Warsaw Business Journal December 2021 #61

WARSAW

BUSINESS JOURNAL S i n c e 1 9 9 4 Po l a n d ’ s l e a d i n g

DECEMBER 2020 ~ No. 12 (61)

business magazine in English

For daily news visit us at wbj.pl

HOW TÉTRIS MEETS NEW MARKET DEMANDS? Rajmund Węgrzynek and Paweł Brodzik, managing directors, share their insights

CAVATINA CONTINUES CONSTRUCTION DESPITE THESE TOUGH TIMES,

+

says Łukasz Żelezik, executive director

IKEA GOES GREEN

SKYLINER

ANDREAS PROKES, KARIMPOL’S CO-OWNER AND MANAGING PARTNER, EXPLAINS THE JOURNEY

DECEMBER

4 In The Frame 6 In Review

Abortion Demonstrations in Poland

News Ambassadors’ page The future in the Covid era

14 Features 24

Minimum wage increase by Sergiusz Prokurat Future of the Polish economy by Stanisław Gomułka Poland-Ukraine economic ties by Sergiy Tsivkach The resilience of the Polish EV market

by Aleksander Rajch Impact of socio-political conflicts on the economy by Sławomir Dudek

27 Talking Points

Interview Edwin Bendyk, head, Stefan Batory Foundation Interview Karin Sköld, head, IKEA Retail Polska

34 In Focus

Retail Industry Marketing trends for 2021 Retail Industry Print is still alive

39 Tech 30

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News Interview Paulina Romaniszyn, head, STADA Polska

45 Lokale Immobilia

News Interview Andreas Prokes, co-owner and managing partner, Karimpol Interview Łukasz Żelezik, executive director, leasing, Cavatina Holding Interview Paweł Brodzik and Rajmund Węgrzynek, managing directors, Tétris Poland Interview Krystian Modrzejewski, country manager Poland, LCP Feature The investment market Feature The changing office market

69 Expert Opinion

Interview Magdalena Fiałkowska, a public-speaking coach

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70 Events

Book of Lists awards

W B J DECEMBER 2020

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PUBLISHER'S NOTE

Morten Lindholm Editor-in-Chief/Publisher mlindholm@valkea.com

Sankhyayan Datta

Could 2021 be best year yet?

AS 2020 DRAWS TO A CLOSE, it’s difficult not to be positive while thinking about what lies ahead. How much worse can it possibly get? Therefore, instead of pondering over the past, I have projected myself into the future, commenting on 2021.

Here are my thoughts on how the year will pan out for life and business in Poland.

• It has been a fantastic year: Poland’s GDP has soared by 5 percent, driven by domestic demands and successful export – from the food and subcontracting industries to the trendy sectors of e-car production in Europe and meditech that is driving a revolution of improvements in people’s lives.

• It has been nice to discover that people’s protests weren’t required to save democracy, freedom of speech and people’s rights. And Poland is still the openminded society it has been for over 30 years and is still considered progressive both at home and beyond.

• Unemployment is down again to the numbers before the Covid-19 disruption.

The level of unemployment is, so to speak, nearly zero, and Poland needs a lot of support workers from abroad to keep the positive business momentum in real estate, technology development and service jobs.

• What a relief that Poland managed to avert the threat of losing EU funds over rule of law breaches and is able to support the EU as a net receiver while developing further and quickly catching up with western and Scandinavian standards. Also, it wasn’t only a question about the money, but also the image of Poland in the eyes of the world – especially the EU – and tearing off the “fascist” label while simultaneously marching toward a more positive view of a country that wants to develop, learn and set the future standards of better living in Europe. That’s what the young generations of Poles want – freedom and opportunities besides the respect that comes with hard work.

Having traveled back home to Denmark to visit my parents, other family members and friends, having visited friends in the UK and Italy and having holidayed in Asia, I appreciate that life has come back to “normal” and the terrible Covid-19-fueled days of 2020 are fortunately long gone and we’re all celebrating the great leap forward the year has brought.

Along with my predictions and hopes above, I wish you all a wonderful year ahead! I look forward to meeting you, hearing from you and learning about your successes. And as you kickstart 2021, do enjoy our fact-packed magazine, full of exciting interviews, stories and materials illustrating why next year will be so great.

MORTEN LINDHOLM

Managing Editor sdatta@valkea.com

Krzysztof Maciejewski Business & Web Editor kmaciejewski@wbj.com

Kevin Demaria Art Director kdemaria@valkea.com Contributors Ewa Boniecka Sławomir Dudek Stanisław Gomułka Jerzy Kamecki Konrad Krzysztofik Tomasz Opiela Sergiusz Prokurat Aleksander Rajch Beata Socha Sergiy Tsivkach Adam Zdrodowski Sales

Adam Fogler afogler@valkea.com Magdalena Klimiuk mklimiuk@valkea.com Katarzyna Pomierna kpomierna@valkea.com PR & Marketing

Dominik Grudziński dgrudzinski@valkea.com Print & Distribution

Krzysztof Wiliński dystrybucja@valkea.com Event Director, Valkea Events

Magda Gajewska mgajewska@valkea.com Contact: phone: +48 22 257 75 00 fax: +48 22 257 75 99 e-mail: wbj@wbj.pl

WBJ.pl For subscriptions-related enquiries, please email us at wbj@wbj.pl WarsawBusinessJournal

@wbjpl

All photographs used in this issue are courtesy of partners and companies unless specified otherwise.

Copyright © 2020 by Valkea Media SA All rights reserved. This publication or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permissionof the publisher.

Published by

ul. Jerzego Ficowskiego 15

Valkea Media S.A.

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DECEMBER 2020 W B J

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October 30, 2020 Hundreds of thousands of protesters have flocked to the streets of Poland since the country’s top court declared in October that abortions in instances where a fetus is diagnosed with a serious and irreversible birth defect were unconstitutional. Such procedures constitute about 96 percent of legal abortions in the central European nation.

Poland’s abortion laws were already among the strictest in Europe but the Constitutional Tribunal’s ruling will mean an almost total ban.

PHOTOGRAPH BY SHUTTERSTOCK

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NEWS HIGHLIGHTS OF THE PAST MONTH FROM WBJ.PL

“Congratulations to the hundreds of thousands of courageous women in Poland who are out on the streets standing up for democracy and the right to control their own bodies” Bernie Sanders, senator for Vermont and two-time US presidential hopeful, tweeted on October 31. The day before, outraged by a court decision to ban nearly all abortions, tens of thousands of women took to the streets of Poland’s capital, culminating a week of big protests across the country.

‘Charlatan’ chosen for 2021 Oscars Film director Agnieszka Holland has another chance of winning an Oscar at the next Academy Awards, this time for a Czech film that she has directed. Set against the region’s dramatic 20th-century history, the film, “Charlatan,” is based on the true story of Czech healer Jan Mikolášek, who lived from 1887 to 1973. The film will represent the Czech Republic at the 93rd Academy Awards in April 2021, as the country’s official entry in the International Feature Film category. Born in Warsaw in 1948, Holland is one of Poland’s best-known film directors abroad, with a career spanning half a century.

ARTS AND ENTERTAINMENT

Copernicus portrait to be in UK for first time A spectacular three-meter-wide painting of the astronomer Copernicus is to be shown

in the UK for the first time, to showcase a superstar 19th-century artist little known outside his native country. The National Gallery said Jan Matejko is widely regarded as the national painter of Poland, revered for his huge, minutely detailed depictions of key moments in the nation’s history. His masterpiece, Astronomer Copernicus or Conversations with God, is his portrait of Nicolaus Copernicus, the 16th-century astronomer who transformed our understanding of the solar system. It hangs in the senate chamber of the Jagiellonian University in Kraków, from where it rarely leaves. The National Gallery announced on November 23 that it would display the painting in the spring in a free exhibition introducing British audiences to Matejko.

According to calculations by ArcelorMittal Poland (AMP) – the Polish arm of the multinational steel corporation – 650 people will lose jobs after the closure of the blast furnace and steel plant in the Kraków steelworks. “This is a lie,” union representatives have said and pointed out that up to 2,000 people may be unemployed. “We did not expect such a decision. The board was in denial all the time. They knew it, they deceived us,” Krzysztof Wójcik, chairman of the labor union NSZZ AMP told private Polish broadcaster Polsat News. He did not rule out strikes. Sanjay Samaddar, president and CEO of AMP, informed journalists that the decision is related to the crisis in which the European steel industry has found itself in the Covid-19 pandemic and the challenges it is facing on the global steel markets.

BUSINESS AND ECONOMY

ArcelorMittal to close furnace in Poland’s south

BUSINESS AND ECONOMY

State-run oil giant buys leading media group

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ARTS AND ENTERTAINMENT

WBJ

In Review | NEWS Poland’s state-controlled oil company, PKN Orlen, announced its purchase of the Polska Press media organization from its German owner on December 7. The Polska Press group includes 20 leading regional newspapers, 120 weekly magazines and 500 online portals. The Polish state has a 27.5 percent stake in PKN Orlen and the government has repeatedly emphasized its ambitions to “re-Polonize” foreign-owned media companies. The sale of Polska Press by its current owners, Verlagsgruppe Passau, still needs to be authorized by antitrust authorities.

Members of the ruling Law and Justice party (PiS) welcomed the takeover by the statemanaged company.

BUSINESS AND ECONOMY

HISTORY

Mastercard has ranked Poland as the fifth best country for women entrepreneurs in the world and the highest in the EU. In the 2020 Mastercard Index of Women Entrepreneurs (MIWE) Poland follows Israel, the US, Switzerland and New Zealand in the rankings of 58 global economies. The index’s methodology involved an analysis of 12 indicators and 25 sub-indicators, including Advancement Outcomes, Knowledge Assets and Financial Access, and Supporting Entrepreneurial Conditions.

The largest unexploded WWII bomb ever found in Poland detonated during the defusing process, a Polish Navy spokesman has said. The chance the bomb – at the bottom of a Baltic Sea shipping canal – would detonate had been put at 50-50 and all the divers were unharmed. About 750 residents had been evacuated near the port city of Świnoujście, north-west Poland. The RAF dropped the Tallboy or “earthquake” bomb in a raid in 1945 which sank the German cruiser Lützow. Świnoujście was part of Germany and called Swinemünde at the time of the bombardment. The shock of the latest detonation was reportedly felt in parts of the city and a video shows the blast throwing up a large column of water into the air. The bomb was 6m long and weighed 5.4 tonnes, nearly half of which was its explosives. The bomb was embedded at a depth of 12m and only its nose was sticking out.

Poland in top five nations for female honchos

CLIMATE AND ENVIRONMENT

Polish kids face more pollution than French kids

BUSINESS AND ECONOMY

Carrefour pulls ads from Polish state TV The French retail giant Carrefour has withdrawn its new advertising campaign from the website of the Polish state TV channel after it broadcast messages of homophobic hate. Telewizja Polska (TVP) reportedly gives disproportionate airtime to Poland’s governing party PiS, which uses the channel as a mouthpiece to support the government’s anti-LGBT+ narrative. The broadcaster is notorious for its extreme rightwing bias and recently produced one particularly appalling anti-LGBT+ documentary, “Invasion,” which was so homophobic it was banned by Polish courts.

QUOTE OF THE MONTH

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Polish children are significantly more exposed to air pollution than French children, research by the University of Hasselt in Belgium has found. The study, conducted over 28 children in Rybnik, Poland, shows they are between three and nine times more exposed to air pollution than children in Strasbourg, France. Tests on children in Rybnik and Strasbourg found the Polish children had an average of 425 percent more black carbon – a carcinogenic substance linked to the burning of fossil fuels – in their urine.

The lead scientist from Hasselt University, Tim Nawrot, said he “has never seen” such high concentrations. Children are particularly vulnerable to air pollution. Particulate matter, including black carbon, is associated in early life with lower birth rate, decreased cognitive function, impaired cognitive aging, increased cardiovascular morbidity and mortality as well as respiratory and cancerous diseases in later life. Meanwhile, the latest European Environment Agency report found that Poland has the EU’s most polluted air. Almost all parts of Poland exceed European air standards and the pollution is estimated to cause almost 50,000 premature deaths annually.

WWII bomb explodes during attempt to defuse it

HISTORY

New memorial for Nazi victims in Berlin The German parliament recently decided that a memorial site for the Polish victims of WWII and the German occupation in Poland will be created in Berlin. The decision is an important step in creating what will be the only WWII memorial in Berlin

“Poland became part of the European model” claimed economists working for Poland’s state-run Pekao Bank on November 14. According to the experts, the country’s GDP shrank 2 percent year-on-year in Q3 2020, which is the smallest decline among all European countries that have published their data apart from Lithuania (1.7 percent). The average across the EU is 4.3 percent.

dedicated to a single nation. German parliamentarians said in the debate that they hope the monument will fill a “blank space in German memory.” They recalled that the German occupation of Poland was “unique in its cruelty” and that not a single Wehrmacht soldier, SS member or police officer had been convicted by a German court for crimes committed in Poland.

POLITICS

Poland uneasy over Biden win

INTERNATIONAL

EU to bypass Poland if veto not lifted: official The EU will start preparing a new recovery fund against the pandemic without Poland and Hungary, unless the two countries lift

by December 8 their veto to the EU budget and the stimulus agreed on July totaling €1.8 trillion, a senior EU diplomat has said.

Warsaw and Budapest, both under EU scrutiny for what Brussels sees as undermining judicial and media independence, are blocking the budget and the recovery fund because they object to making the money conditional on respect for the rule of law and democratic norms. Poland and Hungary argue that the so-called conditionality threatens their “autocratic” regimes and makes them targets for funding cuts.

POLITICS

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European judges in solidarity with suspended Polish judge The European Association of Judges and Prosecutors for Democracy and Freedom (MEDEL) has issued a sharp statement on the decision of the Disciplinary Chamber of the Supreme Court. Adam Tomczyński single-handedly revoked Judge Beata Morawiec’s immunity, although the Disciplinary Chamber – in accordance with the Court of Justice of the European Union (CJEU) decision – should completely suspend its operation. “This illegal activity must result in immediate action by the European institutions,” urged European judges.

Tomczyński from the Disciplinary Chamber of the Supreme Court decided that he would waive the immunity of Morawiec, suspend her from her duties and reduce her salary by 50 percent. Since coming to power in 2015 in Poland, PiS has spent more than four years trying to take control of the country’s system of courts and public prosecution, eroding the independence of most branches of the judicial system. PiS has been accused of “installing their puppets” who believe in their political line.

The prospect of a Joe Biden presidency has reportedly set Poland and its populist government on edge as it worries the new president-elect will be critical of its anti-LGBT+ domestic policies. Polish President Andrzej Duda benefited greatly from Donald Trump’s wholehearted endorsement, being honored at a high-profile White House photo op just four days before Poland’s presidential election in summer 2020. The close ties they cultivated saw Poland securing US military presence on its soil, which Poland reciprocated by backing the US Middle East policies, prioritizing the US as a supplier of its military hardware and proposing the name “Fort Trump” for a major military base. Meanwhile, Biden has condemned Poland and its “LGBT-free” zones in the strongest of terms, declaring on Twitter that they “have no place in the European Union or anywhere in the world.” According to experts, the ruling Law and Justice (PiS) party and its loyal “sidekick” Duda are now struggling to digest Trump’s defeat and are nervous about the impact it will have on Polish-American relations. These tensions were reflected in a curiously-worded tweet sent by Duda on November 7. As the rest of the world celebrated Biden’s win, Duda congratulated him on his campaign, not his victory and noted that the process was still ongoing. Duda was later quoted as saying by the conservative niezalezna.pl website: “This election process in the US is not over yet.” He was quoted as saying during a video conference for readers of the rightwing newspaper Gazeta Polska that: “All the indications are that Joe Biden will be the president, but this issue is not yet finally settled.”

POLITICS

POLITICS

A prominent lawyer and outspoken critic of Poland’s government has been detained on accusations of money laundering. He was later taken to the hospital after a fall, in circumstances that remain unclear. The lawyer, Roman Giertych, who has been involved in a series of high-profile cases against members of the governing Law and Justice (PiS) party, was placed in handcuffs by a special anti-corruption unit outside a Warsaw court.

He has also represented prominent opposition figures, including Donald Tusk, the former president of the European Council.

Warsaw Mayor Rafał Trzaskowski launched a new civic movement Shared Poland (in Polish: Ruch Wspólna Polska) in Warsaw on October 17. “We are inaugurating a movement that aims for Poland, where the end never justifies the means, where the law is the foundation of the state’s actions, the law always comes first, even if it is against the interests of the authorities, where everyone, regardless of nationality, religion, political views, origin or sexual orientation, has the same rights,” Trzaskowski told the launch event. He said that Poles have never been “as

Government critic detained

Opposition civic movement takes off

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In Review | NEWS much divided as they are today.” Trzaskowski – President Andrzej Duda’s challenger in Poland’s last presidential vote – added: “Ten million Poles voted for President Andrzej Duda, 10 million for me, and, unfortunately, as many as 10 million stayed at home.”

documentary “Playing Hide and Seek” exposed two cases of pedophile priests that Janiak handled, first as an auxiliary bishop of Wrocław and then as bishop of Kalisz, which he had headed since 2012.

RELIGION

POLITICS

Academics protest ‘fundamentalist’ education minister

Cardinal chastised by Vatican unconscious in hospital

Minister Mateusz Morawiecki said Poland was hoping to deploy its vaccine program

by February, adding that it would cost between PLN 5 billion and PLN 10 billion. Meanwhile, Eurostat data shows that Poland has the lowest number of practicing physicians per capita in the EU, with 238 per 100,000 inhabitants, while Romania has 304, Hungary 338 and Slovakia 352.

By way of comparison, Austria has 524 and Germany 431. According to a new OECD report published recently, Poland has the lowest number of doctors in relation to the population in the EU and the highest rate of chronic diseases among the elderly.

Activists dressed as security guards climbed onto a balcony of a Polish education ministry building recently and hung a banner protesting the appointment of a new minister whom they consider to be a religious fundamentalist and a danger to the nation’s youth and universities. Many university academics in Poland are protesting the conservative government’s appointment of Przemysław Czarnek, who has said that LGBT people aren’t equal to “normal people,” women were created to produce children and who has voiced support for corporal punishment.

Regarding pro-abortion demonstrations in Poland, Czarnek has said that the protesters displayed “satanic behavior.”

A prominent Polish cardinal who was recently sanctioned by the Vatican over sexual abuse allegations has been hospitalized since last week and remains unconscious, Polish media reported November 10.

Retired Archbishop Henryk Gulbinowicz was sanctioned by the Vatican a week before after the 97-year-old was accused of sexually abusing a seminarian and of covering up abuse in another case. Private Polish broadcaster TVN24 on November 9 night aired a documentary suggesting that another wellrespected churchman, Cardinal Stanisław Dziwisz, covered up sex abuse by priests in Poland and elsewhere, including abuse of minors by the Mexican priest Marcial Maciel Degollado.

RELIGION

SOCIETY

SOCIETY

Pope Francis on October 17 permanently removed a Polish bishop who was kicked out of his diocese a few months ago pending a Vatican investigation into allegations he covered up cases of sexual abuse by his priests. The resignation of Edward Janiak as bishop of Kalisz suggests the Vatican was able to substantiate at least some elements of the accusations made in a documentary about sex abuse in Poland that has undermined the country’s influential Catholic hierarchy. Francis in June had ordered Janiak to leave Kalisz and forbade him from having any influence on how the diocese is run pending the investigation. In May, the online

The number of coronavirus cases recorded in Poland passed 1 million on December 2 as the government said it has agreed to buy 45 million vaccine doses, amidst a second wave of the pandemic that is proving more serious than the first. The daily number of new cases has dropped since a surge in October and early November, but Poland has one of the lowest testing rates in the European Union and one of the highest proportions of positive tests in the world. On December 2, a further 13,855 coronavirus cases and 609 deaths were reported, health ministry data showed, bringing the total to 1,013,747 confirmed cases and 18,208 deaths. Prime

Thousands of people took part in an annual far-right march in Warsaw to mark Poland’s Independence Day on November 11, defying a ban imposed by city hall due to coronavirus restrictions. Planned as a drive through the capital’s main arteries to circumvent the ban, the march spilled into the streets, with pedestrians carrying Poland’s red-and-white flags, firing flares and holding up banners that said “Our civilization, our rules.” The annual event has become a friction point between far-right groups and supporters of the nationalist government of Prime Minister Mateusz Morawiecki on one side and their liberal opponents on the other.

Bishop accused of sex abuse coverup removed

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Poland passes one million coronavirus cases, buys vaccine doses

SOCIETY

Irish town cuts ties with Polish twin The Fermoy Twinning Committee in Co Cork has officially terminated its twinning relationship with Nowa Dęba in Poland which has been designated as an “LGBTfree zone.” The twinning relationship between Fermoy and Nowa Dęba has been terminated after 14 years. “LGBT-free zone” refers to some regions of Poland which, from the beginning of 2019, began declaring themselves unwelcoming of an alleged “LGBT ideology.” As of October 2020, some 100 municipalities (including Poland’s five out of 16 provinces), encompassing about a third of the country, have declared themselves “LGBT-free zones.” Since gaining control of the Polish parliament on the basis of a fragile majority in 2015, the governing Law and Justice (PiS) party and its loyal ally, President Andrzej Duda, along with Catholic Polish archbishops have repeatedly attacked LGBT+ people. .

Independence Day march defies Warsaw ban

Curated from: ap.com, bbc.com, bloomberg.com, euractiv.com, ft.com, imperial.ac.uk, money.pl, notesfrompoland.com, nytimes.com, pap.pl, pinknews.co.uk, polsatnews.pl, reuters.com, theguardian.com, theowp.org

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WBJ

Ambassadors’ Corner Top diplomats in Warsaw tell the WBJ about...

future from countries’ thethe challenges andtheir changes their countries perspective inongoing the coronavirus era

face due to the pandemic

?

How high are your country’s hopes for 2021 in light of the vaccine announcement/s?

What does a Biden-Harris presidency mean for your country’s ties with the US?

How are Christmas and NYE celebrations in your country going to be different this year?

Arndt ArndtFreytag Freytagvon von Loringhoven Loringhoven German Germanambassador ambassador

People in our country place great hope in a vaccine against the virus. At the same time, even if it is approved, distribution and vaccination will take time. Until a high percentage of our citizens are vaccinated, we need to be as careful as we are today, to slow down the spread of the virus and to protect the health of our fellow citizens. From an economic point of view, I believe it is crucial to ratify the EU’s budget and recovery fund, which was designed to prevent more serious long-term damage to the European economy, as soon as possible.

With the Biden-Harris administration at the top of the US, we are looking forward to a comeback of multilateralism in US foreign politics. This is fundamental. As President-elect Biden has declared, he intends to re-enter the Paris climate agreement and will stop the withdrawal from WHO. For our part, we are determined to strengthen transatlantic ties. Europe and the US are indispensable partners to master global challenges including climate, trade, health, security, and promote democracy.

Christmas is that time of year we like to spend with our families in larger groups than just with those we share the household with, including grandparents, cousins, aunts and uncles. Often we rotate between different parts of the family during the holidays. Seeing them involves traveling, and therefore, especially for the elderly, an extremely high risk of infection. If we have to abstain from seeing them this year, this will definitely cause many of us great pain. Going to church is also part of celebrating Christmas in Germany, even for those who don’t attend services on a regular basis.

Aldo Aldo Amati Amati

Italian Italian ambassador ambassador The announcements have raised hopes and have given some reassurance that a long-term solution is on the way, allowing people and investors to look toward 2021 with greater confidence. There is in Italy a strong desire to move forward. Ours is a very open country with a population of active people and entrepreneurs always on the move – business or leisure. Tourism is also a strong pillar of our economy, already too much affected in 2020. Ultimately, hopes are high but at the moment there is cautious optimism and the awareness that a strong commitment from everyone is essential to recover.

The friendship between Italy and the US has deep and historical roots.

We share a set of values and ​​ a solid longstanding alliance. I’m sure that under the Biden-Harris presidency, our two countries – and the entire EU – will be able to further strengthen the bonds of deep-rooted friendship, in the name of the common values of freedom, justice and democracy.

The international community needs the support of the US, which has long played a leading role in building the rules of multilateralism, to deal with an unprecedented crisis that is endangering the health, life and future of millions of people.

The Christmas atmosphere is very special in Italy. It is something that changes the shape of our cities and towns, making them even more spectacular. It is sad to think that this year will be different. While it could be a period for commercial activities and maybe even a breath of fresh air for our economy, parties, lunches and dinners with friends and relatives are among the best ways to promote the spread of the virus. Surely it will not yet be possible to kiss, hug or organize Christmas and NYE celebration dinners and events the way our long-lasting traditions require.

Eduardas EduardasBorisovas Borisovas Lithuanian Lithuanianambassador ambassador

Anders Eide Eide Anders

Norwegian ambassador ambassador Norwegian

Francisco FranciscoJavier JavierSanabria Sanabria Valderrama Valderrama Spanish Spanishambassador ambassador

It’s expected that in 2021, our economy will grow by 3 percent.

We hope that next year the epidemiological situation will be much better and there will be no need for restrictions that were introduced in Lithuania this year. The news that vaccines could be available soon, allows every country to make much bolder economic decisions raising hopes that all challenges could be left in the past. However, we need to be cautious. The middle of 2020 has shown everything can turn upside down at any minute. We need to be prepared for all possible surprises prepared by our new “enemy.”

A number of Covid-19 vaccines are being tested. Several different vaccines look likely to be approved relatively soon. Norway is co-chair of the ACT-A facility council, the global initiative that is working to accelerate development, production and equitable access to Covid-19 tests, treatments and vaccines. We are optimistic that we will see an improvement in the epidemic situation and an increase in economic activity in 2021. At the same time, we need to keep in mind that the epidemic will not end immediately when the vaccine is introduced. Precautionary measures will still be necessary, at least for the first half of next year.

We should be cautious when it comes to the future. We have to avoid false expectations. Nobody knows how long the pandemic will last or how serious it will continue to be.

All of us hope that 2021 will bring us better days. The impact of the pandemic has been and still remains appalling worldwide. It has had an impact not only on global health but deep and lasting economic consequences. Spain was hit very hard last spring and we are also experiencing a very difficult second wave now. This said, news on vaccines is encouraging but their effectiveness needs to be confirmed.

Washington will remain our strategic partner and ally. We count on their attention, presence and contribution to our security. We are interested in a proactive and solid transatlantic cooperation of the EU and new US administration on the basis of common values, interests and mutual trust.

It is of key importance for both to undertake fresh efforts to reinvigorate mutual relationship and further strengthen the bond while recognizing that in the area of security and defense, the US’s role remains key.

We expect re-engagement of the US on climate issues, trade agenda and a more coordinated approach to global challenges like the pandemic.

The US is our most important ally. We work closely together in many areas.

We look forward to developing cooperation with the US further under Mr Biden’s leadership. Our primary aim is to safeguard Norway’s interests.

The US is important for Norwegian security, economy and for Norwegian jobs. The world needs the leadership of the US to help solve the major global challenges it’s facing. We look forward to a fruitful collaboration, in the UN Security Council, and in the international efforts to combat the pandemic and mitigate climate change. We have maintained close cooperation with the US throughout different administrations.

Spain and Europe need a strong US – one committed to peace, security, democracy, freedom and human rights. The Biden-Harris ticket has a huge task ahead of them nationally and overseas. We definitely hope to see more predictability and closeness to the “old” continental Europe.

There’s room for improvement in political concertation and trade.

Spain has always had an excellent relationship with the US (but for the Spanish-American War in 1898). We share views and values. The Spanish cultural heritage in the US is very significant. Spanish is the second most spoken language in the US. There are plenty of reasons to be optimistic.

There are plenty of unique Christmas There are plenty of unique Christmas traditions that every Lithuanian can traditions that every Lithuanian can relate to, e.g. on Christmas Eve every relate to, e.g. on Christmas Eve every dinner table in Lithuania is stacked dinner table in Lithuania is stacked with at least 12 different dishes. with at least 12 different dishes.

According to our old pagan tradition, According to our old pagan tradion Christmas Eve, animals talk and tion, on Christmas Eve, animals talk dead ancestors are present at the and dead ancestors are present at table. Christmas Eve is a night of the table. Christmas Eve is a night of contemplation. Festivities erupt only contemplation. Festivities erupt only on Christmas Day. During these holion Christmas Day. During these holidays many Lithuanians come home days many Lithuanians come home to meet their families to celebrate. to meet their families to celebrate.

It’s still unclear whether quarantine It’s still unclear whether quarantine will be in place during this period will be in place during this period and and whether an opportunity to meet whether an opportunity to meet our our loved ones would be the biggest loved ones would be the biggest gift. gift.

Norway stands at the beginning of a serious second wave of infections.

The virus is spreading rapidly. All countries now have outbreaks of infection. Our government has therefore introduced new national infection control measures. An important aim for these measures is to safeguard a relatively normal Christmas celebration, in addition to protecting lives.

For the time being the development is however such that we must be prepared for restrictive measures through Christmas as well. We still hope to be able to celebrate with families and those that we’re close to, but larger gatherings of friends and extended family will have to wait.

Celebrations might look different Celebrations might look different this this year, yet the Christmas mystery year, yet the Christmas mystery will will be present as usual – or even be present as usual – or even stronstronger – among believers. Large ger – among believers. Large families families and friends may not be able and friends may not be able to get toto get together. It’s likely that more gether. It’s likely that more tears will tears will be shed for those that have be shed for those that have passed passed away due to the pandemic. away due to the pandemic. Christmas Christmas greetings may collapse greetings may collapse the lines. NYE the lines. NYE celebration will surely celebration will surely look different look different due to the imposdue to the impossibility of crowded sibility of crowded gatherings. The gatherings. The immense majority of immense majority of the population the population is mentally prepared is mentally prepared for restrictions. for restrictions. This sacrifice is worth This sacrifice is worth it since first it since first and foremost we long for and foremost we long for welcomwelcoming 2021 in good health and ing 2021 in good health and spirit in spirit in Spain.

Spain.

FEATURE

J

obs are part of life. Maybe you’ve heard of the concept.

It’s called work and we all do it. Selling or buying time on the market. The labor market works most efficiently when wages are determined by supply and demand rather than by any other factor such as government intervention. This is the case with the minimum wage.

Imagine that you visit a grocery store to buy a kilogram of apples worth €1.

What will happen when you go to the fruit and vegetables stand and see that the price has been set at €2 by government order? You will probably just put the apples away and leave the store without buying them.

Or you’ll buy half as many as you initially planned. Perhaps you will buy pears instead? Just as the government should not set a minimum

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price for apples, it should not impose on employers the lowest salary they should pay their employees. And if this happens, its consequences must be taken into account.

Of course, raising the minimum wage fits perfectly into the arguments of people who are guided by feelings to help the poorest. When this is supported by the argumentation of economists that an increase in the minimum wage forces higher productivity, it leads to the impression that this may be the right way to follow.

CONSEQUENCES OF RISING WAGES The minimum wage is the foundation on which wage relations throughout the entire economy are built. There are budgetary consequences of raising the minimum

wage, as many social benefits are linked to the minimum wage. It is also a reference point for the wage structure of all employees working in enterprises. Its large increase results in the fact that wages rise too excessively and the competitiveness of companies decreases. It looks like a multi-story skyscraper. When the regulations dictate to raise the “floor” higher, the distance to other floors will decrease. Employees who have earned “above the floor” so far will feel financially degraded. Some employees will start demanding pay raises to restore shaky relations. So there will be pressure to raise wages for everyone, to restore the proportions of this multi-story skyscraper.

If this is the case in all companies, a certain sequence of events will follow, i.e. higher wages will increase costs. Companies will try to pass

SHUTTTERSTOCK

Minimum wage raise irresponsible?

The crisis is in full swing. Unemployment is rising. Nevertheless, the exceptional situation of the Polish economy during the Covid-19 pandemic did not translate into freezing the minimum wage. In light of the pandemic and the related economic crisis, or negative economic growth, a huge surge in the minimum wage from 2021 may escalate the catastrophe.

BY SERGIUSZ PROKURAT

on some of the higher employment costs to consumers and this will translate into higher prices. This will result in a decline in demand and, as a result, in sales. This will require adjusting the scale of production and dismissing some workers – the least efficient ones. All these factors combined will undoubtedly lead to a price increase next year and probably, unfortunately, to a slightly delayed, but still, a wave of massive company closures.

From the employee’s point of view, the increase in the minimum wage, which is intended to force higher productivity, will end up pushing the weakest and most needy out of the full-time labor market. Such people may switch to civil law contracts – contracts of mandate and contracts of specific work – or enter the grey market. The reality is that the

artificial forcing of higher wages cannot make employers pay more than their employees are worth. A higher minimum wage prompts a greater percentage of entrepreneurs to circumvent it. The alternatives are – apart from the aforementioned dismissal of some people and shifting certain working duties to the remaining employees (a secret of increasing work efficiency) – shortening the working time and automation of work. In the latter case, enterprises can replace low-skilled labor with machines. Similar to the example above, we can choose pears instead of apples when shopping in a store. So, for example, grocery stores can take another step toward investing in self-checkout systems, work automation systems or finally apps that will replace human workers. Research con-

ducted in 2016 by scientists Daniel Aaronson, Eric French, Isaac Sorkin and Ted To shows that once the minimum wage is raised, the market reacts with the mechanization of work because activities performed by low-skilled workers are relatively easy to replace by machines.

RIGHT MOVE?

The second wave of Covid-19, another lockdown and a wave of inflation hinder the operation of enterprises. Unemployment is growing everywhere in the world, including in Poland. Is a sharp increase in the minimum wage the right move? As it turns out, it is also more difficult to “get” or “find” a job. This will particularly decrease young people’s chances of getting their first job. Research shows that in Poland in the period 2002-

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W B J DECEMBER 2020

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2013, about 116,000 jobs were lost annually due to the increase in the minimum wage, of which as many as 39 percent were people under 29 years of age. Hence, an increase in the minimum wage leads to a decline in the incomes of the poorest, both those who are looking for a job and those who are dismissed, causing increased poverty, which is exactly the opposite of the intention to raise the minimum wage. The real tragedy of minimum wage regulations is that they are supported by well-intentioned groups, whose aim is to reduce poverty. Meanwhile, people who suffer the most from increases in minimum wages are usually those who are most affected by poverty.

Economists have the least influence on the policies in the areas they know best and agree most about.

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Research shows that once the minimum wage is raised, the market reacts with the mechanization of work

They have the greatest influence on the policies they know the least and generally disagree about, depending on perspectives. The minimum wage belongs to the former, but it creates so much unnecessary buzz because it flows from how society perceives the phenomenon of the free market.

Meanwhile, in economic theory there exists quite a serious agreement regarding perceiving the minimum wage. Keynesians, monetarists and not to mention the supporters of supply-side economics, have no doubts a minimum wage does harm.

Interestingly, some people see this topic differently and believe that increasing the minimum wage brings relief to the poorest. And as long as there are arguments that its growth brings positive results, economic science will remain a field for ideological debates.

SHUTTTERSTOCK

FEATURE

Wage rage From 2021, the lowest monthly salary in Poland will amount to PLN 2,800 (PLN 18.30 per hour).

***

It is a PLN 200 increase compared to the current year, or 7.7 percent more than in 2020.

***

The hike was reported following a draft regulation adopted by the Cabinet on September 15.

***

In September 2019, a month before the Polish parliamentary elections, strongman Jarosław Kaczyński, the de facto leader of the governing PiS party, pledged a minimum wage spike among a raft of “pre-election sweeteners.”

***

Kaczyński promised that the minimum wage would increase to PLN 3,000 by the end of 2020 and PLN 4,000 by the end of 2023.

***

For civil law contracts, a minimum hourly wage was introduced in 2017.

***

Until the end of 2016, during the first year of work of an employee, their remuneration could be lower than the minimum wage, but it could not be less than 80 percent of the minimum wage.

***

The average monthly expenditure per capita in households in 2018 was PLN 1,187 and was lower than 2017 expenses in real terms by 0.7 percent.

***

In 2019, the minimum subsistence level (existential) for a single-person household amounted to an average of PLN 616.55 per month.

***

In 2019, the minimum subsistence level (social) for a single-person household amounted to an average of PLN 1,212.59 per month.

***

The subsistence minimum (existential), also known as the biological minimum, is a “low, alarming level to satisfy needs, below which there is a biological threat to human life and psychophysical development.”

***

The subsistence minimum (social) includes expenses such as transport.

***

Both subsistence levels are different for families with children.

SOURCE: bankier.pl, businessinsider.com.pl, gov.pl, ipiss.com.pl, stat.gov.pl

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FEATURE

POLAND NEXT What’s in store for Poland over the next several years.

Economically.

In 2020, the global economy found itself unexpectedly in the state of a significant recession, caused by restrictive government measures intended to reduce the human cost of a large worldwide coronavirus epidemic. The GDP is expected to fall by some 3-5 percent globally and by some 5-10 percent in the EU and the US. To limit that recession in the course of 2020 and to initiate a recovery in 2021, very expansionary monetary and fiscal policies have been adopted. The expected outcome is that the total change of global GDP will be close to zero in the period 2020-2021. Developments in Poland are likely to imitate those in the world. These developments are expected to increase sharply the public debt and reduce private investment for several years after 2021 but are expected to have a limited impact on the trend rate of growth in the long term.

In 2017, the IMF pointed out three phenomena in Poland: since 2012, the working-age population in the country had been dwindling at a rate of 1 percent a year, investments in fixed assets made by Polish privateowned companies accounted for a mere 11 percent of the GDP in 2004-2016 and the pace of growth in the total productivity of the main production factors, namely labor and capital fell from 2.4 percent in 2003-2007 to 1 percent in 2013-2016.

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The proposals included in the government’s economic program are quite detailed on two important issues. If implemented consistently, these proposals could pose a problem in the long run. They are: 1. A change in the pension system that involves introducing additional pension payouts (13th and 14th pension) financed from the state budget.

2. A radical increase in the administratively determined minimum wage, much faster than the rise in labor productivity.

The proposed large increase in the minimum wage, if implemented, would create the illusion that real wages are determined by politicians, rather than by investments and technology, and so by businesses and employees. The very large increase of public debt in 2020 may force the government to abandon the implementation of proposals 1 and 2.

After Poland’s accession to the EU in 2004, the EU’s funding of nearly half of public investments played an important modernization role in the country, especially in the field of infrastructure (CASE 2019). After 2022, this funding will be reduced significantly. From 1994-2018, an important role in the development of the export sector and technological innovation was played by foreign investments: an average of 3.3 percent of

“Poland’s transformation: Facts and myths about the period 1990–2020 and the country’s chances of attaining the economic level of the USA and Germany after 2020” was originally published in NAUKA – the official scientific quarterly of the Polish Academy of Sciences.

SHUTTERSTOCK

BY STANISŁAW GOMUŁKA

the GDP a year, around 15 percent of all investments.

However, the political doctrine pursued by the governing Law and Justice (PiS) party considers them a threat to national sovereignty. This may reduce the inflow of FDI.

the income per capita in Germany (without the former German Democratic Republic). In Scenarios One and Two, the narrowing of the income gap would continue until 2040, when the average income in Poland would reach 70-75 percent of the average income in Germany FOUR SCENARIOS OF ECONOMIC GROWTH IN 2020-2040 (without the former German Democratic Republic) in In the main scenario for Poland, I propose assuming Scenario Two and 80-85 percent in Scenario One. Each that the average rate of growth in the GDP per capita scenario is related to a different economic policy. will be 2.5 percent until 2030 and 2 percent in 2030In Scenario One, economic policy would aim at main2040. This scenario is based on the assumption that taining a stable number of people employed in the nonPoland will join the group B countries in 2040 when agricultural sector, lowering considerably the number of the per capita income gap between Poland and Spain those working in agriculture and low-productivity enterand Italy is closed. In the optimistic scenario, the rate prises, maintaining solid public finance (with an average of growth until 2030 would be higher by 0.5 percentage deficit near zero), and a large share of investments in point, which means 3 percent a year. In the pessimistic fixed assets in national income (more like 20-25 percent scenario, it would be lower by 0.5 percentage point, of the GDP than 15-20 percent). which means 2 percent a year. Let us call these: Scenario One (the optimistic scenario), Scenario Two (the Professor Stanisław Gomułka standard scenario), and Scenario Three (the pessimistic is the chief economist of BCC, a scenario). business club for entrepreneurs and If we adopt these assumptions, Poland’s position would be as follows: in Scenario Three, the developthe largest statutory organization of ment gap between Poland and wealthy countries would individual employers in Poland. stop narrowing in 10-15 years, with the average income per capita reaching the level of around 65 percent of

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Kyiv calling

Even though the economic ties between Ukraine and Poland are robust and have been strengthening over time, there is still room for significant trade and investment growth.

BY SERGIY TSIVKACH

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O

ver the past decade, the relations between Ukraine and Poland have been getting stronger leading to Poland becoming Ukraine’s key EU trading partner.

Globally, Poland remains Ukraine’s fourth-largest trading partner after China, Russia and Germany, with bilateral trade worth $7.4 billion in 2019.

In terms of investments, during the first half of 2020, the FDI inflow from Poland to Ukraine reached $662.2 million. Poland occupies the 7th place among EU countries by the volume of FDIs to Ukraine and 10th place globally. Currently, there are nearly 3,000 Polish companies successfully operating in Ukraine.

Among the largest ones are Cersanit (ceramics), Barlinek (production of wooden floors), Can-Pack (packaging), Inter-Groclin (manufacturer of automobile equipment and accessories), Nowy Styl and Black Red White (furniture manufacturers), Śnieżka (paints and varnishes), PZU (insurance industry), Kredobank and Getin Holding’s Idea Bank.

Despite the vigorous pace of strengthening bilateral relations between the two nations, there remains huge scope for further extension, particularly in the sphere of infrastructure, energy, IT, and manufacturing.

USE THE POTENTIAL

SHUTTERSTOCK

Ukraine is an important transit corridor for trade and travel between Europe, Asia and the Middle East. The country has extensive railway and highway networks, sea and river ports (terminals), airports and a wide network of air destinations, freight and customs terminals. Although the country has a broad transport infrastructure, it needs to be modernized and extended and the quality of services improved through gradual alignment with European standards. This creates a lot of opportunities for

UKRAINE IS AN IMPORTANT TRANSIT CORRIDOR FOR TRADE AND TRAVEL BETWEEN EUROPE, ASIA AND THE MIDDLE EAST

private investments and public-private partnerships (PPPs).

In the following years, Ukraine aims to attract more players through a transparent procurement process in the infrastructure sector. Namely, there are three concession projects for seaports – a ferry terminal in Chornomorsk seaport, a container terminal in Chornomorsk seaport and a passenger complex in Odesa seaport – six roads, four airports and three railway concessions. These projects are planned for 2021-2022 and at an estimated cost of $1.7 billion.

Ukraine’s unique location on the crossroads of the main trade routes between Europe, Asia and the Middle East makes the country a major logistics hub. Recently, Ukraine and Poland signed a memorandum of intent on cooperation between the ports of Gdańsk and Odesa. This step allows the creation of the intermodal transport corridor and will give the impetus for further development of logistics and transport, expanding the geography of container traffic from China through Ukraine to Poland and Europe and back using different types of transport without stops.

NEW OPPORTUNITIES

Traditionally, Ukraine has a powerful and developed energy sector, including gas, electricity, hydro, coal and nuclear. Ukraine’s way to energy independence – according to the Energy Strategy of Ukraine 2035 and recent reforms in the energy sector – opens new opportunities for global energy players and small investors in Ukraine.

Given Ukraine’s current natural gas production, the proved reserves base is underutilized. The government’s recent deregulation efforts in the gas sector and the launch of open auctions of special permits for oil and gas extraction attract more private companies with advanced technologies and boost gas production in Ukraine.

For instance, in October, PGNiG, a Polish state-run gas giant, signed an investment agreement with Energy Resources of Ukraine (ERU) on a joint exploration and production project in Ukraine. This is a step toward the launch of joint operations in the area located close to the Polish border with a strong production potential as the previous geological surveys conducted by PGNiG showed a correlation of its geological structures with Przemyśl – Poland’s largest natural gas field. The company plans to launch a natural gas exploration program in Ukraine in the first half of 2021. Ukraine and Poland are consistently looking for the diversification of gas supply sources and such a project seems beneficial for both parties as well as contributes to energy market integration and strengthening energy security across the region.

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FEATURE

DESPITE THE VIGOROUS PACE OF STRENGTHENING BILATERAL RELATIONS BETWEEN THE TWO NATIONS, THERE REMAINS HUGE SCOPE FOR FURTHER EXTENSION PROMINENT IT SECTOR

The IT industry is among the country’s fastest-growing industries and a major driving force of Ukraine’s economy. This is the only sector in the Ukrainian economy that has shown immunity to political and economic fluctuations and demonstrated steady growth by nearly 40 times over the last fifteen years: from $110 million in 2003 to an estimated $5 billion in 2019. Ukraine is on its way to becoming the leading tech hub. The Ukrainian IT industry consists of over 4,000 local IT service companies. More than 110 leading global companies have subsidiaries in the country. Samsung, Microsoft, Ring, Snap, Magento, Plarium, Boeing, Siemens, Ericsson – all have established their R&D centers in Ukraine.

A MANUFACTURING BASE

With a highly-skilled and cost-competitive workforce and a wide selection of greenfields and brownfields, Ukraine is just the right place for launching manufacturing facilities.

Polish companies have already benefited from investing in Ukraine’s manufacturing sector including Barlinek, which became one of the largest manufacturers of three-layer fabricated woodblock flooring in Ukraine. The company started its operation in 2017 and invested about $75 million into the plant construction in Vinnytsia.

There is also a huge potential for joint venture projects in agrifood processing which will bring Ukraine up to a new level in the global food supply chains.

By renewing the installment scheme for settlement of VAT duties on imports of manufacturing equipment, favorable conditions for the growth of light metal-processing and other industries have been created. Ukraine also launched the abolition of the state monopoly on spirits production and liberalized ethanol exports. Thus the investment in ethanol production has been unlocked and eight distilled spirits plants have already been auctioned through the transparent privatization process attracting in total UAH 477 million (less than $17 million).

privatization of the Dnipro Hotel. The starting price increased 13 times reaching $41 million and 29 investors took part in the bidding. The winner is the private real estate company Smartland and Alexander Kokhanovskyy, the founder of the country’s most successful e-sports organization, Natus Vincere, the former co-owner of ESforce and the founder of DreamTeam startup.

It is obvious that nowadays countries have to compete globally for investors by offering them better conditions for doing business and lucrative incentives. With the introduced draft law “On state support for investment projects with significant investments,” Ukraine suggests such incentives as corporate tax exemption, no import duty or VAT on equipment, reduced land tax and provision with developed infrastructure and utilities, and will arrange a personal advisor from the government if the investors commit to €20 million investment.

Ukraine is also moving toward providing incentives for industrial park operators and residents. The two draft laws aimed at developing the manufacturing and R&D sectors have already been registered in the Ukrainian parliament. Such a step will allow increasing Ukraine’s investment attractiveness on one hand and providing benefits for the companies on the other. In particular, businesses based in an industrial park will receive tax holidays for five years.

The recently-released UkraineInvest Guide (ukraineinvest.gov. ua/guide/) contains much broader information about Ukraine’s potential and analytical data from various industries. It could also become a starting point for Polish investors to enter the Ukrainian market since the guide provides the business with up-to-date information in the regulatory policy as well as includes the most attractive investment projects including PPPs and privatization.

There is indeed a huge potential for further development of Ukrainian-Polish economic and investment relations. This is especially true in the realm of investments in the infrastructure, logistics and energy sectors as it would also bring great value to strengthening strategic cooperation between two countries.

LONG-TERM SUCCESS

Ukraine has already made a great leap forward in the privatization of state-owned enterprises by introducing the transparent system of online auctions. Of 3,733 state-owned enterprises (SOEs) in Ukraine, nearly 1,000 will be auctioned, while 1,261 are to be liquidated. Polish companies have a unique opportunity to scale and diversify their businesses by acquiring those assets and pave the way for future successful operation in Ukraine.

And we already witnessed the successful and transparent

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Sergiy Tsivkach is a Ukrainian- and UK-qualified commercial lawyer with over 20 years of professional experience, and executive director, UkraineInvest – a Kyiv-based independent investment advisory body.

IMMENSE POTENTIAL The Polish EV market proved to be much more resistant to the Covid-19 pandemic-related difficulties than the conventional automotive sector.

BY ALEKSANDER RAJCH

T

SHUTTERSTOCK

he “E-mobility meter” (in Polish: Licznik Elektromobilności) operated by the Polish Alternative Fuels Association (PSPA) and the Polish Automotive Industry Association (PZPM) shows that 14,788 electric vehicles drove on Polish roads (BEV+PHEV) at the end of September 2020. 5,792 new EVs were registered during the first nine months of this year, which is a 97 percent rise compared to the same period in 2019. To put things into context, the same period showed a drop in registration for petrol and diesel powertrains by 24 percent and 23 percent respectively.

EUROPEAN LEADER Moreover, Poland is a European leader in terms of zero-emission public transport, both in terms of production, as well as in the field of introducing these vehicles to municipal fleets by local authorities. In the period between January and September 2020, 116 e-buses rolled out on Polish streets, an increase of 197 percent against the same time last year. E-buses are produced in Poland by companies such as Solaris, Volvo and MAN. The charging infrastructure in Poland is also seeing robust development. At the end of September, 1,282 charging stations were available nationwide. Significantly, Poland has a very high share of fast chargers (DC) when compared to other European nations, at 30 percent. There are three EVs for every publicly available charging point. Of course, this good result is also an effect of small EV car parks.

EUROPEAN HUB Poland is also becoming a European hub for the battery production industry, which is increasingly more important for the development of e-mobility. The LG-Chem lithium-ion cell production facility in Kobierzyce, near Wrocław in south-west Poland, is one of the largest such sites in Europe. The annual output of this production plant may reach up to 65 GWh. There are numerous investments in the battery sector being developed in Poland by other companies including Daimler, BMZ, Umicore, Johnson Matthey, SK Innovation, Capchem and Guotai-Huarong.

The crucial event in 2020 on the Polish e-mobility market was the launch of the EV acquisition support program operated by the National Fund for Environmental Protection and Water Management (NFOŚiGW). The programs offered such as “Green Car” (in Polish: Zielony Samochód), “eVan” and “Koliber” did not achieve the desired popularity amongst potential beneficiaries. The potential buyers reserved between 0.1 percent to 12.2 percent of the allotted budget depending on the program. Despite that fact, once the programs become adapted to the market reality, e.g. raising the incentive amounts and raising the maximum price of the vehicles included in the program, they may have the potential to become a catalyst in the process of increasing EV sales in Poland.

SUSTAINABLE TRANSPORT Apart from the potential financial instruments, increasing demand for EVs amongst Polish consumers also necessitates changes in the current law. PSPA initiated the “White Book on E-Mobility” project with the intention of working out very clear and precise recommendations of legal changes that would support the development of sustainable transport in Poland.

The industry’s voice was heard, as the Polish government published a draft of the resolution to introduce “E-Tariff,” to reduce the fixed costs (opex) for EV charging infrastructure operators. The final implementation of these regulations will have a significant impact on the development of the EV charging network on Polish roads.

The Polish e-mobility market has immense potential. The “Polish EV Outlook 2020” report authored by PSPA predicts a realistic scenario, wherein the Polish EV car park may exceed 280,000 vehicles by 2025 if state subsidies such as incentive programs and tax reduction incentives like the reduction of 100 percent VAT from new EVs are introduced. If no such measures are brought along then the number of EVs will be twice as small. The predictions also show that given that same scenario the number of BEVs in 2030 will reach 900,000 units. Combined with hybrid plug-in vehicles – PSPA estimates nearly 160,000 such vehicles in 2025 and 570,000 by 2030 – in 2025 there may be as many as 1.5 million low- and zero-emission vehicles (BEV and PHEV) on Polish roads. The pursuit of a decarbonized economy and Polish cities without smog surely depends on the realization of such scenarios.

The Polish Alternative Fuels Association (PSPA) states that it is the largest, fully representative industry organization, which promotes zero- and low-emission technologies in transport. Aleksander Rajch is the director for external relations in PSPA.

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FEATURE

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SOCIAL CAPITAL DEFICIT The socio-political conflict that is tearing Poland today is also destroying the economy like cancer.

Citizens feel it perfectly. Scientists also confirm this. The conflict reduces our social capital to zero.

And without it, entering the club of developed and innovative countries is simply impossible.

BY SŁAWOMIR DUDEK

SHUTTERSTOCK

T

he belief that the econ-

omy and the red-hot conflict in our society are not related is completely wrong. Conflicts have infected all areas of our lives. However, there are no signals from the political scene that politicians are noticing this fact. I do not know of any of their statements, regardless of the political stripe, in which conflicts are directly linked to the destruction of the economy.

However, citizens understand this very well. The Research Institute for Economic Development of the Warsaw School of Economics, in its cyclical survey of the sentiments of households, conducted jointly with the Association of Financial Companies (ZPF), recently asked respondents exactly about this relationship. The latest results are devastating. However, they do not yet take into account the protests following Poland’s top court’s (Constitutional Tribunal) ruling on eugenic abortion. Almost 90 percent of our society believes that widespread political conflict has a negative impact on social confidence and thus is a barrier to Poland’s economic development and a barrier to catching up with the richest and most modern economies in Europe and in the world.

This opinion is shared by all social groups, from left to right. The greatest concerns about the impact of political conflict on the economy were recorded in Podlaskie province

(94 percent). Fears were also higher than the average in Małopolskie, as well as in Łódzkie and Zachodniopomorskie (all 91 percent). But generally, all over Poland, the public sees the problem that strong conflict is a barrier to economic development.

SOCIAL CAPITAL – TO BE OR NOT TO BE OF THE ECONOMY The rulers are worried about investments. They want to implement ambitious programs stimulating the expansion of production assets and infrastructure. They talk about increasing the efficiency of production factors and employee qualifications. So they throw on the agenda the so-called fixed capital and human capital.

But they completely forgot about one more important production factor determining the development of our economy, i.e., social capital. This concept is well known in economics.

It refers to social relations and the mutual trust of economic agents.

This trust is essential to developing the market exchange and achieving the benefits from it. Both from an economic and social point of view.

Let us take an example that will explain what we are talking about.

Many volleyball teams reach the so-called world level in the game.

They are characterized by a high and similar level of physicality, efficiency, technicality and equipment.

However, to achieve the highest goals, to be at the forefront, team-

work is necessary – the teamwork of all players, regardless of what club they come from, trust and understanding and common goals – which in the economy we call social capital.

Economic research clearly shows that countries with a high level of social capital (trust) have managed to overcome the middle-income trap, record-high economic growth and are technologically advanced.

To reach the level of the mostdeveloped innovative economies require acceleration of the accumulated social capital in Poland.

Since the beginning of the economic transformation in Poland, the level of social capital has been very low. This has been shown by numerous studies. And for several years we have been reducing it additionally. Social dialogue and public debate are being destroyed.

Socio-political conflicts are constantly heated and they depreciate this capital even more.

AN ECONOMIC ROAD TO NOWHERE The Polish economy faces huge challenges. Over the coming decades, demographic changes will negatively affect economic potential. The aging process of Polish society is one of the fastest in Europe. It is a demographic crisis or even catastrophic. The working-age population will decrease by about 10 million people in several decades. Negative trends will be hard

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FEATURE

GENERALLY, ALL OVER POLAND, THE PUBLIC SEES THE PROBLEM THAT STRONG CONFLICT IS A BARRIER TO ECONOMIC DEVELOPMENT to stop. The European Commission forecasts that by 2070 the real GDP growth rate of Poland may drop even below 1 percent. The Polish finance ministry is optimistic that this rate will amount to 1.7 percent in the long-term (against 4-5 percent in recent years). According to these forecasts, Polish GDP per capita by 2070 will not exceed the EU average (it will still be 10 percent below), and as compared to Germany’s GDP per capita, it will be lower by up to 20 percent.

If we cannot radically stop demographic trends, opportunities lie in increasing the economic activity of the population and a comprehensive migration policy. Meanwhile, in Poland, surprisingly, the retirement age has been lowered and there has been no migration policy for years. The last hope is, therefore, technological progress, the development of entrepreneurship and the absorption of innovation. However, as scientific research shows, in the conditions of undeveloped social capital, innovation grows less or is not widely implemented (in particular in SMEs).

Social capital is also a lifeline during sudden crises. Such as a pandemic. If Poland had high social capital and trust, we would have been able to prepare much better aid packages. In countries with high social capital, aid instruments came in quickly and smoothly. There is simply a great deal of trust between the company and administration and employees and administration.

And this made operation in crisis conditions much easier.

In Poland, everything is given a political label. If someone disagrees

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with economic policy decisions, they are doing politics. If they disagree with epidemic management decisions, they are doing politics. Everything is subordinated to the media and PR narrative. Hence, all projects and activities are hidden until the very end, without the participation of external experts or social partners. We can only dream of transparency. Lack of trust makes decisions worse than optimal because they do not take into account the whole picture, all opinions.

WITHOUT SOCIAL CAPITAL, WE WILL NOT REDUCE THE TAX GAP I do not know if the finance ministry is aware that the scale of fraud and tax avoidance (the so-called tax gap) is very low only in countries with high social capital. As the data for 2019 shows, in the case of reducing the VAT gap in Poland, we have already reached the wall. Unfortunately, the VAT gap increased from 9.9 percent to 10.2 percent, and in 2020 it may increase by a further 5 percentage points and will be above the European average. Economists agree on the causes. The lowestgrowing fruit has already been harvested and “simple reserves” have been exhausted. We banished t she mafias from Poland and the biggest frauds were reduced. Now, the reduction of the VAT gap must apply to small transactions, the so-called shadow economy. And it is not that simple anymore, because it concerns many transactions, many small entities and individual taxpayers. It is impossible to eliminate the shadow economy by oppressive and police methods, and it generates huge costs, including political ones.

The only way is to raise civic

awareness about the dangers of tax evasion, etc. This awareness is called “tax morality.” Research for Spain (Alm, Gomez [2008]) shows a strong, positive relationship between the level of social capital and “tax morality.” Numerous studies (including Torgler, Benno [2007], Torgler [2011], Alm [2012], Molero, Pujol [2012], Saad [2014]) show “tax morality” as an important factor determining the degree of tax compliance.

Today Poland needs social capital more than ever. It is an essential fuel to support the development of the economy and ensure the economic security of all citizens. Unfortunately, it cannot be bought. Nor can it be prescribed by law. It can only be collected in small chunks in the course of the government’s current relations with society, of the relations of particular social groups. We need to start aggregating it immediately. It is already late, Poland has suffered losses. We have wasted our time. However, we will waste more – all of Poland – if we do not rebuild social and civic ties, as well as mutual trust and trust in the state. The ultimate goal must be cooperation and transparency. It is impossible to build a modern, social and civic economy on conflict.

Sławomir Dudek, PhD Chief economist of Employers of Poland (EoP). Established in 1989, EoP is the oldest and the largest organization of employers in Poland representing 19,000 companies and employing over five million people.

Talking Points

DEFENDING DEMOCRACY Edwin Bendyk, the boss of Stefan Batory Foundation, explains why democracy is important and the inner workings of the Foundation, in a tête-à-tête with the WBJ’s chief political editor.

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INTERVIEW BY EWA BONIECKA

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Talking Points We have to understand the changes going on in the whole planet and learn to build a common attitude to shape our societies in the best possible way

WBJ: How do you see your role in the ongoing difficult political and economic situation in Poland?

Edwin Bendyk: I see my role as a continuation of the Foundation’s mission of supporting democracy and civil society. Democracy and its future depend on all of us. We want to popularize such values as tolerance, openness, listening to people and seeking contacts with people holding different views among others. We have a vision of Poland which is democratic, free, open, respecting the law and freedom, rejecting discrimination, supporting civil society, free culture and all public institutions and which defends democracy on various levels of society and rejects all types of undemocratic behaviour.

One example of our activity is the action “Your Vote, Your Choice.” But we are not connected to any political party. We just support democracy on various levels of society.

So there are no active members of any political party in the Batory Foundation?

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This is correct. The Foundation, which is a financially independent, private institution, has liberally-minded members, who express their own views. Members of the Foundation’s Council include such personalities as professor of sociology Andrzej Rychard, economist Jan Krzysztof Bielecki, film director Agnieszka Holland and Nobel award-winning writer Olga Tokarczuk.

The board of the Foundation looks similar. Various members of society attend our public meetings, sometimes also guests from other democratic countries. We have our own finances and Poles can also choose to donate 1 percent of their personal income tax to the Batory Foundation – last year we collected PLN 1.5 million. Foundation together in consortium with two other NGOs is also an operator of so-called Norwegian funds addressed to NGOs in Poland.

Does the present situation look bleak?

(After a moment of silence) No. I think that we try to understand the changes around us and the present

situation in the world. The various actions undertaken by the Batory Foundation help us to understand that democracy is now in a difficult state and that we have to change this.

Do you press for changes in Poland?

I hope so but this requires a lot of work. We look at democracy in a very broad sense. We organize important political debates and take practical steps when democracy is being violated in many fields. We want people to understand and react to changes occurring in our country and also in the world. We are, for example, a member of the European Foundation Centre in Brussels.

We encourage people to take part in public life, in local government elections as well as in elections to the lower house (Sejm) of the Polish parliament and the European Parliament.

Since 2009, we have been promoting the message “Your Vote, Your Choice.’’

We have been delivering grants. We cooperate with other democratic, NGOs in Poland and in Europe.

We support civil society protests against hate and discrimination of people with different outlooks and orientations in ethical matters. Our Foundation, together with 1,200 NGOs, supported a non-affiliated and experienced judge Zuzanna Rudzińska-Bluszcz for the constitutional post of the commissioner for human rights in Poland because the term of office of the democratic and liberal Adam Bodnar has come to an end. Yet this citizens’ proposal was rejected by the PiS majority in Sejm.

Nevertheless, we support Rudzińska-Bluszcz.

[Rightwing, nationalist and populist Law and Justice (PiS) party has been the governing party in Poland since fall 2015.]

Can anyone join the Foundation?

The Foundation is a professional institution, which employs a large number of administrative staff and which analyses problems of democracy in broad terms. We are not linked to any parties but open to cooperation with people with various views. So any

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person can take part in our public meetings. There are also similar foundations that analyze the condition of democracy in other countries in Europe and the US. They also have professional specialists in many fields. In present times, when people are linked and the use of technology and fake news is widespread, publications issued by such foundations are important for all democratic societies.

When I watch public debates on TV in which members of your Foundation participate, I never hear personal attacks on politicians but only strong criticism of violations of democracy. Why is it, for instance, that member of your board Agnieszka Holland never mentions Batory Foundation by name but only speaks up against unlawful acts perpetrated against cultural institutions?

This is not the point. Members of our bodies express their own views. We have confidence in each other.

We know that we fight for democracy and propagate its value in our lives. We

work for democracy, not for the publicity of the Batory Foundation. During 30 years of our work, we achieved recognition among democratically-minded citizens and also among people who hold different views than ours on certain matters.

The Foundation supports citizens’ movements acting for democracy. Will you, therefore, support the citizens’ movement which liberal politician Rafał Trzaskowski – who was the Civic Platform (PO) party’s candidate in the last presidential elections – is organizing to encourage people to vote for democracy?

We will not be a formal part of the movement organized

by Trzaskowski, who is a well-known politician of the PO party. We will not support it in a direct way but we can cooperate with it, as with any other movement or organization sharing similar values as we have. We hope we have a similar vision of Poland as a free, open, tolerant and lawful country that respects freedom of speech and democratic rules in all institutions – including edu-

cational and cultural, such as historical museums.

It is worthwhile to speak with people as a gesture of goodwill even if they have different views on certain matters.

What is your personal dream as chairman of the Foundation? You assumed this post at a very difficult time for Poland and the world.

As I have written in my latest book [“In Poland, that is everywhere. It’s about the fall and future of the world” (in Polish: “W Polsce, czyli wszędzie. Rzecz o upadku i przyszłości świata”)], I am very worried about the changes that are now occurring in many countries in all fields of life.

Democracy should never be taken for granted and people realize it now – not only in Poland. We have to analyze the social, economic, political and cultural changes going on in the current times and ask ourselves what is the future of our civilization. I would like the Foundation to ask all citizens about it and to have their voices heard not only in Poland. Right now, not only we but also other nations experience a decline in democracy, justice and equality for all people.

We have to understand the changes going on in the whole planet and learn to build a common attitude to shape our societies in the best possible way. This is my personal dream.

Edwin Bendyk is chair of the board of Stefan Batory Foundation – an independent Polish NGO. He is also a published author, journalist of the weekly “Polityka” magazine and head of the Centre for Studies on Future at Collegium Civitas in Warsaw.

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Talking Points

Climate action starts at home, believes the boss of IKEA Retail Polska Karin Sköld INTERVIEW BY MORTEN LINDHOLM

WBJ: IKEA initiated the debate “From Green Deal to Good Deal. Challenges and opportunities related to the European Green Deal.” What was behind this initiative?

Karin Sköld: At IKEA, we perceive “Green Business as Good Business.”

Although sustainability is often perceived as a cost, we see it as an investment in a better future for the many. We try to convince other companies and decision-makers to follow our way of thinking. That’s why we initiated the debate on the subject during the European Forum for New Ideas in September. I think that now is the time to take a leap and speed up our actions if we want to secure a livable planet for future generations. IKEA already takes its part of the responsibility: in our strategy, we address global challenges, we are committed to trans30

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forming our operations so that in 2030 we will become “People and Planet Positive,” meaning that we need to be 100 percent circular and climate positive. We are ready to work across institutions and markets, with the business community and civil society to deliver to the vision set by the European Green Deal. We see it as our priority globally because we subscribe to the “One Planet – One Home” vision.

You are not only CEO of IKEA Retail in Poland but also its chief sustainability officer. How is IKEA working with sustainable development – in production, supply chain and consumer education?

We look at sustainability in a holistic way. We try to implement a sustainable approach at every stage of our products’ life cycles. In our ambitious “People and Planet Positive Strategy,” we

aim to use only renewable or recycled materials in our products by 2030. Over 40 percent of our products are more sustainable already, i.e., made from recycled, renewable materials or materials which come from more sustainable sources.

By becoming “Climate Positive” we mean reducing more greenhouse gas emissions (GHG) than the IKEA value chain emits. What’s more, we commit to being a fair and equal business, creating a positive social impact for everyone across the IKEA value chain – by achieving gender equality and eliminating the gender pay gap, which we practically did in Poland. In 2019, the difference between the salaries of our male and female employees was only 0.16 percent. When it comes to consumer education, we have great inspirations on our website IKEA.pl/dlaplanety. We strongly believe

Poland is one of the biggest production hubs for IKEA globally. Regarding sustainability, will this develop further? For how many people have you created work in Poland?

Yes, it’s true. Today, almost 20 percent of IKEA products in the world are made in Poland. In terms of production for IKEA, Poland is second only to China. What’s more, last year, the value of IKEA products for export reached €3 billion, which accounted for nearly 28 percent of Polish furniture exports in 2019. This means that if all IKEA suppliers were treated as one entity, they would be among the top five largest exporters in Poland.

In terms of sustainability, we have just launched an updated IWAY [IKEA way of responsibly procuring products, services, materials and components] code of conduct that regulates the conditions one has to meet to become an IKEA supplier.

We revise them regularly so they reflect the current state of research and sustainable goals. When it comes to creating jobs in Poland, IKEA directly employs 15,000 people. Additional 75,000 people work for our suppliers across the country. Especially now, in the time of

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GREEN BUSINESS

that climate action starts at home and that everyday efforts sum up and bring us closer to a better life on a healthier planet. Recently, we launched the IKEA Better Living app where you can find suggestions of small steps you can take if you want to tackle climate change at home.

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the Covid-19 pandemic, our priority is to keep current employment and working conditions. So far, after the first wave of the pandemic, we have managed to keep this promise.

How bad has Covid-19 influenced IKEA’s business in Poland?

We already know that we

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didn’t meet our business goals set for the financial year 2020 (September 2019 to August 2020). The seven weeks of lockdown in March-April definitely constituted a unique experience, a true test of agile management in practice.

The stores were deprived of what constitutes a spirit of IKEA – meeting customers

face-to-face, helping and inspiring them to arrange their homes in a functional and beautiful way, always with a twinkle in the eye.

Thanks to the incredible abilities of our employees, we managed to transfer this approach to remote sales and remote planning.

Many of our coworkers learned how to support

telephone sales, planning kitchens online and were engaged in collecting online orders in the stores.

I am deeply thankful for their engagement! Their hard work had tangible results. I want to stress again that in these difficult times we managed to secure current contracts and working conditions. The safety of

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Talking Points

sories, which was naturally caused by the need to provide space for homeschooling and work from home.

Good information from IKEA’s point of view is that we can inspire how to combine all the different needs while keeping the interior friendly and organized.

That’s why we have just launched the Interior Design Hub I mentioned earlier.

Everyday efforts sum up and bring us closer to a better life on a healthier planet

our employees and clients, including psychological security, is the top priority for IKEA. Right now, during the second lockdown, we benefit from the accumulated experience and focus on online and remote sales.

The unique shopping experience in IKEA – walking through a labyrinth and touching or trying the products – must be very difficult to move online and secure the same amount of ad-hoc shopping. What have you done to support the online experience for your customers?

Indeed, it is hard to imagine a walk through an IKEA store online. Maybe we should offer possibilities of virtual visits like many museums do these days.

Coming back to what we already did, first of all, we secured remote planning services. These services are extremely popular in IKEA and now we offer them online, sharing inspirations and our know-how. Planning services include interiors on our newly launched Interior Design Hub and PAX, METOD and BESTA systems. This allows for virtual meetings with the clients – what our

employees miss these days.

We have also launched the IKEA app, the first shoppable app that has a lot of inspiration. Moreover, our digital team works hard every day to make online shopping experience as close to IKEA store shopping experience as possible.

We did a revamp of our webpage, providing more inspiration online. We analyze consumer activity on a daily basis and introduce changes because we want our webpage to enable easy, intuitive and satisfactory shopping.

From the positive side of Covid-19 have you learned something new about yourself, your company and customers in the period?

I am again reminded of the fantastic team I have the opportunity to work with here in Poland. During the pandemic, I was able to see with my own eyes, what Ingvar Kamprad [IKEA founder] used to say – that a crisis brings out the best in us. It is true that it brings us together as a team and within the organization. The spirit of the Polish team is very unique, there is a lot of entrepreneurship, agility and engagement while facing a

difficult situation like we had this year. What’s more, I can see that IKEA values such as togetherness or leading by example are very strongly represented in IKEA Poland.

The key business learning is of course speeding up online transformation. Some processes that seemed very complicated and lengthy, turned out to be doable when they received clear priority. Personally, I see it as a great achievement during this difficult time.

On the other hand, what we could see is that home became more important than ever. The various activities our customers need to arrange within their four walls reached an ever-high level. We saw a significant increase in interest in home office furniture and acces-

What are your hopes for 2021?

Like everyone else I guess, I hope for the end of the pandemic and for people to stay safe and healthy. I wish for the limited impact of the pandemic on the world economies. I strongly hope we draw learnings from this difficult time and we appreciate in the future what we can achieve when we work together. What’s more, the pandemic has shown us that we as humans are vulnerable to forces of nature. Though tragic, this is a good example of what might happen if we don’t stop overexploiting Earth’s resources. I think that now more than ever we need to work together and gather everyone to act on preventing climate change.

Karin Sköld took over as president of IKEA Retail Polska on September 1 and also became the director for sustainability.

Previously, Sköld was a regional director and was responsible for nine IKEA stores in Poland located outside Warsaw.

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IN FOCUS RETAIL INDUSTRY

FIVE MARKETING TRENDS FOR 2021 Nowadays, a marketing head has at their disposal at least several dozen sensible channels and tools for communicating with their target group. BY TOMASZ OPIELA

PRESS MATERIAL

“A strategic approach should be the first step in planning activities for 2021”

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I

have decided to share with you my personal selection of next year’s marketing trends. Here are my must-haves for 2021:

ing. Personally, it does not bother me too much, because for us, as an agency, it gives us a lot of room for the brands we work with.

1. STRATEGIC APPROACH Basic. Basis. Something for everyone to start planning their activities with. At least in theory. My experience shows that a great many actions and decisions are made ad hoc, without a specific strategy and goal. Because someone had a cool idea or saw an interesting action at their competitor’s or wanted to do something creative. In today’s Covid and, hopefully, post-Covid world, a strategic approach should be the first step in planning activities for 2021. Brands with clearly defined marketing strategies that know what they want to achieve, can do much more than those operating without such a plan.

At Valkea, the strategy department is involved in the vast majority of projects that we receive. Without a strategic view, we do not move on.

4. WEB DESIGN/MOBILE FIRST This point seems obvious, but it is enough to click through the pages of a few large companies for a moment to see how big the problem is. Appearance and UX are of course only one side of the coin, it looks even worse from the perspective of Google. That is why this point is on my must-have list for 2021. Rebuilding the website, starting with the mobile version, should be the No. 1 goal for most brands in the coming year. Remember that the website is our own kingdom, which neither Facebook nor Google can deprive us of. If we build and promote them properly, it can play a fundamental role in many sales and image processes, which we so easily transfer to our profiles on Facebook, Instagram or YouTube.

2. DIGITALIZATION The year 2020, which many of us, for obvious reasons, will want to forget as soon as possible, accelerated the process of digitalizing everything we could.

Including what seemed non-digitalizable before Covid. It’s a process with no going back and I think everyone is aware of it.

Marketing communication starts online today. This is how most brands create their strategies. And rightly so. However, it is not always easy. Digitalization also brings many pitfalls and shortcuts to avoid.

Especially when we go a little deeper into the marketing tools we have used so far in the offline sphere. Let’s take a simple example of a catalog or magazine that the brand has published in the traditional way so far. What to do with it now? Is it digital?

How simple it sounds! Convert PDF and send it by email to customers? Embed it on a website and promote it in SM channels?

Theoretically, only the distribution path of the same content changes. But the reality is much more complicated.

Tomasz Opiela CEO of Valkea Media – a marketing agency in Warsaw.

What worked great for printing won’t work as well online. There are many reasons. First, the competitive environment in which a printed magazine is located is definitely different than when it is online.

On the screen of a smartphone or laptop, it will fight for the customer’s attention with countless content that is just one click away. Secondly, the way of creating content for individual channels is a very sophisticated and tailored process that cannot be simply translated between them. At Valkea, we have managed to create a product that perfectly copes with the described challenges.

3. CONTENT MARKETING It has been with us for a long time, but its role will be even greater in 2021. Consumers bored with traditional advertising messages are more and more demanding and hungry for the highest quality message. Only campaigns based on strategically thought-out and perfectly-produced content have a chance to appear in the minds of recipients and create a positive sentiment, without which a brand will disappear in a split second and fall into oblivion.

Everyone knows that Nike and Red Bull have built their brands based on unique content productions, but still few brands can skillfully use content market-

5. INFLUENCER MARKETING With most consumers still trusting and believing content from their favorite opinion leaders, influencer marketing is in full swing. If we add to this the lower cost of building reach than in most other media, the possibility of presenting the product in a non-obvious, natural way, which is in vain to look for in other channels (maybe except for content marketing), then we have another must-have marketing in 2021 for many products and brands. Of course, it is worth paying attention to the details, choosing the right people for cooperation and, together with the agency, refining the way a product is displayed.

Of course, this is my subjective opinion. Regardless, however, in choosing them, I was not guided by personal taste, but most of all by efficiency, innovation and the opportunities they bring. And although some of them have been on the market for a long time, I am mentioning them because, in my opinion, in 2021 they will play an absolutely key role.

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COVID-19 DIDN’T KILL THE PRINT STAR If you’re a retailer or a shopping center, the current partial lockdown is the perfect time to provide your customers with an attractive magazine or even leaflet straight into their home mailbox. Research and actual experience show it will pay dividends even before Covid-related restrictions are lifted.

BY JERZY KAMECKI

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“To date, there has been no confirmed case of coronavirus contamination from contact with a newspaper or other type of surfaces used for printing”

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OPPOSITE PAGE SHUTTERSTOCK, THIS PAGE PRESS MATERIAL

our customers are spending more time than ever at home. During this time, research shows they are consuming far more media, which means even more time in front of screens of all kinds. The very same research also shows, however, that people are reading more printed magazines and newspapers. This is the ideal moment to serve them a printed magazine, one that helps them dream of a better time, plan their holiday shopping and ease their digital burnout.

STAYING POWER There are even more reasons that this is the perfect time to provide your current and potential customers with a printed magazine. First, it breaks through the digital clutter. If the publication is high-quality it is likely it will remain in the house for one to weeks. Second, it radiates permanence and reliability – just like a brick-and-mortar location. Furthermore, the printed word lends an aura of prestige (though that depends on the paper – and prestige may not be needed in the discount or consumer electronics sectors).

If well-made (more on quality below) the magazine is likely to engage readers for a much longer period of time with the power to tell a story unmatched by digital formats. Home-bound customers can flip through the pages and plan their Christmas shopping, which they will act on in the digital realm or physically as soon as restrictions are eased.

HELPING CUSTOMERS “Advertising leaflets and magazines from retailers are by far the most important source of information about promotions.

Almost 60 percent of buyers declare using them to plan their shopping at least from time to time,” says Renata Twardowska, Gf K expert in the consumer panels and services department.

“Discounts still play a huge role for Polish buyers and they are most susceptible to this type of promotion. That’s why further investment in printed promotional materials can have the greatest impact on raising awareness of a product and on promotional offers of a chain of stores,” she adds.

There are good reasons that brands pay a premium to their retailers for the presence of in-store magazines and leaflets – they are effective at driving sales.

NOT JUST FOR LIDL AND BIEDRONKA Magazines need not be limited to discount chain stores. Examples of quality publications include the always much anticipated IKEA catalog, Play Expert or the Exim Tours Menu – a mix of magazine and catalog, with augmented reality elements, produced by Valkea Media.

CONVERSION QUANTIFIABLE Paper magazines have gotten a bad rap because they cannot be analyzed to the same extent as digital advertising. However, there are ways to get around this problem.

Warsaw’s Fashion House Shopping Center Klif cleverly drove sales and managed to track the success of their fall magazine.

Klif published a small fashion magazine with an inserted gift card mock-up. The card invited readers to take advantage of the pro-sale promotion – customers who brought the card and made a purchase, received an actual gift card to any Klif tenant for subsequent purchases.

Anna Szlaga, Klif ’s marketing manager, confirms the gift card registration results suggest that the activity highly motivated customers, especially regular customers, to make additional purchases.

COVID-SAFE As for some fears that newspapers or printed materials transmit the Covid-19

virus, they are unfounded. To date, there has been no confirmed case of coronavirus contamination from contact with a newspaper or other type of surfaces used for printing. In an interview with BBC Radio Scotland, virologist Prof George Lomonossoff stated that the surface of the newspaper is fairly sterile due to the entire printing process it undergoes. The chance of transmitting the coronavirus through newspapers is negligible, according to him.

For added security, special anti-virus/ anti-bacterial varnishes such as aqueous coating can be used.

None of this is to suggest that you stop your digital or social advertising. There are many factors to consider when deciding if a custom magazine aligns with your brand strategy. However, doing the same thing as the competition is no way to get ahead, while a well-executed magazine distributed during the coronavirus restrictions may be the perfect way to increase brand engagement and sales.

Jerzy Kamecki New Business Director at Valkea Media – a marketing agency in Warsaw.

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exercise your brain with piatnik!

HONEYCOMBS WWW.PIATNIK.PL

TECH i n s i g h t s TECH NEWS

Amazon adds 2,000 jobs

The US e-commerce giant Amazon has increased employment in Poland by 2,000 to 18,000 permanent jobs in 2020, the company has said in a press release. The company started recruitment for the Christmas period early and wants to employ over 10,000 people for seasonal jobs across its nine logistics centers in Poland, according to the release.

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>>>

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TECH

APPS AND PHONES

TCL enters Poland with smartphones

APPS AND PHONES

Smartphone more important than sex?

Almost half of the respondents think so, according to a survey. 160 glances a day.

This is how many times we check notifications on the phone, the latest research

by Reviews.org reveals. Fascinated by technology and its possibilities, we immerse ourselves in the smartphone world. A quick glance is not enough for us, most of us stare at the phone display for at least three hours a day. It’s not a little but is it wrong? About 45 percent of respondents of the Reviews.org survey declared that if they had to choose between the phone and sex then… they would choose the former without hesitation.

The Chinese electronics company on November 4 officially presented its phones available in Poland. These are nicelymade and well-priced mid-range models.

TCL is known in our market mainly for the sale of TV sets and household appliances. Now also smartphones from this manufacturer will be available. The company that has extensive experience in the production of displays pays attention to the screens of its smartphones.

The TCL 10 Plus model is probably the cheapest smartphone with a curved AMOLED screen – it costs PLN 1,399 – and a special processor supporting the display, color reproduction and improving the visual experience. We also get a set of four cameras on the back: with the main lens 48 MP, a Qualcomm processor: Snapdragon 665, 6 GB RAM, 256 GB of built-in memory expandable with a card and a battery with a capacity of 4500 mAh. Of course, there is an NFC module on board.

APPS AND PHONES

vivo starts operating in Poland

Xiaomi and Samsung strong, Huawei weak

vivo, a Chinese technology giant, on October 20 announced the entry into Poland and five other countries: France, Germany, Italy, Spain and the UK. During the conference, vivo representatives presented the first range of smartphones and devices that will be available on European markets. Among them is the smartphone vivo X51 5G, which boasts of the main camera with a builtin gimbal – an innovative mechanism for image stabilization that enables the realization of very clear photos and videos also in motion or in low light. The image quality depends on the stability of

According to the latest Canalys data, in the third quarter of 2020, Xiaomi maintained its leading position on the smartphone market in Poland and strengthened its second position in the Central and Eastern Europe region and third position in Europe. Samsung is in second place in Poland (27 percent, a decrease of 3 percent), Huawei is in the third position with 17 percent and a decrease of 28 percent. In Europe, Samsung is the first (34 percent), the second is Apple (19 percent), the third is Xiaomi (19 percent), Huawei is fourth with a 14 percent share and a decrease of 31 percent.

APPS AND PHONES

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CYBERCRIME

University of Warsaw data leaked There has been a breach of personal data protection on the website of the Faculty of Mathematics, Informatics and Mechanics of the University of Warsaw, informed the dean of the faculty Prof Paweł Strzelecki. Unauthorized people could have access to the file containing the data of specific students, graduates, employees and associates of the university. Strzelecki informed on the department’s website about the personal data breach incident that took place on the www.mimuw.edu.pl portal.

CYBERCRIME

‘Hacked’ politicians Politicians increasingly claim that their social media accounts have been hijacked by cybercriminals. It does not have to be caused by foreign services or sophisticated hackers. Stealing passwords can be a piece of cake.

What connects the head of Amazon Jeff Bezos, CEO of Tesla Elon Musk, Prime Minister of India Narendra Modi and US President Donald Trump with PiS MPs: Joanna Borowiak, Marek Kuchciński and Marcin Kamil Duszek? Their social media accounts have recently been hacked. However, while in the case of foreign public figures, the attacks have been confirmed, in the case of Polish deputies, cybersecurity experts are not sure whether the breaches actually took place.

CYBERCRIME

‘Popular Android apps are vulnerable’ A lot of apps in the Google Play store are still vulnerable to hackers and to the theft of confidential personal and financial data, experts from Check Point have warned. The endangered applications include Edge browser, Xrecorder, Cisco Teams as well as the dating apps Grindr and OkCupid.

Curated from: nik.gov.pl, pap.pl, technologia.dziennik.pl

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the camera. The company also introduced a range of mid-range Y series devices (Y70, Y20 and Y11).

NEWS

ELECTROMIBILITY

Polish electromobility at ‘tail end of Europe’ The chance that a million electric cars will be driving on Polish roads in 2025 seems to be smaller and smaller, emphasized Marian Banaś, head of Poland’s Supreme Audit Office (NIK).

As he pointed out, “although four years have passed since the presentation of the development vision, electromobility in Poland is still at the initial stage.”

NIK’s report shows that “in terms of the number of electric cars and infrastructure, we are still at the far end of Europe.” NIK checked whether

the public administration ensured the effective implementation of tasks related to the development of electromobility in Poland. “The inspection was carried out at the Ministry of Energy [currently the Ministry of State Assets], the National Center for Research and Development and in 26 city offices,” states the press release. The audit covered the years 2016-2019.

INTERNET

5G: Poland, others, write to EC regarding fake news The EU should oppose the dissemination of false information related to the

5G network and do more to raise public awareness of this issue, wrote 15 EU countries in a letter to the European Commission. Poland came out with the initiative in this matter. The letter to the deputy presidents of the European Commission Margrethe Vestager, Věra Jourová and the EU commissioner for the internal market, Thierry Breton, was sent by the government plenipotentiary for cybersecurity Marek Zagórski. The initiative was signed by ministers from Austria, Bulgaria, Croatia, the Czech Republic, Cyprus, Estonia, Finland, Greece, Latvia, Lithuania, Luxembourg, Portugal, Slovakia and Sweden.

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TECH

DEEP IMPACT

THE COVID-19 PANDEMIC HAS IMPACTED THE STABILITY OF MANY INDUSTRIES, INCLUDING PHARMA, EMPHASIZES PAULINA ROMANISZYN WHO HEADS THE POLISH ARM OF THE GERMAN PHARMACEUTICAL GIANT STADA. INTERVIEW BY BEATA SOCHA

WBJ: Many patients across the country are facing increasing difficul-

ties finding the medication they need, particularly for chronic conditions. In what ways has the pandemic impacted the pharma business?

Paulina Romaniszyn: The coronavirus pandemic has changed and continues to change our reality, forcing us to adapt to the new situation. From what we’ve seen so far, we can distinguish three stages of how the pandemic is affecting the

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pharmaceutical industry. In March, at the beginning of the pandemic, we noticed an increased turnover in Polish pharmacies and sales growth of 35 percent year-onyear. In the second phase, from April, the sector recorded major losses of some 50 percent compared to the beginning of the year. The decline was caused by patients refraining from visiting pharmacies and clinics in fear of contracting the virus, as well as due to shortages in the supply chain. The latter translated into a shortage

of medication. When borders were closed and all transport of medicinal products was halted, access to medications was limited. Even access to active substances (active pharmaceutical ingredients or API) necessary to produce drugs was more difficult, which led to longer production times.

Patients stayed at home more and consulted their doctors less. This has forced the industry to find other ways to reach their customers, by moving from offline to online. The areas where no losses were recorded include oncology, psychiatry and neurology, as well as pain medications. Paradoxically, the largest losses were seen in meds used for upper respiratory system infections, antibiotics, as well as in cardiology and diabetology. This could be caused by suspending planned visits and because patients, fearing to go to the doctor, did not treat their conditions with medication.

OPPOSITE PAGE SHUTTERSTOCK, THIS PAGE PRESS MATERIAL

The third stage, which started in August, is again reporting growth. Patients have been going to their doctors more often and to pharmacies as well.

How has the pandemic affected STADA? Despite economic instability, STADA recorded significantly smaller losses, compared to the entire pharma sector. Our flagship products are pain medications, such as Tramal, Transtec and Zaldiar.

Besides, we have a strong presence in the OTC market, including our core products ITAMI diclofenac patches and Nizoral as well as a portfolio we acquired from GSK, Cholinex and Orofar.

Maintaining the company’s strong position has been the product of intensifying our digital marketing efforts, finding new ways of reaching clients and the great dedication of our team. We made sure to keep patients well-supplied, we fast-tracked our supply chain in order to ensure that our products reach Poland in time. We are now seeing rapid sales growth. In September, it stood at 18 percent compared to August.

Has the pandemic taught us anything?

One of the questions that has been raised is whether the manufacturing of active substances should be developed within the country to ensure stability during lockdowns. Would you agree with this point of view?

The pandemic has definitely taught us humility. It has made us aware that some things are simply out of our control, even for a Polish or international pharmaceutical company. We should definitely expand our production capacity within the country, particularly given that only 30 percent of all drugs we sell in Poland are produced domestically. However, I also believe that we need to be open to international investors. We should be looking at promising areas such as biosimilar drugs, as well as new technologies in medical devices. Foreign investors often offer new solutions at very accessible, European prices.

How quickly do you think we can expect Covid vaccines to be distributed in Poland?

Through acquisitions as well as organic growth, we aim to become of the top ten pharmaceutical companies in Poland over the next five years.

SOONER THAN LATER MACHINES WILL MAKE THE FINAL CALL AND NOT HUMANS There are hundreds of pharmaceutical and biotechnological companies working on coronavirus vaccines. According to WHO, there could be as many as 33 potential vaccines, which are in clinical trials now. In Europe, the EU has devoted significant resources to vaccine research.

According to a declaration from EU members, €2.7bn has been made available to ensure an effective vaccine is created as quickly as possible. We all hope to see the first patients vaccinated soon, however, no one can tell when it might be commercially available. The most optimistic scenarios claim a Covid vaccine could be available in early 2021.

What are your priorities as the new general manager of STADA? Over the course of 23 years in the pharmaceutical business, I have learned many things, but most importantly that people are the most valuable asset of any company. Immediately after taking the position in STADA, I realized how dedicated my team is. Our motto is ONE STADA and you can feel this philosophy at work every day. Our team is both committed and also highly creative. By using my knowledge and experience, I will focus on building our drug portfolio and increasing growth in specialist and OTC medications. My biggest priorities are company profitability, expanding our portfolio in new areas of therapeutics, optimizing costs, organic growth and acquisitions. I want to focus on making the company highly profitable, but also on a strategic view – the directions in which the company could develop. Sometimes it is worthwhile to stop for a moment and look at what is happening in the pharmaceutical market from a larger perspective.

What do you think the pharmaceutical market needs right now?

Currently, the biggest priorities are a cohesive pricing policy, more openness to innovation from healthcare policymakers, as well as subsidies for new therapies, particularly in oncology. It is also crucial to recognize the value of Polish employees across the entire pharmaceutical industry.

Last year STADA took over Walmark, this year it has acquired many known brands, such as Cholinex, Orofar and Venoruton. What are the company’s growth plans?

Our goal is achieving double-digit growth, by developing both the OTC drugs segment as well as therapeutic programs for patients. We also want to expand our generic drugs segment by revising our current portfolio, as well as venture into new areas of therapeutics.

PAULINA ROMANISZYN

Country head and general manager of the Polish branch of STADA Arzneimittel AG – a pharmaceutical company based in Bad Vilbel, Germany which specializes in the production of generic and over-thecounter drugs.

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PRESS MATERIAL

Revitalization of the entrance area of ​MARYNARSKA POINT 2 Tétris has prepared and implemented a project to refresh the reception area, atrium, elevator halls and public toilets on the ground floor – 390 sqm in total surface. The association with creating a green oasis became the main inspiration for the architects. As many live plants as possible were introduced into the interior, taking advantage of the light coming through the glass front and the skylight. At the entrance, guests are greeted by a green wall behind the reception, which directs their gaze towards the openwork structure in the heart of the atrium. The architects proposed the simplest shape of the house with a gable roof, which enhances the impression of intimacy and coziness. Inside you will find a built-in couch with a high backrest that absorbs sounds, tables, armchairs and chairs. At different heights, there are pots with fancy plants complemented by mood lighting. The plants have been selected so that they can easily live in a closed space.

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LOKALE IMMOBILIA | NEWS OFFICE BRIEFS

HOCHLAND TO LEASE IN POZNAŃ

VORVERK OPENS REGIONAL CROMWELL SECURES OFFICE LEASE IN KRAKÓW OFFICE IN POZNAŃ

Hochland will lease over 1,000 sqm in the Business Garden complex in Poznań.

JLL represented the tenant in the contract negotiation process. Hochland is part of the Hochland Group, which employs around 4,200 people in several countries. The company has been present in Poland since the beginning of the 1990s and has significantly contributed to the development of the Polish dairy market by creating a number of new categories and developing active communication with consumers, which has influenced the changes in eating habits. Due to the intensive development, Hochland decided to move its headquarters to Poznań from Kaźmierz.

Supplier of household appliances including a multifunctional machine Thermomix and the Kobold homecare system, Vorwerk Polska, has leased office and retail space in the Giant Office complex in Poznań. The owner of the building was represented in the lease transaction by real estate advisory firm Savills.

Vorwerk was founded in Wuppertal, Germany, in 1883 and remains headquartered there. Over the course of its history spanning over 130 years, it has grown into a global company with operations in more than 70 countries. Vorwerk’s core business has focused on direct sales of high-quality household appliances. Vorwerk has been present in Poland since 1995 and has its head office in Wrocław.

During the 25 years of the presence of Thermomix on the Polish market, more than 700,000 customers have bought one.

Real estate investor and manager, Cromwell Property Group (Cromwell), has signed a four-year lease extension with UBS Business Solutions for 5,000 sqm of office space at the Green Office Complex in Kraków on behalf of Cromwell European Real Estate Investment Trust (CEREIT). Green Office Complex consists of 23,000 sqm of net lettable area (NLA) spread across three buildings. All three buildings are modern and consist of flexible floor plates able to suit a multitude of uses and different requirements. The fully-let building is located in Kraków, the second-largest city and largest regional office market in Poland and home to a number of international businesses, including telecom business, Motorola.

CBRE TO COMMERCIALIZE DOR PLAZA The construction of the Dor Plaza office building has started as planned despite the prevailing global pandemic. This modern class A building will have seven stories with a total area of ​​ approx. 15,000 sqm, three levels of an underground garage, a representative reception and specially designed greenery around the building. Dor Plaza is being built near ul. Żwirki i Wigury, by the main exit routes, with good access to the Chopin airport and the center of Warsaw. The completion of the building, which will be fully commercialized by CBRE, is planned for the first half of 2022.

Consulting company CBRE has become the exclusive agent of the Hortus office building located in Powiśle (district of Warsaw). The building belonging to the company Nieruchomości Powiśle has a total of over 10,000 sqm of modern office space. Hortus is a modern A-class office building located in the Central Business District, in Warsaw Powiśle, at the intersection of Topiel, Zajęcza and Drewniana streets. The location of the building provides excellent access to the communication network: proximity to Wisłostrada, the Centrum Nauki Kopernik metro station (approx. 350m), the SKM-PKP Powiśle railway station (approx. 600m), as well as public bus transport. The office building has a spacious underground car park offering one parking space for every 65 sqm of office space and rich infrastructure for cyclists.

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PRESS MATERIAL

POWIŚLE GAINS NEW OFFICE SPACE

LOGISTICS BRIEFS “The CEE region continues to offer excellent opportunities to investors. I believe that after a difficult 2020, we will see a rebound and increased activity in the real estate market in the coming year” - Piotr Szafarz, head of the CEE Real Estate at the global law firm Dentons

PANATTONI ACQUIRES WROCŁAW BUSINESS PARK

Wrocław Business Park has been acquired by Panattoni from Aviva Investors, the global asset management business of Aviva plc. The seller was represented by the Avison Young investment team throughout the transaction. Wrocław Business Park comprises two warehouses of ca. 9,500 sqm GLA in total and development land of ca.

10.5ha. It is located at 55 Bierutowska Street in Wrocław, in an established industrial and commercial area within the central part of Psie Pole.

RESIDENTIAL BRIEFS YIT READY FOR SECOND STAGE OF PARKUR RESIDENCE Finnish developer YIT has chosen the general contractor for the second stage of the Parkur Residence housing estate. The tender was won by Kalter, which is also responsible for the first phase of the investment. 116 new apartments will be built during the second stage. Construction works begin in November this year. Their completion is planned for the second quarter of 2022. The Parkur Residence estate is located at ul. Kłobucka 25, right next to the Służewiec horse racing training track. The entire investment includes the construction of over 400 apartments in three stages. In the first one, 132 premises were built. Residents will be able to pick up the keys early next year. In the second stage, a 10-story building with 116 flats will be built, as well as a two-story underground garage with 126 parking spaces.

NEW ROBYG WPB INVESTMENT IN WROCŁAW Place among the three parks in the iconic Krzyki was chosen by the developer ROBYG WPB for Kameralna Olszówka – its latest residential investment. Construction will start at the beginning of next year. Kameralna Olszówka is the first residential investment that the ROBYG Group runs from start to finish under the name ROBYG WPB. The developer chose Krzyki-Partynice as the location. Kameralna Olszówka will be built at the intersection of ul. Skarbowców and Szarugi.

ALINEA'S CONSTRUCTION IS READY In Żerań (northern Warsaw), at ul. Łopianowa, a residential building with a rather unusual appearance appeared. It is distinguished by a stepped form of the façade. The top view is reminiscent of a zigzag. This distinctive feature can be easily seen as the construction of the 5-story building has recently been completed. Now the façade, interior plasters, as well as interior, electrical and sanitary installations are being completed. The final effect will be visible in the spring of 2021. The investment is carried out by Bouygues Immobilier Polska, a developer that is well-known and respected in Warsaw. The project is called Alinea, which means “indentation” in French. The name refers directly to the shape of the body formed by ingeniously arranged, spacious balconies.

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LOKALE IMMOBILIA | OFFICE

Warsaw remains one of the most important markets for developer Karimpol Group. The company, which will finish its Skyliner office tower in the city in January, is looking for new sites there, says co-owner and managing partner Andreas Prokes.

INTERVIEW BY ADAM ZDRODOWSKI

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PRESS MATERIAL

GETTING READY FOR POST-COVID REBOUND

WBJ:

Karimpol has been present in the Polish market for over 20 years now. What made you enter Poland two decades ago and how important is the country in your development and investment strategies at the moment?

Andreas Prokes: We entered

Poland in 1997, just eight years after the political and economic transformation of the former communist countries of Central and Eastern Europe and we were convinced that the region had huge growth potential due to its size and population. Since then, the attractiveness of CEE has only increased – Poland and its neighbors are now members of the EU and have greatly benefited from EU funds – and the region remains our main expansion target.

The Karimpol Group is now present in five countries – Austria, the Czech Republic, Hungary, Poland and Slovakia – and Prague and Warsaw are the most important markets for the company. We may have been less active in the Polish capital than some of the international office developers, but this results from the fact that we are a privatelyheld business owned by two Austrian families with no institutional investor being involved.

This means some limitations, but it also gives us a lot of freedom when it comes to the realization of our plans.

We do not think in terms of volumes but have always been focused on reasonable, organic growth and a cautious selection of the properties that we want to build. Thanks to this, we have been able to deal with different market crises, including the present one, relatively well.

market changed over the last 20 years?

It has certainly become more mature and more competitive, and offices themselves, just like everywhere else, have become much more sophisticated – just take a look at all the PropTech solutions used in today’s buildings. Tenants have become more demanding and their preferences regarding building types and locations have evolved over the last two decades.

Nowadays, there is particularly much tenant interest in space in central Warsaw, including in the new office towers that have been springing up in the city’s CBD and Wola district.

In Poland, you have so far been focused on Warsaw.

Will this change in the coming years?

For now, we will remain focused on Warsaw, which is one of the most attractive office locations in Europe. We are looking at a number of regional office markets in Poland including Wrocław, Kraków and Katowice, but we will rather not enter them any time soon.

Poland’s real estate market has been affected by the current crisis, but so have basically all the other markets in Europe. Do you think that Poland will retain its position as one of the continent’s office hotspots once the pandemic is over?

It will take some time before markets across Europe fully recover, but I am sure that the Polish market will emerge from the pandemic as strong as it was until last year. The fundamentals are there and Warsaw is still seen by international investors and tenants as one of the most attractive business locations on the contiFrom your perspective, how nent. Crucially, there is still a big has the Polish office property gap between yields in Poland and

yields in Western Europe. Judging by what we hear from our clients, the inflow of foreign companies and capital will continue in the coming years.

What are your development plans in Poland for the near future?

We are currently looking for plots of land for new office investments in downtown Warsaw. We will probably announce some purchases in the second half of next year. Apart from the office property sector, we are also working on a new logistics concept under the brand “Squarebizz” that we will implement in different locations across Poland, including in the Warsaw area. This will be small business units (SBU) warehouses adapted to the current e-commerce and last-mile logistics trends. As a warehouse The Polish market will developer, we have already delivemerge from ered over half a million square the pandemic meters of space in Central Europe as strong as and Squarebizz’s users will beneit was until fit from our extensive experience last year in that field.

Karimpol will soon complete its Skyliner office project in Warsaw, which is the company’s flagship scheme in Poland. With the pandemic raging on, is the investment on schedule and have you had any major problems while working on it this year?

The project is on schedule and will open for business in a few weeks from now, as was originally planned. Largely due to the strict sanitary measures introduced by the scheme’s general contractor, Warbud, we have actually had relatively few coronavirus cases here on the construction site.

At some point earlier this year, capacity admittedly decreased to 75 percent to 80 percent, but this is it. Disruptions in the supply

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LOKALE IMMOBILIA | OFFICE

Skyliner was designed by one of the most renowned architectural studios in Poland, APA Wojciechowski, and will be distinguished by a number of architectural features including its very height – with its 195 meters to the roof, it will be one of the tallest buildings in Warsaw. It will have a spectacular lobby, the tallest office building lobby in Warsaw, a two-level Skybar located at the height of 165 meters and superfast lifts allowing one to get from the ground floor to the top floor in less than half a minute.

The tower is pre-certified in the BREEAM system at the “Excellent” level and equipped with advanced building applications. We have planned abundant greenery both inside the building and around it.

Will you want to sell the building upon its completion?

We are working on a new logistics concept that we will implement in different locations across Poland chain have proved to be a more serious issue, but we have successfully dealt with it, too.

The development is also on budget – construction costs have gone up in recent months, but this is something that we took into account from the very beginning.

The total cost of the investment will amount to approximately €140 million.

How is the leasing of the development proceeding?

At this moment, we would not like to reveal many details as we are still in talks with major tenants and expect to sign important deals in the coming weeks.

However, I can say that the vast majority of the space in Skyliner is currently under negotiation. We

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aim to finalize its leasing process by the end of next year.

Skyliner is being built in Warsaw’s Wola district where a number of other office towers are now under construction or have recently been commissioned. How will your skyscraper stand out from the crowd?

Skyliner reflects the values we respect in our company: sustainability, quality and solid construction. This skyscraper is the result of our cooperation with the most renowned brands in the Polish market including Warbud and APA Wojciechowski. We expected a sustainable design and great quality and today we can see what a great job has been done here.

At some point in the future, yes, but it will not happen anytime soon. Our strategy is to keep the properties we build for some time after their completion – in some cases, this can even mean quite a few years. We are well known in the market for maintaining long-term relationships with our clients and for the after-sale service we provide to them – we do not want to suddenly abandon the people who have trusted us. We will definitely want to retain this kind of market reputation.

The Skyliner site allows for the construction of one more building. What are you going to develop there and how advanced are those plans?

We are planning a mid-rise office building there and are currently in the process of obtaining administrative approvals for it. APA Wojciechowski is working on the design and we hope to be able to start building the project before the end of 2021.

>>>

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LOKALE IMMOBILIA | OFFICE PARTNER'S STATEMENT

Michał Sadowski Architect, co-owner and vice-president of the board, APA Wojciechowski

S SKYLINER IN NUMBERS 195m height Over

49,000 sqm total leasable area 45 number of floors

165m above the ground the location of an almost 800-sqm Skybar 430 number of underground parking spots 330 number of parking spaces for bicycles 21 number of lifts 52

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kyliner – already its first photos show that many of the last floors are actually hiding in the clouds. The building, thanks to its architecture, is a very characteristic element of the city skyline. It is distinguished by both proportions and carefully developed shape.

The high tower – soaring and slender – was firmly set on a wide, glazed base 16m high. This elevation above the ground level is extremely important for its proportions. It gives the impression that the upper part of the building is floating above the ground. Single-spaced, fully-glazed hall provides a very clear entrance to the office building.

The interior of the hall with an external public passage connects the so-called Spanish stairs. They penetrate the façade, merging the ground floor with the first floor of the building, both inside and outside. They will perform not only a communication function but they will also include seating and greenery, thus creating an informal meeting place.

The spacious staircase in the Skyliner will be a lively public space where people will be happy to spend time. The lobby will become – depending on the need of the moment – a cafe, a place for a spectacular fashion show, an audience for a theater event, a cinema show or an art gallery.

We designed a whole range of public services here. The accessibility of the building and its connection with the city are very important elements of the entire project for us.

Therefore, in front of the office building, a passage and a square are created, which was based on a strictly geometric composition of trees and will be filled with greenery, enlivening the space and encouraging to walk or rest. The most important architectural element of the entire Skyliner composition is a wall of architectural concrete, which connects a completely glazed hall, a 195-meter tower and the top of the building – a two-level, elegant SkyBar. Its guests will see an amazing panorama of the entire city of Warsaw and spend time in an intimate atmosphere.

The interior of the building is also impressive. The space on repeatable floors is left without intermediate or corner columns, making it possible to freely arrange office spaces.

The glass façade with the highest thermal and acoustic parameters enjoys its simplicity and excellent proportions.

The team of architects and engineers designing the skyscraper worked in a fully-integrated BIM environment.

The building has obtained the BREEAM pre-certificate at the Excellent level.

Skyliner is an elegant and timeless building and we are very proud of it.

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RISING SPACE

In this tough time across the world Cavatina continues construction of 1 million sqm of mixed-use space which shall be delivered on the market till 2025, informs Łukasz Żelezik, executive director, leasing at Cavatina Holding.

INTERVIEW BY SANKHYAYAN DATTA

WBJ:

Tell us about the Cavatina Group Łukasz Żelezik: Cavatina Holding is one of the leaders in the commercial real estate market. The company’s operations are based on Polish capital and include a portfolio of projects with an area of 500,000 sqm. From the beginning of its operation in 2015, Cavatina has achieved incredible efficiency and dynamics of development, as evidenced by new projects in the largest Polish cities, such as Kraków, Katowice, Gdańsk, Wrocław and Łódź. Cavatina intends to develop over 1 million sqm of mixed space by 2025.

How many projects have been created since the company was founded? What investments are currently being implemented?

We strive to ensure that each of our buildings is unique in terms of architecture and utility. Cavatina has 24 completed projects and more are underway.

All our projects are distinguished by quality and competitive prices. We are currently working on new pro-

jects located all over the country.

The most interesting of them are located in the south and north of Poland. Palio Office Park – a multistage functional office and service complex – is located in Gdańsk, on the territory of the shipyard. Our Cavatina Hall project in BielskoBiała, which uniquely combines office and cultural functions, is also at the final stage of construction. In addition to office space, the facility will include a concert hall designed to the highest acoustic standard and a recording studio.

Cavatina builds office and commercial space throughout Poland.

Is the company planning to enter new regions or the residential real estate sector?

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team adapts the office space to the new reality, ensuring the safety and comfort of employees.

What are Cavatina’s plans for the last quarter of this year and the beginning of 2021?

Our new projects will be commissioned at the beginning of next year. They include Office Building C, located in the center of Katowice, which is part of the multifunctional Global Office Park complex, further projects in Kraków – the first stage of Ocean Office Park and the fourth stage of Equal Business Park.

Moreover, in Gdańsk, the first stage of Palio Office Park will be put into use at the shipyard.

The Cavatina’s flagship project – Chmielna 89 office building in Warsaw – received an occupancy permit at the end of June this year. Currently, ESTATE’s advanced finishing works are underway for office space on all floors. The largest financial institution in Poland will move into the building in December.

“CAVATINA HOLDING CARES ABOUT THE CONTINUITY OF INVESTMENT PROJECTS IN THESE DIFFICULT TIMES”

The Cavatina Group has created a housing platform – Resi Capital.

Our offer will soon include modern apartments for rent, intended for all people who do not want or can not buy their own apartment, but are looking for a place to live. The Resi Capital offer will cover a wide range of areas (27-69 sqm), both studio apartments as well as two-, three- and four-room apartments. By the end of 2022, the portfolio of Resi Capital will enrich the real estate market with over 2,000 new apartments in such cities as Katowice, Łódź and Wrocław.

More than six months have passed since the Covid-19 pandemic hit Poland. How did the virus affect the Group’s operations?

Cavatina Holding cares about the continuity of investment projects in these difficult times. The company has maintained the current pace of construction projects and successfully implemented its commercialization and sales strategy for this year. Moreover, our dedicated

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The group decided to finance an aid campaign – #CavatinaPomaga – for people most at risk from coronavirus infection. Tell us about it.

In recent difficult times, the company has focused on efficient operation, but never ceased to pay attention to social issues.

Cavatina Holding decided to finance the campaign for people most at risk of Covid-19 infection, allocating PLN 1 million for this purpose. Therefore, the “Fiducia” Foundation, whose main founder is Cavatina Holding, launched a campaign for the elderly in March. #CavatinaPomaga supports people for whom ordinary shopping can be dangerous by financing purchases made by volunteers, thus encouraging older people to stay at home.

A recent Washington Post report states that the way we work has changed and some changes may stay with us forever. In light of the technology that is available and is developing rapidly, remote work is becoming more and more popular. Do we still need office buildings?

Despite changing the nature of work to a hybrid or remote model, every company still needs headquarters and employees need space to integrate and exchange ideas. That is why Cavatina Holding has created a dedicated team that is responsible for the design of functional and safe offices, as well as the rearrangement of existing spaces. Cavatina Holding, out of concern for the safety of employees and their guests, decided to immediately implement solutions based on the international WELL Health-Safety Rating guidelines. Cavatina Holding ensures also, that all subsequent projects will be submitted to the WELL Health-Safety Rating program. The comfort, safety and health of all building users are of paramount importance to us.

“DESPITE CHANGING THE NATURE OF WORK TO A HYBRID OR REMOTE MODEL, EVERY COMPANY STILL NEEDS HEADQUARTERS AND EMPLOYEES NEED SPACE TO INTEGRATE AND EXCHANGE IDEAS”

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A HEALTHY LEVEL

Poland’s real estate market has been suffering from the symptoms of Covid-19, but it still managed to secure a major injection of investor capital in the first three quarters of 2020.

One sector is recovering visibly faster than the others.

SHUTTERSTOCK

BY ADAM ZDRODOWSKI

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T

he Polish commercial real estate market has been seeing a drop in investment transactions this year, but the downturn seems to be milder than one might have expected considering the scale of the coronavirus pandemic and the restrictions related to it. Volumes recorded in the Q1-Q3 period show that investors are adapting to the current situation focusing on assets that have proved more resilient to the crisis. The general outlook for the next few months is rather positive.

A total of slightly over €4 billion was transacted in the Polish commercial property sectors in the first three quarters of 2020, according to Cushman & Wakefield data. This marks a 12.4-percent decrease on the same period of 2019 when the figure stood at nearly €4.6 billion. The industrial sector has attracted the most investor interest so far this year accounting for 48 percent of the Q1-Q3 volume. The office and retail sectors accounted for 38 percent and 14 percent of the volume respectively.

LOSERS AND WINNERS

The last three quarters brought a lot of uncertainty with the ongoing slowdown not resembling the crises witnessed in the 2000s, pointed out Michał Stępień, an associate in the investment department of Savills. Restrictions hit a market that was heated up and awash with capital, he noted. While the first half of the year saw the finalization of a number of deals initiated before the outbreak of the pandemic, the result recorded in Q3 (over €1 billion) already reflected the lockdowndampened sentiments and subdued investor activity.

Many investors now see warehouses as a firstchoice asset class

The particular commercial property sectors have been affected to a varying degree. The retail sector has suffered the most – the fact that many shopping center stores remained closed for much of the year has basically reduced investors’ interest in malls to the minimum.

Convenience shopping centers may be an exception, but those account for a tiny portion of the investment pie. In Stępień’s opinion, there are currently no signs that investors will step up their activity in the retail sector in the coming months.

Offices have fared better and investors’ activity in the sector has remained at a relatively high level (even if buyers have visibly become more choosy) despite the still unanswered questions about when a return to office work will take place and what the demand for office space will look like in the next few quarters. Data from the office space leasing market will be crucial for investors’ interest in office assets in the coming months, especially in the context of the large amount of new space under construction, Stępień argued.

The industrial sector has, without any doubt, been most successful at adapting to the current situation with the negative impact of the pandemic on the economy at large having here been largely offset by the accelerated growth of the e-commerce market. Many investors now see warehouses as a firstchoice asset class – suffice it to say that the sector’s share in the total transaction volume increased to around 70 percent in Q3. Interestingly, some alternative asset classes including data centers and solar farms have also been drawing more investor attention.

WEAKER, BUT SOLID

As WBJ went to press it was still too early to predict exactly how the year could end for the investment market with Q4 usually being very important for the market’s overall annual performance. However, according to Savills, in an optimistic scenario, one can expect the total 2020 volume to be close to €6 billion.

Cushman & Wakefield experts forecast that the figure will stand at between €5.2 billion and €5.5 billion. This would be approximately 30 percent below the 2019 level, but still well above the five-year average.

What is clear is that the industrial sector will continue to perform well despite – or actually partly because of – the pandemic in the months to come. The combined value of investment transactions in that sector will exceed – for the first time in history – €2 billion this year. The office sector will also likely keep seeing a healthy level of investor interest.

Several big office deals valued at a total of more than €700 million are now being negotiated and are expected to close in the first half of 2021, Cushman & Wakefield has revealed.

A recent report by Savills IM, an international real estate investment manager, points to investors’ confidence about 2021 with almost 60 percent of them globally expecting Europe’s property markets to recover next year. According to the study, mid- to long-term prospects for Poland’s commercial property market remain positive with attractive assets worth looking at in the country including modern distribution centers along the main corridors, selected office facilities in Warsaw and key regional cities, outlet centers and food-anchored retail parks.

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LOKALE IMMOBILIA | OFFICE

A return to the office will sooner or later happen, but the postpandemic workplace will in many cases look different from the one which we have known to date as companies adapt their ways of operation to the changing labor market trends.

BY ADAM ZDRODOWSKI

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T

SHUTTERSTOCK

TIME TO REFIT

he office property market will be embracing the “new normal” in the coming months with the offices of tomorrow expected to look a bit different than before the outbreak of the coronavirus pandemic. The current crisis has strengthened some of the existing market trends including the drive toward greater flexibility as well as the focus on providing cooperation- and creativity-fostering areas and ensuring building users’ well-being. This will have a direct impact on office space arrangement and fit-out in the next few years.

“OFFICES WILL RETAIN THEIR FUNCTION AS PLACES REFLECTING THE COMPANY VALUES AND CULTURE”

CHANGING ORGANIZATIONAL CULTURE

“Office space arrangement trends will largely be shaped by the changing culture of organizations and the way in which companies will operate once the pandemic has ended,” argues Jakub Zieliński, team leader, workplace advisory, at JLL. In his opinion, remote work – until recently seen as a welcome employer-offered perk – is here to stay with us for good, but the extent to which it will be in use will depend on the specific nature of each particular company.

While some companies primarily depend on the work of independent professionals, others need the cooperation of an entire team of people and the efficient exchange of knowhow and information in order to achieve success. The latter often takes place in informal situations, in places such as office kitchens during lunch breaks that play a role in boosting employees’ motivation and creativity, Zieliński claims. This is an aspect that may sometimes be overlooked, but also one whose significance has become evident during this year’s lockdown.

In this sense, physical offices will certainly remain useful, if only as kind of “social clubs” for those employees who do part of their job (especially the part requiring much concentration) at home. On the other hand, it remains to be seen how many of such employees will eventually choose to work partly from

home once a return to the office has become possible. With the size of apartments in Poland remaining well below the EU average, not all actually find the home office a very attractive and convenient option.

Danuta Barańska, creative director at fit-out company Tétris, is of a similar opinion. She says remote work will increasingly often be combined with work in the office and the latter will play the “hub and club” role. This means the need for creating workplaces that foster cooperation and interaction and facilitate all kinds of business and social meetings. “We recommend our clients to look at their offices once again and adapt them to the norms and expectations which have appeared due to Covid-19,” Barańska adds.

FEELS LIKE HOME

What could all of this mean for office interior design trends in the coming months? For one thing, apart from a rearrangement of space to ensure more distance between desks, a division of the floor plan into a number of clearly defined specific zones is likely. Those zones could include so-called focus rooms (for focused work), as well as co-working type social areas and areas dedicated to all the company employees working on a particular project and facilitating the decision-making process within a given team.

As numerous employees who have been working from home

this year are expected to return to the office in 2021, at least some employers may choose to modify the office setting so that it better resembles the home atmosphere and guarantees a comparable level of comfort.

The ideal office will be able to address employees’ need for home-like coziness and intimacy (for example by providing a different kind of furniture, redesigning kitchens and reducing noise), while at the same time meeting all the typical workplace needs.

EVEN MORE PROPTECH

For another thing, modern offices of the near future will definitely be even more hightech than they are today. The latest property technology solutions will be employed to facilitate everyday work even further, as well as to ensure building users’ safety. Those will include apps used for an ever more efficient reservation of desks, conference rooms and parking spaces. Conference rooms will more often than before be used for virtual meetings – expect more investment in super-fast internet connections and video conferencing equipment.

Proptech apps will also be useful for monitoring the quality of the air in the office, an issue which, because of the ongoing pandemic, will certainly remain important for tenants in the months to come. In spite of the changes in the labor market that Covid-19 is helping accelerate, offices will retain their function as places reflecting the company values and culture. The proper fit-out will remain the key to promoting the company brand, building a sense of belonging and loyalty among the employees and – last, but not least – attracting new talent.

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LOKALE IMMOBILIA | OFFICE

TRUST IN CEE COOPERATION Tétris integrates services for its international clients and introduces changes to meet new market demands. The new organizational hub-structure ensures a simplified ordering process via a single regional point of contact while operating from local offices.

CEE Hub, consisting of the Czech Republic, Hungary, Poland, Romania and Slovakia, will be led by Paweł Brodzik (right) and Rajmund Węgrzynek, managing directors of Tétris Poland.

WBJ:

CCC HQ office in Warsaw emanates elegance and style associated with the brand.

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the maxim “Think globally, act locally” is highly effective. Each of the markets has its own specific dynamics, conditions and culture. Therefore, we will maintain the development of separate national structures but simultaneously use the group’s potential for support. The possibility of using experienced specialists from each of our branches, whenever necessary, is not to be overestimated within the Hub. Tétris offers full coordination of

PRESS MATERIAL

What is the idea behind the structure change?

Rajmund Węgrzynek, managing director of Tétris in Poland and CEE: In business,

Tétris designed the interior for Unidevelopment based on the combination of industrial elements with greenery.

Tétris in 2015 to commence operations in our country. After only five years, this part of Tétris business has become the second most profitable. In 2019 alone, Tétris completed fit-out works on approx. 200,000 sqm, with a turnover of PLN 290 million.

This experience in adjusting to rapidly growing needs gives us an undeniable advantage in building a strong business across Central and Eastern Europe.

Therefore, when developing an optimal model for the operations of the entire Hub and each of its units, Tétris, apart from its global practice, will use our Polish experience gained from the implementation of complex projects worth over PLN 1 billion in 2015-2019.

Rajmund Węgrzynek: Today,

fit-out works, as well as consulting and architectural services.

Our teams of designers and architects create original concepts and propose optimal solutions based on global guidelines of a particular brand.

Paweł Brodzik, managing director of Tétris in Poland, CEE Hub Leader: Creating

effective mechanisms in business operations requires indepth knowledge of a specific market, the utilization of global know-how, and an individual approach. In our industry, the strength lies in effective management and developing a network of trusted subcontractors. I am glad that I can actively participate in further strengthening the position of Tétris both in Poland and in the entire region.

How your clients could benefit from this change?

the key to increasing the scale of business in the fit-out market is the ability to simplify processes and to operate efficiently both in local and international markets. By continuing to grow in CEE, Tétris will not only boost its competitive advantage in the search for global clients but will also look to further expand its services.

Rajmund Węgrzynek: The

main advantage of strengthening cooperation within CEE for clients is the consistency, and time savings, achieved by allowing for properties of one company in several countries not only to be designed by one team, ensuring uniformity of the project but also to be delivered according to the same standards.

Why do you think Tétris entrusted you, Polish managers with coordination of the CEE Hub? Paweł Brodzik: Poland is the

largest commercial office market in the CEE region with a current office stock of 10 million sqm and an investment market transaction volume of EUR 2.9 billion in H1 2020. JLL’s report indicates that Poland generates 46 percent of CEE’s overall transaction volume. The rapid development of Poland’s market encouraged

Poland is the largest commercial office market in the CEE region”

It is 2020, so I have to ask if you observe or predict major changes to developers’ and tenants’ preferences or behavior?

Paweł Brodzik: For many com-

panies, the introduction of “home office” to replace the regular office environment, as a means of dealing with the pandemic, is a signal to evaluate and break the stereotype, that “you can only work effectively in the office.”

This is undoubtedly true. However, people will always have a need for face-to-face interaction with their colleagues and clients – it’s the nature of business.

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>>>

LOKALE IMMOBILIA | OFFICE Indisputably, human interaction is an efficient way to perform daily duties, achieve targets and resolve problems. For this reason alone, an office environment will be required. I cannot answer the question today if it will be based simply on the need to have a comfortable space to meet outside of the home – most likely not. But I know for sure, that we will have to find a solution that makes people’s work effective. This is a challenge for the future. The business will suffer without personal contact, many companies are aware of this and are addressing this issue.

We at Tétris already advise our clients to focus on building a more flexible working environment that could be easily adapted to changing needs.

Moreover, we introduce the idea of the “Hub & Club” office, where a company’s employees can meet, interact, exchange thoughts and cooperate.

The dressing tables with cosmetics exhibitions designed by Tétris architects for Avon’s Warsaw office add warmth and greenery to the space while also matching the brand’s image.

The local dimension of global thinking

Africa Casablanca

Gdansk Amsterdam Rotterdam London London

Berlin

Eindhoven Düsseldorf Brussels

Lille

Warsaw Wroclaw

Frankfurt

Prague

Luxembourg

Krakow

Johannesburg Cape Town

Paris

South America

Zurich Geneva Lyon

Milan

Bordeaux Rio de Janeiro

Marseilles Rome Barcelona Madrid Lisbon

Sao Paulo

Tétris was founded in France in 2003. Since 2007, the company has been part of the JLL group. Tétris provides a comprehensive service in both design and implementation for office, retail and hospitality markets. Thanks to the company’s continued expansion into new markets, Tétris became a partner for representatives of local SMEs and corporations, as well as international concerns.

Today, the company operates in 15 countries from 31 local offices, with over 7,000 completed projects achieving a turnover of $711 in 2018 and sees great potential for growth.

In the Czech Republic, Tétris has been operating since 2014. From its office in Prague, the company also manages projects in Slovakia. In Hungary and Romania, Tétris, through the local JLL Project & Development Services, continues to strengthen its structures and increase its identity in the local fit-out markets.

It is worth noting that in each of these four countries the real estate market is highly concentrated in their respective capital cities. In Prague alone, modern office space stock increased by 109,000 sqm in Q1-Q3 2020 and now stands at 3.7 million sqm. The office space market in the Hungarian capital is now near 3.9 million sqm (+193 000 sqm in Q1-Q3 2020) and in Bucharest 2.9 million sqm (+124 000 sqm in Q1-Q3 2020) while in Bratislava, it is currently at 1.89 million sqm.

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ecco leather debuts the ‘ecco tannery series’ collection of shopper bags crafted exclusively from upcycled leather from its own tannery

The bags are exclusively available at the ECCO Store on Nowy Świat 43.

ECCO Leather stretches its appeal even further with a collection of bags cut from up-cycled leather from its own tannery. Making ecofriendly use of leather stock from the tannery’s innovation labs, the collection features an impressive range of experimental structures, vivid and newly developed colors, and high-quality classic finishes. The diverse collection shows ECCO’s commitment to both avant garde leather innovation, as well as more sustainable production – and gives customers the opportunity to elevate their essential shopper with bold and unexpected options.

The ECCO Leather tannery in the Netherlands creates a vast array of unique leather articles finishes per year. A hotbed of innovation, onsite designers craft leather samples that range from classic and premium to wildly experimental. “The ECCO Leather innovation

LOKALE IMMOBILIA | REAL ESTATE

COMMERCIALLY RESILIENT ESTATE

Krystian Modrzejewski, country manager Poland at LCP – a British commercial real estate (CRE) investment company – shares the company’s plans to achieve their ambitious goal in the shadow of Covid-19. LCP has marked its presence in Poland with over 50 properties acquired and managed since 2005. The company commits to invest a quarter of a million euro over the next two years. INTERVIEW BY KONRAD KRZYSZTOFIK

WBJ:

Your experience in CRE goes back to the times before LCP entered the Polish market. What attracted you to the company?

Krystian Modrzejewski: I would say there were two main reasons for joining LCP. Firstly, it was the opportunity to manage a diverse real estate portfolio. It seemed attractive and challenging at the same time.

Secondly, LCP is and was one of the biggest private equity funds in Poland, which guarantees a quick decision-making process

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and provides great potential for the development of business.

What’s more, it’s a family business with long-term investment plans. The majority of properties that were acquired decades ago remain in the LCP portfolio today. The organization is neither oriented towards quick profits nor selling its properties at an enhanced price just a few years after investment. Instead, it provides management of its real estate, continuous support for the tenants and care for the consumer needs.

Retail parks and small business units, in which you invest, are said to address the needs of local communities and consumers. How so?

LCP invests mainly in retail parks and standalone supermarket units which are conveniently located throughout Poland, and in warehouse and office projects, called SBU. Small business units, although relatively new in this part of Europe, will be another pillar in the company’s portfolio. Projects of this type proved successful in France and Eng-

land. SBUs will be developed under the name Multiparcs – a warehouse and office complex with a module area of 200-1500 ​​ sqm along with an office part.

They are located on the outskirts of larger cities and are easily accessible by car or even by public transport. Thanks to functional technical solutions, SBU facilities can be easily adapted to tenants from various industries: service, commercial, distribution, warehouse and production. Furthermore, with the high standard of finish, they can also act as online shop storage (such as Dailyfruits in Wrocław) or showrooms. It is an attractive and convenient alternative for small enterprises to locate their business in a modern environment. Demand for both retail parks and SBU projects is increasing as they continue to meet the needs of consumers and retailers.

A HopStop in Siedlce is yet another recently added project on your list of retail parks in Poland.

That’s right. The retail park in Siedlce is a great example of a modern, conveniently-located commercial estate. It’s in close proximity to a newly-built family housing estate and contains such shops as Lidl, Rossmann, Media Expert and an Orlen petrol station.

Those are the shops that stock a range of everyday necessities and provide FMCGs. The retail park segment continues to expand in Poland despite the Covid-19 outbreak and related lockdowns, similarly to the convenience shops situated on the ground floors of apartment buildings.

Those small-format retail complexes legally don’t classify as shopping malls – therefore, they will remain

open even during a strict lockdown.

Online and stationary shopping work best in tandem

That’s probably the most resilient type of retail estate during the Covid-19 pandemic. They’re either within walking distance or easily accessible by car and with ample outdoor parking space. They offer direct store access, and therefore, relatively low consumer density – that means safer shopping. From a retailer’s perspective, retail parks are an affordable alternative to city center shopping malls or high streets where the rent would be higher. These are the main reasons why we plan to invest €150 million to €200 million over the course of the next two years.

Would you then say that large-scale shopping malls will sooner or later cease to exist in the real estate market?

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I doubt it. Shopping malls have a specific role to fulfill in society. Aside from sheer transactional business, they function as a meeting place for friends, a source of inspiration for giftshopping and family entertainment spots. Online shopping isn’t capable of catering to all those needs. Shopping centers are and will be part of the lifestyle of young people. The pandemic burdened the shopping mall sector heavily, though.

Evolution of retail parks Standard retail parks were originally visited for quick purchases of necessity goods.

Tenants who previously occupied large shopping malls have started moving to retail parks. They want to be closer to their customers and take advantage of the more frequent footfall generated by discount food operators compared to large shopping centers.

Retail parks continue to expand and evolve. New functions have been added to standard retail parks (eg. gyms, beauty salons, parcel lockers, medical centers, food track parks or restaurants) in response to their local community needs and expectations.

Retail parks withstand the pandemic lockdown. They continue to be a versatile option for businesses at a lower rental rate and with convenient access for customers.

Speaking of e-commerce, according to a report from Accenture, about 20 percent of Poles turned to online shopping for the first time in their lives during the lockdown. Do you expect they will come back to the stationary shops?

Online and stationary shopping work best in tandem. It’s all about the synergy. Let’s look at the retail companies that had begun selling their products online years before the pandemic broke out. They keep their brick-and-mortar shops regardless and customers continue to enjoy shopping in person, trying things on, seeking advice from sales assistants just like they enjoy buying online. It’s the experience factor that pulls us to the malls. What’s more, the support of digital transformation in the retail area is truly bonding the online and offline experiences, allowing us to interact with brands virtually in-store and at home. However, we will still meet key needs in traditional stores, which Retail Parks are the optimal representative.

The blurred borderline between online and offline shopping will continue to trend in 2021 and beyond with each addressing various needs of retailers and customers.

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How different is the Polish commercial real estate market compared to the British one?

Retail parks are an affordable alternative to city center shopping malls or high streets where the rent would be higher

risk of virus contraction or battling driver shortage. However, these solutions seem dehumanized and hinder the personal conWhen it comes to the sectors tact between the customer and and the spectrum of real estate the seller. That is an issue espetypes, we are catching up with the cially now that we become more trends visible in the West. Havand more alienated in our technoing said that, we have our specific logically-advanced society. People Polish mentality and we much need contact with others and this more enjoy shopping as an expe- is even more visible during the rience and part of our lifestyle. As pandemic. for SBUs, they are very popular in the UK and our plan is to intro- Did the pandemic-induced recession force you to stall duce them more broadly into the any investment projects?

Polish market.

Yes, we’ve held off any investWe talked about the transments in the office real estate formation in retail. What sector. It’s hard to predict the changes can we expect in the demand for office space in the goods delivery sector? near future. In the other secMany delivery chains are still tors, however, we are not slowrecovering from the impact of ing down. We have very ambithe pandemic. This pushed busitious acquisition plans in both the nesses to explore new solutions retail park and the supermarket that could otherwise be consectors. We are currently opensidered well ahead of time. I’m ing the first SBU project in Bydgotalking here about self-driving szcz [northern Poland] and have delivery vehicles that are being started the construction of a simiintroduced and tested in several lar project in Zabrze [southern places across the globe. Such Poland]. autonomous pods can deliver anything from medicines, clothes Do you plan to invest in healthcare real estate in the and groceries through the post.

Driverless trucks have started to near future?

We’ve considered such a project emerge in the freight network.

That’s particularly advantageous quite recently and may explore this further at some point again. when finding ways to reduce the

E X P E RT O P I N I O N

Six tips for a good presentation:

• prepare interesting and engaging content for the audience • use storytelling techniques • practice breathing and mindfulness techniques on a regular basis • practice in front of different groups of people • continuously build your speaking skills as this will give you confidence and fortify your toolbox • visualize your performance at the real location or try rehearsing at this spot

GOT STAGE FRIGHT?

The best way to tackle stage fright is “good preparation and the right training,” Magdalena Fiałkowska, a celebrated public-speaking trainer, confides.

WBJ:

Why is public speaking so difficult?

Magdalena Fiałkowska: Public speaking fear is pretty common. In the past centuries, the fight or flight reaction was necessary to survive. Higher cortisol levels motivated our bodies to do the only reasonable thing. But right now we don’t have to fight or run away from a tiger or a bear.

The reaction has stayed but we deal with a different reality and the worst thing that can happen is that audience will not like our presentation.

How to deal with stage fright?

Glossophobia – the strong fear of public speaking – is one of the most common fears. We have to deal with public speaking starting from kindergarten plays. As adults we attend job interviews, give business presentations or make a toast at a

wedding. There are many ways to deal with stage fright but many examples prove that the best way is good preparation and the right training. Even the best relaxation techniques will not help if we have no clue what we are going to talk about.

What would you recommend to someone who wants to start public speaking?

I would advise on attaining knowledge and practicing. Two factors here are crucial: theory and practice. There are plenty of interesting books on the market about public speaking. You can join local Toastmaster clubs, workshops for amateur theater, watch TED Talks and get a coach or join workshops about public speaking.

Can anyone learn to be a good performer?

I believe yes. This is a skill like driving a car. In the beginning, you have to think about changing gears, looking at the correct mirror, remembering road regulations, etc. but afterward, it becomes second nature. I’m even convinced that public speaking can become as pleasant as driving a car. Being a good speaker means having the skills to create interesting content and being conscious about the dynamics of your speech, gestures, body language, voice and stage movement.

These are things that you can definitely work on if you are motivated and willing to learn. I have worked with a variety of clients ranging from students to CEOs and artists. Regardless of your position or title, anyone can become a good performer.

Magdalena Fiałkowska is the head of speakers at TEDxWarsaw, an ICF professional certified coach (PCC) and the owner of sztukawystapien.pl.

EVENTS

The WBJ relives or looks forward to the most important events from the world of business and economy

From left: Katarzyna Judkowiak - partner of Rรถdl & Partner, Morten Lindholm, Renata Kabas - Komorniczak - Managing Partner of Rรถdl & Partner, Marzena Rฤ czkiewicz - partner of Rรถdl & Partner

Michel Kiviatkowski, managing partner, Mazars in Poland with Morten Lindholm

THE LARGEST POLISH COMPANIES UNDER THE BOOK OF LISTS MICROSCOPE! Book of Lists 2020/2021 certificates have been awarded.

Work on the jubilee, 25th edition of the Book of Lists magazine has come to an end. After several months of intensive work and data collection, we present you the Guide to Polish Business and Economy. This edition was unique not only because of the jubilee but also because of the current world situation. The new reality that we found at the turn of March and April significantly hindered communication with companies and, as a result, delayed the decision-making process regarding participation in the publication. However, thanks to the commitment of our team, we collected a sufficient number of applications to create 26 rankings of companies from selected, most important sectors of the Polish economy.

As every year, the Book of Lists presents the latest financial reports of companies, revenues, market trends and analyzes. Thanks to our professional partners: Creditreform, IBR, ZPL, Cushman & Wakefield, we have enriched the publication with statistics and expert insights on individual market sectors.

We would like to thank our partners:

COMMERCIAL PARTNERS

CONTENT PARTNERS

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Congratulations to the winners of the rankings!

BOOK OF LISTS

We would like to thank the other companies for their participation.

Below is a list of the 1st places in each Book of Lists 2020/2021 rankings:

2020/2021

PRZEWODNIK PO POLSKIM BIZNESIE I GOSPODARCE A GUIDE TO POLISH BUSINESS AND INDUSTRY

BEST PERFORMANCE BUSINESS REVIEW • RANKINGI NAJWIĘKSZYCH FIRM WEDŁUG SEKTORÓW

– RANKING ACCOUNTING COMPANIES 2. RÖDL & PARTNER (RÖDL KANCELARIA PRAWNA Sp.k.)

– RANKING TAX ADVISORY COMPANIES – LARGE ENTERPRISES 3. MDDP MICHALIK DŁUSKA DZIEDZIC I PARTNERZY – RANKING TAX ADVISORY COMPANIES – MEDIUM ENTERPRISES 4. KANCELARIA OŻÓG TOMCZYKOWSKI – RANKING TAX ADVISORY COMPANIES – SMALL AND MICRO ENTERPRISES 5. MAZARS W POLSCE – RANKING AUDIT COMPANIES 6. RÖDL & PARTNER – RANKING CONSULTING COMPANIES 7. KRUK SA – RANKING RECEIVABLES MANAGEMENT COMPANIES 8. HAYS POLAND – RANKING HR COMPANIES – EXECUTIVE SEARCH 9. HAYS POLAND – RANKING HR COMPANIES – RECRUITMENT & SELECTION 10. GRUPA PROGRES – RANKING HR COMPANIES – TEMPORARY WORK AGENCIES 11. DENTONS EUROPE DĄBROWSKI I WSPÓLNICY – RANKING LAW FIRMS 12. Sii – RANKING IT CONSULTING COMPANIES 13. LIDEX CENTRUM TŁUMACZEŃ I OBSŁUGI – RANKING TRANSLATION COMPANIES 14. PARTNER OF PROMOTION – RANKING PUBLIC RELATIONS COMPANIES 15. PROFILINGUA SZKOŁA JĘZYKÓW OBCYCH - WSiP SA – RANKING LANGUAGE SCHOOLS 16. KONSORCJUM SZKOLENIOWO-DORADCZE GAMMA – RANKING TRAINING COMPANIES 17. MAKOLAB – RANKING MARKETING AGENCIES 18. SKANSKA – RANKING COMMERCIAL REAL ESTATE DEVELOPERS

BOOK OF LISTS 2020/2021 • BEST PERFORMANCE BUSINESS REVIEW

1. RÖDL & PARTNER (ROEDL OUTSOURCING Sp. z o.o)

PLN 100 [VAT 8% INCLUDED]

ISSN 1644053X

PARTNERS

19. CBRE

– RANKING COMMERCIAL REAL ESTATE AGENCIES 20. MURAPOL SA

– RANKING RESIDENTIAL DEVELOPERS 21. PANATTONI EUROPE

– RANKING WAREHOUSE SPACE DEVELOPERS 22. TÉTRIS POLAND

– RANKING DESIGN & FIT OUT COMPANIES 23. PM GROUP POLSKA – RANKING ARCHITECTURAL FIRMS 24. BUDIMEX SA – RANKING GENERAL CONTRACTORS 25. SWECO CONSULTING – RANKING CONSTRUCTION PROJECT MANAGEMENT

COMPANIES 26. SODEXO POLSKA

– RANKING REAL ESTATE MANAGEMENT COMPANIES 27. GRUPA RABEN

– RANKING TRANSPORT, SHIPPING AND LOGISTICS COMPANIES 28. GRUPA ASSECO

– RANKING SOFTWARE PRODUCERS AND IT INTEGRATORS

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LAST WORD governed” poverty-stricken children, LGBT+ supporters, faceless commoners, pro-feminist people, immigrant rights’ defenders and “Mother Nature” sought shelter.

Fast forward a few months shy of four years. Now it’s December 2020. Had you told me a year ago that a coronavirus would kill over 1.5 million people worldwide and would ravage many more million lives and families, I would have said “you’re barking mad.” Yet here we are.

Besides lives being lost in biblical proportions this year, a lot has changed.

Some of the changes have been terrible.

Some others quite the opposite. Thousands of businesses have been shuttered for good – “lock, stock and barrel” like my friend from the university said as their family was forced to put on sale pubs around Nottingham. An unknown number of people has lost their livelihoods, been forced to battle depression alone, been driven to suicide or has been denied critical medical care given that their IT WAS A GREY, cold and slightly windy mornailment wasn’t Covid-19-related. To those numbers, add ing. Not unusual in any season in Poland. I was eating people affected due to BLM marches and pro-abortion breakfast with two of my friends-turned-acquaintances at demonstrations and other protests. a restaurant in Poznań’s medieval market square. We were On the other hand, however, although not comparable, discussing the, at the time, ongoing “Not-My-President’s- the air has gotten clearer in many parts across the world, Day” rallies worldwide against Donald Trump. Krys and flora and fauna have purportedly flourished, an undefined Sławek seemed supportive of Trump who had taken office number of people has been able to discover their creative a few weeks back. I was visibly upset Hillary Clinton had calling or been able to spend more time with their families lost. Not that I rooted for her anyway. albeit oftentimes online.

For as long as I can remember, I have mostly supported As you might have realized even before turning to the “lesser of two disappointing options” – I was told that last page of the last issue for 2020 of this magazine, it’s “lesser of two evils” is, for the most part, a “misnomer.” increasingly impossible to predict the future with a high So, while sipping a tepid cup of Earl Grey tea and tuck- degree of certainty. One thing we can be sure of though. If ing into bacon that was at the border of crispy and soggy, we don’t learn from our past and as a result take corrective I told my friends that I feared worldwide civil unrest. No, actions in the present, our future’s predictability will take a not because of Trump and definitely not because of any further far more sinister hit. one person. But because of the direction in which things – I’m not being an alarmist. I’m only urging you to spare society, economic disparity, climate, among others, in no a moment and think. Think beyond your own realm. particular order – appeared to be heading for years. They Think about those that are different than you. It has to be still are. a collective effort and not “what’s in it for me?.” It has to be Explaining further, I used the analogy between then a marathon, not a sprint. For it to be an absolute win-win, – early 2017 – and the French Revolution that sought to we have to spare a thought for the environment. We have completely change the relationship between the rulers and to choose a certain path. Only the future will tell whether those they governed and to redefine the nature of political we were right or wrong… power. The only difference: in 2017, the definitions for And before I head to the kitchen to find my favorite “the rulers” and “the governed” metamorphosed into mulled wine recipe, I wish you a contemplative Christmas something infinitely more complex depending upon the and a 2021 better than you hope for. Whatever you get up situation. to over the festive period, surely don’t turn yourself, even Simplistically put, whereas “the rulers”, not connected, unwittingly, into a superspreader. Cheers! included “waffling” David Cameron, “radical” religious Note: The food in the Poznań restaurant was served clerics, “corrupt” businesspeople, oppressors of women, piping hot. I just enjoy my meals and drinks relatively xenophobes and humankind, under the umbrella of “the cold. - SD

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