Page 1

A human rights official has urged Poland to open up about CIA ‘black sites’

Vladimir Putin has activated the first of two Nord Stream gas pipelines

Bumar will reportedly be given z∏.300 million to invest in R&D

4

5

WWW.WBJ.PL

3

VOLUME 17, NUMBER 36 • SEPTEMBER 12-18, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

Since 1994 . Poland’s only business weekly in English

Natural strengths

REAL ESTATE

The organic and traditional food sector is growing rapidly in Poland. Find out why in WBJ ’s special report on the country’s food industry 11-15

COURTESY OF KOSTRZEWA PR

Lokale Immobilia

• Business Garden • Themed hotels • Wola Center 16-18

Losing ground Poland has become less competitive economically, a new report suggests 8

A guide to Polish business and industry

Law firms

Przewodnik po polskim biznesie i gospodarce

20-21

In this issue

SHUTTERSTOCK

News . . . . . . . . . . . . . . . . . . . . . . .2-4 Industry News . . . . . . . . . . . . . . . . .5 Interview . . . . . . . . . . . . . . . . . . . . .6 Listed Firms . . . . . . . . . . . . . . . . . . .7 Finance & Economics . . . . . . . . . . .8 Opinion & Analysis . . . . . . . . . . . . .9 Economic Forum in Krynica . . . . .10 Poland’s food industry . . . . . .11-15 Lokale Immobilia . . . . . . . . . .16-18 Markets . . . . . . . . . . . . . . . . . . . . .19 The List . . . . . . . . . . . . . . . . . . .20-21 Arts & Culture . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

Swiss intervention

Euro zone worries

Markets rallied on news of the Swiss National Bank’s decision to cap the strength of the franc against the euro. Economists hope the move 3, 19 will boost consumer spending in Poland

The rich and the powerful convened in Krynica-Zdrój for the Economic Forum last week, where the future of the euro zone was a main topic of discussion

10


NEWS

www.wbj.pl

Gilowska to debate? After saying she would not debate against current Finance Minister Jacek Rostowski, Zyta Gilowska, the former deputy prime minister and former finance minister, made an apparent about-face last Thursday. In a statement sent to the Polish Press Agency, she said she could take part in a debate held in an “academic forum,” which would be in line with legal codes. Law and Justice (PiS) head Jaros∏aw Kaczyƒski originally proposed that Ms Gilowska, a member of the Monetary Policy Council and open PiS supporter, represent the party in an upcoming preelection debate.

Poland sends condolences to Russia Following the tragic plane crash in Russia that claimed the lives of 43 people last Wednesday, including almost the entire Russian major league ice hockey team Lokomotiv Yaroslavl, both President Bronis∏aw Komorowski and Prime Minister Donald Tusk sent out condolences to Moscow. “On behalf of the Polish nation and myself I offer you, Mr President, my sincerest condolences,” Mr Komorowski wrote to his Russian counterpart Dmitry Medvedev.

IN THE SPOTLIGHT

Numbers in the News

Jaros∏aw Wa∏´sa

CHF1.20 is the rate to the euro at which the Swiss National Bank says it will cap the franc

z∏.3.4737 was the rate of the z∏oty to the Swiss franc on Thursday morning, the strongest it had been in weeks

z∏.15.3 billion was the value of drugs and pharmaceutical products sold by wholesalers to pharmacies in the first eight months of 2011. That is almost 5 percent more (z∏.720 million) than over the same period in 2010.

51.8 was Poland’s PMI reading for August, the second-weakest reading in two years

European Parliament MP Jaros∏aw Wa∏´sa, son of the Solidarity leader and former Polish President Lech Wa∏´sa, was seriously injured in a motorcycle accident earlier this month and remained in a Warsaw hospital as WBJ went to press. On September 2, the motorcycle that Mr Wa∏´sa was riding collided with an SUV on a road near Sierpc, Mazowieckie voivodship. Local prosecutors have already launched an investigation into the causes of the accident. There were apparently no eyewitnesses. Doctors involved in Mr Wa∏´sa’s treatment initially described his medical condition as very serious and potentially

life-threatening. Towards the end of last week it was reported that the politician’s condition had been stabilized and that there were promising signs of recovery. Mr Wa∏´sa, who sustained multiple internal injuries and bone fractures, including serious injury to his spine, has already undergone a number of operations, with more treatment having been planned for this week. Rehabilitation will take months, doctors said. At a press conference in ¸ódê, European Parliament President Jerzy Buzek said he was shattered by the news of Mr Wa∏´sa’s accident. Prime Minister Donald Tusk has already visited the hospital in which Mr

Wa∏´sa is being treated. Last Thursday, former President Lech Wa∏´sa visited the Wawel Cathedral in Kraków where he prayed for his son’s recovery. “First of all, I thanked God for my son Jarek’s life, since it was a miracle that he had survived,” Polish media quoted Mr Wa∏´sa as saying. Born in 1976 in Gdaƒsk, Jaros∏aw Wa∏´sa studied political science at the College of the Holy Cross in Worcester, Massachusetts. Running on the Civic Platform party’s list, he was member of the Sejm from 2005 to 2009, when he won a seat in the elections to the European Parliament.

Quote of the Week “The PiS chairman is not a pretty girl on the loose, that everyone has to run after him and ask him when we could arrange to meet” Prime Minister Tusk shares his displeasure with Jaros∏aw Kaczyƒski’s demands regarding the time and location of proposed pre-election debates.

Figures in focus The structure of Polish citizens' activity when crossing Poland's borders with non-EU countries in 2010 (%) 2.15 1.35 4.2% 5.9%

Shopping Visiting relatives or friends

Adam Zdrodowski

Tourism

On WBJ.pl Time for culture While business and political leaders gathered in Krynica-Zdrój last week, artists and thinkers assembled in Wroc∏aw to attend the European Culture Congress. Held over four days under the theme “Art for Social Change,” the Congress was planned as one of the highlights of the cultural program of the Polish Presidency. Guests included film-maker Andrzej Wajda and author Umberto Eco. WBJ.pl has prepared selected highlights from the event.

US, Poland sign defense procurement deal Polish Defense Minister Tomasz Siemoniak and US ambassador to Poland Lee Feinstein signed a Reciprocal Defense Procurement Agreement (RDPA) in Warsaw last Thursday. The deal is aimed at enhancing bilateral cooperation in security and defense by “greatly” reducing barriers to trading defense articles between the two countries, a statement on the American embassy’s website reads. Contract opportunities for Polish and American firms in the US and Poland, respectively, are expected to increase following the signature of the RDPA. ●

SEPTEMBER 12-18, 2011

COURTESY OF JAROSLAWWALESA.PL

2

Employment/business 86.5% Other

Source: Central Statistical Office

Company index 3Legs Resources ................5 Investec GLL Global

PMR ..................................11

AC Nielsen ........................17 Special Opportunities

Polimex-Mostostal ..........17

AGS Architects..................18 Real Estate Fund ..............17 Polkomtel............................7 Aster....................................5 Jaspers & Eyers ..............16 Blackstone Real Estate....17 JEMS Architekci................18

DATELINE

Bolsa Global Quimera ......17 Jora Vision ......................18

PwC ..................................10 Radwar................................5 Rank Progress ..................17

Budimex ......................16, 17 KGHM..................................7 Rogowski Development....18 Bumar ................................5 Kury∏owicz & Associates..16

September

BZ WBK ..............................8 Las Palm ..........................18 CB Richard Ellis ..............17 LC Corp ............................16

15

DESA: AUCTION OF WORKS ON PAPER

Event:

Discover the art of Polish masters Stanis∏aw Ignacy Witkiewicz and Jan Matejko, as well as other works from artists representing the École de Paris. Location: Desa Unicum, Warsaw. desa.pl

17-18 WROCLOVE BEAUTY SALON Event:

Take in a series of lectures on the latest trends and treatments in the cosmetics industry. Location: ul.Wystawowa 1, hall IASE, Wroc∏aw. salon-wroclaw.pl

19-21 SECURITY RESEARCH CONFERENCE Event:

Join the debate on the issues facing the public safety and security fields today. Topics will focus on legal, technological and organizational aspects. Location: Hilton Hotel, Warsaw. src11.eu

20-21 Event:

SEB Asset Management ..17 Skanska Property Poland 16

14th INTERNATIONAL ENERGY CONFERENCE

Chevron ..............................7 LG ......................................23 Spó∏dzielnia Mleczarska

EUROPOWER 2011

Damis................................18 ¸meat................................12 w ¸apach ..........................12

Find out everything you need to know about the energy sector in Europe and in Poland. Location: Hotel Novotel, Warsaw. nowaenergia.com.pl

21

ASSET MANAGEMENT FORUM

Event:

Follow the forum’s top 10 recommendations, announced annually at the European Congress of Finance. Location: Warsaw Stock Exchange, Warsaw. gab.com.pl

24

8th EDITION OF THE INTERNATIONAL OKTOBERFEST

Event:

Mingle with senior-level management from some of the largest companies operating in Wroc∏aw and the Lower Silesia region. Location: Wroc∏aw; Arsenal Museum

Echo Investment ..............17 ¸ucznik................................5 STUDIO A4 ........................17 Food Service ....................12 Marathon ............................7 SwedeCenter ....................16 Gazprom..........................4, 9 Matexi Polska ..................18 Symbio Polska ..................11 Getin Holding ....................16 Metsä Tissue ....................17 Totalserve............................8 Ghelamco..........................16 Mlekovita ..........................12 Goodman ..........................17 Neinver Polska ................17

UPC Polska ........................5 UTI Defense and

gowebtrade.com ..............19 Neocity ..............................18 Industrial Technologies......5 Hafema and International

Nord Stream ..................4, 6

Destination Strategies......18 Organic Farma Zdrowia....11 Haier ................................23 Peter Nielsen......................5

Vekoma Rides Manufacturing ..................18

Vsf Creative ......................17 Helios ................................17 PGE ....................................7 Hitachi GE

PGNiG ............................5, 7 X-Trade Brokers

Nuclear Energy. ..................9 Piotr i Pawe∏ ....................17 Dom Maklerski ................19 ILF Consulting Engineers ..17 PKM Duda ........................12 Xtrememac ......................23


NEWS

SEPTEMBER 12-18, 2011

www.wbj.pl

3

Currencies

SNB intervenes, traders look for new safe haven The Swiss National Bank’s decision to cap the franc’s strength was seen by many as the first volley in a new round of the ‘currency wars’

COURTESY OF THE SWISS NATIONAL BANK

In a move that cheered global markets and sent major currencies higher against the Swiss franc, the Swiss National Bank last Tuesday said it was setting a cap on the strength of the currency, as its appreciation had begun to weigh significantly on the nation’s economy. The bank said that it would not allow the franc to drop below CHF1.20 to the euro, a level it would defend “with the utmost determination.” It added that it would do this through the purchase of foreign currencies, which it said it was prepared to buy in “unlimited quantities.”

cies, including the dollar, euro and z∏oty. The strength of the franc, which had gained about 29 percent against the dollar and 17 percent against the euro over the past 12 months, was seriously beginning to hit the bottom lines of Swiss firms and the country’s economy alike. Switzerland’s GDP growth over the past 20 years or so was due in large part to foreign demand for Swiss exports. A slump in those exports was a big reason the country’s economy slowed in Q2. The SNB’s move had an immediate effect on the Swiss stock market, which climbed 7 percent after the announcement.

The SNB’s decision gave Polish holders of francdenominated mortgages some relief The decision marked the first time the SNB had moved to set a limit on the franc’s rate

since 1978. The franc immediately dropped against many curren-

New ‘currency war’? Analysts saw the move as the first falling domino that would push other central banks around the world to take measures to keep their curren-

cies low and their exports competitive. Japan, whose central bank last month spent JPY4.51 trillion (about $58 billion) on yen sales, the biggest intervention for any month since 2004, is expected to be one of those countries. Brazil, whose economy is heavily dependent on exports, is too. “We will see a lot more intervention now, we will see manipulation on a grand scale,” Bloomberg quoted Stuart Thomson, a portfolio manager at Ignis Asset Management in Glasgow, as saying. “Traditional safe havens are trying to undermine the value of their currencies.” The SNB’s move also sent the z∏oty soaring against the franc, rising 8 percent on the day of the announcement. By the end of trade on Friday, the z∏oty had firmed to z∏.3.55 against the franc. Before the anouncement on Tuesday, it was trading at around z∏.3.83.

The drop in the CHF/PLN rate has given Poland’s 700,000 holders of franc-denominated mortgages some relief. Many took out their loans in the boom years of 2007 and 2008, and have steadily seen their mortgage payments rise. The hope is that a stronger z∏oty will allow them to devote more of their earnings to consumer spending – the factor that analysts say has contributed the most to Poland having navigated the economic crisis relatively unscathed. With the Swiss franc now out of play, investors around the world began looking for new safe havens as they flee what they see as risk in the dollar and the euro. Nordic currencies – especially the Norwegian krone and the Swedish krona – were the immediate “winners.” Both currencies saw strong gains after the SNB’s announcement was made. Andrew Kureth

CIA secret prisons

Poland called to account for CIA ‘black sites’

Ten years after the September 11, 2001 attacks, Commissioner for Human Rights at the Council of Europe Thomas Hammarberg has urged Poland, Romania and Lithuania to come clean regarding their alleged hosting of CIA “black sites.” As part of the “global war on terror,” several countries collaborated with the CIA’s counter-terrorism operations. Some, including Poland, are accused of having hosted secret detention facilities, or “black sites,” where the CIA conducted “enhanced interrogation” (including water-

boarding) on detainees. Of the three Eastern European nations, allegations of Poland’s involvement have been the most specific. Several reports, including one adopted by the European Parliament in 2007, allege that a CIA black site operated in Poland in 2002-2003, where rendition flights brought suspected terrorists Abu Zubaydah, Abd Al-Rahim Al-Nashiri, as well as suspected 9/11 plotters Khalid Sheik Mohammed and Ramzi Binalshibh.

Investigation Poland has never admitted to hosting the site, though it has launched an investigation into the matter. The Human Rights Commissioner, while admitting that Polish officials were not involved in handling or inter-

rogating any detainees, declared that “authorization was obviously given at the highest political level and some assistance provided by the intelligence services.” Mr Hammarberg urged that the results of the ongoing investigation by Poland’s Prosecutor General should be put under public and judicial scrutiny without delay. Human rights organizations have voiced concerns about the effectiveness of the investigation, opened in 2008. An important roadblock is the fact that the United States has refused to provide legal assistance for the case on the grounds of national security and state interest. Many also argue that political pressure is likely playing a role in the sluggishness of the investigation.

Transatlantic worries Also last week, a newly released WikiLeaks cable from the US embassy in Warsaw showed both countries were communicating at the highest levels about allegations of a CIA secret prison in Poland as early as 2005. “At the height of the ‘war on terror, Poland, Romania and Lithuania extended quite extraordinary permissions and protections to their American partners … the full truth must now be established and guarantees given that such forms of cooperation will never be repeated,” stated Mr Hammarberg last week. “The purported cost to transatlantic relations of pursuing such accountability cannot be compared to the damage inflicted on our European system of human rights protec-

COURTESY OF THE COUNCIL OF EUROPE

A human rights official has slammed Poland for failing to come clean on complicity with US rendition practices

Thomas Hammarberg says authorization for the black sites was given at the “highest political level” tion by allowing ourselves to be kept in the dark,” he added. As WBJ went to press,

there had been no official reaction from the Polish govAlice Trudelle ernment.


4

NEWS

www.wbj.pl

SEPTEMBER 12-18, 2011

Energy security

Vladimir Putin said that Russia was freeing itself from “the dictate of transit states” As Russian Prime Minister Vladimir Putin turned on the gas supply to the first of two pipelines in the Nord Stream pipeline system last Tuesday, he cheered the fact that the importance of transit countries for Russia’s gas exports was diminishing. Standing between the country’s gas reserves and European consumers, Belarus, Poland

and Ukraine will be bypassed by Nord Stream, which runs beneath the Baltic Sea. Mr Putin said the first pipeline should start supplying Germany in October. “We are slowly and surely turning away from the dictate of transit states,” Bloomberg reported Mr Putin as saying. Also present at the launch on Tuesday was Gazprom CEO Alexei Miller, who said, “Soon we will be able to start the direct supply of our energy resources to consumers in European countries, and this is definitely a

sign of trust in Gazprom and in Russia.” Poland has been a long-time opponent of the Nord Stream pipeline, with Foreign Minister Rados∏aw Sikorski famously comparing the project to the 1939 Molotov-Ribbentrop Pact, which divided Polish territory between Russia and Germany. Since 2005, Nord Stream has met with “constant fuss,” said Mr Putin on Tuesday. In Poland, opposition has centered around concerns that the pipeline could hinder access to sea ports in Szczecin and

ÂwinoujÊcie. During a visit to Warsaw in June, German Chancellor Angela Merkel sought to ease Polish anxieties. “We have always said that we don’t want to go ahead with a project at the expense of another country, especially not our neighbor Poland,” she said. She added that if access to the ÂwinoujÊcie port proves to be affected, then “we will be obliged to lay the pipeline deeper in order not to hinder access to the port.” Alice Trudelle

AP/FOTOLINK

Russia opens first Nord Stream pipeline

Mr Putin turning on the gas supply last Tuesday

WikiLeaks

US critical of Kaczyƒski-era foreign policy: cable The Polish government was said to have reduced its effectiveness in European institutions A diplomatic cable from 2006 leaked by whistle-blowing website WikiLeaks reveals that the US considered Polish foreign policy to have worsened under the government that was in

power at the time, led by the Law and Justice (PiS) party. The late Lech Kaczyƒski was president when the cable was written, while his twin brother Jaros∏aw was prime minister. “President Lech Kaczynski’s tight grip on foreign policy has squeezed out his own Ministry of Foreign Affairs [MFZ] with a corresponding loss of effectiveness in European institutions

and overall quality in Polish foreign policy,” reads the cable, which was leaked from the US embassy in Warsaw. The cable bemoaned the politicization of top- and midlevel positions, frequent personnel changes, introverted leadership and long-standing vacancies at the ministry, saying these factors represented “the president’s disregard for the foreign policy establishment.”

Citing one example of a political appointment, US diplomats noted that in February 2006, President Kaczyƒski had replaced the PiS government’s first foreign minister, career diplomat Stefan Meller, with then Deputy Foreign Minister Anna Fotyga, who was described in the cable as “a long-time confidante with little foreign policy experience.”

Domestic focus Poland’s overall foreign policy principles at the time were deemed by the cable’s authors to be sound, particularly with regards to its relationship with the US. But the administration’s focus on domestic matters was considered to have undermined its ability to pursue a number of regional and EU foreign policy objectives.

PiS came to power in 2005 on an anti-corruption platform and pursued this goal when in government. It also aimed to cultivate a stronger presidency and a more centralized government. With these aims, the state’s “effectiveness in pursuing a number of regional diplomatic objectives has clearly declined,” the cable reads Gareth Price


INDUSTRY NEWS

SEPTEMBER 12-18, 2011

Armaments

www.wbj.pl

5

Shale gas

Bumar gets z∏.300 mln for New center aims to bridge knowledge gap research and development shale-gas A university in Kraków is looking to provide a platform for communication on a key topic for Poland’s energy future

Baconschi, participated in the event and signed a cooperation agreement to jointly develop defense technologies (anti-aircraft and anti-ballistic missile) between Poland’s Bumar Group and Romania’s UTI Defense and Industrial Technologies, according to a statement on Bumar’s website. Other members participating in the event included the director of the European Defense Agency, ClaudeFrance Arnould, Ukraine’s minister of national defense, Mykhaylo Yezhel, Italy’s secretary of state for defense, Guido Crosetto, Namibia’s ministry of defense’s chief of staff, Abraham Iilonga, and the head of Poland’s National Security Bureau, Stanis∏aw Koziej.

The Tischner European University Centre for Energy Studies (TEU/CES) in Kraków is set to be officially inaugurated on September 17. The center will aim to provide a platform for communication on the issue of energy sustainability in Poland, with a special focus on shale gas, which has garnered no little controversy due to environmental concerns. The center, with its bilingual website, will enable access to international case studies, research, local community perspectives, as well as environmental and legal implications, among other information related to shale-gas extraction. “Without a professional, fact-based, single-window approach to communication, engaging all key stakeholders … the risk of prejudice, misconceptions and misleading assumptions dominating the debate long before any production starts is just too high,” said Jaros∏aw Gowin, the rector of Tischner European University. Mr Gowin added that the center would ensure readily

Ella Pa∏ka

COURTESY OF BUMAR

Polish Defense Minister Tomasz Siemoniak has announced that the stateowned Bumar Group, a leading supplier and exporter of armaments and military equipment, will receive z∏.300 million in funding for the research and development of new weapons and equipment, Rzeczpospolita reported. The majority of these funds, z∏.135 million, will go to Bumar’s ammunition arm, the daily wrote. Rzeczpospolita said that a further z∏.70 million will go to

the Scientific-Industrial Centre of Professional Electronics Radwar, for the development of new radar technologies, with close to z∏.30 million earmarked for Bumar ¸ab´dy. The remaining z∏.15 million will be given to ¸ucznik, a Radom-based company that focuses on artillery, the newspaper added. Bumar is set to receive z∏.90 million of the total z∏.300 million this year and the rest of the money over the following two years. Mr Siemoniak reportedly made the announcement at the International Defense Industry Exhibition (MSPO) in Kielce last week. Both Polish Foreign Minister Rados∏aw Sikorski and his Romanian counterpart, Teodor

COURTESY OF TISCHNER EUROPEAN UNIVERSITY

Almost half of the funding will go to the conglomerate’s ammunition division, says daily

The TEU/CES project team, including rector Jaros∏aw Gowin (far right) available information that could address the “knowledge gaps” in the debate. It is estimated that Poland could have as much as 5.3 trillion cubic meters of shale gas reserves, which if extracted successfully could satisfy Poland’s gas needs for up to 300 years, effectively eliminating the country’s reliance on Russian gas exports. Despite this, the issue has caused controversy because of fears related to the environmental impact that shale gas drilling could have, among them the effects on ground water. Deposits of shale gas have already been discovered in

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

Radwar will get z∏.70 million to develop new radar technologies

Watchdog agrees to UPC’s z∏.2.4 billion Aster takeover

Changes to inheritance law to become binding in October On October 23, 2011, changes to the Civil Code which will amend Polish inheritance law are due to become binding. The changes are designed to facilitate the legal turnover of property and avoid complications connected with inheriting items of property that have been chosen at the parties’ discretion, such as enterprises, real estate, companies’ shares or stocks and transferable rights and obligations in partnerships.

COURTESY OF UPC

UPC now has 18 months to sell part of Aster’s network in Warsaw and Kraków UPC Polska, the largest cable operator in the Polish market, has received permission from the competition regulator to take over smaller rival Aster for z∏.2.4 billion. Poland’s consumer watch-

dog, UOKiK, has agreed to the deal, but has set several conditions. In Warsaw and Kraków, where the firms’ combined share of cable TV, broadband internet and stationary telephony services

amount to between 50 and 60 percent, UPC will be forced to resell a part of the network belonging to Aster. The transactions must be completed within 18 months AT of UOKiK’s decision

¸ebieƒ, in northern Poland and near Kutno, in central Poland, by British firm 3Legs Resources and Poland’s natural-gas monopolist PGNiG, respectively. The center will open with a two-day conference aimed at highlighting important issues related to Poland’s shale gas reserves. Among the key speakers at the conference will be Polish President Bronis∏aw Komorowski and Deputy PM Waldemar Pawlak. Representatives from the international energy sector and regional governments, as well as environmental experts, will also take part in the discusDavid Ingham sions.

Separate commercial proceedings for entrepreneurs to be wiped from civil procedure The Sejm, the lower house of the Polish parliament, has adopted draft legislation that will change the Civil Procedure Code. The new legislation is being implemented to facilitate civil procedures. The most crucial change will be the abolishment of separate proceedings in commercial cases. From the moment these changes come into force, court cases between entrepreneurs will be settled on the basis of general provisions of civil procedure. The new legislation will also introduce several other changes, including rules to govern evidence that has been submitted to the court beyond the agreed deadline. The law will be discussed by the Senate and, if positively evaluated, will be forwarded to the president for signing.

New tasks for users of fiscal cash registers From September 1, 2011, retailers who conduct sales using fiscal cash registers have been obliged to print out a fiscal receipt or an invoice for each transaction. Moreover, they have been under the obligation to give the original receipt/invoice to the buyer. Retailers have also been obliged to immediately inform a cash-register services firm of any malfunctioning of cash registers and to have their cash registers technically examined and serviced. Social Insurance Institution to suspend retirement benefits unless employment contract is terminated Persons who still work and who acquired the right to receive retirement benefits between January 8, 2009 and December 31, 2010, have until the end of September 2011 to decide their professional future. If they continue in employment, the Social Insurance Institution (ZUS) will suspend payment of their retirement benefits. If the persons in question wish to receive these benefits, they will have to terminate their employment. This obligation was introduced in an act on changing the Law on Public Funds.

BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE


6

INTERVIEW

www.wbj.pl

SEPTEMBER 12-18, 2011

Parliamentary elections

A message of reform Tomasz Por´ba, member of the European Parliament and the man in charge of the Law and Justice (PiS) party’s election campaign, talks with WBJ about his party’s policies, its campaign strategy, the Smolensk catastrophe and PiS’s determination to change Poland

Your message of a “Great Project,” with its ideas of fundamental changes in Poland, seems to be referring to PiS’s previous idea of building a “Fourth Republic.” Is this the case? In our campaign we would like to concentrate first and foremost on making the most of a unique moment in our country’s history, where thanks to being a member of NATO and the European Union and having access to large amounts of EU funds, we have opportunities to undertake crucial reforms in all fields: the economy, finances, education, and social and foreign policy. PiS is a strong opponent of the government’s foreign policy, with leader Jaros∏aw Kaczyƒski once claiming that Poland is a “Russian-German condominium” and that Prime Minister Donald Tusk does not represent Polish interests. How do such accusations fit into the matter-offact debate you want to conduct? Please let me remind you of some facts. Polish shipyards collapsed because Prime Minister Donald Tusk was not efficient enough in his talks with the European Commission in

order to find a way to avoid their closure – unlike the Germans, who did so and managed to save their shipyards. Mr Tusk also believes Germany’s claim that the building of the Nord Stream gas pipeline will not block the access of some of the bigger ships to the port in ÂwinoujÊcie, while independent experts argue exactly the opposite. The PO government signed a long-lasting agreement with Russia for delivery of gas to Poland on very unfavorable conditions, which was changed only after the European Commission reacted and stated that such a contract would be against Polish national interests. As you can see, instead of fighting for Polish interests, Mr Tusk’s government has been realizing projects which steadily increase Poland’s dependence on our strong neighbors. Due to the current financial crisis in the EU, some members of the euro zone want to integrate more closely. This could lead to a two-speed EU developing, where developed economies operate separately from developing ones. How should Poland react to this situation? Poland is a large European country and we should play a leading role in our region by firmly opposing the concept of a two-speed development of the EU. Unfortunately, the PO-led government has been doing exactly the opposite, which is clear to me as a member of the European Parliament. Prime Minister Donald Tusk and Foreign Minister Rados∏aw Sikorski conduct a policy of courting some of the strongest EU members, namely Germany and France, and later follow their proposals unconditionally. Such a policy may be good for the EU’s biggest countries, but it’s not necessarily good for Poland. So, when we see that certain leaders of the euro zone want to create some sort of inner economic government in the EU and treat the rest of the member states as peripheral entities, our country, which holds the rotating presidency [of the Council of the European Union], should strongly oppose it. We should defend

COURTESY OF LAW AND JUSTICE

Ewa Boniecka: Before the beginning of the election campaign, you said that you wanted a campaign based on facts and that “it is my ambition to impose [this] in the campaign.” Do you still think this is feasible considering the reality of the political relationship between Law and Justice (PiS) and the ruling Civic Platform (PO) party? Tomasz Por´ba: It is my lasting ambition that during this campaign PiS concentrates on the facts at hand, and that is our election strategy. So, first, we want to confront each parties’ program and, second, we want to put forth our analysis of four years of a PO-led government. And this analysis clearly shows, as we have stated many times, how bad the situation is in Poland and how poor PO’s performance in government has been. During the election campaign PiS will put forward proposals for fundamental reforms that we have to undertake in order to speed up the modernization of Poland.

who usually do not take part in the elections.

Mr Por´ba says PiS wants to conduct a campaign based on facts not only our own interests, but the interests of all smaller members of the EU. It is obvious that the EU as a whole will not develop if we allow deep rifts between the rich and the poor.

“We should defend not only our own interests, but the interests of all smaller members of the EU” I have been speaking with Slovaks, Czechs and other MEPs from our region, and they all agree that Poland should lead the opposition against some of the ideas of the euro zone leaders that may be potentially harmful for our countries. Now, the situation is even more difficult because several decisions have already been made by some of the bigger players, which was facilitated by the Polish government’s weak and opportunistic foreign policy. Mr Tusk and his ministers should have reacted and taken action three years ago when the first signals for building a two-speed EU appeared. Now, it may be too late. Yet what concrete steps does PiS believe can be taken by Poland against the two-tier integration of the euro zone, to which we do not belong? Poland should be conscious of its own value, potential and diplomatic ability to act firmly and to conduct policies which would be profitable for our country. Instead, our government follows the EU’s mainstream, which leads to our

marginalization. PiS wants to reject the present opportunistic Polish approach to the EU, together with the servile character of Mr Tusk’s government’s foreign policy. Poland should have its own opinion on all crucial issues now appearing in the EU. Our presidency of the EU clearly provides our country with unique opportunities for presenting some new ideas, but there aren’t any indications that Mr Tusk’s government is going to exploit them, due to a lack of ambition and far sighted European policies. But Poland has set its priorities for the presidency: It wants to push forward with the Eastern Partnership, work on energy security and deal with next year’s EU budget. The country holding the presidency is expected to follow the longterm agenda established by the European Commission … Each presidency should consist of two approaches. One is more administrative – that is, continuing on from the previously established agenda, while the second should focus on initiating some regional projects important to the country holding the presidency. Each strong country used to mark its presidency, as France did for example, when it promoted the association of Mediterranean countries by creating the Union for the Mediterranean or as Sweden did when it officially launched the “Baltic Strategy.” In order for the presidency to be successful it is necessary to find a balance between the two approaches and that is exactly what Poland should do. PiS proposed the concept of

creating a common European policy for the Carpathian region, which would encompass countries located to the south of our country, including Slovenia, Romania and Hungary. However, this proposal was rejected by the PO government. What are PiS’s alternatives to PO’s policy in the financial and economic fields? Our priorities are focused on the reduction of the budget deficit which has grown enormously under the PO government. We want to reform public finances by introducing a task-oriented budget, reform the tax system and get rid of various barriers currently paralyzing entrepreneurial activity. This program would let a PiS-led government set conditions for Poland’s economic development. We started such a development when we were in power and we would like to continue it, following the elections. We’d like to point out that the crisis in Europe should not excuse total passiveness by the PO government. PiS has a so-called “iron electorate.” How do you seek to win new voters? We are conscious that the support of our “iron electorate” may not be enough to win the elections, so we want to have more influence on other groups such as teachers, academics, scientists, entrepreneurs and young voters. We have been presenting our modernization plans and the positive changes for our country to those who are disillusioned with the present government’s policies and those

How will the issue of the April 10, 2010 Smolensk catastrophe be treated by PiS in the campaign? The Smolensk catastrophe was a real tragedy. People talk about it in their homes and they would like to know the truth. Therefore, such an important subject cannot be omitted in the campaign. Among other aspects, the catastrophe clearly showed the weakness of our state. The [official government] report prepared by Interior Minister Jerzy Miller is based on incomplete materials and did not dare to dismiss many false conclusions reached in the [Russian-led Interstate Aviation Committee] report. So, PiS wants to ask international experts to look into the matter – we would ask the European Commission to establish an international committee to investigate the circumstances of the Smolensk tragedy. It was one of many of Mr Tusk’s mistakes in the matter that the government did not turn to NATO for help in the investigation. This is especially so when one considers that many Polish – that is, NATO – generals perished in that catastrophe. PiS has expressed its reluctance to participate in public debates with other parties in the run-up to the election. Moreover, there have been some sharp exchanges and mutual accusations between PiS and PO recently. Will the so-called Polish-Polish was never end? The Civic Platform party had four years to debate with the opposition and did not do so, even during preparations for the Polish presidency in the EU. And now, suddenly, Donald Tusk wants to debate with Jaros∏aw Kaczyƒski. PO does not even have a program, so what would be the merit of such a debate? I see PO’s proposal [to hold debates] as disingenuous and simply not credible. And, as for the question about a Polish-Polish war, this should be addressed to the PO party. Their members notoriously, and strongly, offended the late President Lech Kaczyƒski. PO’s way of functioning on the political scene is based on attacking us and increasing fear against PiS in society. So, we cannot sit silently and not react. ●


LISTED FIRMS

SEPTEMBER 12-18, 2011

Metals

KGHM predicts net profit of z∏.9.6 billion for 2011 Copper giant KGHM has revised its net profit forecast upward for the full-year 2011, due mainly to higher-thanexpected copper prices. In a new report, the company forecasts a bottom line of z∏.9.64 billion (z∏.48.2 per share), which is 16 percent higher than the prediction it made in its January budget. The change in forecast results from the recent high prices of both copper and silver. Chief executive Herbert Wirth told reporters last Wednesday that his company could, however, miss the target if the sale of its stake in Polish mobile phone operator Polkomtel doesn’t happen this year. In its updated report, KGHM says planned equity investments for 2011 have also increased, by 19 percent, to z∏.10.8 billion. Just last week Mr Wirth said that KGHM was on the verge of acquiring a copper ore mine in South America, although he did not reveal the exact location, Parkiet reported. The company is due to finalize the transaction by the end of the year.

COURTESY OF KGHM

The result is contingent on the sale of the company’s stake in Polkomtel

KGHM is one of the world’s largest copper miners KGHM is also looking for sources of copper in places like the Mediterranean Basin, Scandinavia and Portugal. Currently it also has access to a copper mine in Canada. The news of KGHM’s upwardly revised net-profit forecast gave the company’s

shares a slight boost on an otherwise weak Warsaw Stock Exchange last Monday, when the new forecasts were announced. By the close of trade on Friday, KGHM’s share price stood at z∏.9.30, up 2.31 percent on the week. Gareth Price

Growth spurt KGHM's annual net profit (z∏. billions) 2007-2011 10 8 6

*Forecast

4 2 0

2007

2008

2009

2010

2011* Source: KGHM

PGNiG records ‘very pure’ shale gas flow in northern Poland Poland’s gas monopolist PGNiG has recorded gas flows at one of its shale gas concessions in northern Poland, a member of the company’s board, Miros∏aw Szka∏uba, revealed last week at the Economic Forum in Krynica. Mr Szka∏uba told Reuters that the gas the company had found was “very pure” and

that the firm was now considering talks with “foreign partners like Chevron and Marathon about diversifying exploration risk, which could be made through a swap in license stakes.” Up until now, PGNiG had mainly been drilling for shale gas in the Pomorskie voivodship in northern Poland, but the Polish gas giant is also

expected to begin drilling near the town of Tomaszów Lubelski, in the Lubelskie voivodship in southeastern Poland, within weeks. PGNiG currently holds the largest number of concessions for drilling shale gas in the country. Poland’s shale gas reserves have been estimated at as much as 5.3 trillion cubic Ella Pa∏ka meters.

PGE eyes takeover prospects abroad, has z∏.20 billion available With financial capabilities estimated at z∏.20 billion, Poland’s largest utility group, Polska Grupa Energetyczna (PGE), is planning on acquiring assets abroad, the firm’s CEO said last Wednesday. “We’re looking for any potential [takeover] projects,” Tomasz Zadroga told Reuters. Mr Zadroga did not elaborate on specific acquisition targets, and said that the European market was currently overvalued. But, he added, “if

there are some projects at a good price, then why not?” PGE has ample means for future takeovers, Mr Zadoga said. “Right now we have z∏.500 million in cash. We will add money from the sale of [mobile phone network operator] Polkomtel, so including eventual debt, our financial capabilities stand at over z∏.20 billion.” The utility company is currently awaiting regulatory approval for the sale of its

21.85 percent stake in Polkomtel, valued at over z∏.3 billion. The firm also posted strong results for H1, with net profit up by an annual 48 percent to z∏.2.22 billion, consolidated revenue up by 37.3 percent y/y to z∏.13.9 billion, and EBITDA up by 11 percent to z∏.3.99 billion. According to the company, these results make PGE “the most profitable energy group in Poland and one of the most profitable ones in Europe.” Ella Pa∏ka

www.wbj.pl

7


8

FINANCE & ECONOMICS

www.wbj.pl

SEPTEMBER 12-18, 2011

Interest rates

Economic competitiveness

RPP leaves interest rates unchanged

Poland losing some of its competitive edge, new report says

Poland’s rate-setters are in a wait-and-see mode, stressing neither the possibility of increases nor cuts

ing of the Council, further signs of weakening global economic activity have appeared,” the RPP wrote. The Council also said it still “does not rule out the possibility of further monetary policy adjustment, should the outlook for inflation returning to the target deteriorate.” At the same time, National Bank of Poland president Marek Belka stressed once again that the balance of risks for future inflation has changed due to a deteriora-

In line with expectations, Poland’s rate-setting Monetary Policy Council (RPP) decided to keep interest rates unchanged last week. Poland’s headline rate will remain at 4.5 percent, as fears of weakening economic expansion eclipse those of spiraling price growth. “Since the previous meet-

tion in economic prospects in Poland and worldwide. BZ WBK said in a research note that it was not changing its expectations that the NBP rates will remain unchanged in the coming months, even though the tone of the subsequent statements could be eased further. November’s RPP meeting will reveal much, the bank said, given the publication of new NBP projection of GDP and CPI. Gareth Price, Andrew Kureth

Slow rise The National Bank of Poland's main interest rate, September 2010 – September 2011 5.00 4.75 4.50 4.25 4.00 3.75 3.50 3.25 3.00 Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

2010

Jun 2011

Jul

Aug

Sep

Source: National Bank of Poland

The country dropped two places in an annual ranking of competitiveness Poland’s competitiveness on the world stage has declined, according to new data from a recently released report by the World Economic Forum. The country dropped two places, from 39th in the 2010-2011 report to 41st in the 2011-2012 edition. The authors of the report wrote that to improve its competitiveness Poland would need to upgrade its transport infrastructure, which is currently deemed to be trailing international standards by a “considerable margin.” The report also notes that those in Poland’s business sector remain concerned by the burden of government legislation. Poland is advised to concentrate on improving its business environment in order to increase its attractiveness for more advanced business and technological investments. “As Poland transitions to the innovation-driven stage of development, it will have to focus more strongly on developing capacities in innovation and business sophistication,” the

report reads. It adds, “Stronger clusters, more R&D orientation of companies, and intensified collaboration between universities and the private sector would help the country to move toward a more future oriented development path.” The most problematic factors for doing business in each country were also ranked, with tax regulation, inefficient government bureaucracy and restrictive labor regulations considered, in that order, to be those which hold Poland back the most. Praised in the report was the size of the Polish market, its educated workforce and its “well-developed financial sector.” Despite the global crisis, the competitiveness of world

economies continues to rise, with developing countries – and particularly those in Asia – showing the most-improved competitiveness. Global competitiveness is often generally beneficial in tough economic times since it helps countries get through a crisis quicker. For example, a country such as Latvia, which saw a steep drop in GDP, was able to pull itself out of the crisis fairly quickly due in part to its improved competitiveness. That country jumped six places year-on-year in the ranking. The World Economic Forum examines competitiveness in terms of education, infrastructure, innovation, economic stability and health care in order to determine a counGareth Price try’s rank.

Falling behind Competitiveness ranking, selected countries Rank 1 5 6 10 26 38 41 43 64 66

Country Switzerland US Germany UK China Czech Republic Poland Italy Latvia Russia

Overall index score 5.74 5.43 5.41 5.39 4.90 4.52 4.46 4.43 4.24 4.21

Source: World Economic Forum's Global Competitiveness Report

Tax Eye

Hungary – a triumphant return Richard Wernick is managing director of Totalserve (Polska) Sp. z o.o. He is a chartered tax advisor and a registered trust and estate practitioner and has been practising in Poland since 1997 The world of international tax planning perfectly reflects Darwinism in action. Jurisdictions emerge and evolve. Some thrive and others become extinct. Hungary was the first Central European country to introduce a modern market-driven tax system, with elements of an offshore system included to attract foreign investors. The years of “goulash communism” in the 1960s-1980s meant that Hungarian tax officials were, unlike their neighbors, more understanding of business operations and needs. In recent years Hungary seemed to be heading for extinction as an international tax planning jurisdiction. However the center-right Fidesz government of Viktor Orbán, which came to power last year, has introduced legislation that makes Hungary a contender to be one of the best holdingcompany jurisdictions in Europe. The legislation offers a low base corporate income tax of

10 percent on taxable income up to HUF500 million (approximately €1.86 million) and a higher rate of 19 percent on any excess. This will be reduced to a flat rate of 10 percent from January 1, 2013. Ten percent is the rate of corporate income tax in both Bulgaria and Cyprus and is acceptable to the European Union. This rate applies to both income and capital gains.

An interesting rule Hungary has an interesting participation exemption rule. Shares must be owned in a listed or unlisted company for at least 12 months and the Hungarian company must own at least 30 percent of the share capital of the foreign entity. In addition, each participation must be registered with the Hungarian tax authorities within 30 days of its purchase or acquisition. Dividends are exempt from tax with no minimum ownership period or ownership percentage specified, although dividends from

blacklisted countries and territories (tax havens) are subject to tax. Any loss may be carried forward indefinitely. Transfer pricing rules are based on OECD rules and the Hungarian tax authorities broadly fol-

“Hungary is a contender to be one of the best holdingcompany jurisdictions in Europe” low other jurisdictions’ practice. There is a 3:1 thin capitalization limit which governs the tax deductibility of interest paid on loans from connected parties, the same as in Poland.

Attractive features Since Hungary does not impose any withholding tax on payments made by companies, there is nothing to stop a true

offshore company based in say, Panama, owning a Hungarian holding or trading company. Another very attractive feature of Hungary is the taxation of R&D. Hungary aims to be a leading EU center of R&D and has introduced a special tax regime. Fifty percent of any royalties are deemed to be tax free, which produces an effective corporate income tax of just 5 percent for most companies. There are also enhanced tax deductions for R&D expenditure. Hungary has over 60 double taxation avoidance agreements in effect and several more in negotiation. Since Poland and Hungary are both EU members, the Parent-Subsidiary Directive and the EU Interest & Royalties Directive both apply to payments made from Poland. These provide for exemption from Polish withholding tax in the case of dividends, provided that: a) the Hungarian company owns at least 10 percent of the Polish company and; b) it has owned

or will own the shares for an unbroken period of 24 months. For interest and royalties, a 5 percent withholding tax rate applies until July 1, 2013 and thereafter, zero. A 25 percent shareholding is required in this situation, but the ownership period is the same. Under the Hungary Poland Double Taxation Avoidance Agreement the withholding tax rate on dividends, interest and royalties is 10 percent with no minimum ownership percentage or ownership time frame required.

‘Poles and Hungarians cousins be’ The standard rate of VAT is 25 percent with a reduced rate of 5 percent and a zero rate. There is a flat rate of personal income tax of just 16 percent. Most international investors operate in Hungary through a limited liability company (KFT). A KFT does not have shares. Quotas representing equity ownership are issued to members. These quotas are registered at the

Regional Company Registration Court. Companies and individuals can be members, and a minimum of one shareholder is required with no maximum. One director, which can be an individual or a company, is required but there are no residency requirements. A local registered office and agent are, however, required. The minimum share capital, which must be fully paid up, is HUF500,000 (approximately €1,800) and formation is both quick and easy, taking around two weeks. Poland and Hungary have centuries-old ties of friendship, as the saying goes, “Poles and Hungarians cousins be.” March 23 is the day of national friendship for both countries. Polish businesses and investors are warmly welcomed and the business environment and legal system are familiar. Hungary may not yet have knocked Cyprus off its number-one spot as the center to incorporate, but it is a close runner-up now. ●


OPINION & ANALYSIS

SEPTEMBER 12-18, 2011

www.wbj.pl

9

Opinion

COURTESY OF THE WORLD ECONOMIC FORUM

Divided we fall

P

olitics trumped sensible economics in the United States this summer, when Congress and President Barack Obama could not agree on taxes, entitlements, deficits, or an investment stimulus. Europe’s leaders were also paralyzed – ruling out defaults and devaluations, as well as deficits and stimulus. And, having run negative real interest rates, printed money, plowed in liquidity, and subsidized commercial banks, central

bankers everywhere appear to have concluded that they, too, have reached the limit of what they can do. As a result, few people today doubt that the world is drifting, rudderless and leaderless, towards a second downturn. The debate about whether we face a “new normal” of slower growth has been resolved: nothing now looks normal. Muddling through has failed. Unable to conclude a global trade deal, climatechange agreement, growth pact, or changes in the financial regime, the world is likely to descend into a new protectionism of competitive devaluation, currency wars, trade restrictions, and capital controls.

Time for a growth pact But this is not a time for defeatism. Countries claiming to have reached the limit of what they can do really mean that they have reached the limit of what they can do on their own. The way forward to sustained growth and employment is not through a flurry of one-off national initiatives, but rather through global policy coordination. That was the goal back in April 2009, when the G-20 set three critical

tasks. The first, preventing a global depression, was achieved. The other two – a growth pact, underpinned by a reformed global financial system – should now be the main items on the G-20’s agenda when it meets in November. In 2010, the International Monetary Fund estimated that a coordinated approach to macroeconomic, trade, and structural policies could achieve 5.5 percent higher global GDP, create 25-50 million additional jobs, and lift 90 million people out of poverty. But a global growth pact looks even more indispensable today, given the world economy’s structural problems and the huge imbalances between production and consumption. So, first, we must restore the broad vision of global cooperation contained in the G-20 growth pact. But a broader and deeper agenda is needed: China should agree to implement policies to raise household spending and consumer imports; India should open its markets so that its poor can benefit from low-cost imports; and Europe and America must boost competitiveness in order

to increase their exports.

A new global regime The G-20 was adamant in 2009 that future stability required a new global financial regime. The problem is already evident. Europe’s bankingsector liabilities are nearly five times higher than in the US, at 345 percent of GDP. Germany’s banks are leveraged at 32 times their assets. So, not only is bank recapitalization essential for financial stability, but so is a reformed euro, built on fiscal and monetary coordination and an enhanced role for the European Central Bank in supporting individual governments (not individual banks) as lender of last resort. When it comes to jobs, as the Nobel laureate economist Michael Spence has shown, growth is now a necessary but insufficient condition for job creation. Today’s epidemic of youth unemployment, in particular, requires new approaches – a development bank, for example, to help employ the bulging youth population in the Middle East and North Africa, and training and apprenticeship programs elsewhere. The G-20’s growth

Gordon Brown

compact must be a jobs compact, too. The G-20, which represents 80 percent of world output, came into its own in 2009 as the only multilateral body able to coordinate global

“Countries ... have reached the limit of what they can do on their own” economic policy. Unfortunately, its member states soon abandoned that goal and defaulted to national solutions. Predictably, going it alone has proven futile in ensuring economic recovery. The G-20’s time has come again. The sooner French President Nicolas Sarkozy calls the G-20 together to act, the better. ● Gordon Brown is a former prime minister of the United Kingdom. Copyright: Project Syndicate, 2011. www.project-syndicate.org

Analysis

Lithuania’s Visaginas nuclear power plant: a race against time

Kinga Dudziƒska

T

he Visaginas nuclear power plant in Lithuania is a regional project to be pursued in cooperation with the Baltic States and Poland. The project is aimed at enhancing energy security in the region, and it is encountering mounting obstacles. With Rosatom, the Russian state nuclear energy corporation moving quickly on other nuclearplant projects in nearby Kaliningrad and Belarus, timing is crucial, and the success of Lithuania’s Visaginas plant is likely to depend on the speed with which it is implemented.

A race against time The shutdown of the Ignalina nuclear plant in December 2009 resulted in a drop in Lithuanian’s budget revenues along with higher consumption of other fuels. This has made energy independence a priority for Vilnius. For Lithuanian authorities, the Visaginas nuclear power plant also

represents a crucial step in enhancing energy security in the region. The plant is due to be completed by 2020, in cooperation with strategic investor Hitachi GE Nuclear Energy. Latvia, Estonia and Poland are also expected to participate in the project as partner countries. But while the Lithuanian power plant is still in the planning stages, construction of another nuclear plant in the nearby Russian oblast of Kaliningrad has already started, and work is also progressing on a nuclear plant to be built in Belarus. Under these circumstances, the pace of implementation might play a decisive role, in particular regarding investors’ interest in the Visaginas project. Time, however, is not on Lithuania’s side, even though authorities have announced the terms of financing for the Visaginas power plant will be drawn up by the end of the year.

Tensions with Russia Lithuania considers the new nuclear power plant as a priority also because the country is uncomfortably dependent on Russian energy supplies. Authorities stress that Vilnius is paying the highest price for gas in the region, and have asked the European Commission to investigate Gazprom’s pricing policies. Price relations depend first of all on negotiated contracts, but also on political considerations. Russian gas giant Gazprom is now protesting amendments Lithuania recently made to its national gas legislation. They involve the separation of production, trade and transmission, in line with European Union legislation. These would be a threat to Gazprom’s simultaneous hold on supplies and ownership of gas transmission pipelines. Lithuania has until November to decide how the amendments to its

national gas law will be implemented, and in the meantime negotiations with the Russian firm will continue. Complete and effective implementation of the new law could alter the market conditions in which the Russian company operates and it could be an example for other EU countries to follow.

Polish participation The changing external situation means that the viability of the Lithuanian investment could be called into question. Poland’s participation in this capital-intensive project rests on the implementation of parallel projects, in particular on the construction of the Polish-Lithuanian LitPol energy link. Only then would Poland gain a stable source of energy, ensuring constant supply to its northeastern regions, and have a chance to draw on Lithuania’s experience and know-how – a vital factor

in view of its planned domestic nuclear projects. It is unclear at the moment, however, on what conditions the Visaginas project is to be implemented. Latvia’s difficult economic situation may hinder its participation. Estonia, in turn, is planning to invest heavily in renewable energy sources. It is also likely that investors’ interest in the project and ultimately their success will depend on the rapidity with which other nuclear projects in nearby Kaliningrad and Belarus are implemented. This first-come, first-served basis is something that Russia understands perfectly well. By safeguarding markets, Russia could ultimately increase its influence on the energy sector in the region. ● Kinga Dudziƒska is an analyst at The Polish Institute of International Affairs (PISM). www.pism.pl

Editorials are the opinions of WBJ’s editorial board. Other opinions are those of the authors alone. Comments, opinions and letters should be sent to editor@wbj.pl. Please include a name and contact information and clearly indicate if they are to be considered for publication.

PUBLISHER VALKEA MEDIA SA

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

CO-MANAGING EDITOR

REAL ESTATE EDITOR

CONTRIBUTORS

PRODUCTION MANAGER

GARETH PRICE (GPRICE@WBJ.PL)

ADAM ZDRODOWSKI (AZDRODOWSKI@WBJ.PL)

E. BLAKE BERRY EWA BONIECKA PIOTR ÂLUKASKI RICHARD WERNICK JOANNA WÓYCICKA

PIOTR WYSKOK

CO-MANAGING EDITOR

ALICE TRUDELLE (ATRUDELLE@WBJ.PL)

COPY EDITORS

DAVID INGHAM ELLA PALKA JOURNALIST

POLITICS EDITOR

KATARZYNA PIASECKA

REMI ADEKOYA

INTERN

(RADEKOYA@WBJ.PL)

PATRICK HALLIDAY

MARKETING &SALES

PR & MARKETING SPECIALIST

AGNIESZKA BREJWO

NATALIA ROGACZEWSKA (NROGACZEWSKA@WBJ.PL)

MARKETING &SALES DIRECTOR

PRINT & DISTRIBUTION COORDINATOR

KRZYSZTOF WILI¡SKI (DYSTRYBUCJA@VALKEA.COM)

(ABREJWO@WBJ.PL) GRAPHIC DESIGNER

BOOK OF LISTS SPECIALIST

¸UKASZ MAZUREK JOWITA MALICH (JMALICH@WBJ.PL)

COLUMNISTS

PAUL FOGO JUDITH GLINIECKI ADAM NARCZEWSKI ANDREW NAWROCKI

MANAGING DIRECTOR MONIKA STAWICKA

CARTOONS

PIOTR WYSKOK

MAGDALENA KARPI¡SKA (MKARPINSKA@WBJ.PL)

JOANNA RASZKA (JRASZKA@VALKEA.COM) SUBSCRIPTIONS MANAGER

AGNIESZKA MICHALIK (AMICHALIK@VALKEA.COM)


10

KRYNICA ECONOMIC FORUM

www.wbj.pl

SEPTEMBER 12-18, 2011

The euro zone

PM Tusk: Europe should remain ‘open’

Will the single-currency project survive?

Europe should strive to remain open and inclusive, said Donald Tusk in Krynica At the open of last week’s Economic Forum in KrynicaZdrój, Prime Minister Donald Tusk said that the European Union was devised for hard times and therefore the current crisis should not be viewed as a threat to its existence. European countries must now fight the urge to conduct divisive policies and strive to maintain openness and unity, said Mr Tusk. Questioning free movement within the Schengen area or the merits of enlargement would be a sign of capitulation, he added. Instead, Europe should strive towards full integration and openness to new countries, he said. “Today in Krynica, tomorrow from Warsaw, but also from Brussels and from Strasbourg should resound a very powerful voice, sustaining the spirit of all who believe in European integration, not only in the sense of status quo, but also further integration,” said the prime minister. Mr Tusk congratulated Moldova’s prime minister and Georgia’s president, also present at the forum, for the pace of reforms conducted by their countries. “A few years ago no one thought that the path of Georgia and Moldova towards Europe would be so fast,” he said. Poland and its neighbors, which include some of the EU’s newest members, are among those who have been weathering the storm the most successfully. Among the top five countries in Europe in terms of economic growth for the second quarter – Estonia, Latvia, Lithuania, Poland and Sweden – four are from the CEE region, the PM pointed out. Alice Trudelle

used to exceed that level sometimes,” Horst Koehler, the former president of Germany, said during a panel discussion. “The monetary union needs a new framework of political and economic action, but basically the core problem is the sovereign-debt issue, as well as the lack of structural reform to improve competitiveness,” he added. Croatian Finance Minister Martina Daliç, too, still has faith in the euro. When asked if her country’s government, which signed an accession agreement with the European Union in June of this year, was “rethinking” its plans to adopt the euro, she answered that it was not. “Contrary to what some are saying, I believe that in 10 years’ time, the euro zone will [still] exist. Too much political and economic effort has been put into the project for it to just be given up like that,” she said, adding that 80 percent of Croatian household deposits were denominated in euros, which means her country is already strongly connected to the currency bloc.

Given the ongoing travails of Greece and worries over Italian and Spanish finances, the imminent death of the eurozone project is being forecast by many. Nevertheless, the consensus of politicians, past and present, at the Economic Forum in Krynica-Zdrój was that talk of the end of the euro zone is exaggerated. That’s not to say the consensus was overly positive – if the continent’s politicians don’t take immediate, decisive action to tackle its problems, the doomsday prophets may well be proven right, many said. Opinions differed as to the seriousness of the situation, with some pointing to the relative robustness of the euro amid recent financial storms. “Although Germans are presently paralyzed by the eurozone crisis, as they had high expectations for the European monetary union at the outset, the euro remains a stable currency. The inflation rate of the euro, which is close to 2 percent, is lower than that of the former Deutsche Mark, which

Drastic overhaul needed But Polish Finance Minister Jacek Rostowski spoke in

more alarmist tones, saying there was an urgent need for structural overhaul. “The European project was not constructed to handle the kind of crisis we have today. Right now, the European Central Bank is not allowed to fund budgets but [economist John Maynard] Keynes’ great insight was that once in 80 or a 100 years such a crisis will occur which may necessitate such actions,” said Mr Rostowski. “The euro zone is made up of 17 different national budgets and one central bank. Some think the ECB doesn’t

need to supply liquidity to keep some national treasuries from going bankrupt, but are those treasuries not more important to the EU as a whole than the banks that were bailed out?” he asked.

Too much politics Business mogul Jan Kulczyk, one of Poland’s richest men, said that the main problem is too much politics in the European economy. “One of the reasons

Poland has done better than many other Western economies in recent years is because there is less politics in the Polish economy than in many Western countries. I am still optimistic for the continent … let’s not forget that the EU is the largest economy in the world, but it needs to allow more freedom,” he said. “It takes 10 times more time to patent a product in Europe than in the US, and even though 50 percent of Nobel Prize winners in medicine come from Europe, all the largest pharmaceutical firms are in the US because there is more freedom there,” he added. Mr Rostowski concluded by saying that Europe’s wealthiest countries were faced with a simple choice: They could either show solidarity with the weaker countries or they could allow the crisis to deepen in places like Greece, which could in turn lead to troubles spreading to countries like Italy and Spain. “There is no doubt that the euro zone would not be able to survive such a crisis in Italy or Spain,” he added. Remi Adekoya

EU membership

CEE nations see clear economic benefit from joining European Union FDI and exports have grown since accession, helping fuel growth – cohesion funds haven’t hurt either Poland and other European Union member states from the CEE region have become wealthier since joining the bloc, due largely to a significant rise in foreign direct investment and increased exports, according to a report prepared by PwC and unveiled at the 21st Economic Forum in Krynica-Zdrój. At a panel discussion Poland is due to receive €67 billion from the EU between 2007-2013 focused on the report, Witold Or∏owski, chief economist at has grown by about 30 percent vakia, Hungary and the Baltic CEE region attracted a total PwC and former presidential over the last seven years, com- States each have a GDP per of $243 billion over the 2004 economic adviser, said Poland’s pared to less than 8 percent capita of between 52 and 66 to 2009 period, compared to membership of the EU was GDP growth for the “old” EU percent (Poland is at about 58 $116 billion for the pre-acces15 in the same period, accord- percent) of the EU average, sion 1998-2003 period. CEE “invaluable.” with the figure standing at 73 countries’ exports have risen “Although in the last seven ing to the report. The average GDP per capi- percent for the Czech Repub- by over 60 percent since years we have seen the pendulum in the region swing from ta in Central and Eastern lic. In 2004, Polish GDP per accession. crazy optimism to very pes- Europe, measured in purchas- capita was roughly 40 percent There is also the issue of simistic moods, the overall ing power parity, rose from 40 of the EU average. EU funds, of which Poland progress that has been made is percent of the EU average in was allocated €67 billion for 2004 to 48 percent in 2010. great,” Mr Or∏owski said. the 2007-2013 budget period. ‘Manna from heaven’ Right now Poland, Slo- When it comes to FDI, the Mr Or∏owski described the GDP in the CEE region SHUTTERSTOCK

COURTESY OF KPRM

It should, but only if leaders take decisive action soon, according to panelists at the Economic Forum in Krynica

SHUTTERSTOCK

European Union

funds as “manna from heaven,” especially in the current difficult economic period. However, he warned that the near future would prove a tough and uncertain time. “I think the crisis is continuing and will continue. We are simply seeing different phases of it. We cannot count on capital always being available,” he said. “If, for example, Greece goes bankrupt, there is no ruling out that Poland and other CEE countries would suddenly be unable to raise funds on financial markets,” he added. Mr Or∏owski said that Poland and other countries in the region would have to be “very careful” and not make the mistake of financing their growth solely through credit, as many countries in the West had done before the 2008-09 crisis. “They were the ones which were hit the most by the crisis – we here in Poland should never forget that.” Remi Adekoya


Legal Eye: Poland locks horns with the EC on GMOs

Poland could profit from growing interest in local and traditional food

Ukrainian agriculture and food giants list on the WSE

15

12, 13

14

NATURAL STRENGTHS Warsaw Business Journal ’s special report on Poland’s food and agriculture sector

SEPTEMBER 12-18, 2011

Organic food

Going organic: Though still a niche market in the food industry, organic food is growing dynamically worldwide. With competitive prices, a large workforce and a large share of small-scale, traditional farms, Poland holds the right cards to become an important player. Although it is not likely to become the dominant method of food production any time soon, the popularity of organic farming comes as a result of increased concerns about the environment among consumers. This has led to growing demand for food produced without the use of pesticides, herbicides, chemical fertilizers, antibiotics, and genetically modified organisms (GMOs). Recent data from market research firm PMR put the share of organic food in Western Europe at around 2.5 percent of the value of the grocery market. In Poland the proportion was about 0.2 percent. On the other hand, accord-

ing to market research company Organic Monitor, the global market for organic products in 2009 stood at €40 billion, and almost half (€18 billion), of these products were bought by European consumers. Among them, Germany was the leading buyer (€5.8 billion), followed by France (€3 billion) and the UK (€2.1 billion). PMR estimated the size of Poland’s ecological food market at approximately z∏.400 million in 2009. The Institute of Soil Science and Plant Cultivation (IUNG) recently gave a considerably more conservative estimate at €50 million (z∏.200 million). This compared to markets worth €68 million in the Czech Republic, €25 million in Hungary, €12 million in Estonia, €5 million in Bulgaria, €4 million in Slovakia and €3 million in Romania. But in Poland, as in the rest of the EU, the eco-product market is growing rapidly. The

z∏.800 million and z∏.1 billion.

Rapid expansion

SHUTTERSTOCK

Poland is wellpositioned to take advantage of a growing interest in healthy food

promise for Poland

IUNG estimates that between 2000 and 2009 the market grew by an annual 20 to 30 percent. NewConnect-listed Organic Farma Zdrowia, the leading retailer of organic products on the Polish market, estimates that by 2013 the sector will be worth between

Poland lags far behind EU leaders in terms of organic agricultural landshare, with only around 2.8 percent of its total agricultural land used for organic farming. This compares to sector leaders the United Kingdom, Germany, Italy and Spain, who use 9.4, 11.7, 12.9 and 17 percent of their farmland, respectively, for organic farming. However, Poland has seen one of the highest growth rates in the EU since its entry in 2004. Through 2010, both the number of organic farms and total area devoted to organic

food production had increased substantially, from 3,760 to 20,000 farms and from 82,730 to over 500,000 hectares, according to the Ministry of Agriculture. The number of processing plants also grew from 50 to nearly 300. This still leaves plenty of room for further growth, and the sector has been remarkably resilient to the global economic downturn. The trend continued in the first half of 2011, with leading retailer Organic Farma Zdrowia posting record sales of z∏.7.97 million in Q2, which represented growth of 51.6 percent on the same period a year earlier. According to S∏awomir Ch∏oƒ and Przemys∏aw Tomaszewski, respectively chairman of the board and vice president of Organic Farma Zdrowia, these good results confirm an upward trend in the organic food market. Although in H1 EBITDA was negative by z∏.47,000, this loss was as much as 92 percent lower than a year earlier, and is largely attributable to important investments, the firm said in a statement. Meanwhile, NewConnectlisted Symbio Polska, one of

Poland’s largest producers and processors of organic food, posted a net profit of z∏.166,000 for Q1 2011, up 80 percent y/y.

A conducive environment “The main advantage of the Polish organic sector is the fact that the majority of Polish farms are small and familyrun, which makes them much easier to convert,” said Artur Tyminski, co-founder of Symbio Polska. Indeed, the general consensus seems to be that the structure of Polish agriculture, which might hinder competitiveness where conventional agriculture is concerned, is favorable to organic production. The fact that Polish agriculture has remained largely non-industrialized, as opposed to many Western European countries, gives it great potential. A large labor force in the countryside and low labor costs add another advantage, as organic production is more expensive and much more labor-intensive than conventional agriculture. Because of its Continued on p. 15 ➡

Agriculture

The grain harvest was one of the worst in 50 years, but vegetable crops did better In late August, Poland’s Minister of Agriculture Marek Sawicki described this year’s grain harvest as the most difficult in 50 years. This was after heavy rains in July blighted many farmers’ yields and lowered the quality of the grain for many others. Mr Sawicki said some of Poland’s farmland looked more like rice fields than those for growing wheat, as adverse conditions delayed until August a harvest which would normally begin in July.

“This is one of the most difficult harvests for Polish producers of cereals, due to difficult weather conditions prior to and during the harvest season,” The Polish Federation of Crop Producers (KFPZ), said in a statement. Heavy rains have also affected fruit production, especially in Poland’s northwest. There, losses on some plantations reached close to 100 percent, with the Wielkopolskie voivodship being particularly affected, experts at Poland’s Agricultural Market Agency (ARR) told WBJ. With the summer grain harvest now practically com-

pleted, Poland’s statistical office (GUS) estimates this year’s harvest of basic cereals should reach 24.3-25.2 million tonnes, about 1-5 percent lower than last year.

Impact “Currently there is no data that would realistically assess the financial impact of this year’s adverse weather conditions for Polish farmers,” admitted the ARR’s experts. However, they said they expected that due to the lower quality of the grain harvested this year, a larger share will serve as feed grain. Joanna LeÊniewska, a spokesperson for KFPZ, agreed. “Intense

rainfall has lowered grain quality, and due to the poor quality of the crops in certain fields which were harvested late in the season, produce can only be used as fodder for animals,” she said. This will help to maintain domestic grain prices at a relatively high level for 2011 and 2012, says the ARR. But that, in turn, will have a negative impact on pork and poultry production, for which profitability levels will be low, the agency predicted. Ms LeÊniewska agreed that it is difficult to tell what longterm financial impact this harvest will have. “But certainly some farmers will have less

SHUTTERSTOCK

Heavy rains have mixed effect on harvests

Grain prices are expected to remain high in 2011-2012 income due to lower yields and poorer grain quality. And this will probably translate into less investment next season,” she said. In August, the Council of Ministers passed a resolution on establishing a program of assistance for farmers whose Continued on p. 14 ➡

In this supplement Going organic . . . . . . . . . . . . . . . .11, 15 Difficult harvest . . . . . . . . . . . . . .11, 14 Poland’s agri-food sector . . . . . .12, 13 Ukrainian firms on the WSE . . . . . .14 Food sector consolidation . . . . . . . .15 EU GMO law . . . . . . . . . . . . . . . . . . . .15


12

POLAND’S FOOD SECTOR

www.wbj.pl

SEPTEMBER 12-18, 2011

Poland’s agri-food sector

Tradition and modernity exports of agri-food products and accelerated the development of the Polish food economy,” said Miros∏awa Tereszczuk from the Institute of Agricultural and Food Economics (IERiG˚) at the National Research Institute in Warsaw. Today agri-food exports represent over 10 percent of total national exports.

SHUTTERSTOCK

A bite out of the crisis

Small-scale, traditional farming may prove to be one of the Polish agri-food sector’s best assets

Meat exports Meat is the most popular Polish food export. Poland’s antipathy to genetically modified organisms – including for feed – contributes to the image of country’s meat as “natural.” Pork, veal and beef are the country’s best-selling meat products abroad. Poland’s government plans to invest more in meat production and increase its sale abroad in the coming years. It is estimated that in H1 of 2011, production of

beef may rise by 4 percent as compared with H1 of 2009. Poland is also successful in the export of poultry meat. Polish goosemeat products dominate the German market. Meat from Poland is also making its mark in Asian markets. This year Chinese authorities approved some Polish meats for import. The top Polish meat exporters include Zak∏ady Mi´sne ¸meat-¸uków, Food Service and PKM Duda. ●

As local and traditional food products become increasingly popular, Poland might just have found the right jingle The year 2011 has been an important one for Polish agrifood exports. Poland’s turn at the presidency of the EU Council started in July and, in January, Poland was the partner country at the Green Week in Berlin (IGW). Both represent huge PR opportunities, considering the dominance of EU countries in general and Germany in particular as markets for Polish exports of agri-food (food produced agriculturally). Despite fears that EU

accession would flood the Polish market with foreign products, exports have surged and Poland has been a net exporter for several years, with over 80 percent of exports directed to EU markets. Since 2003, the value of exports has increased from €4.0 billion to €10.5 billion in 2010. And in 2010, the Agriculture Ministry estimates there was a trade surplus of €2.6 billion. “Poland’s membership in the European Union produced a dynamic increase in

Agri-food exports have also proven resilient in the face of recent crises. While wavering demand from EU consumers during the global slowdown did affect Polish agri-food exporters, the decline was moderate. Sales of Polish agri-food products abroad dropped in 2009 for the first time since Poland entered the EU, but only by around three percent, which compares to a 15 percent drop for exports in general. This was in large part due to the depreciating z∏oty, which helped make all Polish exports more competitive. But agriculture in 2009 was nonetheless the only sector of the economy that had a positive balance of trade, recording a €2.2 billion surplus according to Poland’s Agriculture Ministry. Floods and droughts in 2010 and heavy rains in 2011 were hard on the Polish harvest. But despite this, Polish food exports grew by over 15 percent between 2009 and 2010, to €13.3 billion, and are expected to grow at an even faster pace in 2011, said Agriculture Minister Marek Sawicki.

Let them eat Polish Although Poland is a leading global producer of rye, rapeseed and potatoes, as well as a leading European producer of apples and berries, it is difficult to pinpoint one dominant sector in agri-food exports. In

terms of value, Poland’s biggest agricultural export is meat, including pork, beef and various types of poultry meat. Milk products, baked goods, fish products and tobacco also account for a large share of the value of Poland’s exports. In 2010, Germans, who buy one-quarter of Polish agricultural exports to the EU, bought smoked fish, poultry meat, as well as baked goods. Britons, the second-largest EU importers of Polish food, bought chocolate, poultry meat and pork meat. Czechs imported Polish poultry, pork and cheese, while French, Italians and the Dutch purchased Polish cigarettes and beef.

When weakness becomes a strength According to experts, Polish food producers were well-prepared to enter the EU, and have been taking advantage – albeit not entirely efficiently – of EU subsidies for agriculture. Over 90 percent of food processing facilities have been modernized and are now in line with EU standards. But agriculture remains largely inefficient. Only around 30 percent of Poland’s over 1.5 million farms are considered by the EU to be competitive, modern farms. A mere 225,000 farmers with plots of over 15 hectares produce about 90 percent of agrifood products. The overwhelming majority of Polish farms are smaller than five hectares (70 percent of Polish farms account for less than 20 percent of all arable land) and remain loss-making, highly inefficient and oriented towards self-supply. The resulting situation is that agriculture employs 15 percent of Poland’s workers and generates only four percent of GDP. However, small-scale, “traditional” farming, which uses

Dairy exports After decreasing by almost 30 percent annually in 2009 (to €634 million), the balance of foreign trade in Polish dairy products rose to €760 million in 2010, mainly due to a significant rise in transaction prices, according to the Agriculture Ministry. Prior to EU accession, Poland’s main dairy export was milk powder (around 50 percent of the total value). Dairy exports are now dominated by cheese (35 to 40 percent of the total value). Exports of yogurt and milk drinks are also growing dynamically. Highly processed products form over

60 percent of total dairy exports. About 80 percent of Polish dairy exports go to European Union member states. Russia lifted its ban on Polish dairy imports in 2008, and has since become an important export market as well. Like its meat products, the popularity of Poland’s dairy products is owed to their “natural” image and advantageous prices. Poland’s top dairy exporters include Spó∏dzielnia Mleczarska “Mlekovita,” Okr´gowa Spó∏dzielnia Mleczarska w ¸owiczu, and Spó∏dzielnia Mleczarska w ¸apach. ●


SEPTEMBER 12-18, 2011

POLAND’S FOOD SECTOR

Fruit and vegetable exports Poland is an important producer of fresh fruits and vegetables, as well as their preserves, such as juice concentrates and pickled cucumbers. Whereas in the period of January-November 2010 the biggest market for fresh Polish fruits was the Commonwealth of Independent States, both fresh vegetables and preserves were exported predominantly to EU countries. few chemicals, results in agriculture products that are perceived as healthy, authentic and which have a smaller impact on the environment. In other words Polish farms, compared to their highly industrialized and large-scale Western European counterparts, are well-positioned to cater to seekers of natural, traditional products.

A wise bet And their ranks among European consumers are growing. “We are witnessing a trend of moving away from fast food,” Mr Sawicki told WBJ. “Consumers are looking for traditional, natural products that are safe and without artificial additives and preservatives.” And these customers are prepared to pay. “There is a growing market for high-quality ecological and regional products, and European consumers prefer to accept a high quality product even if it is a bit more expensive, but produced in line with nature, using traditional methods,” commented W∏adys∏aw ¸ukasik, president of the Agricultural Market Agency (ARR). This, it seems, is the bet Poland has made to promote Polish food in a year of highvisibility within the EU. For the Green Week in Berlin, Poland prepared “an invitation to a culinary journey of discovery around Poland’s most attractive regions, where people still live in harmony with nature and where they still prefer traditional foods,” in minister Sawicki’s words. According to him, the “wisdom” of keeping traditional

Importantly, unfavorable weather conditions severely affected Poland’s fruit and vegetable sector in 2010. Fruit crops decreased by 25 percent, whereas the production of field vegetables fell by 13 percent, amounting to 2.7 and 4.2 million metric tons respectively. Experts predict that the period of 2010/2011 will see a decrease in exports of almost all fruits, vegetables and their preserves.● forms of farm management allows Poles to offer products which modern consumers are now looking for. “One could say we are modern traditionalists,” he said.

Get them organized Polish agri-food exports have the advantages of high quality, competitive prices, a large work force and no shortage of investment. But are farmers and entrepreneurs taking advantage of the situation? On the positive side, organic farming is developing quickly, and this trend is expected to continue. This year, the Agriculture Ministry is also launching a program to revive Polish local markets, where farmers will be able to sell their products directly to consumers. Efforts are also being made to develop agritourism, and the Agriculture Ministry has devised a common promotion strategy together with the Polish Information and Foreign Investment Agency (PAIiIZ) and the Polish Tourist Organization (POT), which launched at the Green Week in Berlin in January. But according to all of the experts WBJ consulted, the level of disorganization in the market remains a sizable obstacle. Farmers need to form groups and build closer relations with food processing businesses. Producers also lack organizations as well as distribution channels and retail facilities, and should aim to bring together production, processing and retail. Exporters also tend to be loosely connected and do not benefit from strong exporter’s clubs.

Let them eat Polish Biggest export markets for Polish agri-food products, 2010 Country

Value (€ billion)

Germany

2.973

United Kingdom

0.923

Czech Republic

0.849

France

0.794

Italy

0.762

Russian Federation

0.752

Netherlands

0.750

EU27

10.466

Commonwealth of Independent States

1.376 Source: Agriculture Ministry

“Many producers are too small to act independently and conclude great contracts on distant markets,” said the ARR’s W∏adys∏aw ¸ukasik. “The weakness of Polish exporters is that they cooperate weakly with each other on external markets.” Polish agri-food products also lack a long-term promotional strategy. Indeed, although the Polish diaspora, which accounts for an important part of EU demand, buys products that they know from home, there are very few strong, recognizable Polish brands. It also does not help that Polish products are not always sold under their Polish food producers’ brand name in Europe. According to Mr ¸ukasik, Polish food producers and exporters also lack support from financial institutions. “Polish exporters do not have

“Consumers are looking for traditional, natural products ... and they are prepared to pay” as broad insurance available to them as their Western European counterparts, and are therefore more at risk when it comes to delays in deliveries and the like.“

signed a protocol which was described as a “milestone” on the way to exporting pork meat to the Chinese market. In February 2011, Polish poultry exports received the green light from Chinese authorities. But according to Mr Lee, Polish businesspeople are generally not very used to doing business with Asian countries, instead focusing on European markets. The lack of a developed and established network for economic cooperation is another factor slowing down trade. Closer to the east, trade with the Commonwealth of Independent States (CIS) is being revived. These former Soviet republics used to be Poland’s main trade partners, but trade plummeted after the fall of the Soviet Union and Poland’s entry to the EU. Relations with Russia also suffered under the leadership of the Law and Justice (PiS) party, and between 2005 and 2007 some Polish exports were subject to an embargo. In 2010, exports to the CIS constituted only around 10 percent of total agri-food export value, amounting to €1.4 billion. But this represented an increase of as much as 36 percent from 2009, according to the Agriculture Ministry. Rebuilding exports with Russia and CIS countries is difficult and things are progress-

www.wbj.pl

ing slowly. “In some cases Polish companies were replaced by others from the EU, Argentina or New Zealand, who have secured long-term agreements,” said Mr ¸ukasik. But, according to IERiG˚’s Miros∏awa Tereszczuk, that is where Polish food exporters should concentrate their efforts. “Eastern markets, in my opinion, are the future.”

Green rush? With relative geographic proximity, competitive prices and EU membership, Poland is well-positioned to tap into eastern markets. But although their importance is bound to increase, the EU, and Germany in particular, are expected to remain the principal destination for Polish agri-food exports for the near future.

13

An increased budget for promotion, as well as concerted strategies, should enable Polish producers and exporters to benefit from good visibility at the European level this year. High-quality products, which answer a growing demand for natural and traditional food, sport good chances of being well-received. Lack of cohesion among and between Polish farmers, producers and exporters will likely continue to impair their ability to make the most of this situation. But on the other hand, this leaves vast investment opportunities for entrepreneurs interested in importing Polish food and agricultural products and, according to Minister Sawicki, those investors should hurry. Alice Trudelle

Upward trend Poland's agricultural exports and imports, as well as the resulting trade balance, in € billion 15 Exports Imports

12

Balance 9 6 3 € bln

2004

2005

2006

2007

2008

2009

2010

Source: Institute of Agricultural and Food Economics (IERiG?), Ministry of Agriculture

Looking east For the time being, Polish exports remain competitive in the EU market because of their price. But this could change, warned Miros∏awa Tereszczuk. “In fact it has already changed since Poland’s EU accession. Prices are going up, we see it this year, with everything going up by two, three percent, and it will continue.” On the one hand, Poland must deal with an ongoing liberalization process on the EU food market. Cheaper products from Asia or MERCOSUR countries (Argentina, Brazil, Paraguay, and Uruguay) are being made available to European consumers. But these markets, which have led the global recovery, also have consumers with increasing purchasing power, and this could also be an opportunity for Poland. For example, a new EUSouth Korea free trade agreement, which came into force in July 2011, could bring tangible results, according to Tai-Sik Lee, general director of the Korea Trade-Investment Promotion Agency (KOTRA) in Warsaw. Prospects for Polish pork meat in particular are looking up. The Agriculture Ministry is indeed making efforts to facilitate trade with Asia. In May 2010 Minister Sawicki went on an official visit in China and WBJ_125x170_CMB_EL.indd 1

9/9/11 10:59 AM


14

POLAND’S FOOD SECTOR

www.wbj.pl

SEPTEMBER 12-18, 2011

Stock exchange

Ukrainian agriculture firms take to the WSE A growing number of Ukrainian firms are raising capital by listing on the Warsaw Stock Exchange (WSE), as they continue to look for alternative sources of funding outside their own country. Companies involved in agriculture and food production form the majority of all Ukrainian firms on the WSE. In May the WSE launched the WIG-Ukraine, listing firms which have their headquarters in Ukraine or which do most of their business there. The first index of its kind in Europe, the WIG-Ukraine now comprises 10 Ukrainian firms. The cre-

ation of the index is a consequence both of the increased interest from Ukrainian firms in the WSE, as well as of the bourse’s stated strategy to attract more firms from the east. Although it also includes coal giants Sadovaya and Coal Energy, the WIG Ukraina mostly comprises firms dealing in agricultural and food products. Among the agriculture firms currently listed on the WSE are Kernel, a manufacturer of sunflower oil, worth almost z∏.900 million; Astarta, a sugar producer valued at z∏.666.4 million; Milkiland, a producer of dairy products worth z∏.167; and Agroton, a diversified farming group valued at z∏.162 million. According to specialists, there is potential for many more such firms to join the WSE.

Ukrainian growth The makeup of the WIG-Ukraine index on the Warsaw Stock Exchange Company

SHUTTERSTOCK

Warsaw’s bourse aims to continue to attract firms from Poland’s eastern neighbor in the future

Sunflower oil firm Kernel debuted on the WSE in March

Share in index (%)

Sector

1.

KERNEL

34.500

Agriculture

2.

ASTARTA

25.117

Agriculture

3.

COALENERG

8.558

Coal

4.

MILKILAND

6.374

Agriculture

5.

AGROTON

6.291

Agriculture

6.

KSGAGRO

4.546

Agriculture

7.

WESTAISIC

3.952

Batteries

8.

SADOVAYA

3.736

Coal

9.

IMCOMPANY

3.539

Agriculture

10.

OVOSTAR

3.385

Agriculture Source: Warsaw Stock Exchange

economic conditions. The firm, a sunflower oil and colza oil producer whose world market share is estimated at 4 percent, had aimed to raise between z∏.390 million and z∏.507 million in its debut, according to

ViOil Holding SA, a Ukrainian producer of sunflower, is expected to make its debut in Warsaw in the near future, although it temporarily suspended plans for its IPO in August, due to unfavorable

Bloomberg. Earlier this year, Ukrainian Minister of Agriculture Nikolai Prisa˝niuk announced that the government would scrap restrictions on exports of cere-

als that were introduced last year. The increased income for Ukrainian grain firms could potentially pave the way for further IPOs in the future. David Ingham

➡ Continued from p. 11 agricultural production has been affected by adverse weather conditions in 2011. The program will include preferential loans, with a rate of 0.1 percent interest, to help with the resumption of production, social assistance to families in the form of a z∏.5,000 allowance to individual farms and the deferred payment of insurance premiums.

On the bright side Speaking earlier this month at the Harvest Festival in Jasna Góra, Polish President Bronis∏aw Komorowski acknowledged that many farmers were

experiencing particularly difficult times, especially regarding the value obtained yields. However, the weather is never perfect and Polish farmers often have to cope with drought or overabundant rainfall, he added. And yet, despite yearly hardship, Polish agriculture is performing well, he said. “Polish farmers have contributed to the fact that our country went through a relatively mild economic crisis,” said Mr Komorowski. “Remember that until recently we were the only green island on the map of Europe, an island of economic development, surrounded by

the threat of crisis. Poland was a green island, as green as the Polish countryside and Polish agriculture,” he added. On the bright side, heavy rains have not been negative for all types of crops. Indeed, the temperatures that proved destructive for grains are believed to have boosted vegetable production. “The July rainfall and high temperatures very favorably influenced the yield of most vegetable species, especially root vegetables, cabbage and cucumbers,” said the ARR experts. Indeed GUS expects that this year’s harvest will be slightly higher for all major types of vegetables. GUS also

SHUTTERSTOCK

Heavy rains have mixed effect on harvests

While grains suffered from the heavy rains, the apple harvest is expected to benefit estimates the year’s overall fruit harvest will be higher

than in 2010, especially in the case of apples.

David Ingham, Alice Trudelle

Expert's Opinion

Factoring: a useful tool for food exporters Sebastian Grabek, Head of Factoring Department, HSBC Bank Polska S.A. Polish food is conquering foreign markets, as evidenced by recently published data from the Ministry of Economy. The data shows that over the past 10 years, exports of Polish agri-food products have increased more than six-fold. Experts from the Institute of Agricultural and Food Economics estimate that this year, their value may rise by 6% over that of 2010, exceeding €14 billion. The good results of Polish food exporters do not mean, however, that they do not suffer from difficulties associated with financ-

ing. Many of these problems can be solved with trade-finance instruments such as export factoring. Unlike a loan, not only does factoring provide financing, but it can also protect the exporter against the risk of buyers defaulting on payment. On the basis of invoices issued, the bank pays the exporter up to 90% of their value, usually the next day after the invoices are sent to the bank. This mechanism allows the company to improve liquidity and provide funding to increase sales or to pay suppliers earlier. With up to 90% of the invoice available immediately after it is issued, the exporter can offer its customers extended payment terms, and thus improve the competitiveness of its offer. In many markets, the ability

to offer longer periods can be one of the key advantages to acquire new customers. Factoring can also be used to reduce other kinds of risk, for example, associated with the insolvency of the recipient. The vast majority of food exported by Polish companies goes to countries within the euro zone. In view of the precarious situation in the euro zone, the risk is increasing that food importers functioning in the zone could become insolvent. If the Polish exporter uses the full factoring services (without recourse), the bank takes the risk of the debtor becoming insolvent. Moreover, when issuing an invoice, an exporter can not accurately predict what the exchange rate will be on the day the claim is

BROUGHT TO YOU BY HSBC BANK POLSKA S.A

settled. The use of factoring can reduce this risk – the entrepreneur receives cash for the invoice submitted to the bank usually the day following the date of sale. Export factoring is just one of many solutions for financing the food-trade business that can make carrying out these activities much easier. And that goes especially for exporters who are supported by a large, multinational financial institution, which thanks to its presence in many markets and its longterm experience can assist your company in managing receivables from foreign customers more effectively than any local bank which is not present outside of Poland. ●


POLAND’S FOOD SECTOR

SEPTEMBER 12-18, 2011

www.wbj.pl

Going organic: promise for Poland

Legal Eye

Genetically Modified Organisms 101

➡ Continued from p. 11 relatively small size, the organic market also has a higher degree of organization among and between producers, processors and retailers than the conventional agriculture sector. EU and Polish subsidies, which have provided over z∏.609 million and z∏.42 million, respectively, to the organic farming sector between 2005 and 2009, have been instrumental to the sector’s takeoff. An increase in the number of certification bodies (Poland now has 10) has also helped significantly.

The sales network for organic products in Poland has been developing rapidly, and research by PMR indicates that the number of organic stores should increase from 300 in 2010 to around 500 by the end of 2011. Eco-food chain Free Delikatesy recently announced it intends to open around 50 retail outlets in Poland by the end of 2013. But because organic food is expensive (it often costs twice as much as other foods) and retail points are mainly confined to large cities, sales of organic food in Poland are mostly restricted to wealthy urban dwellers. Western Europe’s larger retail sales networks and more affluent consumers are unfortunately difficult to access, even though Polish organic food prices can be competitive. “As with conventional products, even though Poland is a great producer of many types of foodstuffs, it is difficult to find Polish products with Polish

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

500

On August 24, the Polish government suffered another setback in its ongoing effort to comply with European Union law regulating the use of genetically modified organisms, commonly referred to as GMOs, when President Bronis∏aw Komorowski vetoed the most recent legislation restricting the use of GMOs in Polish agriculture. Four years earlier the European Commission had declared Poland’s draft law restricting the use of GMOs to be in contravention of EU law. Since that time Poland has found itself at loggerheads with the EU Commission over the use of GMOs. This most recent setback could not have come at a worse time, as Poland faces a new trial in the European Court of Justice over its ban on the use of GMOs and the potential loss of millions of euro in EU funding.

400

What’s the problem?

SHUTTERSTOCK

Awareness is key

Poland’s organic food market could be worth as much as z∏.1 billion by 2013 labels on European shelves,” said Mr Tyminski. “The organic sector in Western Europe is very well developed, and countries have their own local producers,” he added. In his opinion, it might be easier for some Polish organic producers to promote their products in Eastern European countries. Symbio Polska itself expanded its distribution channels to the east in 2010, signing a contract with a retail network operating in Lithuania, Latvia and Estonia. Wide and often deceptive use of organic-related terms like “eco” or “bio” to boost the sales of mainstream products is also an important threat to genuine organic products. One solution to this problem is to educate customers on the difference between regular and organic

food, enabling them to make more informed decisions about how their food is produced. Indeed, the main driver for the organic market is an increased awareness of healthy eating habits and the principles of sustainable development,

since these are the biggest motivating factor for buying organic food. As Mr Tyminski put it, “If they don’t know what the difference is, why would people want to buy organic?” Alice Trudelle

Growing trend Hectares of organic farmland in Poland 2003-2010 600

300 200 100 0 2003

2004

2005

2006

2007

2008

2009

2010

Source: Ministry of Agriculture

Food production

A second wave of consolidation expected High commodity prices and a fragmented market means continued consolidation is forecast for Poland’s food producers Consolidation in Poland’s food-production sector is expected to continue throughout the coming few years, with a number of major Polish and international firms eying acquisition targets in the fish, meat, and dairy sectors. Over 40 mergers and acquisitions took place in Poland’s food-processing sector last year, according to KPMG, and this year is shaping up to be a similarly busy one for the industry. One of the stand-out transactions so far in 2011 has been US McCormick & Co’s purchase

15

of Polish spices firm Kamis in June for z∏.830 million.

Next up In the seafood sector, the Graal Capital Group has said it is looking to take over three or four entities operating in the same market, with a view to enhancing its position as the biggest seafood-processing group in Poland. At present the company operates a total of nine different brands, which mainly produce canned fish, meats and vegetable salads. Consolidation is also expected in the red-meat products sector. Duda, which describes itself as the largest company in Poland in the redmeat slaughtering and packaging industry, hopes to generate z∏.208.5 million to spend on development over the next three years. First, though, its

shareholders will need to agree at an upcoming meeting to increase the company’s share capital. Spokesperson Daniel Ratajczak said takeovers are being considered as part of the company’s development plans. Daily Rzeczpospolita, meanwhile, reported that Grupa Polmlek, a dairy-products company, is eying Rzeszowska Spó∏dzielnia Mleczarska, a dairy firm based in Podkarpackie voivodship. The company declined to comment for WBJ, but coowner Andrzej Grabowski told Rzeczpospolita that Polmlek is currently in talks with a dairy products company that has annual revenues of more than z∏.100 million.

A fragmented market Experts say that chief among the reasons for the ongoing

consolidation trend is the relatively large number of small players on the market and recent high commodities prices. “Nearly all commodities used by food industry players are at all-time-high values in year-on-year terms,” said Adam Kaptur, an analyst at Bank Millennium’s brokerage house. “Because of this margins are low and profits have decreased among weaker firms, meaning the cost of buying smaller companies has dropped,” he explained. Analysts say that private equity funds, too, may be interested in buying up Polish food-production firms, due to the relative stability of the food sector and the fact that it is less sensitive to economic crisis than most other sectors. Gareth Price

Currently Poland puts severe restrictions – in fact representing a de facto ban – on the use of GMOs in Polish agriculture, as well as the sale of food products that contain GMOs to Polish consumers. The draft law vetoed by President Komorowski would have permitted the limited use of GMOs in Poland; however, it still banned the use of GMOs in animal feed, which presumably includes corn. The EU, on the other hand, regulates the use of GMOs, but does not impose an outright ban.

EU regulation The use of GMOs in the EU is regulated by Regulation (EC) 1829/2003, which I will simply refer to as the GMO Law. The GMO Law sets forth an approval process by which a manufacturer can seek approval to introduce a GMO to the European market. The approval process contains several stages, beginning with a risk assessment by the European Food Safety Authority. Depending on the results of the risk assessment, the Commission will issue a decision to approve or reject. Approval by the Commission at this stage, however, simply means that the GMO application is then submitted to the Stand-

ing Committee on the Food Chain and Animal Health for further review. If the Committee issues a positive opinion, the commission will then grant its final approval. If the committee’s decision is negative, the application is then referred to the Council of Ministers for review. The Council of Ministers’ decision will be the final one. If the Council, however, is unable to reach a decision, the matter is referred back to the Commission for final resolution. Once approved for use in the food chain, a GMO must be clearly labeled as such to enable a consumer to make an informed choice, unless it is deemed to be an “accidental” GMO.

Accidental GMO crops Crops and other food items that are accidentally contaminated by a GMO do not have to be labeled as such. By “accidentally contaminated” I mean that the farmer did not intentionally use GMO technology to produce the food item. This exception to the rule, however, has recently come under attack. On September 6, 2011, the European Court of Justice ruled that honey containing trace amounts of a GMO from pollen must first be approved for use as a GMO using the EU’s authorization process. In this particular case, beehives were located within 500 meters of a corn field using GMO technology. The contamination was accidental, but nevertheless the Court ruled that the honey must first be approved as a GMO.

GMO crops To date the EU has approved the use of GMOs in corn, cotton, rapeseed oil, soybeans and potatoes. Most of the GMO permits have been sought and issued to a limited number of agro-science companies, including Monsanto, Bayer, Syngenta and Pioneer.

Politics With elections fast approaching, it is unlikely that the Polish parliament will be able to revise the draft law to the extent necessary to prevent another presidential veto. Final resolution will need to wait till after the autumn elections. ●


Construction will launch this autumn on Neinver’s second outlet center project in Warsaw

Two theme hotels will be built as part of the Adventure World Warsaw amusement park project

17

18

LOKALE IMMOBILIA

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

Green Horizon’s green credentials Developer Skanska Property Poland has obtained LEED Gold precertification for its Green Horizon office project in ¸ódê. Skanska Property Poland also plans to secure the EU GreenBuilding certificate for the development. “The certificates ... prove that our projects are environmentally friendly, [and] also confirm excellent technical parameters of Skanska’s buildings,” Waldemar Olbryk, regional director at Skanska Property Poland, said in a statement. The Green Horizon project will consist of two buildings comprising a total of 33,000 sqm of GLA. ●

In this issue Business Garden Poznań permit 16 LC Corp's office project . . . . . .16 SkyTower topped out . . . . . . . .16 Szczecin outlet contractor . . .17 Rank Progress sells malls . . . .17 Factory Annopol Warszawa . .17 Theme hotels . . . . . . . . . . . . . . .18 NeoVillage construction launch 18 Rogowski builds in Warsaw . .18 Property-related stocks . . . . . .18

Office space

Business Garden Poznaƒ gets go-ahead SwedeCenter’s latest development will deliver some 80,000 sqm of GLA Developer SwedeCenter has received a building permit for its Business Garden Poznaƒ office complex in Poznaƒ, Wielkopolskie voivodship. The project, which will sit on a six-hectare plot located at the intersection of the city’s ul. Bu∏garska and ul. Marceliƒska, will comprise nine buildings offering a total of approximately 80,000 sqm of office and service space. Business Garden Poznaƒ is the second of three planned Business Garden-branded green business parks which SwedeCenter will develop in Poland. Construction on a similar scheme is currently underway in Warsaw; in the pipeline is an eco-friendly complex in Wroc∏aw, Lower Silesia voivodship.

Business Garden Poznaƒ is the second of three planned eco-friendly business parks The Poznaƒ investment is to be characterized by the employment of technological solutions which will allow for

reduced utility consumption, air quality control and optimized access to natural light. The project, for which

Office space

Clock starts ticking for Wola Center contractor Budimex has 24 months to complete the development, which will bring roughly 30,000 sqm of office space to the market Developer LC Corp, a company owned by Leszek Czarnecki, one of Poland’s richest men, has announced that a site in Warsaw’s Wola district that will host the Wola Center office complex has been handed over to the general contractor, Budimex. Budimex will be paid z∏.170 million for the work, which is is due to be completed in the second half of

hybrid and electric cars. The intensity of the planned development will be relatively low, with a substantial portion of the plot having been earmarked for a spacious internal garden, said Eelko Korteweg, commercial director of SwedeCenter. “We are receiving very positive feedback on the Business Garden concept, [which is] designed to create a pleasant, natural and eco-friendly environment,” Mr Korteweg said. Business Garden Poznaƒ will be developed in two phases, with the first comprising four office buildings and the second, five. The two phases are scheduled to be delivered to the market in the years 2013-2014 and 2015-2016, respectively. Construction on the first set of structures in the complex is expected to finish in the second quarter of 2013.

2013. Located on ul. Przyokopowa, at the site of a former lamp factory, the office complex will consist of four interconnected buildings that will be accessible through separate reception areas. The building will offer approximately 30,000 sqm of usable office space. All offices will have A/C with heat recovery and suspended ceilings, while the building will offer its own management system, tilt windows and 16 high-speed elevators. There will also be a covered patio section located in between the buildings that will serve as a meeting place, in addition to a two-level

underground parking area. The design of the building was furnished by Kury∏owicz & Associates, the architectural studio founded by the late awardwinning Polish architect Stefan Kury∏owicz. Mr Kury∏owicz oversaw the design of the building before he died in a tragic airplane crash in Spain earlier this year, along with his associate Jacek Syropolski and two others. LC Corp is a real estate development company that focuses on residential, office, commercial and retail projects throughout Poland. Ella Pa∏ka

SwedeCenter hopes to obtain LEED certification, will also feature green roofs, as well as parking spaces for bicycles and

Adam Zdrodowski

Czarnecki’s Sky Tower project topped out A topping-out ceremony which he is a majority sharewas held last week at the holder. AZ construction site of Leszek Czarnecki’s Sky Tower skyscraper project in Wroc∏aw, Lower Silesia voivodship. The 212 meter tower is scheduled to be completed in the second half of next year. The z∏.1 billion development, which is sitting on a 2.7 hectare plot located on Wroc∏aw’s ul. Powstaƒców Âlàskich, will comprise 236 apartments, over 21,000 sqm of office and and more than 24,000 sqm of retail space. During the topping-out ceremony Mr Czarnecki announced that most of the office space in the Sky Tower complex will be occupied by companies of the The skyscraper will be Getin Holding group in ready in H2 2012 COURTESY OF LESZEK CZARNECKI

Developer Ghelamco Poland has delivered the first phase of its Mokotów Nova office project in Warsaw. The company has obtained an occupancy permit for two buildings offering a total of 25,000 sqm of space; the whole 40,000 sqm complex is scheduled to be completed in the first quarter of next year. Designed by the Belgian Jaspers & Eyers studio, Mokotów Nova is in the process of being BREEAM-certified.

SEPTEMBER 12-18, 2011, LI 16/36

COURTESY OF KOSTRZEWA PR

Mokotów Nova first phase

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


SEPTEMBER 12-18, 2011

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Retail

New owner at Marynarska Point

Outlet Park Szczecin contractor announced

COURTESY OF ECHO INVESTMENT

Polimex-Mostostal landed the z∏.49 mln contract Polimex-Mostostal will serve as the general contractor for Echo Investment’s first outlet center project, Outlet Park Szczecin in Zachodniopomorskie voivodship. The value of the contract is z∏.48.65 million. The commercialization process is being conducted in cooperation with CB Richard Ellis. “The process is coming on very well at the moment, with close to 70 percent of the surface space rented out. Further discussions are underway, mainly with firms that are interested in larger areas,” Marcin Materny, director of the shopping centers department at Echo Investment, said in a statement. Outlet Park Szczecin will

Around 70 percent of surface space at Outlet Park Szczecin has been rented out be delivered in two phases. The first will deliver a total of 70 commercial premises, which will house, among other things, a Helios multi-

plex movie theater and a Piotr i Pawe∏ supermarket, and will be completed by the end of H1 2012. The second phase will add a further 60

commercial spaces. Outlet Park Szczecin will have a surface area of 23,000 sqm and offer 1,400 parking spaces. The original

architectural concept was devised by Vsf Creative, while STUDIO A4 has made several alterations to the project. Patrick Halliday

Rank Progress sells Legnica, ZamoÊç malls Real estate developer and investor Rank Progress has signed a preliminary sales agreement for its Galeria Piastów shopping center in Legnica, Lower Silesia voivodship. The facility will be purchased by Spain’s Bolsa Global Quimera for €68.5 million with the transaction expected to be finalized by the end of next month.

“We’ve got many investments under construction and in the pipeline. The revenues from the sale of Galeria Piastów will support our future projects,” Jan Mroczka, president of Rank Progress capital group’s management board, said in a statement. Galeria Piastów is not the first retail project which Rank Progress has decided to divest

this year. At the beginning of September, the company finalized a €44 million deal with a special purpose vehicle of Blackstone Real Estate for the sale of the Galeria Twierdza investment in ZamoÊç, Lubelskie voivodship. Earlier this year, Blackstone also acquired Galeria Twierdza I and Park Handlowy Twierdza II in K∏odzko, Lower

Silesia voivodship. Rank Progress and the American investment fund have already signed a preliminary agreement, expected to be finalized by the end of this year, for the sale of the Galeria T´cza project in Kalisz, Wielkopolskie voivodship, which is due to open in October. Active in the Polish market since 1997, Rank Progress

specializes in the development of retail projects and their subsequent lease or sale. Apart from the Galeria T´cza project in Kalisz, the company is currently also developing shopping centers in Miejsce Piastowe near Krosno, Podkarpackie voivodship, and Âwidnica, Lower Silesia voivodship. Adam Zdrodowski

Factory Warszawa Annopol construction to start Developer Neinver Polska will soon launch construction on its Factory Warszawa Annopol retail project in Warsaw. The company has just selected construction firm Budimex as the general contractor of the investment, whose value is estimated at more than z∏.61 million.

Located in Warsaw’s Bia∏o∏´ka district and scheduled to open next year, Factory Warszawa Annopol will be the largest outlet center in the Polish capital, housing some 120 stores of Polish and international brands on its 19,700 sqm of space. “Factory Warszawa Annopol

will be the second outlet center project of Neinver in Warsaw and the first retail scheme in Poland to have been BREEAM-certified at the design stage,” Barbara Topolska, general director of Neinver Polska, said in a statement. She added that the loca-

tion of the center, close to the main transportation routes in the district, will ensure good connection with other parts of the city. Completion of the scheme will roughly coincide with the modernization of Trasa Toruƒska and the delivery of Warsaw’s Northern Bridge.

Neinver has been active in the Polish market since 2000. Completed projects of the company, which is now also working on a major multi-function development in Katowice, include Factory Warszawa in Warsaw and Galeria Malta in Poznaƒ. Adam Zdrodowski

17

German investment fund SEB Asset Management has purchased one of the two office buildings that comprise the Marynarska Point office complex in Warsaw. The building was sold for €38 million by Investec GLL Global Special Opportunities Real Estate Fund. The 11-storey, class-A building comprises 13,200 sqm of office space and has a parking lot for 185 cars. The office building is currently fully leased, with its main tenants including research company AC Nielsen and ILF Consulting Engineers. It is located on ul. Post´pu in Warsaw’s Mokotów district.

Goodman builds for Metsä Tissue Developer Goodman Group will build a 26,200 sqm warehouse in Krapkowice near Opole for tissue and cooking paper producer Metsä Tissue. Construction on the facility, which is the second project realized by Goodman for this client (after a development delivered in Germany in 2008), has just commenced and is expected to finish in March 2012. “We are pleased to have been selected for the Krapkowice project which will be Goodman’s second development for Metsä Tissue,” Bla˝ej Ciesielczak, country manager for Poland at Goodman Group, said in a statement. ●


www.wbj.pl

Jarmark Europa successor Damis, the one-time owner of Warsaw’s famous but now defunct Jarmark Europa market, has signed a preliminary agreement to bring a new market to the capital. Called Eurojarmark, the new facility will be the largest flea-market in Europe, according to Gazeta Wyborcza. It will span 11 hectares on a site near the crossroads of ul. Toruƒska and ul. Jagielloƒska in the capital’s Praga Pó∏noc district. The opening is planned for autumn 2012.

Matexi’s first investment in Poland Matexi Polska, a branch of Belgian residential developer Matexi Group, will begin construction on a residential building in Warsaw’s Bemowo district in Q1 2012. The facility, which will comprise 52 apartments, will be Matexi’s first investment in Poland. Construction is expected to last up to 14 months. ●

LOKALE IMMOBILIA – REAL ESTATE

Neocity launches NeoVillage development

Adventure World Warsaw to get two themed hotels Two themed hotels which will form part of the first phase of the Adventure World Warsaw amusement park project are due to be completed in the spring of 2014 The Adventure World Warsaw amusement park, work on which is set to begin in spring 2012, will be located in Grodzisk Mazowiecki, about 40 kilometers from the capital. The themed hotels, named Aqua Hotel and Grand Resort Hotel, will be the first of their kind in Poland, Las Palm, the special-purpose vehicle set-up

to construct and manage the whole project, said in a press release. The facilitites, whose designs will tie-in with some of the themes and concepts of the park, will offer a total of 800 rooms. The three-star Aqua Hotel will be geared toward families with children. It will include 410 four-person rooms and will be directly connected to Adventure World Warsaw’s water park. The second themed hotel, Grand Resort Hotel, will provide more up-market accom-

SEPTEMBER 12-18, 2011

modation, with 28 luxury suites due to be offered among its 321 rooms. The investor behind the whole project is a Luxembourgbased international consortium of private investors. The investment is estimated to cost around €400 million. Aside from Las Palm, the group of companies involved in the project also includes architectural studio AGS Architects, as well as Jora Vision, Vekoma Rides Manufacturing, Hafema and International Destination Strategies. Katarzyna Piasecka

COURTESY OF CORE PR

18

NeoVillage will offer 146 apartments

Rogowski Development expands Apartamenty Wilanowska Rogowski Development has launched construction on the second phase of its Apartamenty Wilanowska upscale residential project in Warsaw. The new offer comprises 219 apartments scheduled for completion in Q2 2013. The units in Apartamenty Wilanowska II, whose total value exceeds z∏.200 million, will be sized from 40-324 sqm

and priced from z∏.7,800z∏.12,700 per sqm, depending on their standard and location within the estate. The Apartamenty Wilanowska complex is being built on 20,000 sqm of land located at the intersection of Warsaw’s Al. Wilanowska and ul. Dolina S∏u˝ewiecka. The investment has been designed by the JEMS

Architekci architectural studio. Rogowski Development was established in 2004. In Warsaw, the company’s completed projects include Galeria Wiatraczna and Apartamenty Cybernetyki; construction is now underway on the Apartamenty Przy WyÊcigach and Apartamenty Miƒska scheAdam Zdrodowski mes.

Developer Neocity is launching construction on its NeoVillage residential project in Warsaw. Located on ul. Konotopska in the capital’s Ursus district, the scheme will comprise five low-rise buildings offering a total of 146 apartments. NeoVillage will offer relatively small two- and threeroom apartments, sized between 37 and 70 sqm, which are now in high demand in the Warsaw market. Their prices will range from z∏.250,000 to z∏.400,000.

“In view of the considerable interest in popular segment units in Warsaw, we have decided to implement as many as 100 two-room apartments and 46 three-room apartments,” Dror Kerem Dora, managing director of Neocity, said in a statement. Neocity has been present in the Polish market since 2006. Apart from the newly launched NeoVillage scheme, the developer is currently also building a project called Intenso in Warsaw’s Wola disPatrick Halliday trict.

Property-related stocks Security

Closing price on Sep 8

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏. mln)

BUDIMEX

66.20

-7.67

65.00

109.20

-28.82

25,530,098

1,690.09

CELTIC

18.00

-7.64

15.55

60.55

N/A

34,068,252

613.23

DOMDEV

28.73

-3.27

27.45

50.80

-40.88

24,560,222

705.62

ECHO

3.44

-7.28

3.29

5.55

-25.22

420,000,000

1,444.80

ELBUDOWA

110.90

-7.58

107.00

188.40

-40.38

4,747,608

526.51

ENERGOPLD

3.00

-5.66

2.97

4.10

-23.47

70,972,001

212.92

ERBUD

19.41

11.04

14.70

61.00

-61.56

12,602,711

244.62

GANT

8.93

-12.19

8.11

20.80

-57.09

20,499,953

183.06

GTC

10.72

-11.62

10.72

24.98

-52.42

219,372,990

2,351.68

HBPOLSKA

1.04

-11.86

0.97

3.90

-70.20

210,558,445

218.98

JWCONSTR

8.21

-13.58

8.00

18.35

-50.69

54,073,280

443.94

LCCORP

0.96

2.13

0.85

1.69

-40.74

447,558,311

429.66

MARVIPOL

9.14

-0.65

7.22

12.81

-20.52

36,923,400

339.70

MIRBUD

2.51

-11.31

2.25

4.75

-41.49

75,000,000

188.25

MOSTALWAR

20.59

-11.93

20.15

69.00

-67.45

20,000,000

411.80

MOSTALZAB

1.57

-5.99

1.46

3.73

-57.10

149,130,538

234.13

ORCOGROUP

22.95

-8.57

21.25

40.00

-27.60

14,053,866

322.54

PBG

85.60

-8.94

85.60

252.00

-65.79

14,295,000

1,223.65

PLAZACNTR

2.70

-8.47

2.40

5.39

-48.77

296,738,962

801.20

POLAQUA

12.70

-9.29

12.37

20.60

-30.18

27,500,100

349.25

POLIMEXMS

1.69

-7.65

1.69

4.58

-62.86

521,154,076

880.75

POLNORD

13.05

-13.00

12.88

39.20

-66.71

23,798,439

310.57

RANKPROGR

10.63

2.21

9.49

13.60

5.46

37,145,050

394.85

ROBYG

1.17

-4.88

1.17

2.13

N/A

257,390,000

301.15

RONSON

1.05

-7.08

1.00

1.70

-37.13

272,360,000

285.98

TRAKCJA

1.64

-14.14

1.59

4.97

-62.47

232,105,480

380.65

ULMA

59.55

-3.95

57.20

88.00

-17.23

5,255,632

312.97

UNIBEP

5.20

13.04

4.47

10.30

-37.50

33,927,184

176.42

WARIMPEX

5.95

-0.83

5.90

10.89

-33.37

54,000,000

321.30

ZUE

9.74

11.95

7.90

15.14

N/A

22,000,000

214.28


MARKETS

SEPTEMBER 12-18, 2011

www.wbj.pl

Stocks report

world stock indices DJIA

NASDAQ

11,295.81 (Sep 8 close)

S&P500

2,529.14 (Sep 8 close)

-1.72% (for the week)

FTSE100

1,185.90 (Sep 8 close)

-0.66% (for the week)

DAX

5,340.40 (Sep 8 close)

-1.54% (for the week)

Heightened uncertainty

NIKKEI225 5,408.46 (Sep 8 close)

-1.44% (for the week)

8,793.12 (Sep 8 close)

-5.62% (for the week)

-2.95% (for the week)

CHANGE: -0.72%

CHANGE: -4.88%

CHANGE: -4.23%

CHANGE: -8.16%

CHANGE: -17.82%

CHANGE: -12.47%

(year to Sep 8)

(year to Sep 8)

(year to Sep 8)

(year to Sep 8)

(year to Sep 8)

(year to Sep 8)

52-week high: 12,928.50

52-week high: 2,887.75

52-week high: 1,370.58

52-week high: 6,105.80

52-week high: 7,600.41

52-week high: 10,891.60

52-week low: 10,376.00

52-week low: 2,229.12

52-week low: 1,101.15

52-week low: 4,791.00

52-week low: 5,150.05

52-week low: 8,227.63

Andrew Nawrocki, Market analyst & trader, gowebtrade.com Global stocks experienced another week of high volatility, with the VIX CBOE spiking by more than 10 percent at the beginning of the week. With stocks dipping and gaining a few percentage points each day, the sporadic movements were almost exclusively dictated by external events. On September 2, non-farm payroll data for August showed a virtual stand-still in new jobs, with essentially zero jobs created in the private sector. Though US markets closed due to Labor Day, equities around the world were hammered. The WIG lost nearly four percent, after closing 2.43 percent down last Friday. Tuesday, September 6, saw the WIG gain half a percent, the only one of five in Europe to close higher for the day. The rest of Europe

Major indices WIG

40,405.17 (September 8 close)

WIG20

2,365.94 (September 8 close)

08.09

07.09

06.09

05.09

02.09

01.09

31.08

30.08

29.08

26.08

25.08

24.08

23.08

08.09

07.09

06.09

05.09

02.09

01.09

31.08

30.08

29.08

2,200

26.08

38,000

25.08

2,260

24.08

39,000

23.08

2,320

22.08

40,000

19.08

2,380

18.08

41,000

17.08

2,440

16.08

42,000

12.08

2,500

11.08

43,000

22.08

52-week low: 2,194.07

19.08

Change year to September 8: -12.34%

18.08

52-week low: 37,368.93

17.08

52-week high: 2,932.62

Change year to September 8: -12.79%

16.08

Change for the week: -2.02%

12.08

52-week high: 50,371.74

11.08

Change for the week: -2.76%

Top 5 BEST RESBUD HERMAN NEWWORLDN BBICAPNFI

Closing 11.50 9.10 1.07 34.30 0.80

% change (week) 52-week high 27.78 12.96 24.15 12.40 20.22 1.62 17.87 48.99 17.65 1.96

52-week low 4.60 7.05 0.89 24.85 0.68

Top 5 GTC PBG GETIN LOTOS POLIMEXMS

Closing 10.72 85.6 8.41 27.8 1.69

% change (week) 13.15 9.81 8.68 8.63 8.28

52-week high 24.98 252.00 15.29 49.42 4.57

52-week low 10.72 85.60 7.98 26.40 1.69

Bottom 5 YAWAL PRONOX EKO MISPOL INTERSPPL

Closing 4.07 0.18 3.40 3.14 1.65

% change (week) -30.43 -25.00 -24.44 -23.23 -22.90

52-week low 4.00 0.18 3.34 3.14 0.18

Bottom 5 TPSA KGHM CYFRPOLSAT CEZ PZU

Closing 17.7 173.8 15.1 135 353.5

% change (week) -3.56 -3.05 -2.32 -1.48 0.14

52-week high 19.01 198.40 17.35 154.10 411.00

52-week low 15.10 113.80 13.05 118.70 322.20

52-week high 17.30 2.32 8.40 8.09 2.60

2,247.08 (September 8 close)

sWIG80

The SNB’s surprise

9,000.41 (September 8 close)

Change for the week: -4.88%

52-week high: 2,987.72

Change for the week: -5.31%

Change year to September 8: -15.86%

52-week low: 2,101.80

Change year to September 8: -22.40%

2,500

52-week high: 12,932.00 52-week low: 8,670.88

Adam Narczewski, X-Trade Brokers Dom Maklerski SA

10,000

2,400

9,500

2,300 9,000

2,200

NewConnect

44.08 (September 8 close)

WIG-Bank

08.09

07.09

06.09

05.09

02.09

01.09

31.08

30.08

29.08

26.08

25.08

24.08

23.08

22.08

19.08

18.08

17.08

16.08

12.08

8,000

08.09

07.09

06.09

05.09

02.09

01.09

31.08

30.08

29.08

26.08

25.08

24.08

23.08

22.08

19.08

18.08

17.08

16.08

12.08

11.08

2,000

11.08

8,500

2,100

5,563.46 (September 8 close)

Change for the week: -2.61%

52-week high: 64.04

Change for the week: -5.96%

52-week high: 7,387.49

Change year to September 8: -28.62%

52-week low: 44.66

Change year to September 8: -15.02%

52-week low: 5,222.29

6,200

47.0 46.5

6,000

46.0 45.5

5,800

45.0 5,600

44.5 44.0

SOURCE: WSE

08.09

07.09

06.09

05.09

02.09

01.09

31.08

30.08

29.08

26.08

25.08

24.08

23.08

22.08

19.08

18.08

17.08

16.08

12.08

5,200

08.09

07.09

06.09

05.09

02.09

01.09

31.08

30.08

29.08

26.08

25.08

24.08

23.08

22.08

19.08

18.08

17.08

16.08

12.08

11.08

43.0

11.08

5,400

43.5

closed in the red, with investors increasingly concerned that Germany’s financial aid will dry up as discontent continues to grow in the country. Worries were shortlived, as Germany’s top court ruled in favor of contributing more to the euro zone’s rescue fund the next day. The WIG shot up by 3.14 percent, with financials and energy stocks doing particularly well. Thursday, eagerly awaited by investors, had both Fed chairman Bernanke and President Obama addressing the economic situation in the US. Mr Bernanke’s speech was lackluster at best, while President Obama announced an ambitious new plan to add jobs. Despite this and a strong speech to Congress, markets closed lower in Europe on Friday. The WIG plummeted 4.2 percent. ●

Currency report

Other indices mWIG40

19

The Swiss franc remained the main star of the currency market. On Tuesday, the Swiss National Bank (SNB) announced it would defend the level of CHF1.20 to the euro at all costs. The Swiss franc, which has been gaining value due to worsening global sentiment, became too much of a burden for the Swiss economy and the authorities reacted. The EUR/CHF instantly advanced, helping Swiss franc credit holders in Poland and Hungary as the CHF/PLN and CHF/HUF dropped instantly. The CHF/PLN achieved a spectacular drop from z∏.3.84 all the way to z∏.3.45 in three hours and oscillated around z∏.3.52 till the end of the week. Due to worse macro indicators from the US as well as no clear declarations from Federal Reserve chairman

Ben Bernanke and US President Barack Obama about any monetary or fiscal actions by the country, the dollar continued to gain as investors moved funds to the still “safe” US treasuries. The EUR/USD continued its September downward movement, declining from $1.42 all the way to $1.38. The increased risk aversion was not good news for the z∏oty. The local currency appreciated against the franc due to the SNB’s decision, but lost value against the majors. The EUR/PLN continued to climb, reaching z∏.4.33 at one point, the highest level since November of 2009. It finished the week at z∏.4.30. The USD/PLN reached plummeted z∏.3.14 (it finished the week at z∏.3.11), the highest since November of 2010. ●

currency rates 3.8726

3.8383

3.8776

3.8759

4.0142

05.09

06.09

07.09

08.09

09.09

3

SOURCE: NBP

3.8116 02.09

0.1045 09.09

0.1016 08.09

0.1015 07.09

0.1007 06.09

0.1014 05.09

0.1008 02.09

09.09

08.09

07.09

06.09

PLN-100JPY

5

4

3.5539

3.4699

3.4952

3.5023

3.7466

PLN-RUB

0.12

0.08

05.09

3.0

02.09

4.9760 09.09

4.7785

3.5

3.7865

PLN-CHF

4.0

08.09

4.7918 07.09

4.7894 06.09

4.7959

4.7431 4

02.09

3.1148 09.09

2.9984 08.09

2.9941 07.09

2.9698 06.09

2.9748 05.09

02.09

2.9277

4.3139 09.09

4.2187

3.0

2.5

PLN-GBP

5

05.09

PLN-USD

3.5

08.09

4.2182 07.09

4.2135 06.09

05.09

4.1687 02.09

4

4.2055

PLN-EUR

5


20

THE LIST

www.wbj.pl

SEPTEMBER 12-18, 2011

Corporate Services

Law Firms Ranked by total number of board-certified lawyers

Languages used

Rank

Number of lawyers

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

Salans D. Oleszczuk Kancelaria Prawnicza Sp.k. Rondo ONZ 1, 00-124 Warsaw 1 22 242-5252/22 242-5242 warsaw@salans.com www.salans.com

www.bookoflists.pl

Unlicensed Total number of lawyers Licensed board-certified (Master of advocates / Foreign / lawyers / Law legal Tax advisors degree) Total number of Licensed / advisors lawyers Training for license

English / French / Russian

German / Spanish / Italian

Other

Main specialization / Other specializations

Global affilation

Total employees / Year founded

Top local executive / Title

Tomasz Dàbrowski

71 140

15 47

3 6

17 52

✓ ✓ ✓

✓ ✓ -

-

All specializations

Salans

240 1991

71 135

28 43

4 9

50 40

✓ ✓ ✓

✓ ✓ -

Korean

Tax advisory for business entities WND

WND

255 1992

CMS Cameron McKenna Dariusz Greszta Sp.k. ul. Emilii Plater 53, 00-113 Warsaw 3 22 520-5555/22 520-5556 warsaw@cms-cmck.com www.cms-cmck.com

69 145

23 47

5 4

21 46

✓ ✓ ✓

✓ ✓ ✓

Japanese

Commercial and corporate law Energy law; trial law; antimonopoly and competition law

CMS Cameron McKenna; CMS

254 1989

Andrew Koz∏owski

So∏tysiƒski, Kawecki & Szl´zak Sp.k. ul. Wawelska 15B, 02-034 Warsaw 4 22 608-7000/22 608-7070 office@skslegal.pl www.skslegal.pl

64 102

9 52

3 5

5 31

✓ ✓ ✓

✓ ✓ -

-

Commercial and corporate law Mergers and acquisitions; intellectual and industrial property law; trademark protection; arbitrage; trial law

Global Advertising Lawyers Alliance; EuroITCounsel; International Trademark Association; European Employment Lawyers Association; Attorney’s Club

205 1991

Rudolf Ostrihansky

Domaƒski Zakrzewski Palinka Sp.k. Rondo ONZ 1, 00-124 Warsaw 5 22 557-7600/22 557-7601 dzp@dzp.pl www.dzp.pl

63 143

13 50

3 7

23 58

✓ ✓ ✓

✓ ✓ ✓

Portuguese

Commercial and corporate law Mergers and acquisitions; labor and social insurance law; PPP; infrastructure

WND

243 1993

Krzysztof A. Zakrzewski

44 81

16 28

9

1 29

✓ ✓ ✓

✓ ✓ ✓

Norwegian; Portuguese

Commercial and corporate law; mergers and acquisitions; venture capital and private equity Technology; media; telecom; copyright law; intellectual property and industrial law; pharmaceutical law; real estate; securities

Baker & McKenzie

155 1992

Marcin Gmaj

42 69

9 26

5 1

7 20

✓ ✓ ✓

✓ -

WND

Commercial and corporate law Real estate, construction and infrastructure; banking and finance; securities and capital markets; trial law and arbitrage

Clifford Chance

124 1992

Grzegorz Namiotkiewicz

41 68

21 18

2 2

27 20

✓ ✓ ✓

✓ ✓ ✓

WND

Technologies; media; telecom Commercial and corporate law; mergers and acquisitions; antimonopoly and competition law

Eversheds International Limited

106 1998

Krzysztof Wierzbowski

39 70

25 14

-

13 18

✓ ✓ ✓

✓ ✓ ✓

-

Real estate and investment process Intellectual and industrial property rights; mergers and acquisitions; adjective law

Interlex; Terra Lex

82 1992

Zbigniew Drzewiecki; Andrzej Tomaszek

36 89

WND WND

4 1

28 25

✓ ✓

✓ ✓ -

Czech; Slovak

Commercial and corporate law Banking and finance; trial law; labor law and social insurance

WND

238 1999

Amadeusz Krawczyk

36 68

7 24

5 5

27 23

✓ ✓ ✓

✓ ✓ ✓

-

Mergers and acquisitions Banking and finance; commercial and corporate law; real estate; capital market; corporate advisory

White & Case LP

137 1991

Witold Dani∏owicz

35 75

26

9

18 22

✓ -

✓ -

-

Technologies; media; telecom (TMT business law) Mergers and acquisitions and other investment projects; venture capital and private equity; real estate and construction law; energy law; public orders

WND

91 1996

Stanis∏aw Grynhoff; Piotr Woêny

35 63

15 20

6

3 25

✓ ✓ ✓

✓ ✓

-

Commercial and corporate law Trial law; mergers and acquisitions; banking and finance

WND

85 1988

Tomasz Gizbert-Studnicki

Hogan Lovells (Warszawa) LLP Sp.p. Oddzia∏ w Polsce ul. Nowogrodzka 50, 00-695 Warsaw 14 22 529-2900/22 529-2901 hoganlovells.warsaw@hoganlovells.com www.hoganlovells.com

30 61

7 23

1 4

26 23

✓ ✓ ✓

✓ ✓ -

WND

Commercial and corporate law Real estate; banking and finance; tax law

Hogan Lovells

117 1991

Beata Balas-Noszczyk

Dewey & LeBoeuf Grzesiak Sp.k. ul. Ksià˝´ca 4, 00-498 Warsaw 14 22 690-6100/22 690-6222 woffice@dl.com www.dl.com

30 55

6 22

4

26 22

✓ ✓ ✓

✓ ✓

-

Mergers and acquisitions Securities and capital markets; venture capital and private equity; trial law; tax law; antimonopoly and competition law

Dewey & LeBoeuf

114 1991

Jaros∏aw Grzesiak

Beiten Burkhardt P. Daszkowski Sp.k. ul. Skorupki 5, 00-546 Warsaw 14 22 583-7100/22 583-7109 bblaw-warschau@bblaw.com www.bblaw.com

30 30

1 7

4 3

13

✓ ✓ ✓

✓ -

-

Commercial and corporate law Real estate; tax law; banking and finance

Beiten Burkhardt Rechtsanwalte

45 1999

Peter Daszkowski

Wardyƒski i Wspólnicy Sp.k. Al. Ujazdowskie 10, 00-478 Warsaw 1 22 437-8200/22 437-8201

warsaw@wardynski.com.pl www.wardynski.com.pl

Baker & McKenzie Gruszczyƒski i Wspólnicy Kancelaria Prawna Sp.k. Rondo ONZ 1, 00-124 Warsaw 6 22 455-3100/22 445-3200 warsaw@bakermckenzie.com www.bakermakenzie.com Clifford Chance, Janicka, Kru˝ewski, Namiotkiewicz i Wspólnicy Sp.k. ul. Lwowska 19, 00-660 Warsaw 7 22 627-1177/22 627-1466 warsawinfo@cliffordchance.com www.cliffordchance.com Wierzbowski Eversheds Sp.k. ul. Jasna 14/16A, 00-041 Warsaw 8 22 505-0700/22 505-0701 kancelaria@wierzbowski.pl www.wierzbowski.pl Drzewiecki, Tomaszek & Wspólnicy Sp.k. ul. Belwederska 23, 00-761 Warsaw 9 22 840-9500/22 840-9510 dt@dt.com.pl www.dt.com.pl Koksztys Kancelaria Prawa Gospodarczego Sp.k. Al. Armii Krajowej 61, 50-541 Wroc∏aw 10 71 335-1450/71 335-1450 kancelaria@koksztys.pl www.koksztys.pl White & Case W. Dani∏owicz, W. Jurcewicz i Wspólnicy – Kancelaria Prawna Sp.k. 10 ul. Marsza∏kowska 142, 00-061 Warsaw 22 505-0100/22 505-0400 warsaw@whitecase.com www.whitecase.pl Grynhoff Woêny Wspólnicy Sp.k. ul. Pi´kna 18, 00-549 Warsaw 12 22 212-0000/22 212-0001 warszawa@gwwl.pl, www.gww.pl T. Studnicki, K. P∏eszka, Z. åwiàkalski, J. Górski Sp. k. 12 ul. Jab∏onowskich 8, 31-114 Kraków

12 427-2424/12 427-2333 spcg@spcg.pl, www.spcg.pl

Managing Partner

Tomasz Wardyƒski; Stefan Jacyno Chairman Partner; Managing Partner

Managing Partner

Managing Partner

Managing Partner

Managing Partner

Managing Partner

Managing Partner

Managing Partners

Director

Managing Partner

Unlimited Partners

Senior Partner

Managing Partner

Managing Partner

Unlimited Partner


THE LIST

SEPTEMBER 12-18, 2011

Rank

21

Languages used

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

www.wbj.pl

Unlicensed Total number of lawyers Licensed board-certified (Master of advocates / Foreign / lawyers / Law Licensed legal Tax advisors Total number of degree) / advisors lawyers Training for license

English / French / Russian

German / Spanish / Italian

Other

Main specialization / Other specializations

Global affilation

Total employees / Year founded

Top local executive / Title

Allen & Overy, A. P´dzich Sp.k. Rondo ONZ 1, 00-124 Warsaw 17 22 820-6100/22 820-6199 warsaw@allenovery.com www.allenovery.com

29 61

3 23

1 1

4 22

✓ -

✓ -

-

Banking and finance Mergers and acquisitions; capital markets; commercial and coroprate law

Allen & Overy

110 1991

Arkadiusz P´dzich

Kancelaria Radców Prawnych i Adwokatów Nowakowski i Wspólnicy Sp.k. 17 Pl. Mickiewicza 18, 13-200 Dzia∏dowo 23 697-2546/23 697-2546 dzialdowo@knw.pl, www.knw.pl

29 46

3 22

4

3 14

✓ ✓ ✓

✓ -

-

Logistics; transportation law Antimonopoly and competition law; copyright; intellectual and industrial property law; currency options

ConsortioLex

53 1998

Cezary Józef Nowakowski

Weil, Gotshal & Manges – Pawe∏ Rymarz Sp.k. ul. Emilii Plater 53, 00-113 Warsaw 19 22 520-4000/22 520-4001 pawel.rymarz@weil.com www.weil.com

28 66

13 16

7 2

11 27

✓ ✓ ✓

✓ ✓ ✓

-

Mergers and acquisitions Trial law; securities and capital market; venture capital and private equity

Weil, Gotshal & Manges

120 1991

Pawe∏ Rymarz

Chadbourne & Parke, Radzikowski, Szubielska i Wspólnicy Sp.k. ul. Emilii Plater 53, 00-113 Warsaw 20 22 520-5000/22 520-5001 warsaw@chadbourne.com www.chadbourne.com

27 35

5 22

2

WND WND

✓ ✓

✓ ✓

-

Mergers and acquisitions Energy law; real estate and project funding

Chadbourne & Parke LLP

WND 1990

W∏odzimierz Radzikowski

Miller, Canfield, W. Babicki, A. Che∏chowski i Wspólnicy Sp.k. ul. Nowogrodzka 11, 00-513 Warsaw 21 22 447-4300/22 447-4301 kontakt@pl.millercanfield.com www.millercanfield.pl

26 47

6 14

4 2

21 11

✓ ✓ -

✓ ✓ -

Portuguese; Swedish

Real estate Technologies; media; telecom; commercial and company law; trial law

Miller, Canfield, Paddock and Stone, P.L.C.; Employment Law Alliance; The Fource Alliance

65 1991

Wojciech Babicki

D. Dobkowski Sp.k. ul. Ch∏odna 51, 00-867 Warsaw 22 22 528-1300/22 528-1309 legal@kpmg.pl www.kpmg.pl

25 37

1 24

1

12 9

✓ ✓ ✓

✓ ✓ ✓

-

Commercial and corporate law Real estate; mergers and acquisitions; banking and finance

WND

51 1996

Dariusz Dobkowski

DLA Piper Wiater Sp.k. ul. Emilii Plater 53, 00-113 Warsaw 23 22 540-7400/22 540-7474 warsaw.recepcion@dlapiper.com www.dlapiper.com

24 46

3 14

7

22 20

✓ ✓

✓ -

-

Mergers and acquisitions Trial law; energy law; copyright law; intellectual and industrial property law

DLA Piper

70 2007

Krzysztof Wiater

Wierciƒski, Kwieciƒski, Baehr Sp.k. ul. Polna 11, 00-633 Warsaw 23 22 201-0000/22 201-0099 biuro@wkb.com.pl www.wkb.com.pl

24 52

9 15

1 2

8 16

✓ ✓ ✓

✓ ✓

-

Mergers and acquisitions Energy law; trial law; public orders

TagLaw; Multilaw; Associated European Energy Consultants; The Association of European Lawyers; The International Network of Boutique Law Firms

68 2004

Andrzej Wierciƒski

Âlàzak, Zapiór i Wspólnicy Kancelaria Adwokatów i Radców Prawnych Sp.k. Al. Korfantego 141, 40-154 Katowice 25 32 783-8800/32 783-8899 kontakt@kancelaria-szip.pl www.kancelaria-szip.pl

22 47

11 11

-

7 18

✓ ✓ ✓

✓ -

Croatian

Energy law Public orders; copyright law; intellectual and industrial property law; government law

Consortio Lex

55 2002

Krystian Âlàzak

22 37

8 11

2 1

15 12

✓ -

✓ ✓ -

Portuguese

Economic law Court proceedings and arbitrage; public orders; intellectual property protection; banking and finance; capital markets; infrastructure; energetics

K&L Gates LLP

65 2010

Maciej Jamka

Kubas Kos Gaertner – Adwokaci Sp.p. Al. Armii Ludowej 26, 00-609 Warsaw 25 22 321-8300/22 321-8302 warszawa@kubas.pl www.kkg.pl

22 43

16 6

1 -

6 15

✓ ✓ ✓

✓ ✓

Ukrainian

Trial law Banking and finance; commercial and corporate law; real estate

WND

60 1995

Andrzej Kubas

TGC Ordowska Kancelaria Prawnicza Sp.k. ul. Królewska 27, 00-060 Warsaw 25 22 653-3644/22 827-6915 tgc@tgc.eu www.tgc.eu

22 33

3 9

7 3

4 7

✓ ✓ -

✓ ✓ -

Dutch

Commercial and corporate law Trial law and arbitrage; labor law; real estate

ALFA International; SRA, LCIA

46 1991

Nicholas Fielding; Beata Ordowska

41 1997

Sylwester Cetera; Ma∏gorzata W´grzyn Wysocka; Agnieszka Ko∏aczkowska; ¸ukasz Dziewoƒski; Maciej Domaga∏a

K&L Gates Jamka Sp.k. Al. Jana Paw∏a II 25, 00-854 Warsaw 25 22 653-4200/22 653-4250

warsaw@klgates.com www.klgates.com

Managing Partner

Chief Parter

Managing Partner

Managing Partner

Managing Partner

Managing Partner

Managing Partner

Managing Partner

Managing Partner

Managing Partner

Senior Partner

Managing Partner; Partner

CWW S. Cetera, M. W´grzyn-Wysocka i Wspólnicy Kancelaria Radców Prawnych i Adwokatów Sp.k. 29 ul. W∏odkowica 10/11, 50-072 Wroc∏aw 71 780-7600/71 780-7601 kancelaria@cww.pl, www.cww.pl

21 32

Chajec, Don – Siemion & ˚yto Sp.k. ul. Lwowska 19, 00-660 Warsaw 30 22 492-4000/22 370-0708 kancelaria@cdz.com.pl www.cdz.com.pl

20 33

1 19

1 -

1 12

✓ ✓ -

✓ -

-

Mergers and acquisitions Real estate; trial law; commercial and corporate law

IAG International Advisory Group

51 2003

Andrzej Chajec

Roedl, Majchrowicz-Bàczyk, Kancelaria Prawna Sp.k. ul. Prosta 51, 00-838 Warsaw 30 22 696-2800/22 696-2801 warszawa@roedl.pl www.roedl.pl

20 72

1 11

1 19

52 14

✓ -

✓ ✓ ✓

-

Commercial and corporate law; tax law Real-estate; trial law; commercial mediation and negotiation

Rödl & Partner

76 1992

Aneta MajchrowiczBàczyk

Tokarczuk, J´drzejczyk i Wspólnicy Kancelaria Prawna GLN Sp.k. Pl. Pi∏sudskiego 1, 00-078 Warsaw 30 22 344-0000/22 344-0001 gln.warsaw@gide.com www.gide.com

20 45

4 13

3 3

4 12

✓ ✓ ✓

✓ ✓ ✓

Romanian

Mergers and acquisitions Banking and finance; energy law; real estate law

Gide Loyrette Nouel

72 1990

Dariusz Tokarczuk

3 18

1

3 8

✓ -

✓ ✓ -

-

Energy law Trial law; real estate; mergers and acquisitions

ConsortioLex

Unlimited Partners; Limited Partners

Notes: WND = Would Not Disclose. Research for the List was done in November 2010. Number of employees and ownership structure are as of October 2010 unless stated otherwise. All information pertains to the companies' activities in Poland. Companies not responding to our survey are not listed.

Managing Partner

Legal Advisor

Managing Partner

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


22

ARTS & CULTURE

www.wbj.pl

Concert

SEPTEMBER 12-18, 2011

Festival

Ladino magic with Yasmin Levy For food lovers and families affected by the Palestinian crisis. She became a Goodwill Ambassador in 2008. With all the world’s major opera houses already under her belt (Sydney, London, New York, etc.), there is no doubt that her Warsaw concert is set to be a hit. ● For more information log onto palladium.art.pl COURTESY OF WINE & FOOD NOBLE NIGHT

Yasmin Levy’s work is a reflection of her Israeli cultural heritage and JudeoSpanish Ladino influences. Her work also includes elements of flamenco and Iranian music. Her 2001 debut album “Romance & Yasmin”

brought joy to the ears of ethnic music lovers, although none of her subsequent albums have been a disappointment either. Levy’s most recent release, 2009’s, “Sentir” featured cooperation with one of the hottest producers in the genre, Javier Limón. Yasmin Levy is also involved in charitable organizations, bringing help to children

Wine & Food Noble Night & Open Family Day Tor WyÊcigów Konnych S∏u˝ewiec ul. Pu∏awska 266 September 24-25 This year’s Wine & Food Noble Night festival, which COURTESY OF CONCERTS.PL

Yasmin Levy in concert Palladium ul. Z∏ota 9 September 24

will take place at the S∏u˝ewiec horse-racing track, is a must for all foodies, with a 4,000sqm marquee where guests can taste the best of Polish cuisine and 300 different wines from 38 wineries from countries including New Zealand, Uruguay and South Africa.

And there is good news for families: the second day – Open Family Day – is dedicated to children. The program will include a kids menu, sculpture, cooking workshops and a kids’ theater. ● For more information log onto openfamilyday.pl

Marathon

Survival of the fittest 33rd Warsaw Marathon ul. Krakowskie PrzedmieÊcie September 25, 9 am The capital will play host to the 33rd Warsaw Marathon this month, with runners set to take on the

grueling 42-km course which will see them pass major landmarks in the heart of the city and along both sides of the Vistula River. Entrance for the event is priced at z∏.150, with regis-

tration forms, course info and race facts all available in English on the event website. ● For more information log onto maratonwarszawski.com

Museums, galleries and venues in Warsaw Centre for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 www.csw.art.pl Czarna Gallery ul. Marsza∏kowska 4 www.czarnagaleria.art.pl Galeria 022, DAP, Lufcik ul. Mazowiecka 11a www.owzpap.pl Galeria 65 ul. Bema 65 www.galeria65.com Galeria Appendix 2 (Praga) ul. Bia∏ostocka 9 www.appendix2.com Galeria Asymetria ul. Nowogrodzka 18a www.asymetria.eu Galeria Foksal ul. Foksal 1-4 www.galeriafoksal.pl Galeria Milano Rondo Waszyngtona 2A (Praga) www.milano.arts.pl Galeria Schody ul. Nowy Âwiat 39 www.galeriaschody.pl

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

Simonis Gallery ul. Burakowska 9 www.simonisgallery.com

Katarzyna Napiórkowska Art Gallery ul. Âwi´tokrzyska 32, ul. Krakowskie PrzedmieÊcie 42/44 and Old Town Square 19/21 www.napiorkowska.pl

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

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

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

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

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

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

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

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

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


LAST WORD

SEPTEMBER 12-18, 2011

www.wbj.pl

23

Tech Eye

IFA 2011: endless blathering about 3D

COURTESY OF LG

rized from our handy German phrasebook – “Guten tag, Herr Affengesicht” – to the no-necked security thugs manning the entrance.

performance (particularly when it comes to the battery) may not live up to the hype. As for the 3D aspect, the phone offers a glasses-free experience, and

We might even buy the phone just for the chance to torture our coworkers with creepy 3D photos of our offspring caught in the “midnosepick pose” so characteristic of four-year-olds. The Optimus 3D, which runs a somewhat dated version of Android OS, costs about £500. The only other product which Techeye had time to scrutinize before our unceremonious departure from this year’s IFA was the Soma Stand from XtremeMac (www.xtrememac.com). This is a pyramid-shaped speaker dock for – as the company’s name implies – Apple products. There’s not a whole lot else to say about the Soma Stand, except that it folds up a bit if you want to transport it and is expected to cost around €100 when it goes on sale next month. Oh, and one other thing – don’t bother trying to dent a German security guard’s head with it. It’s not heavy enough. ● AC EM EM XTR OF

It turns out that “Herr Monkeyface” is not an acceptable form of address when dealing with der nonecked. After a brief argle-bargle at the front door, Techeye managed to sprint through approximately half of the exhibition before the guards caught up and forcibly ejected us from the building. Still, it was time enough to get a good impression of the zeitgeist pervading this year’s IFA. And what zeitgeist was that? Put simply: 3D über alles. Yes, there were a few odd, forward-looking exhibitors like Haier,

which had prototypes of a brainwave-controlled TV and a “transparent organic TV” on show, but practically everyone else was hawking gadgets with 3D functionality crammed into them. LG (www.lg.com) was a prime example. The Korean electronics giant had 3D TVs, phones and even a quirky bit of software called the 3D Game Converter, which allegedly adds a bit of depth to 2D games. The thing that caught our eye, though, was the Optimus 3D, which LG is calling the “world’s first tridual and full 3D smartphone.” Uh … what? Bear with us here. The “tri-dual” part refers to the phone’s architecture, which boasts a 1 GHz dualcore, dual-channel processor as well as a dual memory set-up. Taken altogether, that’s supposed to boost computing power significantly, though some early reports indicate

Y TES UR CO

IFA Berlin, the self-described “world’s largest trade show for consumer electronics and home appliances,” was held last week and Techeye was naturally on the scene. For those of you who have never had the pleasure, IFA is kind of like the better-known International Consumer Electronics Show, although it’s a little less full of itself and a little more full of bratwurst. The event is never boring, but this year we got a bit more exercise than usual. Ok, that doesn’t necessarily mean much, since we usually get no exercise at all. So you’ll just have to trust us when we say our legs haven’t moved so fast since the time when Techeye was 12 years old and we tried to impress the girls at fat camp by setting a treadmill to “roadrunner.” Here’s what happened: arriving at the Messe Berlin Exhibition Grounds last week we politely murmured the one phrase we memo-

that’s great until the novelty wears off, which is after about 10 minutes. But the Optimus 3D’s stereoscopic cameras are interesting, we’ll admit.

Ever tried to impress the girls at fat camp and ended up with a mouthful of treadmill instead? Let us know: techeye.wbj@gmail.com


WBJ #36 2011  

Warsaw Business Journal, vol. 17, #36, September 12-18, 2011