WBJ #14 2011

Polish? Silesian? “Camouflaged” German? There’s a hot debate on national identity

WBJ launched its latest publication, Made in Poland

Games-maker CD Projekt makes an ambitous return to the world of “The Witcher”

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21

WWW.WBJ.PL

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VOLUME 17, NUMBER 14 • APRIL 11-17, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

REAL ESTATE

Since 1994 . Poland’s only business weekly in English

The cost of living COURTESY OF AMW

Lokale Immobilia

Food prices are on the rise and the opposition says the government is to blame

• JWC’s Nowa Dana • K´pa Mieszczaƒska • Platinium’s permit 15-18

The dragon and the eagle

A guide to Polish business and industry

Przewodnik po polskim biznesie i gospodarce

Security companies 20

In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-4 Industry News . . . . . . . . . . . . . . . . .5 Markets . . . . . . . . . . . . . . . . . . . . . . .6 Listed Firms . . . . . . . . . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . . .8-9 Business Environment . . . . . . . . .10 Opinion . . . . . . . . . . . . . . . . . . . . . .11 Cover Story . . . . . . . . . . . . . . . .12-13 Made in Poland Conference . . . . .14 Lokale Immobilia . . . . . . . . . . .15-18 The List . . . . . . . . . . . . . . . . . . . . . .20 Company Focus . . . . . . . . . . . . . . .21 Arts & Culture . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

¸UKASZ MAZUREK/WBJ/SHUTTERSTOCK

China's ambassador to Poland, Sun Yuxi, weighs in on bilateral trade and political ties 8-9

Fueling speculation A whopping 5.3 trillion cubic meters of shale gas could lie beneath Poland

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Open to acquisitions Following its successful IPO, Open Finance is looking to expand through M&A deals 7

A GUIDE TO POLISH EXPORT will h it sh elves in April 2 0 1 1 !

For advertising and promotion opportunities contact: Agnieszka Brejwo: abrejwo@wbj.pl; (+48) 639-85-68, ext. 226

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NEWS

www.wbj.pl

Portugal requests bailout

Polls point to heated race Only eight percentage points separate the two largest parties in Poland’s parliament, according to the latest SMG/KRC poll. The ruling Civic Platform (PO) party had the support of 37% of those polled, and its main rival, Law and Justice, had 29%. The Democratic Left Alliance, meanwhile, came in third with 11% support. PO’s junior coalition partner, the Polish People’s Party, polled at just four percent. Five percent is the threshold needed to enter parliament.

Record remittances in 2011?

President Bronis∏aw Komorowski has signed the pension reform bill which the government has been working on for months. The reform will see private pension funds (OFEs) receive 2.3% of workers’ salaries as opposed to the 7.3% which is currently paid into its accounts. This amount will rise to 3.5% by 2017. The reform will take effect on May 1. ●

Numbers in the News

5.3 trillion m3 of shale gas may lie beneath Poland, according to the US Energy Information Administration

2014-2015 is the earliest a serious discussion could start on Poland joining the euro zone, according to Prime Minister Donald Tusk

z∏.6.5 billion was the National Bank of Poland’s net profit in 2010

z∏.1 billion is how much Poles spend on dance lessons each year, according to Dziennik – Gazeta Prawna

Quote of the Week

European Parliament President Jerzy Buzek last week criticized a number of Polish MEPs who, it had been revealed, were signing attendance lists at the meetings of the Sejm’s European Union Affairs Committee and then disappearing immediately or remaining for just a short while.

The European Parliament is paying the MEPs €304 per day of work at the committee.

TV broadcaster TVN24 published news that Polish MEPs of various party affiliations were collecting payment even though they do not discharge their duties properly.

In an interview with the station, Mr Buzek described such behavior as reprehensible but rare. He stressed that the MEPs’ ability to participate in the committee meetings was

Money sent home by Poles working abroad may hit a new record this year as an additional 500,000 are expected to look for jobs in Germany after the country opens its job market on May 1. Those already working in that country wire €100 million a month to their home country.

Some experts predict that more than €5.2 billion (the previous record, from 2007) will be transferred to Poland this year.

President inks pension reform

Jerzy Buzek

IN THE SPOTLIGHT

COURTESY OF THE EUROPEAN PARLIAMENT

Months of fears have now become reality: Portugal has asked the EU for a bailout to salvage its financial system.

European finance ministers met last Friday and said that an estimated €80 rescue package negotiated with the IMF, the European Central Bank and Portugal’s main political parties should be ready by mid-May. The bailout will be contingent on “ambitious” reforms and austerity measures.

APRIL 11-17, 2011

crucial for the exchange of different views. “The majority of MEPs make use of it and work very hard and honestly,” Mr Buzek said.

The European Parliament president added that he wanted the European Parliament to adopt a code of best practices which would specify the duties of MEPs and state how, in an honest and transparent manner, they should fulfill them.

It is not the first time in recent weeks that Mr Buzek has had to deal with ethical standards in the European Parliament. In March, British newspaper The Sunday Times alleged that a number of MEPs from countries such as Austria, Romania, Slovenia and Spain had agreed to propose amendments in return for money. They were exposed when approached by

journalists posing as lobbyists.

The controversy, which is now being investigated by EU officials, doubtlessly poses a major challenge for Mr Buzek.

The Sunday Times’ sting may prove one of the biggest corruption scandals in the history of the European Parliament and has already resulted in the resignation of two of the MEPs involved.

Born in 1940 in Smilovice (which is today in the Czech Republic), Mr Buzek has been president of the European Parliament since July 2009. A professor of technical sciences, he started his political career in the anti-communist movement in the 1980s.

In 1997, Mr Buzek was elected to the Sejm and served as prime minister of Poland from 1997-2001.

“I told [her] that Leszek had gone to South America” Jaros∏aw Kaczyƒski tells Wirtualna Polska how he avoided telling his sick mother about the death of his twin, President Lech Kaczyƒski

Figures in focus IP improvement Intellectual property crimes in Poland (number of initial proceedings launched) by type, 2006-2010 Software

Film

Audio

3,000 2,500 2,000 1,500 1,000 500 0 2006

2007

2008

2009

2010

Adam Zdrodowski Source: Polish National Police

On WBJ.pl

Company index Agencja “Komandos” ..............20 G4S ............................................20 MOFO Architekci ......................16

A nation within the nation?

Are Silesian and Polish identities incompatible? Law and Justice leader Jaros∏aw Kaczyƒski seems to think so. WBJ.pl takes a look at this complicated debate on national identity. Log on to learn more about the history of southwestern Poland and why its inhabitants might describe themselves as Silesian.

Agencja

Getin Noble Bank ......................7 Mohito ........................................16

Ochrony Mienia “Matpol” ........20 Goodman Group ......................16 Multikino....................................17 Agencja Ochrony Osób i Mienia

Grupa 5 Architekci....................15 Open Finance ..............................7

Zubrzycki ..................................20 Grupa EKOTRADE ....................20 Optimus ....................................21 Agencja Ochrony Osób i Mienia

Grupa HUNTERS ......................20 P. Dussmann ............................20

Guard-Service ..........................20 Grupa Solid................................20 PKO BP..................................7, 10 AIG/Lincoln Polska ..................17 Gustaw Securitas System........20 PKO TFI......................................21 Atari............................................21 H&M ..........................................17 Police ..........................................6 Atelier 3 Girtler & Girtler ........17 Hines..........................................15 Polish AVD ............................................23 Honda ........................................23 Chamber of Commerce ..........14

DATELINE

Best Western ............................16 House ........................................16 Polkomtel ....................................5 Blackstone Group ....................18 Impel Security Polska..............20 Prestige Hotels & Resorts ........5 Blackstone Real Estate ..........18 Jastrz´bska

April/May

British Polish

PricewaterhouseCoopers..........7

Spó∏ka W´glowa ........................5 Progress II ................................18

Chamber of Commerce ..........12 Justice Holdings ........................7 Progress III ................................18

APRIL

13

CURRENT ACCOUNT

C&A............................................17 JW Construction ......................15 ProLogis ....................................17

Event:

National Bank of Poland releases current account data for February

Carrefour ..................................18 Jysk ............................................18 PUHIT ........................................16

11-12 SALES CONGRESS

18

WAGES

Engineering Group ....................8 Koga ..........................................23 Rhenus Contract Logistics......17

Event:

Central Statistical Office releases corporate wages and employment data for March

Event:

Kongres Sprzeda˝ – the conference will look to find solutions for the biggest issues that sales executives are facing. Location: Hotel Sheraton, Warsaw. kongressprzedaz.pl

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PRCH BUSINESS MIXER

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INDUSTRIAL OUTPUT

Event:

An opportunity to exchange business experiences and contacts among 150 companies brought together through the Polish Council of Shopping Centres. Location:Villa Foksal, Warsaw. prch.org.pl

Event:

Central Statistical Office releases industrial output and producer prices data for March

MAY 8-11 Event:

13

INFLATION

Event:

Central Statistical Office releases inflation data for March

CD Projekt ................................21 K2 Internet ................................15 Rank Progress ..........................18 China Overseas

KGHM ..........................................6 Reserved..............................16, 17

City Security Group ..................20 Konsalnet SA ............................20 Robyg ........................................17 CMP Group................................16 LandesBank Berlin ..................15 RTV Euro AGD ..........................17 Colliers International ..............17 Leroy Merlin ..............................18 Securitas Group........................20 Cropp ........................................16 Lot ................................................5 SMG/KRC ....................................2 Dekra

LPP ............................................16 Starcom ....................................15

Construction Management ....16 MarcPol ....................................17 Tate & Lyle PLC ........................15 Develop Investment..................16 Marks & Spencer ....................18 TMS Brokers ..............................7 DM BZ WBK ................................7 MARMA Group ..........................16 UniCredit Group..........................5 DM BZ WBK SA ........................6 McDonald’s................................18 Warsaw Stock

HR CONGRESS The 40th IFTDO World Conference & Exhibition international HR Congress & Expo. Location: Hotel Marriott, Warsaw. www.iftdo2011.com

Dolcan........................................18 Media Expert ............................18 Exchange ........................7, 17, 21 Echo Investment ......................16 Mermaid Properties ................15 Wydawnictwo Naukowe PWN 15 Ericpol Telecom ........................14 Metropolis..................................21 X-Trade Brokers Dom Maklerski Ericsson ....................................14 Military Property Agency..........16 SA ................................................6 Europejski Fundusz

Miller, Canfield, W. Babicki, A.

Zara ............................................17

Hipoteczny ................................17 Chelchowski & Partners ........13 Zizia ............................................18

NEWS

APRIL 11-17, 2011

www.wbj.pl

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Shale gas

Poland sitting on massive gas reserves?

It was already common knowledge that Poland’s potential shale gas reserves could be a game-changer for the country, but a new estimate from the United States’ Energy Information Administration (EIA) has raised the bar again.

Unconventional resources consultancy Advanced Resources International had previously put Poland’s maximum shale gas reserves at three trillion cubic meters, but the EIA’s most recent analysis suggests 5.3 trillion cubic meters of shale gas could be present beneath the country.

Poland’s annual gas consumption amounts to 14 billion cubic meters at present, meaning the reserves could supply the country’s needs for 300 years.

But Henryk Jacek Jezierski, Poland’s chief national geologist, has warned against over-optimism. He emphasized that the American study

was still preliminary.

“The next step in determining the size of Polish [reserves] are the results of the US Geological Survey and the Polish Geological Institute, which will probably be published in September,” Mr Budzanowski said in a statement published on the Polish Environment Ministry’s website. And even those figures will be an approximation, he added.

Reliable data can only be gathered on the basis of exploration, a broad picture of which will not be clear for a few more years.

relations and energy security expert at the Polish Institute of International Affairs (PISM).

“Undertakings relative to shale gas in Europe are still quite risky, and any kind of news that the potential shale reserves are bigger than expected is great news for investors, as well as for the Polish administration and policymakers,” said Mr Wyciszkiewicz.

On the one hand, reports of potentially larger reserves are likely to influence the investment strateEnthusiasm for shale gas could make drilling rigs a common sight in Poland gies of companies interested in the Positive mining, the country has a Polish market. On the other similar levels. projections And given Poland’s con- much friendlier social and hand, it might provide an Nonetheless, the EIA’s report places Poland as a clear leader cerns regarding energy securi- political environment for the incentive for the government when it comes to shale gas ty (it is currently dependent on development of the shale gas to accelerate the building of a noted Ernest proper regulatory and legal reserves in Europe, with only Russian gas) and public opin- industry, France estimated to possess ion’s generally positive view of Wyciszkiewicz, an economic framework for this potential SHUTTERSTOCK

A new estimate suggests the nation may have nearly twice as much shale gas as previously thought

Politics

new sector, Mr Wyciszkiewicz suggested.

Other steps needed to encourage investment include the improvement of access to exploration equipment such as drilling rigs, the establishment of interconnectors to other national gas pipeline systems and, eventually, deregulation of the energy market so that new players can get direct access to end consumers.

“For now we are still in the exploration phase, but it is important that companies interested in investing be sure that the market will be accessible for them,” commented the PISM expert.

The EIA report singles out three regions in Poland that appear favorable for shale gas exploration: the Baltic region in the north, Lublin in the south, and Podlasie in the east.

The Environment Ministry has so far granted 85 concessions for shale gas exploration. Polish gas monopolist PGNiG and US firm Lane Energy have recently made promising progress in the Pomorze region in the north.

Alice Trudelle

Debt and deficit

Kaczyƒski takes on ‘Silesianness’ National Bank of Poland nets The leader of Poland’s z∏.6.5 billion profit in 2010 largest opposition

EASTNEWS

Law and Justice (PiS) leader Jaros∏aw Kaczyƒski has jumped headfirst into a debate on national identity centered around Silesia.

The Silesia region, which lies mostly in the southwestern part of the country, has a complicated history. Most of its historical area is now located in Poland, with smaller parts in the Czech Republic and Germany, but at various points in time it fell under the dominion of Germanic kingdoms.

Many in the region were angered by PiS’s recently released “Report on the State of the Republic,” which stated that declaring “Silesianness” in this year’s census “is simply a way of cutting off your identity from [‘Polishness’]” and is probably “a camouflaged German option.”

Asked about the passage by the press, Mr Kaczyƒski didn’t back down. He said that those who would claim to be part of a “Silesian nation” were, in his opinion, making a “camouflaged” declaration of Germanness.

PiS’s leader singled out the Silesian Autonomy Movement

Camouflaged Germans?

(RAS) and its leader, Jerzy Gorzelik, as examples.

Speaking to Tok FM, Mr Gorzelik later countered that PiS should consider changing its name to NPD, alluding to a far-right German party. He added, “Kaczyƒski’s party has reached the same level as that nationalist, German faction.”

Mr Gorzelik also claimed not to be offended by accusations of Germanness, because “Germanness is nothing bad.”

However, he did take offense to Mr Kaczyƒski’s accusations that those who identified themselves as Silesian are defacto identifying as German.

There have since been calls for Mr Kaczyƒski to apologize to Silesians, but he has refused to do so.

RAS was created in 1990 and its stated aim is greater autonomy for the Silesian region. It also says on its website that Silesians have the right to declare Silesian nationality. To support its argument, it notes that in the United Kingdom’s census it is possible to declare a “Silesian” nationality.

In the last Polish national census held in 2002, over 173,000 people declared themselves to be Silesian nationals.

From April 1 to June 30 this year, Poland will hold its first census since joining the European Union and there are reports that some Poles will declare themselves Silesian just to spite Mr Kaczyƒski.

Remi Adekoya

The National Bank of Poland booked a 2010 net profit of z∏.6.5 billion, most of which will go towards reducing the deficit and public debt.

According to Polish law, 95 percent of the NBP’s profit is paid into the state’s coffers.

The remaining five percent is siphoned off to a reserve fund.

“Income from the NBP will only be used to lower public debt and reduce the deficit,” Finance Minister Jacek Rostowski told the press soon after the NBP revealed its 2010 takings.

In its budget for 2011, the government had predicted a zl.1.7 billion payment from the NBP’s 2010 profits. It turns out, however, that the state will instead receive a windfall sum of around z∏.6.2 billion.

Asked by reporters why the money is not being put towards investments, as a number of opposition parties say it should be, Mr Rostowski replied that the country is already investing heavily in road infrastructure and that it will invest a significant amount

of money in science and higher education in 2012.

“But it will not be with [NBP] money,” he said. “The best way to achieve the rapid development of Poland is to repair the public finances as soon as possible.”

Indeed, some are concerned that Poland’s debt-toGDP ratio could cross the 55 percent threshold. Once that level is breached, legally mandated austerity measures come into play. Poland’s public debt stood at z∏.748.5 billion last year according to

government statistics, which put it at 53 percent of economic output.

Mr Rostowski also reiterated earlier comments that this year and next Poland would be the leader in Europe when it comes to repairing public finances, adding that money from the NBP would provide a “useful boost” to help achieve this aim.

The NBP will transfer the money once the government has approved the bank’s financial statements.

Gareth Price

COURTESY OF NBP

Some 95 percent of that will be spent on repairing the state’s battered finances

party is concerned about “camouflaged Germanness”

Money from the NBP will provide a helpful z∏.6.2 billion boost to public finances

4

NEWS

www.wbj.pl

Anniversary of the Smolensk tragedy

Poland to grow by 365 hectares?

Continuing acrimony

The Czech Republic is discussing a plan to hand back 365 hectares of land to Poland, but the question of exactly which land is controversial.

The land debt dates from the late 1950s, when Poland and Czechoslovakia shifted their borders. At the time, the latter received more land than it gave up – 368.44 ha more, to be precise.

The border between the two countries stretches 796 km, touching five regions on the Czech side and three

COURTESY OF THE EUROPEAN COMMISSION

One year after the death of President Kaczyƒski, his brother still blames the gov’t for the tragedy Law and Justice (PiS) leader Jaros∏aw Kaczyƒski did the rounds in the media last week in the run up to the first anniversary of the Smolensk catastrophe.

In an interview for weekly Wprost, Mr Kaczyƒski said he would be in mourning for the rest of his life and that he would never accept the loss of his brother. He even appeared on TVN24, a TV station which he and his party colleagues harshly criticize for its “vicious attacks” on Law and Justice.

Asked what kind of atmosphere he wanted surrounding the anniversary of the tragedy, Mr Kaczyƒski said he wanted everything to go “calmly.”

However, he also refused to rule out the possibility his brother had been assassinated and reiterated previous claims that Prime Minister Donald Tusk, President Bronis∏aw Komorowski and other members of government bear a “moral responsibility” for the catastrophe.

voivodships on the Polish side.

According to information from the Polish Press Agency (PAP), the Czech Ministry of the Interior has suggested handing over land located in the Liberec region between Âwieradów and Bogatynia in the Western Sudetes mountains.

The area borders Poland’s Lower Silesia voivodship.

However, PAP cited local Czech officials upset with the national government’s plan.

They complained, for example, that it would be unjust to

take land from what is already the Czech Republic’s smallest region.

Polish officials, for their part, note that the proposal is still in the initial stages.

A Polish-Czech Border Commission has been dealing with the matter since the early 1990s, but despite several attempts, no resolution has been achieved to date. The last attempt, in 2008, would have seen the transfer of 370 hectares.

EBB

Support for euro at record low

Jaros∏aw Kaczyƒski believes the government bears a “moral responsibility” for the Smolensk crash “Yes, I still say that the moral responsibility for the catastrophe lies with those politicians, among others,” Mr Kaczyƒski said. “Remember that the campaign against my brother led to the separate visits [to Smolensk by the PM and the president] and to the lowering of security standards regarding my brother’s visit,” said Jaros∏aw Kaczyƒski, alluding to his belief that the government worked to marginalize the former president.

President Kaczyƒski was not officially invited by the

APRIL 11-17, 2011

Russians last year to mark the anniversary of the infamous Katyƒ massacre, which led to his tragic flight a few days after PM Tusk, who had received an invitation, attended a commemoration and service.

As WBJ went to press, Jaros∏aw Kaczyƒski was expected to play a central role in commemoration events over the weekend. Four demonstrations had been registered for Sunday by committees aligned with the Law and Justice party.

Remi Adekoya

Support for the euro in Poland has hit a record low of 32 percent, a poll published by CBOS last week indicated.

Conversely, opposition to the euro has reached 60 percent, up 11 percentage points since last year.

There are three main reasons for this drop, according to Miros∏awa Grabowska, head of CBOS. “Firstly in 2009 and 2010, society heard a lot of bad news about the economic conditions in the euro zone, so people have started wondering whether it is beneficial for Poland to adopt the euro or not,” she said.

“Secondly, society has always feared higher prices after the adoption of the euro. And with prices rising rapidly in z∏oty now, that fear has multiplied,” Ms Grabowska said. The third reason, she concluded, is that the government hasn’t maintained a coherent stance on the euro or a clear calendar for joining the euro zone, and this further served to confuse people.

Back in 2008, Prime Minister Donald Tusk’s government had set 2011-2012 as its target date for joining the euro. Not long after, the global financial crisis hit and

the government quickly dropped its adoption plan. It has since been coy on the matter.

Speaking last week to Onet.pl, the prime minister noted that Poland doesn’t meet the Maastricht criteria at the moment and that 2014 or 2015 would be the soonest point at which the country could “seriously discuss” entering the euro zone.

Mr Tusk has previously also said that the euro zone needs to sort out its current members’ financial woes before Poland will consider adopting the common currency.

RA

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INDUSTRY NEWS

APRIL 11-17, 2011

Telecoms

might be seen as less important by some buyers, Mr Sawala-Uryasz said.

Meanwhile the number of bidders for a 100 percent stake in Polkomtel dropped from seven to five last week, Polkomtel deputy CEO Krzysztof Kilian was reported

by Reuters as saying.

“Of all the companies that have entered the shortlist, I would say that [Nordic operator] TeliaSonera is one of the most important rivals to local investor Zygmunt Solorz˚ak,” said Mr Sawala-Uryasz.

Investors have until May 6 to file their biding offers.

The rising price of coal could boost revenues from JSW’s privatization

Alice Trudelle

Sound (financial) signals Polkomtel’s results for 2009 and 2010 2009

2010

Change (%)

Revenues

7.77 billion

7.67 billion

-1.3%

EBITDA

2.67 billion

2.83 billion

6%

Net profit

980 million

1.11 billion

13.2%

14.03 million

14.05 million

Number of customers

COURTESY OF JSW

Poland’s number-two mobile operator Polkomtel has reported a net profit of z∏.1.1 billion for 2010, up 13 percent on the previous year. The group, which operates mobile network Plus, has said that profits would be redistributed entirely to shareholders before the sale of the company.

However, its subscriber numbers were less positive, with an annual gain of only 0.1 percent. At the end of 2010, the operator had 14.056 million subscribers, compared to 14.038 million in 2009.

According to Przemys∏aw Sawala-Uryasz, an analyst for UniCredit Group, the growth in net profit could boost the firm’s value in the run-up to the sale. But the stagnation in subscribers reflects the fact that the three major networks (Era, Plus and Orange) are in the process of losing market share to smaller players (such as Play).

“As the company is coming

up for sale, obviously it is crucial to provide valuation based on the best figures that they can possibly pull … but the most significant figures for strategic investors are the number of subscribers,” he said.

Polkomtel’s sale, described as Europe’s largest telecoms deal in years, has been valued at between z∏.16 billion and z∏.18 billion.

Whoever acquires Polkomtel will get with it a third of Poland’s large and highly saturated mobile market – a rare opportunity – and therefore the lack of substantial growth in the number of subscribers

0.1%

The combined net profits of Polish coal mining companies for the January-February 2011 period stood at z∏.412.4 million, according to preliminary data from Poland’s Industrial Development Agency. The figure is nearly seven times higher than it was during the same period of last year.

Coal production declined by 4.7 percent y/y to 11.1 million metric tons, while sales rose by eight percent to 11.7

million tons. The strong figures were in large part due to the rising price of coal, which grew in value by over 18 percent over the period.

According to Deputy Economy Minister Joanna Strzelec¸obodziƒska, the current market situation offers a highly favorable moment for the IPO of state-owned Jastrz´bska Spó∏ka W´glowa (JSW), the EU’s largest producer of coking coal.

Alice Trudelle

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

Tourism to pick up in 2011?

Poland should see a moderate increase in the number of tourists this year, according to new figures from the Polish Institute of Tourism. Almost 13 million people are expected to visit Poland, compared to 12.5 million in 2010.

This is still a far cry from the 16 million recorded in 2007, but represents an improvement on the figure of 12 million seen in 2009, an eight-year low.

Inbound tourism is forecast to generate $11.3 billion for the Polish economy this year, up $1.1 billion on 2010.

As in previous years, Germans are expected to form the bulk of foreign tourists, followed by Russians, Belarusians and Ukrainians. Around 2.5 million Western Europeans (excluding Germans) are estimated to visit Poland this year.

Recent events in North Africa and the Middle East will affect Poles’ travel habits

“Business cycles often change in the coking coal industry,” she was quoted by the Polish Press Agency as saying. “If you’re going to privatize, it should be done when [the market] is peaking,” she added.

JSW’s IPO is scheduled for June 30. Jaros∏aw Zagórowski, the coal miner’s president, has estimated that the company is worth z∏.3-5 billion.

Source: Polkomtel

Inbound tourism

Turbulence in North Africa and the Middle East, combined with the Polish presidency of the EU may prove a boon for the tourism industry

5

Coal miners see bumper profits

Polkomtel posts mixed results in run-up to sale The Plus operator’s net profit was up, but its number of subscribers stagnated

www.wbj.pl

this year, but are unlikely to cause a major shift in inbound tourism to Poland.

“I don’t expect a very substantial growth in the number of visits from international tourists, because people who travel to countries like Egypt or Tunisia are not the same group as those who choose Poland,” said Witold Bartoszewicz, an expert from the Institute of Tourism.

However, he expects more Poles to remain in the country due to international events.

The Polish seaside is likely to see a surge in activity, in his opinion.

Krzysztof J´drocha, a member of the board at the Polish Prestige Hotels & Resorts group, which comprises 37 high-end facilities across the country, confirmed that interest in Polish summer

vacations was much greater than last year.

“We hope, like the whole hotel sector, that the situation in the Mediterranean can help Poland this year,” he said. “But I expect the increase in activity to come from the business travel sector rather than the leisure travel.”

In his opinion, the Polish presidency of the EU Council, which starts in July, will bring a lot of conferences and business travel, potentially leading to a four to five percent increase in activity.

But “normal” leisure travelers from Western Europe, where social and economic prospects are still uncertain, might not be ready to spend on international travel, Mr J´drocha concluded.

Alice Trudelle

Lot suspends routes to Middle East Poland’s flagship airline, Lot, has decided to suspend all flights to Egypt, Syria and Lebanon in May and June.

The airline cited unstable political conditions as the main reason. Lot celebrated its inaugural flight to Beirut

last June, and flights to Cairo and Damascus began last September, but recent political instability has scared off many travelers. Difficulties have also arisen at Cairo’s airport because of limited night flights. ●

Withdrawal of alcohol license found to be constitutional On April 5, the Constitutional Tribunal examined a question raised by the Voivodship Administrative Court in Gdaƒsk related to alcohol licenses. The Tribunal decided that it was constitutionally acceptable to void an entrepreneur’s alcohol license if his employee has sold alcohol to a minor, even if the entrepreneur has fulfilled all requirements to ensure that employees observe the statutory prohibition of the sale of alcohol to minors.

The Tribunal decided that the principle of freedom of economic activity is not absolute and may be restricted when it comes to other values protected by the constitution. In the opinion of the Tribunal, although license cancellation is a severe measure against an entrepreneur, it is necessary to ensure that minors are not sold alcohol.

New consumer credit rules On April 1, the Sejm approved changes to the Act on Consumer Credit. Among other things, the changes provide for an extension of the period in which it is possible to withdraw from an agreement. Currently the period is 10 days; it will be increased to 14.

The Act will be applicable for all financial institutions, including co-operative savings and credit unions (SKOKs), and also with respect to the evaluation of con-

sumers’ creditworthiness. The draft Act also introduces a unified credit form which will include basic information on credit and its costs. This in turn should make it easier for consumers to compare different banks’ offers.

The legislation has now been sent to the Senate.

European Commission on CO2 emissions On March 29, the European Commission adopted the so-called “derogation package,” the Commission’s decision on how to allocate free greenhouse gas emission allowances to eligible installations.

Ten member states, including Poland, will be able to allocate a limited number of emissions credits to their power plants instead of selling them (this is the socalled derogation). The Commission has established the rules which must be observed by member states if they decide to allocate emissions credits to eligible power plants.

Recent attempts to soften the rules governing allocation of greenhouse gas emission allowances for Polish entrepreneurs, which are highly dependent on coal and emissions, have been to no avail. The most disputed points were: the notion of physical initiation of an investment project and the falling trajectory of free allowances over the 2013-2020 period. ●

BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE

6

MARKETS

www.wbj.pl

APRIL 11-17, 2011

Stocks report

world stock indices DJIA

NASDAQ

12,409.49 (April 7 close)

S&P500

2,796.14 (April 7 close)

0.55% (for the week)

FTSE100

1,333.51 (April 7 close)

0.45% (for the week)

DAX

6,007.37 (April 7 close)

0.47% (for the week)

1.67% (for the week)

The rally goes on

NIKKEI225 7,178.78 (April 7 close)

9,590.93 (April 7 close)

1.64% (for the week)

-1.68% (for the week)

CHANGE: 7.19%

CHANGE: 4.46%

CHANGE: 6.03%

CHANGE: 1.82%

CHANGE: 2.95%

CHANGE: -7.35%

(year to April 7)

(year to April 7)

(year to April 7)

(year to April 7)

(year to April 7)

(year to April 7)

52-week high: 12,423.00

52-week high: 2,840.51

52-week high: 1,344.07

52-week high: 6,105.80

52-week high: 7,441.82

52-week high: 11,408.20

52-week low: 9,596.04

52-week low: 2,061.14

52-week low: 1,010.91

52-week low: 4,790.00

52-week low: 5,607.68

52-week low: 8,227.63

Tomasz Jerzyk, technical analyst DM BZ WBK SA Polish stocks last week extended a recent rally and major WSE indices set new multi-month highs. On Friday, some profit taking was visible after a strong opening and few hours of sideways movement, but the overall WIG index still rose by nearly one percent on the week and the blue-chip WIG20 inched up 0.9 percent.

The Polish Monetary Policy Council decided to raise the key interest rate by 25 bps last week, to four percent.

This was good news for the z∏oty, which appreciated sharply in the second half of the week. A stronger z∏oty is usually positive for other Polish assets and it probably helped to lift stocks.

Market breadth may be a concern for some investors as most of listed companies under-performed the indices,

Major indices WIG

50,371.74 (April 7 closure)

WIG20

2,928.95 (April 7 closure)

07.04

06.04

05.04

04.04

01.04

31.03

30.03

29.03

28.03

25.03

24.03

23.03

22.03

07.04

06.04

05.04

04.04

01.04

31.03

30.03

29.03

28.03

2,700

25.03

47,000

24.03

2,760

23.03

47,800

22.03

2,820

21.03

48,600

18.03

2,880

17.03

49,400

16.03

2,940

15.03

50,200

14.03

3,000

11.03

51,000

21.03

52-week low: 2,270.13

18.03

Change year to April 7: 6.33%

17.03

52-week low: 39,109.37

16.03

52-week high: 2,928.95

Change year to April 7: 5.71%

15.03

Change for the week: 3.98%

14.03

52-week high: 50,371.74

11.03

Change for the week: 3.37%

Top 5 ERG BIPROM PETROLINV PEPEES AVIASG

Closing 1.35 7.86 10.49 0.85 67.50

% change (week) 52-week high 42.11 1.56 26.77 7.97 24.29 18.54 23.19 0.88 22.73 71.00

52-week low 0.72 5.30 5.05 0.44 54.35

Top 5 LOTOS KGHM GETIN PKNORLEN CYFRPOLSAT

Closing 47.95 194.10 15.29 56.50 16.72

% change (week) 8.61 7.71 7.68 7.31 5.62

52-week high 48.50 194.10 15.29 57.50 17.30

52-week low 28.05 88.50 9.35 35.48 13.36

Bottom 5 IGROUP SIMPLE WILBO DROP PEMUG

Closing 0.24 14.87 1.70 30.60 1.25

% change (week) -14.29 -11.49 -10.53 -10.00 -9.42

52-week low 0.22 7.51 1.70 24.00 1.02

Bottom 5 PBG CEZ BZWBK ASSECOPO TVN

Closing 176.00 142.00 225.90 53.90 18.17

% change (week) -6.38 -2.47 -0.35 0.00 0.17

52-week high 252.00 148.80 227.00 59.65 19.31

52-week low 175.00 118.70 179.00 49.02 15.95

52-week high 1.33 17.57 2.85 43.00 1.90

Currency report

RPP hikes interest rates

Other indices mWIG40

2,987.72 (April 7 closure)

sWIG80

12,907.99 (April 7 closure)

NewConnect

57.97 (April 7 closure)

WIG-Banki

7,387.49 (April 7 closure)

SOURCE: WSE

07.04

06.04

05.04

04.04

01.04

31.03

30.03

29.03

28.03

25.03

24.03

23.03

22.03

07.04

06.04

05.04

04.04

01.04

31.03

30.03

29.03

28.03

25.03

6,800

24.03

57.0

23.03

6,920

22.03

57.4

21.03

7,040

18.03

57.8

17.03

7,160

16.03

58.2

15.03

7,280

14.03

58.6

11.03

7,400

21.03

52-week low: 5,751.39

18.03

Change year to April 7: 6.11%

17.03

52-week low: 54.52

16.03

52-week high: 7,387.49

Change year to April 7: -8.58%

15.03

Change for the week: 4.17%

14.03

52-week high: 64.39

11.03

Change for the week: -0.51%

59.0

Adam Narczewski, X-Trade Brokers Dom Maklerski SA

07.04

06.04

05.04

04.04

01.04

31.03

30.03

29.03

28.03

25.03

24.03

23.03

22.03

07.04

06.04

05.04

04.04

01.04

31.03

30.03

29.03

28.03

12,400

25.03

2,800

24.03

12,520

23.03

2,840

22.03

12,640

21.03

2,880

18.03

12,760

17.03

2,920

16.03

12,880

15.03

2,960

14.03

13,000

11.03

3,000

21.03

52-week low: 10,980.45

18.03

Change year to April 7: 5.38%

17.03

52-week low: 2,361.69

16.03

52-week high: 12,907.99

Change year to April 7: 6.41%

15.03

Change for the week: 1.42%

14.03

52-week high: 2,987.72

11.03

Change for the week: 2.58%

which is a sign of a weak bull market. Chemicals, miners and oil companies were the big winners last week.

Police was the top pick among chemicals, although it’s hard to see why. I think chemicals are generally considered a safe bet in Poland and many investors were looking for opportunities among those shares. Police soared by 13 percent, while Pu∏awy, Azoty and Synthos all rose by eight percent.

KGHM was the best performer among miners as well as WIG20 constituents. The firm rose by nearly five percent on dividend expectations and copper futures gains.

Food firms and media stocks were the biggest laggards.

It was a good week for investors, but it looks like some slides are likely in the upcoming days. ●

The Polish Monetary Policy Council (RPP) last week hiked interest rates for the second time this year by another 25 bps, bringing the main rate to four percent.

The z∏oty appreciated all week, with the EUR/PLN dropping from z∏.4.02 to z∏.3.95, its monthly low. Due to the weakness of the dollar, the USD/PLN reached z∏.2.75 by Friday, the lowest level we’ve seen since November of 2010.

The z∏oty’s gains were also due to a rally on stock markets, which continued throughout last week. Corrective movements on the stock market are currently the main danger, in terms of depreciation of the z∏oty in the short term, as increased risk aversion might negatively affect the currency.

The EUR/USD also kept

climbing last week, breaking the resistance level of $1.4280 and reaching $1.44, its highest level since January 2010. The euro appreciated despite unclear statements from ECB head Jean-Claude Trichet during a press conference after the central bank hiked interest rates.

As expected, the new rate in the euro zone is 1.25 percent, but there was no clear signal from the ECB as to whether this is the beginning of a longer-term process.

The dollar failed to regain ground as no statements about any monetary policy tightening came from the US Fed. We will have to wait for a series of good labor market data for the Fed to start thinking about rate hikes. In the meantime, the USD will need good macro news from the economy to rebound. ●

currency rates

08.04

SOURCE: NBP

3.2683

3.2258

07.04

3.3689 05.04

3.0

3.2941

3.3783 04.04

08.04

07.04

06.04

05.04

04.04

01.04

0.08

06.04

3.4001 01.04

0.0986

0.0979

0.0992

0.1001

0.1002

PLN-100JPY

3.5

3.0097

0.10

08.04

3.0349

0.1005

PLN-RUB

0.12

07.04

3.0497 06.04

3.0767 05.04

04.04

3.0871 01.04

4.5515

4.5096 08.04

3.0

3.0711

PLN-CHF

3.2

07.04

4.5533 06.04

4.6101 05.04

04.04

4.5625 01.04

2.7863

2.7489 08.04

4

4.5816

PLN-GBP

5

07.04

2.7986 06.04

2.8388 05.04

2.8395

2.8455 2.5

01.04

3.9594 08.04

3.9823 07.04

3.9989 06.04

4.0253 05.04

4.0325 04.04

01.04

4.0312

4

3

PLN-USD

3.0

04.04

PLN-EUR

5

LISTED FIRMS

APRIL 11-17, 2011

Debuts

COURTESY OF MA¸GORZATA PSTRAG/WSE

Open Finance IPO ‘successful’

Open Finance president Krzysztof Spyra at the WSE

The financial intermediary wants to use its takings for M&A deals Open Finance, the largest financial intermediary in Poland, made its debut on the Warsaw Stock Exchange last Tuesday, earning some z∏.480 million.

The company’s share price was set at z∏.18, but it saw a 6.1

percent increase, to z∏.19.1, after the start of trading. It closed the first day at z∏.18.41.

Around 24.7 million shares were listed, over 80 percent of which belonged to Getin Noble Bank, a lender controlled by one of Poland’s richest men, Leszek Czarnecki.

“The IPO was quite successful. I wouldn’t be too bothered about the share

price at the end of the first day of trading,” said Jan Rekowski, director of IPO department at brokerage firm DM BZ WBK. “It’s normal that retail investors buy shares on the first day only to sell them that same day,” said Mr Rekowski, adding that Open Finance had raised a lot of cash from the debut.

The firm plans to use the funds to diversify its revenue streams, acquiring insurance firms and investment funds. It also plans to either take over or create a brokerage. Open Finance is currently awaiting approval from the Financial Supervision Authority to allow it to complete a takeover of insurer Link4.

“We have decided to follow the lead of successful models in Western Europe and expand our activities into new business sectors,” Krzysztof Spyra, president of Open Finance, said in a statement.

Last year Open Finance earned a net profit of z∏.72.3 million on revenues of z∏.320 million, up from z∏.65.1 million and z∏.267 million in 2009, respectively. Its stock closed last Friday at z∏.18.90, up 2.66 percent on the week.

Remi Adekoya

Banks

PKO BP looks to start fresh Its new logo and ad campaign are apparently bringing in new clients Poland’s largest bank, PKO BP, is getting a makeover.

With a new marketing campaign and newish logo, it hopes to revitalize its image and draw in new clients.

According to its strategy, the bank will replace external advertising materials for its 1,200 branches and around 1,900 smaller outlets, as well as adjust its marketing materials.

It has updated its iconic coinbank logo, designed in 1967, although the changes are largely cosmetic. And it has hired television personality Szymon Majewski to serve as the face of its new advertisement campaign.

All of this, PKO BP says,

The old ...

was spurred by opinion surveys which indicated that its image “did not correspond to its market position or very good financial results.” The bank has something of a reputation as an “older person’s bank,” and is making a serious effort to woo younger clients, with special offers for students and under-30s.

The total cost of the revitalization strategy hasn’t been revealed, but various media sources have suggested Majewski’s two-year contract is worth z∏.3.3 million and that updating the décor of its branches and outlets alone will cost the bank up to z∏.600 million. The first stage of the campaign is expected to be completed by the end of the year.

PKO BP is already claiming success with its new ads.

According to the bank’s data,

in the first three weeks of Mr Majewski’s campaign, new savings accounts grew by around 25 percent y/y.

According to Maciej Baraƒski, an analyst from Dom Maklerski BZ WBK, within the context of the Polish banking market, PKO BP’s new direction is a defensive move rather than the first volley of a price war. He believes it will be effective and expects it to help the bank attract new clients.

The news out of PKO BP wasn’t all sunny last week, however. Speaking at a press event concerning its new image, bank president Zbigniew Jagie∏∏o admitted that the cost/income ratio will be up to 45 percent this year.

A representative of PKO BP confirmed that figure, but refused to discuss it further.

... and the new

Katarzyna Piasecka

www.wbj.pl

7

WSE top for IPOs in first quarter The Q1 breakdown Structure of the European IPO market by value and number of debuts, Q1 2011

Value 4%

4%

Number

2% 4%

5%

Deutsche Börse

8%

4%

Oslo

6%

8%

Borsa Italiana Euronext

8% 47%

16% 61%

London Warsaw

23%

Luxembourg Others Source: PricewaterhouseCoopers

The Warsaw Stock Exchange saw the highest number of initial public offerings of any European bourse during the first quarter of this year – 45.

“Despite an unfavorable situation on European capital markets, the first quarter was successful for the Warsaw exchange. The large number of debuts was a positive surprise, especially since the first quarter is historically the least active period for IPOs,” Tomasz Konieczny, a partner in PricewaterhouseCoopers’ capital markets team, commented in his firm’s latest “IPO Watch Europe” report.

The WSE’s Q1 success was due to a whopping 38 listings on its alternative market,

NewConnect. The London Stock Exchange’s AIM market saw the next highest number of IPOs among secondary markets, with just nine.

In terms of main floor debuts, the WSE was second in Europe with seven, compared to the LSE’s 13.

Poland’s exchange accounted for 47 percent of all European listings in Q1, according to PwC’s research. But in terms of value, it accounted for just four percent of the total, while the LSE’s debuts were responsible for a robust 61 percent.

United Kingdom-based investment vehicle Justice Holdings was the largest debut of Q1. Its €1.06 billion IPO was

held on the LSE. Meanwhile, TMS Brokers’ €21.4 million debut on NewConnect was the biggest seen in Warsaw last quarter.

The growth of the Warsaw Stock Exchange is expected to continue this year.

“We’re expecting a few big IPOs on the WSE’s main market in 2011 – and Jastrz´bska Spó∏ka W´glowa’s public offer is one of those planned for the second quarter. Thanks to such offers, Warsaw should strengthen its leading position in the Central and Eastern European region,” Jacek Socha, vice president for PwC in Poland, said in the report.

EBB

8

INTERVIEW

www.wbj.pl

APRIL 11-17, 2011

Polish-Chinese relations

Getting oriented with Poland Sun Yuxi, Ambassador to Poland for the People’s Republic of China, talks trade and politics with Warsaw Business Journal Ewa Boniecka: One of China’s biggest construction companies, COVEC, is building part of the A2 highway in Poland, the first project to be carried out by a Chinese consortium in an EU country. What’s your take on the venture?

Sun Yuxi: Covec (China Overseas Engineering Group) has engaged in a lot of big projects in developing countries, yet this is the first time it is doing so in Europe. It is a highly experienced consortium including some other Chinese companies and it won the construction contract to build a relatively small 50 km of the A2 highway in Poland.

Covec is a company and my embassy is not involved in the contract, but is obviously supporting them policy-wise. But business is business and Covec itself is overcoming some earlier difficulties in conducting work. ... It took some time to

learn how to cooperate, due to certain differences in management styles, language problems and cultural differences between Chinese and Polish workers.

Yet Covec is now covering its earlier losses and cooperation is developing very well. So I think that this Chinese company’s direct involvement in developing Poland’s infrastructure will be successful and could open the way to other such ventures in the future.

How do you view the overall development of Polish-Chinese economic relations ?

Polish-Chinese economic relations are developing very well and offer promising prospects.

In 2010, the volume of mutual trade was $11 billion. Chinese imports from Poland increased by 13 percent and Chinese exports to Poland grew by 26 percent. So there is a big gap, and we are still trying to narrow it. Now the most important task ahead of us is to make our mutual trade more balanced in favor of the Polish side.

I consider this an urgent goal, so I organize Polish business trips to China to show the

potential of our huge market.

We are already buying copper products from Poland, we might buy more agricultural products. But I think that Polish exports to China should include something more sophisticated. For example, Poland produces very good helicopters, and these could be sold to China.

We want to expand Chinese investment in Poland,

stations and in ventures dealing with the development of renewable energy.

China is now the world’s second-largest economy after the United States and before Japan. How do you see its impact on the global economy?

China’s economy is developing very quickly: in 2010 GDP growth reached 10 percent; in

“We now have a fully open market economy, so there are good conditions to invest in our country” which in 2010 reached over $200 million. The Polish government has privatization plans, and we are interested in those projects and our businesspeople do research in some of these areas.

Secondly, Chinese companies are interested in direct cooperation in building Polish expressways, railways, power

2009 it was 9.7 percent. Yet Chinese GDP has grown steadily over the last 30 years at around nine percent, so the road to our present economic position was not achieved overnight.

Now, due to the current, fast rate of its economic growth, China is making a valid contribution to the global

economy. Especially when there are international financial crises, our high economic performance helps to generate some growth in various areas of the global economy.

It is time for us to think about how to speed up the process of integrating the Chinese economy into the world economy, and we are ready to participate in all efforts to help the global economy perform better. China is active in such gatherings as the G20 and G8, we are discussing global finance with the World Bank, the International Monetary Fund and other global financial institutions.

Yet we believe that the present global economic order is not ideal. It was created 5060 years ago and is not responsive to the emerging challenges. The global economic situation has changed and we think that we need some reconstruction, at least some reforms, in the world economic order. And China is talking about this with some other global economic players.

The huge trade imbalance that you have with many

countries around the world, and the exacerbation of this due to your government’s decision to keep the yuan artificially low, has raised much concern in the US and among other large economies. How do you view this issue?

Well, competition in business occurs all over the world, and we are discussing some issues you have mentioned with US and other countries. We are concerned about the situation when we export more and import less, but nowadays lots of the sectors of Chinese manufacturing are joint ventures with foreign firms and their exports increase these statistics.

Yet we see our lack of trade balance with other countries as a problem and during the two or three years of the financial crisis we have sent many trade delegations to the US and Europe to make arrangements to buy more and sell less.

So the figures of those last years show that while our export has increased by 31.3 percent, import to China has increased by much more, by 38.7 percent. The new trend is clear. We now have a fully open market economy, so there are

Warsaw Business Journal Group and the Polish Chamber of Commerce, under the patronage of the Economy Ministry, have undertaken a new initiative called the Polish Export Promotion Program, aimed at promoting Polish exporters and their products abroad. Through this project we will shine a spotlight on Poland's export market, as well as the companies and products that it comprises, and draw attention to their achievements.

The project will include: • Made in Poland – A guide to Polish export • Mister and Junior of Exports, a competition to award Poland’s best exporting companies and export products – those which distinguish themselves by a high level of quality and innovation • A gala, on June 14th 2011, at which the awards will be given out

To get more information about the project, please contact Sales Director Agnieszka Brejwo at abrejwo@wbj.pl

INTERVIEW

COURTESY OF THE CHINESE EMBASSY IN WARSAW

APRIL 11-17, 2011

Ambassador Sun Yuxi wants to increase Chinese tourism to Poland good conditions to invest in our country and to export more products to China.

And how are you attracting investments and exporters?

We are encouraging such developments by talking with governments, business organizations and exporters in various countries. In our internal economic policy, we are now concentrating on two main goals. First, we are making a major effort to reduce the great developmental disparities between various parts of the country and to attract more business to poorer areas.

Second, over the next five years we want to develop cleaner energy, reduce the present level of energy consumption and make our whole economic development more environmental friendly.

So we need to import new technologies and to buy more sophisticated products from abroad. This situation offers excellent an opportunity for our economic partners to increase their export to China and reduce the trade deficits which they have in their relations with us.

How are China’s relations with the European Union?

China and the European Union established a comprehensive strategic partnership in 2003 and since then we have built close political and economic relations with the EU. We invest a lot in the EU and we want to invest more. We have investments in all areas, and we are now investing also

in some EU debt obligations, state bonds and treasury bonds in Greece, Spain and Ireland.

This is a purely economic, apolitical activity.

Yet economic might has political consequences, so how is your economic might influencing your foreign policy? There are some opinions in the West that China is deliberately playing down its political role in the world – what is your view?

Our political purpose is to improve the lives our more than one billion people. So we need to maintain peace and stability inside and outside China. Therefore our foreign policy and our political activities in the world are mainly concerned with maintaining peace and stability.

So when questions arise about the situation in Iran, the Korean Peninsula, Afghanistan and some of the world’s other hot spots, we want to have the political means to deal with those problems. ... We are willing to cooperate with the US, Russia and other countries to find political measures to resolve difficult global problems.

And contrary to the Western opinions you have mentioned, we are not playing down China’s political role in the world. We are not using our “economic might,” as you call it, to play our role. We are fully aware that we are still a developing country in which – according to UN statistics – 150 million people live in poverty. That means that 12 percent of our population is

still living in poverty and that Chinese economic development is very much unbalanced.

So others may have all kinds of opinions about our role, but I strongly advise anyone who wants to know and understand China to go there and see how the people live and how they look at the world.

And what’s your take on the current state of Chinese-Polish political and cultural relations?

China and Poland have close political relations and in 2004 during the visit of our president in Poland an agreement on friendly and cooperative partnership was signed. Cultural ties are also strong: many Chinese troupes perform in Poland and during the 200th anniversary of Chopin’s birth there were a lot of Polish cultural events in China.

We have opened four Confucius Institutes in Polish universities where the Chinese language and culture are thought and in China two universities have Polish language departments. One of them is in my home town of Harbin.

What I regret is that there is such a small tourist exchange between our countries. While 60 million Chinese visit other countries around the world every year, only 20,000 come to Poland. I have the ambition to increase the level of our mutual tourism, I encourage cooperation between our travels offices and I believe that our mutual tourism will grow in the next few years. ●

www.wbj.pl

9

10

BUSINESS ENVIRONMENT

www.wbj.pl

Interest rates

Poland’s Q1 GDP growth at 4%

RPP hikes rates again

Gareth Price

Rising tide Consumer price inflation for 2010 and 2011, in y/y percentage change 4.00

Quoting anonymous sources, Reuters reported last week that estimates made by the Polish Central Statistical Office (GUS) suggest that Poland’s GDP grew by about four percent in Q1.

That figure is in line with most expectations, though bank BZ WBK noted that its forecast was slightly higher, at 4.2 percent. GUS is expected to publish the official data on May 31.

Polish consumer confidence drops The Consumer Confidence Index (CCI), which shows the degree of optimism that consumers feel about the overall state of the economy, dropped by 10 points to 76.2 in March, marking the largest decline in the CCI in two years.

Observers attributed the drop to the turmoil in North Africa and the Middle East,

the earthquake in Japan and to fears concerning the government’s plan to transfer some OFE (private pension) funds to the state-owned social security institution, ZUS. The latter point has reportedly upset retirees, and, at the same time, has made consumers more aware of the poor condition of the state’s GP finances.

Government approves 2012 budget guidelines

3.25

2.50

1.75

1 Feb 1 20 11

0

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20

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01 c2

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01

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t2

Oc

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Poland’s rate-setting Monetary Policy Council (RPP) decided to raise the country’s main interest rate for the second time this year to help combat rising inflation. The decision, made last week, was in line with market expectations.

The RPP hiked the headline interest rate by 0.25 percentage points to four percent.

In explaining its decision, the body cited the relatively robust expansion of the economy and recent above-target inflation rate figures. It added that by raising rates it was continuing the monetary policy tightening cycle.

“Data on the Polish economy signal that in the first quarter of 2011 the annual growth rate of GDP could be close to the [4.4 percent figure which was] observed in the previous quarter,” the report reads.

The RPP also pointed out that February CPI inflation, which stood at 3.6 percent, was above the National Bank of Poland’s inflation target of 2.5 percent. Rising food and fuel prices have caused inflation to rise in economies around the world, giving rate-setting bod-

still expects three more hikes this year and more in 2012.

“Interest rates are still too low given the economic recovery and the normal growth rates of around four percent expected in both 2011 and 2012. Also core inflation, which has started to trend upwards and will most likely continue rising in the coming months, justifies higher rates,” the bank’s researchers wrote.

In addition to the reference rate hike, the RPP hiked the lombard rate to 5.50 percent on an annual basis, the deposit rate to 2.5 percent and the rediscount rate to 4.25 percent.

ies like the RPP plenty of food for thought.

“To reduce the risk of inflation running above the inflation target in the medium term the Council decided to raise the NBP interest rates,” the RPP explained. “Core inflation increased further, while inflation expectations rose markedly,” it added.

Although many analysts expect the RPP to continue raising rates this year and next, Marek Belka, the head of the NBP, has said that markets are pricing in too much tightening for this year compared with his own expectations.

Nevertheless, Nordea Bank

Feb

Continued fears about rising inflation helped prompt the decision

APRIL 11-17, 2011

Source: National Bank of Poland

The government approved its main guidelines for the 2012 budget. It expects the economy to expand by four percent, annual inflation to reach 2.8 percent and unemployment to hit 10 percent by year-end.

Analysts from bank PKO

BP described the guidelines as realistic. According to the bank’s base scenario, GDP growth will pass the four percent y/y mark, with a stronger increase in employment in the national economy and a lower AK level of unemployment.

Last week Q4 2010 GDP growth for the euro zone was published and was in line with expectations at 2 percent yearon-year and 0.3 percent quarter-on-quarter.

AK

Privatization revenues could top z∏.10 billion in 2012 The Polish government could earn more than z∏.10 billion from privatization revenues in 2012, Treasury Minister Aleksander Grad said last week.

“Preliminarily, we are expecting some z∏.10 billion ...

After more careful analysis, the value could rise,” he told Radio PiN. Poland aims to make z∏.15 billion from the sale of stateheld assets this year. The sale of miner Jastrz´bska Spó∏ka W´glowa is expected to provide a seizable portion of this.

According to Mr Grad, the Treasury expects to earn between z∏.3.3 billion and “more than z∏.4 billion” in dividends paid out from stateowned firms’ 2010 net profits.

GP

OPINION

APRIL 11-17, 2011

www.wbj.pl

11

Marijuana makes a comeback Joanna Wóycicka

I

’m probably going to take some heat for this article, so let me start with this statement: I have never used narcotics and have never even smoked a joint. I have no emotional or historical attachment to marijuana, yet I feel strongly that Poland should legalize it and use the opportunity to reduce VAT.

“If somebody is looking for marijuana in Poland, they won’t have too much trouble finding it” Why discuss this now? Well, two weeks ago Poland’s parliament passed an amendment to the law on combating drug addiction. It mitigates the absurd provision that criminalizes the possession of even small quantities of narcotics for personal use.

Parenting from parliament Opposition party Law and Justice (PiS) railed against this change, claiming that it would lead to the legalization of marijuana, one of the standard demands of the left and liberals.

“Speaking as a mother, I ask you to withdraw this law which is harmful for our children,” said an impassioned Beata Kempa, a PiS MP. I too am a mother, but I would not make a similar appeal. It’s no secret that if somebody is looking for marijuana in Poland, they won’t have too much trouble finding it.

If Ms Kempa were to simply ask her children, then she would probably find out who sells grass in the neighborhood. This is generally an open secret among young people. For some kids it is easier to buy pot than alcohol or cigarettes. In a shop, you have to prove that you are over 18.

Ms Kempa should also realize that if a kid wants to try it, he or she will do so and no prohibitions passed in the Sejm will make a difference.

On the other hand, if a kid is not interested, even a package of joints sold in the local supermarket won’t change his or her mind.

Raising smart kids involves talking to them about drugs and teaching them about the dangers. Good par-

enting starts in the home, not in parliament.

Cure for the crisis?

If we approach the matter rationally, rather than emotionally, it’s clear that the state would benefit from the legalization of marijuana.

First of all, it could, as is the case in the Netherlands, hold a monopoly on the cultivation of cannabis plants and earn strong profits from its sale.

And this needn’t be a marijuanadependent endeavor – experts note that hemp can be used to produce

high quality oil and ecological paper.

Advocates for the legalization of pot have calculated that the money generated from its cultivation and sale – money flowing into the state’s coffers – would allow VAT to be reduced by at least one percentage point. At the same time the budget would be strengthened by taxes from those dealing marijuana, an enterprise which is currently consigned to the black market.

Marijuana advocates add that it is considered healthier than alcohol or cigarettes, has fewer side effects and does not lead to physical dependency.

They also argue that decriminalizing it would help to curb the trade in hard drugs which truly threaten society.

These points are frequently debated, with no small degree of vitriol, but an open debate on the matter in Poland would be better than nothing.

An election matter Rational, economics-based arguments for the legalization of pot are all well and good, but let’s be honest – the government will never entertain the notion in an election year. At the same time, however, parties on both ends of the ideological spectrum are ready to make the issue an election topic.

The left is not building its election campaign on slogans of social solidarity, but rather on “moral matters” – the legalization of abortion, gay marriage and soft drugs. And it will attack the ruling Civic Platform (PO) for not taking any real stance on these matters.

For its part, the Catholic ultra right will propagate diametrically opposed slogans and will also attack the PO for its lack of a stance in “issues fundamental to the future of the nation.”

And where does that leave PO? Its politicians will perform impressive acts of intellectual acrobatics in order to remain aloof from ideological arguments and to run a safe, centrist campaign. In other words, expect to see the party blowing plenty of smoke this year. ● Joanna Wóycicka is the former head of the foreign sections of the ˚ycie Warszawy and ˚ycie newspapers and the former head of the foreign department at the Polish Press Agency (PAP). j.woycicka@hotmail.com

Hungary’s presidency of the EU Council – Dr David Görömbölyi a halftime report

At

halftime you can usually lean back, take a sip of beer and watch the experts analyze the action from the first half. It is worth summing up what has already happened and what can you expect after the break.

The calendar shows that three months have already passed in 2011, a year of Central European EU presidencies – halftime for Budapest as it plays on Europe’s most important pitch. Let us have a look at the score so far.

A rough start Hungary took the field during an exceptionally challenging period for the European Union. Having just survived the financial crisis, the EU has come to understand that there still are some deeply rooted economic concerns and macroeconomic anomalies, and that an increasing number of member states are teetering on the brink of bankruptcy.

The Hungarian presidency’s prepa-

rations to tackle these challenges in the European Council were finalized by January 1, 2011, but no one expected that the first weeks would be overshadowed by a full-scale attack by Europe’s political left wing regarding a non-EU matter, an amendment to Hungary’s media law. Discussion of the topic was ubiquitous, keeping everyone from the Hungarian government to the European Commission occupied, thereby actually jeopardizing the functioning of the presidency.

It took a bit of time for even the analysts to be able to distinguish between the quality of the presidency and internal political debates, but as the Financial Times put it, “The Hungarians have made quite a bit of progress on some of the thorniest EU issues … it’s worth considering that they may be proving more quietly competent than many may had [sic] expected.”

highlight the economic issues.

The creation of a Common Energy Policy has started and the Cohesion Policy has been strengthened, and then there’s work on the first European Semester and the creation of the Unitary European Patent.

Most importantly, the presidency has negotiated the adoption of a reform package for better economic governance. Also known as the “Six Pack,” this set of reforms has been labeled “a silent revolution” by European Commission President José Manuel Barroso.

János Martonyi, Hungary’s minister for foreign affairs, has claimed that the presidency will only be successful if it makes Europe stronger. And this is exactly what the aforementioned elements do.

Into the second half Scoring points The results speak for themselves. The list is long even if we only want to

Unlike in sports, halftime for the presidency of the EU Council does not actually involve a break for the

team. The machinery of European institutions keeps on working non-stop, and so does the presidency.

The next three months will bring interesting battles over interesting issues, and it is certainly worth following (with one eye at least), as, starting July 1, Warsaw will be taking over from Budapest. Anything happening now on the European level will have an effect on Poland’s circumstances and aspirations.

The cooperation of the two presidencies has been outstanding. The two prime ministers, Donald Tusk and Viktor Orbán, have agreed that it is essential to put on a well-coordinated, convincing show in 2011. If Central Europe can prove this year that it is a worthy flag-bearer for the EU, then its voice will also be taken more seriously in the coming years.

For Warsaw, the most intense weeks and months of preparations are still to come. In contrast, the current presidency can play with confidence now, knowing that the toughest battles

have been fought and won, and that a solid performance will strengthen Budapest’s status in Brussels.

So far we have seen little selfish individualism and a great deal of team play from the Hungarian side. You can expect a similar picture over the next

“The toughest battles have been fought and won” few months, but remember that the realities of European politics have taught us that a hard tackle can come at any time, from any direction. Let’s just hope the second half is as satisfying as the first. ● Dr David Görömbölyi is a foreign policy analyst, lecturer and the Hungarian Ministry for Foreign Affairs’ EU Presidency liaison in Warsaw

Unless otherwise noted, the opinions here are those of Warsaw Business Journal. Readers’ comments, opinions and letters should be sent to editor@wbj.pl. Please include a name and contact information and clearly indicate if they are to be considered for publication.

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COVER STORY

www.wbj.pl

APRIL 11-17, 2011

Food prices

Hard to swallow The cost of eating is on the rise in Poland, but for how long?

A big issue Food prices are certainly going to be a big issue for Poland’s government in the run up to the autumn elections, according to Sergiusz Trzeciak, a public affairs expert and former chairman of the Sobieski Institute. “The question is whether they are going to be the big issue,” he said.

Mr Trzeciak accepted that PiS was trying to earn political capital on the rising cost of living in Poland, but said that this was only to be expected. “The role of the opposition is sometimes to overexaggerate the issues; they are using this as a

Fuel for price hikes?

Carmel Cahill, a trade and agriculture expert with the OECD, commented that the situation can ultimately be reduced to the most basic of all economic drivers – supply and demand. On the demand side, one of the factors Ms Cahill cited was fuel.

“In the past few years we have seen a significant proportion of sugar cane and oil seeds going to the production of biofuel. That has created a big increase in demand, but supply is not quite keeping up,” she noted.

Pawe∏ Ro˝yƒski, an editorialist for Dziennik – Gazeta Prawna, wrote last week that prices for commodities such as rapeseed oil and sugar have almost doubled in the past year. He also noted that the production of biofuel production has contributed to this rise.

Moreover, in Mr Ro˝yƒski’s opinion, policies regarding biofuels are just the “tip of the iceberg of ecological absurdity.” He cites the effect of the EU’s alternative energy requirements on the price of wood, which in turn affects the costs of furniture, paper and packaging. And the latter in particular has an impact on prices of packaged foods.

SHUTTERSTOCK

When former Prime Minister Jaros∏aw Kaczyƒski exited a corner shop in Warsaw last month and complained to handily placed journalists that food prices were much higher than when he was in government, it was clearly a PR stunt.

This is an election year, after all, and Mr Kaczyƒski wants his Law and Justice (PiS) to turf out the ruling Civic Platform (PO) party this coming autumn.

But his issue was well-chosen – rising food prices affect every voter in the country.

Nationally, the big issue has been sugar, which has risen by 40 percent over the last year.

Regionally, there are a number of more specific complaints. In Kraków, for example, producers of obwarzanek – bagel-like bread rings which enjoy protected status in the EU – have raised per-unit prices from around z∏.1 to z∏.1.5 over the last 12 months.

They blame the increase on the rising cost of wheat.

It’s not just Poland’s problem, of course. The Food and Agriculture Organization of the United Nations Price Index averaged 237 points in February, its highest level since the index launched in 1990. March saw a little relief, as the index slipped to 229.8, but the threat of further growth remains.

Anthony Casey

Sugar prices have risen by 40 percent in Poland over the past year Supply situation political tool, but that’s understandable.”

Bohdan Wy˝nikiewicz, vice president of the Gdaƒsk Institute of Market Economics, agreed to a point, but said that the opposition’s case had been dominated by “populist and insubstantive” arguments.

“This is undoubtedly a problem for the government and [Prime Minister] Tusk.

Kaczyƒski’s PiS will benefit politically from the situation, but not enough to win the election,” Mr Wy˝nikiewicz commented.

Nevertheless, Mr Trzeciak pointed out, it is not the government’s role to regulate food prices. It could mitigate price hikes by increasing benefits and implementing tax cuts, he conceded. In fact PiS has

“I can’t see the current situation being any different under any other government” already called for a one-off payment to those on benefits, to help ease the burden. But PO MP Jaros∏aw Gowin has ruled this out.

“Bearing in mind the [economic] situation, I don’t think that they are going to do that.

In terms of compensating for the rise in food prices, it would be a huge expense to raise pensions, and the government is doing everything it can to avoid additional expenditures,” said Mr Trzeciak.

As Poland is a free market economy, politicians can do little else to bring down the

price of food. And neither should they, said Michael Dembinski, head of policy at the British Polish Chamber of Commerce. He argued that the market should be allowed to find its own equilibrium, and that hasty fixes often prove counterproductive.

Mr Dembinski added, “I can’t see the current situation being any different under any other government.”

Dr Andrzej Jarzynowski of the Centre for Social and Economic Research (CASE) went further, saying the food market in Poland was an

example of “perfect competition.”

“Intervention will worsen the final results,” he stated flatly. “Payments to farmers will support the least effective producers, payments to lowincome people will increase inflation.”

The BPCC is establishing a Food Policy Group, which will allow growers, producers, retailers, distributors and other businesses from the food sector to meet regularly and discuss such issues. However, Mr Wy˝nikiewicz at the Gdaƒsk Institute noted that, like the government, entrepreneurs had “limited opportunities” to influence food prices. The price of bread and sugar is reliant on wider global issues, he noted.

On the supply side, Carmen Cahill of the OECD noted that weather conditions and natural disasters have had a huge effect on food production. Fires in Russia last year made a serious dent in the wheat harvest. The Russian government reacted by limiting wheat exports, investors panicked, and the price of bread went up. Storms affecting farms in Canada exacerbated the problem.

Ms Cahill compared this chain reaction to the sudden increase in the price of rice in 2007-2008, when poor harvests also prompted a panic on the market, at a time when food prices overall were reaching unprecedented highs.

But, she added, although rice is a staple food for much of the world’s population, the

Investing in Poland 2011 is available now!

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COVER STORY

APRIL 11-17, 2011

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13

Legal Eye

Price controls?

SHUTTERSTOCK

Paul Fogo is a senior attorney with Miller, Canfield, W. Babicki, A. Chelchowski & Partners. fogo@pl.millercanfield.com

Grain prices shot up after last year’s fires in Russia wiped out crops effect was not felt as strongly in the developed world. This time around price rises are more noticeable because they are spread more evenly across the board – with key “Western” consumables such as meat, sugar, cereal, oil seed and dairy produce all becoming more expensive.

The added burden is being felt most by the poorest, said Ms Cahill, because the proportion of their household income that they spend on food goes up. According to the OECD, the average household in Poland spends 24 percent of total income on food. But for those living on pensions or benefits, this proportion can be as high as 70 percent.

According to Bohdan Wy˝nikiewicz of the Gdaƒsk Institute, the situation in Poland isn’t yet dire as current price increases “fall within the range of social tolerance.”

“The decrease in the standard of living of the poorest will not be significant, though certainly it will be noticed. It will lead to a reduction in food waste and a shift in demand for cheaper food,” he suggested.

No relief in sight Alternative uses for traditional food commodities, EU policy, weather and natural disasters … those are just a few of the factors affecting prices in supermarkets. The big question is, how long will prices continue to rise?

Mr Dembinski of the BPCC was frank in his response: “We just don’t know. Food prices are, like all commodities, subject to the vagaries of the market. Speculators speculate on sugar, grain, rice and cocoa just as they do on the dollar or the z∏oty.”

He said it was quite likely that the pace of rises would

slow, but that the general trend would be upward.

Carmel Cahill was reluctant to make a hard and fast prediction, but, she said, “Prices should come down from the peak they are at now if this year’s harvests are normal and we don’t get any weather shocks or other surprises. But they are likely to remain higher in the coming years than they have been, compared to the previous decade.”

Judging by past experience, Bohdan Wy˝nikiewicz said, food price rises will slow, stabilize and then decline before seeing a smaller increase in the second half of 2011, punctuated by seasonal declines.

In other words, there won’t be much relief for consumers, at least in the short term. But, according to Mr Dembinski, the fragmented food retail sector is keeping some of the pressure off of households by cut-

ting margins in order to stay competitive.

It’s perhaps a tougher situation for small and mediumsized enterprises in the food production sector, as they’re being squeezed from both sides. The BPCC’s British Polish Food Forum in March heard complaints from some SMEs that they’re being forced to focus on volume or find a niche in order to stay in business.

And although one high-profile consumer has squarely laid the blame on the government, experts agree that a top-down approach would yield little result. High food prices will continue to provide ammunition for political squabbles, but the matter is not one of governance, whether for good or ill.

Will Polish consumers feel that way come autumn? That, like so much else, may depend on the weather. ●

A growing problem?

Food for thought

FAO Food Price Index readings, 2000 to March 2011

OECD Food Consumer Price Index in February, y/y change

250

15 12

200

9 150 6 OECD avg. 3.0 3

100

20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 1 Jan 0 20 1 Feb 1 20 1 Ma 1 r2 01 1

01

02

00

20

20

20

Source: the Food and Agriculture Organization of the United Nations

Control over prices Contrary to what some media outlets reported, former Prime Minister Kaczyƒski did not actually call for the imposition of government price controls. And good that he did not. Food prices are set by the market.

The Polish government does not possess the legal means to impose price controls on consumer goods, at least not directly.

Indirectly, the Polish government could reduce the amount of VAT charged on food items in an effort to reduce the price of food, as well as reduce the amount of VAT charged on fuel used in the manufacturing and delivery process. But so far the government has not announced any plan to reduce taxes.

0

EU action

-3

At the EU level it is possible to influence the price of certain food staples by increasing import or pro-

50 0

Consumer price inflation of food items rose in Poland by 5.3 percent y/y in February, according to the OECD. That was the eighth-highest figure in the 34-member organization.

And we can feel it in Poland. With each passing month, my family’s grocery bill seems to grow, despite the fact that our eating habits have not changed and we do the majority of our shopping at the same hypermarket.

Apparently we are not alone. Last month Law and Justice party leader Jaros∏aw Kaczyƒski held a press conference at a local store to complain about rising food prices. According to Mr Kaczyƒski, the government should take action to counteract the rise in food prices.

Great! I’m all for lowering the grocery bill. But how, legally speaking, does he expect to do this?

-6

Estonia

Hungary

UK

Poland

Germany

Spain

France Switzerland Source: OECD

duction quotas.

For instance, the EU could increase the amount of sugar imported into the bloc, thereby increasing supply. Similarly, the EU could increase the quotas allotted to dairy farmers to increase the supply of milk.

But this is different from dictating the price of sugar or milk. And moreover, such action can only be taken at the EU level. To date, however, the EU has not taken such action.

Price wars What if a retailer decides to take advantage of the recent uptick in food prices and advertises a particular food item, such as sugar for example, below cost in an effort to gain market share? Is this legal?

The answer is, of course, no. But this doesn’t mean retailers don’t try. Every now and then my wife comes home proud that she purchased a bag of sugar at half price. Either the original price included a huge profit margin or the retailer is in fact selling at below the cost of production.

If in fact the sugar were sold at below cost, such a sale would be in contravention of Poland’s Act on Unfair Competition. If it were to occur, a competing grocery market would be entitled to seek an injunction against the continued sale of sugar at below cost by a competitor, as well as to seek compensation for lost profits that the retailer could evidence as a result of such sale below cost. Please note, however, that the government itself is not empowered to impose a monetary fine on the offending retailer.

The restriction against selling a product below the cost of production, however, does not apply in the case of a store’s liquidation, lapse of a product’s expiration date or production. ●

14

www.wbj.pl

MADE IN POLAND LAUNCH

APRIL 11-17, 2011

Alice Trudelle

Exports

Poland works to build its brand

PIOTR GAMDZYK/WBJ

Marek K∏oczko, secretary general of the Polish Chamber of Commerce

Guests packed the conference center in Warsaw’s Focus building

Grzegorz Gawin, head of the Department of Economic Diplomacy at the Foreign Ministry

Warsaw Business Journal would like to thank our partners in organizing the “Made in Poland” conference, including the Polish Chamber of Commerce, KPMG, Skrivanek, the Focus building, Event Room and Food Zone

PIOTR GAMDZYK/WBJ

One point on which both officials and exporters agreed was the need for a unified promotional strategy of the country and its industries.

But the best publicity for Poland might not lie with government action or inaction. Katarzyna Pàk, chief of communications in Poland for Swedish telecoms firm Ericsson, said that in her company, Poles were viewed as effective, responsible and capable of thinking outside of the box.

“Ultimately, our best ambassadors are ourselves,” she concluded. ●

Ewa Sw´drowska-Dziankowska, deputy director of the Economy Ministry’s Department of Aid Instruments

PIOTR GAMDZYK/WBJ

with rules that don’t exist anywhere else,” he added.

Hubert Kubik, from the Polish Spirits Industry, said that the fact that Swedish vodka was now better known than Polish vodka, despite Poland having a much longer tradition of producing the spirit, was a failure on Poland’s part.

Commenting on the fact that PM Donald Tusk did not bring a business delegation along for his last official visit to India, S∏awomir Smoliƒski, director of the bureau of export for Asia-Pacific at military equipment producer Bumar, said that industries like defense could not compete without government support at the highest level.

“We are wasting an opportunity created by Poland’s reputation for having weathered the global financial crisis remarkably well,” he added.

PIOTR GAMDZYK/WBJ

Products and services “made in Poland” are increasingly associated with quality, at least among those who know them. Therein lies the rub, though – spreading the word is one of the main difficulties facing Polish exporters.

This was the conclusion reached by government officials, Polish exporters and foreign importers at a conference entitled “How to help Poland’s exporters reach their full potential” last week. Organized by the Warsaw Business Journal and the Polish Chamber of Commerce, the conference coincided with the launch of WBJ’s new annual guide to Polish exports titled appropriately, “Made in Poland.”

“Polish export and its potential is really a fantastic story, both in sectors that one might expect, like food production and agriculture, but also in less obvious areas, like arms, pharmaceuticals and even luxury yachts,” said Andrew Kureth, editor-in-chief of Warsaw Business Journal and Made in Poland.

According to Marek K∏oczko, secretary general of the Polish Chamber of Commerce, exports have reached satisfactory levels in terms of their participation in the overall economy, but

in terms of exports per capita, Poland is still among the lowest in the EU. Improving the situation requires a lot of work, participants agreed.

Ewa Sw´drowskaDziankowska, deputy director of the Economy Ministry’s Department of Aid Instruments, assured that simplifying entrepreneurship was one of the biggest priorities of her ministry.

And, in response to the absence of a strong “Polish brand,” the Economy Ministry has decided to promote 15 industries, including amber, yachts and military equipment. Panelists at the conference were divided over the idea, with some arguing that Poland should focus solely on one sector, and others saying that no specific industry should be singled out, but that the focus should rather be on the fact that Poles are worth doing business with.

Support on the diplomatic front, especially for difficult markets like Russia and for sensitive sectors like defense, is also crucial for Polish exporters, admitted Grzegorz Gawin, head of the Department of Economic Diplomacy at the Foreign Ministry.

Despite acknowledging that activity to promote Poland had picked up recently, exporters gave mixed reviews of the government’s performance so far.

“We were the happiest when the government did not interfere,” said Marek Gajowniczek, vice president of Ericpol Telecom. “Poland has a tendency to over-regulate, and we are confronted

PIOTR GAMDZYK/WBJ

The country has excellent products and services to offer, but still needs to get the word out

Katarzyna Pàk, chief of communications for Ericsson in Poland

A second attempt to sell K´pa Mieszczaƒska is underway

Dolcan is getting to work on its first ‘rent-free’ project

16

18

LOKALE IMMOBILIA

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

New Sterlinga tenant Real estate company Hin es has signed a lease agreement for 2,630 sqm of office space at its Sterlinga Business Center (SBC) office project in ¸ódê with the Polish subsidiary of Tate & Lyle PLC, a global provider of ingredients and solutions for the food, beverage and other industries. The deal has been signed for seven years. Tate & Lyle has become the largest tenant in SBC, almost 40% of whose office space has now been leased. SBC offers 13,400 sqm of office space across nine floors. ●

In this issue Platinium’s permit . . . . . . . . . . .15 Nowa Dana in Szczecin . . . . . .15

Platinium Business Park V gets underway GTC is getting to work on building five in the complex, eyeing building six Warsaw Stock Exchange-listed developer Globe Trade Centre (GTC) has obtained a building permit for the fifth building in its Platinium Business Park office complex in Warsaw. Construction on the 11-storey facility, which will provide 11,000 sqm of GLA, is scheduled to launch this month and finish in Q2 2012.

“For years Platinium Business Park has gained recognition from tenants and industry experts. The three existing buildings, as well as a fourth one under construction, have all been nearly 100 percent leased out, which for us is the best proof of its success,” Piotr Kroenke, general manager of GTC, said in a statement.

Platinium Business Park V is

Construction on the building is scheduled to launch this month already 50 percent leased out, with major tenants including K2

The investment is part of JWC’s strategy to diversify into other sectors One of Poland’s largest residential developers, JW Construction (JWC), has obtained a permit to build Nowa Dana, a retail-office project, in Szczecin.

The developer plans to start construction of the facility before the end of H1.

The 22-storey facility in the city center of Szczecin will offer around 34,000 sqm of usable space. The majority will be class-A office space, with around 4,000 sqm of shopping space. Nowa Dana’s top floor will host a restaurant with a panoramic view.

The investment is being built at the site of the former Dana textile factory.

“We currently are in the

Rebuilding momentum?

JWC share price at close of trading day, March 31-April 7

15.00 14.75 14.50

Osiedle Zdrowa expansion . . .17 Galeria Słoneczna opens . . . . .17 Dolcan’s Rudy Rydz . . . . . . . . . .18 Twierdza Kłodzko sale . . . . . . .18

Adam Zdrodowski

JWC bringing retail-office center to Szczecin

Source: WSE

Property-related stocks . . . . . .16

gives us confidence to start, after obtaining a building permit, con-

Mixed-use development

Goodman’s land bank . . . . . . . .16 Kępa Mieszczańska sale . . . . .16

Internet and Starcom. “Successful leasing of the fifth building

struction of the sixth and last building of the complex,” Mr Kroenke said.

Platinium Business Park is located at the intersection of ul.

Domaniewska and ul. Wo∏oska in Warsaw’s Mokotów district.

The latest phase of the complex, for which GTC hopes to obtain LEED certification, has been designed by the Grupa 5 Architekci studio. Warbud is acting as general contractor and LandesBank Berlin provided financing for the project.

GTC has developed projects totaling approximately 800,000 sqm of space to date. In Warsaw, apart from its Platinium investment, the company is now also constructing a third building in the Ok´cie Business Park complex. The structure, which will comprise over 9,100 sqm of GLA, is scheduled for delivery by the end of this year.

14.25 14.00 March 31

April 1

April 4

April 5

April 6

April 7

middle of demolition work on the plot where the investment will be constructed,” said Robert Wójcik, member of the management at JWC. “We are also looking for a potential contractor,” he added.

JWC is listed on the Warsaw Stock Exchange and is active in the Warsaw, ¸ódê, Szczecin and Tri-city markets. Its portfolio of delivered and pipeline projects includes around 25,000 apartments and 350 single-family houses.

JW Construction is also working to diversify its revenue streams. Apart from Nowa Dana, it is working on Jerozolimskie Point, an office investment located in Warsaw.

The building is scheduled for delivery later this year.

Katarzyna Piasecka

COURTESY OF JWC

Mermaid Properties has finished renovation work on the Pa∏ac M∏odziejowskiego historical property in central Warsaw. The company has turned the palace, which is located on Warsaw’s ul. Miodowa, into an office building offering 6,850 sqm of modern office space.

Two-thirds of that area has already been leased by the Ministry of Foreign Affairs. Mermaid bought Pa∏ac M∏odziejowskiego in 2006 from Wydawnictwo Naukowe PWN. Originally, the company planned to furnish luxury apartments at the location but changed its mind due to the global financial crisis.

APRIL 11-17, 2011, LI 16/14

Office development

COURTESY OF ADVANCED PR

Palace renovation finished

•

Nowa Dana will offer approximately 34,000 sqm of usable space

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

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

APRIL 11-17, 2011

Island investment

Developer Echo Investment has started construction on its Galeria Olimpia shopping and entertainment center in Be∏chatów, ¸ódzkie voivodship. Located on ul.

Kolejowa and ul. Armii Krajowej, the expansion project is scheduled for opening in August 2012.

Designed by the MOFO Architekci studio, Galeria Olimpia will comprise a total of 30,500 sqm of GLA housing approximately 100 stores.

LPP in Millenium Hall Four brands of the LPP group will open stores in the Millenium Hall shopping and entertainment center in Rzeszów, Podkarpackie voivodship. Reserved, Cropp, Mohito and House will take up 1,200 sqm, 300 sqm, 220 sqm and 300 sqm of retail space in the mall, respectively.

Millenium Hall is being built by CMP Group and Dekra Construction Management on behalf of MARMA Group subsidiary Develop Investment. ●

AMW tries again with K´pa Mieszczaƒska This time around, it’s splitting the land up The Military Property Agency (AMW) plans to call a tender for land in the northern part of K´pa Mieszczaƒska, an island on the Oder River in central Wroc∏aw. The agency expects to invite initial bids this June.

This will be the AMW’s second attempt to sell the land in recent years. Previously it tried to sell the whole 125,000 sqm plot to a single buyer.

The initial bid price was set at about z∏.370 million, but the agency was forced to lower the level over time. When the last call for bids took place in May 2010, the price was down to z∏.281 million.

Having changed its approach, the AMW has now divided the land into 24 plots ranging from 0.2 to 1.5 ha.

Some of the plots will be sold together.

Crucially, a zoning plan for the area is being worked on and, according to the agency, it should be adopted by June. The city authorities haven’t yet decided what kind of development it will allow on the island, but a representative of Wroc∏aw City Hall confirmed that all options are being considered.

For its part, the AMW has

The AMW has proposed that the island be zoned for high-rises suggested the possibility of office, service, residential or even academic development on the island. It has even proposed that Wroc∏aw zone the area for high-rise construction.

According to Jakub Rosowski of Wroc∏aw’s Regional Urban Development Office, the fact that the land is being split into separate plots will not result in urban entanglement and incoherent urban planning.

“Quite the contrary, it may result in something interesting, breaking the monotony,” he said. Katarzyna Piasecka

Property-related stocks Security

Closing price on April 7

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏.mln)

BUDIMEX

109.10

6.44

84.55

109.10

13.06

25,530,098

2,785.33

CELTIC

20.81

3.79

17.43

60.55

N/A

34,068,252

708.96

DOMDEV

48.24

1.56

38.52

61.00

-7.94

24,560,222

1,191.17

ECHO

5.20

6.12

3.95

5.40

9.70

420,000,000

2,184.00

ELBUDOWA

153.90

-0.06

152.00

188.40

-13.54

4,747,608

730.66

ENERGOPLD

4.10

0.24

3.57

4.33

-5.31

70,972,001

288.86

ERBUD

38.80

-2.07

38.07

61.00

-23.85

12,602,711

488.99

GANT

14.19

0.78

12.98

26.00

-43.69

20,499,953

290.69

GTC

21.50

1.03

19.58

24.98

-12.49

219,372,990

4,716.52

HBPOLSKA

2.40

1.69

2.36

3.90

-31.03

210,558,445

505.34

JWCONSTR

14.50

-2.03

13.50

18.69

-4.61

54,073,280

784.06

LCCORP

1.62

4.52

1.41

1.73

-1.82

447,558,311

725.04

MARVIPOL

8.40

-6.67

8.40

19.90

-55.44

36,923,400

310.16

MIRBUD

4.45

-2.20

2.71

4.75

58.36

75,000,000

333.75

MOSTALWAR

43.00

-5.89

43.00

76.30

-44.01

20,000,000

860.80

MOSTALZAB

2.82

3.68

2.63

4.84

-37.75

149,130,538

420.55

ORCOGROUP

38.40

1.59

19.00

40.00

32.69

14,053,866

541.21

PBG

176.00

-6.38

175.00

252.00

-18.52

14,295,000

2,515.92

PLAZACNTR

4.37

9.25

3.70

6.38

-31.61

292,647,720

1,278.87

POLAQUA

18.22

4.11

16.00

22.50

-3.24

27,500,100

501.05

POLIMEXMS

3.62

2.84

3.33

5.10

-28.17

521,154,076

1,870.94

POLNORD

33.55

8.23

30.50

44.00

-11.64

22,246,431

747.26

RANKPROGR

13.20

10.74

9.59

13.60

N/A

37,145,050

490.31

ROBYG

2.05

-0.49

1.70

2.08

N/A

257,390,000

525.08

RONSON

1.41

-1.40

1.36

2.10

-22.53

272,360,000

384.03

TRAKCJA

3.62

4.02

3.32

4.97

-21.30

160,105,480

581.18

ULMA

88.00

6.67

70.00

88.00

15.11

5,255,632

462.50

UNIBEP

7.40

-4.88

7.30

10.30

-17.13

33,927,184

251.06

WARIMPEX

10.51

4.06

7.64

10.85

27.70

54,000,000

554.04

ZUE

12.79

-3.47

12.79

15.14

N/A

22,000,000

281.38

Goodman increases land bank

COURTESY OF NBS COMMUNICATIONS

Olimpia work starts

COURTESY OF AMW

16

Kraków Airport Logistics Centre has a target lease area of 160,000 sqm Goodman Group has secured a total of 39 hectares of development land in Poland, upon which it plans to build new logistics projects in the country. The plots, which are located near Poznaƒ and Wroc∏aw, total 21 ha and 18 ha and have the potential to host up to 100,000 sqm and 93,000 sqm of warehouse space, respectively.

Goodman has developed and manages over 100,000 sqm of logistics space in

Poland to date, with properties under construction totaling 42,000 sqm.

“We currently hold land sites in Poland with a total area of 212.3 ha on which we can build a minimum of 950,000 sqm of additional warehouse space. Our sites cover all of the key logistics hubs throughout Poland, which positions us very well to meet the needs of all potential customers,” B∏a˝ej Ciesielczak, country manager Good-

man Poland, said in a statement.

Goodman was recently awarded a tender to invest in and develop the 500,000 sqm Pomeranian Logistics Centre project, which is located near the newly completed Deepwater Container Terminal in Gdaƒsk. Another major project is the Kraków Airport Logistics Centre, which has a target lease area of 160,000 sqm.

Adam Zdrodowski

First Best Western in Warsaw Best Western, one of the world’s largest hotel chains, has acquired its first hotel in Warsaw. The three-star Felix facility is located on ul.

Omulewska in the capital’s Praga Po∏udnie district, five kilometers from the new National Stadium. The hotel is owned by real estate company PUHIT. In addition to its 227 rooms, equipped in accordance with Best Western’s international standards, the facility offers conference space, a restaurant and an

After Five club. Over the past few years, the owner has invested over z∏.12 million in renovating and modernizing Felix in order to adapt it to Best Western’s requirements.

Prices per night currently start at z∏.179.

“The opening of the hotel in Warsaw was one of the most important phases of Best Western’s expansion in the Baltic region,” stated Saija Kekkonen, Best Western’s managing director for Finland, the Baltics and Poland. “Especially given the upcoming

Euro 2012 and the increasing importance of Warsaw as the business center of Central Europe,” she underlined.

The Best Western chain was created in 1946. At present, it includes about 4,000 facilities located in 80 countries. The Best Western Hotel Felix in Warsaw is the chain’s eighth facility in Poland. The other seven are located in Bia∏ystok, Bia∏owie˝a, Katowice, Kraków, Osjaków (near ¸ódê), Wroc∏aw and Rzeszów.

Katarzyna Piasecka

APRIL 11-17, 2011

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

New ProLogis tenant

Residential

Robyg’s Osiedle Zdrowa scheme grows The developer is selling 174 apartments in the capital Developer Robyg has launched sales of apartments from the latest phase of its Osiedle Zdrowa residential

project in Warsaw. One hundred and seventy-four units are on offer, sized from 33.6-117 sqm and priced from z∏.6,399 per sqm.

According to the developer, this phase of Osiedle Zdrowa comprises a large number of

to banks’ lending policy and changes in the ‘Family on its Own’ [mortgage-subsidy] program,” Oscar Kazanelson, president of Robyg’s supervisory board, said in a statement.

Osiedle Zdrowa is located on ul. Zdrowa in the capital’s Wilanów district. The latest phase of the development, which has been designed by Atelier 3 Girtler & Girtler, is scheduled for completion in

two-room apartments of 40-50 sqm in size, a product which is currently in high demand in the Warsaw market.

“Each building is planned separately, in response to the changing market situation.

This allows for flexible reaction

Q3 2012.

Robyg, which listed on the Warsaw Stock Exchange last November, is currently involved in a total of six residential projects in Warsaw and Gdaƒsk.

The company has recently announced plans to build a complex of office and retail buildings in Warsaw’s Wilanów district and is also considering entering the Wroc∏aw market.

2.0

Industrial space developer ProLogis has signed a lease agreement for 17,200 sqm of warehouse space at ProLogis Park B∏onie with Rhenus Contract Logistics, a European provider of logistics services. Colliers International mediated the transaction. ProLogis Park B∏onie is located along the E30, around 25 km from Warsaw. The facility comprises eight warehouses totaling more than 152,000 sqm.

1.5

Arabic investors eye hotels

Adam Zdrodowski

Regaining ground Robyg's stock price, November 2010 – April 2011

COURTESY OF TBT I WSPÓLNICY

2.5

Nov 15

Dec 6

Jan 7

Feb 7

The latest phase of Osiedle Zdrowa is scheduled for completion in Q3 2012

Mar 7

Apr 6

Source: Warsaw Stock Exchange

Galeria S∏oneczna mall opens brands Zara, H&M, C&A and Reserved, grocery chain MarcPol, electronics retailer RTV Euro AGD and a sixscreen Multikino cinema.

Located on Radom’s ul.

Chrobrego, Galeria S∏oneczna is part of a larger, multi-use project called Centrum S∏oneczne. Apart from retail space, the complex also includes the Osiedle S∏oneczne residential scheme whose first, already delivered phase includes three buildings with a total of 86 units, a water park, amphitheater, recre-

ation park and green areas.

AIG/Lincoln has been active in the Polish market since 1997. The developer is present in both the residential and commercial segments; its major completed projects include the Saski Point, Saski Crescent, Riverside Park and Grzybowska Park office developments in Warsaw as well as the Diamond Business Park logistics investments in Raszyn, Piaseczno, ¸ódê, Stryków and Gliwice.

Adam Zdrodowski

COURTESY OF MEDIADEM COMMUNICATIONS

AIG/Lincoln Polska has held the grand opening ceremony for its Galeria S∏oneczna shopping and entertainment center in Radom, Mazowieckie voivodship.

The three-storey facility, which is the first retail scheme of its kind in the city, comprises 42,000 sqm of retail space with 150 stores and points of services. Parking for 1,220 vehicles has also been provided.

The mall is currently 85 percent leased out. Major tenants include fashion

17

The mall is 85 percent leased out

Real estate company Europejski Fundusz Hipoteczny (EFH) is eyeing partnerships with Middle Eastern companies for Polish hotel projects before Euro 2012. “Euro 2012 is a draw for foreign investors. They are now looking for partners in our country because they need a key to the domestic market,” said Izabela Ga∏àzka, vice president of EFH. These companies are interested in already existing hotels as well as projects which encountered difficulties during the financial crisis and could be realized quickly, Ms Ga∏àzka said. ●

18

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Residential

APRIL 11-17, 2011

Rank Progress sells Galeria Twierdza K∏odzko

Dolcan launches work on first ‘rent-free’ project

COURTESY OF GLOBALBRAND INSTITUTE

Developer Dolcan has launched construction of its Rudy Rydz residential project in Warsaw. The investment is the first of a number of “rentfree” schemes which the company is planning to build in or near the capital. The concept, which Dolcan announced last year, involves the development of housing units whose owners will not have to pay the usual maintenance and cooperative fee expenses.

The Rudy Rydz estate, located in Warsaw’s Rembertów district, will comprise stand-alone buildings housing from four to six apartments.

In total, 78 units sized from 50-90 sqm have been planned within the project, and almost half of them have already been sold. The prices of the apartments start at z∏.5,500 per sqm.

Phase I of Rudy Rydz is scheduled for completion in Q1 2012. Within the next few months, Dolcan plans to start construction on four other projects of this kind.

COURTESY OF RANK PROGRESS

Others to follow soon in locations around Warsaw

The 31,500-sqm project is valued at almost €40 million

Rudy Rydz will comprise a total of 78 units Czerwona Jarz´bina will be located in the Targówek district and will deliver 46 apartments, while the Konik Polny and Kamyk Zielony schemes will both be built in Bia∏o∏´ka and will comprise 26 and 130 apartments, respectively. The company’s latest project, Osiedle Pasikonik in Marki (near

Warsaw), will host a total of 16 residential units.

Dolcan has operated in the Polish market for 20 years now. The developer has so far delivered 20 projects comprising approximately 4,000 apartments in cities such as Warsaw, Lublin, Szczecin and Bydgoszcz.

Adam Zdrodowski

A subsidiary of American investment fund Blackstone Real Estate has inked a preliminary agreement for the purchase of Galeria Twierdza K∏odzko, a shopping center located in the Lower Silesian town of K∏odzko. The deal is valued at almost €40 million and is expected to be concluded by the end of May. Progress II and Progress III, subsidiaries of real estate investor and developer Rank Progress, are the sellers.

Zizia, Blackstone’s daugh-

ter company, is conducting due diligence on the property.

The value of the transaction could change based on its findings, Rank Progress has noted.

Galeria Twierdza K∏odzko opened in 2009. Its two components – Galeria Twierdza I and Park Handlowy Twierdza II – comprise a total of 31,500 sqm of retail and service space.

Its tenants include Carrefour, Media Expert, Jysk, Marks & Spencer, Leroy Merlin and McDonald’s. The facility also hosts a multiplex cinema.

The Legnica-based Rank Progress has two completed investments – in Legnica and Jelenia Góra – under its belt and other four retail projects currently under way in Âwidnica, Kalisz, Krosno and ZamoÊç. The company earned a z∏.91 million net profit in 2010.

Blackstone Group operates out of 21 global offices and invests regionally through local partners and advisors.

Katarzyna Piasecka

A guide to Polish business and industry

Przewodnik po polskim biznesie i gospodarce

The 2011 edition of book of lists is now available!

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

To order:

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

20

THE LIST

www.wbj.pl

APRIL 11-17, 2011

Corporate Services

Security Companies Ranked by revenue from security services in 2009

www.bookoflists.pl

Type of property protected

Access control system installation / Remote monitoring / CCTV monitoring / Convoys

On-site protection / Cleaning / Intervention units / Training

Other

1

Grupa Solid ul. Post´pu 17, 02-676 Warsaw 22 668-6006/22 668-6006 ext. 1507 solid@solidsecurity.pl www.solidsecurity.pl

876.6 842.5 826.0

941.1 892.5 854.8

✓ ✓ ✓ -

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

-

✓ ✓ ✓

✓ ✓ ✓

PZU; InterRisk Vienna Insurance Group

Millennium Bank; Bank Zachodni WBK; PKO BP; Coca Cola HBC Polska; Carrefour Polska; Castorama Polska; MPWiK; Statoil Poland

17,268 13,491 1994

Arkadiusz Reszke

2

Konsalnet SA ul. Przasnyska 6A, 01-756 Warsaw 22 560-5000/22 560-5004 centrala@konsalnet.com.pl www.konsalnet.com.pl

483.0 250.0 251.0

511.0 300.0 307.0

✓ ✓ ✓ WND

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

Cash processing; security audits; armed escorts; VIP protection; mass event security; transport of hazardous goods, artwork, valuables, noble metals; loss verification in economic relations; GPS monitoring

✓ ✓ ✓

✓ ✓ ✓

-

Pekao; PKO BP; ArcelorMittal Poland; Tesco Poland; Polkomtel; Polska Telefonia Cyfrowa

WND WND 1994

Adam Paw∏owicz

3

Impel Security Polska Sp. z o.o. ul. Âl´˝na 118, 53-111 Wroc∏aw 71 711-0300/71 711-0313 cc.ochrona@impel.pl www.impel.pl

416.6 386.0 323.1

1,033.4 1,002.1 890.1

✓ ✓ ✓ -

✓ ✓ ✓ ✓

✓ ✓ ✓

-

✓ ✓ ✓

✓ ✓ ✓

Ergo Hestia

Kredyt Bank; Vattenfall Heat Poland; Katowicki Holding W´glowy; KGHM Polska Miedê; 4213 Military Unit

WND WND 1990

¸ukasz Puci∏owski

4

G4S ul. Prosta 69, 00-838 Warsaw 22 534-5100/22 534-5101 g4s@pl.g4s.com www.g4s.pl

201.1 208.0 209.0

201.1 208.0 239.0

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

Cash processing; protection and security consultancy; security audits; escorts; mass event security

✓ ✓ ✓

✓ ✓ ✓

ACE; Hestia

WND

7,672 7,797 1993

Dariusz Chorà˝y

5

Securitas Group(1) ul. Cybernetyki 21, 02-677 Warsaw 22 457-0735/22 457-0784 securitas@securitas.pl www.securitas.pl

190.0 184.0 126.0

190.0 184.0 126.0

✓ ✓ ✓ -

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

Security audits; bodyguards; reception services; security management

✓ ✓ ✓

✓ ✓ ✓

4,363 WND 1996

Krzysztof Toczyƒski; Dariusz Bàk; Miros∏aw Purzeczko

6

Grupa EKOTRADE(2) ul. Prosta 2/14, 00-860 Warsaw 22 548-9000/22 548-9050 biuro@ekotrade.com.pl www.ekotrade.com.pl

142.0 123.4 107.6

144.6 126.6 111.0

✓ ✓ ✓ -

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

Fire monitoring; mass event security; reception services

✓ ✓ ✓

✓ ✓ ✓

XL Insurance Company Limited

Getin Bank; MarcPol; Metropolitan Warszawa; Warsaw School of Economics; Agricultural Social Insurance Fund

5,200 350 1991

Jacek Jerschina

7

City Security Group Sp. z o.o. ul. Wybrze˝e Gdyƒskie 2, 01-531 Warsaw 22 628-6070/22 635-5116 biuro@citysecurity.pl www.citysecurity.pl

67.0 57.5 38.0

68.0 59.0 38.0

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓

Anti-terrorist training

✓ ✓ ✓

✓ ✓

Concordia

NATO Military Airport in Malbork; Praktiker; ALMA: Bumar; Accor; Radwar

3,600 1,150 2001

Beniamin Krasicki

8

Grupa HUNTERS Sp. z o.o. ul. Bukowska 111, 62-065 Grodzisk Wielkopolski 61 442-1600/61 442-1613 biuro@hunters.pl www.hunters.pl

32.9 26.7 21.6

43.8 37.8 25.6

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ -

Inkaso; event security; GPS car monitoring; DNA system marking

✓ ✓ ✓

✓ ✓ ✓

Allianz; PZU; Hestia; Benefia

Suchan; Imperial; Douglas; Piotr i Pawe∏; TOM

852 1,136 1990

Piotr ˚y∏kowski

9

Agencja Ochrony Osób i Mienia Guard-Service Sp. z o.o. ul. Tatrzaƒska 6A, 60-413 Poznaƒ 61 847-7196/61 847-7196 guardservice@guardservice.pl www.guardservice.pl

19.0 16.5 12.0

20.0 17.0 13.0

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

-

✓ ✓ ✓

✓ ✓ ✓

PZU

Volkswagen Polska; Raben Polska; LEK; Sulzer Chemtech; Kuehne+Nagel

500 500 2000

Konrad Sz∏apka

Agencja Ochrony Mienia “Matpol” Sp. z o.o. ul. Dominikaƒska 33, 02-738 Warsaw 10 847-3535/853-5544 matpol@matpol.com.pl www.matpol.com.pl

18.7 18.5 14.0

18.7 18.5 14.0

✓ ✓ ✓ -

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

Mass event security

✓ ✓ ✓

✓ ✓ ✓

InterRisk; Concordia

Social Insurance Institution (ZUS); Pekao; Warsaw Medical University; the Chancellery of the President of Poland; Municipal Bus Authority in Warsaw

663 98 1993

Zbigniew Matys

Agencja Ochrony Osób i Mienia Zubrzycki ul. ¸ucka 18/1701A, 00-845 Warsaw 11 22 654-3011/22 654-3012 biuro@zubrzycki.com.pl www.zubrzycki.com.pl

17.3 21.6 20.9

17.3 21.6 20.9

✓ ✓ ✓ -

✓ ✓ ✓ ✓

✓ ✓ ✓

-

✓ ✓ ✓

✓ ✓

PZU

Rossman; Deichmann; PKP (Oddzia∏ Dworce Kolejowe); Ministry of Health

400 130 1994

Sylwester Zubrzycki

Gustaw Securitas System Sp. z o.o. ul. Tkacka 19-22, 70-556 Szczecin 12 91 812-1478/91 434-7527 biuro@gustaw-securitas.pl www.gustaw-securitas.pl

16.4 14.5 12.0

17.2 14.5 12.0

✓ ✓ ✓ -

✓ ✓ ✓ -

✓ ✓ ✓

-

✓ ✓ ✓

✓ ✓ ✓

PZU; Warta

Polish Radio and TV Szczecin; National Museum; District Public Prosecutor’s Office; Voivodship Administrative Court; Carlsberg Polska; NETTO

580 108 1988

Gustaw Wiliƒski

Agencja “Komandos” Sp. z o.o. ul. Pontonierów 7, 00-910 Warsaw 13 22 879-1500/22 879-1520 ochrona@komandos.pl www.komandos.pl

15.0 25.0 30.0

15.0 25.0 30.0

✓ ✓ -

✓

✓ ✓

Deposit and treasury services

✓ ✓ -

✓ ✓ ✓

Concordia Polska

The President’s Residency in Wis∏a; Szczecin-ÂwinoujÊcie Port; BNP Paribas Fortis; ZASADA

240 140 1990

Józef B´benek

1.2 0.3 0.2

43.2 29.4 23.3

✓ ✓ ✓ -

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

Mass event security

✓ ✓ ✓

✓ ✓ ✓

AXA TUiR

Nap Invest; Budizol; Cosmedica; Medicover; Fantasy Park

91 19 1993

Pawe∏ Skwarczowski

Rank

Property security / Bodyguards / Alarm system installation / Detective services

Services

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

Revenue from security Total revenue services (z∏. mln) (z∏. mln)

Private houses / Offices / Industrial buildings

Shopping malls / Banks / Public buildings

Cooperation with insurance companies

Selected clients

Number of security employees / Full time employees / Year founded

Top local executive / Title

2009 / 2008 / 2007

P. Dussmann Sp. z o.o. ul. Kurpiƒskiego 55A, 02-733 Warsaw 14 22 827-2290/22 827-2298

dussmann@dussmann.pl www.dussmann.pl

Notes: NR = Not Ranked, WND = Would Not Disclose. Research for The List was done in May 2010. Number of employees and ownership structure are as of May 2010. All information pertains to the companies’ activities in Poland. Companies not responding to our survey are not listed.

Footnotes: (1) Securitas Group consists of Securitas Polska Sp. z o.o.; Securitas Services Sp. z o.o.; Securitas Alert Services Sp. z o.o.; Purzeczko - Grupa Securitas Sp. z o.o. (2) Grupa EKOTRADE consists of Ekotrade Sp. z o. o.; Agopol Ekotrade Sp. z o. o.; Multexim Patrol Sp. z o. o.; Dyskam Sp. z o.o.

Schenker Logistics; Grupa Lotos; Avon; Bank Handlowy-Citibank; XL Insurance (member of HSBC; Ernst & Young; P&G; XL Capital) Polbank EFG; Electrolux; Delphi; MAN; General Motors; BAT; Electro World

President

President

President

President

Presidents

President

Board Member

President

President

President

Owner

President

President

President

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

Reprints are available.

COMPANY FOCUS

APRIL 11-17, 2011

www.wbj.pl

21

Game development

Taking it to the next level

Lessons past CD Projekt itself has been around since 1994, but for its first decade the company was primarily a regional publisher and distributor, best-known for localizing foreign games. In 2007, it caught the gaming world’s attention with “The Witcher,” a computer roleplaying game (RPG) which put the player in the role of Geralt of Rivia (see accompanying box).

Developed on a budget of z∏.27 million, the game earned respectable reviews (a score of 81/100 on Metacritic for the original release, and 86 for the later “Enhanced Edition” release). Sales for the first 12 months amounted to over one million units.

Making its first big game was a major learning experi-

Revenues 50 40

Themes from Polish and European history pop up, as seen in prejudice against and ghettoization of non-human races. “Pogroms” and similarly violent events are common.

The witchers themselves are mutants, the results of medical experiments performed on children. Those who survive the process spend years training to fight the rather nasty creatures

* Acquisition official as of May 2010

30 20 10 zł.mln -10

2009

2010 Source: Optimus

Game on Optimus' stock price, April 2010 – April 2011* 10 8 * Price from the fourth of the month or nearest trading day

6 4 2

20 1 Feb 1 20 1 Ma 1 r2 01 1 Ap r2 01 1

Jan

0

01 c2

De

0

01

01

v2

t2

Oc

No

0

10 20

pt Se

0

01

g2

Au

0

01 y2

Jul

0

01

e2

Jun

01

01 r2

y2

0

0

Source: Warsaw Stock Exchange

In public life CD Projekt too has changed a great deal since 2007. Back then it was preparing for a 2009 stock market debut and the acquisition of smaller competitor Metropolis.

Then came the financial crisis. The company is in the process of liquidating Metropolis, having taken most of its staff onboard, and it finally entered the Warsaw Stock Exchange last year through an acquisition by former computer hardware producer Optimus.

Iwiƒski and Kiciƒski note that the transition to publicly traded company has made it far easier to raise capital, and the introduction of an institutional investor, PKO TFI, has added stability. Being on the WSE has also boosted CD Projekt’s overall credibility.

“The perception of the company is changing dramati-

Concept art from “The Witcher 2” cally. We did not expect it to change so much,” admitted Iwiƒski.

Both men acknowledge that Optimus isn’t the best name for CD Projekt’s holding company or its stock symbol. They would

The world of ‘The Witcher’ CD Projekt’s “Witcher” games are based on an intellectual property created by Polish fantasy author Andrzej Sapkowski. His writings chronicle the adventures of Geralt of Rivia, an albino witcher (wiedêmin), or monster hunter, with a fondness for wine, women and warfare.

The world of “The Witcher” is dark and brutal, with few conventional heroes.

Profit

60

Ma

Soon the company will find out if its lessons were learned well enough. It is preparing to launch a sequel to its 2007 game, titled “The Witcher 2: Assassins of Kings,” on May 17. And its expectations are high.

Adam Kiciƒski, president and joint CEO of Optimus, described a sales target of one million units for the May-toDecember period as “more conservative than optimistic.”

For the full May-to-May cycle, the firm wants to move 1.3 million units, a figure up about 30 percent on first-year sales for “The Witcher.”

Expenditures on “The Witcher 2” will be marginally higher than for the first game as well, but the sum includes the development of unannounced projects. “At the end of the day, the cost of ‘Witcher 2’ on the PC will be lower than that of ‘Witcher 1’ PC,” Kiciƒski said.

Drawing on its experience from the first game, CD Pro-

Consolidated revenues and net profit for Optimus (in z∏. millions), before and after CD Projekt acquisition*

Ap

Sophomore effort

Initial figures

jekt has also taken a different approach to its international publishing deals.

“Our intention on ‘The Witcher 2’ was to change [the situation].

In order to change it you need to finance the game all yourself, plus put additional money on marketing, PR, production of additional assets if needed,” says Marcin Iwiƒski.

This time around, the company expects to earn closer to 60 percent of net income on sales and it has also been careful to hold onto the rights to digital distribution. By eliminating the costs associated with bricks-and-mortar retail, it will take around 70 percent of the total price for digital sales.

And digital is a much more popular sales platform than it was in 2007. “This is becoming the place for gamers to buy,” noted Iwiƒski.

COURTESY OF CD PROJEKT

There aren’t many offices where a life-sized statue of an armored orc constitutes a sensible interior design choice.

They clash with potted plants, after all, and tend to make clients nervous.

That’s not a problem at CD Projekt’s office. The game developer is in the business of suspending disbelief, and its premises attest to this. Casually attired employees let off steam with foosball and the latest Xbox 360 games, or chat in the well-equipped kitchen.

Within these sword-andposter adorned walls, a lifesized orc fits in pretty well.

The decor offers a curious juxtaposition though. This “Peter Pan”-meets-”Revenge of the Nerds” atmosphere so common in game development in fact belies a deadly serious, highly competitive industry.

Computer games are a relatively young business, but one that has matured rapidly over its few decades of existence.

ence for the company, said Marcin Iwiƒski, co-founder of CD Projekt and joint CEO of Optimus, the firm that owns it.

“It was our dream to make games, but we were starting from scratch. We didn’t know how to make games, but we knew how to sell them and this is a big advantage,” he added.

His company partnered with Atari to publish the game internationally, signing a deal which saw Atari take upwards of 65 percent of net income on sales. It was somewhat skewed in terms of the net income split, but unlike many freshman developers, CD Projekt retained full creative control and rights to its intellectual property (IP). And the partnership taught CD Projekt a great deal about the international publishing process.

“It’s easy to go back in time today and say if we could have done it a certain way it would have been much better, but at that time we hadn’t developed any games,” Iwiƒski said, noting that the lessons “needed to be learned.”

COURTESY OF CD PROJEKT

Polish game developer CD Projekt is preparing to launch its second major game and has ambitious plans for its flagship property

E Blake Berry

which inhabit the world of “The Witcher,” such as giant spiders, zombies and demons – the standard fare for fantasy IPs, for the most part.

Within this world, the character of Geralt (or the gamer playing as Geralt, in CD Projekt’s games) frequently faces moral dilemmas. Does he save a monstrous princess, cursed because she is the product of an incestuous union? Or

does he simply slay her?

What about a pair of murderers about to be killed by a wrathful ghost? Does the witcher intervene or let vengeance take its course?

In the world of “The Witcher,” the only certainty is that Geralt will end up in a fight, drink the local tavern under the table and tumble into bed with a willing wench (or two). And not necessarily in that order. ●

eventually like to change the situation, possibly licensing out the Optimus label.

“We recognize the strengths and weaknesses of the Optimus brand. It definitely has value and we would like to use it, but we have no intention of producing hardware, so it will mostly be through licensing if at all,” said Iwiƒski.

Wedded to ‘The Witcher’ CD Projekt’s fortunes depend largely on the success of “The Witcher 2.” Game development is always a gamble, and doubly so with a top-shelf game.

But the company is betting especially heavily on its IP, with comic books timed to come out with the new game, console versions expected (but not officially confirmed) and other plans in the works.

“We want to build an empire around the IP,” says Adam Kiciƒski. Games will remain the core stream, but there are plenty of other opportunities to explore, he adds.

For his part, Marcin Iwiƒski is confident that his company can achieve success by staying true to “The Witcher,” with its dark and immersive narrative, and by focusing on its core market. “We know our place and how we can monetize it successfully. I think that’s our big strength.” ●

Disclosure The author has worked on a freelance basis for CD Projekt in the past, editing texts for the English-language versions of “The Witcher” games.

22

ARTS & CULTURE

www.wbj.pl

APRIL 11-17, 2011

Cinema before sound Backwards in time form. All films will be accompanied by live music.

Tickets z∏.16-20. For more info, log on to www.fn.org.pl ●

Heart of darkness This month the Centre for Contemporary Art in Warsaw (CSW) showcases the vivid, often disturbing images of Polish artist Aleksandra Waliszewska.

A graduate of Warsaw’s Academy of Fine Arts, Ms Waliszewska has more than 20 solo exhibitions to her name and has been awarded several stipends by the Polish Ministry of Culture. According to the CSW, she draws a new 25x35 picture every day, ignoring the conventions of the contemporary art world.

“Heroes of Might and Magic,” whose name the artist borrowed from a popular computer game, is not a great exhibition for school trips or first dates (depending on the date, of course). For one thing, the

COURTESY OF ALEKSANDRA WALISZEWSKA

“Heroes of Might and Magic” April 20 – May 23 Centre for Contemporary Art

“Reverse” (“Rewers”) April 18 Kino Alchemia This is the latest showing in Kino Alchemia’s “Polish Films in English” series, which seeks to familiarize anglophones with the local cinematic tradition. The critically acclaimed “Reverse” won five awards at the 2009 Polish Film Festival, including the “Best Film” award.

Primarily set in 1950s Warsaw, this is a story about three generations of women in Stalinist Poland. Sabina (played by Agata Buzek, daughter of former Prime Minister Jerzy Buzek) is looking for a husband. Aided by her mother

COURTESY OF SYRENA FILMS

The 9th edition of the Silent Film Festival will be largely devoted to German cinema, but films from as far off as

Australia and Japan will make an appearance. On the 80th Anniversary of the death of Friedrich Wilhelm Murnau, his masterpiece “Nosferatu” will be shown in re-mastered

and hindered by her grandmother, various male suitors begin to visit their apartment.

One of them will change Sabina’s life, for better or for worse. ●

Vintage vehicles Car Rally & Exhibition April 17, 11 am – 6 pm The National Museum in Warsaw

works on display are all humble in scale (25x35 cm) and technique, meaning they do not draw the viewer in from afar.

Then there’s the subject matter. The Ms Waliszewska’s work is filled with dark themes of isolation, biological identity

and sexual predation. In some pieces, victims appear almost oblivious to their own plight; in others, such as “Death of a Pedophile,” they are clearly empowered. It’s challenging material, but it’s worth reflection.

EBB

Get an Insider’s glimpse at all that Warsaw has to offer with the Warsaw Insider!

On the last day of its “We Want to be Modern” exhibition, the National Museum is holding a vintage car show.

Cars from the ‘50s and ‘60s will take visitors back to the days of the Polish People’s Republic. This is also the last chance to see “We Want to be Modern,” which showcases examples of post-1945 Polish design.

For more info, log on to www.mnw.art.pl ●

COURTESY OF WIKIMEDIA COMMONS

Silent Film Festival Kino Iluzjon, April 14-17

Some content provided by the Warsaw Insider. For more information on culture and entertainment in Warsaw this month, pick up the April issue.

Museums, galleries and venues in Warsaw Centre for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 www.csw.art.pl Czarna Gallery ul. Marsza∏kowska 4 www.czarnagaleria.art.pl Galeria 022, DAP, Lufcik ul. Mazowiecka 11a www.owzpap.pl Galeria 65 ul. Bema 65 www.galeria65.com Galeria Appendix 2 (Praga) ul. Bia∏ostocka 9 www.appendix2.com Galeria Asymetria ul. Nowogrodzka 18a www.asymetria.eu

Warsaw’s most popular Englishllanguage lifestyle lif t l magazine i ffeatures: t : • top shopping reviews and listings • monthly calendar of parties, eventss and exhibitions • latest art, design, fashion and beauty trends • hotel, spa and fitness club reviews • up-to-the-minute resto, bar, cafe and club reviews

Subscribe to the Insider! Contact t t kwilinski@valkea.com k ili ki lk

Galeria Foksal ul. Foksal 1-4 www.galeriafoksal.pl Galeria Milano Rondo Waszyngtona 2A (Praga) www.milano.arts.pl Galeria Schody ul. Nowy Âwiat 39 www.galeriaschody.pl

Green Gallery ul. Krzywe Ko∏o 2/4 www.greengallery.pl

Simonis Gallery ul. Burakowska 9 www.simonisgallery.com

Katarzyna Napiórkowska Art Gallery ul. Âwi´tokrzyska 32, ul.

Krakowskie PrzedmieÊcie 42/44 and Old Town Square 19/21 www.napiorkowska.pl

State Archaeological Museum in Warsaw ul. D∏uga 52 (Arsena∏) www.pma.pl

Królikarnia National Gallery ul. Pu∏awska 113a www.krolikarnia.mnw.art.pl Le Guern Gallery ul. Widok 8, www.leguern.pl Museum of Independence Aleja SolidarnoÊci 62 www.muzeumniepodleglosci.art.pl National Museum in Warsaw Al. Jerozolimskie 3 www.mnw.art.pl Polish National Opera at Teatr Wielki Pl. Teatralny 1 www.teatrwielki.pl Pracownia Galeria ul. Emilii Plater 14 www.pracowniagaleria.pl

State Ethnographic Museum ul. Kredytowa 1 www.ethnomuseum.website.pl Historical Museum of Warsaw Old Town Square 28-42 www.mhw.pl History Meeting House of Warsaw ul. Karowa 20 www.dsh.waw.pl Warsaw Philharmonic ul. Jasna 5 www.filharmonia.pl Warsaw Rising Museum ul. Grzybowska 79 www.1944.pl

Galeria XX1 Al. Jana Paw∏a II 36 www.galeriaxx1.pl

Rempex Art and Auction House ul. Karowa 31 www.rempex.com.pl

Wilanów Palace Museum and Wilanów Poster Museum ul. St Kostki Potockiego 10/16 www.milanow-palac.pl www.postermuseum.pl

Galeria Zoya ul. Kopernika 32 m.8 www.zoya.art.pl

Royal Castle Pl. Zamkowy 4 www.zamek-krolewski.com.pl

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

LAST WORD

APRIL 11-17, 2011

www.wbj.pl

23

Tech Eye

the traditional sense of the word.

We’re not the sort to hold up a bank or ransom a wealthy family’s beloved pet llama. But we do have a weakness for freshly baked everything.

Ever since we learned to crawl, we’ve devoted insane amounts of time to plotting and executing cookie capers, pie pilferage, shortbread swindles, you name it.

If it’s freshly baked, we’ll burgle it.

The secondmost important factor in an escape plan, aside from the route, is the getaway vehicle. We favor bikes, personally, as they can squeeze through alleys and other tight spaces where fat-bottomed pastry chefs dare not tread.

And we naturally prefer high-tech bikes to boring low-tech vehicles.

Enter the Bergmönch (www.bergmoench.com): half backpack, half bike. Made by Dutch firm Koga, it’s meant for people who like to take the hard way up a mountain

and the easy way down. In fact, since it lacks a seat and a means to generate forward momentum, down is the only way it goes.

The bike features a hand-built, full-suspension aluminum 7005 frame, with triple-hardened tubes and a lightweight swing arm. If you’re the type to enjoy having an extra nine

COURTESY OF KOGA

COURTESY OF AVD

Never underestimate the importance of a proper getaway plan. It’s often the difference between a criminal mastermind and a criminal doing 25to-life with a snuggle-hungry cellmate called The Gibblet.

Call us crazy, but Techeye has always preferred being on the mastermind side of things. That’s why we

meticulously plan several escape routes for every heist we pull.

What, Techeye a criminal? Not in

kilos strapped to your back on a mountainside and have €1,499 laying around, then this is the vehicle for you.

Or, if you’re like Techeye, you might “borrow” some exhausted climber’s Bergmönch and use it to rob Alpine bakeries.

For flatland getaways, a better

vehicle would be AVD’s Windcheetah recumbent trike (www.windcheetah.co.uk). The Windcheetah comes in two varieties, the ClubSport (€2,750) and the HyperSport (€3,850), and its maker has just unveiled a second series of the latter which shaves off some weight and adds some swank.

Although AVD is coy about its top speed, the Windcheetah is reputedly very fast. It’s probably somewhere in the neighborhood of a real cheetah, but we’d advise against racing one unless you let us videotape the experience.

Our final getaway vehicle – Honda’s U3-X Personal Mobility Device – is so unusual that the average pie owner will stop to marvel at your wobbly, slowspeed escape rather than give chase.

The U3-X is perhaps best described as the love child of a Segway, a unicycle and a Honda’s ASIMO robot. Parentage-à-trois –

COURTESY OF HONDA

A fresh look at getaway vehicles

that’s the level of freaky we’re dealing with here.

We have no idea how it works, but the gadget can stand by itself and the rider can zip in all directions without turning. There’s a promo vid for the U3-X which is boring enough to make a tax official’s brain hemorrhage, but nevertheless makes us want one.

If and when Honda brings the U3-X to the market (it’s technically still a concept vehicle), Techeye will put it to good use. After we figure out how to keep our balance with an armload of cupcakes, of course. ●

Ever execute a half-baked escape plan, get caught and end up in prison with a cellmate named after chicken innards? Let us know: techeye@wbj.pl