WBJ #38 2013

Komorowski slams UN

Ursus nets Ethiopian deal

Poland’s president wants a reform of the United Nations Security Council

The Polish machinery producer will export 3,000 tractors to the African nation

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WWW.WBJ.PL

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VOLUME 19, NUMBER 38 • SEP 30 – OCT 6, 2013 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

Since 1994 . Poland’s only business weekly in English

Drugs and revolution WBJ takes a look at Poland’s pharmaceutical industry, which has undergone shock therapy following regulatory changes implemented last year. How is it coping today?

12-13

As part of its focus on investing in Poland, WBJ asks experts which industries will attract FDI in the upcoming years 15

LOKALE IMMOBILIA COURTESY OF SKANSKA PROPERTY POLAND

REAL ESTATE

Pro-business party on the way?

• Green Day sold • Konstruktorska Business Center • Miasteczko Orange 16-19

Former Justice Minister Jaros∏aw Gowin, who has quit Civic Platform, wants to establish an economically liberal party 3

In this issue

SHUTTERSTOCK

News . . . . . . . . . . . . . . . . . . . . . . .2-4 Business . . . . . . . . . . . . . . . . . . . .5-6 Finance & Economics . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . . . . .11 Investing in Poland . . . . . . . . .12-15 Lokale Immobilia . . . . . . . . . .16-19 Markets . . . . . . . . . . . . . . . . . . . . .20 The List . . . . . . . . . . . . . . . . . . . . . .21 Sports . . . . . . . . . . . . . . . . . . . . . . .22 Lifestyle . . . . . . . . . . . . . . . . . . . . .23

NEWS

www.wbj.pl

Car upholstery maker Inter Groclin Auto has signed a contract with Faurecia for the supply of upholstery worth €104 million. After announcing the deal, the company’s share price went up by over 25%. Deliveries are to start in Q4 2013 and will continue until the end of 2020.

is the GDP growth forecast for 2013 upheld by the Ministry of Economy

z∏.8 billion is how much Poland may benefit from a planned LNG terminal by 2025, according to EY

€6.9 billion is the expected value of Polish furniture exports in 2013, according to B+R Studio

z∏.1,278 was the average disposable monthly income per person in Polish households in 2012, according to Poland’s Central Statistical Office

Quote of the Week

The company is facing tough challenges from the budget airlines which are taking control over Polish skies. Hungarian WizzAir has decided to make Warsaw Chopin Airport its permanent base of operations and is competing there with LOT for passengers. Irish Ryanair has just announced it will start flying between Polish cities, which, until now, was a service offered exclusively by LOT and another state-owned airline – Eurolot.

Such moves are forcing LOT to spend more money.

“Wizzair is a well-managed

Kamila Wajszczuk Jacek Ciesnowski

Poles take on foreign policy What do Poles think about their country’s place in the world today? Are they in support of foreign interventions? Are they still pro-American? Do Poles still fear an invasion of their country? Log on to WBJ.pl to see the results of a German Marshall Fund survey answering this and other questions regarding Poles’ attitude towards foreign policy.

Calendar

“June 4 is an occasion to celebrate freedom not only in Poland.”

Figures in focus Closing the gap Average monthly wages in selected countries in 2030 (in US dollars) 6,000 5,000 4,000 3,000 2,000 1,000 0

Source: PwC

Company index Adamed ....................................................................12 Mabion......................................................................12 Alior............................................................................6 Metals and Engineering Corporation of AAMI ........6 B+R Studio ............................................................2, 6 MF Capital................................................................17 Bank Pekao..............................................................15 Modzelewski & Rodek ............................................16 Bio-Tech Consulting ................................................13 Netia ..........................................................................6 Boryszew....................................................................6 Bouygues Immobilier Polska..................................18 Neuca ......................................................................13 Boza Inwestycje ......................................................16 Noble Securities ......................................................20 Budrem ....................................................................16 Orange......................................................................18 Business Centre Club..............................................12 PAIiIZ ........................................................................15 BZ WBK......................................................................7 CBOS ..........................................................................3 CBRE ..................................................................15, 17

7-9

EXPO REAL

Event:

Web:

The 16th International Trade Fair for Property and Investment is a meeting place for firms and professionals. The fair features exhibition space, as well as a number of conferences focused on different aspects of real estate investment.

Munich, Germany exporeal.net

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PRCH RETAIL AWARDS GALA

Event:

The Polish Council of Shopping Centres’ Retail Awards are aimed at promoting high standards in the retail network and shopping

Web:

Pepsi ..........................................................................5 PGE ........................................................................2, 5

CCC ............................................................................6 PKP ......................................................................5, 17 CEE Stock Exchange Group ......................................4 PKP Cargo ................................................................5 Celon Pharma..........................................................12 PKS Poznaƒ ............................................................17 Cyfrowy Polsat ..........................................................6 PL.2012+ ....................................................................5 Deloitte ..............................................................13, 16 Dentons....................................................................15 DTZ ..........................................................................17

October/November

D

N

Se

President Bronis∏aw Komorowski explaining why he invited US President Barack Obama to the 25th anniversary of Poland’s first semi-free elections after communism

Tu rke y Po la nd Ru ss ia Ch ina Me xic o

Stiff competition

company that doesn’t have financial problems. Its move to Warsaw Chopin Airport is changing our current situation. We might be forced to replace our fleet, make some moves [in order to remain competitive],” Mr Mikosz said, adding that he will have to discuss such moves with the European Commission.

Meanwhile, the government is working on consolidating all its aviation companies into one big holding.

Such an enterprise would encompass LOT, Warsaw Chopin Airport and smaller companies operating on it.

This way, the government hopes, the companies that are profitable, like the airport, would bootstrap the troubled airline.

On WBJ.pl

Polish companies reach nuclear deal Poland’s largest utility PGE will keep 70% in PGE EJ1, its subsidiary responsible for the nuclear power plant project, and sell 10% stakes to miner KGHM and utilities Tauron and Enea, the companies said in their respective statements. The project involves the construction of two nuclear power units with a capacity of about 3,000 MW each. The first unit should be in operation by 2025, the second one in 2029. ●

lost z∏.159 million, and intends to reduce this amount to z∏.132 million by the end of the year, which is less than the z∏.142 million figure that the rescue plan forecasts.

n

Poland’s national airline LOT will ask for additional financial aid from the government after its next management board meeting scheduled for October 9, the company’s CEO Sebastian Mikosz said. He did not specify the amount the airline would ask for.

In December 2012, LOT received a z∏.400 million loan as state aid. The company is in a restructuring process and its rescue plan, which was sent to the European Commission and has been temporarily approved, included an option for another tranche of state aid worth z∏.381 million.

“The winter is coming, which is the worst possible season for us,” said Mr Mikosz, explaining why he has to ask for more money from the state coffers.

In H1 2013, the company

pa

Inter Groclin signs multimillion contract

1.5%

Ja

The European Commission announced that it has decided to take Poland to the European Court of Justice for not complying with EU rules regarding in vitro fertilization and VAT. The first case arises from Poland’s non-compliance with rules on the quality and safety of human tissues and cells. The second one stems from Poland reducing VAT rates for general medical equipment and pharmaceutical products and for fire-protection goods.

LOT to ask for more state help

US A

EC takes Poland to court over in vitro and VAT

Numbers in the News

Ko rea Fra nc e Ge rm an y

Poland’s government agreed on a draft state budget for 2014. The draft stipulates for revenue of z∏.279.91 billion and expenditures not higher than z∏.324.64 billion. The budget deficit is expected to be no more than z∏.47.73 billion. The draft also includes an EU funds budget for next year, with revenue of z∏.77.96 billion and expenditures of z∏.78.35 billion.

IN THE SPOTLIGHT

So uth

Gov’t adopts 2014 budget

SEPTEMBER 30 – OCTOBER 6, 2013

COURTESY OF LOT

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PMR....................................................................12, 13 Polkomtel ................................................................17

Echo Investment ......................................................16 Polpharma ..............................................................12 Enea ......................................................................2, 6 Pracownia Architektoniczna

Location: Web:

mall sector. This year the jury will choose winners out of over 40 applications.

Fabryka Trzciny Art Center, Warsaw prch.org.pl

OCTOBER 22 – NOVEMBER 15 BELGIAN DAYS Event:

Location: Web:

Belgian Days are organized by the Belgian Business Chamber together with the Embassy of Belgium in Warsaw and the Economic Representations of Brussels, Flanders and Wallonia. They will feature both cultural and business events in two Polish cities.

Warsaw and Poznaƒ belgium.pl

Epstein ....................................................................18 Grzegorz Czerwiƒski ..............................................17 Eurolot........................................................................2 PwC ..........................................................................15 EY................................................................................2 Faurecia ....................................................................2 GLL Real Estate Partners ......................................16

Qatar Holding ..........................................................18 Randstad ..................................................................15

Grupa 5 Architekci ..................................................16 Red Bull ..................................................................23 Grupa Azoty................................................................6 Rödl & Partner ........................................................15 HB Reavis ................................................................18 Ryanair ......................................................................2 IKEA............................................................................6 Skanska Property Poland........................................16 IMS ....................................................................12, 13 Synthos ....................................................................20 Inea ............................................................................5 Tauron ........................................................................2 ING Bank Âlàski ........................................................6 Inter Groclin Auto ......................................................2 Telekomunikacja Polska..........................................20 Investec Bank ..........................................................16 TVN ............................................................................6 Jones Lang LaSalle ................................................19 Ursus..........................................................................6 JSW ..........................................................................20 Warimpex ................................................................16 KGHM ........................................................................2 Warsaw Chopin Airport ............................................2 Kopernika 21............................................................16 Warsaw Stock Exchange ................................4, 6, 16 KPMG ........................................................................4 White Stone Development ......................................17 Kury∏owicz & Associates ........................................17 LOT ............................................................................2 WizzAir ......................................................................2 LPP ............................................................................6 X-Trade Brokers ......................................................20

NEWS

SEPTEMBER 30 – OCTOBER 6, 2013

www.wbj.pl

3

United Nations

Komorowski blasts UN, demands reform Poland’s president had some harsh words for the United Nations Security Council in New York

nent seat in the Security Council for the years 2018-2019. “We believe that we will be able to serve the aims and principles of

“Much too often, the immediate interests of countries take priority over values, laws and obligations.” adding that in the case of Syria “this was amiss.”

Reforms to strengthen the council COURTESY OF KPRP/FLICKR

Polish president Bronis∏aw Komorowski, while addressing the UN’s General Assembly in New York last week, castigated the members of the organization’s Security Council for taking biased positions on the current civil war raging in Syria.

According to the Polish president, the UN Security Council’s stance did more to fuel the conflict rather than assuage it.

“It is with regret that I say the members of the Security Council were more eager to choose sides in the Syrian conflict and supported them in various ways, rather and force them to stop fighting altogether and to embark on peace talks,” Mr Komorowski said.

The Polish president said that the Syrian conflict had “exposed the inefficiency and

courage to propose concrete solutions, activate some of UN and Security Council’s procedures,” said Mr Komorowski

President Bronis∏aw Komorowski ineffectiveness in the United Nations decision-making process.”

Mr Komorowski talked about an “internal blockade” in the Security Council, which he said is in need of reform.

“Much too often, the immediate interests of countries take priority over values, laws and obligations with fatal consequences for human rights,” said Mr Komorowski.

The Polish president called

for swift action aimed at conflict resolution from the permanent members of the Security Council, the US, the UK, France, Russia and China.

“If one has the power to veto, one should also have the

Stressing the urgency for UN reform, Mr Komorowski said that, “one should not postpone things or wait for another anniversary as an excuse to once again make efforts to reform the Security Council.”

According to the Polish president the council needs reforms which would “increase its authority, representative qualities and effectiveness.”

In New York, Mr Komorowski also stated that Poland will be seeking a non-perma-

the UN well, as well as represent the interests of member states in accordance with and in the spirit of the Charter [of the UN],” he added.

Mr Komorowski also met with US president Barack Obama in New York where he extended to his counterpart an invitation to attend next year’s 25th anniversary of the first semi-democratic elections, which were held in Poland on June 4, 1989. “We are counting on the active involvement of the US in the anniversary, which is an occasion to celebrate freedom not only in Poland,” Mr Komorowski told journalists Remi Adekoya afterwards.

Politics

Gowin to establish an economically liberal party?

Jaros∏aw Gowin, a former justice minister who quit the ruling Civic Platform in early September announced he will be cooperating with several experts in creating a plan to govern Poland in the years 2015-2019 with the ultimate aim of establishing his own political party.

Amongst the experts who will be working with Mr Gowin on the program are Stanis∏aw Gomu∏ka, an economics professor and former deputy finance minister, Krystyna Iglicka-Okólska, an economics professor and demography expert and Konstanty Radziwi∏∏, MD and long-time head of the Polish Chamber of Physicians and Dentists.

Mr Gowin, who lost the leadership election of Civic Platform to Prime Minister

Donald Tusk in August this year, has been a harsh critic of the present government’s economic policies, accusing it of veering to the left and abandoning its liberal economic roots.

When he quit the party in September, he listed the government’s recent transfer of assets held by private pension funds (OFEs) to the state-controlled Social Insurance Institution (ZUS) as the proverbial “last straw.” “Mr Tusk wants to take money out of Poles’ pockets,” said Mr Gowin then.

At the press conference where he announced he was working on his program, Mr Gowin also said there was “too much party politicking and too little policy in Polish politics.”

“Today, I want to start work on a program to govern Poland in the years 2015-19,” he added.

A new party? Yes Mr Gowin made no attempt to hide his political plans for the future. He said his aim is to win 20 percent support in the 2015 parliamentary elections by cre-

ating a party which would “decide what kind of policies to employ when it comes to families, demography and the healthcare system.”

“I want to create a wide socio-political formation, which will be convincing and will be addressed to the disillusioned voters of Civic Platform, to those who choose [opposition] Law and Justice as the lesser evil and also to those millions of Poles who say they have no one to vote for,” he added.

WBJ asked John Godson, Poland’s first black MP, who likewise recently quit the ruling party, what he thought of Mr Gowin’s move. Mr Godson said Poles are “sick of political parties run by bureaucrats.” He also said that Mr Gowin consulted him on his plan to “mobilize the grassroots electorate, NGOs and other civic societies by engaging experts not involved in politics.”

Asked if he planned to get involved in Mr Gowin’s initiative, Mr Godson said he hoped to be “part of the electoral committees which would put such policies into place.”

A September CBOS poll revealed a party led by Mr Gowin could count on the support of 7 percent of Poles, enough to get into parliament.

Interestingly, the major opposi-

tion party, Law and Justice, stands more to lose than Civic Platform if Mr Gowin were to form a new grouping, the study showed. While only 3 percent of current Civic Platform sup-

“Mr Tusk wants to take money out of Poles’ pockets.”

COURTESY OF KPRM

The former justice minister who recently quit Civic Platform has announced he is working on a political program along with some notable experts

Jaros∏aw Gowin intends to establish a new political party

porters would defect and vote for Mr Gowin, as many as 7 percent of Law and Justice’s supporters declared they would do the same.

Remi Adekoya

NEWS

www.wbj.pl

Poland condemns terrorist attack in Kenya Poland’s Ministry of Foreign Affairs expressed its grief about the events in Nairobi, where at least 67 people were killed in a terrorist attack on a shopping mall carried out

by Islamist group al Shabaab. “We hope that all hostages are freed soon and that the people responsible for this crime are tried and sentenced,” Undersecretary of State Bogus∏aw Winid wrote in a statement.

WSE to merge with CEESEG soon Talks between the Warsaw Stock Exchange and the CEE Stock Exchange Group (CEESEG) are in progress and may be finalized within months, the WSE’s chief executive Adam Maciejewski told Reuters. Mr Maciejewski added that if the deal does not go through, the WSE will focus on organic growth an cooperation with other business partners. ●

SEPTEMBER 30 – OCTOBER 6, 2013

Energy

Climate confusion Poland will organize two simultaneous climate conferences in November – one on curbing carbon emissions, the other promoting the use of coal Some might consider it ironic that the country whose prime minister recently announced it is “going back to coal as a primary energy source” is hosting this year’s UN Climate Change conference in November, during which experts and decision-makers will discuss ways to curb carbon emissions.

But what enraged environmentalists is the fact that the environmental conference will be held at exactly the same time as another one, the International Coal and Climate Summit, focused on the promotion of coal.

Furthermore, the pro-coal event, organized by the World Coal Association (WCA), is being endorsed by Poland’s Ministry of Economy and the Ministry of the Environment.

The latter is also responsible for organizing the UN climate conference.

“The Polish government is transforming something of international importance into a lobby opportunity for coal,

the very energy which destroys the climate the most,” Claude Turmes, MEP and vice-chair of the European Parliament Green group told EurActiv.

Warsaw Communique The coal summit will be promoting its “Warsaw Communique” which the WCA calls “a call to action to support the use and deployment of more efficient coal technologies to tackle climate change.”

The World Coal Association’s chief executive Milton Catelin leaves no doubt as to the fact that the place and the date of their summit is not coincidental. “We want to use our event as a platform to discuss how we can curb carbon emissions.” Mr Catelin said.

“Multiplatform dialogue about the role of coal in the global economic development and the use of high-efficiency low-emissions coal technologies is necessary if we want to fight climate change,” he added.

So far Polish and Chinese mining companies have signed up for the coal conference, and some politicians, including Poland’s Deputy PM and Minister of Economy Janusz Piechociƒski, will speak at the event.

Some environmentalists will also participate in discussions. One of them, Yvo de Boer, current climate advisor at KPMG, said that Poland is a prominent EU member state and its voice needs to be heard.

“We need to find a way to make it part of the solution rather than part of the problem,” Mr de Boer told EurActiv. “It is better to have [Poland] inside your tent pissing out, than outside pissing in,” he added paraphrasing US President Lyndon B. Johnson.

CCS dilemma One of the main topics of discussions at the coal summit will be carbon capture and storage (CCS) technology, which is a compromise between coal and renewables.

It is the process of capturing waste from large emission sources and storing them underground, so they won’t

COURTESY OF THE MINISTRY OF THE ENVIRONMENT

4

Environment Minister Marcin Korolec. His ministry will be involved in both conferences enter the atmosphere. Poland is the only EU state which has failed to notify the European Commission of any measures taken to comply with the bloc’s CCS directive.

“It is important that they hear a voice strongly advocating for action on climate change and I want them to understand that if they can commercialize CCS, coal can have a future but it will have to come with tougher support mechanisms,” said Bryony Worthington, the founder of

Sandbag, another environmental group that will take part in the coal conference.

It’s hard however to expect Poland to be interested in such a costly solution. Particularly, since the only CCS operation in Europe, in Mongstad, Norway, was recently scrapped due to increasing costs and delays.

Meanwhile Poland’s recent decision to stick with coal was made to cut energy costs, not to increase them.

Jacek Ciesnowski

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BUSINESS

SEPTEMBER 30 – OCTOBER 6, 2013

www.wbj.pl

5

Stock Exchange

Infrastructure

National Stadium losing PKP Cargo less money than forecast closer to IPO The state treasury will retain over 50 percent of the company, which is the second biggest rail freight operator in the EU

When Poland went into its stadium-building frenzy before the EURO 2012 Soccer Championship, which it cohosted with Ukraine, experts weren’t convinced if the new venues were a good investment or rather a financial sinkhole. Many feared that after the initial hype of the soccer games, Poland would be left with a large, modern stadium that would see little action and bring even less money.

Last week, Warsaw’s National Stadium operator PL.2012+ released its financial results for the first seven months of 2013, which paint a moderately optimistic picture of the stadium’s long-term future.

Even though the National Stadium will still bring losses of roughly z∏.10 million this year, the revenue for the first 7 months of 2013 is z∏.3 million higher than expected.

PL.2012+ has also reduced costs by over z∏.2.5 million.

Altogether, the stadium’s net result will be better than expected by z∏.5.5 million, the company’s CEO Marcin Herra said. Mr Herra also added that the venue should be profitable in 2015.

Railway freight transportation firm PKP Cargo will carry out its initial public offering in the fourth quarter of 2013, subject to market conditions, the company said in a press release.

The firm’s issue prospectus was submitted in July this year.

The offer is directed at institutional and retail investors in Poland and at institutional buyers in the US, the company said. After it is completed, state-owned railway holding PKP will retain an over 50 percent stake in PKP Cargo.

SHUTTERSTOCK

So far this year, the biggest stadium in Poland has lost z∏.5.5 million less than expected and could be profitable by 2015

Poland’s National Stadium is looking for a naming rights sponsor Looking for a name Out of the four stadiums used during last year’s tournament, only Warsaw’s National Stadium doesn’t have a sports club making use of its facilities on a regular basis. Without a regular tenant it can be difficult to make ends meet, but PL.2012+ is making up for it by organizing conferences, concerts, business meetings or even fairs, which bring millions of visitors to the stadium, thus improving its financial standing.

The stadium suffered some negative press last year. A World Cup qualifying game between Poland and England had to be rescheduled by a day due to heavy rainfall, even though the arena has a retractable rooftop. Another big event last year, Madonna’s concert, proved to be a financial fiasco even though it had

Asseco looks to become no. 2 IT firm in Europe Poland’s largest IT company Asseco Poland is thinking of teaming up with a strategic partner to create the secondbiggest sector firm in Europe.

“What we plan is not a merger but a partnership to become second in Europe. I don’t even dream of replacing the no. 1 player, SAP,” the company’s CEO Adam Góral said at the Reuters Russian and Eastern Europe Investment Summit last week.

Mr Góral did not reveal any further details on how the goal would be achieved. “We are not in any talks at the moment,” he said. “It seems attainable for us in a five-year perspective. Give us some time to be successful in emerging markets to make it easier for us to be a partner.”

The CEO added that Asseco will continue to expand geographically. “We must be

stronger in emerging markets.

We started to work on Africa and are close to finalizing a small buy in Ethiopia. We have a target in Denmark and think we can be useful for Angola,” he said.

The Asseco capital group already has companies from over 30 countries in its portfolio. This year, the IT firm entered new markets by acquiring R-Style Softlab in Russia and Onyx Consulting in Georgia. In Ethiopia, the Polish firm is looking for a partner to help it create a hub for African projects. It has also expressed interest in the Nigerian and Angolan markets.

In the first half of 2013, Asseco Poland had a consolidated net profit of z∏.180 million with its operating profit at z∏.328.4 million and a revenue of z∏.2.78 billion.

Kamila Wajszczuk

been heavily subsidized by the Ministry of Sports and Tourism.

Despite last year’s misfortunes, 2013 has been decidedly better for the venue. The stadium hosted 19 big events (concerts, games, fairs) and 139 business events in the first seven months of 2013, which is more than PL.2012+ had earlier predicted (10 and 100 respectively).

But organizing events is not the only way stadiums can make money. Legia Warszawa, currently the champion in Pol-

ish premier league, sold the rights to their stadium’s name to Pepsi for z∏.6 million payable every year. The deal is coming to an end soon and the club is hoping to find a new sponsor willing to pay z∏.10 million.

Stadiums in Poznaƒ and Gdaƒsk also have naming rights sponsors – Inea sponsors City stadium in Poznaƒ and PGE has a deal with the arena in Gdaƒsk. PL.2012+ is also looking for a naming rights sponsor ready to pay at least z∏.10 million.

Jacek Ciesnowski

Spin-off But before its planned stock exchange debut, the company will spin off a subsidiary, Windykacja Kolejowa, which will not be included in the IPO, Dziennik Gazeta Prawna reported.

The spin-off, planned for October, is said to have been suggested by PKP

Cargo’s privatization advisors.

Windykacja Kolejowa, which will be incorporated into the PKP group, will take over all of PKP Cargo’s claims against state-controlled infrastructure operator PKP Polskie Linie Kolejowe (PKP PLK). The claims arise from excess fees paid by PKP Cargo to PKP PLK for the usage of railroads. The total amount is estimated at z∏.2 billion.

The move is an attempt to make PKP Cargo’s offer as transparent as possible. “We need as few unknowns as possible in PKP Cargo’s IPO,” said PKP group CEO Jakub Karnowski explaining the decision to transfer all claims to the spin-off firm.

PKP Cargo is the largest rail freight operator in Poland, with a 60.3 percent market share in terms of freight turnover, and the second-largest in the EU, with an 8.5 percent market share. In H1, the company saw its net profit drop to z∏.76.8 million from z∏.136.6 million a year earlier. The IPO is subject to regulatory approval.

Kamila Wajszczuk Jacek Ciesnowski

6

BUSINESS

www.wbj.pl

SEPTEMBER 30 – OCTOBER 6, 2013

Exports

Polish furniture export continues to grow their chairs or tables are actually from Poland.

“Only 20 percent of Polish companies make furniture under their own brand, the rest produce products commissioned by international giants, or manufactured in their factories on Polish soil,” Tomasz Wiktorski from market research firm B+R Studio told Rzeczpospolita.

IKEA alone produces furniture worth z∏.4 billion a year.

Poland is popular among worldwide producers because of the abundance of materials and significantly lower labor cost. That’s why manufacturers can sell their products cheaper than competitors from other countries.

The value of Polish furniture exports has been rising for years.

In 2012 the country exported a record-high €6.6 billion worth of furniture, which is 61-fold increase since 1989, when Poland was beginning its economic transformation. Analysts predict that this year the record will be broken again with furniture exports reaching a value of €6.9 billion (z∏.29 billion), according to a forecast by sector research firm B+R Studio.

Polish-made furniture is being sold predominantly to Germany (39 percent). Other major importers include France (8 percent), the UK (7 percent) and the Czech Republic (6 percent). But customers there don’t even realize that

Big volume In terms of volume, Poland is the second-largest exporter in the world, selling 2.7 million metric tons of furniture abroad (China is the undisputed leader with nearly 15 million tons), but in terms of value, it also falls behind Germany and Italy.

The reason is simple: for every 100 kilograms of furniture exported, German and Italian companies receive €500-600, while Polish exporters only receive half of that, according to B+R Studio’s research.

There some 24,000 companies making and selling furniture in Poland, the bulk of them are micro-companies employing no more than 10 people. Only 100 of them have over 250 employees on the payroll.

Jacek Ciesnowski

Automotive

COURTESY OF WIKMEDIA COMMONS

This year Polish furniture manufacturers will export nearly €7 billion worth of furniture. That figure would double if they sold it at the same prices as other European producers

With 2.7 million metric tons of furniture sold abroad, Poland is the second-largest furniture exporter in the world

Stock exchange

Ursus sells 3,000 WSE launches new tractors to Ethiopia blue chip index The machinery producer hopes that the deal is the first step towards rebuilding its position in Africa

SHUTTERSTOCK

The famous agricultural machinery producer Ursus has inked a contract worth $90 million with state-owned Ethiopian company Metals and Engineering Corporation of AAMI. The Polish manufacturer will supply 3,000 tractors and spare parts for them.

It will also provide service centers for the vehicles. The machines will be delivered in two shipments, one in late Q2 or early Q3 2014 and the other one in 2015.

The agreement states that the cooperation could be extended to farming machinery and equipment in the future. After the deal was announced, the Polish firm’s share value went up by 74 percent. The company expects that the contract will help it increase employment in its Lublin plant, which currently has 110 workers on staff.

Ursus will deliver 3,000 machines in 2014-2015

Go Africa In order to lay the groundwork for the contract, the company’s representative accompanied Prime Minister Donald Tusk on his trip to Africa in April this year. “The role of Polish diplomacy and Poland’s Foreign Ministry was crucial in sealing the deal,” said Ursus vice-president Karol Zarajczyk and added that, “we hope it will help us find new partners in this rapidly developing region of the world.”

The contract with the Ethiopian state-controlled company is “the first step in

rebuilding our former export destination,” Mr Zarajczyk said after signing the deal.

Ursus tractors used to be exported to several African countries, including Algeria, Morocco, Tunisia, Kongo, Ghana, South Africa and Nigeria.

“Our products are recognized there, people remember them fondly because of our tractors and it helps us compete with new brands sold there,” Ursus spokesperson Mariusz Lewandowski said back in April.

Kamila Wajszczuk, Jacek Ciesnowski

The new index will replace Warsaw Stock Exchange’s previous blue chip WIG20 by the end of 2015 The Warsaw Stock Exchange has started publishing a new blue chip index WIG30, which is made up of the 30 biggest and most liquid stocks on the Warsaw bourse. It is set to gradually replace the WIG20 index, which will ultimately be taken off the listing at the end of December 2015.

WIG 30 is made up of the WIG20 companies plus 10 new firms: banks Alior and ING Bank Âlàski, metal manufacturer Boryszew, retailers CCC and LPP, media groups Cyfrowy Polsat and TVN, utility Enea, chemicals producer Grupa Azoty and telecom Netia. The new index’s portfolio will at no time include more than 7 companies from one sector, while the share of any single company may not exceed 10 percent of the index.

“WIG30 is a better reflection of the growth of the Polish econ-

omy and the dynamic development of the Polish capital market in the past years; the expansion of the elite group of listed companies will be an important factor for their further growth and should attract even more investor interest in their stock,” Adam Maciejewski, the bourse’s CEO said in a statement.

Changing times Since WSE’s launch in 1991 the number of listed companies has increased from 5 to 443. The capitalization of Polish companies jumped from z∏.8 billion to nearly z∏.540 billion since 1994, when WIG20 was launched. WSE is currently one of the fastest growing markets in Europe. It is also the biggest stock exchange in the CEE region.

The Warsaw Stock Exchange is also preparing to replace its mid-cap mWIG40 with WIG50.

Small-cap sWIG80 will also be expanded to WIG100. Both these changes are set to be implemented in March 2014.

WIG30TR will be calculated alongside the new blue chip index. It is a total return index,

whose value will include the prices shares were traded at as well as dividend income or income from subscription rights.

WIG20 Futures, an index composed of derivative contracts on WIG20, will continue to be listed. However, WIG30 will now become the underlying of new futures and options. The migration from derivatives listed currently and the new derivatives will begin in September 2014 and is scheduled to be taken off the listing in SeptemBeata Socha ber 2015.

New blue chips The companies included in the WIG30 index Alior Bank Asseco Polska Bogdanka Boryszew BRE BZ WBK CCC City Handlowy Cyfrowy Polsat Enea Eurocash Grupa Azoty GTC ING Bank Âlàski Jastrz´bska Spó∏ka W´glowa Kernel

KGHM Lotos LPP Netia Pekao PGE PGNiG PKN Orlen PKO BP PZU Synthos Tauron TP SA TVN

Source: Warsaw Stock Exchange

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FINANCE & ECONOMICS

SEPTEMBER 30 – OCTOBER 6, 2013

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7

Interest rates

Too many uncertainties RPP member Jerzy Hausner told the Polish Press Agency that interest rates will most likely remain flat in H1 2014 and possibly later next year. However there are “too many uncertainties” to make projections about

the situation in H2 2014. “The expectation that the current level of interest rates will also hold throughout a certain portion of 2014 is reasonable. What portion that will be will depend on the strength of the economic recovery,” Mr Hausner said.

Another rate setter, Andrzej Bratkowski, also said that the council is unlikely to raise interest rates until the second half of 2014, unless the economic rebound is more rapid than expected. The central banker added that rate increases are more probable in Q4 than Q3 2014. The RPP may start thinking of higher rates when GDP growth exceeds 3 percent, he Kamila Wajszczuk said.

Holding steady The National Bank of Poland’s reference interest rate, September 2011-September 2013 5

4

3

Source: National Bank of Poland

There is still room for lowering Poland’s benchmark interest rate, Finance Minister Jacek Rostowski said during a budget debate in the Senate. Over the last six months, Poland had the second-highest interest rates in the EU, he said, and this was an additional burden that inhibited growth in the country’s economy.

The room for interest rate cuts comes from the lowering of Poland’s structural deficit by over 4 percentage points in 2010-2012, Mr Rostowski explained. “But unfortunately the Monetary Policy Council (RPP) did not take on a more accommodative, a more expansive policy in the autumn of 2012 and in 2013,” he added.

Despite Mr Rostowski’s arguments for lowering interest rates, members of the National Bank of Poland’s Monetary Policy Council were unanimous in the opinion that interest rates should remain flat at least until the end of this year, according to the minutes of the RPP’s September sitting.

“In the opinion of the Council, the level of interest rates in the longer run would depend

on the scale and structure of recovery and the resulting inflationary pressure,” the statement said. No motions to change interest rates were put forward at the sitting.

The RPP left the NBP’s benchmark interest rate at 2.50 percent, the lombard rate at 4.00 percent, the deposit rate at 1.00 percent and the rediscount rate at 2.75 percent.

2

1

0

Sep. ’11 Oct. ’11 Nov. ’11 Dec. ’11 Jan. ’12 Feb. ’12 Mar. ’12 Apr. ’12 May ’12 Jun. ’12 Jul. ’12 Aug. ’12 Sep. ’12 Oct. ’12 Nov. ’12 Dec. ’12 Jan. ’13 Feb. ’13 Mar. ’13 Apr. ’13 May ’13 Jun. ’13 Jul. ’13 Aug. ’13 Sep. ’13

Monetary Policy Council members say rates will remain unchanged at least until mid-2014

Retail sales up by 3.4% in August Retail sales in Poland grew by 3.4 percent year-on-year in August, statistics office GUS said. Month-on-month it declined by 0.7 percent. In real terms retail sales increased by 3.5 percent y/y.

Economists surveyed by the Polish Press Agency had

expected retail sales to grow by 2.8 percent y/y and fall by 1.3 percent m/m in August.

The data confirmed an expected recovery in consumption, BZ WBK economists wrote in an e-mailed comment.

“Today’s data confirm the scenario expected by us assum-

ing domestic demand finally joins exports, which have been solely driving the recovery in H1. This will be supported by further improvement of [the] situation on the labor market, which was confirmed again in today’s data,” the economists KW wrote.

Unemployment inches down again “This is also reflected in PMI data (subindex for employment only marginally above neutral level of 50 pts) and in the following months

the unemployment rate is likely to increase (in line with the seasonal pattern),” the economists wrote.

KW

Sluggish improvement Poland’s unemployment rate, August 2011-August 2013 15

9

Source: Central Statistical Office

12

Aug. ’11 Sep. ’11 Oct. ’11 Nov. ’11 Dec. ’11 Jan. ’12 Feb. ’12 Mar. ’12 Apr. ’12 May ’12 Jun. ’12 Jul. ’12 Aug. ’12 Sep. ’12 Oct. ’12 Nov. ’12 Dec. ’12 Jan. ’13 Feb. ’13 Mar. ’13 Apr. ’13 May ’13 Jun. ’13 Jul. ’13 Aug. ’13

The registered unemployment rate in Poland fell to 13 percent in August, compared to 13.1 percent in July, statistics office GUS said. The figure is in line with the estimate announced by the Ministry of Labor and Social Policy in early September.

At the end of August, the number of individuals registered as unemployed stood at 2.08 million, GUS said. At the same time, labor offices had 52,600 job offers available.

In an e-mailed comment, BZ WBK economists said that the number of unemployed persons fell by 10,000 m/m and that this was the sixth consecutive month of decline.

The situation on the labor market is improving, but at a “sluggish pace,” they said.

COURTESY OF THE INTERNATIONAL MONETARY FUND

Finance Minister: Poland’s Poland enters gradual high rates inhibit growth recovery – NBP head

“The worst for Poland is over,” said Marek Belka Poland is entering a phase of gradual economic recovery, National Bank of Poland President Marek Belka told reporters. “Gradual does not mean impetuous or fantastic.

But still, based on all the signals coming from the economy it seems that recovery is not threatened,” Mr Belka said.

According to Pawe∏ Durjasz from the prime minister’s Economic Council, Poland’s GDP is expected to grow by 1.4 percent for the entire 2013 yearon-year, based on recent

macroeconomic data. In Q3 2013, economic growth should be about 1.8 percent y/y.

The NBP head named faster industrial output and retail sales data, which grew by 3.4 percent year-on-year in August, as well as lower unemployment, which fell by 0.1 percentage points in August, as the key positive signals.

“This is huge, great news which could improve the life of every Polish family but an economist needs to look at these pieces of information

and draw the same conclusion I do,” Mr Belka said and added that even though the road to recovery may be long, “the worst for Poland is over,” he added.

Mr Belka also said that he does not expect inflationary pressure in the coming months, so there would be no reason to change interest rates before the end of 2013. “And then we will see and we will probably make some form of forward guidance again.”

Kamila Wajszczuk

8

INTERVIEW

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SEPTEMBER 30 – OCTOBER 6, 2013

Politics

New political power Eryk Mistewicz, a political consultant, sits down with WBJ to talk about new trends in politics, the growing influence of social media and the profiles of major Polish parties as well as the outlook for the new entities currently emerging on the political scene Another thing is that we are entering the “post-political era.” In traditional politics there is a specific period of time during which parties and candidates run their electoral campaigns. Elections end with one party’s victory. That party then implements its political program and fulfills – or not – its campaign promises. In any case, the political battle is over once the votes are counted.

Now we are witnessing never-ending campaigns with parties trying to hold on to their voters’ support at all times. This leads to a permanent battle between parties, aggressive campaigns and to accusations which overshadow important policies.

Finally, there is a growing power outside the established system of influence. In the

“These days there is no room for grand ideological visions” COURTESY OF FUNDACJA INSTYTUT NOWYCH MEDIÓW

Ewa Boniecka: The Polish political scene is currently undergoing a phase of dynamic change. Do you think this stems from real shifts in Poland’s political setup or is it just a new form of political marketing?

Eryk Mistewicz: There are a few processes going on simultaneously. Politicians often act like sprinters. They focus on the short distance, which means securing their positions in the parties and on future electoral lists while remaining oblivious to everything else.

They run short distances and fail to consider long-term political goals and social problems. We can already see them campaigning for the European Parliament and for the 2015 parliamentary elections, even though these elections are still so far off.

Eryk Mistewicz, political consultant past media and opinion leaders were a force to be reckoned with. Now the internet is becoming very influential.

People express their views

online and help shape public opinion. This change is happening all over the world including Poland.

I worked on Nicolas

Sarkozy’s campaigns in 2007 and in 2012 and I witnessed that change. In 2007, journalists and experts were the ones who evaluated presidential

debates. In the 2012 campaign, hundreds of opinions were published online while the debate was still ongoing.

People were, in real time,

SEPTEMBER 30 – OCTOBER 6, 2013

evaluating who was winning the debate and thus creating opinions among the French.

In Poland the traditional, mainstream media, which was so influential in the previous parliamentary campaigns, no longer have a monopoly on shaping public sentiment because the influence of various social media is increasing.

In what ideological direction is that new power leaning towards in Poland?

Views expressed on the internet are varied. I can point out the two main schools of online political thought right now.

First, there is a group calling for the fair distribution of goods “because we all have the same needs,” as they say. People expressing these views are leftist and populist in ideology.

The other major trend is linked to the issue of the [2010] Smolensk plane crash where Polish president Lech Kaczyƒski died. There is a group of people who believe he was assassinated. They are fundamentally right-wing and nationalist.

So while a few years ago traditional media promoted more centrist views, social media promotes more radical views and this is affecting public sentiment.

From the point of view of political marketing I would say that the [ruling] Civic Platform (PO) is no longer viewed as “sexy” by social media users. Young former supporters of PO are bored with Prime Minister Donald Tusk. PO, which used to be good at PR, now has a problem creating a positive image and communicating with voters. This is something that PO and Donald Tusk should take into serious consideration, which in my opinion they are not doing right now.

Do you think that Donald Tusk and PO should look for a more distinct political and ideological identity in order to regain public support?

These days there is no room for grand ideological visions.

The major parties in democratic countries combine various political, economic and social views in their programs.

I do not think that the prime minister should search for any ideological identity.

Donald Tusk consciously avoids presenting ideologial views. He has built his party and the government on solid

and pragmatic center-right foundations, which has proven quite effective.

PO presents a vision of the state which steers clear of ideological matters and does not interfere in spheres where it is not necessary.

In my view PO won’t strengthen its identity by weakening its liberal or conservative factions, but by looking for a balance between them and staying in their middle-of-the-road position. This gives Poles another option apart from the two opposing ideological camps – the farright and the populist left.

Still, support for PO keeps dropping. The party is losing its middle-class and young electorate. What can it do to recover?

In my view the future of PO is solely in the hands of Donald Tusk. People no longer vote for ideological programs, they vote for particular leaders. It was Mr Tusk who personally won his party a second term in power.

Today the government is showing symptoms of wear and tear, which is quite natural during a second term but has to be overcome. I think that Donald Tusk has not lost his political strength and instinct. He is capable of identifying political threats and weakness and finding solutions for them.

I am certain that he will soon conduct a thorough cabinet reshuflle. Poles are not interested in the internal problems of PO and its ideology but they are concerned with how effective it is as a ruling party.

Therefore, the reshuffle cannot be just about personnel changes, there also has to be improvement in how effective PO is in governing the country.

If ideology is no longer important, as you say, why then is the main opposition party Law and Justice (PiS), which is very ideological, gaining support and surpassing PO in the polls?

PiS is gaining support for many reasons, mainly because of PO’s current weakness.

I divide parties into two categories. There are parties, like PiS on the right and Democratic Left Alliance (SLD) on the left, which hold onto some kind of ideology and distance themselves from those who do not share this ideology.

Eryk Mistewicz Eryk Mistewicz, born in 1967, is a political consultant and journalist. He has written for conservative socio-economic weeklies such as Wprost, Uwa˝am Rze and Do Rzeczy.

Mr Mistewicz has also been involved in political campaigns in France and Switzerland including in the 2007 and 2012 presidential campaigns of Nicolas Sarkozy.

In 2010, he was co-author of the book “The anatomy of power” while in 2011 he published a book on political marketing titled “Marketing narrative: How to build stories that sell.” ●

INTERVIEW There are also modern parties, open to people with various beliefs, with different views on some matters, but willing to work together. PO, with all its troubles and faults, is an example of a modern, 21st century party.

A few weeks ago former Justice Minister Jaros∏aw Gowin, who was the leader of a conservative faction within PO, quit the party. Can PO recover from this blow and does Mr Gowin stand a chance if he were to form his own party?

The departure of Jaros∏aw Gowin did not weaken PO. The ruling party has some other prominent politicians with conservative views such as current Justice Minister Marek Biernacki. The balance between conservative and liberal factions within the party will be maintained, but they will need to cooperate.

Jaros∏aw Gowin’s image as a traditional conservative politician from Kraków can serve him well. But his political chances depend on the strategy and people he chooses to work with.

If he allows himself to be associated with politicians who have already used up their political capital, his new party will not attract support from voters. I believe he has a shot if he decides to cooperate with politicians, who have so far distanced themselves from PO and from PiS, perhaps mayors of some major cities with bigger political ambitions.

How do you see the chances of the new leftist entity, Europe Plus, which is about to join forces with the socially liberal Palikot’s Movement? Mr Palikot has told WBJ he is trying to revamp his political image by changing his party’s name...

If Janusz Palikot changes his party’s name, it would be a big mistake. As I pointed out, people don’t vote for political programs, they vote for politicians with recognizable names. Mr Palikot still has support among many young voters.

Palikot’s Movement and Europe Plus are parties which were established after a significant amount of market research. They are centerleft, but without a defined ideology.

Europe Plus and Palikot’s Movement could together become PO’s junior coalition partner provided it wins enough seats in the next parliamentary elections. It would be a good match for PO, as both these parties support modernization and deeper integration within the European Union. Such a step would be far less politically risky for PO than forming a coalition with the ideological SLD. ●

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OPINION & ANALYSIS

SEPTEMBER 30 – OCTOBER 6, 2013

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11

Merkel in the Land of Smiles Joschka Fischer

G

ermany’s elections are over.

The winners and losers are clear, and the political landscape has changed profoundly. The real drama, however, occurred not among the country’s main parties but on the boundaries of the political spectrum.

Chancellor Angela Merkel is celebrating a landslide victory, with her Christian Democratic Union (CDU) having fallen just short of an outright parliamentary majority. But the scale of her triumph is mainly due to the collapse of her liberal coalition partner, the Free Democratic Party (FDP), which for the first time in the German Federal Republic’s history will not be represented in the Bundestag.

The liberals have always formed a key part of German postwar democracy; now they are gone. Responsibility for that lies, first and foremost, with the FDP. No governing party can afford such woefully incompetent ministers and leadership; Merkel had merely to stand back and watch the liberals’ public suicide over the last four years.

to bring the CDU back down to earth.

The only new factor that could bring about a structural change in German politics is the rise of the new Alternative for Germany (AfD). Though its share of the popular vote fell just

electoral strategy, Merkel needs a coalition partner. The Left is not an option, and any attempt at building a coalition with the Greens – a party that will be reeling from the shock of its poor performance for quite some time – would court instability.

So Germany will be left with a grand coalition – just as the German electorate wanted. The SPD will recoil at the prospect, sit on the fence, and finally give in, because Merkel has a powerful disciplinary instrument: she could call a new election, in which the CDU would probably win an outright majority.

below the 5 percent threshold required to enter the Bundestag, the party performed surprisingly well. If its leadership can build on this success, the AfD will make news in next spring’s European Parliament elections.

Indeed, the AfD scored well in eastern Germany – where three state elections will be held in 2014 – by gaining many votes from The Left.

This implies that the AfD could establish itself on the German political landscape permanently, which would make a comeback for the FDP all the more difficult.

Still, despite the FDP’s implosion and the opposition parties’ disastrous

A grand coalition is not the worst option. Nothing fades as quickly as the glow of an election victory, and the German idyll will soon be disturbed by harsh reality – the European Union’s simmering crisis, Syria, Iran, and energy policy.

The need for consensus is especially acute with respect to the difficult decisions concerning Europe that the German government now faces. Greece needs more debt relief.

A European banking union with joint liability cannot be put off much longer. The same is true of many other issues. A winter of discontent awaits Merkel, followed by a European election campaign that is likely

A grand coalition could show greater flexibility in addressing the euro crisis, but less on questions of foreign and security policy. In this respect, however, Germany would gain much from the opportunity to craft a proper foreign policy in the framework of the EU and the Western alliance that in recent years has had a dangerous void where Germany used to be – though this is more a vague hope than a concrete expectation.

It will also be interesting to see if and how Merkel tackles Germany’s muddled Energiewende (energy turnaround) – the move to a low-carbon economy that is the most important

Linke (The Left), and the Greens – cleared the center and cannibalized each other on the left. The leadership issue made matters worse – the SPD’s Peer Steinbrück and the Greens’ Jürgen Trittin never had the slightest chance against Merkel and Finance Minister Wolfgang Schäuble.

Rise of the euroskeptics

Energy turnaround But no one should expect a significant change in Merkel’s EU policy or her approach to foreign affairs and security questions. Her positions on these issues have now been endorsed by a huge portion of the German electorate; and, from a certain age, most people – including those in high office – do not change easily. Besides, in these matters, there is no longer much difference between the centerright CDU and the center-left SPD.

domestic project of her tenure.

Either she will succeed with it, or it will become a monumental disgrace for Germany and a disaster for the German economy. The decisive questions now are whether she musters the courage to concentrate all the necessary responsibilities for this mega-project in the energy ministry, and whom she entrusts with overseeing this Herculean task.

The late editor of the weekly magazine Der Spiegel, Rudolf Augstein, who never liked former Chancellor Helmut Kohl, titled his commentary about German reunification “Con-

“Merkel has a powerful disciplinary instrument: she could call a new election, in which the CDU would probably win an outright majority.”

The opposition parties, too, paid the price for their failure to come to grips with reality. The economy is humming, unemployment is low, and most Germans are better off than ever before. But, rather than focusing on the government’s weaknesses – energy, Europe, education, and family policy – they bet their political fortunes on social justice. Merkel’s Panglossian campaign was much more in tune with the sentiment of the German electorate than the opposing parties’ tristesse about working-class distress, which was rightly seen as a ploy for raising taxes.

Governing majorities (and therefore elections) in Germany are always won in the center. Merkel’s predecessor, the Social Democratic Party (SPD) leader Gerhard Schröder, knew this well. But this time her opponents – the SPD, Die

gratulations, Chancellor!”

For Merkel, Sunday’s election has opened a door, especially with respect to overcoming the euro crisis and to deepening European integration. But, until she walks through it, I will refrain from congratulating her. ● Joschka Fischer was German Foreign Minister and Vice Chancellor from 1998-2005. Mr Fischer entered electoral politics after participating in the antiestablishment protests of the 1960’s and 1970’s, and played a key role in founding Germany’s Green Party, which he led for almost two decades.

Copyright Project-Syndicate, 2013 Project-syndicate.org

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COVER STORY

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Pharmaceuticals

Poland’s pharma revolution

Joanna Irzabek

SHUTTERSTOCK

After the government introduced legislation that hamstrung the industry, firms are adjusting to the new reality The Reimbursement Act, which came into force in January 2012, has revolutionized the Polish pharmaceutical market. It has affected everyone involved in the market, including patients, doctors, producers, wholesalers and pharmacies. Its intended and unintended consequences will shape the market for years to come.

Reimbursement reform Arguably, the law’s main aim was to lower the price limits for reimbursed drugs so that savings could be used for the introduction of innovative drugs into the system. So far, the z∏.2 billion saved in 2012 has been used to patch a hole in

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Poland’s health care budget.

However, it is true that some drugs have now become cheaper at the counter, proving that some prices had been artificially inflated. The Ministry of Health has also introduced several “drug programs” that cover the most expensive therapies, benefiting patients with serious diseases. The government’s expenditure on chemotherapy, for example, is expected to grow by 27 percent this year, according to Monika Stefaƒczyk, chief pharmaceutical analyst at research firm PMR. But as with any revolution, the new law has also created many victims, causing bankruptcies and lay-offs. “Many pharmacies, especially those with large shares of reimbursed drugs in their turnover, have felt the pain,” said Tomasz Dzitko, chairman of the pharmaceutical committee at the Business Centre Club, Poland’s largest employer organization. Prices of a number of innovative, reimbursed

drugs were cut to levels that made sales hardly profitable, said Ms Stefaƒczyk. Some drugs were completely removed from the outpatient sector’s reimbursement lists.

It is therefore unsurprising that Poland’s entire pharma market has shrunk. The number of employees fell by more than 9 percent, said Dr Dariusz Nowicki, director of the Polish Chamber of Pharmaceutical Industries and Medical Devices Polfarmed. The net profits for the whole sector dropped by almost half in 2012 – from more than z∏.1.5 billion in 2010 to just over z∏.820 million. Investment outlays decreased by more than 30 percent in the same year, compared with two years back.

The repercussions continue to be felt. Total wholesale margins are expected to drop further in 2014 from 9.8 percent in 2012 to just 5 percent this year, representing a nominal depletion of margins of over z∏.600 million, according to Mr Dzitko.

Life after revolution By now, however, most companies have adjusted to the new reality. The cost-reduction phase is over, according to Micha∏ Pilkiewicz, country manager at the Polish branch of IMS, a health care information company. Looking ahead, companies will now seek to diversify their product portfolios by entering into new therapeutic areas and new market segments. Some will choose to remove their products from

reimbursement lists. Others will seek profit in the inpatient market by entering into highcost drug programs and chemotherapy.

Generally, companies will increase the share of non-reimbursed medicines and over-the-counter (OTC) drugs in their portfolios, Mr Dzitko said.

Poland’s aging population, with better access to cheap generics, is going to be a powerful driver behind the increased consumption of non-

reimbursed drugs. That trend has only been accelerated by the reimbursement reform.

Exports and innovation According to IMS data, import sales volumes rose by a staggering 40 percent in the first half of 2013, compared with the same period last year. “It’s a rapidly growing phenomenon,” says Mr Dzitko. “Socalled ‘parallel imports’ now include more than 350 product lines, with total sales of over

Domestic producers Experts spot innovative potential among domestic players. Celon Pharma, Mabion, Adamed, and Polpharma are among the favorites. Polpharma Biologics’ modern R&D center in Gdaƒsk Science and Technology Park are good examples.

Another local innovative firm, Adamed, has allocated z∏.200 million to research and development activities over the past five years.

But the country’s generics industry can face tough competition from the Far East, warned Ms Stefaƒczyk. Some Polish drug companies may even relocate manufacturing there. “A dif-

ferent question is whether this can only be seen as an unfavorable development in the globalized world,” she added.

Micha∏ Pilkiewicz of IMS Poland believes the price advantage will keep pharma production at home. Its cost-competitiveness, coupled with investments in new modern facilities and qualified personnel, have made Poland one of the leading exporters of innovative medicines to the Nordic countries, Benelux and Germany.

Unintentionally, the new reimbursement law may only deepen this trend. ●

Find this content and more in Investing in Poland 2014. Information and key data about all of Poland’s voivodships can be found inside. Also, find analyses of major trends moving Poland’s economy. Want more?

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SEPTEMBER 30 – OCTOBER 6, 2013

z∏.230 million.”

Paradoxically, exports are also rising, as low prices at home force wholesalers to look abroad for more revenue.

“The drop in the real prices of many drugs in Poland, coupled with the erosion of wholesale margins by nearly five percent over three years, has made wholesalers look for ways to improve their economic performance through exports,” said Mr Dzitko.

This has caused concerns about possible excessive exports. Mr Dzitko however dismissed the specter of drug shortages. “There has been no reliable data so far on the extent of the problem. Similar initiatives in Spain have resulted in temporary bans on exports of only four drugs out of over 15,000 registered items.”

More Catholic than the Pope Nevertheless, provisions for export controls have been included in the amendment to the Reimbursement Act that will probably go into force in 2014. Such measures might not be welcomed by the European Union.

“The European Commission may want to look very carefully at our future regulations,” said attorney ¸ukasz S∏awatyniec, managing associate and head of the pharmaceutical practice at Deloitte

Legal. “If the national authorities reserve the right to block exports to other EU member states, the commissioners might decide it undermines the principle of the free movement of goods.”

Most Polish regulations in the sector reflect the EU’s legal framework, however.

There are common rules for clinical trials and advertising, for instance. It’s where the member states are free to determine their own rules that Poland’s requirements are unparalleled – reimbursements being one such area.

“The European Union’s regulations are already strict, but Poland is more Catholic than the Pope,” said Tadeusz Pietrucha, CEO of Bio-Tech Consulting, a firm that specializes in valuation and assessment of biotechnology R&D projects. “This regulatory zeal reduces our competitiveness not only against such powers as the US but also against Asian countries.”

Innovate or die With a number of world patents for biological and biosimilar drugs about to expire, Polish pharmaceutical firms are standing before a major opportunity. Some 75 percent of companies surveyed by market research firm PMR think they could benefit from the patent expiry trend.

However, in order to manu-

COVER STORY facture new drugs, they would have to procure the expensive know-how, and invest in new production lines and labs, the costs of which are seen as a significant barrier. “This will be an opportunity mostly for larger companies, which have funds for investment,” the PMR report reads.

Polish pharmaceutical companies are also wary of the competition from Chinese firms, which have been preparing to flood the market with their generic drugs as soon as the patents expire. Excessive bureaucracy in Poland, particularly for clinical trials, is also seen as a major obstacle.

Mr Pietrucha was unequivocal about the restrictiveness of Polish law, which he said stifles the innovative potential of the domestic pharma industry.

“Polish companies need to increase investment in R&D, otherwise they’ll face marginalization or even go out of business altogether.” Authorities, on the other hand, including tax officials, should stop treating innovative companies as potential crooks, he added.

Experts agree that with a few noble exceptions, Polish companies rarely invest in truly innovative medicines.

“Their R&D activities are mostly limited to generics, said Michael Turczyk, senior manager of research and development and government incentives at Deloitte. “Though

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13

The OTC factor According to IMS, a 7.1 percent slump in the 2012 volume of sales of OTC drugs was followed by a 6.9 percent increase in the first half of 2013, compared with the same period last year, mainly due to the flu season.

“The surge in OTC, dietary supplements and ‘lifestyle’ drugs is taking place precisely because they are not subject to the regulator’s restrictions,” said Mr Pilkiewicz. “Price, margin and discount management has remained firmly in the companies’ hands.”

Up for grabs This means that distributors with a significant OTC share in their portfolios will gain the upper hand, while players depending on reimbursed drugs will struggle to survive. The latest purchase of ACP’s wholesale arm by Neuca is a forerunner of an expected trend of consolidation, experts said.

The pharmaceutical wholesale market however is already highly consolidated and stable.

The dominant three full-profile wholesalers control more than 70 percent of the market, Mr Dzitko of BCC pointed out, while the consolidation of the pharmacy segment is progressing at a slower rate: most pharmacies still operate as independent entities. Mr Pilkiewicz of IMS says they’ve had some visible successes, it has not spurred development of innovative drugs.”

“Poland is not very attractive for manufacturers of innovative drugs,” Ms Stefaƒczyk confirmed. New, innovative molecules are an extremely rare addition to the reimbursement lists and government grants are just

acquisitions of small, local pharmaceutical wholesalers are possible but this will not alter the balance of power between the top ranking wholesalers in the country.

The impact of the new law will also be felt by domestic drug producers. The government’s slashing of the reimbursement expenditure may even threaten their very existence.

“Polish domestic drug production quantitatively makes up more than 50 percent of overall drug sales,” said Dr Nowicki. That keeps prices low. But as distributors adapt to the new economic conditions and focus on products that generate big, quick returns, the market will witness a progressive dilapidation of drug offer at pharmacies, he predicts. This deteriorating condition of domestic producers must lead to continuing replacement of domestic production with imports. If that indeed happens, the result could be a twofold hike in prices – up to the current European level, he predicts.

Levied additionally with very high administrative fees that exceed the European average five- to six-fold, domestic producers have already begun switching to the production of dietary supplements, cosmetics and even nonhealthcare businesses, he says.●

enough to fund the development of cheap generics. “Generally, the help is insignificant and the companies too weak,” she added.

But though they may not exactly be world-class, Poland’s innovative drug manufacturers do have potential for growth. Available technologies enable them to work on upgraded formulations of

the existing drugs and – a new thing on the market – biosimilars.

Not to be confused with traditional small-molecule generics that make up 90 percent of the present market, these bioequivalents of original biotech drugs for which patent protection has expired, will play a growing role, Mr Pietrucha said. ●

INVESTING IN POLAND

SEPTEMBER 30 – OCTOBER 6, 2013

Investment

15

Expert view

The future of FDI in Poland With public aid programs nearing their end and EU enlargement opening up new destinations for investors, Poland has few tricks left with which it can attract FDI Poland has long been one of the most attractive countries for investors, particularly since its accession to the European Union in 2004. In 2003 Poland attracted €3.671 billion in FDI. In 2011 the figure stood at €13.6 billion, an almost quadruple increase.

One of the most important factors in creating a favorable investment climate is economic and political stability.

Poland is the only EU country which avoided contraction during the latest crisis although its economy has slowed down considerably from 4.5 percent GDP growth in 2011 to around 1 percent in 2013, according to estimates.

Poland, a 38-million nation, is one of the biggest markets in the EU with an abundant pool of well-qualified and underpriced labor. With some 1.6 million students at Polish universities, one out of every 10 students in the EU is a Pole.

Meanwhile, the average pay is only a third of the EU average, according to OECD data.

Traditionally, the central Mazowieckie voivodship offers the highest salaries, with wages 21.5 percent higher than the national average of z∏.3,760, according to recent research by the Employers and Entrepreneurs’ Association (ZPP).

However, if we take Warsaw out of the equation, the voivodship falls behind the Pomorskie voivodship (z∏.3,900). The

www.wbj.pl

Tomasz Dàbrowski, Dentons, Warsaw Managing Partner&CEE Head What sectors can expect an influx of capital in the nearest future?

Just like today, it can be expected that during the 2014-2020 EU financial framework, Poland will attract investment in industries, which can count on EU funds. These include mostly sectors that are based on innovation.

Additionally, investors will be interested in sectors such as energy, transport, environmental protection projects and R&D. We expect that more outsourcing and R&D centers will be built

Paul Jasniach, PwC, Director

northern WarmiƒskoMazurskie and the south-eastern Podkarpackie voivodships offer the lowest remuneration, 13.6 and 13.4 percent below the country’s average.

Competition from the East But the situation is constantly changing, and what encourages investors now might not work in ten years’ time. For example, the lifespan of Poland’s special economic zones has been extended until 2026, which has dispelled investors’ fears and made them willing to undertake new projects, even greenfield investments, at least temporarily. In another six or seven years’ time, however, the question whether or not it makes sense to get involved in Polish SEZs will return.

We must also remember that the upcoming EU 20142020 financial perspective that earmarks roughly €73 billion in development funds for Poland is most likely the last one so generous. After that EU funds for investments will

dry out.

We can’t also forget that the European Union will continue to expand. And what are currently Poland’s strongest suits, low costs and a big internal market, will soon apply to future EU members as well, including Poland’s eastern neighbor – Ukraine. Once the country enters the bloc, many investors might be enticed by its much larger market and production costs decisively lower than in Poland.

At the recent Investing in Poland 2014 conference, Warsaw Business Journal discussed the current investment landscape with the top experts in the field. Now, WBJ asks them what lies ahead. What can Poland expect in the future, both short- and long-term? Which industries will attract the most FDI? Where will the money come from? And finally, what other fortes does Poland have which can help it compete with other investment destinations?

Beata Socha, Jacek Ciesnowski

Warsaw Business Journal would like to thank our project partners: Strategic Partners:

Media Partners:

What, apart from low labor costs and public aid, can Poland use to attract companies to locate their investments here in the future?

Poland is already doing a great job attracting investment. This is due to the ability to provide a stable business environment. I don’t just mean in a political or economic sense, but also in a business sense.

Poland has a very strong pipeline of graduates entering the labor force each year, a very large labor pool employed across many industries, a huge amount of international companies already located throughout the country, and a number of associations working with companies, the government, univer-

Jacek Protas, WarmiƒskoMazurskie voivodship marshall What sectors can expect an influx of capital in the nearest future?

Interest in our country is determined by many factors. Most important, naturally, is the global economic situation. Poland should be able to attract investors that are looking for highly qualified employees capable of doing creative and thus often very complicated work.

Each subsequent year of stable economic growth will boost our image and make it all the more likely that foreign investors will look towards Poland.

What, apart from low labor costs and public aid, can Poland use to attract companies to locate their investments here in the future?

Our advantage is what was for very long con-

Maciej Jamro˝y, Partner at Rödl & Partner

Partners:

What, apart from low labor costs and public aid, can Poland use to attract companies to locate their investments here in the future?

Among all the incentives that Poland offers investors, the special economic zones (SEZ) deserve special attention. There are currently 14 such zones in Poland. Exemption from income tax and real property tax is just one of several investment incentives offered in SEZs.

in Poland, and more complicated business processes will be handled here.

What, apart from low labor costs and public aid, can Poland use to attract companies to locate their investments here in the future?

Among the countries competing for foreign investment, Poland should maintain its advantages such as a significant domestic market, a relatively stable and functional legal system, predictability of public administration and highly qualified employees.

We can also hope that the infrastructure in Poland will improve, which should boost investment. Moreover, there is a tendency among companies, which have already invested in Poland to reinvest their profits here. ●

sities and cities to make sure that the business environment for both current and future investors is sustainable.

What sectors can expect an influx of capital in the nearest future?

While all industries are always looking at new markets and new models to be competitive, in the last few years Poland has proven itself as the top destination in CEE for business services.

It is the fastest growing industry in Poland.

Recently there has been particular pressure on financial institutions, with an increased burden of financial regulations and reporting requirements.

So there is certainly an anticipation that this could further help grow the services sector in Poland. In many cases that will simply mean international banks, which are already present in Poland and operating service centers successfully, expanding their operations. ●

sidered our curse – geographical location.

Wedged between the East and West of Europe, Poland can be considered a “gateway to the East,” for entrepreneurs from other EU countries who are planning on entering Eastern markets. Warmiƒsko-Mazurskie voivodship is a perfect place for such investors, as this is the only region of Poland that shares a border with Russia and thus provides direct access to its huge market.

Our region, despite being predominantly associated with nature, has many companies which use the latest technology. From an investor’s point of view, the large population is a huge plus as it provides both a large customer base and a significant pool of skilled employees.

Where will investments come from in the years to come?

The major sources won’t change but it is possible that soon, big Chinese companies will start investing in the newest EU member states. ●

These features show that Polish SEZs are very attractive for investment and business development. It is worth taking a look at the advantages of operating in the special economic zones, especially in the context of the government’s recent decision to extend their existence (until 2026).

What are some other significant advantages Poland can offer?

Other incentives include an attractive geographical location, an absorptive internal market, relatively low labor costs, highly-qualified managerial and engineering staff, strong support from local authorities regarding assistance to investors. ●

WBJ talks to Daniel Puchalski of Jones Lang LaSalle about investors’ needs in the commercial real estate market today

PKS puts up 3.3 ha of land in the center of Poznaƒ up for sale, with the asking price at z∏.116 million 17

19

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

Budrem to build Karuzela retail park Ostrów Wielkopolskibased developer Budrem was selected by Boza Inwestycje as the general contractor for its Karuzela retail park in Turek in the Wielkopolskie voivodship.

The park is scheduled for opening in late Q1 or early Q2 2014. The facility will comprise 12 retail units on 5,392 sqm of space.

Warimpex plans to build hotel in Warsaw Real estate investment firm Warimpex is preparing to launch the construction on a hotel under the Angelo brand in Warsaw. The scheme will be located in Warsaw’s Wola district. “If everything goes well, I expect that we will launch this project in autumn next year,” Jerzy Krogulec, director general at Warimpex Polska, said. ●

In this issue Green Day sold . . . . . . . . . . . . . .16 Kopernika 21 . . . . . . . . . . . . . . . .16 PKS plot . . . . . . . . . . . . . . . . . . . .17 Polkomtel’s new HQ . . . . . . . . .17 Konstruktorska opened . . . . . .18 Miasteczko Orange . . . . . . . . . .18 JLL interview . . . . . . . . . . . . . . . .19

Green Day sold for €34 million

The 16,060-sqm scheme is currently under construction and is set to be completed in Q1 2014 Developer Skanska Property Poland has sold its Green Day office building in Wroc∏aw for €34 million. The investment, scheduled for completion in Q1 2014, was purchased by Investec GLL Global Special Opportunities Real Estate Fund, which is managed jointly by Investec Bank and GLL Real Estate Partners. The deal is scheduled to be finalized in the first quarter of 2014 when property rights are transferred.

Located at the intersection of ul. Wyszyƒskiego and ul.

Szczytnicka in Wroc∏aw, near the Grunwaldzki Center and the old town, the seven-storey building was designed by Wroc∏aw-based firm Maçków Pracownia Projektowa. It comprises 16,060 sqm of leasable space as well as a two-floor underground parking for 218 cars.

“Green Day is yet another building that we have leased out and sold before its completion,” said Waldemar Olbryk, the president of Skanska Property Poland. “Green Towers complex in Wroc∏aw and Green Corner in Warsaw had also been sold before their completion. Green Day’s success is evidence of Wroc∏aw’s investment potential,” Mr Olbryk added.

Skanska also recently launched construction on its fourth and largest office building in Wroc∏aw, called Dominikaƒski. Located at the intersection of ul. Kazimierza Wielkiego and ul.

Dominikaƒska, near the Plac Dominikaƒski square in the center of the city, it will deliver 16,000 sqm of GLA, when completed in Q2 2015.

Skanska Property Poland, a part of the Skanska Group, has been operating in Poland since 1997. Investments completed by the company elsewhere in Poland include Deloitte House and Marynarska Point, both in Warsaw.

Karolina Kowalska

The seven-storey building will offer over 16,000 sqm of GLA

Office/Retail

New office building near Old Town Developer Kopernika 21 has been granted a construction permit for its building in downtown Warsaw The 610-sqm Kopernika 21 building will be erected at the intersection of ul. Kopernika and ul. Ordynacka, in the heart of Warsaw, within a walking distance from the city’s Old Town.

Designed by the renowned Grupa 5 Architekci architectural studio, the new structure

was designed in line with the style and height of adjacent buildings and was meant to resemble the buildings that stood there before World War II. The development will fill the gap between two buildings.

Kopernika 21 will consist of a two-storey base and a fourstorey tower erected on it. The last floor will be glass-layered.

The building will be divided into retail and office sections. The retail part of the building will be accessible from ul. Ordynacka.

The planned building has already raised some controver-

sy. In order to build it, the developer has to wall up eight windows in the Kopernika 23 tenement house, which is adjacent to the scheme.

The municipal property manager allowed the developer to make the changes without ordering it to pay the residents compensation for lowering the value of the apartments which will have their windows walled up. The developer only agreed to refurbish the facade of the adjacent building’s ground floor.

Karolina Kowalska

COURTESY OF GRUPA 5 ARCHITEKCI

WSE-listed developer Echo Investment has selected Modzelewski & Rodek as the general contractor for its Q22 office building at the intersection of Al. Jana Paw∏a II and ul.

Grzybowska in downtown Warsaw. The company will construct the building’s shell for z∏.98.5 million.

The investment will offer 50,000 sqm of space on 39 storeys.

Office

COURTESY OF SKANSKA PROPERTY POLAND

General contractor selected for Q22 building

SEP 30 – OCT 6, 2013, LI 18/38

The six-storey building was designed to resemble pre-war tenement houses

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

SEPTEMBER 30 – OCTOBER 6, 2013

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Office/Retail

Office

PKS sells land in Poznaƒ’s center

Polkomtel’s new headquarters COURTESY OF PRACOWNIA ARCHITEKTONICZNA GRZEGORZ CZERWI¡SKI

The lease of 23,000 sqm in a built-to-suit office scheme is the largest office lease transaction in the Polish market this year The operator of Plus mobile phone network, Polkomtel, has secured a new location for its headquarters in Warsaw. The company will occupy 23,000 sqm of office space in the built-to-suit building, currently under construction on ul. Konstruktorska. This is

PKS Poznaƒ puts up 3.3 ha of land for sale in the heart of the capital of the Wielkopolskie voivodship The tender for the sale of the plot, located on ul. Stanis∏awa Matyi 1 and currently housing a bus station, is scheduled for October 18. The asking price for the 32,864 sqm plot is z∏.116 million.

A planning decision for the site was issued in April, which

will enable the future owner to obtain a building permit and launch construction soon.

The seller has also included in its offer a preliminary architectural concept for the plot, drawn up by the Poznaƒ-based Pracownia Architektoniczna Grzegorz Czerwiƒski design studio that consists of two residential buildings, comprising 371 housing units, and four office-retail-service buildings.

The complex will deliver 62,670 sqm of office-service space, 15,335 sqm of retailservice space and 20,370 sqm

of residential areas.

DTZ is advising PKS Poznaƒ in the sales process of the land, which is one of the most attractive areas in the city.

After the transaction, the existing bus station will be relocated to Poznaƒ City Center, a mixed-use complex, built in partnership with the Polish State Railways. The project comprises a retail center, a bus station and a railway station. The total value of the mixed-use complex amounts to some €250 million.

Karolina Kowalska

asset management will be provided by MF Capital. CBRE advised Polkomtel in the transaction.

“This is the largest lease transaction in the Polish office market in 2013 and we are proud that CBRE is the business partner of such a prestigious company,” said Daniel Bienias, director of the office agency at CBRE. “We believe that this built-to-suit building will fulfill all of our client’s requirements and improve their work environment,” Mr Bienias added.

COURTESY OF APA KURY∏OWICZ

The asking price for the plot is z∏.116 million

the largest office lease transaction in the Polish market in 2013.

The seven-storey building was designed by Kury∏owicz & Associates architectural studio, in accordance with the tenant’s technical requirements. Polkomtel will move to the new location in September 2015.

The building, comprising a total of 38,109 sqm, is located within walking distance from the existing Polkomtel headquarters on ul. Post´pu. White Stone Development is the contractor behind the scheme and

17

The company will move to its new headquarters in September 2015

Karolina Kowalska

18

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LOKALE IMMOBILIA – REAL ESTATE

SEPTEMBER 30 – OCTOBER 6, 2013

Office

Office

Konstruktorska debut Miasteczko Orange BREEAM-certified

Konstruktorska Business Center offers 48,000 sqm of office and retail space on seven floors

New office building will serve as HB Reavis headquarters The Slovakian developer has officially opened its Konstruktorska Business Center. The opening ceremony was attended by a number of high-ranking guests such as Vasil Grivna, ambassador of Slovakia in Poland as well as Warsaw’s districts heads.

Designed by the Epstein architectural studio and located at the intersection of ul.

Konstruktorska and ul. Suwak in S∏u˝ewiec Przemys∏owy, a part of the Mokotów district, Konstruktorska Business Center offers 48,000 sqm of office and retail space on seven floors as well as an underground parking lot for roughly 1,050 cars. Certified with a “Very Good” BREEAM certificate, the building comprises internal patios filled with trees, greenery and shallow ponds. Its glass-layered facade provides maximum possible daylight.

Construction on the class-A building was launched in April 2011 and completed in March 2013, when its investor, HB Reavis, moved into it, making it its Polish headquarters. Konstruktorska Business Center had been attracting tenants long before its completion.

Currently, some 60 percent of the building is leased out. Otis, Carrier, Procter&Gamble, IMS Health, ˚ywiec Group and Comperia are amongst the tenants of the building.

Karolina Kowalska

Developer Bouygues Immobilier Polska has been granted an “Excellent” BREEAM certificate for its Miasteczko Orange office complex, making it the biggest office building in Poland to hold the prized certificate.

The built-to-suit Miasteczko Orange office complex, located on Al. Jerozolimskie 160 in the capital’s Ochota district, comprises five buildings totaling 43,700 sqm of leasable office space, all of which has been taken up by telecommunications giant Orange Polska.

Miasteczko Orange features a number of sustainable solutions that allow the firm to cut its operational costs by up to 30 percent. These include energy-saving elevators, which switch to a stand-by mode when not used frequently, thereby conserving up to 20 percent of energy in compari-

COURTESY OF BOYGUES IMMOBILLIER

COURTESY OF HB REAVIS

Orange Polska’s headquarters, which can hold up to 3,350 people, features several sustainable solutions and encourages workers to commute ecologically

Miasteczko Orange is the biggest office complex in Poland to hold an “Excellent” BREEAM certificate son to standard elevators. The underground garage provides 1,050 parking spaces, 53 of which are reserved for drivers who car-pool to work.

The building also features 120 bike stands and locker rooms with showers. In order to encourage employees to choose sustainable solutions, there is a bicycle-rental stand in front of the building.

The developer emphasized that every room in the building has access to daylight. There is also a 300-person canteen, a deli

and a garden with a fountain.

Construction on the development, which was designed by renowned architect Stanis∏aw Fiszer, was launched in 2011. At the end of 2011 Miasteczko Orange’s developer Boygues Immobilier sold the project to Qatar Holding, an investment company established in 2006 by the Qatar Investment Authority, for an undisclosed sum. The scheme is the Qatari firm’s first investment in Poland.

Karolina Kowalska

SEPTEMBER 30 – OCTOBER 6, 2013

LOKALE IMMOBILIA – REAL ESTATE

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19

Real Estate

Thinking ahead Lokale Immobilia sits down with Daniel Puchalski, director of the Land Advisory Services Department at Jones Lang LaSalle, to talk about responding to the market and investors’ needs in the post-crisis era

What kind of property is most likely to be redeveloped?

We often advise retail investors how to redevelop their facilities. For example, they can announce a tender and sell one part of a plot, and on the remaining part, they can develop a new building concept that will attract customers. This job requires a great deal of creativity in particular with the greenfield projects where it is not certain what might arise.

Today, there is a discussion among retail investors about the future generations of shopping malls, which will have interactive elements where some products will be selected on iPhones, iPads or large video screens, while retaining structures of a traditional “brick-and-mortar” shopping mall, where everything is on display.

We do not want to start creating futuristic shopping malls but we do want to ensure that our client is ready for what the market will need in several years. Today we focus on inventing new building types and new forms of service in the retail world.

How do you decide which locations are worth investing in?

We are looking for locations that today, from the point of view of our competition, are business wastelands. We try to look for a new business idea so we can enter the market with a project in a year or two. Our

business idea is not to have a pipeline for the next 12 months, but for the next 12 to 24 months.

I have been working in Jones Lang LaSalle for a relatively short time, but we already have a portfolio of land worth more than z∏.500 million. We are currently working on a further z∏.400 million’s worth. Among them are projects with a complicated legal status, without local development plans and those which are subject to claims.

We also work on projects requiring demolition, that we want to put up for sale next year.

Are you looking for plots in the entire Poland?

When it comes to residential real estate and office space, we focus on the major cities, such as Tri-City, Wroc∏aw, Kraków, Poznaƒ, ¸ódê, Szczecin and, of course, Warsaw. When it comes to retail – in all cities with more than 30,000 residents such as Kalisz, PrzemyÊl, Zgorzelec, Sosnowiec, Pruszków we are looking for land for retail parks or small galleries.

A lot of outlets are now being built. Do you have requests regarding land prepared for outlets?

Certainly, there is still demand for outlets in Poland.

However, I assume, that they will be created differently.

Both shopping centers and retail parks are looking for savings today.

Retail parks used to be planned for 15,000-20,000 sqm. Today it is more often 5,000-10,000 sqm with the exception of DIY stores.

Shopping malls excluding those that had already been planned earlier are not going to be built the way they used to be, namely with an area of 80,000-100,000 sqm. New ones will rather be half that size.

Which cities are growing the most when it comes to the office market?

Warsaw has always been in first place, with Wroc∏aw, Kraków and Poznaƒ behind.

Next are BPO markets such as Szczecin and ¸ódê, that could be hinterlands of the largest cities. For example, ¸ódê has

COURTESY OF JONES LANG LASALLE

Karolina Kowalska: What is today’s market like? How has it changed since the global crisis started?

Daniel Puchalski: We have been observing a significant influx of investment to the market after years of crisis that started at the end of 2008.

Based on all the data collated from analyses, we estimate equity on the market to be between z∏.1.3-1.6 billion. Of course, that doesn’t have to mean all of this will be spent this year but there is potential.

We also want to advise on the redevelopment and refurbishment of buildings, including older ones. The market is becoming increasingly mature and ready for new investment ideas.

Daniel Puchalski

always been a hinterland of Warsaw.

Due to a large supply of office space in Warsaw, prices have decreased, which has weakened the position of ¸ódê. Warsaw’s total modern office stock has passed the 4 million sqm threshold and there are business districts like Upper Wola or S∏u˝ewiec Przemys∏owy, where rental prices have been revised slightly downward.

Old and historic buildings seem to be gaining more interest amongst office space investors. What makes them attractive?

The strength of buildings such as Le Palais on ul. Pró˝na in Warsaw is primarily their location. Just as opportunity makes the thief, likewise location makes the buyer. An old building requires cooperation with the curator of historic buildings, who can delay construction. Right now we are preparing a tenement for sale in the center of Warsaw.

It is beautiful and its aesthetic look is added value but it is the location that will be a major criterion of the purchase. We have a lot of offers regarding postindustrial build-

ings that are beautiful, but they need to be adapted to today’s investment requirements. Firstly, there is a spatial zoning plan and building regulations that should be followed. This requires the presence of a curator of historic buildings.

We want to prepare information for our investors relat-

investors to become increasingly interested in purchasing investment plots. We also estimate that the land market and advisory services will be worth around z∏.3.5 billion in the next three to four years.

Therefore, Jones Lang LaSalle has decided to deepen, expand and focus its investment land expertise into one

“Just as opportunity makes the thief, likewise location makes the buyer.” ed to technical expertise, the opinion of the curator, and what function, from a market point of view, is better – residential or office space.

Recently, Jones Lang LaSalle set up a Land Advisory Services Department. Why did you decide to make such a change in the structure of your Polish office?

The Land Advisory Services Department was created in response to market needs. We can see a growing demand for strategic land advisory services, and expect developers and

department. Its launch helped us run land advisory projects for our clients more swiftly and comprehensively as well as raising our company’s profile in this segment of the real estate market.

How is this new structure different from other advisory departments?

It offers investment land services and is composed of agents with unique expertise and experience, who provide full support at every stage of a project. The real estate market is maturing and properties are

aging. This means that services connected with assessing the potential of a particular location and preparing a strategy that fully exploits this potential, including a change in functionality, will become increasingly popular.

We not only support our client in land search and purchase but also assist land owners in preparing plots for a sale process: in acquiring the necessary permits, selecting and coordinating architects’, engineers’ and lawyers’ work, identifying the land development opportunities, documentation management, financial analyses and market research.

For example, someone comes to us saying he or she has land for sale but knows nothing about selling plots or their possible uses or is a market player but needs professional advisory services. We can evaluate the property and conduct research to establish whether the plot would be suitable for office or residential property. We can also revise legal status of the land, help in attaining all the necessary permits and find a buyer.

This unique service responds to the needs of today’s market. ●

20

MARKETS

www.wbj.pl

SEPTEMBER 30 – OCTOBER 6, 2013

Stocks report

world stock indices DJIA

NASDAQ

15,328.30 (Sep 26 close)

S&P500

3,787.43 (Sep 26 close)

-1.97% (for the week)

FTSE100

1,698.67 (Sep 26 close)

-0.05% (for the week)

DAX

6,512.66 (Sep 27 close)

-1.37% (for the week)

-2.13% (for the week)

US politics scaring investors

NIKKEI225 8,661.51 (Sep 27 close)

14,760.07 (Sep 27 close)

-0.16% (for the week)

0.12% (for the week)

CHANGE: 14.28%

CHANGE: 21.69%

CHANGE: 16.15%

CHANGE: 8.05%

CHANGE: 11.35%

CHANGE: 38.10%

(year to September 26)

(year to September 26)

(year to September 26)

(year to September 27)

(year to September 27)

(year to September 27)

52-week high: 15,709.58

52-week high: 3,798.76

52-week high: 1,729.86

52-week high: 6,875.60

52-week high: 8,767.97

52-week high: 15,942.60

52-week low: 12,471.49

52-week low: 2,810.80

52-week low: 1,343.35

52-week low: 5,605.60

52-week low: 6,950.53

52-week low: 8,488.14

¸ukasz Wróbel Noble Securities SA With a calendar lacking notable macroeconomic data publications, markets concentrated on two groups of factors. The first regarded themes related to the anticipated moves of central banks, both in the euro zone, with ECB head Mario Draghi hinting at another liquidity boosting program, and in the United States. Secondly, investors had their eyes on the approaching deadlines for American politicians debating their national budget and the so called debt-ceiling.

After the initial optimistic reaction to the dovish surprise by the Federal Reserve, which decided not to decrease the size of its asset purchase program, the main indices on the New York Stock Exchange fell for five days in a row and US treasuries saw significant demand.

Ten-year yields on US

Major indices WIG

50,819.81 (September 27 close)

WIG20

2,422.46 (September 27 close)

27.09

26.09

25.09

24.09

23.09

20.09

19.09

18.09

17.09

16.09

13.09

12.09

11.09

27.09

26.09

25.09

24.09

23.09

20.09

19.09

18.09

17.09

2,200

16.09

44,000

13.09

2,260 12.09

45,400

11.09

2,320

10.09

46,800

09.09

2,380

06.09

48,200

05.09

2,440

04.09

49,600

03.09

2,500

02.09

51,000

10.09

52-week low: 2,177.02

09.09

Change year to September 27: -7.76%

06.09

52-week low: 43,145.55

05.09

52-week high: 2,628.36

Change year to September 27: 5.64%

04.09

Change for the week: 0.59%

03.09

52-week high: 50,936.34

02.09

Change for the week: 1.02%

Top 5 URSUS REINHOLD LSTCAPITA ARCTIC DROP

Closing 3.16 0.58 1.08 2.75 8.05

% change (week) 52-week high 63.73 4.51 48.72 0.58 44.00 1.20 28.50 7.00 25.98 10.71

52-week low 1.62 0.22 0.35 1.86 5.28

Top 5 BRE TPSA HANDLOWY ASSECOPOL PKOBP

Closing 467.75 8.36 113.00 48.85 37.29

% change (week) 7.90 7.18 5.21 3.50 3.30

52-week high 498.00 15.50 123.60 49.29 37.72

52-week low 282.79 5.83 80.23 36.84 30.63

Bottom 5 GANT CALATRAVA IDEON MOBRUK CELTIC

Closing 1.11 0.02 0.03 25.00 2.25

% change (week) -33.93 -33.33 -25.00 -24.24 -22.41

52-week low 0.98 0.02 0.03 25.00 2.22

Bottom 5 JSW SYNTHOS EUROCASH PGE KERNEL

Closing 75.90 4.85 49.00 17.05 50.20

% change (week) -6.30 -5.83 -3.92 -3.12 -2.92

52-week high 94.15 6.00 66.56 18.56 72.35

52-week low 57.70 4.12 37.17 13.35 45.10

52-week high 4.83 0.53 0.20 60.00 9.18

Currency report

Consolidation on the market

Other indices sWIG80

13,346.97 (September 27 close)

NewConnect

316.89 (September 27 close)

WIG-Banki

7,783.75 (September 27 close)

Change for the week: 0.65%

52-week high: 353.00

Change for the week: 3.74%

52-week high: 7,795.20

Change year to September 27: -4.61%

52-week low: 296.29

Change year to September 27: 15.78%

52-week low: 6,108.94

320

Adam Narczewski X-Trade Brokers DM SA

27.09

26.09

25.09

24.09

23.09

20.09

19.09

18.09

52-week low: 9,660.90

17.09

12.09

11.09

52-week high: 13,346.97

10.09

09.09

27.09

26.09

25.09

24.09

23.09

20.09

19.09

18.09

17.09

11,500

16.09

2,700

13.09

12,000

12.09

2,840

11.09

12,500

10.09

2,980

09.09

13,000

06.09

3,120

05.09

13,500

04.09

3,260

03.09

14,000

02.09

3,400

06.09

Change year to September 27: 26.74%

05.09

52-week low: 2,339.10

04.09

Change year to September 27: 28.33%

03.09

Change for the week: 1.57%

02.09

52-week high: 3,296.37

16.09

3,296.37 (September 27 close)

13.09

mWIG40 Change for the week: 2.07%

7,900

316

7,580

312

7,260

308

SOURCE: WSE

27.09

26.09

25.09

24.09

23.09

20.09

19.09

18.09

17.09

16.09

13.09

12.09

11.09

10.09

09.09

06.09

05.09

04.09

03.09

27.09

26.09

25.09

24.09

23.09

20.09

19.09

18.09

17.09

16.09

13.09

12.09

11.09

10.09

09.09

06.09

05.09

6,300

04.09

296

03.09

6,620 02.09

300

02.09

6,940

304

treasury bonds fell to 2.6 percent from almost 3 percent because of fears related to the short-term challenges of US public finances. The political ping-pong in America could lead to a government shutdown and the freezing of some non-mandatory federal expenditures.

However, thanks to increasing demand for financials and telecoms, the WIG managed to climb. Although gains on the main indices were far from impressive, it’s worth noting that last week the WIG index reached its highest level since 2008. The most attractive shares were those of Telekomunikacja Polska, which rose more than 6 percent. On the other hand, companies with products sensitive to commodity prices like JSW and Synthos saw their share price decrease by more than 5 percent. ●

We have not experienced this calm a week on the z∏oty market for a long time.

There were no spillovers from abroad, no domestic macro data or significant events to influence the market. The EUR/USD consolidated in the $1.34-$1.35 range.

In Poland, the macro data that did emerge was largely ignored. Markets failed to respond either to the drop in the unemployment rate from 13.1 percent in July to 13 percent in August, or to retail sales which increased by 3.4 percent year-on-year in the same month.

Meanwhile, EUR/PLN traded in a narrow z∏.4.21z∏.4.23 range. Any movement outside that range would likely trigger a larger change.

The usually more volatile USD/PLN was also stable

last week, staying within the z∏.3.11-z∏.3.13 range. Surprisingly, the largest movement involved the Swiss franc, which appreciated strongly against the euro. This in turn caused an appreciation against the z∏oty to the zl.3.45 level.

This week could be more volatile as the European Central Bank’s head Mario Draghi will hold a press conference regarding the ECB’s monetary policy.

Still, I do not expect large movements involving the z∏oty. Instead, after the previous volatile weeks I expect consolidation on both the EUR/PLN and the USD/PLN markets. More z∏oty action is expected when the Polish government announces further details about its pension scheme. ●

currency rates 3.1758 27.09

3.1695 26.09

SOURCE: NBP

3.1701 25.09

3.1621 24.09

23.09

3.1580

3.1337 3.1

20.09

0.0965 27.09

0.0972

0.0977

100JPY/PLN

3.2

26.09

25.09

0.0983 24.09

23.09

0.0980 20.09

3.4379

3.4506 27.09

0.09

0.0979

RUB/PLN

0.10

26.09

3.4275 25.09

3.4379 24.09

23.09

3.4215 20.09

5.0201

5.0333 27.09

3.4

3.4292

CHF/PLN

3.5

26.09

4.9944 25.09

5.0087 24.09

23.09

4.9972 20.09

3.1277

3.1328 27.09

4.9

5.0143

GBP/PLN

5.1

26.09

3.1234 25.09

3.1338 24.09

23.09

3.1152 20.09

4.2262

4.2310 27.09

3.1

3.1260

USD/PLN

3.2

26.09

4.2153 25.09

4.2291 24.09

23.09

4.2144 20.09

4.2

4.2268

EUR/PLN

4.3

THE LIST

SEPTEMBER 30 – OCTOBER 6, 2013

www.wbj.pl

21

IT & Telecoms

Telecom Operators Ranked by total revenue in 2012 A guide to Polish business and industry

www.bookoflists.pl

Przewodnik po polskim biznesie i gospodarce

Rank

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

Total revenue (z∏. mln)

Revenue from telecom services Net profit (z∏. mln) (z∏. mln)

Number of subscribers

network: Public network / Cellular Digital / Dedicated Analog / network / Data transmission Pager / networks / Radio systems Internet access

SMS service / Voicemail

Conference connections / Call-back system

Total number of employees / Year founded in Poland / Year licensed

Ownership: Polish / Foreign

Top local executive / Title

2012 / 2011 / 2010 / 2009

1

Orange Polska Al. Jerozolimskie 160, 02-326 Warsaw 22 527-1939/22 527-1979 biuro.prasowe@orange.com www.orange.com

14,147.0 14,922.0 15,715.0 16,560.0

14,147.0 14,922.0 15,715.0 16,560.0

855.0 1,918.0 108.0 1,283.0

20,056,000

✓ ✓ ✓

✓ ✓ ✓

✓ ✓

✓ ✓

22,114 1991 WND

WND France Telecom 49.8%; other shareholders - 48.5%; TP shares - 1.5%

2

Polkomtel Sp. z o.o. ul. Post´pu 3, 02-676 Warsaw 22 426-1000/22 426-0054 www.polkomtel.pl

7,133.0 7,312.0 7,673.0 7,773.0

WND WND WND WND

WND WND WND WND

WND

WND WND WND WND

WND WND WND WND

WND WND

WND WND

WND 1995 1996

Zygmunt Solorz-˚ak WND

Zygmunt Solorz-˚ak

3

T-Mobile Polska SA ul. Marynarska 12, 02-674 Warsaw 22 413-6000/22 413-6914 pr@t-mobile.pl www.tmobile.pl

7,002.0 7,200.0 7,300.0 7,600.0

WND WND WND WND

WND WND WND WND

15,919,000

✓ ✓ ✓

✓ ✓ ✓

✓ ✓

✓ ✓

WND 1995 1996

None Deutsche Telekom 100%

Miroslav Rakowski

4

Netia SA ul. Poleczki 13, 02-822 Warsaw 22 352-2000/22 352-2001 info@netia.pl www.netia.pl

1,578.6 1,541.8 WND WND

1,153.4 1,164.0 WND WND

-94.2 225 WND WND

WND

✓ ✓

✓ ✓ ✓

✓ ✓

✓ -

WND 1990 1991

5

UPC Polska Sp. z o.o.

Al. Jana Paw∏a II 27, 00-867 Warsaw 22 241-6822/22 241-6901 info.upc@upc.com.pl www.upc.pl

1,447.3 1,039.4 WND WND

WND WND 948.6 WND

WND WND WND WND

1,466,100

✓ ✓ WND -

✓ ✓

-

✓ -

1700 1989 WND

WND Liberty Global

6

GTS Poland Sp. z o.o. ul. Marynarska 15, 02-674 Warsaw 22 488-8000/22 488-8001 info@gts.pl www.gts.pl

478.0 451.0 426.0 421.0

WND WND WND 421.0

WND WND WND WND

7,000

✓ ✓ -

WND ✓ ✓

✓

✓ -

WND 1997 2000

WND

Piotr Sieluk

7

ATM SA ul. Grochowska 21A, 04-186 Warsaw 22 515-6100/22 515-6600 info@atman.pl www.atman.pl

180.3 175.2 401.8 286.5

180.3 175.2 116.8 90.4

13.8 13.7 21.4 9.9

986

✓ ✓

✓ ✓

-

✓ -

168 1994 2001

WND

Maciej Krzy˝anowski

8

NASK ul. Wàwozowa 18, 02-796 Warsaw 22 380-8080/22 380-8201 nask@nask.pl www.nask.pl

100.6 95.8 89.5 85.8

WND WND WND WND

30.7 17.3 3.1 -1.4

WND

✓ ✓ ✓

✓ ✓

✓

✓ -

325 1993 WND

State Treasury - 100% MIcha∏ Chrzanowski None Director

9

Korbank SA ul. Nabyciƒska 19, 53-677 Wroc∏aw 71 723-4323/71 723-4329 info@korbank.pl www.korbank.pl

4.6 3.9 3.3 2.8

1.7 3.2 WND WND

0.6 0.3 0.7 0.6

5,000

✓

✓ ✓

✓

-

25 1997 1997

Tymoteusz Bi∏yk 80.9%; other shareholders- 19.1% None

WND NA NA NA

WND NA NA NA

WND NA NA NA

100,000

WND WND WND WND

✓ WND WND ✓

✓ ✓

WND WND

45 2012 2012

Dirlango (¸ukasz Wejchert) Virgin Mobile Central Eastern Europe

Virgin Mobile Polska Sp. z o.o. ul. Domaniewska 49, 02-672 Warsaw NR 22 395-5693 marketing@virginmobile.pl www.virginmobile.pl

Notes: NA = Not Applicable, NR = Not Ranked, WND = Would Not Disclose. Research for The List was conducted in April 2013. Number of subscribers, employees and ownership structure are as of April 2013. All information pertains to the companies’ activities in Poland. Companies not responding to our survey are not listed.

Bruno Duthoit President

President

President

WND Third Avenue Management - 17.8%; ING OFE, ING Miros∏aw Godlewski Dobrowolny Fundusz President Emerytalny - 15.3%; SISU Capital - 11.4%; Aviva OFE Aviva BZ WBK - 5.2%

Simon Boyd President

President

President

Tymoteusz Bi∏yk President

Tomasz Gniewek Managing Director

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. Monika Brysiak, ul. Elblàska 15/17, 01-747 Warsaw, via fax to +48 22 257-7500, or via e-mail to online@bookoflists.pl. Copyright 2013, 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

SPORTS

www.wbj.pl

SEPTEMBER 30 – OCTOBER 6, 2013

Tennis

Poland disappoints at home

Radwaƒska wins tournament in Asia COURTESY OF WIKIMEDIA COMMONS

Volleyball

Despite enjoying home advantage, Poland failed to advance to the quarterfinals of the European Championship Out of all of Poland’s sports teams, the men’s volleyball squad is arguably the most successful of them all. Having regularly won medals at various prestigious tournaments in recent years, the players have been selected as Polish “team of the year” on several recent occasions.

Additionally, with Poland being co-hosts of this year’s tournament, along with Den-

mark, the country’s sports fans expected a medal.

The tournament started according to plan with the Polish team easily beating Turkey 3-1 in its first game. The next game however, revealed the weaknesses in the team. France defeated Poland 3-1, leaving no doubt as to which team was superior. The last group game against Slovakia inspired hope once more, with Poland winning 3-1 and placing second in its group.

This all meant that the Polish team would have to play Bulgaria in a play-off game for the quarterfinal spot. The decisive game started fantastically for the Poles as they won the

first two sets, but later on, the old volleyball rule, that if you lead 2-0 and don’t win the next set, you’ll lose the whole game 2-3, was proven right by the Bulgarians, who won the next three sets including the tiebreak. Bulgaria thus advanced further, knocking Poland out of the competition.

The question now is what’s next. Miros∏aw Przedpe∏ski, president of the Polish Volleyball Federation, said before the tournament started that if Poland doesn’t win a medal, the team’s Italian coach Andrea Anastasi would be fired. It now remains to be seen if that will indeed be the case.

Jacek Ciesnowski

SHUTTERSTOCK

The Polish team didn’t have many reasons to celebrate

Agnieszka Radwaƒska in the heat of the battle

The Polish tennis star won a tournament in South Korea, securing a spot in the prestigious WTA Tour Championships, which will take place in Istanbul Agnieszka Radwaƒska must enjoy playing in Asia. In 2011 she won two tournaments there, in Japan and in China.

The next year she made it to the final in Japan and to the quarterfinals in China.

For Ms Radwaƒska this year’s fall tour of Asia started in South Korea where she won

the tournament held there, beating Russian Anastasia Pavlyuchenkova 6:7, 6:3, 6:4 in the finals. The victory meant a third WTA title this year for the 24-year-old tennis player, as well as her 13th overall in the WTA. However, in the next tournament in Tokyo she fared worse. After beating Canadian Aleksandra Wozniak and Slovak Dominika Cibulkova, she reached the quarterfinals only to be knocked out by German Angelique Kerber in two straight sets – 6:4, 6:4.

Ms Radwaƒska can blame the loss on exhaustion. Over the course of 10 days she

played eight games, winning seven of those. Now she’ll have a few days of rest before the next WTA tournament in Beijing begins this week.

Despite her Tokyo loss, Ms Radwaƒska’s South Korea victory ensured she has qualified for the season-ending WTA Tour Champions tournament which will be held in Turkey at the end of October. The eight best players of the season will participate in the tournament, and the Polish tennis player, who is currently ranked number four by the WTA, is sure to play there for the third straight year.

Jacek Ciesnowski

Museums, galleries and venues in Warsaw Centre for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 www.csw.art.pl Czarna Gallery ul. Marsza∏kowska 4 www.czarnagaleria.art.pl Galeria 022, DAP, Lufcik ul. Mazowiecka 11a www.owzpap.pl Galeria 65 ul. Bema 65 www.galeria65.com Galeria Appendix 2 ul. Bia∏ostocka 9 www.appendix2.com Galeria Asymetria ul. Nowogrodzka 18a www.asymetria.eu Galeria Foksal ul. Foksal 1-4 www.galeriafoksal.pl Galeria Milano Rondo Waszyngtona 2A 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 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.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.wilanow-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

LIFESTYLE

SEPTEMBER 30 – OCTOBER 6, 2013

Film festival

www.wbj.pl

23

Performance

United States of cinema Breakdancing to Bach Red Bull Flying Bach Teatr Wielki October 15-16 Warsaw Who would have thought that baroque masterpieces composed by Johann Sebastian Bach and breakdancing would go so well together? If anyone has doubts about the unusual mix, they should see the Flying Bach performance by breakdancing world champions Flying Steps. The group will perform their routine to classical compositions from

Bach’s “The Well-Tempered Clavier.”

The performance tells the story of a young ballerina and a group of breakdancers, who start off as enemies and end up as friends, partners and lovers. Authors hope that trough the storyline, music and dance they will show that there is a fine line between modern and classical culture and that some themes are universal.

The Red Bull Flying Bach performance has been awarded the “ECHO Klassik Son-

derpreis 2010,” for outstanding achievements in classical music.

Flying Steps was formed in 1993, and has won several world breakdancing championships, including international Battle of the Year and the Red Bull Beat Battle. The group has been touring the world since 2011 with their latest performance. This will be their first show in Poland.

Jacek Ciesnowski

Ticket prices start at z∏.45

Red Bull Flying Bach

handful of her movies made it to wider distribution.

The other retrospective is probably the most commercial event of the festival. The Masterpieces of American cinema series will present movies from the 90 years of history of the Warner Brothers studio.

From the first talking film, “The Jazz Singer,” to a recent blockbuster, Christopher Nolan’s “Inception.”

Jacek Ciesnowski

Festival passes cost z∏.160

COURTESY OF RED BULL FLYING BACH

With the United States producing hundreds of films each year, it’s no wonder that all over the globe, there are festivals devoted exclusively to US cinema. In Poland the American Film Festival will have its fourth edition this year.

The festival’s organizers hope to change the way American films are perceived and show that US movies are not only Hollywood blockbusters, but can be independent and artistic as well.

The movies in this year’s edition of the AFF include a horror “The Wait” directed by M. Blash and starring Chloe Sevigny and Jena Malone. The movie is about two sisters who receive a cryptic message claiming that their recently deceased mother is about to return from the grave.

“Blue Caprice,” a drama based on the true story of John Allen Muhammad and Lee Boyd Malvo, known as the “Beltway snipers,” is also expected to make its mark. In 2002, they killed 10 people and terrorized the US East Coast for three weeks. The movie’s director, Alexandre Moors,

describes the national panic surrounding the events and recounts the story from the killers’ perspective.

A part of the festival will focus on the latest US documentaries, the event will also feature “On the Edge” section, where recent experimental movies will be showcased.

The organizers prepared two retrospectives. One on Shirley Clarke, an experimental film-maker, known for her documentaries and short films which tackled many controversial issues, portraying racial and sexual minorities. Ms Clarke, despite winning an Academy Award for the documentary “Robert Frost: A Lover’s Quarrel with the World,” never gained wide recognition as most of the time she had to fight with censorship and only a COURTESY OF AMERICANFILMFESTIVAL.PL

American Film Festival October 22-27 New Horizons Cinema Wroc∏aw

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

reklama_I_IN_POLAND_2012_v2.indd 1

2011-08-08 09:38:47