WBJ #16-17 2011

Poland’s private TV stations are far more efficient than public broadcaster TVP

Techeye gets childish about dieting

Poland’s most important work of art is going on a European tour 6

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VOLUME 17, NUMBER 16-17 • APRIL 26 – MAY 8, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

REAL ESTATE

Germany opens its gates COURTESY OF IMAGO PUBLIC RELATIONS

Lokale Immobilia

Germany’s labor market is finally opening up to Poles.

Will it lead to the exodus some are predicting?

• Morski Park opens • PBM in Praga • Poland’s office market leads 15-18

A guide to Polish business and industry

Since 1994 . Poland’s only business weekly in English

12-13

Przewodnik po polskim biznesie i gospodarce

Office furniture suppliers 21

In this issue

SHUTTERSTOCK

News . . . . . . . . . . . . . . . . . . . . . . .2-4 Industry News . . . . . . . . . . . . . . .5-6 Listed Firms . . . . . . . . . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . .10-11 Cover Story . . . . . . . . . . . . . . .12-13 Business Environment . . . . . . . . .14 Lokale Immobilia . . . . . . . . . . .15-18 Markets . . . . . . . . . . . . . . . . . . . . .19 The List . . . . . . . . . . . . . . . . . . . . . .21 Arts & Culture . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

Looking east

Coal shoulder

Prime Minister Donald Tusk wants to focus attention on eastern neighbors in the run-up to Poland’s EU presidency 3

As unions threaten to block coal deliveries, the economy minister says JSW’s privatization could be delayed 5

A GUIDE TO POLISH EXPORT is AVAILABLE NOW! To order: Please contact us at +48 22 639 85 68 or kwilinski@valkea.com

NEWS

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More jobs, but no raises

The percentage of Poles who, in a recent survey by Ramstad, stated that they have changed jobs in the last six months

4.8 billion m3 is the amount of natural gas sold by Poland’s monopolist PGNiG in Q1 2011

45,000 is the number of new apartments currently available in the Polish market, according to Rzeczpospolita

z∏.1,500 will be the new minimum monthly wage, starting in 2012, after the government agreed to a proposal by Labor Minister Jolanta Fedak. Currently, Poland’s minimum wage is z∏.1,386

Quote of the Week “We owe Pope [John Paul II] a lot, but let’s not exaggerate” Lech Wa∏´sa, in an interview for the Italian newspaper La Repubblica, on the Polish Pope’s contribution to the battle against communism

Figures in focus Cultural exchange Exports of cultural goods, selected EU countries, % of total external trade, 2010 2.0

1.8 *EU27 excludes intra-EU trade.

1.5 1.0 0.7

0.6

0.6

0.5

0.5

0.4

0.5

0.3 0.1

0.1

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Ge rm

*

blic

27

Re pu

Cz ech

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ia

% Fra nce

Chernobyl, 25 years later On April 26, 1986, Reactor 4 of the Chernobyl Nuclear Power Plant in Ukraine exploded, releasing large quantities of radioactive material into the atmosphere. WBJ.pl takes a look back in pictures and videos at what is to this day considered the worst nuclear disaster in history.

Ro m

Adam Zdrodowski

On WBJ.pl

Source: Eurostat

Company index Anti ....................................19 Grupa Lotos ......................19 Pharmena ........................15

DATELINE 8-11 Event:

HR CONGRESS The 40th IFTDO World Conference & Exhibition international HR Congress & Expo.

Location: Hotel Marriott, Warsaw. www.iftdo2011.com

10-13 TRANSPORT LOGISTIC EXHIBITION

Larger EU budget

International Exhibition for Logistics, Mobility, IT and Supply Chain Management.

Location: Messe Munchen International. www.transportlogistic.de

Banco Santander. ..............5 Guillaume Sadoux ............17 Polimex-Mostostal ..........19

10 -13 MASZBUD Event:

Event:

17th International Fair of Road Construction Industry.

Location: Kielce Trade Fairs. www.targikielce.pl

10-13 TRAFFIC-EXPO – TIL Event:

7th International Fair of Infrastructure, Airport Technologies and Infrastructure Exhibition.

Location: Kielce Trade Fairs. www.targikielce.pl

Bankruptcy Management

and Special Vehicles Fair.

Location: Kielce Trade Fairs. www.targikielce.pl

Solutions ..........................15 Databank ..........................16 Ronson Development ......15

Energy and Environment International Trade Fair. Location: Madrid, Spain. www.ifema.es

16-18 EUROPEAN ECONOMIC CONGRESS Event:

Debates and panel discussions on issues facing Central Europe’s economies Location: Katowice. www.eec2011.eu

20-22 INTERNATIONAL MBA ALUMNI CONGRESS Event:

Aimed at the integration of MBA students and alumni from all over the world.

Location: Kraków. ksb.uek.krakow.pl

24-25 REAL VIENNA Event:

Bank Zachodni WBK ..........5 Infosys BPO Poland..........15 PZ Cussons ........................5

13th International Construction Equipment

11-13 GENERA

10-13 AUTOSTRADA-POLSKA Event:

Asseco ..............................16 Grupa Marketingowa TAI..16 PKN Orlen ..........................7 Atlas Estates ....................16 GTC....................................19 PKO BP ........................5, 19

May

Event:

Poland is set to receive nearly €11 billion (z∏.44 billion) in European Union funding for 2012, according to EU Commissioner Janusz Lewandowski. “This is a decent budget, given the crisis in Europe,” Mr Lewandowski told reporters after the details were announced. ●

More than 50 heads of state are expected to attend the events, among them Polish President Bronis∏aw Komorowski. Special masses and other events marking the beatification will also take place in numerous Polish cities.

Born Karol Wojty∏a in 1920 in Wadowice, Poland, and reigning as pope from October 16, 1978 until his death on April 2, 2005, John Paul II was the first non-Italian pope since the early 16th century and one of the longest-serving heads of the Catholic Church in history.

He is widely regarded as one of the most influential leaders of the 20th century, credited with contributing significantly to the end of communism in Europe.

ua

proceedure that excluded the usual five-year waiting period which separates the start of the procedure from the death of the candidate.

In January this year the conclusion of the beatification procedure was made possible after the recognition by Pope Benedict XVI of a miracle attributed to John Paul II, namely the inexplicable cure of a nun said to have suffered from Parkinson’s Disease.

Another miracle will now have to be approved before the late pontiff is declared a saint.

The May 1 celebrations in the Vatican City will include a special beatification mass held

by Pope Benedict XVI and the lying in state of John Paul II’s coffin in St. Peter’s Basilica.

Lith

Hundreds of thousands of pilgrims are expected to descend upon the Italian capital city of Rome on May 1 to take part in the Vatican’s celebrations marking the beatification of the late Pope John Paul II. The predecessor of the current Pope Benedict XVI will officially be declared “blessed” on that day, a recognition which is the penultimate step in the canonization process.

Calls for a swift declaration of John Paul II’s sainthood were voiced by many Catholics as early as during the pope’s funeral on April 8, 2005. The imminent launch of the beatification procedure was announced by Pope Benedict XVI soon afterwards, with the pontiff accepting a fast-track

More firms shutting than opening Poland saw more businesses closing than new ones opening in the first two months of 2011. Some 54,200 companies deregistered and only 39,000 new ones opened, according to data complied by market research firm HBI for Dziennik Gazeta Prawna.

Retail sales businesses, especially small ones, saw the highest level of attrition, with only 7,000 new companies opening and 14,000 closing their doors.

27%

on

Polish entrepreneurs and business owners are increasingly feeling the harsh effects of expensive energy prices.

Companies’ production costs are rising, but they can’t adjust prices for fear of losing customers.

According to a study by the National Bank of Poland, high supply costs are currently the main obstacle to business development.

Numbers in the News

UK

Steep crude prices hurt economy

Pope John Paul II

COURTESY OF WIKIMEDIA COMMONS

Analysts say the second quarter of this year will be characterized by high demand for Polish products on international markets as a result of a weak z∏oty. The National Bank of Poland’s growth indicator forecasts for industry productivity in mid-April stood at almost 35 points, nearing the 40-point maximum.

Polish firms are expected to increase hiring in the coming months to meet the expected demand.

However, this won’t be coupled with raises for existing employees, since firms are unsure how long the good times will last.

IN THE SPOTLIGHT

APRIL 26 - MAY 8, 2011

Est

2

Real Estate and Investment Fair focused on Central & Eastern Europe.

Location: Vienna. www.realvienna.at

Investment Property

Relpol................................19

Best Western ....................17 Ipopema Securities ............5 Skanska Property Poland..15 BNP Paribas ....................13 Jastrz´bska Spó∏ka

Société Générale ..............13

Boryszew ..........................19 W´glowa..............................5 SPEC ..................................6 Bruegger ............................6 Jones Lang LaSalle..........16 Strabag Budowa Budimex ............................16 KGHM ............................5, 19 Infrastruktury ..................16 Caelum Development ......16 Knight Frank Poland ........18 Tax Care ............................15 CEZ....................................19 Le Duff Group ....................6 TP ....................................5, 7 Credit Suisse ......................7 Liebrecht & Wood ............15 TP Group ..........................16 Cushman & Wakefield ..15, 18 Lot Polish Airlines ............13 TPSA..................................19 Dalkia ..................................6 Optimus ............................19 TVN....................................19 DM BZ WBK........................7 PBG ..................................19 United PR............................6 Elektra Plus ......................18 PBM Po∏udnie

Valivala Holdings B.V........16

Enea ....................................6 Development ....................18 W.P.H. AGRAHURT ERG ..................................19 Penta Investments ............6 Export-Import ..................17 Futureal ............................16 Pepees ..............................19 Wilbo ................................19 Globe Trade Centre ..........15 Petrolinvest ......................19 Zastal ................................19 Grupa K´ty ..........................5 PGNiG........................6, 7, 19 ZenithOptimedia Group ......5

NEWS

APRIL 26 - MAY 8, 2011

www.wbj.pl

International relations

Tusk highlights eastern policy The Prime Minister has taken his recent travels to emphasize the importance of the Eastern Partnership initiative

result of this, interest in the Eastern Partnership will diminish, meaning less money and less political attention,” said ¸ukasz Adamski, an expert at the Polish Institute of International Affairs (PISM).

Eastern worries

COURTESY OF KPRM

After a meeting with his British counterpart in London last week, Polish Prime Minister Donald Tusk said that he and Mr Cameron shared “a similar perspective about the need for greater competition, greater deregulation and a real push to make Europe a high-growth, rather than a slow-growth, area of the world.”

The two leaders discussed NATO’s involvement in Afghanistan, as well as Poland and Britain’s bilateral relationship in general.

But Mr Tusk won an important endorsement when Mr Cameron said that although he and the Polish PM agreed that “Europe should make a strong and welcoming response to the Arab Spring,” they both believed the response “shouldn’t reduce in any way the important work Europe does with its Eastern neighbors and partners to encourage democracy and development.”

Mr Cameron was referring

Mr Cameron (left) agreed that the “Arab Spring” should not overshadow the EU’s work with Eastern neighbors to the Eastern Partnership, a Polish-Swedish diplomatic initiative to draw some of the European Union’s eastern neighbors closer. The project looks to reach out to Armenia, Azerbaijan, Belarus, Georgia,

Moldova and Ukraine, and is one of Poland’s top priorities.

“Indeed, many Polish politicians are worried that the main focus today is on the Mediterranean because of the events in North Africa and that as a

In the run-up to Poland’s EU presidency, which starts on July 1, Mr Tusk has also been making the rounds in Eastern Partnership countries to reassure his counterparts that Poland would be a vocal advocate of the project in the EU. In the last few weeks, Mr Tusk was in Moldova and in Ukraine. But in Ukraine at least, closer integration with the EU faces competition from Russia. The day before Mr Tusk arrived in Kiev, Russian Prime Minister Vladimir Putin had come to advise Ukraine to join the economic union currently comprising his country, Belarus, Kazakhstan and Kyrgyzstan.

For the moment, Ukrainians have declined the Russian offer and seem keen on advancing talks with the EU on the mainly economic Association Agreement (AA). Regarding EU accession however, prospects remain distant.

“Although the stated aim of Ukrainian foreign policy remains EU accession, there are huge powers within the country which are afraid of such a move because they know it will mean an increased democratization of the country, the rule of law and better business practices,” said Mr Adamski.

Don’t spend on laggards Meanwhile, in London, PM Tusk admitted in an interview with The Economist that Poland and the UK had “differing opinions” as to how the next EU budget should be shaped.

The British government wants to see cuts in EU cohesion funds. Poland, as the biggest beneficiary of these funds in the current (20072013) budget, is against any changes that would adversely affect it.

Citing Eastern Europe as the most dynamic part of the union, Mr Tusk stressed that investing EU funds there instead of in the “poorer regions” made sense. He also said he agreed with Mr Cameron that there was a need for greater budget discipline in the EU, especially on money spent “ridiculously.”

Remi Adekoya

Support for PO drops as prices rise Although the ruling Civic Platform (PO) still has the most support among all of Poland’s political parties, at 40%, its numbers have declined by 14% since January, according to the latest TNS OBOP poll.

Meanwhile, support for the largest opposition party, Law and Justice (PiS), remains stable at 26%. Many observers say rising living costs are one of the main reasons support for the ruling party is eroding.

Poland raises minimum wage The Polish government has agreed to raise the minimum wage starting from January 2012. The current minimum wage is z∏.1,386, but the government plans to increase it to z∏.1,500, Parkiet reported.

According to the Government Information Centre, this increase will reflect the forecast national average monthly salary for the coming years. ●

Bureaucracy

President signs deregulation bill The new law could save Polish entrepreneurs as much as z∏.6 billion

ay your business bloom this spring!

Warsaw Business Journal Group wishes you a happy holiday season and a bright, colorful and successful spring

COURTESY OF PREZYDENT.PL

Just prior to the Easter holiday President Bronis∏aw Komorowski signed a deregulatory bill aimed at limiting the administrative barriers and costs of doing business.

The bill is designed to curb bureaucracy by reducing the number of licenses and permits required to conduct various types of business. The new rules are also meant to make it easier for licensed professionals to start their own, individual practices.

The changes mean that business owners will be able to draw up about 200 different official documents on their own, instead of having them issued by various administrative bodies as is currently required.

“This bill is a very important and decisive step in a good direction,” said President Komorowski. “[It] means that tax offices and other state institutions will be able to issue eight million fewer certificates,” he added.

The president’s office estimates that the changes will allow one million entrepreneurs and five million

M

The bill should make the lives of entrepreneurs easier self-employed citizens to save more than z∏.6 billion in total.

“That is the amount that citizens will not have to spend on certificates which will, in many cases, be replaced by self-attestations,” said the president, who in a symbolic move signed the bill at a tax office in the Warsaw district of Mokotów.

Privately-owned companies, including self-employed individuals, will be able to transform their businesses into other entities, such as limited liability companies. The bill

will also reduce the maximum possible fine, from 10 percent to three percent of a firm’s revenue, which can be levied on companies as a result of illegal actions perpetrated by someone acting on the company’s behalf.

In addition, the deregulatory bill also marks the return of sales of alcoholic beverages on trains running domestic routes in Poland. Currently, only international routes are permitted to sell alcohol.

The bill comes into force on July 1 of this year.

Remi Adekoya

3

NEWS

www.wbj.pl

Warsaw Ghetto Uprising remembered Tributes were paid in Poland’s capital on April 19 to those who took part in the Warsaw Ghetto Uprising against the Nazis 68 years ago.

Wreaths were laid at Warsaw’s Monument to the Ghetto Heroes by a number of top state officials. The Warsaw Ghetto Uprising broke out on April 19, 1943 and lasted through May 16 of that year, by which time superior German forces had suppressed the insurgents.

More preschoolers in Poland According to a new EU report on education, all four-year-olds in France, Belgium, and the Netherlands currently attend preschool.

However, in Poland, only 67.5% of children in the same age group attend preschool. Still, compared to attendance four years ago, the number of preschoolers in Poland has increased by 20% and is steadily on the rise. ●

APRIL 26 - MAY 8, 2011

Art

Currency management

Da Vinci masterpiece gets FM to sell euro to green light to go on tour strengthen z∏oty It took a royal request to get Poland’s Culture Ministry to agree, though Poland’s most important work of art will embark on a tour of three European capitals following a year of intense debate on whether it should be allowed to leave the country.

Leonardo da Vinci’s Lady with an Ermine, a masterpiece of the Renaissance era, will now go on display in Madrid, London and Berlin.

Poland’s Ministry of Culture and National Heritage and a number of Polish art curators have for the past year opposed the idea of allowing the painting to leave the country, fearing it could be damaged in transit. The 15th-century masterpiece is painted on wood and is therefore extremely vulnerable.

Nevertheless, an appeal by Spain’s King Juan Carlos for the painting to be transported to Spain helped convince the ministry to change its mind.

The king made the request to Polish aristocrat Prince Adam Karol Czartoryski, the painting’s owner, who then made a

personal appeal to the ministry.

“It’s difficult to refuse the King of Spain, especially since he’s my cousin,” Mr Czartoryski told the PAP news agency.

His family’s foundation, the Princes Czartoryski Foundation, has been lobbying to have the painting put on temporary display outside of Poland.

After allowing the painting to travel to Spain, Poland also agreed to British and German requests that they too should be able to display the painting in their capitals.

The masterpiece itself depicts a young woman in a red and blue dress holding a white ermine (or short-tailed weasel). It is one of only four

Finance Minister Jacek Rostowski’s unexpected move has helped to rally the z∏oty

COURTESY OF WIKIMEDIA COMMONS

4

works, including the Mona Lisa, that Leonardo da Vinci painted of women.

The painting is part of a permanent collection of the Czartoryski Museum in Kraków, to where it will return in 2012 and remain for 10 years. The tour will reportedly earn the museum thousands of euro which will be spent on upkeep.

Gareth Price

After a meeting between Finance Minister Jacek Rostowski and National Bank of Poland head Marek Belka, it was announced that part of the funds Poland receives from the EU would be sold regularly on the market to limit excess liquidity and relieve pressure on the NBP to increase interest rates.

“The maximum amount of European funds that could be sold on the market this year would be €13-14 billion, but we are only talking about a part of [these funds],” said Mr Rostowski at a joint press conference with Mr Belka.

Mr Belka said the excess liquidity of the banking sector made it difficult to conduct an effective monetary policy. The NBP head denied, however, that this decision meant the bank was leaving inflationary aim policies for currency rate policies.

“This operation will be conducted by the Ministry of Finance. We are not fixing any target exchange rate,” said Mr Belka, adding that “currency interventions are still possible,

but only if there is a worrying dynamic in the currency market.”

Analysts predict that the actual amount the government could sell will be much smaller than the €13-14 billion mentioned.

“Last year gross inflows of EU funds to Poland were equal to €11.2 billion, but the Ministry also had to make payments of over €5 billion,” said Piotr Kalisz, Citi Handlowy’s chief economist, in a communique. “If we assume similar payments this year, the Finance Ministry will have only €8 billion for forex interventions.”

“Moreover, we expect at least half of this will be kept for Q4, as the ministry will focus on interventions in December in order to keep the end-of-year public debt level below 55 percent of GDP,” the statement read.

All in all, the Finance Ministry will likely be able to sell no more than €3-4 billion over the next six months.

After the announcement, the z∏oty rose against the euro and dollar. The z∏oty closed the week of April 18 at z∏.3.95 to the euro, ending the week flat.

Remi Adekoya

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INDUSTRY NEWS

APRIL 26 - MAY 8, 2011

www.wbj.pl

Coal

Striking workers could delay JSW’s IPO Poland’s Economy Minister has said the initial public offering of Jastrz´bska Spó∏ka W´glowa (JSW), Europe’s largest coking coal miner, could be postponed because of ongoing protests by its workers over privatization.

Trade union members held a 24-hour strike at each of JSW’s six coal mines in midApril and announced their intention to block the transport of coal from the company’s mines on April 26.

Referring to the conflict with the unions, Economy Minister Waldemar Pawlak told reporters that “the date of Jastrz´bska Spó∏ka W´glowa’s debut does not have to be rigid, it is possible to shift it.”

“The situation at the company is difficult and complicated, while the lack of agreement

istry’s position on JSW’s debut.

The Economy Ministry has overall responsibility for JSW, but the Treasury has taken a strong stance on the issue of IPO plans for the company.

“You cannot be subject to pressure from trade unions who

[between workers and management] makes taking business decisions difficult,” he added.

Nevertheless, Poland’s Treasury, which holds a 100 percent stake in the company, said in a statement that it was “surprised” by the Economy Min-

are not interested [in whether] JSW is a transparent, publicly listed company,” it wrote.

“According to Polish law, trade unions cannot decide if a company is to be traded on the bourse or not.”

The miners’ protest is a

COURTESY OF JSW

That’s the Economy Ministry’s position; the Treasury sees things differently

Many JSW workers distrust the government’s assurances on job security

response to the government’s decision to float up to 49 percent of its 100 percent stake in JSW on the Warsaw Stock Exchange at the end of June.

The government could potentially raise up to z∏.5 billion, which it would use to help reduce the country’s borrowing needs.

Some analysts have speculated that the Economy Ministry fears the actions of the striking workers have driven down the potential value of JSW’s shares, hence its decision to consider delaying the IPO date.

The state has said it will retain a majority stake in the firm and guarantee jobs, but trade unions have questioned these assurances, claiming the government hasn’t provided formal documents detailing its promises. The striking workers want their salaries increased and their jobs secured for a further 10 years.

Gareth Price

PKO drops plan to issue Advertising Polish advertising market growth z∏.5 billion in bonds forecast revised downwards

MATEUSZ GO¸ÑB/WBJ

Global estimates have also been slashed after crises in Japan and North Africa

The lender seems to have pulled back from plans to snap up another banking asset Poland’s largest bank, stateowned PKO BP, has given up on its plans to issue z∏.5 billion in bonds. The bank had stated it was going to use the money to finance potential takeovers in the banking sector.

Last year PKO also announced it would issue bonds for up to z∏.5 billion. The lender had intended to use the money to finance the takeover of its smaller rival BZ WBK. PKO was, however, beaten to the prize by Spanish lender Banco Santander. In October 2010, the bank still maintained it could issue bonds to finance other takeovers.

When asked why it had now decided to drop the idea of the bond issue, PKO BP’s press office wrote in an email that “PKO BP has a strong capital base which enables it to achieve its current business goals. Therefore, at present it is not necessary for PKO BP to aggrandize its funds for the money from the bond issue.”

According to Tomasz Bursa, an analyst at Ipopema Securities, after Santander’s takeover of BZ WBK, the list of potential takeover targets for PKO BP on the Polish market KP has been depleted.

Shockwaves from recent global events have led one influential market researcher to revise downward its 2011 growth forecasts for the Polish advertising market.

According to preliminary estimates from ZenithOptimedia Group, the Polish ad market is set to grow by 5.5 percent this year, compared to an original forecast of 6.8 percent.

The difference is due to “The conservative advertising policy of marketers,” ZenithOptimedia Group Poland CEO Jakub Potrzebowski said, adding that “the correction in the domestic market is consistent with the trend of global advertising markets.”

ZenithOptimedia has reduced its global ad-spend forecasts from 4.6 percent to 4.2 percent following the political turmoil in North Africa and the devastating earthquake in Japan. Accord-

ing to its initial estimates, ZenithOptimedia reckons that without these events, about $2.4 billion more would have been spent on ad expenditure globally this year.

One Polish company, however, has not let the dramatic events of recent months get in the way of its international investment plans.

Independent Polish agency Change Integrated is cooperating with global powerhouse PZ Cussons and is now in the process of setting up an office in Nigeria’s largest city, Lagos.

“Nigeria might sound exotic, but it is the biggest market for our client PZ Cussons,” Change Integrated chief executive Marek ˚o∏edziowski said.

“Opening an office in Lagos is a logical move. It will help us to service the client better and allow us to effectively tap into a 150-million-customer market,” he added.

Change Integrated won two “Cannes Lions” at the Cannes Lions International Advertising Festival last year. It was the only

Polish agency to participate in the event.

Like many countries in the West, Polish advertisers are now shifting their focus away from print media advertising and towards the web.

“There is no doubt that the internet ad market will still be growing rapidly. In the next few years it will become bigger than the press ad market,” Mr ˚o∏edziowski said.

According to ZenithOptimedia’s predictions, internet advertising in Poland is set to show the biggest increase this year. Newspaper advertising, however, is expected to fall by 3.4 percent over the same period.

The Central and Eastern European ad market in general is set to see a significant increase in expenditure on advertising over the next few years. From a low of -18.1 percent y/y in 2009, CEE is forecast

by ZenithOptimedia to see ad expenditure grow by 10 percent y/y in 2011 and by 13.8 percent in 2013.

Gareth Price

5

KGHM rejects union demands for raises There’s no chance that KGHM will raise the base wage of its workers, said company president Herbert Wirth, as reported by Parkiet. Labor unrest has long troubled the copper giant, whose workers are now threatening management with strike action if their demands are not met. Union leaders have announced that pickets will go up outside company headquarters on May 5, exactly two years after previous pickets were successful in securing a z∏.5,000 premium for workers.

TP invesments could reach z∏.8 billion Poland’s incumbent telecom operator TP is reportedly close to agreeing on a massive new broadband network expansion plan. “We’re negotiating a new market arrangement with TP. We expect that, in the next six years, TP could bring online at least five million new fiber-optic cables with a speed exceeding 100 Mb/s,” Aneta Stre˝yƒska, president of the telecoms regulator UKE, told daily Parkiet. TP has refused to confirm any numbers, but analysts say the sixyear program of broadband network expansion could cost TP up to z∏.8 billion.

Grupa K´ty beats expectations For Q1 2011, Poland’s largest aluminum products producer Grupa K´ty saw its net income and sales rise by more than it had forecast.

Grupa K´ty announced in its quarterly report that net income for the first three months of the year came in at z∏.18.8 million. At the same time, the group’s sales stood at z∏.322.6 million. ●

INDUSTRY NEWS

Tesco continues Poland expansion British supermarket giant Tesco, which already operates 369 stores in Poland, plans to open 87 new stores in the country in 2011, Dziennik Gazeta Prawna reported.

That’s more than twice as many as last year, and many more than in 2009 when Tesco added just 24 stores. This year’s annual investment is set to total z∏.1 billion. The majority of the stores planned will be small and located in towns with populations under 1,000 residents.

Metsa Tissue to invest €55 million Finland-based Metsa Tissue, a producer of kitchen and bathroom tissue, is planning the largest investment program in its history.

The firm is looking to spend some €55 million in Poland over the next three years, Puls Biznesu reports. This includes bringing online two new paper production machines and modernize an existing facility, among other projects. ●

APRIL 26 - MAY 8, 2011

Broadcasting

Poland’s private television broadcasters outshine TVP

Polsat employees generate the most revenues

Private TV stations are crushing public TVP when it comes to efficiency Times are changing for Polish broadcasting. Private broadcasters are now able to achieve their ratings with far fewer employees than national broadcaster TVP. Last year’s earnings figures are in and private broadcaster

Polsat has emerged as the most effective broadcaster in the market. The company’s perworker net profit clocked in at z∏.234,600 last year, while private broadcaster TVN recorded z∏.186,700 per employee, daily Rzeczpospolita reported.

TVP’s per-worker net profit, meanwhile, totaled just z∏.5,200 – and that only because the station gets some government tax breaks.

Legal News Contact: Lech Gniady lg@pnplaw.pl

Debt collectors get easier access to debtors’ accounts Cooperation starting April 11 between the National Bailiff Chamber and the National Settlement Chamber has made it possible for debt collectors to gain access to the electronic system of information exchange (OGNIVO), an instrument which makes it possible to obtain information on debtors’ bank accounts.

Until now a debt collector had only been able to access a debtor’s bank account at the request of the creditor, who first had to indicate to the debt collector a specific bank or banks in which the debtor holds an account.

Now, if a debtor has a bank account in any bank, a debt collector is able to effectively access the account in the course of an enforcement procedure.

Housing communities subject to VAT in certain cases In its judgment of March 10, 2011 (case file no. I FSK 423/10) the Supreme Administrative Court decided that in some specific cases housing communities must act as VAT payers. These cases include situations in which a housing community provides services such as heating and water for separate premises (when the services are performed outside, usually for the

benefit of tenants). A housing community, as an organizational unit representing the owner, is in such a case also the taxpayer.

It is therefore under an obligation to register as a VAT payer and to issue VAT invoices.

In other cases, such as when it comes to traditional obligations connected with management of a common real property, the community is not a VAT payer, but rather an ordinary customer.

Changes in commercial proceedings Until recently the time limit for reopening proceedings in commercial cases stood at two years, except in those situations in which a party was deprived of the possibility to act or if it was not properly represented.

The Constitutional Tribunal, however, challenged the two-year time period for reopening proceedings in commercial cases. As a result, on April 14, 2011, President Komorowski signed an amendment to the Civil Procedure Code. This has prolonged the time period during which proceedings in those commercial cases that ended with valid judgments can be reopened to five years. This is similar to the time frame which applies to civil law cases. ●

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Furthermore, the paper reports, Polsat and TVN brought in some z∏.1.1 million in combined profits from sales per employee, while rival TVP saw just shy of z∏.400,000 (sales and service contracts) per worker.

Private firms are also more efficient at attracting audiences. Last year, Polsat needed an average of 14 workers to attract one percent of market share. According to Nielsen Audience Measurement, rival TVN needed 70 workers to accomplish the same feat and TVP needed 102 people.

In terms of efficiency, Polsat is head and shoulders above the competition, and analysts expect the company to retain its lead this year, thanks in part to its growing engagement in specialty channels and digital distribution platforms such as Cyfra+, Multimedia and Vectra.

Analysts say it’s interesting that it’s no longer just a clash of the titans in Polish broadcasting, as smaller, more focused firms are stealing niche portions of the market as they cater to special interest groups of viewers.

GP

Firms shortlisted for SPEC sale – reports

EAST NEWS

www.wbj.pl

COURTESY OF WIKIMEDIA COMMONS

6

SPEC’s sale could bring Warsaw some z∏.750 million Warsaw City Hall has reportedly chosen a number of firms for the second stage of the privatization of SPEC, operator of Warsaw’s heating network.

No names have been officially mentioned, but Polish media sources say utility PGE, gas monopolist PGNiG, Czech Penta Investments and French utility Dalkia are among those which made it through.

“We will not reveal any information about potential bidders at the moment,” said Agnieszka K∏àb from Warsaw City Hall’s press office.

“In June we will commence discussions with potential investors. Then we will announce who they are,” she added.

Polish utility Enea did not appear in media reports as a potential second-rounder, despite the interest it had previously shown in acquiring SPEC. Grzegorz Adamski, Enea’s spokesperson, confirmed that the company would not be making a bid for SPEC, explaining that such a move would not be consistent with Enea’s strategy for the forthcoming period.

Warsaw wants to earn at least z∏.750 million from the sale of an 85 percent stake in SPEC. Its sale would complete the largest privatization process ever conducted by a local government authority in Poland.

Katarzyna Piasecka

Le Duff Group bringing Brioche Dorée cafés to Poland this year France’s Le Duff Group plans to open 50 of its flagship Brioche Dorée cafés in Poland by 2012.

Details about the investment are still scarce, but spokesperson Severine Randjelovic confirmed that the group has already bought several locations, including one in downtown Warsaw, and plans its first opening this year.

The company is currently seeking partners and franchisees in Poland. Potential investors can also choose to

participate in a joint venture agreement. Ms Randjelovic confirmed that the cost of opening one Brioche Dorée in Poland was €30,000. Startup costs for the group’s plans in Poland could therefore amount to as much as €1.5 billion.

“Ideally the group would like to locate its Brioche Dorées in all major cities in Poland,” said Tomasz Zapalski from United PR in Warsaw.

The cafés vary between 70 to 200 sqm in size and will be located in city centers, shop-

ping centers, railway stations and airports, he added.

Le Duff Group already has stores in neighboring Germany and the Czech Republic, but this will be the company’s first foray into Poland. Openings in Poland are part of a larger expansion program in the region, which also comprises Germany and Austria.

After purchasing American giant Bruegger’s in 2011, Le Duff describes itself as the “second largest café bakery AT group in the world.”

Polish scientists hope to patent graphene mass-production technology, obtain EU funds It’s stronger than steel, lightweight, flexible and it is a better conductor than silicon. It’s called graphene, and Poland is now the first country in the world capable of producing it on an industrial scale.

Polish scientists from the Institute of Electronic Materials Technology are now work-

ing on obtaining an international patent for their mass production technology, Gazeta Wyborcza reported.

They will likely receive financial support from Polish and European Union authorities for their patenting efforts, the daily said.

Since its discovery in 2004,

graphene’s properties have amazed scientists. It is 100 times stronger than steel, and can be stretched by 20 percent without breaking.

Graphene is transparent and made of components available in abundance, making it an ideal material for GP electronics.

LISTED FIRMS

APRIL 26 - MAY 8, 2011

www.wbj.pl

Natural gas

Gov’t overrules PGNiG on dividend The gas behemoth will now pay out double the amount originally proposed by its management board State-controlled gas monopolist PGNiG will pay out a dividend of z∏.708 million following the Treasury Ministry’s decision to overrule the management board’s much smaller payout proposal.

The gas giant will pay out z∏.0.12 per share on its 2010 earnings, or double the amount suggested by the management board.

The Polish state will receive z∏.513.2 million, z∏.30 million of which will be in non-cash assets.

PGNiG had previously agreed to pay the Treasury’s cut

of the dividend in cash only, but changed its mind at the general shareholders meeting.

Ever since its debut on the Warsaw Stock Exchange in 2005, PGNiG has paid out non-cash dividends to the state. These have come in the form of assets which the government used to build a separate gas pipeline operator – Gaz System – in order to comply with the European Union’s competition rules.

PGNiG’s chief financial officer S∏awomir Hinc told reporters the latest dividend will be the last which includes non-cash items.

Also in mid-April, PGNiG announced it had sold 4.8 billion cubic meters of natural gas in the first quarter of this year, approximately 3.1 bil-

lion cubic meters of which were first imported. The firm plans to ramp up domestic natural gas production from the current 4.1-4.2 billion cubic meters per year to 4.44.5 billion cubic meters in

2015, the company wrote in a statement.

The firm also earned z∏.148 million from the sale of its 10 percent stake in chemicals maker Azoty Tarnów in midGareth Price April.

Gaseous largess PGNiG's annual dividend payouts for the last five years (z∏. billions) 1.121

1.2 1.003

*Due to be paid

1.0 0.708

0.8 0.531

0.6

0.472

0.4 0.2 zł.bln 2007

2008

2009

2010

2011* Source: PGNiG

Telecommunications

TP’s first-quarter net profit plummets Its fixed-line revenues fell once again Poland’s largest telecommunications firm TP said net profit for the first quarter of 2011 fell by more than expected, as its fixed-line business continued to contract.

Lower-than-expected earnings in the mobile-phone segment and accelerated amortization also hurt the company’s bottom line.

TP’s Q1 net income dropped 34 percent year-on-year to z∏.189 million, the France Telecom-owned firm said in a statement. A year earlier the telecoms operator earned z∏.285 million.

Analysts had expected TP to book net income of around z∏.270 million for Q1 2011.

Poles are increasingly using their mobile phones to make

calls, which has led to a sharp drop in fixed-line use. TP’s first-quarter revenues from the fixed-line segment dropped by 7.8 percent y/y.

But it seems TP hasn’t yet been able to expand its own mobile business sufficiently to offset fixed-line losses. The company recorded belowforecast revenues of z∏.1.69 billion from its mobile business over Q1.

During that time TP felt the effects of the regulator’s decision to slash SMS termination rates, while minutes of mobile phone use also fell over the period.

“A slowdown in mobile phone base growth was partially to blame,” Pawe∏ Puchalski, an analyst at DM BZ WBK said, adding that rival Polkomtel’s aggressive advertising campaign through

the quarter was largely responsible for this.

The company’s total Q1 revenues dropped by 3.7 percent to stand at z∏.3.73 billion.

Company CEO Maciej Witucki told reporters he expects TP’s full-year sales to decline by between 2.0 percent to 4.5

percent in 2011.

“The potential effect of [rival] Era’s re-branding and regulated price cuts due in July means TP is probably heading towards the lower end of [Mr Witucki’s] top-line range,” Mr Puchalski said.

Gareth Price

Talking money TP's revenues from fixed-line and mobile telephony over the last five quarters (in z∏. billions) Fixed-line

Mobile

2.0 1.5 1.0 0.5 zł.bln

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Source: Telekomunikacja Polska

Oil

Orlen profits from high oil prices The refiner expects a z∏.1.3 billion operating profit in Q1 According to estimates of selected financial and operating data for the first quarter, Poland’s leading refiner, PKN Orlen, made a z∏.1.3 billion operating profit in the first three months of 2011.

This translates into an almost threefold surge from the z∏.464 million in operating profit it achieved a year earlier. According to a statement from the company, growing crude oil prices accounted for most of the figure, or z∏.900 million.

But even the EBIT LIFO (operating results disregarding the crude oil price) was significantly higher than expected by Piotr Dzi´cio∏owski, an analyst at Credit Suisse.

EBIT LIFO, which according to Mr Dzi´cio∏owski is more relevant, since it shows the health of the business without one-off effects, was z∏.400 million, compared to his expectations of z∏.200 million.

However, “overall if I extrapolate to an annual basis I don’t see a big improvement on my full-year expectations of roughly z∏.2 billion EBIT LIFO,” said Mr Dzi´cio∏owski.

Consolidated financial

results for the first quarter are due to be released on April 29.

Orlen expects a 10 percent increase in refining sales from its Baltic and Czech refineries, with stable volumes in the Polish market. The refiner also forecasts a four percent increase in retail sales, but expects this to be offset by lower retail margins in Poland and the Czech Republic.

Looking forward, three elements should influence Orlen’s performance in 2011. The sale of mobile operator Polkomtel, from which Orlen could gain as much as z∏.4 billion, is one of them. The second is a decision on the sale of the refiner’s loss-

making Mažeikiai refinery in Lithuania.

According to Credit Suisse’s Piotr Dzi´cio∏owski, a third element that could be a big driver for Orlen’s stock is the pending approval of a law on mandatory reserves. If it is passed, the government would buy back the mandatory reserves that Orlen is required to keep.

“This means that Orlen will extract the cash value of its reserves, which now constitute a highly non-performing asset, and this would be very positive for its shareholders,” said Mr Dzi´cio∏owski.

Alice Trudelle

7

8

INTERVIEW

www.wbj.pl

APRIL 26 - MAY 8, 2011

Interview

Dr Monika Smoleƒ, under-secretary of state in the Ministry of Culture and National Heritage, talks to WBJ about the state of Polish culture and the cultural offensive as part of Poland’s presidency of the European Union.

Ewa Boniecka: It seems that the majority of Polish politicians never mention the word culture in their public speeches. Is this because Polish culture is perceived by them as not important enough to talk about within the framework of the country’s development?

Monika Smoleƒ: You are probably right. For a long time culture was perceived as a rather luxurious area, a kind of a financial burden for the state, and not an integral part of our social and economic progress.

Nevertheless, in my view this attitude has changed significantly in recent years and culture has begun to play a more important role in strategic documents, both on a national and regional level.

Culture is beginning to be perceived not only as of value by itself, but also as an important factor in our country’s development, by fueling GDP and creating jobs, especially in creative industries and in promotion. The influence culture has both in constructing national and regional identities, as well as in developing an open, creative and innovative society, is being appreciated more.

A good example of how the perception of culture has changed recently is the fact that among nine strategic documents prepared by the government to define Poland’s roadmap until 2020, the strate-

gy of developing social capital, in which culture plays a vital role, is included. We are convinced that the development of Poland is not possible without investment in social capital, as well as in culture.

This was also one of the conclusions of the Polska 2030 report, which was prepared by Minister without portfolio Micha∏ Boni. The example that comes to mind of changes in the way we perceive culture on a regional level is the passion shared by the many cities (16 in total) who have entered the 2016 European Capital of Culture competition. Although the financial reward is relatively small – only €1.5 million – each one of these cities has treated the competition as an opportunity to promote its economic potential, cultural achievements, heritage, vitality, and its ambitions in all areas related to cultural development.

After the first selection, five cities were chosen for the final competition: Gdaƒsk, Katowice, Lublin, Warsaw and Wroc∏aw, with the verdict to be announced in June. All this proves that culture is finally being understood as an important asset and that we are learning to use our cultural potential more efficiently.

And how do you see the role of the government in supporting culture?

The mechanisms for supporting culture in Poland are decentralized. The Ministry of Culture directly finances 40 national cultural institutions, and over 10,000 cultural institutions are supervised and financed by local governments.

In fact, 75 percent of the budget provided for culture is at the disposal of local governments and only 25 percent is administered by the Ministry of Culture, which now has over z∏.2.4 billion at its disposal.

But I don’t want to talk only about money, Minister of Culture Bogdan Zdrojewski is responsible for designing the general direction of cultural policy and cultural legislation, supporting local initiatives, private ventures and subsidizing individual artists through a system of grants distributed in a competitive manner.

The Ministry has prepared a few special programs, among them Culture Plus, a program which aims to improve access to culture in rural areas and small cities by strengthening the activities of institutions such as public libraries and local cultural centers. An agreement between Telekomunikacja Polska and the Ministry of Culture that allows for free internet access in public libraries has been signed, and there are many more such examples.

These are the plans, but what about the financial means for fulfilling them?

These are not only plans – many things are actually in the process of implementation right now. For example,

COURTESY OF THE MINISTRY OF CULTURE & NATIONAL HERITAGE

Poland’s cultural offensive

Under-secretary Smoleƒ sees culture as a job-creator and a driver of GDP the Culture Plus program is fully in progress, since the government has already approved its budget. Due to an agreement between the Minister of Culture and the Minister of Education, music and arts lessons are coming back to primary schools, after years of absence.

A special cultural website for children has been launched, and the Chopin Year was a model project for promoting Poland. The Ministry of Culture is, among all ministries, a leader in the absorption of EU funds and thanks to these funds we have

experienced a kind of investment boom in culture, with the map of cultural infrastructure now rapidly changing.

I would especially like to point out European funds for culture, because we usually only talk about funds for road construction and the environment. In the current budget for the years 2007-2013, €1.1 billion was reserved for Poland, for the development of cultural infrastructure and the entire sum was used efficiently.

How do you see the role of private sponsorship of cul-

ture, which is so apparent in other countries?

In Poland private sponsorship of culture is unfortunately still not very popular. If it exists it is directed rather towards the largest and most prestigious institutions and events. All others mostly depend on government and municipal financial support. In my opinion there are many reasons for this situation. Certainly private sponsorship is related to the level of social prosperity, which is still relatively low in Poland. In addition, businesses and individual donors prefer to support projects that might

INTERVIEW

APRIL 26 - MAY 8, 2011

be profitable in the future.

But, most importantly, our tax system does not encourage people to sponsor culture.

Nevertheless, hopefully private sponsorship of culture will gradually grow.

home in Krasnogruda, in the district of Suwa∏ki, on the 100th anniversary of his birth.

Another project is related to music. An international symphony orchestra called “I, culture,” comprising young musi-

“In the current EU budget ... €1.1 billion was reserved for Poland for the development of cultural infrastructure” Do you think that the ambitious plans for the promotion of Polish culture during Poland’s presidency of the European Union will encourage private sponsors to contribute?

Certainly the cultural program prepared by the Ministry of Culture for the six months of our European presidency is the most ambitious program ever for promoting Polish culture. The presidency is of course a big political and diplomatic task, but we see it also as an unprecedented opportunity to expose Polish culture and its links with European culture.

A cultural offensive is a vital and integral part of our presidency, strengthening Poland’s position in the EU and enriching such an important subject of our presidency as part of the Eastern Partnership.

We are planning to organize over 1,000 cultural events in Poland and over 400 abroad. Polish artists, Polish films and Polish musicians in a variety of cultural events will provoke discussion with our European partners about the role of culture in the world today.

Our program is based on four foundations: first, Poland’s cultural heritage and young, talented artists; second, the role of non-governmental organizations in promoting culture, since 2011 is proclaimed as the European year of voluntary activities; third, the strength of the Eastern Partnership’s program and the role of culture in developing better understanding between the six countries participating in it and other EU members; and last but not least, culture as an important factor in social development, since the motto of the Polish cultural program is “I, culture,” which emphasizes culture for social change.

What cultural projects will be presented within the framework of promoting the Eastern Partnership?

We start on June 30 with the “Three Agoras” conference on cultural diversity in Europe, which is inspired by Czes∏aw Mi∏osz’s famous book “Native Realm” [“Rodzinna Europa”]. The conference will take place At Mi∏osz’s former

cians from Eastern Partnership countries, will perform the music of Polish composers such as Karol Szymanowski and Henryk Wieniawski, in cities throughout Poland and in some of the most prestigious concert halls in Europe.

It would be difficult to mention all of the projects related to the Eastern Partnership, as there are so many of them, particularly in Bia∏ystok and Lublin, and I would not want to limit myself only to these projects because there will also be many more.

During [the Polish] presidency we will host quite a few important political meetings in Warsaw, Sopot, Poznaƒ, Kraków and Wroc∏aw, and in each one of these cities spectacular cultural programs will follow the political discussions.

Every city has been chosen for a different cultural discipline.

For example Poznaƒ will be the city of dance and classical music. Kraków will host theater and contemporary music and Katowice, modern design.

How will the Polish cultural offensive abroad look?

In European capitals – Brussels, London, Berlin, Paris, Madrid, Athens, Kiev, Moscow and Minsk and also in such cities as Beijing and Tokyo, we will organize cultural events promoting various forms of achievement by the three Polish artists who are at the center of our offensive.

These are the composer Karol Szymanowski and the writers Czes∏aw Mi∏osz and Stanis∏aw Lem. In all these cities we will also present exhibitions by Polish artists, designers, performing artists, as well as screenings of Polish films. We have ambitious plans to be present at the most important European Festivals. The word “cultural offensive” is, in this context, fully adequate.

The main point for the foreign cultural program and Polish program will be the European Culture Congress, to be held in Wroc∏aw on September 8-11, with the participation of ministers of culture from the 27 member countries of the European Union. The congress will be divided into three sections.

First there will be discussions between European artists, scientists and politi-

cians about the role of temporary culture, its problems and challenges in an era of new technology of communication will take place.

Under the motto “Art for Social Change” we would also like to initiate a discussion about the role of culture in creating social and economic development in Europe. These debates will be linked to a book written especially for the congress by the famous Polish philosopher, Zygmunt Bauman, who will also be the honorary guest of the congress.

Second, during the four days of the congress an interdisciplinary cultural festival will launch many cultural events, exhibitions and concerts. The events include a big symphony concert conducted jointly by famous Polish composer Krzysztof Penderecki and Radiohead star Jonny Greenwood. The young avantgarde Polish writer Dorota Mas∏owska and famous experimental theater director Krystian Lupa will also present a special performance in the Polish Theater in Wroc∏aw.

Third, an important part of the congress will be organized by the non-governmental European organization “A Soul of Europe,” where European politicians and artists will exchange views about freedom in culture, its links with the economy and various models for supporting and financing culture.

It is worth mentioning that one of the founders of the organization was the late Polish intellectual, historian, and former minister of foreign affairs, Professor Bronis∏aw Geremek, whose dream was to hold a meeting of “A Soul of Europe” in Wroc∏aw. It will finally happen, although unfortunately he will not be able to see it.

The Polish presidency of the EU will begin on July 1 in Warsaw. What will be the cultural program for the inauguration?

Compatriots and guests from other countries will find a lot of opportunities to participate in cultural events in Warsaw, as we want to offer culture for everyone. In Plac Defilad, we propose a concert of Polish film and jazz music, performed by wellknown international artists.

In PowiÊle we will stage an experimental music scene, at Mariensztat, which will be a big cultural event for children. Ethnic and folk music will be played in the Old Town Market Place. The National Theater will prepare a premiere of the opera “King Roger” by Karol Szymanowski.

We would like July 1 to boast a veritable cultural fiesta in Warsaw, a city which for the next six months will serve as the capital of Europe. ●

www.wbj.pl

9

10

OPINION & ANALYISIS

www.wbj.pl

APRIL 26 - MAY 8, 2011

Instability in the euro zone Q

uestions about whether a euroskeptic government in Finland will stymie the upcoming Portuguese bailout and whether Greece will default on its debts are contributing to markets’ concerns over the eurozone. However, both risks are overstated.

Finnish elections and the Portuguese bailout Results from Finland’s April 18 elections indicate Helsinki will take a decided turn toward euroskepticism.

The right-wing True Finns won 39 seats in the 200-seat parliament, gaining an impressive 34 seats over their 2007 performance. Most of these seats were won at the expense of the major center-right conservative parties, such as the Center Party.

This comes at a particularly pivotal juncture, as the Portuguese bailout is set for approval by the euro zone finance ministers at their May 16 meeting, with the Finnish parliament expected to be constituted only a few days later. True Finns leader Timo Soini reiterated on April 20 that his party would not accept a Portuguese bailout in the form in which it was being negotiated. A Finnish veto on the issue would likely scuttle the entire bailout and resurrect doubts about the efficacy of the euro zone support mechanisms painfully negotiated over the past 12 months.

Both the True Finns and the cen-

ter-left Social Democratic Party – the other party now entering coalition talks with the winner of the most seats, the center-right National Coalition Party – want Portugal to restructure its debts at the expense of investors. This would mean partially defaulting on the debts, a condition that is not provided for by the €440 billion ($640 billion) European Financial Stability Facility (EFSF) bailout mechanism. Jyrki Katainen, the leader of the National Coalition Party and now likely prime minister, has nevertheless set support for the Portuguese bailout as a necessary condition for the formation of a coalition government.

Katainen, whose party is strongly pro-EU and who, in his capacity as finance minister, negotiated the EFSF package, will compromise on ancillary electoral issues important to the Social Democrats and True Finns – retirement age and immigration, respectively – to get cooperation on the Portuguese bailout. He ultimately needs only one of the two parties to join the government, so satisfying both parties is not necessary. In fact, Katainen can play the two euroskeptic parties off one another, using their role in the future government as a reward with which to extract concessions on the Portuguese bailout.

Therefore a Finnish veto of the Portuguese bailout is unlikely. Nonetheless, the election in Finland does

illustrate that an election platform of euroskepticism is proving popular, especially in countries expected to support the peripheral economies with bailouts. Euroskeptic parties throughout Europe will likely use this new popularity to force concessions on their core issues, such as their favored social or economic policies, from pro-EU parties by holding them hostage on European matters, which often require unanimity.

“A Finnish veto would likely scuttle the entire bailout” Ultimately, Finland is a relatively small EU member state. While it is one of the last six AAA-rated euro zone members, Finland only accounts for two percent of euro zone gross domestic product (GDP) – even less than Greece. It has a historically independent foreign policy streak, but in the post-Cold War era, it tends to depend on its links to mainland Europe as a strategic counterbalance to perceived Russian threats. As such, it will be difficult for Helsinki to stand by itself, especially if the other countries that control EU spending, such as Germany, approve the bailout.

The threat of Greek debt restructuring Renewed talk of Greek debt restructuring also has raised concerns about euro zone stability. The issue was sparked by a report by German daily Der Spiegel at the beginning of April that cited high-ranking International Monetary Fund officials as saying the fund was recommending Athens restructure its debt – in other words, default on part of its financial obligations. After the report was published, a number of high-ranking German politicians stated their agreement, while EU and Greek politicians – and even U.S. Treasury Secretary Timothy Geithner – denied that such measures were necessary.

A Greek debt restructuring is inevitable but not necessarily imminent. Athens is beginning the second year of its three-year, €110 billion bailout. This package was specifically designed to fully fund Greece through the length of the program and thus remove the need for Athens to tap the debt markets through mid2013.

Even if Athens completes its bailout program successfully, it must then return to markets and thus may become the first country to tap the post-2013 ESM. However, at that point some sort of investor “participation” – default on some debt – will be inevitable. The problem for Athens is that even with severe aus-

terity measures, the interest payments on its debt will increase from €14.7 billion in 2010 to about €21 billion in 2015, accounting for more than eight percent of GDP. Even if we are to take Athens’ (optimistic) growth estimate of between two and three percent and assume that all revenue-generating reforms succeed and that austerity measures are fully implemented, Athens will not be able to shake off its mounting debt problem. In 2012, gross debt as a percent of GDP is expected to reach 158 percent.

This is nothing new. The Greek bailout was intended to buy Germany and the rest of the euro zone three years to clean the balance sheets of their banks and major sovereigns so that when the eventual Greek – and potentially Irish and Portuguese – defaults do come, they will be peripheral events in a very large currency union rather than systemic problems.

The continued uncertainty the Greek default poses is in fact an indication of how much further the euro zone needs to go to settle these fears, especially with banking sector problems still largely unresolved, rather than of how Greece actually still matters. ● This edited version of “Instability in the euro zone” is reprinted with permission of STRATFOR

The next edition of Trendbook Poland – a guide to business trends from Warsaw Business ess Journal

Part of Warsaw Business Journal’s series of business inesss guides

Circulation: 12,500.

Distributed to business leaders, diplomats and investors interested in doing business in Poland

vol.2

To order a copy of Trendbook Poland contact: Krzysztof Wiliński (kwilinski@valkea.com)

OPINION & ANALYISIS

APRIL 26 - MAY 8, 2011

www.wbj.pl

11

On European defense policy, Poland can’t have it both ways

P

oland, if you believe the hype, is the biggest proponent of a common European Union defense policy. It has made defense one of its top policy goals for when it takes over the rotating EU presidency in July, and in recent years has played up its participation in NATO

“If Poland wants to become a leader on European defense policy, it must take a leadership role” missions, especially in Afghanistan, as well as its partnership with the Americans in Iraq.

So it came with some surprise that Poland’s government took such a strong and immediate stand against getting involved in NATO’s military operation in Libya. Poland would, the government said, aid in terms of logistics, but would not fire any of the rounds.

The reasons behind this position were, rather obviously, political.

Prime Minister Donald Tusk, always adroit at reading public opinion, knew that Polish military activity in

Libya would not go down well with a populace who saw no benefit to Poland getting involved.

The lukewarm stance of the United States was an important factor as well. If the US wasn’t going to be leading this fight (it eventually gave up leadership of the operation to France) and if it wasn’t going to be in it for the long-haul (that was clear when President Barack Obama said no US boots would be

put on the ground), then Poland wasn’t going to get involved. When it comes to defense, Poland’s partnership with the US is paramount.

Abstention from military action in Libya was not going to jeopardize that friendship.

Those are all correct assessments on Mr Tusk’s part, and that’s not to mention the simple fact that Poland doesn’t have the money for a military adventure right now. Anything

that could add to the country’s spending on such a scale would almost surely push the debt-to-GDP ratio above the 55 percent threshold, triggering tough, legally mandated spending cuts in next year’s budget.

Yet Mr Tusk also knows that Col. Gaddafi’s reign in Libya is unsustainable. During his trip to the UK in late April, the Prime Minister told BBC in an interview that allowing Mr

Gaddafi to remain in power was “not an option.”

But by choosing not to take part in military action in Libya Poland is in no position to dictate options. As WBJ went to press, it was far from clear that Libya’s rebel forces would hold the territory they had gained, much less push Mr Gaddafi from power.

Admittedly, Polish planes in the air wouldn’t have necessarily tipped the balance in the rebels’ favor, but if Poland is going to support the removal of Mr Gaddafi it ought to put its money – and indeed its military might – where its mouth is.

Poland has chosen to make defense a priority because of its visible and admirable roles in recent conflicts in Iraq and Afghanistan – roles that, Poland hopes at least, have added to the international prestige that the country so desperately craves.

But Poland’s government can’t have it both ways. If it wants to become a leader on European defense policy, then it must take a leadership role – and not just when it’s politically expedient.

Otherwise, when it comes time to press Europe to build a more robust defense policy and infrastructure, there’s little chance that anyone will take it seriously. ●

A weekend in national colors Joanna Wóycicka

N

owy Âwiat – Warsaw’s most expensive street. The middle of a fine spring day. A young man is walking along it and is trying to give passersby a leaflet-like small picture with the image of the Polish Pope John Paul II. “The Pope for you, madam, the Pope for you, sir, free of charge,” he says encouragingly.

Passersby look at him as though he is crazy, look at the picture and … walk on by. On a 100-meter-long stretch of street no one wanted to take a free picture of the soon to be beatified John Paul II. In broad daylight, in the heart of his Polish homeland.

Incomprehensible.

A national saint This year the long May weekend so beloved by Poles will have a specific character. On May 1, Labor Day, the beatification ceremony for the Polish Pope John Paul II will take place in Rome. On May 2, National Flag Day

will be celebrated, and a day later the anniversary of the ratification of the Polish Constitution of 1791. This was the first modern codified constitution in Europe and the second in the world – after that of the United States.

Just a few months ago it seemed that the beatification of John Paul II would be transformed into yet another over-commercialized event. The souvenir and trinket business was set to have a field day.

Instead however, a few days before the beatification, one would have had to search quite intently to find a souvenir shop with a clay bust of the soon-to-be beatified Pope, let alone mugs, pens, posters or publications.

Nor was there any sign that Poles were ready to besiege Rome. The prices in Roman hotels fell after it became clear that travel agencies were having problems filling up pilgrimage trips. In the best case scenario, no more than 32,000 Poles will

travel to Rome – 10 times less than the number who gathered at the mass which the late Pope held in Warsaw in 1979 during his first trip to Poland as Pope.

The Primate of Poland, Archbishop Józef Kowalczyk, unexpectedly said a few days before the ceremony in Rome that “John Paul II does not need any more monuments. Let our tangible actions be his monuments.”

The martyr Lech Kaczyƒski Sociologists note that many ultraCatholics in Poland have changed the focus of their adoration. Instead of flaunting images of John Paul II, they spend their cash on baubles with the picture of President Lech Kaczyƒski, who perished in the Smolensk disaster just over a year ago. This stratum of Polish society has its new martyr, in whose name it fights, accuses, sings and prays.

A week before the beatification,

Lech Kaczyƒski’s brother, Jaros∏aw, head of the Law and Justice (PiS) opposition party, intensified the language of the debate surrounding the Smolensk disaster. He proclaimed that finding its “explanation” was a matter of national concern. From there it is but a short step to call the plane crash “a new Polish via Dolorosa” and his twin brother a national martyr.

Rallies by Kaczyƒski’s supporters near the Presidential Palace during which they sang hymns and held burning torches have seized the followers of conservative ultra-Catholicism.

And now, it must be admitted that they have become the target for the producers of “sacred” knickknacks.

For example, near the palace on Krakowskie PrzedmieÊcie, t-shirts with the picture of Lech Kaczyƒski and the Virgin Mary are on sale for z∏.30. An extra z∏.5 is the price of the same t-shirt, which, the salesman

assures, has been blessed in Toruƒ by Father Rydzyk, founder of the conservative Catholic radio station Radio Maryja.

“Polish ultraCatholicism has lost its interest in John Paul II” Polish ultra-Catholicism has lost its interest in John Paul II. It has a new figure of adoration: former President Lech Kaczyƒski. ● 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

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.

PUBLISHER: VALKEA MEDIA SA

EDITOR-IN-CHIEF: ANDREW KURETH (AKURETH@WBJ.PL)

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POLITICS EDITOR

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12

COVER STORY

www.wbj.pl

APRIL 26 - MAY 8, 2011

Expecting an exodus

¸UKASZ MAZUREK/WBJ/SHUTTERSTOCK

Estimated maximum number of Poles per year who will leave for Germany after May 1, 2011 Sources: EC, BNP Paribas, Polish Ministry of Labor

Remi Adekoya

Labor

A flood across the Oder?

Germany and Austria open their labor markets to Poles on May 1. Will the change herald an exodus that cripples Poland’s economy?

On May 1, Germany, Austria and Switzerland will open up their labor markets for Poles and citizens of the seven other Central and Eastern European countries that joined the European Union in 2004. At the time Germany and Austria were the only two EU member states to make use of

the maximum seven-year transition period before granting CEE workers full access to their labor market.

Switzerland, although not a EU member, also decided to open its market on May 1.

As the date draws nearer, discussions on exactly how this new reality might affect

the Polish economy has intensified. Estimates vary as to how many Poles will eventually leave the country in search of greener pastures.

One thing everybody seems to agree on however, is that Poles will make up the largest number of CEE economic migrants. But the consequences that this will have on Poland’s economy depend to a large extent on exactly how many Poles do make the choice to leave.

Pluses and minuses According to estimates by the European Commission, around 100,000 people a year will emigrate to Germany from the eight CEE countries.

“We expect about half of them to be Poles,” said the EU Commissioner for Employment László Andor, at a press conference. Mr Andor said workers from CEE countries would help reduce labor shortages in

important sectors of German industry, as well as in that country’s service sector.

“This will lead to increased prosperity and will increase GDP growth in Germany by 0.3 percent yearly,” said Mr Andor, pointing to the experience of other EU countries who had earlier opened up their markets to new member states.

However, Mr Andor also pointed to the possible negative consequences for the

CEE countries themselves as a result of the expected increases in emigration.

“The reality in many Central and Eastern European countries is that when foreign labor markets are opened for their citizens, they lose skilled labor in some sectors, such as the medical sector,” Mr Andor said.

That prospect is worrying for both the government and employers in Poland, espe-

COVER STORY

APRIL 26 - MAY 8, 2011

www.wbj.pl

Legal Eye

Earnings: Poland lags

“Germany doesn’t lack jobs, but labor, and in the next few years this trend will be even stronger”

13

GDP per capita (in $ thousands)

Bye-bye work permits

Austria Germany Poland

cially when they consider reports that far more Poles will leave than predicted by Mr Andor.

Mega brain-drain?

One such report was prepared by Micha∏ Dybu∏a, chief economist for BNP Paribas. It estimates that up to 450,000 Poles could leave for Germany and Austria within the next four years.

“Although this is purely a [subjective] assessment, I think the European Commission’s estimates are too low.

Based on what we know, anywhere from one to two million Poles went to the United Kingdom and Ireland when those labor markets were opened,” said Mr Dybu∏a.

“Quite a lot of Poles speak German, the country is much closer than the United Kingdom and culturally, it is easier for Poles to integrate in Germany than in the UK,” said Mr Dybu∏a, adding that German politician and former banker, Thilo Sarrazin, author of “Germany abolishes itself,” a controversial book on immigration, stated that people from the CEE region easily integrate with German society.

Mr Dybu∏a also said that out of all the major European economies, only Germany is currently in good financial shape, which increases its attractiveness.

Voice of skepticism However Sebastian Mikosz, president of Lot Polish Airlines and a senior advisor to Société Générale in Poland, was less worried about huge numbers of Poles flooding across the Oder River.

“I personally would lean towards the 50,000-a-year figure and I think even that is high,” he said.

“Germany has already conducted some recruitment initiatives in Poland and they weren’t very successful. For

example, authorities from one of the German states came to Poland recently, offering about 400 jobs to IT specialists. A two-year contract, good conditions and no prerequisite for knowing German. They were only able to recruit about 30 people,” he added.

Mr Mikosz said that those interested in going to Germany would be more interested in working there on a short-term basis, pointing out that a one-year stay in Germany for work would look good on a CV. But he was more skeptical about Poles going to Germany for a long-term stay.

“I don’t think many [Poles] will decide to go there on a long-term basis.

Of course you can earn more money in Germany than in Poland, but the cost of living is also higher and so your living standards might be similar to what you have in Poland, and you won’t be able to save much money,” he said.

The government’s view The Polish government itself seems to lean towards Mr Dybu∏a’s figures. The Ministry of Labor estimates that within the next three years up to 400,000 workers could leave Poland, mostly from voivodships in the western part of the country. The Labor Ministry believes Germany is mostly interested in nurses, engineers, IT specialists, doctors and laborers.

German Minister of Labor Ursula von der Leyen confirmed that German firms were keen to take on foreign workers, and said the opening up of her country’s labor market would be good for German companies.

Those would be able to train young Polish and Czech workers for jobs, since there were too few in Germans interested in this type of

Un-open to immgration German opinion on the opening of the country's labor market to the eight CEE countries that entered the European Union on May 1, 2004 (%)

14%

Against

In favor

22% 64%

No opinion

Source: IMF

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

Switzerland $ ‘000

10

20

30

40

50

60

70

80

Source: IMF

Jobs available?

Unemployment rates 2010 (%)

10 8 6 4 2 % Austria

Germany

Poland

Switzerland Source: Eurostat

Economic growth: Poland leads the pack Expected GDP growth (%)

2011

2012

6 5 4

Seven years to the day after Poland joined the European Union, the last remaining restrictions imposed on Polish workers within the EU will be lifted when both Germany and Austria drop all work permit requirements on Poles on May 1. At the time of Poland’s accession to the European Union in 2004, both Germany and Austria conditioned their acceptance of the 10 new member states on their right to restrict the number of workers from these new member states for up to seven years. Now, these restrictions will expire.

Germany and Austria will continue to impose restrictions, though, on the workers from the newest member countries, Bulgaria and Romania, presumably until 2014.

Justification for limits

3 2 1 % Austria

Poland

Germany

Switzerland Source: IMF

training.

“We really need workers.

We don’t lack jobs, but labor, and in the next few years this trend will be even stronger,” said the minister.

Half-full or half-empty?

If as many as half a million Poles do indeed leave, it will have a significant impact on Poland’s economy. The question is then not if, but how it will change Poland’s economic situation. Mr Dybu∏a pointed to higher wages and inflation.

“Losing workers, especially skilled workers, would have a negative effect on the economy. The resulting labor shortages in Poland would lead to rising labor costs, which would in turn further fuel inflation,” he said.

“The effects would not be felt immediately, but in 2012-2013 and the central bank would then be forced to react if it is serious about keeping inflation low,” added Mr Dybu∏a, saying that all this could lead to a 0.3 percent reduction in GDP growth.

In contrast, Mr Mikosz saw the situation more positively.

“This could be a significant opportunity for Polish firms that can provide highquality services in the areas of IT or health care, as their prices could be attractive for Germans. I always see opportunities in the liberalization of economies,” said Mr Mikosz.

“We should not be concentrating on rivalries with each other in Europe but on Europe competing with Asia, which is catching up fast. If we do not do this very soon, Europe might be a nice vacation spot but have problems competing economically,” he said.

Mr Mikosz also pointed out that the naysayers had predicted downsides to Poland joining the EU in the first place.

“I remember all that talk of rich Germans coming to buy all the Polish land and kicking out poor Poles. That seems laughable today. Tell me, where are all those Germans now?” he asked.

“Let’s concentrate on opportunities, improving trade and the Polish economy so that maybe one day, Germans will come to work in Poland simply because they can earn more money here,” said Mr Mikosz. ●

By virtue of Article 39 of the EU Treaty, each member state is required to allow workers from another member state access to its labor market without restriction.

As is often the case with the EU Treaty, however, exceptions (otherwise known as derogation periods) abound.

As a condition of its accession to the EU, Poland agreed that other member states could continue to impose restrictions on Polish workers for a limited time.

Specifically, Annex XII to the Treaty of Accession, by which Poland joined the EU, permits a member state to “regulate access to its labour market by Polish nationals for a period of two years following accession.” Germany, along with most EU member states at the time, took advantage of this derogation period and imposed restrictions on Polish workers.

Moreover, each member state retained the right to extend such restrictions for up to seven years in order to address serious disturbances in their respective labour markets. In justifying its decision to extend the restrictions to seven years, the German government cited its 11 percent unemployment rate near the end of the initial two-year term.

In the end only Germany and Austria actually imposed restrictions on workers from the new member states for the full seven-year deroga-

tion period. In contrast, Poland dropped all restrictions on German and Austrian workers in 2007.

Exceptions to the exceptions Germany, despite requiring Polish workers to obtain a work permit during the past seven years, did in many cases extend preferential treatment to Polish nationals. For instance, Polish service providers have been able to conduct economic activity in Germany without limitation, with the notable exception of those service providers engaged in the construction, industrial cleaning and interior decorating sectors.

Moreover, the German government, facing a shortage of health care service providers, has readily accepted the professional qualifications of licensed Polish medical personnel. A Polish physician has been able to practice in Germany from the date of Poland’s accession to the EU without having to satisfy any additional licensing requirements.

Other professionals, such as lawyers, teachers and engineers, have also been able to practice their profession in Germany upon approval by the respective national authority, provided that the duration and content of their training did not differ significantly from the corresponding German requirements.

Going forward As of May 1, a Polish worker may work in Germany or Austria on the same terms and conditions as a German or Austrian national. A Polish national employed in Germany, for instance, may work on the basis of a full or part-time employment contract, a temporary contract or based upon a delegation contract with a Polish employer.

Regardless of the type of employment contract, a Polish national working in Germany will be subject to German labor regulations.

With respect to the delegation of Polish workers to Germany by Polish companies, German law imposes minimum wage requirements to ensure that Polish and German workers are treated similarly. ●

14

BUSINESS ENVIRONMENT

www.wbj.pl

Industrial output disappoints Poland’s industrial output growth eased to 7% yearon-year in March. That compared to 10.7% y/y growth in February.

Construction output grew 24.2% y/y, well above market predictions. There was also a sharp increase in producer price inflation in March. The Producer Price Index rose to an annual rate of 9.3% last month from 7.5% in February. Surging global commodities prices and a weaker Polish currency accounted for the increase.

Average retirement age jumps Last year, the average Polish male retiree was 60.2 years old, while the average female retiree was 59, according to data from social insurer ZUS. The average retirement age for both genders was 59.6. In 2006, the average retirement age was much lower (56.6 years). The situation began to change two years ago, after the government implemented new retirement regulations. ●

Sustained growth

Economic growth

CEE catching up with Poland By 2012, the gap between Poland’s GDP growth rates and those of its peers will start to close, but that’s not necessarily bad news According to the World Bank, in 2011, Poland and Slovakia will still be the clear leaders in GDP growth among the 10 post-communist nations of the European Union, with 4.0 and 4.1 percent growth respectively.

But by 2012, the region’s average annual GDP growth will stand at 3.8 percent and Romania will lead with 4.4 percent GDP growth, according to the organization’s last EU10 economic outlook report.

Does this signal the end of

APRIL 26 – MAY 8, 2011

Poland’s shining moment as one of the region’s, and indeed one of Europe’s most resilient economies following the crisis? Perhaps not.

According to Kaspar Richter, World Bank senior economist and main author of the EU10 economic outlook report, this “closing gap” reflects the fact that Poland is already growing at its potential rate while the other countries, which were hit much harder during the crisis, are getting closer to their potential rates.

“This shouldn’t reflect badly at all on Poland, quite the contrary,” said Mr Richter.

“Poland should stick more or less to its potential growth rate, because we learned from the crisis that it is very impor-

tant to prevent overheating the economy,” he added.

And, according to Mr Richter, the country is on the right track to make sure growth continues at a sustainable rate, with the government tightening fiscal policy in the 2011 budget and the National Bank of Poland recently raising interest rates.

Another encouraging element regarding the region’s economic climate is the increased distinction that investors are making between international and euro zone troubles on the one hand, and the EU10 economies on the other.

Despite an unstable international environment in 2010 and at the beginning of 2011,

EU10 GDP growth rate for 2010, 2011 and 2012 Country

2010

2011

2012

EU10

2.1

3.0

3.8

Bulgaria

0.2

2.5

3.4

Czech Republic

2.5

2.2

2.7

Estonia

3.1

3.7

3.9

Latvia

-0.3

3.3

4.0

Lithuania

1.3

3.3

4.0

Hungary

1.1

1.8

3.0

Poland

3.8

4.0

4.2

Romania

-1.3

1.5

4.4

Slovenia

1.2

2.4

3.0

Slovakia

4.0

4.1

4.3

growth in central Europe has continued. Momentum in the recovery has been strong enough to overcome concerns related to international oil and commodities prices, volatility in financial markets, political crises in North Africa and the Middle East and a natural disaster in Japan.

And while in 2010 sover-

eign debt crises in the euro area tended to have an impact on the EU10 in terms of risk assessment, “we haven’t quite seen that in the latest case of Portugal, and I think one reason is that markets are appreciating that the recovery in the EU10, including Poland, is holding up very well,” said Mr Alice Trudelle Richter.

World Bank: Polish GDP strong this year and next The World Bank has predicted that Polish GDP will grow by 4.0 percent this year and by 4.2 percent next year, making it one of Europe’s growth engines. In its EU10 economic outlook report, the World Bank also predicts Slovakia to see strong growth at 4.3 percent in 2012.

“The performance of Slovakia and Poland is set to remain solid thanks to low pre-crisis imbalances, deep integration into European production networks, EU funds, and, in the case of Poland, solid consumption,” the World Bank says.

The Czech Republic and

Slovenia are expected to see more modest growth in the next two years. The Czech economy is expected to grow by 2.2 percent this year and 2.7 percent in 2012 while Slovenia is predicted to grow by 2.2 percent this year and 2.5 percent next year.

The report also states

that two and a half years after the global financial crisis began, economic output in the EU10 had returned to the pre-crisis level.

The job market is perhaps the sector which is taking the longest to recover, with unemployment still close to its crisis peak across the

region. However the opening of the German and Austrian labor markets to countries that joined the EU in 2004 (including the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia) should help drive unemployment down (see cover story pp.12-13). ●

Poland is one of the world’s premiere emerging office hot spots

PBM Po∏udnie Development will renovate a structure that dates back to 1873 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 tenants at University Business Park Developer Globe Trade Centre has leased a total of 850 sqm of office space at its University Business Park complex in ¸ódê to Bankruptcy Management Solutions, Tax Care and Pharmena. The new tenants, representing the IT, finance and pharmaceutical industries, respectively, will move into the property in June.

University Business Park is located between ¸ódê’s Al. KoÊciuszki and ul. Wólczaƒska. ●

In this issue Morski Park Handlowy . . . . . . 15 Infosys in Green Horizon . . . . 15 Poland top office market . . . . 16 Investment performance . . . . 16 Road tender winners . . . . . . . .16 Property-related stocks . . . . . .16 Karawela moves forward . . . .17 Mazury tourism . . . . . . . . . . . . .17 New Best Western . . . . . . . . . . .17 Zielona Przystań construction 18 PBM builds in Praga . . . . . . . . .18

Morski Park Handlowy opens A second phase of the mall is already in the planning stages On April 15 developer Liebrecht & Wood opened its Morski Park Handlowy retail project in Gdaƒsk. The investment, whose value is estimated at approximately €60 million, combines an outlet center with a traditional retail park, and is the company’s first such project in Poland. Previously the firm developed a similar scheme in the Romanian capital of Bucharest.

The newly delivered development comprises an 11,047-sqm OBI store and a 8,412-sqm Carrefour hypermarket with a shopping gallery and 1,633 sqm of office space. Fashion House Outlet Centre, which comprises over 120 stores and which has existed at the loca-

tion since 2005, is also part of the complex.

Liebrecht & Wood is already planning a second phase of Morski Park Handlowy, which will include bigbox space as well a gas station, a car wash and a drivethrough restaurant. Agata Meble will be one of the anchor tenants in the project. Construction on the scheme is expected to launch in the spring of 2012 and finish by the end of that year.

Liebrecht & Wood has been active in the Polish market since 1993, with the company’s portfolio in the country comprising office, retail and warehouse projects. The firm is one of the investors behind Plac Unii, a z∏.550 million office and retail project currently under construction in central Warsaw.

The investment’s value is estimated at €60 million

Adam Zdrodowski

Office leases

Infosys BPO Poland signs record Green Horizon lease deal The deal is the “largest lease in ¸ódê’s office market in three years” Business Process Outsourcing company Infosys BPO Poland has leased 11,500 sqm in Skanska Property Poland’s Green Horizon office project in ¸ódê. The company, which is planning to expand its range of services and increase its staffing level in the region in the next two years, will move its headquarters to the property in October 2012.

“It’s the largest lease in the office space market in ¸ódê in three years. ¸ódê is currently seen as an excellent location for investments by companies from the modern business services sector,” said Krzysztof Misiak, senior negotiator, office space,

at Cushman & Wakefield, which represented the tenant in the lease transaction.

Located on ¸ódê’s Rondo SolidarnoÊci, Green Horizon will be a seven-storey, class-A, LEED-certified development comprising a total of 33,000 sqm of space and a dual-level underground parking lot for 395 cars. The first phase of the investment, which will offer 19,000 sqm, is scheduled for completion in Q4 next year.

Skanska Property Poland has been present in the Polish office market since the early 1990s. Apart from ¸ódê, the developer is present in cities such as Warsaw, Wroc∏aw and Katowice, in which it is currently involved in the Green Corner, Green Towers and Silesia Business Park projects, respectively.

COURTESY OF FIRST PUBLIC RELATIONS

Ronson Development has launched sales of apartments in its Panoramika residential project in Szczecin, Zachodniopomorskie voivodship. The first phase of the scheme, which is located in the Warszewo district, will comprise two buildings with a total of 82 units.

Construction started in December last year and is scheduled to finish in Q2 2012. “We wanted to prove our credibility to potential clients; this is why we decided only to launch sales three months after the start of construction,” Andrzej Gutowski, Ronson’s sales and marketing director, said in a statement.

APRIL 26 - MAY 8, 2011, LI 16/16-17

Shopping centers

COURTESY OF IMAGO PUBLIC RELATIONS

Ronson launches Szczecin sales

•

Infosys BPO Poland will move its headquarters to the property in 2012

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

16

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Office

Millennium Plaza leases Atlas Estates has recently signed six lease agreements for a total of 11,000 sqm at its Millenium Plaza high-rise building in Warsaw. Asseco prolonged its lease agreement for 8,500 sqm and new tenants, including Wipro and Golden Floor, have entered the property, leasing 1,500 sqm and 700 sqm, respectively.

New Gorzów Wielkopolski shopping mall Irish investment group Caelum Development and Hungarian developer Futureal have concluded a joint venture agreement on the Nova Park project in Gorzów Wielkopolski. The shopping center is scheduled to open in Q1 2012. Construction commenced at the end of 2010. Nova Park will be the biggest shopping center in Lubuskie voivodship. It will offer 32,400 sqm of GLA and will house 150 retail and service units. ●

Poland one of world’s top office markets It is the highest-rated European country in a new report

Trzós∏o, head of capital markets in CEE at Jones Lang LaSalle. “An example of this trend can be capital originating from the Middle East.

These funds are seeking alternative and safe investment opportunities. Not endangered by any natural disasters, and with good macroeconomic prospects, Poland offers such opportunities to global investors.”

The remaining markets defined by JLL as highgrowth regions include Brazil, India, China, Russia, Indonesia, Mexico, Turkey, Hong Kong and Singapore.

This improvement in the Polish office market is reflected by the record leasing activity noted in Warsaw in Q1

According to a new report by Jones Lang LaSalle (JLL), Poland is one of the emerging hot spots in the global office market. No other European market was evaluated as highly by the consultancy.

According to JLL, the Polish office market, like other office hot spots, owed its excellent position mainly to high economic growth prospects, an upswing in leasing activity and renewed corporate confidence.

“Lately, we have seen increased interest in the Polish real estate market from global investors,” said Tomasz

Tight squeeze in Wroc∏aw Percentage of vacant office space in regional Polish cities 25 Q4 2010

Q1 2011

20 15 10 5 0

Łódź

Katowice

Kraków

Poznan

Tri-city

Wroc∏aw

Source: Warsaw Research Forum

Property-related stocks Security

APRIL 26 - MAY 8, 2011

Closing price on April 21

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏.mln)

BUDIMEX

107.50

-1.29

84.55

109.10

9.14

25,530,098

2,744.49

CELTIC

19.21

-3.95

17.43

60.55

N/A

34,068,252

654.45

DOMDEV

45.20

-3.81

38.52

61.00

-16.91

24,560,222

1,110.12

ECHO

5.16

1.78

3.95

5.40

17.27

420,000,000

2,167.20

ELBUDOWA

158.70

3.39

150.00

188.40

-11.34

4,747,608

753.45

ENERGOPLD

3.95

-0.25

3.57

4.33

-7.93

70,972,001

280.34

ERBUD

38.50

-0.16

38.07

61.00

-24.51

12,602,711

485.20

GANT

13.93

1.09

12.98

26.00

-44.72

20,499,953

285.56

GTC

21.00

-1.50

19.58

24.98

-11.58

219,372,990

4,606.83

HBPOLSKA

2.14

-2.73

2.14

3.90

-39.38

210,558,445

450.60

JWCONSTR

15.27

4.02

13.50

18.69

-8.84

54,073,280

825.70

LCCORP

1.60

0.63

1.41

1.72

0.63

447,558,311

716.09

MARVIPOL

8.40

-1.18

8.36

17.92

-53.85

36,923,400

310.16

MIRBUD

3.97

-6.59

2.79

4.75

41.79

75,000,000

297.75

MOSTALWAR

41.23

-3.94

42.92

74.80

-44.88

20,000,000

824.60

MOSTALZAB

2.77

-1.42

2.63

4.75

-39.91

149,130,538

413.09

ORCOGROUP

35.00

-2.78

19.00

40.00

18.24

14,053,866

491.89

PBG

159.90

-8.21

159.90

252.00

-26.82

14,295,000

2,285.77

PLAZACNTR

4.75

10.47

3.70

6.20

-19.35

292,647,720

1,390.08

POLAQUA

18.70

-1.06

16.00

22.50

-8.29

27,500,100

514.25

POLIMEXMS

3.49

-1.41

3.33

4.99

-29.49

521,154,076

1,818.83

POLNORD

33.28

3.16

30.50

44.00

-21.97

22,340,189

743.48

RANKPROGR

12.80

-1.99

9.59

13.60

N/A

37,145,050

475.46

ROBYG

2.06

0.00

1.70

2.13

N/A

257,390,000

530.22

RONSON

1.54

5.48

1.36

2.03

-26.67

272,360,000

419.43

TRAKCJA

3.50

-5.41

3.32

4.97

-21.70

160,105,480

560.37

ULMA

88.00

1.15

70.00

88.00

8.64

5,255,632

462.50

UNIBEP

7.65

0.00

7.30

10.30

-4.61

33,927,184

259.54

WARIMPEX

10.50

1.35

7.64

10.85

10.41

54,000,000

567.00

ZUE

12.15

-5.08

12.15

15.14

N/A

22,000,000

267.30

2011.

According to the Warsaw Research Forum (WRF), the capital’s market saw deals signed for 198,000 sqm in the period.

Pre-lease agreements accounted for 31 percent (61,000 sqm) of the market, while 24 percent (48,000 sqm) of the deals comprised tenants renegotiating contracts.

Companies looking to extend

existing office premises took 9,300 sqm of space (five percent).

The largest pre-let deal in the quarter was concluded by TP Group. The telecoms operator leased 43,700 sqm in office complex Miasteczko TP. The level of vacant space in Warsaw at the end of Q1 2011 was 6.6 percent, an improvement on the end of

2010, when vacancy came to 7.2 percent.

Other Polish cities’ markets also noted higher interest in office leases in the first quarter of 2011. Apart from Wroc∏aw, which had the lowest office vacancy rate (2.1 percent) in the country, Kraków, Tri-city and Poznaƒ were the top Polish office destinations in the period.

Katarzyna Piasecka

Polish retailers seen as best performers in region Even though the Polish property market continued to see capital depreciation in 2010, income return indicated a rebound, according to real estate analysis firm Investment Property Databank (IPD) in its CEE Annual Property Index report.

According to the firm’s research, the Polish retail market constituted the best-performing sector in the entire CEE property market. In 2010 it recorded capital growth at 4.3 percent.

Industrial properties, in contrast, recorded the steepest capital depreciation in Poland, at -4.0 percent. Nevertheless, this still constitutes an improvement in comparison to 2009, when capital depreciation in industrial properties was -15.5 percent.

Although capital depreciation continued in Poland through 2010, at -1.8 percent, the country’s market performed better than its CEE neighbors. The Czech Republic, for instance, noted capital decline at -4.3 percent. In 2010, total income return rose in Poland to 5.3 percent, an improvement on the -4.7 percent recorded in 2009. Rental

values were flat for the year, implying a stabilization after the heavy write-downs of 2009, the firm said. “[The year] 2010 was [one] of mixed fortunes for Poland, the largest country in our CEE index,” said Dr. Nassos Manginas, Director for CEE at IPD in a statement.

“Capital decline was minimal, and a robust income return pushed total returns into positive territory. Though returns have been varied in the last three years, I think these results hint at a bottoming out for the market, and a possible

recovery in 2011 at an all property level.”

According to specialists from IPD, two predominant trends for the entire CEE property market in 2010 were: continued capital depreciation and a considerable rise in commercial property market returns. The firm reported that although the CEE market saw capital depreciation of -3.8 percent at the all property level in 2010, its commercial property market delivered a total return of 3.1 percent.

Katarzyna Piasecka

Retail rules Total income return index for Polish property market (December 2004 = 100) December 2009

December 2010

200 150 100 50 0

Retail

Office

Industrial

Source: IPD CEE Annual Property Index

Report: Strabag and Budimex leaders in road tenders Construction company Strabag Budowa Infrastruktury won the largest number of public tenders for road construction in the first quarter of 2011, according to a recent report by pressinfo.pl and Grupa Marketingowa TAI. Warsaw-based construction firm Budimex was the leader in terms of the total value of tenders won.

Strabag won 48 tenders worth a total of about z∏.262 million in Q1 this year, while Budimex concluded contracts for a total of almost z∏.753 million.

Next on the list of leaders was the Polish subsidiary of international construction gro-

up Skanska, followed by the Polish subsidiary of global road-builder Eurovia Group.

In the first three months of 2011, Skanska won 39 tenders for about z∏.157 million.

Eurovia Polska’s won 35 tenders for about z∏.297 million.

In terms of the regions of Poland that saw the most activity, Mazowieckie voivodship (where Warsaw is located) boasted the greatest number of tenders concluded in Q1.

The region, which saw 328 tenders concluded, accounted for some 14 percent of all such deals signed in Poland in the first three months of 2011.

The Wielkopolskie (Poznaƒ) and Âlàskie (Katowice) voivod-

ships are next on the list, with 263 and 203 tenders concluded in the period, respectively.

Lubuskie voivodship, where only 80 tenders were concluded, saw the least activity.

Mazowieckie voivodship also led in the value of tenders won, at z∏.1.7 billion.

Strabag is one of Europe’s leading construction groups.

Its Polish subsidiary has been active in the domestic market since 1985.

Polish contractor Budimex was created in 1968. The company is 59.06 percent owned by Dutch Valivala Holdings BV, a company from the Spanish Ferrovial Group.

Katarzyna Piasecka

APRIL 26 - MAY 8, 2011

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Blackstone gets Rank Progress centers

New hotels are popping up in Mazury

Poland’s lake district develops as touristic hot spot Poland’s lake district, the Mazury region, is set to see a boom in tourism in upcoming years that will be accompanied by new hotel investments, a new report from Cushman & Wakefield has found.

The region has been attracting an increasing number of tourists over recent years, and has gained some significant tourism and conference infrastructure. It is estimated that the region will see a dozen or so new three- and four-star hotels between 2011 and 2013.

According to data from the Central Statistical Office, there are currently 154 full-year tourism facilities in the region, offering a total of 15,520 rooms. Hotels constitute 68 percent of these facilities.

The biggest investment planned in the region so far is a hotel in Ta∏ty near Miko∏ajki, by real estate investor Europejski Fundusz Hipoteczny. The hotel will operate under the

Sheraton brand.

Two other hotel projects – Inpro Hotel in Miko∏ajki and Grand Tiffi in I∏awa are currently under construction.

One of the most significant recreation infrastructure projects planned in Mazury in the near future is the construction of a chain of mini-harbors. The project, supported by regional development organizations, is estimated to cost some €8 million.

Although it is difficult to estimate the exact total value of the hotel investments planned in the region in the next few years, Polish media sources have put the sum at approximately z∏.700 million.

The region’s conference infrastructure is also expected to develop with considerable speed.

“Increasing demand for conference infrastructure in hotels shown by business tourists is a result of the upswing in the economic situa-

tion in the Polish market and the increased number of domestic tourists using Polish hotels,” said Micha∏ Kuliƒski from Cushman & Wakefield.

“In the near future, this should translate into a considerable improvement in occupancy rates in the region’s hotels,” he added.

The Mazury region remains one of the most popular vacation destinations in Poland. Development of the region’s hotel infrastructure is additionally enhanced by the promotion of Mazury in the framework of the global “New7Wonders of Nature” initiative, which has created a new list of the seven natural wonders of the world for which Mazury is one of the candidates.

Renovation of several bits of road infrastructure, including the construction of the new S7 express road, add to the region’s attractiveness.

ruƒ authorities recently signed an agreement concerning co-financing of an investment to extend an existing tram line so that it can reach the planned mall. Karawela will also build new road infrastructure that will make the development of the new retail scheme possible.

The Karawela project has been designed by the Sud Architectes studio and the renowned French architect, Guillaume Sadoux, who previously worked on the interior designs of Warsaw’s Arkadia and Warszawa Wileƒska malls.

The development is scheduled for completion by the end of 2013. It is being commercialized by DTZ and Retail Spirit Poland.

Subsidiaries of investment fund Blackstone Real Estate have concluded preliminary sales agreements for Galeria Twierdza in ZamoÊç and Galeria T´cza in Kalisz, two shopping centers owned by developer Rank Progress. The total value of the transaction is estimated at about €352 million. The deal for Galeria Twierdza will be made between Rank Progress’ daughter company, Progress III, and Blackstone’s Rumex.

The sale agreement for Galeria T´cza is due to be concluded on December 30, 2011.

Adam Zdrodowski

S&T Daewoo in Tulipan Park Gliwice

COURTESY OF KARAWELA

COURTESY OF FIRST PR

Karawela applies for building permit Warsaw-based real estate company Karawela has applied for a building permit for an eponymous retail project in Toruƒ, in northern Poland.

The scheme will be developed on 21 hectares of land and is expected to become the largest investment of its kind in the region. It will comprise a shopping center and a retail park which will offer a total of 60,000 sqm of GLA. The planned shopping center, at an estimated value of some €50 million, will include a hypermarket and a multi-screen movie theater.

The retail park project, worth approximately €15 million, is expected to house interior decoration, sportswear and electronic goods retailers.

The investor and the To-

17

Industrial space provider Segro has leased 3,092 sqm of warehouse and 278 sqm of office space at its Tulipan Park Gliwice project in Silesia to car-parts manufacturer S&T Daewoo. ●

Katarzyna Piasecka

Eighth Best Western hotel in Poland links Warsaw and Wroc∏aw.

Eight hotels in Poland now operate under the Best Western brand. The facility is owned by W.P.H. AGRAHURT Export-Import S∏awomir Olak.

Symfonia hotel offers 35

COURTESY OF CISZEWSKI PR

Global hotel chain Best Western has added the threestar Symfonia hotel to its franchise network in Poland.

The hotel, located in Osjaków, near ¸ódê in the center of Poland, lies close to National Road no. 8, which

Western Symfonia joins the firm’s seven other hotels in Poland, including Hotel Cristal in Bia∏ystok

rooms and two suites. The hotel also boasts a restaurant and a conference area. The hotel constitutes part of Port 8, a rest area comprising a BP gas station and a Carrefour supermarket, as well as a car wash and parking lot for passenger cars and semi-trucks.

“Our hotel has been built mainly for professionals who use road no. 8 on business trips and who are looking for a rest area adapted to their business activities,” said Marzena Uram, manager of Best Western Symfonia.

Aside from the Symfonia facility, Best Western hotels in Poland are located in Bia∏owie˝a, Bia∏ystok, Katowice, Kraków, Rzeszów, Warsaw and Wroc∏aw. Hotel Felix in Warsaw joined the chain in the first half of April this year.

The Best Western chain was created in 1946. At present, it includes about 4,000 facilities across 80 countries.

Katarzyna Piasecka

Daily executive digest

Poland A.M. gives you the biggest Polish stories of the day.

Have the most valuable news delivered to your inbox each weekday morning.

Sign up for a 2-week free-trial! www.polandam.pl German version: www.polenammorgen.pl

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Car-parts importer and distributor Auto Partner has leased over 3,000 sqm of warehouse space at MLP Group’s Millennium Logistic Park Tychy project in Silesia.

Cushman & Wakefield represented the latter company in the transaction.

Knight Frank Poland RICSregulated Knight Frank Poland has become the first Polish real estate advisor to be regulated by the UK’s Royal Institution of Chartered Surveyors, a validation which is meant to confirm the company’s high standards and quality of service. The designation is valid for one year. “Being ‘regulated by RICS’ enables our firm to benefit from the validation of a well-recognized regulatory body,” Monika D´bska-Pastakia, partner, chairman of Knight Frank Poland’s management board, said in a statement. ●

APRIL 26 - MAY 8, 2011

PBM Po∏udnie Development builds in Warsaw’s Praga Developer PBM Po∏udnie Development is erecting an officeresidential complex in Warsaw’s Praga Pó∏noc district. Located between the capital’s ul. Kijowska, ul. Wieczorkiewicza, ul.

Brzeska and ul. Markowska, the project will comprise a renovated historical tenement house and two accompanying modern buildings.

PBM Po∏udnie Development will carry out the investment in two phases. Within the first phase of the project, construction on which is already underway and is scheduled to finish in September, the company will refurbish a 3,000 sqm structure dating back to 1873 and build an adjacent 5,000 sqm office building with six aboveground and two underground

floors.

In the pipeline is a second phase of the scheme which will comprise a new building with a dual-level underground parking lot for which residential and service space have been planned. However, PBM Po∏udnie Development says it may yet change the function of that structure and go with office or hotel space instead.

Established in 2002, PBM Po∏udnie Development is part of the construction, development, tourism and real estate management group Grupa PBM Po∏udnie. The company is known for the Zielone Mieszkanko and Inwestycja Lazurowa residential projects located in Warsaw’s Bemowo Adam Zdrodowski district.

The project combines historical and modern architecture

Warsaw Business Journal Group, in cooperation with KPMG and the Polish Chamber of Commerce, mmerce, presents Made in Poland – a guide for importers of Polish products.

Sectors analyzed: • Automotive products • Clothes • Cosmetics • Defense • Food & Agriculture • Furniture • Pharmaceutical market • Yachts

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

COURTESY OF ELEKTRA PLUS

Auto Partner leases from MLP Group

COURTESY OF PRESTIGE PUBLIC RELATIONS

18

The Zielona Przystaƒ mall will provide 10,500 sqm of retail space

Construction on Zielona Przystaƒ launches Developer Elektra Plus was set to launch construction on its Zielona Przystaƒ shopping center project in Gorzów Wielkopolski, Lubuskie voivodship in late April. The company has recently selected Energoinstal group’s Interbud-West as the general contractor for the project.

Located on ul. Kombatantów in Gorzów Wielkopolski’s Górczyn district, Zielona Przystaƒ will comprise a threefloor scheme offering 10,500 sqm of retail space. The development will house 65 retail

units and points of services and will include a parking lot for 300 cars.

The value of the investment is estimated at approximately z∏.60 million. Apart from that, Elektra Plus will spend an additional z∏.5 million on publicly accessible infrastructure including a new stretch of the nearby ul.

Okulickiego as well as new bus stops, walkways and bicycle paths.

Zielona Przystaƒ has been designed by the Pi∏a-based Studio Architektury Kontur

architectural firm. The development, which is being commercialized by Multi Serwis dla Inwestycji and King Sturge, is scheduled to open in spring next year.

Active in the construction, development and energy sectors in Europe and the Middle East, Elektra Plus has been present in Poland for 15 years.

The company’s recent projects in the country include the Galeria Kasztanowa shopping center in Pi∏a, Wielkopolskie voivodship.

Adam Zdrodowski

MARKETS

APRIL 26 - MAY 8, 2011

www.wbj.pl

Stocks report

world stock indices DJIA

NASDAQ

S&P500

FTSE100

DAX

Indices up before the Easter holiday

NIKKEI225

12,494.83 (Apr. 21 close)

2,819.16 (Apr. 21 close)

1,337.17 (Apr. 21 close)

6,012.22 (Apr. 21 close)

7,291.66 (Apr. 21 close)

9,685.54 (Apr. 21 close)

1.66% (for the week)

2.14% (for the week)

1.69% (for the week)

0.65% (for the week)

1.96% (for the week)

0.33% (for the week)

CHANGE: 7.92%

CHANGE: 5.32%

CHANGE: 6.33%

CHANGE: 1.90%

CHANGE: 4.56%

CHANGE: -6.44%

(year to Apr. 21)

(year to Apr. 21)

(year to Apr. 21)

(year to Apr. 21)

(year to Apr. 21)

(year to Apr. 21)

52-week high: 12,563.90

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: 11,213.50

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

Despite its four, instead of the usual five, trading days and lowered activity as a result of the general anticipation of a long weekend, the week before Easter saw some high emotions on the Warsaw Stock Exchange. The Monday session started calmly on the bourse only to be negatively impacted by disquieting news from abroad.

After initial slight increases, the main indices found themselves under the pressure of pessimistic sentiment in Europe generated by rumors concerning the need to restructure Greece’s debt and S&P’s lowering of the long-term rating for the United States. The WIG and the WIG20 indices decreased by 1.36 and 1.53 percent on the day, respectively.

On the following days, the

Major indices WIG

49,966.31 (April 21 closure)

WIG20

2,908.02 (April 21 closure)

21.04

20.04

19.04

18.04

15.04

14.04

13.04

12.04

11.04

08.04

07.04

06.04

05.04

21.04

20.04

19.04

18.04

15.04

14.04

13.04

12.04

11.04

2,800 08.04

48,000

07.04

2,840

06.04

48,600

05.04

2,880

04.04

49,200

01.04

2,920

31.03

49,800

30.03

2,960

29.03

50,400

28.03

3,000

25.03

51,000

04.04

52-week low: 2,270.13

01.04

Change year to April 21: 5.57%

31.03

52-week low: 39,109.37

30.03

52-week high: 2,928.95

Change year to April 21: 4.86%

29.03

Change for the week: 0.04%

28.03

52-week high: 50,371.74

25.03

Change for the week: 0.24%

Top 5 PEPEES ANTI ERG PETROLINV OPTIMUS

Closing 1.31 2.30 1.42 10.67 9.70

% change (week) 52-week high 39.36 1.31 30.68 4.45 30.28 1.51 18.42 17.80 15.61 9.70

52-week low 0.44 1.41 0.72 5.03 1.15

Top 5 CEZ LOTOS KGHM TVN PGNIG

Closing 149.50 49.42 196.00 17.78 3.83

% change (week) 4.18 3.17 3.05 2.83 1.59

52-week high 149.50 49.42 200.30 19.31 3.94

52-week low 118.70 28.05 88.20 15.95 3.16

Bottom 5 BORYSZEW YAWAL ZASTAL WILBO RELPOL

Closing 1.00 9.59 3.12 1.44 4.40

% change (week) -13.04 -11.94 -11.86 -11.66 -10.02

52-week low 1.00 9.40 1.99 1.44 3.76

Bottom 5 PBG TPSA PKOBP GTC POLIMEXMS

Closing 159.90 17.24 45.35 21.00 3.49

% change (week) -8.21 -2.71 -1.73 -1.50 -1.41

52-week high 252.00 18.65 46.81 24.98 4.99

52-week low 159.90 14.10 36.15 19.58 3.33

52-week high 4.89 21.09 5.35 2.77 6.29

2,954.97 (April 21 closure)

sWIG80

NewConnect

58.89 (April 21 closure)

WIG-Banki

SOURCE: WSE

21.04

20.04

19.04

18.04

15.04

14.04

13.04

12.04

11.04

08.04

07.04

06.04

05.04

04.04

21.04

20.04

19.04

18.04

15.04

14.04

13.04

12.04

11.04

08.04

07.04

7,000

06.04

57.0 05.04

7,080

04.04

57.6

01.04

7,160

31.03

58.2

30.03

7,240

29.03

58.8

28.03

7,320

25.03

59.4

01.04

52-week low: 5,751.39

31.03

Change year to March 21: 4.26%

30.03

52-week low: 54.64

29.03

52-week high: 7,387.49

Change year to April 21: -7.13%

28.03

Change for the week: -1.09%

25.03

52-week high: 64.09

7,400

From the beginning of February the euro has been gaining against the dollar.

There are several reasons why the upward momentum has been so strong. For one, the problems with the PIIGS countries have almost disappeared, while the ECB has raised interest rates and has not ruled out further monetary movements. At the same time, the Federal Reserve in the US is far from raising rates.

And last week, Standard & Poor’s changed its US longterm debt outlook from “stable” to ”negative.” All in all, those are the main reasons for the euro’s strengthening.

We can see a similar trend in the gold and silver markets. The prices of these two precious metals have continued to increase because of the growing fear of inflation worldwide and

7,258.73 (April 21 closure)

Change for the week: 1.01%

60.0

Pawel Kordala, X-Trade Brokers Dom Maklerski SA

21.04

20.04

19.04

18.04

15.04

14.04

13.04

12.04

11.04

08.04

07.04

06.04

25.03

21.04

20.04

19.04

18.04

15.04

14.04

13.04

12.04

11.04

08.04

07.04

12,600

06.04

12,680

2,800

05.04

2,840

04.04

12,760

01.04

2,880

31.03

12,840

30.03

2,920

29.03

12,920

28.03

13,000

2,960

25.03

3,000

05.04

52-week low: 10,980.45

04.04

Change year to April 21: 4.50%

01.04

52-week low: 2,361.69

31.03

Change year to April 21: 5.25%

30.03

52-week high: 12,907.99

29.03

Change for the week: 0.77%

28.03

52-week high: 2,987.72

Adam Zdrodowski

The euro continues to strengthen

12,800.81 (April 21 closure)

Change for the week: 0.34%

market made up for the losses, with good news from the US and Asian bourses giving buyers the upper hand. There was, however, not enough determination on the part of investors for the indices to reach new highs, and the last session of the week was marked by drops caused in large measure by a considerable depreciation of Telekomunikacja Polska shares.

In the end, the WIG and the WIG20 closed at 49,966 and 2,908 on Thursday, April 21, 0.24 percent and 0.04 percent up on the week, respectively. Analysts were predicting that bulls would try to resume their fight for new records after the Easter break, unless some unexpected events occured in the meantime.

Currency report

Other indices mWIG40

19

the depreciation of the dollar against the main currencies.

The price of gold reached new highs of more than $1,500 per ounce, while the price of silver rose to above $46 per ounce (its highest price since January 1980).

The z∏oty – thanks to higher interest rates, the growing fear of inflation and the verbal intervention of the Finance Minister and the president of the central bank – is also gaining in strength.

The euro currently costs about z∏.3.95 and the dollar costs z∏.2.70. Further monetary tightening will strengthen the Polish currency in the long term.

The near future belongs to Ben Bernanke and his words after the Fed meeting on April 26. If his statement is hawkish, the trend in the EUR/USD market could come to an end. ●

currency rates 3.3118 22.04

3.3143 21.04

SOURCE: NBP

3.3042 20.04

3.3859 19.04

3.3390 18.04

22.04

21.04

20.04

19.04

18.04

3.0

15.04

0.08

15.04

3.2784

0.0968

0.0975

0.0984

0.0972

0.0967

PLN-100JPY

3.5

3.0636 22.04

3.0803

0.0979

PLN-RUB

0.10

21.04

3.0622 20.04

3.1112 19.04

18.04

3.0596 15.04

4.4990

4.4838 22.04

3.0

3.0848

PLN-CHF

3.5

21.04

4.4715 20.04

4.5404 19.04

18.04

4.4584 15.04

2.7183

2.7135 22.04

4

4.4872

PLN-GBP

5

21.04

2.7358 20.04

2.7922 19.04

18.04

2.7293 15.04

3.9787

3.9536 22.04

2.5

2.7608

PLN-USD

3.0

21.04

3.9629 20.04

3.9815 19.04

18.04

3.9479 15.04

3.9

3.9559

PLN-EUR

4.0

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

THE LIST

APRIL 26 - MAY 8, 2011

www.wbj.pl

21

Corporate Services

Office Furniture Suppliers Ranked by revenue from office furniture sold in 2009

www.bookoflists.pl

Desks / Conference tables / Filing cabinets

Partitions / Chairs / Armchairs

Sofas / Cabinet furniture / Accesories

Other

Design / Delivery / Assembly

Rent / Service / Custom furniture

Selected clients

WND 41.0 44.5 41.0

WND WND WND WND

WND WND 850 WND

7 Gdaƒsk; Katowice; Kraków; ¸ódê; Poznaƒ; Warsaw; Wroc∏aw

WND

WND

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

WND

✓ ✓ ✓

✓ ✓ ✓

WND

90 1995

None Martela Oyj 100%

Piotr Fic

WND 3.4 2.9 2.3

WND WND WND WND

WND WND WND WND

1 Lublin

WND

Own production

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ -

-

✓ ✓ ✓

✓ ✓

Auchan; Euro Team

5 2002

Anna Tatomir 100% None

Anna Tatomir

0.4 0.7 0.9 1.1

0.5 0.8 0.9 1.1

WND WND WND WND

2 Warsaw; Kielce

2 Warsaw; Kielce

KJK; Nowy Styl; Drewsystem; CP

✓ ✓ ✓

✓ ✓

✓ ✓ ✓

Kitchenettes; unusual furniture

✓ ✓ ✓

✓ ✓

Medicine Cabinet W. Grzybowski; Maxto; Dachster; Adrenalina Consulting A. S∏omczyƒska; Promic

2 2000

Piotr Michalski 100% None

Piotr Michalski

Arc Interiors Sp. z o.o. ul. ˚ytnia 15 lok.8, 01-014 Warsaw NR 22 862-4840/22 862-4841 office@arcinteriors.pl www.arcinteriors.pl

WND WND WND WND

WND WND WND WND

600 WND WND WND

-

1 Warsaw

Steelcase; Vitra

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

InterfaceFLOR floor covering

✓ ✓ ✓

✓ ✓ ✓

Accenture; Abbott; Boston Consulting; Promed; PricewaterHouseCoopers

13 1997

Pokker Office Sp.j. ul. Krasiƒskiego 24, 40-019 Katowice NR 32 256-1853/32 209-1189 katowice@pokker.pl www.pokker.pl

WND WND 4.7 4.2

WND WND 5.2 5.0

400 350 267 243

WND WND

2 Katowice

WND

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

WND

✓ ✓ ✓

✓ ✓ ✓

WND

30 1988

WND

Poliday Sp. z o.o. ul. Roso∏a 42, 02-792 Warsaw NR 22 648-1833/22 648-1829 biuro@poliday.pl www.poliday.pl

WND WND 5.8 5.0

WND WND 6.0 5.4

WND WND 64 58

1 Warsaw

1 Warsaw

Haworth; Koenig Neurath; Walter Knoll

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

WND

✓ ✓ ✓

✓ ✓ ✓

WND

11 1989

Andrzej ˚ycki 56%; Edyta ˚ycka 44% None

Vertex ul. Zagadki 21, 02-227 Warsaw NR 22 817-3596/22 817-3597 vertex@vertex.waw.pl www.vertex.waw.pl

WND WND WND WND

WND WND WND WND

WND WND WND WND

1 WND

WND

Mebelux; Mikomax; MDD; Profim; Nowy Styl; Levira

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ -

WND

✓ ✓ ✓

✓ ✓

WND

7 1997

Edyta Bro˝ko 100% None

Rank

Brands of office furniture sold

Sevices

Number of showrooms / Location

Products

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

Revenue Total from office Total number Number of stores furniture revenue clientsof in Poland / sold (z∏. mln) served Location (z∏. mln)

1st half of 2010 / 2009 / 2008 / 2007

Martela Sp. z o.o. ul. Redutowa 25, 01-106 Warsaw 1 801-080-045/22 836-7623 martela@martela.pl www.martela.pl

Everest - Lublin, Anna Tatohir ul. Wy˝ynna 16, 20-560 Lublin 2 81 527-0220/81 527-0221

everest@everestmeble.pl www.everestmeble.pl

Formart Piotr W. Michalski ul. Che∏mska 19/21 lok. 120, 00-724 Warsaw 3 22 851-1118/22 851-1118 sekretariat@mebledlabiura.pl www.mebledlabiura.pl

Notes: NR = Not Ranked, WND = Would Not Disclose. Research for The List was done in December 2010. Number of employees and ownership structure are as of November 2010.

All information pertains to the companies’ activities in Poland. Companies not responding to our survey are not listed.

Number of employees / Year founded

Ownership: Polish / Foreign

Top local executive / Title

President

WND

WND

Dariusz

Dariusz Szymczak; Szymczak; Maciej Helman Maciej Helman None WND

Marcin Stawiarski Director

Andrzej ˚ycki President

Edyta Bro˝ko Owner

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

22

ARTS & CULTURE

www.wbj.pl

APRIL 26 - MAY 8, 2011

Celebrating John Paul II Photo festival in ¸ódê

throughout the day, including films, concerts, and exhibitions. ●

ple of Divine Providence in Wilanów. It’s here you’ll find various events taking place

Eclectic sounds

COURTESY OF WIKIMEDIA COMMONS

Sufjan Stevens in concert May 5 Polish Theatre in Warsaw, ul. Karasia 2 8 pm

Tickets cost z∏.120-150 and are available at www.eventim.pl

For tickets see www.ebilet.pl, Empik or Club Capitol

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

The 11th edition of this annual spring celebration sees the performance of De Mono, one of Poland’s eminent pop-rock bands. Formed in the 1980s and famous for hits such as “Kochaç Innaczej,” De Mono will perform at 6:45 pm. ●

Galeria 022, DAP, Lufcik ul. Mazowiecka 11a www.owzpap.pl Galeria 65 ul. Bema 65 www.galeria65.com

COURTESY OF DE MONO

Galeria Appendix 2 (Praga) ul. Bia∏ostocka 9 www.appendix2.com Galeria Asymetria ul. Nowogrodzka 18a www.asymetria.eu Galeria Foksal ul. Foksal 1-4 www.galeriafoksal.pl

Running for the constitution On May 3, Varsovians will run five km in honor of Poland’s 3rd of May Constitution, widely regarded as Europe’s first, and the world’s second, modern co-

Blue Cafe in concert April 27, 8 pm Club Capitol, Warsaw

From the accordion to piano and saxophone, the music style of Sufjan Stevens varies from indie rock and folk to symphonic and electronic sounds. His 2005 album “Illinois” reached number one on the Billboard Top Heatseekers Chart. ●

11th Wola Majówka Festival May 3 Sowiƒski Park, ul. Elekcyjna 17 5:30 pm

21st Run of the 3rd of May Constitution May 3

Blue Cafe with Latin flavor One of the most popular Polish bands of the last decade is back with its new album “DaDa,” in which the band’s pop style is given a Latin flavor. The single “Buena” guest stars Cuban musicians and vocal artists Reinaldo Ceballo and Renell Valdes Cepero, as well as the up-and-coming rap artist Drao Dee. ●

Majówka with De Mono

Entry is free of charge. For more information call 22 836 2856, or log on to www.amfiteatr.okwola.pl

For more information, log on to www.fotofestiwal.com

dified constitution. This year’s run is titled “You Have a Right to Run.” The event begins at 11 am at ul. MyÊliwiecka, following ul. Agrykola, Al. Ujazdowskie, ul. Pi´kna, ul. GórnoÊlàska, ul.

MyÊliwiecka, ul. ¸azienkowska, ul. Czerniakowska, and ul.

Szwole˝erów until the finish

line at Agrykola Park, where a picnic will be held. ● Registration is open until April 28. To register, log on to www.wosir.waw.pl or visit the office of Warsaw’s Centre for Sport and Recreation at ul.

Rozbrat 26

COURTESY OF LEVI VAN VELUW

“Out of Mind & Out of Life & Out of Space” is the theme for this year’s International Festival of Photograpy in ¸ódê.

Exhibitions, workshops and events are scheduled to celebrate the fact that the festival is in its 10th year. Guests include Celina Lunsford, Nina Kassianou and Krzysztof Candrowicz. Erwin Olaf, Levi van Veluw and Alexey Titarenko are just some of the featured photographers. ●

SHUTTERSTOCK

May 1 marks the beatification of the late Pope John Paul II. While the official ceremony will take place in Rome, Warsaw will come alive with events to celebrate this day.

From 10 am there will be a live transmission from Rome beamed to Pl. Pi∏sudskiego.

At 12:30 pm the “Popemobile” used during Pope John Paul II’s first visit to Poland in 1979 will begin a drive through Warsaw following the capital’s Royal Route, all the way to the National Tem-

Fotofestiwal The 10th Festival of Photograpy in ¸ódê May 5-15 various locations in ¸ódê

COURTESY OF BLUE CAFE

The beatification of John Paul II May 1 Pl. Pi∏sudskiego, and the National Temple of Divine Providence, ul. Ksi´dza Prymasa Augusta Hlonda 1.

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 26 - MAY 8, 2011

www.wbj.pl

23

Tech Eye

A bacon of hope in the darkness

ordered to eat healthy, this seems like a great way to have our bacon and sniff it too.

Does Bacōn Classic actually smell like bacon? Well, the fragrance is apparently a mix of oils like bergamot, orange, lime, grapefruit and guaiac wood, along with “two pinches of bacon salty goodness.” So there’s a hint of it in there, but it’s not as though you walk around smelling like Sunday brunch all day, every day.

Fargginay’s eau de redoutable

cochon costs $36. Pick it up to remind yourself of your favorite salty snack or make it a present for that sweet Miss Piggy in your life.

Then there’s the Chew Chew Train from UrbanTrend (www.urbantrendhk.com). It’s a Thomas the Tank Engine clone which breaks down into a cup, two plates, eating utensils and a little bowl and it’s available on Amazon for a little over $20.

Yes, it’s meant for kids, but the train works for a dieting adult because its plates hold kid-sized portions, making it harder to overeat. And, let’s face it, there’s something pretty cool about chew chew chewing your way out of Death’s clutches.

The final item we’re showcasing this week brings together two of America’s greatest loves – condiments and firearms.

The Condiment Gun (www.firebox.com) probably won’t lower our cholesterol levels, but a pull of the trigger will liven up whatever nutritious mush the doctor prescribes.

The gun comes with cartridges which are color-coded for ketchup and mustard, although you can certainly substitute other condiments if you’re feeling especially saucy. And its maker notes that the Condiment Gun delivers its contents “in an accurate stream, so you won’t have to worry about inadvertently drowning your beautifully cooked nosh.”

Like the Chew Chew Train, this is most easily obtained through Amazon, where it retails for $20 (Firebox has it for £14.99). And, like the Train, it’s more than a little childish. But hey, if playing with our food keeps the doctor away, we’re all for it. ●

X

power of pork (www.fargginay.com).

And since Techeye has been COURTESY OF FIREBOX

That got us thinking.

There’s a certain allure to the idea of leading a short, fat life, and there are worse ways to go than death by tenderloin. In addition, Techeye enjoys sweating on the furniture of our enemies.

But obesity makes it difficult to choose whose furniture you do or don’t sweat on, and our beloved harpy would harangue us in the afterlife if we choked on her chorizo.

Thus we’re trying to improve our diet. Last week we discussed the latest in beverage-bettering technology, so this week the focus is on gadgets to improve our eating habits, although in truth the first item we’re looking into isn’t exactly a gadget, but rather a lifestyle fulfillment product.

We’re talking about Fargginay’s Bacōn Classic, a fragrance designed for men and women who respect the

Ever sweat on the furniture of your enemies? Let us know: techeye@wbj.pl

To advertise in WBJ’s classifieds section, contact Ms Agnieszka Brejwo, at (+48) 222-577-526 or abrejwo@wbj.pl

COURTESY OF URBANTREND

COURTESY OF FARGGINAY

As we wrote last week, the doctor has given Techeye an ultimatum – improve our diet or die. His exact words were “you’d better eat better, or you’ll swell up like a milzwurstaddicted Bavarian hausfrau and wear man-dresses fashioned from curtain material for a few months before dying a gruesome, ham-related death.”

The amazing atmosphere, unusual flavors and unique location is what defines this restaurant !

Nowa La Boheme Restaurant at the National Theatre is an elegant place for business lunch, a prestigious gathering of friends or an intimate dinner for two.

For all further information regarding the brand New Fusion Spring/Summer menu as well as garden specials, please visit www.laboheme.pl or facebook www.facebook.com/nowalaboheme

Enjoy the mouthwatering tastes of the new exquisite menu at affordable prices !

NOWA LA BOHEME

Plac Teatralny 3, 00-077 Warszawa

Dział sprzedaży +48 (22) 8268275 / Restauracja +48 (22) 9620681

www.laboheme.com.pl

www.facebook.com/NowaLaBoheme