most recent example was last month's
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announcement that US-based Progress Software Corporation had entered into a definitive agreement to acquire Bulgaria's leading software developing company Telerik AD for USD 262.5 M. Plevneliev also highlighted investment opportunities offered by Sofia Tech Park, a EU-funded project, for the development of startups from Bulgaria and the region of Southeast Europe.
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Croatia Croatia, Poland plan LNG terminal link to boost security Croatia and Poland plan to link their liquefied natural gas terminals by 2020 to boost energy security and cut dependence on Russian supplies of the fuel. “The cooperation between our countries in connecting LNG terminals into the North-South gas pipeline corridor is crucial for the region’s energy security,” Croatian Economy Minister Ivan Vrdoljak said at a news conference in Zagreb after meeting with Polish Treasury Minister Wlodzimierz Karpinski. Croatia, which plans to build its terminal on the Adriatic island of Krk by 2019, estimates its total investment costs, including pipelines and compressor stations, at about 1 billion euros, Vrdoljak told Bloomberg News. Poland may spend $1.3 billion to build the corridor after opening its LNG facility in Swinoujscie next year, Karpinski’s spokeswoman Agnieszka Jablonska-Twarog said. Croatia consumes about 3 billion cubic meters of gas a year, while its domestic production satisfies about 65 percent of its needs. Poland, which buys as much as 10.2 billion cubic meters of gas a year from Russia or two-thirds of the country’s consumption,
earlier raised import capacity from the European Union as part of its strategy to diversify supplies. Regional Player “There is a political will to boost energy security in this part of Europe together,” Karpinski told reporters. “We share the same objectives, the same strategic goals and the next step we are working on are tactical measures.” The Krk-based LNG is expected to have annual capacity of 4 to 6 billion cubic meters. The Polish facility’s capacity will be 5 billion cubic meters a year. U.S. Vice President Joe Biden said last month Croatia has “potential to become a regional energy hub if it makes smart investments now, with the EU support, and works collaboratively with its neighbors.” The chances for the Balkan country to become a regional player are now even bigger after Russia scrapped a $45 billion Black Sea pipeline to carry gas to Europe through the South Stream project, Vrdoljak said today. “The collapse of South Stream is an opportunity for Croatia to become a regional energy center,” he said. Balkan Links The Krk LNG terminal may also supply gas to Bulgaria and Ukraine,
Mladen Antunovic, its managing director, said in Frankfurt. For neighboring Bosnia-Herzegovina, scrapping South Stream would make the country turn away from Russian supplies and connect to the Croat LNG terminal, according to Erdal Trhulj, energy min-
ister in the Muslim-Croat part of Bosnia-Herzegovina. “It’s an excellent opportunity that we must not miss,” Trhulj said in a statement on the government’s website. While the Serbian part of Bosnia, known as Republika Srpska, may continue to rely on Russian deliveries through neighboring Serbia, the MuslimCroat entity may build three gas links with neighboring Croatia, according to the minister.
France French Gala set for February The French Chamber (CCIFP) has set 6th February for the date of its next annual Gala.
Germany
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NRW conference organized by North Rhineland-Westphalia 13th November 2014 at Business Conference Centre VITKAC, Bracka street 9 (5-th floor), Warsaw NRW conference has been organized by North
Rhineland-Westphalia representatives and is a platform of experiences’ exchange between Polish and German companies and institutions related to innovation solutions (branches: machine, automation, advanced materials and IT systems). “Fourth
December 2014 – January 2015
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Chambers of Commerce News
industry revolutions” challenges rely not only on competitive products and services but also on creating efficient and flexible production and logistic systems. They increase added value of
advanced products and services as well as allow to use market opportunities. The conference presents excellent opportunity to establish cooperation with North Rhineland-Westphalia and to get
to know its demanding market. It will also provide information on financing of R&D activities and support offered by German clusters. Time for B2B talks with companies from NRW region.
India India, Poland keen to collaborate in mining sector India and Poland are exploring the collaborative opportunities in the mining sector in India and abroad for raw material security. “I am confident that Poland will make use of the provision for 100 per cent foreign direct investment in Indian mining industry, and our PSUs will collaborate with their Polish counterparts for securing and optimizing raw material resources,” said the Union Minister of Steel and Mines Narendra Singh Tomar at a meeting with a Polish team. Senior Polish delegates met with representatives of different States and heads of steel and mining PSUs. The meeting comes ahead of amendments in MMDR Act to simplify law related to mining and plan to ramp up steel production from the present level of 90 million tonnes (mt) to 300 mt by 2025. According to Steel Secretary Rakesh Singh Indian miners were looking forward to technical collaboration in deep underground mining. SAIL’s Chasnalla underground coking coalmine in Jharkhand employs technology from Poland. Polish State Minister of Economy, Jerry W Pietrewicz, expressed keenness of Polish firms in partnering Indian companies in modernizing mines. The delegation also discussed the recent acquisition of coal mines in Mozambique by a joint venture of five Indian PSUs, International Coal Ventures Limited (ICVL). Polish Minister mentioned that similar opportunities were being opened in Poland as some mines were scheduled to be put up for sale. He also said that Poland was already in talks with Mozambique for mutual business opportunities, and that he looked forward to partnering ICVL there.
Indo-Polish Chamber signs deal with British Centre The Indo-Polish Chamber of Commerce and Industry, the British Centre and the Lifelong Learning
Socio-Economic Department of Lodz University Association. The agreement was signed by Mrs. Bozena Ziemniewicz, the President of the Lifelong Learning Association and the British Centre Director General and Mr. Amit Lath, the IndoPolish Chamber of Commerce and Industry Vice President of Board & Proxy of Management. British Centre is the largest training company in the Lodzkie
Association signed an agreement on mutual assistance in October at the VII European Economic Forum. The cooperation is aimed to support investors by allowing them direct contact with entrepreneurs and academics at the local level through the meetings organized by Lodz Economic Salon. Salon partners are the largest local organizations of entrepreneurs such as 500-Lodz Club, Lodz Chamber of Industry and Commerce, Lodz Special Economic Zone, the Polish Economic Society, Lodz Branch and the Alumni of
Region offering advanced solutions of language learning, including e-learning and teaching Polish to foreigners. British Centre is also a company specializing in providing services of simultaneous interpretation to professional conferences. It is also the Authorized Examination Centre of Cambridge English Language Assessment, the largest and oldest provider of international language examinations. Investors interested in cooperation may contact British Centre at bc1@british-centre.pl.
Vice Chairman of JSW S.A., the largest coal mining company in Poland Jerzy Borecki and other heads of Poland mining firms showed willingness to participate in the upcoming auction of coalmines in India.
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Chambers of Commerce News
Ireland First Charity Irish Ceile Over 200 people gathered for the first Charity Irish Ceile on 7 December at the Bristol Hotel. Attendees included Irish families and friends living in Warsaw. A professional team of Polish-based Irish dancers & musicians led the event. Teas and coffees, guided tours of the Bristol Hotel and a raffle in aid of the St Patricks Foundation all were featured.
Italy New Council of the Italian Chamber The most important Italian companies in Poland such as Brembo, Ferrero, Salini-Impregilo, Intesa San Paolo, Partnerspol, Indesit, Frubella, Arix and Bitron have become members of the Council of the Italian Chamber of Commerce and Industry in Poland (CCIIP) and they will have a significant impact on internal affairs of the Chamber. The Council of the Chamber was introduced to the Statute of the Italian Chamber of Commerce and Industry in Poland - on the proposal of the current Board - in order to create a consultative body which can consist of 13 members. The Council's members are selected from the most important Italian companies associated at the Chamber that have
excelled in Poland. The Council of the Chamber is elected for two years, as well as the Board. At the Board meeting and the General Meeting of Members of the Italian Chamber of Commerce and Industry in Poland that took place on October 9th 2014 in Katowice, the following candidates were nominated for the first term of the Council of the Chamber: Enrico Bologna - Brembo Poland; Enrico Bottero - Commercial Ferrero Poland; Silvio Brignone - Bitron Poland; Umberto Magrini Partnerspol Group; Michele Melegari - Arix Poland; Pawel Piatkowski - Intesa San Paolo SpA in Poland; Fabio Pommella - Indesit Company Poland; Giorgio Provvidenza - Salini Polska; Alessandro Sappa - Frubella Processing. All candidates for the Council of the Chamber accepted
positions and they will choose the chairman on the next meeting. The representativeness of the Council of the Chamber and an extraordinary personality of its members will be a crucial support to the Board in achieving the objectives of the program and the consolidation of the Association. In the past nine months 34 new companies joined the Chamber and the total number of members increased to 101. It is a tangible sign of the renewed interest of the Community of Italian companies in the activities and services of the Italian Chamber. Mr. Piero Cannas, president of the Italian Chamber of Commerce and Industry in Poland, participated at the annual World Convention of Italian Chambers of Commerce Abroad.
Japan
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New opportunities for Japan and V-4 Cooperation The conference took place in Lodz in October 2014, and was organized by the Faculty of Economics and Sociology, University of Lodz under the honorary patronage of Embassy of Japan, Minister of Foreign Affairs of the Republic of Poland, Marshall of the Lodzkie Region and Japan Foundation.
The conference gathered many partners such as JETRO, Lodz Special Economic Zone, Lodz Regional Development Agency, City of Lodz and Yakumo-Goto Club. The initiative to organize the conference derives from the joint statement of Prime Ministers of Japan and V4 countries, called: “The partnership for common values in 21 century”. The joint
statement was issued in Warsaw and covers the most important areas stipulated as of global and regional crucial impact. Issues discussed at the conference referred to major world challenges and have been divided into three blocks: "Science, innovation, research", moderated by professor Marek Belka, president of National Bank of Poland, who held also a presentation entitled “Global
December 2014 – January 2015
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Chambers of Commerce News
economy knows no borders”. Other speakers were: professor Akira Shirahata, Vice President of Josai International University, Tokyo, Mr. Yoshikuni Takashige, Vice President, Portfolio Strategy Division, Fujitsu,
professor Zofia Wysokinska, University of Lodz, professor Atsushi Tanaka, Kwansei Gakuin University, Nishinomiya, Mr Marcin Wlodarczyk, Director, Investor Relations Unit, City of Lodz Office.
Tokyo, Mrs. Yuka Minagawa, Sophia University, Tokyo. "Global and regional aspects of economic growth", moderated by Mr. Katsuyuki Kambara, director of NSK Europe Ltd., Warsaw Liaison Office. The presentations was delivered by:
Then the B2B panel was held with the participation of Mr. Naofumi Makino, Director of the Japan External Trade Organisation JETRO, Warsaw Office, Mr. Yuji Noguchi, Director of the YKK Poland, Mr. Yoshito Okada, President of the
Union of Employers SHOKOKAI, Mr. Tomasz Sadzynski, President of the Board, Lodz Special Economic Zone and Mrs. Aleksandra Suszczewicz, Vice-Director, Development and Strategy Department, Lodz Special Economic Zone, Mrs. Izabela Witaszek, Director of the Department for Business and Public Sector, Lodz Regional Development Agency. “Cultural Exchanges", moderated by professor Jolanta Mlodawska-Bronowska from the Faculty of Economics and Sociology, University of Lodz, with the speeches of Mrs. Jadwiga Rodowicz-Czechowska, General Counselor, Ministry of Culture and National Heritage of the Republic of Poland, Former Ambassador of Poland to Japan, Mrs. Wioletta Laskowska, Manggha Museum of Japanese Art and Technology, Jagiellonian University, Krakow, Mr. Waldemar Czechowski, Polish-Japanese Institute of Information Technology, Warsaw, professor Arkadiusz Jablonski, Adam Mickiewicz University, Poznan. The audience of approximately 100 people and speakers exchanged their opinions and research results, and determined the crucial chances for successful collaboration between Poland and Japan in the fields of science, economy and culture.
Lithuania Poland-Lithuania link faces export limitations Polish-Lithuanian interconnector LitPol will face limited export capacity from Poland to Lithuania in its first years of operations because of a lack of infrastructure on the Polish side. The line is scheduled to start up by the end of next year. Poland-Lithuania capacity will become available only after Polish grid operator PSE completes investment in power links between the Warsaw area and the city of Ostroleka in northeast Poland, PSE said. The exact date
for the Polish line completion has not been determined, but it is planned for 2017-20, PSE said. Full capacity on the 500MW link from Lithuania to Poland will be available from 2016, PSE said. LitPol is one of the EU's 250 key energy infrastructure projects, and has received financial backing from the European Commission. The first leg of the project is due on line by the end of 2015. The completion of the second stage by 2020 will add another 500MW of capacity. The project will cost an estimated €237mn.
2014 December – 2015 January
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Chambers of Commerce News
Mexico Polish – Mexican Virtual trade Mission The Polish – Mexican Virtual trade was held on November 5th, with connections in Poznan and Wroclaw with Mexico. Opening and welcome was led by Rodrigo Daleffe, Santander Mexico and Piotr Dylak, Olga Pietkiewicz, Bank Zachodni WBK, followed by a general overview of the Mexican market led by Demetrio Ruiz, International Desk, Santander Mexico. A session entitled “International Business in Banco Santander” was led by Rodrigo Daleffe, Santander Mexico. Opportunities in the car industry were also presented by Ernesto Malda, Mexican Embassy in Poland and Armando Cortés Galicia of ProMéxico. Perspectives for Polish exports to Mexico were presented by Ziemowit Ekiert, of Acuarius Consulting, and legal issues were addressed by Iker Dieguez
of firm Cacheaux, Cavazos & Newton. Further issues related to finance were addressed by
Piotr Dylak, Dorota Szcześniak, and Maciej Makarewicz of Bank Zachodni WBK.
Portugal MLEKOVITA receives Golden Laurel Super Business During the gala ceremony held in the Primate's Palace in Warsaw on 8 December 2014, CEO Dariusz Sapiński received from the Minister of Agriculture and Rural Development Marek Sawicki MLEKOVITA Group Award in the category of "agri-food sector" in the first edition of the award "Golden
Laurel Super business”. "Super Business" shows for four years and is addressed to the business sector - small, medium and large. "Golden Laurel Super Business" was under the honorary patronage of the Ministry of the Treasury, the Ministry of Environment, BCC, KIG, EMPLOYERS Poland, Polish Bank Association. In the category of "agri-food sector," the jury awarded
MLEKOVITA Group as a leader in the domestic dairy market, over the years achieving the highest revenue growth in the industry. The company was recognized for providing consumers with products of the highest quality, safety in terms of health (effective management of food safety throughout the food chain) and environmentally friendly.
Scandinavia
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SPCC celebrates 10 years The Scandinavian-Poland Chamber of Commerce celebrated its 10th year with a conference and evening reception. The SPCC currently has over 350 members, representing almost all sectors of the economy. The Chamber promotes best practice in the area of corporate responsibility, supports building
positive relationships between Polish and Scandinavian countries and Scandinavia closer to Poles. Among the guests were Mrs. Evelyn Higler, President of IKEA Retail in Poland and Mr Mateusz Walewski, Senior Economist at PwC, who presented the results of a survey on the investment climate in Poland from the perspective of Scandinavian investors.
The conference took place on 4 December 2014 in the Museum of the History of Polish Jews. SPCC Christmas Evening in Gdansk Set for 17 December in Gdańsk, the Scandinavian Chamber will host its annual Christmas gathering for the Tri-City region.
December 2014 – January 2015
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Taiwan Taipei International Cycle Show in March On behalf of the Taiwan External Trade Development Council (TAITRA) we have the pleasure to invite you to the Taipei International Cycle Show TAIPEI CYCLE 2015 which will be held on 18-21 March in Taipei, Taiwan. TAIPEI CYCLE is one of the biggest bicycle trade fairs in the world and the biggest in Asia. The event brings together leading
manufacturers in the industry, such as Giant, Merida, SRAM, Shimano and the Accell Group and many more. The fair will be held in conjunction with the Taipei International Sporting Goods Show (TaiSPO) 2015, which gives buyers a unique ability to simultaneously purchase goods from the bicycle and the sport industry.
Taipei International Machine Tool Show TIMTOS 2015 The 25th International Trade Fair for Machine Tools TIMTOS 2015 will be held from 3rd to 8th March 2015 in Taipei, Taiwan. TIMTOS are among the largest machine tools trade fairs in the world and second biggest in Asia. Taiwan is the fourth
largest exporter of machinery. The event attracts leading manufacturers in the industry. 1010 exhibitors will show their products on 5400 booths on the area of 100,000 sq. m. Products presented: laser punching machines, welding, grinding, surface treatment equipment, tube & wire processing, machine
tool parts/ accessories tools, controllers & control systems, measuring, metal forming machinery, casting and forging, metal cutting machine tools, tools, hydraulic & pneumatic components.
budget and planned changes in special economic zones. PAIiIZ deputy president Anna Polak-Kocińska attended the meeting that took place on 5 November in Wrocław.
“American companies are very important for us. They cooperate with Poland since the economic changes in our country. US investors deliver know-how, in production
Contact: Sandra Piotrowska, sandra@ttcw.it.pl.
Details: http://warsaw.taiwantrade. com.tw/ or kotas@ttcw.it.pl.
United States AmCham on EU Budget period for 2014-2020 American Chamber of Commerce in Poland (AmCham) arranged a meeting on new European Union 2014-2020
2014 December – 2015 January
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Chambers of Commerce News as well as management as well as modern technologies to Poland”, argued Mrs Polak-Kocińska. Investment projects with American capital predominate among projects supported by PAIiIZ. Currently, there are 54 American investments, among the 179 projects supported by the Agency. Re-investments by investors from the US during the last decade confirm confidence in the economy. According to KPMG, more than 69% of American companies reinvested in Poland by opening a next branch, factory, business or research and development centre. U.S.-Poland Innovation Program Council Meeting A full transcript of U.S. Department of State report in late November. Opening Remarks at the U.S.Poland Innovation Program Council Meeting by Scott Nathan, Special Representative for Commercial and Business Affairs, at the InterContinental Hotel Century City in Los Angeles. Thank you Minister Duch for introducing Poland’s council members and other distinguished officials in attendance today. I am happy to see so many familiar friends and partners. I think we have both assembled an impressive group of individuals and institutions. I look forward to the good work we will do together in the future through the Poland-U.S. Innovation Program or PLUS-IP. Our bilateral relationship has never been better. An important cornerstone of this relationship is our economic cooperation. In June, President Obama spoke in Warsaw, emphasizing the importance of Poland’s economic progress, noting: “As you drive through Warsaw, you see that Poland is a country on the move, one with one of the largest and fastestgrowing economies in Europe, a manufacturing powerhouse, and a hub of high-tech innovation.”
Poland is indeed on the move and U.S. businesses and institutions are in the mix. America’s most innovative companies are investing in Poland. 3M Corporation is opening an IT services center for Europe, Africa and the Middle East out of Wroclaw. In Western Poland, Amazon brought three new logistics centers online for Europe. Google is opening Google Campus Warsaw to foster high-tech innovation and entrepreneurship and already has a research and development center in Krakow. Bristol-Myers Squibb has its regional clinical research center in Poland. Corning Optical advances fiber optic and telecom research and development near Lodz and GE continues Thomas Edison’s legacy through its engineering design center in Krakow. We also share strong ties between our universities. California Academy of Science, Carnegie Mellon, Johns Hopkins, Virginia Tech, Utah State, and Baylor College are just some of the many institutions that established linkages with 38 Polish universities and institutes. PLUS-IP provides a platform for our two countries to deepen these ties and strengthen this nexus of government, business, and academia all focused on improving our innovation ecosystems through joint ventures and joint research and development. We must support research and development. Regional innovation clusters in Poland, tied to their American counterparts, support jobs in both countries. Collaboration – both financial and intellectual – between government, business, and academia has been important to the U.S. economy, especially since World War II. This collaboration has brought us the internet, space flight, modern wind turbines, the microchip, countless vaccines, and nuclear medicine among others. Innovation creates a multiplier effect, spurring the
kind of entrepreneurship – both small and large scale - that creates jobs, and provides products and services to enhance the lives of this and future generations. PLUS-IP brings greater focus and structure to those in our two countries already collaborating, while bringing in new partners. These partners come from our government research and business institutes, universities, research and technology institutions, industry associations, large corporations, and small and medium enterprises. Through PLUS-IP, we will deepen our economic collaboration in key economic sectors such as defense, energy, health, and technology – all engines of innovation. Similarly, we will share expertise to identify regional innovation clusters by creating institutional links and networks among local government, the private sector, academia, and nongovernmental organizations. We will also work to nurture start-ups by identifying obstacles to innovation and by sharing best practices on taxation, corporate governance, technology transfer, and policies to protect intellectual property rights. Lastly, I would like to recognize the strong commitment the Government of Poland has made to realize this endeavor by establishing the investment funds. I know our U.S. council members look forward to working with their Polish counterparts on how to get the most positive impact from these funds. Again, I would like to thank our U.S. and Polish PLUS-IP council members and partners for being here today and their commitment of time and resources. I know it will further strengthen our strong bond of friendship and cooperation and contribute to our continued economic prosperity. This is just the beginning and we have a lot of work before us, but I am confident we will succeed.
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Innovation and growth – BPCC policy meeting in Poznań
BPCC members met with representatives of local authorities, universities and research institutions at the GlaxoSmithKline factory on 29
October to discuss how to optimise cooperation between public and private sectors in driving forward innovation in the Polish economy.
December 2014 – January 2015
www.bizpoland.pl Innovation in Poland has not been keeping pace with a rapidly developing global economy; Poland's R&D spend as a proportion of GDP is among the lowest in the EU. The EU financial perspective for 2014-2020 foresees the earmarking of significant funds for R&D to be spent in Poland, raising the levels of cooperation between business and academia. This event brought together interested parties to show what can be achieved when public and private sectors cooperate in the R&D sector. After an introduction and welcome from Michael Dembinski, the BPCC's chief advisor and Krzysztof Kępiński, GSK's external relations director, Joanna Jajus, the director of the department of economic and agriculture activity at the City of Poznań, talked about the support that the city could offer business in the area of institutional support for R&D. The city had created an online platform, called WPI, which explains
what's happening in seven public universities and five R&D institutes. It promotes online projects, awards, offers aimed at businesses. Sectors using the platform include cosmetics, pharmaceuticals, IT, and materials science. The platform contains a large searchable database of offers of analytic services, research and laboratory facilities. Ms Jajus said that a growing number of enquiries from companies looking to cooperate with universities and research institutes. Companies like Solaris, Herbapol, Stomil, Autostrada Wielkopolska, Fabryka Armatur Swarędz have all held meetings with public-sector R&D institutions listed on the platform. The potential of EU funds for cooperation between business and
2014 December – 2015 January
Chambers of Commerce News universities in the next EU financial perspective means that links have to be made now. “It is important to know what's happening at universities,” said Zdziwsław Podrez from Poznań's Uniwersytet Medyczny (medical university). “If technology transfer is to become a reality, academics must want to have this contact with business,” said Mr Podrez. Jacek Wajda from the Adam Mickiewicz University (UAM), spoke about the role of the NCB+R (national R&D centre) and research teams. “The WPI platform opens doors to our university's labs and research infrastructure – we have labs in our chemistry, biology and physics departments. Many offers uploaded here, diagnostic tests, optics, optometry, nano- and bio-medical projects, advanced technology,” he said, encouraging the private sector to become acquainted with the platform. Bartosz Dziadek, the finance manager of GSK's factory in Poznań, presented an outline of the factory's activities. It produces pills, capsules, suppositories and creams, supplying patients from over 100 countries around the world. “Innovation comes from many small improvements, continuously implemented,” he said. “There have never been any huge leaps, rather a series of 4%-5% improvements a year, which mean it can compete with factories in China and India. Production takes place in Poznań. Production lines in Poznan come from the west. “We are outsourcing this type of research work to Poznań University (UAM). Also we cooperate with the local IT cluster. One interesting cooperation was with McLaren F1. Our employees had the opportunity to work with McLaren F1 to learn about best practice in teamwork in production and logistics. The result was a cut in the average time of going around the warehouse from 37 minutes to 7 minutes after seeing how McLaren works,” he said. Kiejstut Żagun, tax advisor at KPMG in Poland, spoke about R&D in Poland up to 2020. “We carried out research among 500 businesses, looking at innovation among Polish entrepreneurs. It was not a rosy picture. Although 70% of companies claim they are innovative, there are doubts as to the quality and depth of their R&D. The number one factor
holding them back is fear of risk that the investment will not pay back. We are not innovative because of risk. Where does innovation come from? Do we buy solutions from the market or do we copy our competition? Or a mix of both?” He noted that Polish firms tend to be buying in innovation – latest machines etc, rather than developing them in house. Currently 80% of Polish R&D spend comes from the public sector, a mere 20% from the private sector. In the US, South Korea, Scandinavia, it's the other way round. By 2020, in Poland should be up to 50/50 – but entrepreneurs can't be mandated to do it – they will have to be encouraged by various instruments to do this,” said Mr Żagun. “Tax breaks are the most effective way, say Polish entrepreneurs. A system of tax credits works well enough in US, Australia and other countries. A technology tax-break is the only way to encourage entrepreneurs to develop new technologies in-house, in-country. Poland has gone through one stage, now needs to make step-change. Tax breaks are the best way to do this; they should support the development of technology, rather than the purchase of technology,” he said. After a networking coffee break, Przemysław Kowalski, managing partner at PWB, spoke about the EU's 2014-2020 financial perspective and the significant changes that would be implemented taking into account the lessons from the previous perspective. Mr Kowalski explained that the operational programmes for the new perspective will be announced in the first two quarters of next year, after a full analysis of the results from 2007-2013 have been analysed. There will be new guidelines; experts are divided whether these will be better or worse than the previous ones. The biggest change will be the need to demonstrate that a particular project would be unable to go ahead were it not for aid. The energy sector has been taken out of the Regional Aid programmes. “It can take between a year and two-and-half years to approve co-financing,” he said. A change affecting the Mazowsze voivodship is beneficial to firms located in poorer sub-regions outside of Warsaw, which will be able to claim a higher percentage of state aid.
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Events
ABSL Krakow Networking party The ABSL Krakow Networking Party, held on November 20th at Plac Nowy 1 restaurant in Krakow, aimed to integrate representatives of the business service sector community from Krakow. With nearly 150 guests and the firstever “for business” performance of Stephane Antiga (moderated by Olga Kozierowska), the event also featured a speech from Krakow Vice-President Magdalena Sroka, as well as whisky tasting and performance of sushi masters.
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Hanna Koziarek, from Eureka Group, talked about the role of technology parks in supporting innovation in business. She began by saying that Poland was home to 53 technology/science parks, 29 technology incubators, 28 enterprise incubators, 45 academic incubators, 209 clusters and 69 technology transfer centres. “These create a synergy effect, bringing together academics, consultants, infrastructure, support, a good business climate, creative people and technology transfer,” she said.
Grzegorz Struś from SMT Software continued the thread about innovation and cooperation in IT. He said his company represented a real Polish success story, with 700 programmers who cooperate with Microsoft and Google, creating solutions for financial services and mobile apps for Orange, Credit Suisse, Toyota, Santander, Raiffeisen Leasing, Deloitte, EY, and Dolby. SMT has completed 300 major projects. “The recruitment process is important for us. Anna Falbogowska, the head of GSK's Business Service Centre, talked about the development of the centre, which serves the
company globally in HR and IT services. “GSK is involved in the manufacture of pharmaceutical products, vaccines and consumer healthcare, and employs 100,000 people around the world”, said Ms Falbogowska. “GSK is only one such success story. 80,000 people work in the shared services sector in Poland – 9,000 of whom are based in Poznań. There are 30 companies in the sector in this city. GSK Poland has worked hard to promote Poznań as a base for the company's shared services activities – Poland has become very important in GSK's global network of shared service centres,” she said.
December 2014 – January 2015
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Events
UAE celebrates annual event Ambassadors and VIP business guests turned out for the annual United Arab Emirates Day, marking the unity of the seven Arab emirates. Business and investment times between Poland and UAE continues to grow, boosted by daily flights by Emirates Airlines between Dubai and Warsaw. Not only passenger traffic is growing briskly but also cargo traffic on Emirates is evidence of the fast-growing trade connections between the regions. Jarek Jakubczak leads Emirates SkyCargo business in Poland, and said that the range of cargo is broad, including electronics and food, including freshlydelivered seafood. UAE investors are particularly focused on these sectors in Poland: commercial real estate, energy, infrastructure, food industry, and capital markets/ portfolio investment.
Miss Polonia is back – 20 December After postponing to reorganize and regroup, the famed Miss Polonia competition is back – set for national broadcast television on 20 December. The new owners, led by private Dutch individuals, have arranged a specially designed 30 meter runway built in the Warsaw exhibition center EXPO XXI. Twenty-five finalists will compete for the crown of Miss Polonia 2014. The winner will be chosen by a jury and the viewers of TVP2 through sms voting. The winner will receive a rich array of prizes, including a new car, and a place in the Miss
2014 December – 2015 January
Universe 2015 competition as well as a chance at an international modeling career. Miss Polonia 2013 was Paulina Krupińska. The presentations of the finalists will be accompanied by performances of premium artists which guarantee an energetic and extraordinary show. The production will be enriched by the implementation of modern technology that will transfer the TV viewers literally to the first row of the catwalk in Expo XXI. Candidates’ preparations are being shown during the breakfast show “Pytanie na Śniadanie” on TVP 2.
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Leadership & Discipline
www.bizpoland.pl
The Power of Persistence Bogusław Woźniak, at the ripe age of 55, has just
BizPoland’s Leadership interviews are a new series of
completed swimming the English channel. He is the sixth
articles covering extraordinary achievements, vision,
Pole to have swum the English channel, and the second
discipline or innovation among Poland’s business
to have swum both the Straits of Gibraltar (2013) and the
leaders. We kick-off the series with an interview
English channel (2014). His 4 hours, 25 minutes swim of
with Bogusław Woźniak, a modest and unassuming man with astounding discipline and focus.
the Straits of Gibraltar is the fastest of any Pole. Tell us a bit about both Channels and the difficulties you faced along the way. The Gibraltar Strait (shortest distance) from Punta Oliveros (Spain) to Punta Cires (Morocco) is approximately 14.4 km wide. Due to the strong current, swimmers actually swim between 16.5km to 22 km - I had on my watch approximately 20 km when finished. Because of that swimmers have to keep up a minimum speed of 3km per hour on average; if you swim slower it is a high chance that you will not reach the
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Moroccan coast, and instead the current will sweep you out to the open sea. The other difficulty when crossing are unpredictable winds that can suddenly increase causing high waves and force the swimmer to abandon the swim. The third is the water temperature: approximately 18-19 C. Theoretically you can swim with neoprene. There are two lists of people who crossed Gibraltar: those in neoprene and the others in a regular swimsuit; however the goal of most swimmers is to cross in the no-neoprene category. The English Channel is completely different and in swimming circles it is referred to as the “Mount Everest” of open water swimming. There are strict rules that govern the swim in order to be recognized by Associations that certify the cross: No neoprene allowed, you are permitted to have only swimming goggles, one baiting cup, and regular short-swimming trunks (above your knees). You are not allowed to touch the assisting boat nor get any support or rest from it. The water temperature varies from 15C up to 18.5C (in the warmest months of late August/ early September). Although the shortest distance coast-to-coast is 34 km, the swimmer, due to the strong current, swims approximately 38- 45 km. I started at 3 am when the water temperature was 17C and the air temperature 12C - it was really cold. In addition I swum with the waves reaching approximately one metre high so this was a bit like swimming in a “wave-making” pool. What led you to this idea to swim the English Channel? Why did you do it? Growing up, I was a regular kid who at the age of 10 couldn’t swim more than 15 meters. But this changed when I joined the swim-club at Grade 3 in primary school and started practicing regularly two times a week (in my early years) to 12 trainings weekly at the age of 14. High school and swimming activities clashed, so I quit swimming and for the next 35 years I swam occasionally in the pool, and sometimes in lakes on vacation. Then, a few years ago at the birthday party of my son I spoke with a friend who was practicing for a swim across Lake Balaton in Hungary. So, I decided to join him. It was three weeks before the event and I
December 2014 – January 2015
www.bizpoland.pl had not been training at all. I did some research and learned that it is “only” a 5,2 km swim, so I decided to give a try. In that year (2012) I completed Balaton Cross Swim (this is the biggest swimming recreational event in Europe with approx 10 000 participants annually). I liked it, and I looked for the next challenge and was drawn naturally to the Straits of Gibraltar. At that time, I was unaware that in order to cross it one must register and then wait for up to three years (the queue is due to windy weather and administrative regulations that permit only one swim across each day). So I flew to Tarifa in Spain in 2013, just to have a look at it - and by coincidence I learned that there might be a “slight chance” to jump to the front of the line. Rafael Gutierez from the Spanish Association that regulates the swim cautioned that it would be “all at your risk” – with a non-refundable deposit for the attempt at crossing. I completed the swim of the Straits in September 2013. At the end of swim I was so exhausted! I had swum 4 hours and 25 minutes, so I said -”never again” - but after a week I started checking the pages of the English Channel Association.
Bogusław Woźniak is 55 years old and lives in Warsaw with his wife and two kids. He successfully runs Terra Investments - a private commercial real estate company for the last 10 years. Terra’s main focus is on advising companies looking for office space both in Warsaw and other Polish cities. Mr. Woźniak worked previously for Skanska, Hines, and Kulczyk Real Estate Holding being responsible for leasing and marketing of office space. Mr. Woźniak holds an MBA from the University of Calgary (Canada).
When did you definitively decide to swim the English Channel, and what was your daily routine and discipline since that time? I know that Gibraltar is a short swim compared to the English Channel. The average time to swim Gibraltar is approximately 4:40 -5 hours, whereas the average swim-time for the English Channel is approximately 14 hours. So I knew that I would have to practice a lot, so I started swimming 35-40 km weekly. To cut a long story short, I joined a swim club with swimmers aged 13-14 years, who practiced 2 times per day six times per week. This was obviously too much for me so I stuck to swimming 4-5 times per week in the mornings from 6 am to 8 am and 3-4 times per week in the afternoons. I started in November and by May I was psychologically tired. It is completely different when you are in high school, young, and with the goal of being a world swim champion versus being 50 years-plus with your business and family on your head. Nevertheless, I decided to stick to the goal, and practiced even more. I participated in some swim marathons on Polish lakes in May and June in order to prepare for the cold waters of the Channel. Even in July (I was scheduled to swim at the end of August) my Channel swim cross looked very unlikely.
2014 December – 2015 January
Leadership & Discipline Tell us about the hardest moment, either in the preparation or in the swim itself, and what mental or emotional discipline/tactics allowed you to persevere. As far as I can remember, I’ve always dreaming of swimming the English Channel. And this was a dream all of us have in the category “what would you do if you won a million in Lotto” . I believe all of us have some plans - some dreams about buying a fantastic car, about building their own house, or to travel around the world, and most of us, as pragmatists, know that this will never happen!. So my dream was about swimming the English Channel and I knew almost all my life that this would not be possible to do for various reasons, such as time, family obligations etc. So do you feel as if you’ve lived your dream? What were the most-emotional highs and emotional lows of your swim. Yes I do ! In order to comprehend the challenge, one must look at the amount of time and determination I put into this English Channel swim. If you are in the water for two hours completely frozen as I was at 5 am waiting for the sun to rise, and you know that you are going to be in such water for the next 10 to 12 hours, it really comes to your mind that achieving your dream probably just isn’t worth it. So at 5 am I was about to abort the swim, but I decided to wait for the sun to rise till 6:30am, then to swim up to the fourth hour and quit. When I reached the fourth hour, my goal was to stay longer than my longest previous swim in Spain, thus 8 hours. Then, having completed 8 hours I knew that I had to finish since it would be a waste to quit - so I kept swimming until finally I saw the French coast. Being so close built up my stamina and I knew that my goal was within reach; nevertheless it still took me for 4 more hours to reach the shore. I completed the swim reaching the French coast after 12 hours and 56 min of continuous swimming. What’s next in your personal goals? I was always told “the first you do it”, the second “you can brag about it” so for the moment I would put a full-stop. Honestly there are plenty of goals one can set - to run a marathon, to complete an Ironman, climb Kilimanjaro. I think, I have not decided yet, what will be next. First I have to make some recovery in my business and family life. Imagine for a moment that you were someone else, facing seemingly insurmountable difficulties. What advice would you give such a person? I believe that the most important is to be persistent in reaching your goals. One’s goals do not have to be high and extremely difficult. Smalls steps are more reachable and teach you a lot. Participating in any sport discipline is similar, it cements one’s will. It also teaches how to overcome your weaknesses and get even stronger for next time. This is perhaps nothing new, but I would say one word: Persistence is the key. n
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