WBJ Observer #06/07 July-August

20 PAGES JULY/AUGUST 2014

Number 06/07

FOR DAILY NEWS VISIT US AT

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PLN 24.50 (VAT 8% included) ISSN 2353-3714 INDEX-RUCH-332-127

20 PAGES OF REAL ESTATE N EWS

Janusz Piechociński

POLISH GLOBAL BRANDS

on exports, energy and switching to innovative economy > 19

Exotic destinations Polish tourism industry > 34

REAL EST A NEWS TE

Manufaktura Czekolady Sweet dreams are made of this > 36

Trending up Poland’s BPO sector is getting not only bigger but increasingly diverse > 52

JULY / AUGUST 2014

POLISH BRANDS FIGHT FOR GLOBAL DOMINATION ALSO IN THIS ISSUE:

• M a d e le i n e A l b r i g h t • O u t d o o r d i n i n g • C o m m e n t a r y • N ew s

lll IN THIS ISSUE Try these:

4

lll NEWS

4-8 In Review Latest News 9 Facts and Figures Economy 10 Time Machine 11 Who’s News Appointments 12 Dateline

13

lll COMMENTARY 13 Politics EP Elections 14-15 Legal Land Development 16 Stocks OFE 17 Legal E-commerce

28

22-26

E-COMMERCE 47-71

LOKALE IMMOBILIA

lll FEATURES

28-30 Design Trains, yachts and furniture 31-33 Chemistry Sector overview

35

lll ENTREPRENEURS

35-37 Phenicoptere Make-up removal glove 39-43 Legia What’s the next step?

44-46 Management Corner CSR 72-73 Cityscape Wrocław 74-75 Ranking Technology parks

76

lll LIFESTYLE

18-21

SUPER-PHARM INTERVIEW

76 Gadgets 77 Events 78 Sports bars 79 Hotels 80 On a final note

43-44

WBJ OBSERVER • JUNE 2014

1

WARSAW BUSINESS JOURNAL SPOTLIGHT AWARD

BUSINESS INNOVATOR OF 2014

lll IN THIS ISSUE Try these:

4

lll NEWS

4-8 In Review Latest News 9 Facts and Figures Economy 10 Time Machine 10 Who’s News Appointments 12 Dateline 13-14 Madeleine Albright in Poland

15

lll COMMENTARY 15 Legal Consumer on vacation 16-17 Legal Bierut Decree 18 Stocks Tape Scandal

30

24-28

POLISH BRANDS ABROAD

lll FEATURES

30-33 Kraków Olympics What went wrong?

34-35 Tourism Poles on holiday

36

lll ENTREPRENEURS 36-38 M anufaktura Czekolady Designer chocolate 39-41 Kekemeke Loyalty app

66-67 Cityscape Gdańsk 68-69 Ranking Book of Lists 72-75 Events Book of Lists gala

19-23

45-65

LOKALE IMMOBILIA

78

lll LIFESTYLE 78 Outdoor Dining 79 Hotels 80 On a final note

43-44

JANUSZ PIECHOCIŃSKI INTERVIEW

W B J O B S E R V E R • J U LY / A U G U S T 2 0 1 4

1

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J U LY / A U G U S T 2 0 1 4 • W B J O B S E R V E R

COVER IMAGE: Shutterstock

WARSAW BUSINESS JOURNAL SPOTLIGHT AWARD

BUSINESS INNOVATOR OF 2014

NEWS

lll INREVIEW News highlights of the past month

In

June, Wprost weekly released a number of taped recordings of private conversations involving several members of the cabinet, including Minister of Foreign Affairs Radosław Sikorski and Interior Minister Bartłomiej Sienkiewicz, CEOs of state-owned companies and other top officials, including NBP head Marek Belka. The conversations, recorded at several Warsaw restaurants, were private and featured officials criticizing or making derogatory comments about world leaders, government members and other Polish politicians.

One of the recordings exposed the Interior Minister and the head of the NBP discussing the dismissal of Finance Minister (Jacek Rostowski), another exposed Sikorski as being very critical of Polish-US relations, claiming that “Poland did not get anything in return.”

The recordings sparked controversy, with the opposition calling for dismiss-

4

J U LY / A U G U S T 2 0 1 4 • W B J O B S E R V E R

al of either the whole cabinet or ministers who were caught on the tapes. PM Donald Tusk refused to do so, but later decided to ask Parliament for a vote of confidence, which he won with ease.

The prosecution is conducting an investigation and has detained two people and charged another two. According to the officials these persons might be

“THOSE WHO STOOD BEHIND THE EAVESDROPPING ARE INVOLVED IN BUSINESSES TOWARD WHICH THE POLISH GOVERNMENT HAS RECENTLY TAKEN CERTAIN STEPS.

responsible for wiretapping and the release of the tapes. Two employees of the restaurants where the recordings were made have been charged.

The prosecution believes that the people responsible for giving the tapes to the press are Marek Falenta, majority shareholder in skladywegla. pl, Poland’s biggest coal retailer, and Krzysztof R. (full name withheld as a result of Polish privacy laws), Falenta’s brother-in-law.

According to PM Tusk, the tapes were released because the government was cracking down on people involved in illegally selling imported Russian coal. “In the background to the recent events, we have big scale trading of Russian coal,” Tusk said.

“I know that people linked with those who stood behind the eavesdropping are involved in businesses toward which the Polish government has recently taken certain steps,” he added.

Image: KPRM/M. Śmiarowski

Government rocked by tapes

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DHL Express provides information regarding customs legislation in countries around the world. In addition to Europe and Asia, which are popular destinations for our services, the fastest growing destinations for Polish customers are the Middle East, South America and Africa. Today, DHL Express is not only a supplier of courier services in Poland, but we are also, thanks to very good cooperation and exchange of information with customers, perceived as a logistics partner and world expert in the field of express services. Currently, the largest group of our clients are companies from the SME sector, to which DHL Express provides expert advice and comprehensive solutions that meet their business needs.

Besides offering Polish SMEs a comprehensive range of solutions, DHL Express is also providing expert advice for customers planning to sell their products abroad. Part of our mission is to stress the importance of the SME sector to the well-being of the Polish economy.

This year we are planning to organize a number of meetings with representatives of the SME sector, in which we will participate as a partner supporting the development of Polish businesses abroad. We want to share our knowledge in order to improve the position of Polish SMEs in their aspirations across borders.

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W B J O B S E R V E R • J U LY / A U G U S T 2 0 1 4

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NEWS

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J U LY / A U G U S T 2 0 1 4 • W B J O B S E R V E R

>> INTERNATIONAL

Obama praises Poland on the 25th anniversary of elections

US

President Barack Obama, who came to Warsaw to take part in the 25th anniversary of the first partially free elections after communism, spoke highly of Poland as an ally and of the country’s road to freedom.

Poland is one of the USA’s biggest allies and best friends, Obama said. He added that he felt honored to be in the country on the anniversary of the rebirth of democracy. He stressed that Poland also celebrates 15 years in NATO this year. “Poland reminds us that sometimes the smallest steps, however imperfect, can ultimately tear down walls, can ultimately transform the world,” Obama said. “The victory of 1989 was not inevitable. It was the culmination of centuries of Polish struggle, at times in this very square,” he added.

The president added that the USA maintains its obligation to extend its engagement in Poland’s security. He pointed to newly stationed air force units as an example.

Upon arriving in Poland, Obama announced a new $1 billion European Reassurance Fund, aimed at boosting the security of the USA’s European allies, a security that has become more fragile after the annexation of Crimea by Russia. Polish President Bronisław Komorowski responded by saying that Poland will boost its military spending to 2 percent of its GDP (up from the current 1.95 percent).

Images: Shutterstock, prezydent.pl

Book a guided segway city tour in Warsaw or rent segway for an event!

no yes

NEWS

54% Poles would like to act but are wary - ING Over half (54 percent) of Poles think that their faith is in their hands and 64 percent prefer acting than complaining, according to a recent report by ING bank. However, 71 percent of Poles very often postpone fulfilling their goals.

As the main reason for delays, Poles give lack of necessary funds (54 percent), lack of time (29 percent) or lack of perseverance (15 percent). “Our research shows that Poles are changing their mindset and prefer to take actions, but still something stops them from doing so,” said Barbara Pasterczyk, director at ING Bank Śląski.

OF POLES THINK THEIR FATE IS IN THEIR HANDS, YET 71% OFTEN POSTPONE FULFILLING THEIR GOALS

•

W B J O B S E R V E R • J U LY / A U G U S T 2 0 1 4

7

Shorts

NEWS

INPOST WILL DELIVER GROCERIES Private postal service operator, InPost, is to expand their e-business offer by implementing a grocery delivery service. Integer.pl, the owner of InPost, sees the growing e-business market as having great potential. After significant success with parcel lockers in Poland and abroad, InPost will reach out to food e-stores to deliver to clients shopping via the Internet.

>> INTERNATIONAL

EU and Ukraine sign agreement D

GOOGLE TO OPEN ITS CAMPUS IN WARSAW Web giant Google will launch a so-called Google Campus in Warsaw, the company’s executive chairman Eric Schmidt announced during his visit in the Polish capital on Wednesday. The campus will be a hub for Polish technology start-ups.

The Warsaw facility will follow similar ones already operating in London and Tel Aviv. It is scheduled to be opened in mid 2015.

The Warsaw Google Campus will most likely provide workspace for several hundred Poles.

Estimated investment may be in the tens of millions of euros.

8

uring a summit in Brussels, the Ukrainian president Petro Poroshenko, chief of the EU Commission, Jose Manuel Barroso and the chief of the EU Council, Herman Van Rompuy have signed the second part of the association agreement between Ukraine and the EU. The first part of the agreement was signed in March in a show of support for the Kiev government during the political crisis and tensions with neighboring Russia.

The Guardian wrote that “this is the agreement that sparked off the revolution” in Kiev.

It aims to include Ukraine, Moldova and Georgia in closer economic ties with Europe.

The main part of the deal is a free-trade agreement that will gradually open borders between Europe and Ukraine, eliminating around 98 percent of tariffs on trade between the two regions. Besides trade, Ukraine and the EU will work to coordinate laws and norms in civil rights and industry standards.

>> DOMESTIC

Kulczyk buys 51.14% in Ciech

KI

Chemistry from the Kulczyk Investments capital group bought 26.95 million shares in chemical group Ciech, the tender offer manager DM BZ WBK said on Wednesday. The stake in the company stands at 51.14 percent.

Poland’s State Treasury, holder of 38.82 percent in Ciech, sold the majority of its shares in the tender, the Treasury Ministry’s spokesperson Agnieszka Jabłońska-Twaróg said on Twitter the same day. One of the longest-lasting

J U LY / A U G U S T 2 0 1 4 • W B J O B S E R V E R

privatization processes was thus closed, she quoted Deputy Treasury Minister Paweł Tamborski as saying.

KI Chemistry announced a tender offer for 66 percent in Ciech at PLN 29.5 apiece in early March, later extending it until May 30. The price per share was raised to PLN 3. On June 2, DM BZ WBK said that KI Chemistry would buy shares in the tender in spite of not achieving the earlier set threshold of 60 percent in Ciech.

Images: European Commission, Wikimedia

The offer will aim at smaller e-stores that have not begun competing with hypermarkets online.

According to Parket, the owner of Integer.pl Rafał Brzoska was quoted as saying that “the e-grocery market is a PLN 1.7 billion market and is further set to grow.”

NEWS / ECONOMY

FACTS AND FIGURES 3.4%

3.4% was Poland’s year-on-year GDP 3.4% growth in Q1 2014,

was Poland’s year-on-year GDP growth in Q1 2014, according to a revised estimate..

Trade volumes 12.5%

12.5% 2.5%12.5%

PLN 117.69 billion PLN

UNEMPLOYMENT (May 2014)

Shares Bonds

Bonds

Futures Bonds

Futures

PLN PLN5.14 485billion million

PLN

Growth of main index (WIG), ytd Futures

Growth o

PLN485 117.69 billion PLN PLN million

UNEMPLOYMENT

PLN 3,878.31 PLN 3,878.31

Growth of main index (WIG), ytd

1.27%

€706.4 million €706.4 million

€706.4 million was Poland’s foreign trade surplus in January-April 2014.

W B J O B S E R V E R • J U LY / A U G U S T 2 0 1 4

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Dec. '13

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in y/y terms,

May. '14 May '13

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May. '14

Apr. '14

Mar. '14

Feb. '14

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May '13

0

Aug. '13

Jul. '13May. '14

May '13 Mar. '14

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Jan. '14

Feb. '14

0

Dec. '13

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0,5

Jun. '13

0

May. '14Jun. '13

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0,5

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1

Apr. '14 May '13

Risk of deflation?

Year-on-year CPI inflation in Poland, April 2013 – April 2014 1 (in %)

8 7 8 6Going up 7 5Poland’s industrial output growth 6 4May 2013 – May 2014 (in %) 5 3 4 8 2 3 17 2 06 1 -15 0 -24 -1 -33 -2 2 -3 1 0 -1 -2 -3 May '13

1,5

May. '14

surplus in January-April and leave the benchmark rate at 2.5 percent. It did, however, modify its statement 2014. by getting rid of the forward guidance it had maintained for the past months.

The RPP no longer maintains the view that interest rates should remain unchanged until the end of Q3 2014, NBP head Marek Belka said at a press conference after the council’s July sitting. However, this does not mean that they will be raised,was he Poland’s foreign trade surplus in January-April stressed. He added that the central bank’s projection shows that inflation may 2014. remain very low for an extended period.

Feb. '13

Goodbye, forward guidance

was the average salary in the Polish The National Bank of Poland’s Monetary Policy Council (RPP) did not surprise enterprise sector in May. economists in early June, when it decided to keep interest rates unchanged was Poland’s foreign trade

Jan. '13

PLN 3,878.31

1.27

1.27% PLN 5.14 billion

Dec. '13

National Bank of Poland’s reference interest rate. was the average was the average salary in the Polish salary in the Polish enterprise sector in May. enterprise sector in May.

1,5

Shares

Shares

(May 2014) remains the National Bank of Poland’s reference interest rate.

remains the National Bank of Poland’s reference interest rate. remains the

1

Number of list

Number of listed companies Trade volumes Trade vo

2.5% 2.5%

1,5

45

458 458

WARSAW STOCK EXCHANGE IN JUNE 2014 Number of listed companies

UNEMPLOYMENT (May 2014)

Jun. '13

Data source: Warsaw Stock Exchange, Central Statistical Office

wasaccording Poland’sto year-on-year GDP a revised estimate.. growth in Q1 2014, according to a revised estimate..

WARSAW STOC IN JUN

WARSAW STOCK EXCHANGE IN JUNE 2014

TIMEMACHINE From our pages . . .

10 years ago

July 1999 Centertel, majority owned by state-run Telekomunikacja Polska acquired a GSM 900 license for ECU 85 million, which angered its competitors. “We paid ECU 217 million for our license,” said Robert Niczewski, a spokesman for Polska Telefonia Cyfrowa, “why should we pay more?”

July 2004 The Budapest Stock Exchange is the latest to announce that the WSE is on its radar screens. “We have recently held talks with [WSE] President [Wiesław] Rozłucki,” says Attila SzalayBerzeviczy, CEO of the Budapest bourse, although he adds, “But they were of a very preliminary nature and no specific decisions have been taken.”

July 2009 Poland’s state-controlled gas monopoly, PGNiG, signed a deal worth $550 million with Qatargas to supply 1.5 billion cubic meters of LNG per year to Poland over the course of 20 years, starting in 2014, once the LNG terminal in Świnoujście will come online. “It is the first long-term contract since 1993 which increases our energy security in real terms,” said Treasury Minister, Aleksander Grad.

August 2004 No less than 5,640 rabbits have been slaughtered to provide elegant headwear for the Polish athletes, says small hat-making company Polkap from Rzeszów, which won a contract to provide 470 rabbit-skin hats that will distinguish the Polish delegation in Athens during this year’s Summer Olympic Games. u

August 2009 After years of rumors about plans to bring Ferrari to the Polish market, it has been confirmed that the luxury sports car will finally arrive. The first dealership in Poland will be opened in mid-autumn by Sobiesław Zasada Group. The dealership will be located in Warsaw at ul. Nowy Świat, not far from the Warsaw Stock Exchange. u

August 1999 The Polish parliament is working on a law that would protect the Polish language. “The primary goal of the new law is to prevent Polish from being gradually eliminated by other idioms,” said Jerzy Bralczyk, a professor from Warsaw University. Proper names, including surnames, trade names, company names and place names, could be maintained if they don’t have a Polish equivalent. “Within 20 years there will be a lot of English names in our language. It’s simply the way it goes. No bill can change that,” said Radosław Bubienko, owner of Travel text publishing company. u

5 years ago

WHO’S NEWS Paweł Tamborski was appointed as CEO of the Warsaw Stock Exchange by the bourse management board, replacing Adam Maciejewski. The main financial regulator must approve the appointment of Tamborski, who previously served as deputy minister of finance with the Tusk government. Tamborski holds a degree in economics and has over 20 years of experience in the finance industry. His previous experience includes, work at Unicredit CAIB Securities’ London office in a managing director role, with responsibility for the Central and Eastern European market.

Małgorzata Omilanowska replaced Bogdan Zdrojewski as Poland’s Minister of Culture. She is a historian and has previously worked in the ministry as an undersecretary. “Every change, every appointment and promotion is a good moment to reflect. Especially when such a change stems from someone’s victory,” said President Bronisław Komorowski, during Omilanowska’s appointment. The change was necessary, as Zdrojewski was elected to the European Parliament and had to leave his post.

Sephora Polska named Gilles Dougoud as its new CEO. He replaces Olivier Schaeffer, who was promoted within the company international ranks. Before his appointment, Dougoud worked in managerial positions for several companies in the Moët Hennessy Louis Vuitton portfolio. Moët Hennessy Louis Vuitton is Sephora’s owner. Sephora owns 92 perfumeries in Poland and 1,800 worldwide.

PGE EJ1, a special purpose vehicle set up by Poland’s largest utility PGE to oversee construction of the country’s first nuclear power plant, has appointed Jacek Cichosz as its new CEO. Previously, Cichosz was the company’s acting CEO and was appointed after Aleksander Grad left the company in February this year.

10

J U LY / A U G U S T 2 0 1 4 • W B J O B S E R V E R

Images: Shutterstock

15 years ago

NEWS / APPOINTMENTS

W B J O B S E R V E R • J U LY / A U G U S T 2 0 1 4

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NEWS / CALENDAR

CALENDAR

P PLFA SUPERFINAŁ

CHARITY VOLLEYBALL TOURNAMENT

JULY

31

Event: 5th annual charity beach volleyball tournament organized by the commercial real estate sector. This year the proceeds will contribute to the construction of a foster home in Dąbrówka Location: La Playa Club, Wybrzeże Helskie 1/5, Warsaw

AUGUST

2

ARABIAN HORSE DAYS

AUGUST

15-19

Event: The biggest annual auction of Arabian horses in Poland. Buyers from all over the globe come to bid on some of the best mares and stallions in the world.

Location: Janów Podlaski State Stud, Janów Podlaski Web: janow.arabians.pl

Event: American Football game of the season.

Two best Polish teams will face off in the final game, crowning this year’s Polish champion.

Location: Municipal Stadium in Gdynia, Olimpijska 5 Web: superfinal.pl

ECONOMIC FORUM

SEPTEMBER

2-4

Event: The Post-Crisis World: “Time for New Leaders” is this year’s edition’s theme. Six plenary sessions, over 100 panel discussions and more than 2,500 invited guests from all over the world.

Location: Krynica-Zdrój Web: forum-ekonomiczne.pl

EUROPEAN CONGRESS OF SMEs

SEPTEMBER

22-25

Event: Challenges and possibilities in the development of small and medium-sized enterprises will be discussed by representatives of science, politics and economy.

Location: Katowice Web: kongresmsp.eu

KATOWICE

Główne obszary tematyczne: · szanse i wyzwania dla przedsiębiorstw, · perspektywa finansowa UE 2014-2020, · trójkąt wiedzy: nauka-biznes-samorząd, · innowacyjność, · badania i rozwój, · współpraca gospodarcza Europa-Wschód, · edukacja i HR, · prawo i podatki w MŚP

IV Europejski Kongres

10 lat

przedsiębiorczości bez granic

Honorowy Patronat Prezydenta Rzeczypospolitej Polskiej Bronisława Komorowskiego, Patronat José Manuela Barroso, Przewodniczącego Komisji Europejskiej oraz Honorowy Patronat Parlamentu Europejskiego

Organizator:

Współorganizatorzy:

Bezpłatna rejestracja na stronie: www.kongresmsp.eu 12

J U LY / A U G U S T 2 0 1 4 • W B J O B S E R V E R

NEWS /

MADELEINE ALBRIGHT

For a more interconnected Europe B Y K A M I L A WA J S Z C Z U K

Image: ABSL

THE DIFFICULT SITUATION IN EASTERN EUROPE, EUROPEAN PARLIAMENTARY ELECTIONS AND PERSPECTIVES FOR SIGNING THE TRANSATLANTIC TRADE AND INVESTMENT PARTNERSHIP AGREEMENT WERE SOME OF THE TOPICS COVERED BY MADELEINE ALBRIGHT DURING HER VISIT TO POZNAŃ IN LATE MAY

M

adeleine Albright, former US secretary of state and professor of international relations, was the keynote speaker at the 5th ABSL Conference. Before delivering her speech to business leaders gathered at the meeting, she answered journalists’ questions at a press conference.

The former secretary of state was on her way to observe the presidential election in Ukraine, so a number of questions centered around that issue. “It is very important that the Ukrainian people have the possibility of making their voice clear as independent and sovereign,” Albright said of the election. She hoped that the democratic process would help end the violence going on in Eastern Ukraine.

“I think that [the situation in Ukraine] obviously has a very large economic dimension,” Albright also said. “Ukraine has many economic problems and I think that one of the issues that somehow gets forgotten ... is Ukraine itself and how much economic help it is going to need in order to have a really viable economy that responds to the needs of the people.”

More economic interaction “There’s also a whole economic dimension because the tool of choice in trying to make clear to the Russians that what they did in Crimea was unacceptable, is economic,” she added. Referring to economic sanctions, she stressed that they always affect more than one side. “When one talks about sanctions there are the targeted countries and individuals and the targeting ones, which it obviously also has an effect on.”

The former politician also referred to energy issues. “The way that the Russians have used energy as a tool of control in some cases and irritation in others, is something that has to be considered,” she said. “I think that the suggestions made by Mr Tusk are very important and significant, in terms of an idea of more energy interaction within the European Union itself versus just individual energy policies. I think that, as Mr Barroso has explained, the issues of energy and environment are two sides of the same coin.”

W B J O B S E R V E R • J U LY / A U G U S T 2 0 1 4

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MADELEINE ALBRIGHT

Biography

M

adeleine Albright was born in Czechoslovakia in 1937.

She moved to the United States with her family in 1948 and completed her education there. She started her professional life at a local newspaper, but later moved on to do research in political science and regarding the press in communist countries.

In 1978-80, she worked for National Security Advisor, Zbigniew Brzezinski. Her later positions included foreign policy advisor to the Democratic Party and US ambassador to the United Nations. In 1997, she became the first woman to be appointed secretary of state, a position she held until 2001.

She holds a PhD from Columbia University. She is currently a professor of international relations at the Walsh School of Foreign Service at Georgetown University. She is known for her love of jewelry and for wearing meaningful pins. In Poznań, she wore a Polish-made amber butterfly.

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“My last point is that I think we have to be aware of the fact that it’s all going to take much longer than most people think,” Albright said, summing up Ukraine issues. “Certainly the rebirth of a functioning Ukrainian economy will take a long time. The relationships with Europe will take a long time [to build] and, I think, some of the redirection of energy flows and functioning is also not something that will happen immediately.”

‘I’m a European’ Albright also spoke of the elections to the European Parliament, which were already in progress in some countries at the time of her Poznań visit. “I’m a European. I always say this. I was born in Europe, and ... I understand Europe pretty well,” she said. She expressed interest in how parties from the political extremes would integrate in the new parliament. “What I would hope is that some of the divisiveness that has become evident in Europe recently will end,” she said.

“The magic of the European Union is supposed to be to put an end to those kinds of divisions and make clear that a Europe that is whole and free is actually a more functional Europe than one that is divided along ethnic and national lines,” Albright said. “The United States, speaking from that perspective, wants to have a Europe that is whole and free as an equal partner, because there are so many other issues in the world. Certainly, there are issues that we have to deal with between Europe and the United States, issues that have to do with trade, the TTIP and a number of other aspects, but we have similar values and we can do much more together.”

Asked about the perspectives of signing the Transatlantic Trade and Investment Partnership agreement, Albright said she hoped to see it done in the foreseeable future. “I think that people see that as more complicated than they thought,” she said. “I had contact with both the Europeans and the Americans on this. It clearly has many aspects to it that are complicated, some to do with recently brought up privacy issues.”

“But I think it’s a really important agreement and one that I know that the United States puts a great deal of emphasis on ... solidifying the relationship between the United States and Europe, the two biggest economies in the world, deciding how to operate with each other in a regularized way, to the benefit of both,” she added. u

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Images: ABSL, Shutterstock

NEWS /

COMMENTARY / LAW

TOMASZ FELISZEWSKI LEGAL COUNSEL AT WKB WIERCIŃSKI, KWIECIŃSKI, BAEHR

Consumer on vacation What tourists should know and do to secure peace of mind during holidays

H

olidays are a unique time of relaxation and entertainment. During this time everyone wishes to avoid disappointments and have the best possible memories from a foreign trip. Before going on holidays, it is good to know what tourists should do to minimize the risk of having unpleasant surprises when the travel agency does not fulfill all of its obligations as organizer.

Choose a trustworthy travel agency Prior to concluding an agreement for service with any travel agency, it is worth spending some time to check whether a particular travel agency has been properly established and has full legal capacity to provide high quality tourist services. Such information is available, inter alia, at the Central Register of Tourist Organizers and Tourist Agents (please see webpage: www. turystyka.gov.pl).

Read the agreement carefully before signing Recent surveys show that most consumers read agreements prior to concluding them with a travel agency.

It is a growing tendency and it is a very positive signal.

Tourists should pay close attention to the content of such contracts and clarify any doubts or vague provisions early on.

According to an August 29, 1997 Act on tourist services, the agreement for the tourist service itself should comprise comprehensive and adequate information regarding the package and should, inter alia, indicate: • the destination • the duration time • the program of the entire event (including the kind, quality and dates of services offered) e.g.: information on the means of transport, hotel facility, sightseeing tour, meals

• the price of the event (separate billing of all dues, taxes and fees if they are not included in the price) and a specification of circumstances that may increase the price Where to seek redress for improper fulfillment of the agreement If the tourist notices any problems upon arrival to his/ her place of destination any cases of improper fulfillment of the agreement should be reported to the agency’s representative or a tour guide. In case the problem has not been sufficiently resolved, the tourist is entitled to send a complaint. The organizer should handle the said complaint within 30 days after concluding the package. Lack of response within the deadline makes the complaint justified.

It is safe to say that a more detailed analysis of the agreement for tourist services, based on the crucial elements listed above, will surely make our long-awaited holiday that much more undisturbed and full of joy. u

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COMMENTARY / LAW

JAKUB TRESZCZUK LEGAL COUNSEL AT NOWICKI AND ZIEMCZYK ADWOKACI I RADCOWIE PRAWNI LAW FIRM

The 70-year-old solution that keeps causing problems Is the Decree of 1945 in any way relevant to property investments in 2014?

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owners were not entitled to compensation or the right to use a property.

After the fall of communism in Poland, property owners or their heirs immediately started to claim damages or return of expropriated property. Interestingly, the Decree itself has never been contested. Thus, the right to compensation and to the use of property can still be inferred directly from its provisions.

Playing for time As for now, Polish courts tend to treat the claims of former property owners favorably – especially in terms of damages claimed from the capital city of Warsaw.

However, the more judgements ordering the payment of compensation are issued by courts, the greater the threats to the stability of the city budget. For this reason, Warsaw authorities have, for quite a while now, sought the adoption of a bill that would govern the issues of reprivatization, simultaneously specifying a fixed compensation for the nationalized land in the amount of 10-20 percent of the property value. Such compensation would be paid from the national, not the city budget. However, successive governments do not address this issue, as the scale of such claims is too great. A one-off payment of all compensations would pose a significant challenge even in terms of the national budget.

The implications of past negligence quickly came to light. The “Decree issues” are known to be the lengthiest and the most time-consuming administrative cases.

Also, it’s very obvious that they are the outcome of a target policy of Warsaw authorities trying to protect city finances. Despite subsequent court judgments

Images: Shutterstock, Kancelaria N.Z./J. Tereszczuk

F

oreign investors planning to purchase a property in Warsaw are often surprised by the fact that in the 21st century they still need to bear in mind legal implications resulting from the so-called Bierut’s Decree of September 26, 1945. Why does the post-war nationalization of land remain an unresolved issue? Is it a real barrier to investment?

Land nationalization in the territory of Warsaw was officially caused by full-scale destruction of the Polish capital during the Second World War which left behind only dead-burnt foundations of buildings in some parts of the city. Possible reconstruction of the town by property owners might have turned out to be ineffective, especially as real holders of property rights were usually unknown. To this day, heirs to many estates located in the northern district of the city, that used to be inhabited by the Jewish minority, have not been determined.

Surprising as it may seem, many lawyers and city planners believe that the general assumptions of the Decree were partially justified, contrary to the commonly held perception of this legal act.

The adopted decree on land nationalization in Warsaw (which didn’t cover buildings) was to ensure rapid and coherent reconstruction of the city, which was heavily affected by war. The process of land nationalization involved compensation to land owners who were also granted the right to make use of a property. Similar regulations were adopted also in other cities of postwar Europe, e.g. Rotterdam.

However, it quickly became apparent that the assumptions of the Decree differ from the reality and the actions undertaken by the Polish government at the time. In fact, buildings were also nationalized and land

COMMENTARY / LAW

aimed at speeding up the examination of cases by the city authorities, the compensation proceedings still can last a dozen or so years with no end result.

More and more often, voices are raised claiming that the public authorities’ playing for time contravenes the principles of a democratic country based on the rule of law. Thus, it’s necessary to immediately adopt regulations that give clearer order to the legal state of Warsaw properties. However, none of the proposed projects have gained acceptance from the government so far. Problems related to the provisions adopted 70 years ago will continue to emerge until these matters are resolved.

How relevant is it to current investments?

The key question is, however, whether issues related to land nationalization could pose real obstacles to potential investments in Warsaw? In most cases, they will not. These issues are mostly about compensation for

property loss, not about its return. Also, they are more problematic for the city authorities than for current property owners or buyers. If an expropriated property experiences “irreversible legal effects” (e.g. a building), its former owner is not entitled to property return, though, they can claim damages from the city instead.

Thus, the majority of property investments in Warsaw have nothing in common with problems arising from potential property return.

Undoubtedly, when talking about investment in a pre-war building, it’s recommended to turn to a specialist before making a decision. Specialists can analyze the legal state of a given property. Such analysis is indispensable, especially if it concerns a property listed as a “decree issue” on the website of the Office of the Capital City of Warsaw (bip.warszawa.pl). In this sense, anything related to investments in pre-war properties should be examined for unresolved problems that may result from laws adopted nearly 70 years ago. u

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COMMENTARY / STOCKS

MATEUSZ ADAMKIEWICZ FINANCIAL MARKETS ANALYST

Forget about the tapes

O

ne of the biggest political scandals in the recent history of Poland put the government and central bank in an embarrassing position. People who are responsible for the economy of our country were caught behaving immorally, so obviously this is an intriguing case for investors.

The first reaction was nervous and the main indices fell sharply, but the whole sell-off was offset the same day.

The tape scandal is not the most important matter for investors, but it is worth clarifying some issues, because some commentators seem to be mixing politics with economics.

First of all, there is no empirical evidence that a party A is better for the economy than a party B, at least when we consider non-radical political forces. What I mean by this is that there is no reason to be afraid of political scene changes. Of course, investors appreciate stability (consider France and Italy during the European crisis) and early elections may lead to some corrective movement of the Polish złoty and bonds on the WSE, but in the long term current trends are not threatened.

The tape scandal did not hurt the Polish stock market as a whole. It hurt only some companies that are closely involved with the case. If not the tapes, what caused the recent declines on the WSE? It’s easy to point to an emerging markets sell-off, but probably the most important specific reason was the situation in Iraq. A potential armed conflict in this economically important country is a good reason to be afraid, and when investors are afraid they usually sell emerging market assets. This situation was no different. Tensions in Iraq have led to a rise in oil prices, which is not desirable in an environment of fragile economic recovery worldwide. The sooner the situation in Iraq is resolved, the better for stock markets.

Recent weeks have not been kind to Polish investors

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and there are some reasons to expect that the future won’t bring rapid changes (i.e. pension fund system amendment). There is some potential for further corrective movement, but it is not significant. Consolidation between 2,300 and 2,600 points (WIG20 contract) remains my base scenario, and now we are heading for the lower limit. Polish stocks will become more attractive after the sell-off and the 2,300/2,200 points area may be a good point to start buying shares.

The Polish economy is doing better and we’re back above a three percent GDP growth rate. There are also chances that an inflation dip is very close.

With solid economic growth, companies listed on the WSE should improve their earnings, and if they do so, they would be much more attractive. Currently, basic indicators like PE (price/earnings) show that Polish stocks are not cheap, but now we can start another phase of a bull market. After an expectation phase, we might see a real improvement phase. Polish companies should benefit from European economic recovery, and increased domestic consumption. Looking historically, moments like this are a good opportunity to buy shares. u

Image: Ministry of Economy

INTERVIEW / JANUSZ PIECHOCIŃSKI

I N T E R V I E W B Y E WA B O N I E C K A

WHERE IS POLAND’S ECONOMY HEADED AND HOW WILL THE TROUBLE IN THE EAST AFFECT ITS COURSE? THE MINISTER OF ECONOMY AND DEPUTY PRIME MINISTER JANUSZ PIECHOCIŃSKI TALKS ABOUT EXPORTS, INVESTMENT AND ENERGY

Playing catch up

>

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INTERVIEW / JANUSZ PIECHOCIŃSKI

>

Janusz Piechociński: I do understand that Poles are impatient with their economic expectations. Most naturally, they want to achieve the highest economic standards of living as soon as possible and to catch up immediately in economic development with the richest countries in the West.

During my meetings with people, I am often asked questions like: “Why can’t I enjoy the same standard of living as Germans can? We have been in the EU for ten years now.” I think that such opinions and slightly overblown complaints about the economic development of our country, reflect rather poorly on public awareness about economic developments in the world. We should also bear in mind the point of economic development and economic structure we started from after our transformation, as is the case with entrepreneurship.

A decade ago, Poland was at a mere 48 percent of the EU standard of living.

Now this ratio is 68 percent. We strive to improve, though. Nevertheless, we have to realize that Poland’s economic development has not been taking place in a vacuum.

Both within Europe and on the global scale the competition is growing in all economic areas. While Poland can boast a strong market economy, we are not innovationoriented, yet. We cannot compete merely with our low labor costs; instead, we have to base our economy’s competitive edge on advanced technologies, which shall in turn lead to changes in our domestic labor market. Along with unemployment issues, we have a shortage of properly educated people in some professions, which proves that further changes in our tertiary education system are necessary.

However, not all people are prepared for the upcoming economic changes. The improvement of efficiency, productivity, modernization, and economic growth at the rate of 3.4 percent of GDP in the first quarter of 2014 does not automatically lead to an increase in the number of jobs.

Consequently, the poorer part of our society does not benefit from economic development and feels that the economic situation is deteriorating.

Will the present upward trend in exports – Poland is among the thirty biggest exporters in the world – continue and how does it affect our economic structure?

Our export structure is changing. Also companies with foreign capital, exporting from Poland, are switching from manufacturing simple products towards producing more sophisticated and advanced goods.

The level of investment in the high-tech

industry and the number of jobs created in that sector in 2013 have been the highest to date. Polish firms are investing abroad and our products are being shipped to more and more nations.

The government is going to introduce a comprehensive program aimed at implementing innovative solutions in our domestic companies. We are going to allocate as much as 85 percent of EU funds to it.

Yet the state alone will not replace human initiative, and the growth of our economy is, to a large extent, based on the activity of medium and big companies, and their constant drive for excellence and modernization. And we should remember that there is a significant role of foreign capital in that expansion.

How much will the crisis in Ukraine affect our exports to the east?

We are experiencing the consequences of that crisis in Poland. Contrary to some Western countries, such as Germany for example, our exports to Russia are not based on technology. We are now recording a drop in food exports to Russian and Ukrainian markets. It is partly due to the embargo introduced by Russia on pork coming from Poland and the EU; also, there is a major drop in fruit exports to Russia. Fortunately, our fruit is selling well in EU countries, and the value of our exports to the EU, mostly to France, rose by 6 percent in the first quarter. Nevertheless, Polish food producers are concerned with the drop of exports to Russia, which is a big

“A DECADE AGO, POLAND WAS AT A MERE 48 PERCENT OF THE EU STANDARD OF LIVING. NOW THIS RATIO IS 68 PERCENT. 20

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Image: Ministry of Economy

WBJ Observer: The Polish economy is growing at some 3.5 percent, which positively distinguishes Poland from other EU countries still struggling with the economic slowdown.

However, many Poles criticize the government for failure to improve the labor market conditions and business environment. How do you respond to such criticism?

INTERVIEW / JANUSZ PIECHOCIŃSKI

“IN THE NEXT DECADE, AFRICA WILL BE ONE OF THE FASTESTDEVELOPING REGIONS IN THE WORLD. W B J O B S E R V E R • J U LY / A U G U S T 2 0 1 4

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INTERVIEW / JANUSZ PIECHOCIŃSKI

“WE ARE PUSHING HARD FOR A COMMON ENERGY SECURITY STRUCTURE IN THE EU.

market for our fruit. According to our preliminary forecast, this year’s apple exports to Russia will be lower by ca. 20 percent, compared to last year.

Our biggest concern is energy security – we are a big importer of gas from Russia.

In your view, how should we be developing our energy sector and what should the Polish economic energy mix consist of?

Poland’s energy security has to be built on exploitation of our own natural resources, development of proper logistics infrastructure and accessibility to foreign sources of energy. We are working on establishing the “Polish energy mix”, while at the same time pushing hard for a common energy security structure in the EU. In the face of the present RussianUkrainian crisis and Russia’s policy of using, or even abusing, its position as the main supplier of gas to Europe, the task of building common EU energy security is one of the biggest challenges.

Today, 87 percent of electricity in Poland comes from hard coal and we have

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plenty of it for years to come. In the case of gas, until we start exploiting our shale gas resources, we have to import 2/3 of it. Poland – like the other EU member states – is buying resources, i.e., gas and oil, from Russia. We are also implementing a strategy of energy security, announced by the government in April of this year. It includes exploitation of coal, construction of new gas pipelines, completion of the LNG terminal in Świnoujście, talking with key world exporters, like the Americans and the Canadians, about possible delivery of liquid gas to that terminal, and speeding up the process of shale gas exploration in Poland.

Most probably, part of our energy resources will continue to be imported anyway. However, we are going to negotiate prices that are at the same level as for other EU member states. We have quite a pragmatic approach to energy policy. We do realize it requires lot of talks and negotiations with other European countries, which sometimes present a different approach in terms of climate policy and the role of coal in producing energy.

Let’s turn to coal mining in Poland, where the present situation is quite poor. The prices of Polish coal are high, they are not competitive; and while Poland is importing coal from abroad, our own coal is lingering at coal yards. What action is your ministry planning to take to remedy this situation?

Let me remind you that coal is a “global” product. Its exploitation globally is growing. Its export to Europe is growing with decreasing prices. The coal exploited in East Siberia is, in euro-dollar-ruble relation, much cheaper that the cheapest coal exploited in Poland.

Those are external conditions affecting our mining industry. At the same time, we are paying the price for long-term negligence of mine modernization and production cost-cutting. Apart from the reconstructed and privatized Bogdanka mine, which is making profits – the remaining ones have to face different challenges. Their budgets are burdened with enormous contributions paid, among other things, in free coal equivalents to their retired miners.

Often, the mines employ obsolete technologies and operate on overexploited coal beds. While the state cannot pay for all losses generated by state-owned mines, we have to do our best to facilitate the conditions of their reconstruction and pave the way for close cooperation between the energy and mining sectors. Another important objective is to ensure more competitive prices for Polish coal. However, the main task of improving the situation in coal mines lays in the hands of managers of

“POLAND WILL BE GRANTED €31 BILLION TO BE SPENT ON IMPROVING TRANSPORT INFRASTRUCTURE.

INTERVIEW / JANUSZ PIECHOCIŃSKI

Image: KPRM

coal holdings. As the example of Bogdanka proves, a mine can become successful by calculating the costs properly and modernizing the entire production process.

It is natural that miners working in very difficult and hazardous conditions want to keep all their present benefits and are afraid of changes; on the other hand, there is no consent in Polish society for spending huge amounts of public money to support ineffective coal mines.

We have to reform this sector to improve the situation in the coal mining industry and to make coal production in Poland competitive. The government has to use new tools to support managers and directors in implementing necessary changes. It will not be an easy process, yet we have to do it and I will spare no effort in making it work.

Recently, the government has enlarged special economic zones where investors have a special tax reduction and other fiscal benefits. Italian holding Fiat, already present there and benefiting from tax reductions, has now received additional development space in the Katowice Special Economic Zone. You announced that it would produce a new small car model in Tychy, while Fiat claims that nothing has been settled yet.

How come Fiat is located in a special zone and benefits from tax privileges, without a solid commitment to produce cars there?

The principles of granting tax exemptions or reduced tax rates to investors operating in special zones are strictly regulated by the law. Their aim is to encourage investors to come to Poland and invest here. Without delivering the new investment, Fiat will not be able to benefit from the tax exemption provided for in the zone. I do believe that the production of Fiat’s small cars in Poland will eventually begin and it will provide a few hundred new jobs.

T

There has also been some fuss about Pendolino trains that were bought from the French producer – Alstom.

They cannot be used on Polish railroads due to the lack of proper infrastructure. There is a loud political outcry over that purchase and it seems legit to ask why the decision was taken to buy the costly French Pendolino when our Polish producer, PESA, is producing excellent and modern trains that are praised abroad and are the preferred choice of Deutsche Bahn?

The decision to purchase the Pendolino was taken a few years ago by the former minister of transport during business negotiations with PKP SA and PKP Intercity. At that time, I was chairman of the Infrastructure Committee in the Sejm and despite declaring that I would not purchase the Pendolino, the decision was taken anyway. Now, I am carefully reviewing the detailed provisions of that purchase agreement. We have signed the agreement for a specific number of Pendolino trains certified for operation on Polish railways at specific speed. It turned out, however, that in the said time the producer was not able to meet this requirement. I expect the proper fulfilment of the purchase agreement; otherwise, we shall start charging the producer with contract-stipulated financial penalties, or we may even terminate the contract. The matter is complicated and both sides have to look for a proper solution. From our side, we demand of

“THE STATE ALONE WILL NOT REPLACE HUMAN INITIATIVE, AND THE GROWTH OF OUR ECONOMY IS, TO A LARGE EXTENT, BASED ON THE ACTIVITY OF MEDIUM AND BIG COMPANIES.

the manufacturer the adjustment of the trains to suit exploitation, first at 120 km/h, then 160 km/h, and finally at the target speed – 220 km/h.

Until quite recently, we have had major problems with spending EU funds which could have been allocated to improve the situation in that sector.

Today, the state of affairs is changing and in the next EU budget perspective Poland will be granted €31 billion to be spent on improving transport infrastructure. Of that money, €10 billion will be allocated to railway operators. The operators will be then held accountable both to the government and the EU Commission for spending that money on effective modernization of the entire railway system. In my opinion, they should strive to execute that task in cooperation with Polish producers of railway equipment and rolling stock.u

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COVER STORY / POLISH BRANDS

Fighting their way to the top POLISH-MADE BRANDS HAVE EVOLVED ON THE WORLD MARKET. THE FEW ORIGINAL EXPORTS LIKE KRAKUS POLISH HAM AND PRINCE POLO, HAVE BEEN OVERSHADOWED

BY NEW AND INNOVATIVE GOODS

BY MARK ORDON

“JOINING THE CLUB OF TOP RANKED MARKET PLAYERS IS A CHALLENGE WHEN YOU ARE FROM A RELATIVELY UNKNOWN CENTRAL EUROPEAN COUNTRY. 24

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It

COVER STORY / POLISH BRANDS

It used to be that if you asked a foreigner with limited knowledge of geography or history what they know about Polish products or specialities, they may have mentioned pierogis or kielbasa, in a very generic sense. Not much else. On the other hand, the same question about Germany would trigger a different reaction: BMW or Mercedes cars, Bosch spark plugs or Bayer aspirin.

Of course, as with any rule, there are exceptions. An American, especially in certain regions of the US, may recall Krakus Polish ham. Most Icelanders, on the other hand, will without a doubt exclaim: Prins Póló! (see p. 28). But stereotypes aside, what is the condition of the Polish brand today?

And you are from where?

Today, an overwhelming number of companies are successfully exporting products manufactured in Poland, yet in many cases these are rebranded for the target market or sold under well-known international brands. In the end, customers may have a difficult time finding any indication that the products were in fact “Made in Poland.” Examples of such products include German NIVEA cosmetics, Swedish IKEA furniture or the popular Italian Fiat 500 city car.

A number of companies in the country

have managed to go a step further, to stand out from the crowd. Since 1996, Solaris Bus & Coach, has been producing public transportation vehicles which now roam the streets of 600 cities and towns in 30 countries. The company was founded and led by the husband and wife duo of Krzysztof and Solange Olszewski.

According to the founders, it wasn’t easy at the start. A lot of effort and investment was put into convincing foreign customers that a bus made in Poland can have the quality of a vehicle made in Germany, says Mateusz Figaszewski, Deputy Director of Public Relations at Solaris. Poland has never really been associated with any leading automotive brand, he explains. It was well worth the struggle. Today, Solaris is among the top European manufacturers of buses, trams and trolleys and is the largest independent bus manufacturer on the continent.

Rafał Brzoska, CEO of Integer.pl, operator of the InPost private postal service, also admitted that joining the club of top ranked market players is a challenge when you are from a relatively unknown Central European country. He quickly adds that the underdog position proved to be beneficial in winning over the likes of Saudi Post, Eesti Post, Australian Post or Iceland Post.

Carving out a place for Polish companies among global leaders may be difficult, but there is really nothing to be

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COVER STORY / POLISH BRANDS

ashamed of, as Adam Leik, Marketing Director at window manufacturer Drutex points out. He stressed that the company never held an inferiority complex. Therefore, there was no real need to conceal the fact that Drutex was from Poland. “That is why we always appear under our own brand and offer Drutex windows made in Poland, according to the rule ‘It’s good because it’s Polish,’” Leik said.

Delphia Yachts, Poland’s top producer of luxurious water vessels, which now ranks among the top 10 European yacht builders, has likewise always emphasized that their boats are built at a Polish shipyard, says the company’s PR manager Ewa Kot. She added that although the tedious task of enlightening customers abroad took years, now Polish yachts are associated with cutting-edge design, top quality and functional features.

Still, there are sectors where the country of origin is not key. In the clothing industry, for example, it does not really matter where the owner of a given brand originally comes from, says Dariusz Pachla, Vice President of the Board of

“WE ALWAYS APPEAR UNDER OUR OWN BRAND AND OFFER DRUTEX WINDOWS MADE IN POLAND, ACCORDING TO THE RULE ‘IT’S GOOD BECAUSE IT’S POLISH.

LPP, owner of the Reserved, Cropp and House brands. It’s a factor which does not really affect the end consumer’s decision to purchase a product off the rack. What is important for LPP rather, he explains, is that the company’s brands are well-established on the markets where they operate and enjoy a high level of awareness among consumers.

Wiesław Włodarski, CEO of Foodcare (Black and Frugo), also notes that positive communication of the brand itself is key.

Only strong brand names which have a story to tell and a clear message to the consumer are capable of making it in today’s market, be it in Poland or abroad.

Quality, innovation, vision.

Not price.

If you think strategies like price dumping can get your foot in the door of the high mileage club, think again.

Figaszewski notes that breaking through with a Polish bus in the German market back in 2000 required endless positive marketing. Regretfully, at the time, “Polish product” was not an equivalent of

ARABIAN HORSE DAYS POL AND 2014

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COVER STORY / POLISH BRANDS

Images: Shutterstock, Krakus

“high quality product.” Although in the long run, offering ridiculously low prices is not the way to go, especially in the public transportation sector. In this regard, Solaris has never competed on price alone, but above all with innovation, high quality and top-level service.

The same rules apply in the clothing sector. As Pachla noted, in addition to a reasonable price and easy access to stores, customers rate the attractiveness of a garment based on its high quality and trendy design. In many cases, price will even take a back seat to far-reaching vision and innovative ideas, like the parcel lockers (paczkomaty) offered by InPost. Brzoska is happy to report that his company had the foresight to predict current trends in the postal market as well as the overwhelming development of the e-commerce sector and were able to react accordingly. As a result, InPost’s parcel locker terminals meet the strict demands of web-driven consumers in Australia, Chile, the UK, Saudi Arabia and dozens of other countries.

It’s not only the consumer that notices Polish companies abroad are not only steadily growing their customer base, but are also being noticed by experts in the field. Top quality and innovative features of InPost parcel lockers earned the company its fourth win in a row at the World Mail Awards 2013, beating out operators like Singapore Post or LibanPost in the “Customer Service” category. In the UK, the parcel lockers earned the Delivery Excellence Award 2014 in the “Best Carrier Contribution to Delivery Innovation” category, earning more votes from internet users than the top postal and delivery operators in Great Britain, including DPD or UK Mail. The luxurious Nautika 1080 Soley, produced by Delphia Yachts, won Croatian Boat of the Year 2014 and was nominated by German yachting magazine Boote for European Powerboat of the Year 2014. Solaris buses were recognized by readers of the German trade magazines Lastauto Omnibus, Trans Aktuell and Fernfahrer as Best Commercial Vehicle 2014 in the category of imported midi buses. FoodCare went in an even more sophisticated direction: a case

The legendary Krakus Polish Ham

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or many years, the Krakus brand and especially its canned ham was a luxury item for most Poles. Yet for many across the globe, it was an everyday food item. Produced by Animex since 1950, which at the time was a state-owned enterprise, the brand name was slated and registered for the US market in particular and was very rarely available to Polish consumers. Along with coal, the tasty cold cut became Poland’s top export item in the 1970’s and was probably the only item in the US associated with the country.

In fact, the ham became an everyday item of American culture. Politicians the likes of Dwight Eisenhower or Bob Dole had pictures taken with the distinctive can, as did many Hollywood stars.

Krakus Polish Ham saw its debut on American television back in 1995, when talk-show host David Letterman handed out 461 cans to the audience and awarded “The Most Honored Ham in the World” to Bob Dole, who subsequently appeared with his can on the cover of Time magazine. Today, Animex is a part of Smithfield Foods, an American company which still supplies Polish-made Krakus brand products to stores in 19 US states.

study of the Black beverage brand appeared in the curriculum of the most prestigious business school in the world – Harvard Business School.

And they’re not stopping there The overwhelming success of these companies has by no means clouded the vision of its leaders. In the nearest future, Włodarski has plans to focus particularly on the US market to push sales of Black. Since May 2014, the energy drink is available in American retail chains under the Black Gold brand, and FoodCare hopes to involve boxing great Mike Tyson to market and promote the product. Włodarski is particularly proud of this achievement and mentions that for him personally it’s a great satisfaction to be able to buy a can of Black or a bottle of Frugo in New York or Chicago, something which he couldn’t have dreamed of 15 years ago.

Drutex has also opted for celebrity exposure. The company, known mostly in the B2B realm, is now targeting the end customer with a sports twist. Drutex windows are to be associated with high quality, professionalism, speed and reliability. That is why the company chose world-class football stars Andrea Pirlo, Philipp Lahm and Jakub Błaszczykowski as their ambassadors.

Leik feels that for his company the best is yet to come. To address the potential in Poland and abroad, Drutex is building a European Joinery Center which will double its output to 10,000 windows daily.

LPP already has a solid position in Central and Eastern Europe, but is now aiming for the German market, where it plans to open three new Reserved stores. Pachla also unveiled the company’s plan to extend beyond Europe. By the end of this year, LPP, along with franchisee Azadea, will open the first non-European Reserved store in Qatar.

Solaris is now answering to the demands of strict emissions regulations in many European cities with its range of electric-powered buses.

The company is also planning the release of a new Urbino model city bus with the official unveiling set for September 24 of this year.

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COVER STORY / POLISH BRANDS

So how is the Polish brand doing in 2014? Quite well, you could say, based on this small sampling of companies. Sampling is the correct term here, because in addition to Drutex, window maker Oknoplast is also a key player abroad, as is Fakro.

Although Solaris is the best known fully Polish-owned independent vehicle manufacturer, busmaker Autosan is also building its position in foreign markets, while Bydgoszczbased PESA is sending its trams and trains to the Czech Republic and Germany.

What seems to be a very positive trend now is the fact that the case of the Polish company abroad no longer seems to be a fight between “us” and “them” – or the disadvantaged Pole against the rest of the world. In their respective sectors, each of these companies has developed into a full-fledged player which now has the means to compete on all levels – be it innovation, quality, service, design or even price. Definitely a better place to be. u

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Iceland: Prins Póló and Coca-Cola

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ost Poles are quite familiar with the popular Prince Polo wafer bar, produced in Cieszyn by the food company Olza (now a part of Kraft Foods). What they might not know, though, is that for 60 years the seemingly modest chocolate and wafer confection has been and still remains an integral part of Iceland’s culinary culture. The first batch of Prince Polo was imported to the country in 1955 during a period of heavy import restrictions and as a result of a trade agreement signed between Iceland and Poland. An entire generation of Icelanders were brought up on American Coca-Cola and Polish Prince Polo, or Prins Póló, as it’s known locally, stated President Olafur Ragnar Grimsson during his visit to Poland in 1999. The two products were a must-have for any gathering. Although import restrictions to the island country were lifted back in 1982, the product is still quite successful. It is estimated that Icelanders consume 160 tons of Prince Polo annually which translates to about half a kilogram per resident per year! “[Prince Polo’s] popularity has not dwindled,” says Svava Kristjánsdóttir, marketing representative for Ásbjörn Ólafsson. which imports Prince Polo,“even though consumption per Icelander is not as high as it once was. At its peak around 1970, every Icelander was consuming about one kilo of Prince Polo a year compared to the half kilo per year today.”

COVER STORY / POLISH BRANDS

SHORT

MEDIUM

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F E AT U R E / K R A K Ó W O LY M P I C S

BY ŁUKASZ CIOCH

FOR KRAKÓW, MAY 25, 2014 (THE DATE OF A REFERENDUM VOTE ON THE CITY’S OLYMPIC BID), WAS ONE OF THOSE DAYS THAT HAS THE POWER TO CHANGE HISTORY AND REDEFINE SOME OF THE CITY’S MOST TENACIOUS STEREOTYPES. WHAT MUST HAVE LOOKED LIKE AN INSIGNIFICANT INGREDIENT TO THE CITY’S LEADERSHIP, A GROUP OF OPPONENTS IN FACT SPOILED THE WHOLE BROTH

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Images: Shutterstock,Wikimedia/Adrian Grycuk

Winter Wonderland

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F E AT U R E / K R A K Ó W O LY M P I C S

FROM POLL TO TOLL

A TNS OBOP poll commissioned a year ago by Radio Kraków and carried out in three cities on a representative sample of 1,500 inhabitants, indicated that 68 percent of respondents in Kraków support the Olympic idea, even though, of the three cities involved (including Tarnów and Nowy Sącz), Kraków received the lowest support. Of the 68 percent votes “in favor,” only 32 percent were a “clear yes” and 36 percent “probably yes.” In a later poll (October 28 – November 2, 2013), which was made part of the official city application, of 2,000 chosen respondents from across Poland, 81 percent said they were in favor of Kraków applying to become the host city for the Winter Olympics. The figure for Kraków alone stood at 66 percent in favor.

One fine Sunday, a strong majority of voters (70 percent of the 36 percent turnout) spoke out against the idea of Kraków hosting the 2022 Olympics. To some, it was a triumph of collective resistance against arrogance served up by City Hall, combined with the emergence of a newly empowered, more mature voter; to others, it was proof that even in Poland’s proudly conservative city of kings, smartly packaged, cheap propaganda and misinformation can still find enough fertile ground to win the day.

Three things came out very strongly from this referendum vote. First of all, more than anything else, the Olympic battle was about leadership, credibility and trust. Irrespective of the actions taken by activists and nay-sayers, it could have been won, given the roots of distrust were not so deeply entrenched and leadership wasn’t so severly lacking.

Secondly, serious grassroots activism is on the rise in Kraków – strong enough to pressure the city government to hold a referendum and daring enough to shout out loud: “We don’t trust you! Cut out the propaganda and show us the facts first!”

Finally, there are far-reaching gaps in the city’s longterm development strategy. The Olympic idea was not part of some smart, all-embracing planning process. It originated quite spontaneously in July 2012. A month later, it was presented before the council – a case of unprecedented efficiency in a city that is not exactly known for administrative agility or making out-ofthe-blue decisions that define a very focused course of long-term action.

After a lot of groundwork, legislative preparations and endless meetings in Poland and abroad, the application was officially submitted on March 13, 2014, apparently paying no heed to superstition. With it, millions of złotys were no longer potential but already committed expenditures. Some of the more exotic spending hit both local and national media headlines, provoking ever more polarization in public sentiment, enough to prompt a Newsweek inquiry with a sarcastic cover, “Olympics, the Kraków way” (February 2014).

However, this was only the beginning of the brickdropping contest, running parallel to a lot of positive effort and the race against time, which were of less interest to the media. In the grand scale of things, the total amount of money (mis)spent prior to May 25 was not really the main issue. What mattered most was the powerful symbolism attached to individual stories, which, taken out of context, went viral and became very detrimental to the entire effort.

In a ‘yes yes yes’ kingdom There can be little doubt that the entire two-year process saw both advocates and opponents of the initiative engaged in a variety of propaganda and social engineering. Likewise, there can be even less doubt that the communications campaign, including the doomed final stage, was bewilderingly amateurish and almost completely oblivious to the realities leading up to the referendum.

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F E AT U R E / K R A K Ó W O LY M P I C S

PLN 10 million

was the cost of Kraków's olympic campaign

The dawn of a new voter On May 25, the fatal blow came from the direction least expected by the project owners, who were perhaps a little too busy to acknowledge the throngs gathered at the foot of the ivory tower. Following the near-forced resignation of committee chair Jagna Marczułajtis-Walczak, the leadership continued prodding blindly ahead.

Days before the referendum, Magdalena Sroka, Kraków’s deputy mayor in charge of the local Olympic Committee, said the following: “I’m convinced we’ll successfully pass through this phase and that it will only make us stronger, similarly as it did for Vancouver.”

Weeks before the fateful referendum, the key decision-makers apparently bet on the referendum turnout not passing the validity threshold of 30 percent.

Meanwhile, the “Kraków Against the Games” campaign and its frontmen delivered their messages in much more appealing packaging. Their arsenal included hundreds of LCD screens in public transport and cheap, carefully-worded, A4sized photocopy warnings on entrances to apartments all over the city, screaming: “Nie od razu Kraków zrujnowano!” (Eng. “Kraków wasn’t ruined in a day”). Stimulating ancient fears and grudges, only partially dormant in a crisis-ridden reality, is a technique used quite often by social activists.

The price of looking down So why did the numerous wake-up calls never register with the authorities?

Inept communication continued to cascade down from high above until May 25. Kraków’s inhabitants must have had enough of it come referendum time. From beginning to end, it was a contrasting PR fight, no doubt. The city reacted to the “crisis stage” with a series of so-called public consultations, amounting to 90-plus-minute, 120-plus-page “yes yes yes” presentations, conducted by Olympic officials, in oversized venues, before undersized audi-

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Image: K. Marcinkiewicz/Konceptia

Until it’s too late A lot happened between March 13 and May 25, scandals and provocations includ-

ed, but it’s sufficient to say that a large portion of the local media joined ranks with the Olympic nay-sayers. A Facebook profile of the “against the Olympics” movement, garnered over 23,000 “Likes.”

The weeks and months that preceded the triumphant (or “ill-fated”) date of May 25, unleashed some totally new breeds of hostility.

Images: Shutterstock

To give the example of Kraków’s Olympic logo: in a city of artists and graphic designers, a smart thing to do would have been to announce an open competition for a logo design at Kraków’s Academy of Fine Arts or other institutions. The winning logo could have cost a quarter of the amount spent on the “Swiss winner” and the money would have helped promote the best local talent. This would have created the impression that the money is invested wisely and spent locally, sending the right kind of signal from the start.

Instead, the pricey commission for a logo gave ever more cannon fodder to activists opposed to the olympic initiative.

If you combine the above with a continuous inflow of extravagant bills (the logo, the Sochi trip and the “consultations tent” among the favorites in the media) with nontransparent decision making, the backlash of public opinion was bound to happen sooner or later.

F E AT U R E / K R A K Ó W O LY M P I C S

ences. This did not bode well compared to the pithy, catchy, fresh-sounding communications set in motion by the “no no no” camp, whose leader now wants to become mayor.

If, in a matter as sensitive as the Olympics, your communication strategy hinges on statements as profoundly vague as “Olympics mean less smog,” coupled with stock-photography posters of happy faces, irritation is the least you should expect in return. Under such circumstances, reluctance to make serious, far-reaching decisions is hardly fair or justified.

Ironically enough, even though the opposition’s waves were swelling, Kraków’s candidacy seemed to gain strength for geopolitical, economic and social reasons.

Advocates for Kraków’s chances included a balance of geographic allocation of confirmed Olympic venues (Beijing 2008, Sochi 2014, South Korea 2018) and resignations of potential, important competitors (i.e. Stockholm).

Thinking big, acting small?

Kraków has long been in the red or on the verge of it. The last decade of large infrastructure projects (two local stadiums, an Opera House and more recently the Congress Centre and Kraków Arena) does not show that things happen on schedule and within budget.

Compared to other urban power centres in Poland, whether willingly or not, Kraków plays the part of a conservative outcast paying the price for political nonconformism, as was painfully demonstrat-

ed by the Euro 2012 football championships.

Towards a diagnosis…

What was the motivation for the Olympic bid? Was it a Euro 2012 hangover-recovery strategy or a conviction that such a grand, national effort should, in principle, make everybody happy?

At stake was not only the brand value of an ancient and beloved city, but a more general effort to strengthen Kraków’s leverage in the competition for both EU and state funds. Kraków has not exactly experienced it to be a level playing field. Instead, it has long seen itself as deeply underprivileged.

Case in point Chances are that the Winter Olympics 2022 would have motivated the conservative, historic Kraków to reshape and redefine itself under the Olympic brand. In an unprecedented referendum, hunger for political longevity, attachment to personal views and collective arrogance in seats of power were instrumental in bringing this dream project to an end. Further ahead, lack of imagination and relevant project management skills could have easily turned the dream into a financial nightmare. Instead, the costly two-year affair, which was only beginning to gain momentum, was put to an abrupt end.

Management textbooks are full of case studies with great ideas (both public and corporate) failing on account of

69.72 %

a comparatively simple project management gap, all the more painful when one feels the bigger things are right on track.

Before the curtain falls…

There was too much politicking from start to end (on both the local and the national level). Lack of clear, consistent and responsible leadership on the project, or more precisely, empowerment and ownership of the project did not help either. Finally, arrogance and lack of fundamental humility played an important role, too. A simple public appeal for trust from the city mayor, combined with an apology for mistakes made, could have worked miracles.

Since May 25, numerous causes have been cited by various experts eager to blame the scapegoat. From the perspective of the city authorities, there were three guilty parties: the gullible voters, the activists and the media. In reality, the entire two-year process saw too many blatant mistakes and a disastrous choice of timing. The date for the referendum (chosen as a result of a combination of local politicking and early media fallout), was perhaps the prime culprit.

In the aftermath of the fateful day, the “guilty parties” could hardly resist blaming the general populace for their ignorance and susceptibility to propaganda, an argument that would perhaps better explain their earlier electoral success than the Olympic fiasco. u

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FEATURE / TOURISM

HAVE MONEY, WILL TRAVEL B Y JAC E K C I E S N OW S K I

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uring the communist era, Poles rarely vacationed abroad. Mostly because leaving the country was not as easy as it is now. The lucky ones that received a passport usually visited other communist countries, with Bulgaria being the most popular tourist destination. After the fall of communism, Poles also rarely traveled abroad for recreational purposes. During the first few tough years of transition, holidays were an unnecessary expenditure.

When things settled and people were able to save their money, a tourist boom began. For years, Greece has been the most popular tourist destination for Poles. But more and more tourists travel to exotic destinations like Thailand or Ghana to spend their vacations and hard-earned money.

According to the latest forecast by the Polish Tour Operators Association (PZOT), this year’s number of sold holidays could increase by nearly 30 percent.

“It looks like 2014 will be another great year for the Polish tourism business,” said Krzysztof Piątek, PZOT President.

“The current economic climate is working in our favor. The złoty is getting stronger against the euro and the US dollar, also fuel prices, crucial for the cost of chartering planes, are much more stable

and lower than the year before. All of the macroeconomic indicators regarding GDP growth and unemployment are dropping and improving consumer sentiment,” he added.

The improved sentiment can be seen in data released by Mondial Assistance, an insurance company. This year, the average household income of families planning on going for holiday is PLN 4,500 (previously it was PLN 6,500). Overall, 47 percent of Poles are planning to leave their homes for holidays this year, while the EU average is 54 percent.

Back on track This will be the second year in a row that Polish tour operators are earning money. In 2013, according to TravelData, all companies combined posted a PLN 85 million profit. However, between 2009-2012 the companies were losing money, with 2009 being the worst (PLN 79 million in losses).

The money-losing period was tough for the industry, with several tour operators filing for bankruptcy each summer season.

The worst was 2012, when 15 such companies went under, leaving thousands of their customers stranded in different parts of the world. Ironically, this situation has helped the business as customers became more aware of which tour operator they were traveling with. They started looking more at their finances and track record rather than

Poland’s biggest tour operators Tour operator

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Income (2013, PLN million)

Itaka 1,350.76 Rainbow Tours 583.63 TUI Poland 568.14 Wezyr Holidays 291.48 Neckermann 267.81 Source: Rzeczpospolita

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just the price, which ultimately sifted out the bad apples. It has also helped change Polish law. In 2012, the Ministry of Finance sharply increased the minimum amount of guarantee funds that tour operators have to maintain from €67,000 to €250,000. This money is used to help bring stranded tourists back home when their tour operator goes bankrupt. “This was a good idea and we can see it clearly worked, as last year was profitable and improved the tour operators’ financial condition,” said Piątek. The numbers proved it. After the new law came into force in 2013, only 5 travel agencies went bust.

Despite the fact that Poles earn more,

Image: Shutterstock

Polish tourists are getting bored with Greek beaches and Egyptian resorts and since many are able to afford more, they prefer to travel to more exotic destinations

FEATURE / TOURISM

their holiday habits have not changed over the years. They still prefer traveling to relatively close places, with warm weather and low prices. Greece remains the top destination with 29 percent of Polish tourists going there this year, Turkey is second with 18 percent and Egypt third, with 16 percent.

But more and more Poles are looking for something unique in their holiday plans.

Far away lands Instead of Greek beaches, Turkish resorts and Egyptian pyramids, an increasing number of Poles prefer Kenyan safaris, Vietnamese street food or South American jungles. The exotic tourist market is booming. Estimated at some PLN 400 million with 70,000 Poles vacationing in exotic places each year. “We estimate the annual growth of the exotic destination market at 30 percent and so far it looks like this niche is resilient to any economic downturn,” said Radomir Świderski, PR manager for Rainbow Tours, Poland’s second biggest tour operator. The company expanded its offer of exotic destinations greatly and is reaping in the profits from this strategy. “Eighty per-

cent of revenue from the winter period was from exotic destinations,” Świderski added.

Between 2002-2012, the average salary in Poland has increased by 67 percent. For a similar expense a Pole had spent on a trip to Greece ten years ago, the same person can now afford a week in more unusual settings (a week-long stay in Gambia can cost some PLN 2,500). Such holidays also have a social factor. Stories about trips to Thailand or Cuba can be more alluring than anecdotes about laying on a Greek beach for two weeks. In today’s social media-oriented world, such factors are becoming more and more important.

Traveling in style The travel itself can be one of the selling points. Nowadays, most Polish travel operators use top-of-the-line airplanes leased from the biggest carriers, to get their clients to and from their destination. Polish statecontrolled airline LOT leases its Dreamliner machines to several Polish tour operators, while many others use regular airlines’ routes to transport their clients. “Travelers are expecting new things each season,

whether its a new destination, new hotels or new ways of getting there. This season, airplanes and airlines are the new thing,” Piątek said. But marketing aside, thanks to larger and faster planes tour operators can save both time and money. “Dreamliners can get to a distant destination without any layovers thus shaving up to 10 hours from a one-way flight,” Świderski said. Rainbow has flown 12,500 of its clients to various destinations during the 2013/14 season and plans to fly 45,000 in the next two seasons.

Even the tense political situation in some of these places does not scare people off. Last year’s violent protests in Egypt, which prompted Poland’s Foreign Affairs Ministry to issue a warning asking tour operators to suspend all planned trips to Egypt, did not change a thing. “Egypt continues to be very popular among Polish tourists. News from Thailand, [which is now in the middle of a military coup] doesn’t scare them either,” explained Piątek. Indeed, the biggest tour operators continue to sell trips to Bangkok. Only regular warfare can scare off Polish tourists from changing their vacation plans.u

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ENTREPRENEURS / MANUFAKTURA CZEKOLADY

}

B Y K A M I L A WA J S Z C Z U K

CHOCOLATE DREAMS COME TRUE

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In

Łomianki, a suburb of Warsaw, there is a unique chocolate shop.

Not only can you buy chocolate in various forms there, but you can also see it made. You are also likely to meet Tomasz Sienkiewicz and Krzysztof Stypułkowski, the founders and owners of Manufaktura Czekolady Chocolate Story, bustling about the place and making sure everything is going right.

The two men have been friends since high school. They had been pursuing careers at large corporations when they both decided it was time to move on. They decided to start doing business together over a bonfire at a class reunion.

Sienkiewicz and Stypułkowski may have started a trend in Poland, being possibly the first well-know example of young professionals quitting high-profile jobs at multinational corporations to start their own company.

“We wanted to do something cool, something we could show to others, have them try it out, something good, something real. It was an ambition of ours, however grandiloquent it may sound, to leave something behind when the time comes,” Stypułkowski said.

“We wanted something real and we wanted to have something of our own,” Sienkiewicz added, explaining that earlier he had worked for a sector that mostly produces virtual goods, telecommunications and IT. “Even if the boss came every now and then, patted you on the back and said ‘good job,’ the work itself was seldom satisfying. Especially if you compare it with a chocolate factory.”

“It was a moment when I felt that if I went one step higher up the corporate lad-

der, I would find myself with the golden handcuffs on and I would never leave,” Stypułkowski said of the moment when he and Sienkiewicz decided to start a business. He saw what happened to many people, who had earlier said they would only work in a big firm for three or four years. So the two men had to act.

Many people find reasons not to go it alone, Stypułkowski said, be it a bad economic climate, lack of funds or any other risk. Doing business is all about risk, he said, though he did stress the value of having a reliable partner to do it with.

Learning and learning Chocolate was not an obvious choice.

When they met to decide what their company would do, a number of ideas appeared during this brainstorming session. The strangest ideas came about, Stypułkowski said, and so did one of establishing a chocolate factory.

“Right away we proceeded to find out how to do just that,” Stypułkowski said. “If chocolate production from cocoa grains was already done in Europe two centuries ago, then we felt it had to be possible.”

They did succeed, though some still do not believe that the full chocolate-making process can be done on a small scale.

Both had to start learning even before the company was actually established.

They carried out a feasibility study to figure out if they could succeed. It was helpful that many books have been published about the chocolate manufacturing process.

They made the risky decision to go into chocolate production full-time in 2009.

At first, the business did not bring any

Images: Jan Malinowski, Shutterstock

INSTEAD OF DEVELOPING THEIR CAREERS IN MULTINATIONAL CORPORATIONS, TWO HIGH SCHOOL FRIENDS DECIDED TO START THEIR OWN BUSINESS. THEY CHOSE TO LAUNCH A CHOCOLATE FACTORY

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ENTREPRENEURS / MANUFAKTURA CZEKOLADY

“WE LISTEN TO OUR CUSTOMERS BECAUSE THAT IS THE ONLY WAY WE CAN DEVELOP THE FIRM.

From bean to bar HOW CHOCOLATE IS MADE

Cocoa beans are picked in May or September from trees growing in tropical areas. They are later left to ferment for three to eight days and then dried, for two to four days. Packed into jute bags, the beans are transported to the chocolate factory. Here they are sorted and roasted. Right after roasting, the beans are cracked and de-shelled with the help of an air current. This process produces coca nibs, which are crushed and then go through a process called conching, which evenly distributes particles within the cocoa paste. The product is later refined with sugar. A process called tempering follows, where temperature is used to insure the right structure of chocolate.

What is left to do at that point is to place the chocolate in a mold, cool it down, decorate and pack.

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ENTREPRENEURS / MANUFAKTURA CZEKOLADY

TOMASZ SIENKIEWICZ

noticeable revenue and it was financed from the two friends’ savings. The initial stage was a time to learn. “Over the first year, I learned more than during five years of work at the corporation,” Sienkiewicz said, “and that continued throughout the next years.”

The business of chocolate “We knew from the beginning that we would not build a big factory, as we would not have the funds for it. So we started with something small. We made some of the machines ourselves,” Sienkiewicz explained. “This involved a lot of fun, but also many hoops to jump through.” From purchasing cocoa beans to finding the right premises, they had to figure everything out themselves.

As the company developed, Sienkiewicz and Stypułkowski also managed to find a minority stake investor who provided a capital injection about a year and a half ago. The money allowed for new ventures such as increasing the product range, Sienkiewicz said, pointing to a dish with pralines.

Before the investor, a private individual who does not wish to disclose any details, showed up at the company, the two founders were solely reliant on their own funds. “The company was consistently profitable” Sienkiewicz stressed, “otherwise the investor would not decide to buy shares.” They broke even after about a year of activity.

Manufaktura Czekolady moved to Łomianki after two years of operating at another location, further away from Warsaw. The suburban town has the major advantage of being close to the capital, where a vast majority of the company’s clients are based. Łomianki also turned out to be a local business hub. “There are really a lot of companies here that cooperate with us,” Sienkiewicz said.

Gourmet choice Manufaktura Czekolady Chocolate Story is Poland’s only bean-to-bar chocolate producer. What the company aims to do is underline the taste of cocoa varieties coming from different regions, Sienkiewicz said. No additives are included in their chocolate, he stressed. A sample tablet may include cocoa, cocoa butter, powdered milk, sugar and natural flavoring. Sienkiewicz and Stypułkowski want to bring Polish chocolate back to the place where it used to belong. “In earlier days,

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KRZYSZTOF STYPUŁKOWSKI

chocolate was something special, something brought from faraway lands and only the royal family, or the aristocracy, could afford it,” Sienkiewicz said. “But later it became a mass product, accessible to all and it became important to make it as cheap as possible.”

“There was no chance for us to compete in terms of price. So we had to try to win with quality and we focused on it from the beginning,” Sienkiewicz said.

The premium chocolate segment has been steadily growing for a number of years now, but it still remains relatively small. This, however, is aimed ... at a very engaged group of consumers – people who want to know how their chocolate is made.

Over five years of the company’s existence, it has made a mark and gained itself a number of fans. People are even for or against specific cocoa varieties.

Some like the Ghana variety, others prefer the ones from Ecuador and so on.

The range of products has expanded from chocolate bars to muffins, pralines, drinking chocolate and others. The company is flexible in looking for ingredient suppliers. It also pays attention to what customers have to say. “We listen to our customers because that is the only way we can develop the firm,” Sienkiewicz stressed.

Any person wishing to buy their chocolate may choose the cocoa grain and the topping. Some clients are also looking for unusual shapes – a good example is a brain-shaped chocolate for a pharmaceutical company.

“IF CHOCOLATE PRODUCTION FROM COCOA GRAINS WAS ALREADY DONE IN EUROPE TWO CENTURIES AGO, THEN WE FELT IT HAD TO BE POSSIBLE.

Heading outward Their products are available in Poland, in stores that attract connoisseurs. Also, shops that sell premium coffee, tea, wine or traditionally made food carry the Manufaktura Czekolady line.

Trips to trade fairs convinced Stypułkowski and Sienkiewicz that their product has potential for export sales. Countries they are targeting now include Lithuania, Latvia, Germany and the United Kingdom. The company is in talks with possible future trade partners in a number of countries.

Manufaktura Czekolady is still a microenterprise and it will continue to be one for the time being. “If growth is too fast, it’s easy to make mistakes, overlook things and lose quality,” Sienkiewicz said. “Plus, it’s impossible to produce a million chocolate bars a month and put your heart into each of them,” Stypułkowski added.

When asked about their personal goals and plans, the two men simply said “chocolate.”u

ENTREPRENEURS / KEKEMEKE

Digital Loyalty

B Y S E R G I U S Z P R O K U R AT

CUSTOMER LOYALTY CAN BE GAINED AT THE PRESS OF A BUTTON

Images: Jan Malinowski, Kekemeke

AN

increasing number of companies bet on quality, and not quantity when it comes to target clients. High-value clients consider a given producer as trustworthy and are ready to pay more for his products. In exchange, the seller should do everything to maintain this situation for as long as possible. This is the aim of loyalty programs where people have cards for collecting stamps or points awarded for each purchase. “We help change the relationship between vendor and client, turning it into a friendship,” said Adam Zajdzik and Tomasz Bucholc, the founders of Kekemeke, a smartphone app.

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ENTREPRENEURS / KEKEMEKE

“Handing over your phone is a gesture of trust, even greater than in the case of a payment card – your phone is your personal assistant, it contains your entire life.

20 percent of clients generate 80 percent of revenue. The question is how to make those 20 percent keep coming back.

When entering the headquarters of Kekemeke in the Warsaw district of Żoliborz, you can’t avoid the feeling that this is what a real start-up looks like. A relaxed atmosphere prevails in the office, not the typical corporate scene. The start-up’s owners, Adam Zajdzik and Tomasz Bucholc, are former corporate employees who decided to leave their jobs. “We saw the poor quality of customer service, how rarely companies

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think about client-users – in spite of fairly good intentions. We wanted to do something different, our own project, on our own terms,” they said.

No more rudeness The idea behind Kekemeke was born after many outings to restaurants and shops. “We saw that people are rude, they don’t greet each other or say hello,”

Zajdzik pointed out. “I was once at a grocery store and was slapped on the hand by the cashier. I wanted to pay with my paypass card and placed it over the reader too quickly. The vendor reprimanded me with her hand. I heard, ‘where are you putting that hand?’ A century or so ago, customer service looked different. Back then a client who entered a local shop immediately received a few articles of clothing in his size and favorite color, because the vendor knew what he wore and even knew his name. This changed when socialism was imposed on the country. The quality of customer service ceased to be important.

We are helping to change that,” Bucholc

>>

ENTREPRENEURS / KEKEMEKE

ADAM ZAJDZIK AND TOMASZ BUCHOLC, CREATORS OF LOYALTY APP KEKEMEKE

Images: Shutterstock, Kekemeke

ness in practice”), which is full of content on adequate customer relations. The blog is filled with interviews and industry statistical data, which would otherwise be difficult to find.

added. An individual approach to a client is the way to succeed for small companies.

Gary Vaynerchuk, the author of the book “Thank You Economy,” agrees with this statement. The writer describes how he transformed a local family business into a flourishing internet store with wine (from $3 million to $45 million annual profits in 8 years). It was a special way of treating clients, coupled with individual relationships with the customers, which helped develop the business to such a large scale and lead Vaynerchuk to become a respected customer service advisor. This is why the Kekemeke team also writes a blog called uprzejmoscstosowana.pl (“polite-

Faster, Simpler At Kekemeke, there are currently 17 people working on developing the app.

But how does it actually work? Simply put, in restaurants in which a client usually eats, he or she can collect stamps, and then exchange them for gifts. For example, after accumulating five stamps, the client can receive a free drink. The user function is very simple: install Kekemeke, add one’s favorite places to the list and during the next purchase ask the staff for a digital stamp. The client will be asked to hand their phone over to the waiter or seller, who will introduce a PIN code in 3-4 seconds. Time is of the essence – the staff of a small restaurant or cafe is very busy.

Most revenue is generated by returning customers. This is in line with the Pareto rule: 20 percent of clients generate 80 percent of revenue. Kekemeke allows businesses to bond with the clients that visit them often. Some people don’t want to use loyalty programs with stickers or cards because they lose them or leave them at home. Meanwhile, clients always have their phone with them.

The idea of handing over your phone is very controversial. “Our phone is one of our most private belongings,” said Bucholc. It turns out that handing your phone over to the vendor minimizes the time required to receive the points and is a unique interaction in and of itself.

Handing over your phone is a gesture of trust, even greater than in the case of a payment card – your phone is your personal assistant, it contains your entire life.

Therefore, the Kekemeke app makes the loyalty process more efficient and takes the client-business relationship to the next level. The entire process creates relationships. “Isn’t it great, when the owner of a restaurant approaches you and thanks you for being his returning customer?”

Creating a lasting relationship Kekemeke can currently be used with a few hundred businesses all over Poland, out of which the majority (over 200) are available in Warsaw according to Zajdzik and Bucholc. In each of these places, 20-30 percent of the clients develop very strong loyalty thanks to the stamps they accumulate, and the average bill of these people increases within a couple of months by 60 percent, this coupled with a twofold increase in the frequency of their visits. “For business owners this translates into a revenue increase of 5-12 percent,” stated Bucholc. The owners have experience in the field. Kekemeke acquired indispensable investors – Protos Venture Capital, made up of experienced professionals, who previously worked on projects such as Niania.pl, Goldenline.pl and Point Nine Capital.

There is a growing number of smartphone users and more clients can accumulate stamps or points for their loyalty with the help of an app. The clients who use Kekemeke have accumulated to date over 215,000 stamps. Popularity of mobile loyalty programs is bound to rise. u

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OBSERVER PRESENTS

Interview with Maciej Krzyżanowski, CEO of ATM

SAFETY IN NUMBERS What are the adventage of collocation over keeping your servers at the office?

Collocation means placing your servers in a specialized facility, which is a data center, run by a third-party company specializing in such services. This ensures the servers can operate in a safe environment, necessary for any company that wants to use its IT resources without interruptions, which cannot be achieved in a regular office.

Such data centers offer their clients fast and reliable internet access, as well as optimal conditions for their equipment, including placing it in a special telecommunications cabinet, the right temperature and humidity, uninterrupted power supply (including emergency supply with power generators) as well as around-the-clock surveillance, access control and fire suppression systems. The biggest advantage of collocation is obviously cost optimization. Although maintaining the necessary systems, security measures and technical support isn’t cheap, economies of scale help reduce costs “per server.” Infrastructure maintenance becomes more effective with large orders, as the costs of keeping tech support personnel and physical security measures are divided between many clients.

Is it easy to find competent data security professionals in Poland?

I don’t think we lack ICT and data security professionals in Poland, as evidenced

by the fact that an increasing number of Western companies are moving their IT facilities here, creating their hub for CEE operations. This speaks both to our country’s development potential and to the fact that Polish specialists enjoy a lot of trust.

ATM has over 20 years of experience on the ICT market, which means we have the know-how to build, equip and operate a data center, as well as create, service and expand a telecommunications network. We also have a strong, well-seasoned technical support team.

It’s worth mentioning that Poland’s data center market, albeit young, is already the biggest market in Central and Eastern Europe. According to research firm PMR, its value has exceeded PLN 1 billion and continues to grow fast. The number of providers is increasing. However, we will see some consolidation in the market in a nottoo-distant future, which will leave only the largest firms in business. That’s why companies should choose reliable data center providers, with a strong market position.

Could you tell us about the origins of the company?

ATM is the biggest data-center provider in Poland (under the ATMAN and Thinx Poland brands) as well as the owner and operator of a nationwide fiber-optic network.

ATM was established in the early 1990s. Its business model involved ICT services.

ATM was the first Polish company with access to the internet and was the first com-

pany to offer internet access commercially.

In the end, we focused on two main areas: collocation services based on data centers and telecom services based on our own fiber-optic network, including data transmission and internet access.

ATM is already a Warsaw Stock Exchange-listed company. What are your further plans?

We’ve been on the WSE for ten years now. Our priority is offering services at the highest level possible. This is our recipe for success and plan for the future. As the leader in data center services in Poland, we want to strengthen our position in the country as well as become a telecommunications hub for Central and Eastern Europe. We’re already on track to accomplish that. Using our infrastructure, particularly data centers, Polish and international firms are doing business in Poland and in neighboring markets.

Who are your clients? Are they mostly Polish companies or foreign ones?

The portfolio of our clients includes Polish and international companies: financial and ICT firms (telecoms, software producers and integrators), traditional and electronic media companies as well as clients active in a variety of sectors from manufacturing and trade to transport and logistics.

We now see an increased interest in data centers among SMEs – it’s a new trend that

INTERVIEW /OBSERVER PRESENTS

is very important for further development of the market in Poland.

BROUGHT TO YOU BY ATM

Apart from collocation you also deal with data security. There has been a lot of fuss about a recently discovered security bug called Heartbleed. What types of threats to data security are out there?

Together with data digitization, the threat from cyber criminals is increasing. This threat includes DDoS (Distributed Denial of Service) attacks, which prevent clients from accessing internet services, as well as attempts to steal the company’s data.

How do you protect your clients’ data from threats like these?

The security measures we offer include solutions protecting clients’ servers collocated in our data centers from the DDoS attacks mentioned earlier. We also offer data back-

“POLAND’S DATA CENTER MARKET, ALBEIT YOUNG, IS ALREADY THE BIGGEST MARKET IN CENTRAL AND EASTERN EUROPE. ACCORDING TO THE RESEARCH FIRM PMR, ITS VALUE HAS EXCEEDED PLN 1 BLN AND CONTINUES TO GROW FAST.

ups, in particular using a Disaster Recovery Center located in a different place than the primary data center. We have excellent infrastructure to do that because our Warsaw facilities are located 10 kilometers from one another (and also separated by the Vistula River). Apart from that we also have a data center in Katowice.

I would like to stress that we don’t deal with security of data or systems located on our clients’ servers directly – we are not their administrator. We don’t deal with the servers’ configuration or their contents. These things are handled by the client.

Data security, however, has many facets.

ATM focuses on offering optimum technical conditions for servers where data are stored and processed, as well as on ensuring secure and uninterrupted access (100 percent power supply, connection redundancy, anti-DDoS system). Further, we guarantee physical security – including an armored, bulletproof server room, if required.u

OBSERVER PRESENTS

July/August 2014

WARSAW RETAIL MARKET STILL ROOM FOR GROWTH > 46

OUTSOURCING

WHERE IS THE INDUSTRY HEADED AND WHAT OPPORTUNITIES ARE THERE FOR OFFICE DEVELOPERS? > 52

INTERVIEW WITH EYAL KELTSH IS THE RESIDENTIAL MARKET BACK ON TRACK? > 62

BUSINESS TRAVEL MARKET IS GROWING, BUT IS THERE ROOM FOR INDEPENDENT HOTELS? > 60 HIGH STREETS: UL. ŚWIĘTOKRZYSKA A NEW GOLD MINE FOR RETAILERS > 64

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>LOKALE IMMOBILIA

NEWS

GALERIA PÓŁNOCNA will add 60,000 sqm of GLA to the Warsaw market

l R E TA I L

Warsaw retail market poised to grow

A

lthough there are few retail schemes currently under construction in Poland’s capital, a wave of new retail development is about to be launched soon. Another 200,000 sqm of retail space will be added to the Warsaw market by the end of 2016 according to JLL. “Developer activity in the Warsaw agglomeration is very low right now. There is only one scheme under construction, Galeria Legionowo, set to be delivered in the spring of 2015. However, the situation will change within the next two years and the capital’s retail market will see another 200,000 sqm of new supply within such projects as Galeria Północna in the Białołęka district and Galeria Wilanów.

Interestingly, nearly 20 percent of the space comes from expansions of existing schemes, including Centrum Janki or Wola Park,” JLL Retail Agency director Anna Wysocka said.

The projects set to be completed by the end of 2016 are GTC’s Galeria Północna (60,000 sqm) and Galeria Wilanów (77,000 sqm), as well as Ferio Wawer (12,500 sqm). There is also a number of smaller mixed-use projects located in the city center that will also deliver a substantial amount of retail space, including Ethos (3,000 sqm), CEDET (9,000 sqm), Hala Koszyki (5,700 sqm) and Centrum Marszałkowska (also known as Nowy Sezam) with 4,800 sqm.

RETAIL SPRAWL

The districts that offer the best opportunities for investors are primarily the ones located on the outskirts, including the northern Białołęka and the southern Wilanów districts, followed by eastern Wawer, southern Ursynów and western Wola, according to a recent report prepared by JLL, research firm Gf K and residential market consultancy REAS. The opportunities arise from lower than average saturation with retail space, growing purchasing power of Warsaw’s residents as well as from planned residential developments.

“According to our market forecast, more than 60,000 units will be completed from 2014 to 2017. … We estimate the number of new residential units to be completed in 2018-2025 at approximately 110,000. The areas of the largest concentration of future residential developments include Białołęka, Wilanów and Wola,” said Katarzyna Kuniewicz, director at REAS. Purchasing power in Warsaw stands at €9,706 per resident and is the highest in “Between 2005 and 2013, the annual purchasing power of an average household in Warsaw doubled to almost PLN 100,000.

Poland. It is also 65 percent higher than the country’s average of €5,870.

“Between 2005 and 2013, the annual purchasing power of an average household in Warsaw doubled to almost PLN 100,000. ... The most affluent households in Warsaw are situated in Wawer, Wesoła, Włochy, Białołęka and Wilanów, while less affluent districts include Bielany, Targówek and Żoliborz,” said Agnieszka Kowalewska, project manager at Gf K Polonia.

The Warsaw agglomeration has the largest retail market in Poland, offering over 1.1 million sqm of GLA in shopping centers (13 percent of the total retail space in Poland). Despite relatively high supply, it is one of less saturated markets.u Retail space saturation per city (sqm per 1,000 residents) Poznań

612

Wrocław

584

Tri-City

507

Łódź

490

Kraków

486

Warsaw

438

Szczecin

421

Katowice aggl.

Source: JLL

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Image: GTC, Cushman & Wakefield, PHN

The next two years will bring a new wave of retail space to the Warsaw market. Still, some districts continue to be highly underdeveloped

LOKALE IMMOBILIA / NEWS l C O M PA N I E S

PKO to sell Qualia Development

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GALERIA MAZOVIA features 28,485 sqm of GLA

l INVESTMENT

CBRE buys mall in Płock

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BRE Global Investors announced its acquisition of Galeria Mazovia, a shopping center in Płock, from a private investor.

The value of the transaction was not disclosed. Pbb Deutsche Pfandbriefbank granted the buyer a €21 million medium-term loan for the purchase.

Opened in 2010, Galeria Mazovia features 28,485 sqm of GLA, which makes it the largest modern shopping and entertainment center in Płock.

The center offers over 120 retail units and 670 parking places. Anchor tenants include: Media Markt, Piotr i Paweł,

22

Zara, H&M, Reserved and Go Sport.

“The acquisition of Galeria Mazovia indicates growing investment activities in the retail sector in medium-sized cities. The property is a prime product as a well-established and dominant shopping center in one of the most affluent cities in Poland,” said Piotr Kaszyński, partner and head of Capital Markets, Cushman & Wakefield in Poland. Cushman & Wakefield and Crido Legal law firm represented the seller in the transaction. Savills, Linklaters, EC Harris Arcadis and Environ represented the buyer. u

new brands entered the Polish market in 2013, 20 of which were from Western Europe, placing Poland ninth in terms of the number of market entrants, according to CBRE

oland’s biggest lender PKO BP is collecting binding offers for the acquisition of its subsidiary, development company Qualia Development, and is expecting to finalize the sale in the third quarter of 2014, member of the bank’s supervisory board Paweł Borys told PAP. Borys said that both Polish and international industry investors are interested in purchasing Qualia.

“We have received quite a lot of interest.

More than seven investors have submitted acceptable, sound price offers,” Borys said. “We believe it’s a good moment to sell, the real estate market has seen some recovery and mortgages are on the rise,” he added.u

l INVESTMENT

PHN still on sale – Treasury

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oland’s Treasury Ministry is still looking to sell a majority stake in real estate group Polski Holding Nieruchomości (PHN), Deputy Treasury Minister Wojciech Kowalczyk said in early July. The Treasury has thus far not chosen an investor for PHN. “The closing of the due diligence process without choosing an investor is related to the fact that our price expectations were not satisfied,” Kowalczyk said. “We are still open and we are waiting for interesting offers and a possible tender,” he added. The Treasury now holds 71.3 percent in PHN. It wants to sell a majority stake through a public tender. In the first stage of the company’s privatization, it sold a 25 percent stake on the Warsaw Stock Exchange.u

The 5th Charity Real Estate Beach Volleyball Tournament Followed by: “After-Sports-Party” Thursday, 31 July 2014, La Playa Music Bar, Warsaw The money raised in this year will be used to finance the construction of a new family-type children’s home in Dąbrówka near Zgierz.

Contact us if you want to learn more about the event or donate a prize.

Weronika Kurnatowska tel: (+48) 22 318 0000, weronika.kurnatowska@eu.jll.com

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LOKALE IMMOBILIA / NEWS

Images: Capital Park

THE DEFINITIVE GUIDE ON HOW TO INVEST IN POLAND AVAILABLE IN SEPTEMBER 2014 > CONTAINS FRESH, VITAL INFORMATION ON POLAND’S VOIVODSHIPS, ITS LARGEST CITIES AND THEIR INVESTMENT POTENTIAL, ECONOMIC ZONES AND INDUSTRIAL AND TECH PARKS IN POLAND > TRENDBOOK SECTION DESCRIBING THE TRENDS SHAPING THE POLISH BUSINESS ENVIRONMENT > CREATED BY THE EXPERIENCED EDITORIAL TEAM OF WARSAW BUSINESS JOURNAL

New Edition 2015 48

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CONTACT/ADVERTISING +48 22 257 75 00 EXT. 226 OR INVESTING@VALKEA.COM

LOKALE IMMOBILIA / NEWS l C O M PA N I E S

Prokom looking to sell Polnord shares

P

rokom Investments has announced it is looking for a buyer for its entire stake in residential and commercial space developer Polnord. Prokom’s stake in Polnord consists of 25.7 percent in the developer’s stock. The reason Prokom quoted for putting Polnord shares up for sale is interest declared by both industry and financial investors specializing in the real estate market.

Prokom’s advisor in the transaction is Ipopema Securities.u l RESIDENTIAL

Image: HR Reavis, Cushman & Wakefield

Subsidy for young home buyers reaches PLN 187 mln The state-owned lender Bank Gospodarstwa Krajowego (BGK) has released statistics regarding the government’s program supporting the purchase of new homes by young adults (Apartments for the Youth). In the first half of the current year, a total of 8,237 applications for support have been filed and PLN 187 million has been awarded to potential young home buyers. The region that is the largest beneficiary of the program is Pomorskie Voivodship with 1,475 applications and PLN 36 million awarded. About a half of the homes is in Gdańsk, the largest city in the region. The second and third largest beneficiaries are Mazowieckie Voivodship (with the capital city of Warsaw) and Wielkopolskie Voivodship. u

l OFFICE

Gdański Business Center building A delivered

HB

Reavis has announced the delivery of building A in its Gdański Business Center office complex in Warsaw. Phase one of the project has now been completed, the company said in a press release.

Building A comprises more than 30,000 sqm of office space. The first tenant,

WARSAW

INTERNATIONAL

MEDIA

WIMS 2014

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Provident will move into the building in July. KPMG will move into GBC in the second half of 2015. In March of this year, HB Reavis delivered building B in the complex. SNC Lavalin and Colopast have already moved in. HB Reavis has recently launched the second phase of the investment, due to deliver 50,000 sqm in 2016. u

TALKING POINT

“Core investors are looking at Poland and the Czech Republic for prime, landmark shopping centers, viewed to offer better value against other core European countries whilst the regional cities across both countries have opened up with a significant shift of core and value-add capital towards this sector.”

James Chapman, head of CE Capital Markets at Cushman & Wakefield.

SUMMIT VII edycja kongresu

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WHO’S NEWS

l INVESTMENT

Capital Park may sell Eurocentrum, buy retail portfolio

P

roperty investor Capital Park could sell the Eurocentrum Office Complex in Warsaw, the company’s management board member Marcin Juszczyk told ISBnews. The firm may also finalize a retail portfolio acquisition soon.

Capital Park is currently re-evaluating the recently completed 70,000-sqm Eurocentrum. “We did not plan to sell it before, but it is generating a lot of interest from investors, so we are not ruling out a sale in

the future,” Juszczyk said.

The board member added that Capital Park has already completed due diligence of a grocery retail network portfolio.

“We are in negotiations. I am counting on a finalization in the summer,” he said.

Juszczyk also said that the company has signed another preliminary agreement on the purchase of a convenience center in Toruń, where it is now conducting due diligence. u

l OFFICE

Hines with building permit for 30,000-sqm Proximo in Warsaw’s Wola

D

eveloper Hines has obtained a final building permit for the construction of a 28,385-sqm class A office scheme

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dubbed Proximo. It will be located at the intersection of ul. Prosta and ul. Przy­ okopowa, near the Rondo Daszyńskiego subway station in Warsaw’s Wola district.

The building is scheduled to be completed in May 2016.

The building will include 2,000 sqm of retail space and 435 parking spaces within a three-storey parking garage. The building’s tallest part will comprise 13 storeys.

Proximo was designed by Rolfe Judd architectural studio. Hochtief Polska has been selected as the general contractor for the scheme.

The developer expects the building to obtain a BREEAM Very Good certificate. u

Agnieszka Mielcarz has been appointed head of retail asset management at Knight Frank. She will be responsible for managing the newly created Retail Asset Management service line.

The team headed by Mielcarz will focus on creating and implementing strategies for shopping malls, with the aim of maximizing their value and return on investment. “There has been a growing demand for consultancy services relating to repositioning of the older generation properties whose owners, facing increasingly growing competition, need specialist advice relating to their respective projects,” the newly appointed manager said. Mielcarz has 15 years of experience in the real estate sector.

She has worked for Cefic Polska (19992002), Apsys Management (2002-2007), Avestus Real Estate (2007-2013) and JLL (2013-2014).

TRANSACTIONS

€754 MLN

WAS THE REAL ESTATE TRANSACTION VOLUME RECORDED IN Q2 2014 IN CEE, ACCORDING TO CUSHMAN & WAKEFIELD.

Images: Capital Park, Hines, Senatorska Investment, Panattoni, BNP Paribas, Knight Frank

John Palmer has been appointed as industrial investments director for Central and Eastern Europe at BNP Paribas Real Estate. He will be responsible for advising clients from the industrial sector in maximizing business value resulting from their real estate involvement.

Palmer has more than 18 years of experience in the Polish commercial real estate market, specializing in logistics consultancy, investments and valuations. He is a member of the European Logistics Group at BNP Paribas Real Estate and a fellow of the Royal Institution of Chartered Surveyors (FRICS).

LOKALE IMMOBILIA / NEWS

l OFFICE

Controversial Old Town office project back on track

S

enatorska Investment, the investor behind the controversial Plac Zamkowy – Business with Heritage office project, has agreed to make changes required by UNESCO to the building’s design. The scheme is located directly next to the Old Town complex, which is listed on the UNESCO World Heritage List. The construction raised controversy last year after it was revealed that city authorities did not consult the organization before issuing a building permit.

The investor agreed to lower the height of the facade by 30 cm, change facade materials and roof colors to make the building blend in with the surrounding tenements.

“We want Plac Zamkowy – Business with Heritage to be Warsaw’s landmark and to make its residents proud. That’s why, in spite of the advanced stage of development work, we are open to any suggestions that could help with this unique investment,” said Maksymilian Marcinkowski, president of Senatorska Investment. u

l LOGISTICS

Panattoni to add 24,000 sqm of warehouse space near Łódź Industrial property developer Panattoni Europe has launched construction on the extension of its Park Łódź East with 24,000 sqm of multi-tenant space. Upon completion, the complex will feature 187,000 sqm.

Panattoni Park Łódź East is one of the developer’s four parks in Central Poland, the other being: Panattoni Business Center Łódź, Panattoni Park Łódź South and Panattoni Park Stryków.

The developer currently has as much as 265,000 sqm of industrial and warehouse space under construction, including two facilities for Amazon, one near Poznań and the other one near Wrocław. The combined value of pending projects exceeds €187 million.u

GOLF

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LOKALE IMMOBILIA / OUTSOURCING–OFFICE

Getting a foothold Poland has long enjoyed its position as the top outsourcing destination in Europe. Where is the BPO sector headed now and can it drive growth in emerging office markets?

B Y B E ATA S O C H A

“IF YOU’RE SETTING UP A BPO AND YOU NEED A COUPLE HUNDRED PEOPLE IN PHASE ONE, IT’S DIFFICULT TO GET THEM IN ONE HIT AS THE LABOR SUPPLY GETS TIGHTER.

The

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business service industry has been Poland’s greatest economic driver over the past years. It is one of the reasons why the country did not experience negative growth during the recent crisis. Nearly 20,000 new jobs were created in the sector over the past year. Between early 2012 and April 2014, employment in outsourcing increased by more that 50 percent, from 83,000 to 128,000, according to a recent report by the Association of Business Service Leaders.

Forecasts remain very encouraging.

Given that the average annual growth in the BPO sector in the last decade has been at 20 percent, it is reasonable to expect employment in the industry to reach

between 150,000 and 170,000 by the end of next year and to continue growing beyond 2015. “I think we can potentially get to 200,000 jobs over the next three to five years,” said Jacek Levernes, co-founder and president of the ABSL in Poland and board member of HP for EMEA. Cutting overheads

Shared service centers (SSCs) are still the dominant form of outsourcing in Poland. There are already 160 SSCs across the country, altogether employing 45,000 people. Poland also has 100 BPO centers and almost 120 R&D centers. The fourth most common service being outsourced to Poland is IT, with nearly 80 ITO hubs.

Image: Shutterstock

LOKALE IMMOBILIA / OUTSOURCING–OFFICE

Firms looking for savings in Poland span across all sectors. The more competitive the industry, the more important shaving off a few percent of the overhead is.

“If you look at the history of shared services, outsourcing and offshoring, it started with IT companies, like HP and IBM. Then came FMCG companies like Coca Cola and Procter and Gamble. Why FMCG? Because their margins were very thin and they were looking to save money,” Levernes explained.

It seems that pharma, faced with a recent onslaught of competition from generic drug producers, is the next big thing in the outsourcing business. “Before, their margins were so large that saving 2-3 per-

cent of the P&L didn’t mean much. Now it’s starting to mean something, so much so that companies like Merck and Bayer are starting to look into this,” Levernes added.

Last year, Bayer moved its finance and accounting SSC, servicing over 20 European countries, to Gdańsk. Recently, another German pharma giant, Merck, decided to open an HR center in Wrocław, initially employing a few dozen people. The company said it will continue its recruitment process into 2015.

Moving up the chain

Although call centers, HR and accounting services still seem to be the top three services that companies are likely to out-

source, there is currently a visible increase in higher-level services being transferred to Polish centers. “Probably there’s scope for Poland to grab more R&D, with a bit of government help and the right direction,” said Alan Colquhoun, head of DTZ for the CEE region.

There is also another major sector that Poland would gladly tap into – fund management. “There are a lot of people who have developed their skills working on basic-level financial services and can be used for fund management. And there is a lot of potential in that route, but it would require legal changes to ensure tax transparency,” said Tomasz Trzósło, managing director of JLL in Poland.

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the

Country has what it takes to attract more advanced-level services, like R&D and fund management. The latter, however, requires both know-how and legal groundwork.

Alan Colquhoun,

head of DTZ for the CEE region

Tight supply

A

ny city with a university has significant attraction for the BPO operators, because there is a ready supply of a multilingual and qualified workforce. The first entrants into such a market avoid competition. If you’re setting up a BPO and you need a couple hundred people in phase one, it’s difficult to get them in one hit as the labor supply gets tighter.

When we did a BPO lease acquisition on behalf of Hewlett Packard in Wrocław in 2004/2005, a big issue we faced was the lack of office space. It was an issue that could have jeopardized the whole deal. It so happened that we put them in the Renoma building, which at the time was considered strictly as a retail location by its owner.

But it had a lot of empty and flexible office space upstairs, which we convinced them to refurbish. Then as the landlord refurbished the space, HP grew into it very nicely.

These changes could create up to 100,000 new workplaces over the next 3-7 years. “We are currently working together with the Economic Council and the Ministry of Finance on ways to change regulations so that we can start competing with Ireland and Luxembourg in the fund management industry, which offers as many as 400,000 jobs in these two countries,” said Levernes.

A cornered market

Poland’s position as Europe’s no. 1 outsourcing destination results not only from lower labor costs and a high supply of skilled workforce, but also from its size, which guarantees stable costs over a longer period. “Poland is too big of a country for the wage levels to change rapidly,” said JLL’s Trzósło. “Although there continues to be wage pressure, the constant influx of talented, educated people from smaller to larger cities keep labor costs competitive,” he added.

The top ten outsourcing cities in Poland (Kraków, Warsaw, Wrocław, Tri-

City, Łódź, the Katowice agglomeration, Poznań, Bydgoszcz, Szczecin and Lublin) have thus far dominated the market, with 95 percent of all BPO/SSC employment located there. International business service companies have leased over 220,000 sqm of office space in 2013, the majority of which was located in Poland’s regional cities. “Altogether, outside the capital, the share of total demand of BPOs/ITOs/ SSCs/R&Ds amounted to about 50 percent,” the ABSL report said.

Rising potental

Are companies in the BPO sector interested in looking for lower costs also in other, smaller cities? JLL’s recent report identified eight emerging office markets that could become major outsourcing destinations: Białystok, Bydgoszcz, Kielce, Olsztyn, Opole, Radom, Rzeszów and Toruń (see map p. 57).

On the one hand, third-tier cities do have advantages, including lower employee turnover, as their labor markets have higher unemployment levels than major

128,000

the number of people employed in business service outsourcing as of April 2014.

470

number of service centers in Poland with foreign capital.

87%

of centers which expanded their scope of services offered.

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LOKALE IMMOBILIA / OUTSOURCING–OFFICE

Who and where?

New investments in top business service destinations in Poland (2013-2014) Location Selected new business service centers Anna Młyniec,

head of Office Agency and Tenant Representation, JLL

Attractive alternative

Images: Shutterstock, DTZ, JLL

S

maller office markets are attractive alternatives for business services companies, especially for those looking to start operations in Poland, as well as those expanding or relocating selected functions from their existing centers in the main agglomerations. These markets offer an increasing number of offices that are adjusted to the needs of business services sector tenants, who are seeking convenient space for typical BPO/SSC units, as well as disaster recovery centers. It is worth noting that business services companies are already driving office demand, not only in major agglomerations like Kraków or Wrocław, but in smaller cities as well.

Kraków GE Healthcare, Lundbeck, RWE, Samsung Wrocław Merck, Parker Hannifin, Unic Group, Viessmann Poznań DFDS, Mars, Newell Rubbermaid, Propex Tri-City Competence Call Center, Kemira, Powel AS, ThyssenKrupp Łódź Clariant, McCormick, Veolia, Samsung Katowice Agg. IBM, Sii, PERFORM Warsaw Linklaters, Procter & Gamble, TNT Express Szczecin Netto, Genpact, Mobica Lublin Convergys, Mobica, Sii Source: ABSL

cities. On the other hand, even with all the qualified graduates they churn out each year, the labor pool they offer may be insufficient for major companies to find the people they need.

“If you’re setting up a BPO and you need a couple hundred people in phase one, it’s difficult to get them in one hit as the labor supply gets tighter,” said DTZ’s Colquhoun.

Same old story

Office space poses an even bigger problem. The old chicken-and-egg, a.k.a. the office-or-tenant issue, has been a major barrier for these cities. If there is no space

to lease, no company will even look at a city as a possible investment location, and if there are no tenants, developers won’t be able to secure the necessary financing to launch development.

Lublin, a city in eastern Poland, managed to get its foot in the door and attract several major BPO players, including Sii, Mobica and Solers. “We were at an advantage in Lublin, because the first modern office space began to emerge 12 years ago, thanks to the activity of a local developer called Centrum Zana,” said Mariusz Sagan, director of the city’s strategy and investor assistance department. Now, Lublin is one of top ten outsourcing destinations in Po-

“IN ORDER TO MAKE IT A SUCCESS, ALMOST ALL DEVELOPERS NEED TO HAVE AN EXIT ROUTE. ONCE THEY’VE BUILT, THEY NEED TO SELL IT.

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Mariusz Sagan,

director of Lublin’s strategy and investor assistance department

Increasing the odds How do you attract business service companies to locate in Lublin?

In the BPO industry, we usually compete with Łódź, Bydgoszcz, Szczecin, sometimes with the Tri-City and Poznań. A company coming to Poland to survey prospective investment locations usually visits three cities. If Lublin is on that shortlist, it means we already have a 33 percent chance that they will choose our city. To boost our odds, we offer the companies a full package: offices, universities, the entire business environment and ways of cooperating with the administration.

Investors look at two things: people and costs. That’s where our additional advantage lies: Lublin has one of the lowest employee turnovers in the country, which is an effect of the labor market situation in eastern Poland.

For instance, in Wrocław 40 percent of employees change their job once a year, in Lublin only 5 percent.

How did Lublin overcome the initial shortage of office space?

We were at an advantage in Lublin, because the first modern office space began to emerge 12 years ago, thanks to the activity of a local developer called Centrum Zana.

We have recently sold a piece of land, where an old bus depot was located, to a developer set to build 100,000 sqm of offices by 2020. We believe the investment will help create another 10,000 jobs in this part of the city, bringing Lublin’s BPO sector up to par with that of Łódź, a city twice as populous.

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land and is preparing for another wave of investors. “We have recently sold a piece of land, where an old bus depot was located, to a developer set to build 100,000 sqm of offices by 2020. We believe the investment will help create another 10,000 jobs in this part of the city, bringing Lublin’s BPO sector up to par with that of Łódź, a city twice as populous,” Sagan added.

Truth be told, the eight cities under the microscope are no barren wastelands either. There is some office space already available and more is set to come. “Modern office space in the eight cities analyzed by JLL, totals more than 321,500 sqm and is comparable to volume in Poznań or Katowice. This currently represents 4.4 percent of the entire available office stock in Poland,” JLL report reads. Currently, almost 50,300 sqm is under construction in these locations, with the majority in Rzeszów (19,700 sqm), Olsztyn (11,900 sqm) and Bydgoszcz (9,800 sqm). An additional 194,400 sqm is in the pipeline, representing a 70 percent increase compared to Q2 2012.

Exit strategy

Still, a total of 300,000 sqm of office space in eight cities is far from impressive.

And if these locations are as attractive as they are made out to be, why aren’t developers more interested in building there?

“One thing to bear in mind is that in order to make it a success, almost all de-

velopers need to have an exit route. Once they’ve built, they need to sell it,” said DTZ’s Colquhoun. However, investors active in Poland’s office market, predominantly German, British and American institutional investors, are too risk-averse to look at such cities as possible targets.

“One of the problems with the Polish commercial property investment market is that 90 percent of the turnover is due to international investors and many of these funds invest to gain exposure to Poland. Therefore, their default position is to buy prime properties,” said Ben Habib, CEO of First Property Group, which has thus far invested some €300 million in Poland. “They generally will not be looking for risk, they are looking to buy safe properties in their chosen geographies,” he added.

If international investors see third-tier cities as too risky, who else is there? “What would help these cities, apart from a proactive local authority supporting the planning process, would be a loosening of the investment legal framework, allowing Polish pension funds to invest directly in real estate,” Colquhoun explained.

Local institutional investors would be an ideal solution to the problem, as their perception of risk is different from that of global players. They “would be much more likely to buy an 8,000-sqm or a 15,000sqm office building in Kielce or Ostrów Wielkopolski,” he added. u

Images: Shutterstock, Lublin City Hall

95

Currently 95 percent of BPO/SSC employees are concentrated in Poland’s top ten outsourcing cities.

Is there really room for smaller cities on Poland’s BPO map?

LOKALE IMMOBILIA / OUTSOURCING–OFFICE

Emerging BPO locations

Five out of the eight emerging BPO markets are located in the eastern part of Poland, where both office space and labor are cheaper.

Will that be enough though?

Olsztyn Bydgoszcz

OFFICE STOCK (SQM)

UNDER CONSTRUCTION (SQM)

PRIME HEADLINE RENTS*

VACANCY RATE

OFFICE STOCK (SQM)

UNDER CONSTRUCTION (SQM)

PRIME HEADLINE RENTS*

VACANCY RATE

OFFICE STOCK (SQM)

UNDER CONSTRUCTION (SQM)

PRIME HEADLINE RENTS*

VACANCY RATE

OFFICE STOCK (SQM)

UNDER CONSTRUCTION (SQM)

PRIME HEADLINE RENTS*

VACANCY RATE

OFFICE STOCK (SQM)

UNDER CONSTRUCTION (SQM)

PRIME HEADLINE RENTS*

VACANCY RATE

OFFICE STOCK (SQM)

UNDER CONSTRUCTION (SQM)

PRIME HEADLINE RENTS*

VACANCY RATE

OFFICE STOCK (SQM)

UNDER CONSTRUCTION (SQM)

PRIME HEADLINE RENTS*

VACANCY RATE

OFFICE STOCK (SQM)

UNDER CONSTRUCTION (SQM)

PRIME HEADLINE RENTS*

VACANCY RATE

Białystok

Toruń

Warsaw

Radom Kielce Opole

Rzeszów

* in €/sqm/month Source: JLL

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I N T E R V I E W B Y K A M I L A WA J S Z C Z U K

{ The next big thing Interview with Jacek Levernes, co-founder and president of the Association of Business Service Leaders in Poland, board member of HP for EMEA How fast do you think the business services industry will continue to expand?

Over the next two to three years we will see continued growth of some 15 percent. Currently, the sector provides 128,000 jobs and I think we can potentially get to 200,000 jobs over the next three to five years.

As we become bigger, it will be important for us to change our value position and attract more advanced services. I don’t think we will be able to compete strictly on costs in the long run. India will always be cheaper than us. But we can add more value. We have to be better, quicker and more innovative.

Do you think Poles are innovative?

What are our other advantages?

Apart from a large population of well-qualified students, we also have stronger specialist and managerial skills than some of our neighbors. For example, Romania has a very good pool of base skills, but is quite scarce in managerial level skills. We have both.

You said that we have to move up the value chain. We’ve seen call centers mushroom all around Poland, then companies started moving their accounting and HR services here. We have IT and some research centers. What is the next big wave going to be?

If you look at the history of shared services, outsourcing and offshoring, it started with IT companies, like HP and IBM. Then came FMCG companies like Coca Cola and Procter and Gamble. Why FMCG? Because their margins were very thin and they were looking to save money.

Recently the pharma and medical companies started experiencing some trouble, because they have a hard time inventing new drugs. There is an increasing number of producers of generic drugs, that is cheap copies, which brings down profit margins for the branded drug companies.

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Jacek Levernes Before, their margins were so large that saving 2-3 percent of the P&L didn’t mean much. Now it’s starting to mean something, so much so that companies like Merck and Bayer are starting to look into outsourcing. In fact, both Merck and Bayer have already opened centers in Poland.

What other areas of BPO/SSC do you think Poland could tap into?

What we are currently working on, together with the Economic Council and the Ministry of Finance, are ways to change regulations so that we can start competing with Ireland and Luxembourg in the fund management industry, which offers as many as 400,000 jobs in these two countries.

If this legislation is amended, which is in the hands of the Ministry of Finance, it would be a game changer. In the fund management middle office you will see double or triple the salaries we have in Poland today.

What is HP’s experience in Poland in this area?

In 2005, we decided to open up a center in Wrocław. We thought that in the next five years maybe we’ll create 1,000 jobs. After six years we have 2,700 in Wrocław alone. We’ve opened up a center in Łódź, with another 100 employees there. Our experience exceeded all of our expectations.u

Image: ABSL

Even if Poles are innovative, we can’t really see that because most of the best inventors are attracted to the UK or to the US. Also Polish inventions are usually sold to other countries rather than promoted as Polish.

What we are really good at is making things better, faster, leaner, etc. We take what we can get and we do a fantastic job in improving that in terms of speed, cost and effectiveness. And this is in fact critically important in the business services sector.

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LOKALE IMMOBILIA / HOSPITALITY

Firms are increasing their business travel budgets and opting for brand hotels

Business travel market growing B Y B E ATA S O C H A

C

ompanies expect the number of their staff traveling on business to increase by some 2 percent this year and continue the upward trend over the next few years. The increase is moderate, but not insignificant, given that 21 percent of companies surveyed plan to spend over PLN 1.5 million on their staff ’s hotel stays and another 19 percent of companies will spend between PLN 751,000 and PLN 1 million on hospitality.

To meet their budget constraints, travel managers’ main objective for 2014 is optimizing travel costs (64 percent

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of those polled). They expect discounts of at least 5 percent from hotels as well as including additional services, such as parking, in the hotel price. Despite increasing pressure on companies’ travel managers to reduce travel expenses, firms have increased their hotel budgets by 3 to 5 percent, according to a recent report conducted for Orbis by research firm SANA Consulting.

That’s good news for hotel chains as 89 percent of travel managers working for corporate clients make reservations in chain hotels, while 73 percent of those polled said that the brand is an important selection criterion. “Branded hotels offer a guarantee of comfort and service

standard,” the report said.

Poland’s hotel market, particularly in Warsaw, has been increasingly chaindominated for years. In a study carried out by consultancy Horwath HTL in November 2013, Warsaw’s hotel base had the highest share of hospitality facilities run by hotel chains (84 percent of all rooms). That is hardly surprising given that Poland’s capital, with the largest number of hotel rooms of all Polish cities (11,659), is the destination of choice primarily for business people who expect a higher standard of service when they travel. They also tend to use corporate discounts with specific international hotel chains. u

LOKALE IMMOBILIA / HOSPITALITY

Survival tactics

Images: Regent Warsaw, Shutterstock

Interview with Krzysztof Woliński, general manager of Regent Warsaw Hotel, previously Hyatt Regency, commenting on the hotel’s short and long term strategy after the Hyatt brand withdrew from Poland According to a recent report, almost 90 percent of companies’ travel managers choose brand hotels. In this increasingly chain-dominated market, how can an independent corporate-oriented hotel survive?

An international brand is like an insurance policy. You don’t really need to care about stars if you’re a part of a major brand. But for an independent hotel stars are vital. We now have four stars. After the brand change, we had a visit from the rating committee and they maintained our status.

Right now, our short to mid-term plan is to get the fifth star. We’re working on that and hopefully we’ll be able to share some good news soon.

How much time did you have to prepare for Hyatt leaving?

The decision was quite abrupt. We had some 10 days of advance notice.

What did you do when you received the news?

Hyatt leaving basically meant taking Regent Warsaw

down the neon sign on the building and being cut off from the reservation distribution network. These were the challenges that we had to face and we’re handling them.

After the initial shock, we realized it wasn’t impossible.

What was the first thing you did?

All the marketing and reservation services used to be handled by Hyatt and we had to rebuild all that from scratch. We only kept our phone number. For a while we didn’t even have a website, which in today’s world is unacceptable.

Fortunately, we had some reservations for the coming weeks and we had no cancellations. Recently, we had the prince of Luxembourg staying here. He had made two reservations; plan A was a branded hotel and we were plan B. In the end, he stayed with us.

Have you noticed a drop in occupancy after Hyatt left?

Not in the least. Our guests did notice the sign was gone. But the people I talked to said that they like the location, they like the hotel and they will continue to come here.

Others, those who were more loyal to Hyatt, said that they visit up to 150 hotels a year and said that our hotel offered higher quality than most.

Do you have a long-term strategy for Regent Warsaw Hotel?

People keep asking us how we want to grow. I tell them, we want to learn to walk before we run. We have no brand and no distribution system. So our first objective is to create these while keeping the volume we’ve had thus far. And if we manage to do that, it will be a major success already.

Krzysztof Woliński, general manager of Regent Warsaw Hotel

Our hotel is primarily a business hotel.

Our prices and occupancy are strong Monday through Thursday. But on non-business days, that is Friday through Sunday, our results are weaker than the Warsaw average.

And this is where we see our opportunity.

Warsaw is a growing tourist market.

Weekend occupancy figures are growing.

Last year, our occupancy in August was 70 percent. We hope to maintain these figures in the current year.

How are you targeting individual clients?

While still under the Hyatt brand, we cooperated with Groupon and sold hotel stays at highly competitive prices. They sold extremely well. These were mostly impulse buys and most of our Groupon guests, who represented Poland’s growing middle class, didn’t plan the trip beforehand.

We’ll continue to look for ways to boost the level of impulse buys. Because if someone already has a plan to come to Warsaw on holiday, there is a host of websites offering “luxury hotels.” What we need is to find alternatives that inspire people to come to Warsaw and to our hotel. u

“All the marketing and reservation services used to be handled by Hyatt and we had to rebuild all that from scratch. We only kept our phone number.

LOKALE IMMOBILIA / INTERVIEW

Swimming with the big fish Interview with Eyal Keltsh, vice president of ROBYG, a WSE-listed residential developer active in Warsaw and Gdańsk I N T E R V I E W B Y B E ATA S O C H A The residential development market continues to see new regulation changes each year. In 2011, the Property Developer Act introduced new regulations on escrow accounts, which limits developers’ access to financing. Then, last year, the new S-recommendation limited the loan-to-value ratio to 80 percent, lowering the accessibility to mortgage loans. What is the effect of these changes on the market?

The Property Developer Act came into force in 2011, but it began to be effective in 2012/2013.

Many projects had been launched earlier, under the previous rules.

Most of the listed developers and other significant housing companies did not notice any material differences because their capital in the projects was always strictly controlled by the banks, so the main change was on the administrative level. Now, that the regulatory changes have come into effect, banks are even more responsible for verifying the financial standing and reliability of developers. We consider it a positive inclination, as the risk of a major developer not being able to complete the project is reduced, which gives clients a sense of security.

The escrow account regulation struck smaller developers the hardest. Some of them did not manage to cope with it, because they were unable to obtain bank financing anymore. Remember that during

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the downturn on the market the construction sector was not treated favorably by banks. Land-banking, as well as construction financing, were hard to come by.

What about now? Can smaller developers survive in the market?

Smaller developers will survive if they manage to collect the required equity to finance their projects.

Developers unable to obtain bank financing will be forced to sell off land or work with other companies providing capital. Otherwise they may face liquidation or bankruptcy.

Prokom recently announced it wants to sell Polnord, PKO is looking to sell Qualia. Echo Investment has also been put up for sale. Should we expect more consolidation in the market?

Since the entry of the Property Developer Act into force, we’ve noted an increase of consolidation processes in the Polish property development. We believe that those processes will intensify in the future.

Will the fact that the ECB decreased deposit interest rates below zero influence the residential real estate market?

We think that this decrease in rate will affect the market in two ways, both positive for the market.

Firstly, we hope it will reduce the cost of mortgages to the clients.

Secondly, people will use invest-

ment in apartments as an alternative investment channel.

Where do you see the residential market headed in the next few years?

We believe the market will continue to be strong The mortgage market is stable. We do not see any risks to Poland’s macroeconomic stability, there is nothing indicating that something may go wrong.

The moderate growth which we see today is healthy and sustainable.

The Polish market is still “under-housed.” There is still a huge deficiency of flats in the biggest cities. Less than 15 percent of the entire Polish population live in the Warsaw agglomeration. Generally, in most countries the capital city houses about 20 percent of the country’s population. Even though Poland’s population is shrinking – like in all European countries – the number of inhabitants of Warsaw will continue to grow. We expect a similar situation in other major Polish cities, like Gdańsk.

We also have to realize that in Warsaw alone there are still about 500,000 people living in rented apartments. After working for two or three years many of them decide to purchase an apartment of their own. Growing demand is a great opportunity for developers operating here. Also, please remember there are several agglomerations where the situation is similar – like Gdańsk, Kraków or Wrocław.

LOKALE IMMOBILIA / INTERVIEW

it makes them feel safer. They say: “Why should I pay a rent, if I can own the place where I live for the same money?” Of course, there are nations which prefer to live in rented accommodation, like the Dutch or the Germans.

“DEVELOPERS UNABLE TO OBTAIN BANK FINANCING WILL BE FORCED TO SELL OFF LAND OR WORK WITH OTHER COMPANIES PROVIDING CAPITAL. OTHERWISE THEY MAY FACE LIQUIDATION OR BANKRUPTCY.

Moreover, in Poland there are many old buildings – constructed some 50 years ago – which are still in use. They were designed to last about 40 years, so for many of them this time passed even 10-15 years ago. In my opinion, the government will have to tackle this problem sooner or later and start replacing them with new developments.

So these blocks will be pulled down?

It’s hard to pull them down when people are still living there.

The government will either have to subsidize their reconstruction or demolish them in cooperation with

developers to replace old blocks with new buildings. The second possibility seems to be a better choice, as people are not willing to buy old flats, even if their locations are very attractive.

Do you think Poles are a nation of “owners” and not “renters” like, for example, Germans? According to OECD data, in Germany only about 40 percent of people own the home they live in.

It is a matter of mentality. When me and my wife decided to get married, the first issue that was discussed was what apartment we should buy. Poles also like to own,

What about the “Apartments for Rent” fund? The government said the fund will deliver 20,000 apartments for rent below market prices. The idea is to provide people with access to the capital’s job opportunities. However, some home owners are afraid these blocks will contribute to urban decay and end up as slums. What impact will the fund have on developers? Won’t 20,000 apartments for rent disrupt the residential market?

First of all, the government would not introduce 20,000 apartments to the market in one day. It will also take time to find those apartments. In my opinion, it is a matter of a couple of years. I also think that the government will simultaneously try to replace the old communist concrete blocks with new buildings.

Secondly, the “Apartments for Rent” fund is an offer dedicated to people who are unable to afford 10 or 20 percent for a down payment, so it seems to be an interim solution for them. Besides, in a big country like Poland, the government would need to introduce approximately 14,000-15,000 apartments for rent each year.

The government said it will be looking to buy entire projects from developers to put in the fund. Would you be interested in such a deal?

We expect that the margins developers could earn on this kind of project would be very small, on the other hand the risk is also lower. Still as you mentioned there is the possibility that such estates could sooner or later turn into slums.

ROBYG Group has a very strong relationship with its customers. More than 20 percent of them are returning clients or people encouraged by positive recommendations. It is very important for us to maintain our high quality and reputation.

That is why we will carefully consider building for the “Apartments for Rent” program, because our clients may have the same concerns as you, so if we consider such cooperation it would be in a new location and probably not within our existing investments. u

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LOKALE IMMOBILIA / HIGH STREETS

The High Streets: ul. Świętokrzyska PA R T S I X O F A S E R I E S

Jasna 26

Coffee Heaven Sphinx Sezam

Planned to be redeveloped as Centrum Marszałkowska

Nowy Świat

Marszałkowska

Pl. Powstańców Warszawy

Mazowiecka

F

Moniuszki Green Coffee

Jasna

ew streets in Warsaw have a location as convenient for retail as ul. Świętokrzyska: centrally situated, neighboring two well-established high streets: ul.

Marszałkowska and ul. Nowy Świat, and soon to be at the intersection of the capital’s two subway lines.

Yet, the street has been marginalized as a retail destination for decades, a situation that both the city and developers are looking to remedy. Together with the construction of the second subway line, the city has decided to redevelop the street allowing for easier access for pedestrians and cyclists. Car traffic, however, will be limited to only one lane in each direction.

Several developers have already set their sights on ul. Świętokrzyska. BBI Development, in consortium with Liebrecht & Wood, is set to launch construction on the Centrum Marszałkowska mixed-use scheme (previously Sezam department store) by the end of 2014. Mermaid Properties has just finished refurbishing the Jasna 26 building into a modern 5,500-sqm office building with nearly 1,000 sqm of retail space.

Together with the completion of the second subway line’s central section scheduled for late 2014, ul. Świętokrzyska will undergo redevelopment between Rondo ONZ and ul. Kopernika. The new design will create public urban space accessible both to pedestrians and cyclists, with limited car traffic. The new ul. Świętokrzyska will also feature a boulevard with

64

green areas, display cases, restaurants and cafes. These will liven up the street and attract passengers using the new public transport access points, putting the street on the map as a shopping and meeting place for tourists and Varsovians.

Increasing pedestrian traffic on ul. Świętokrzyska will turn the eastern section of the street into a shopping destination. The street’s retail

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potential will be enhanced by the redevelopment of the Sezam building, at the intersection of ul. Marszałkowska and ul. Świętokrzyska, into a retail-office complex dubbed Centrum Marszałkowska.

The western section of the street is also developing into a business-office center. Local office employees will be potential shoppers for the stores located there. Świętokrzyska. u

Bożena Kozłowska senior consultant, Research, Knight Frank

Images: Knight Frank, Mermaid Properties, Forumrozwoju.waw.pl

Putting ul. Świętokrzyska on the map

LOKALE IMMOBILIA / HIGH STREETS

I N T E R V I E W B Y M AT T H E W C Z A JA

Waiting for the subway You are about to deliver your Jasna 26 project, 50 meters from ul. Świętokrzyska, currently being redeveloped due to the subway construction. What’s the story behind the scheme?

We came across this address in 2006. We won the tender for the building and at first we were planning on turning it into a residential project.

When the crisis hit shortly thereafter, our investors put the project on hold and then decided against a housing project, which turned out to be a very wise decision.

Then our foreign investors wanted to sell the property, due to the increased risk. We convinced them to redevelop it into an office scheme instead. But we had to find a tenant before starting the construction, which is not easy given the fierce competition on the office market. After a lengthy process we found our tenant – a law firm, Sołtysiński, Kawecki & Szlęzak.

After signing the contract, we launched construction in 2012. The revitalization was very thorough. We had to gut the entire building leaving only the outer walls. All the partition walls, windows and heating installations were removed. At the back of the building there used to be a dilapidated parking lot, which we redeveloped as well. Now it is a twostorey underground parking garage and we built two new wings on the flanks of the property.

On the ground floor, we have retail commercial space, and the rest of the building houses offices. Altogether, it turned out to be 5,500 sqm.

The redevelopment of ul. Świętokrzyska has provided a unique opportunity to create a new high street in Warsaw. How do you, as a developer and a stakeholder, see the future of the street?

We’re definitely counting on a busy street that will draw new retail tenants. We are in talks regarding one of the units in our Jasna 26 project.

The other one is still available. Everyone seems to be waiting for the completion of the new subway line with abated breath.

On the other hand, plans surrounding the new ul. Świętokrzyska are very exciting as it means a new high street will be created as an extension to ul. Nowy Świat.

Radosław Sieroń, president of the management board of Mermaid Properties

The access for cars will be limited and ul. Świętokrzyska will be a one-lane street here, according to the recently unveiled plans. Will that be a problem?

I think that people have grown used to the fact that the street is inaccessible to cars for instance. It would be impossible to block ul.

Marszałkowska now, but this might be a very good moment for the city to make this move on ul. Świętokrzyska. The neighboring ul. Nowy Świat and ul. Krakowskie Przedmieście are hardly thoroughfares either.

We can already see that the pubs on ul. Świętokrzyska are beginning to thrive. The location, next to two subway lines, is great. Many people will spend their evenings here because they have an easy way back home at the end of the night, provided the subway operates until late hours. u

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CITYSCAPE / GDAŃSK

Sea of opportunity

Favorite son

Did you know?

Since 1260, Gdańsk has been hosting St. Dominic’s Fair. Rival-

ing Oktoberfest, it is one of the oldest and biggest cultural open-air events in Europe. The fair is named after the Dominican Order which came up with the idea. In its heyday as many as 400 ships sailed to the city’s harbor with goods from all over the continent to be sold at the fair. Currently the fair, which lasts three weeks in July and August, is visited by an average of 70,000 people per day.

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Lech Wałęsa

Former electrician in the Gdańsk Shipyards, became the face of anticommunism, after leading numerous protests and strikes for which he was fired in 1976. His political career took off in 1980 after the Gdańsk Agreement, in which he played a prominent role during the negotiations. The document between striking trade unions and the communist government was something unheard of at the time. Such protests were usually quelled using force. In 1981, he was named Man of the Year by Time magazine and in 1983 he received the Nobel Peace Prize. In 1990, he became the first democratically elected president of Poland. After failing to be re-elected in 1995, Wałęsa slowly stepped away from the political scene. He remains recognized worldwide and gives lectures around the globe regularly.

Images: Shutterstock, Wikimedia/Pjama, WIkimedia/Starscream

T

hanks to its location on the shore of the Baltic Sea, Gdańsk has always played a prominent role in Polish history. The city’s roots date back to the 7th century when it was a fishing settlement. It was founded somewhere between 970 and 980 by the first ruler of Poland, Mieszko, who wanted to control the Vistula River delta. Officially, 997 is used as a date for the city’s founding. It’s first mentioned by name in 999 in “Vita prima Sancti Adalberti”, a document depicting the life and death of St. Adalbert, who was Poland’s first saint.

Over the centuries, the city was wedged between two nations: Poles, who wanted a stable access to the Baltic Sea and Germans, who wanted to expand further to the West. However, because of its economic position as one of the most important regional grain trade outposts, it enjoyed significant autonomy, even briefly becoming a free city during the Napoleonic Wars and again after World War I. Because of its large German influence and the fact that the city was incorporated into German territory at various periods of its existence, its German name, Danzig, has been widely popularized over the years. To this day it’s still occasionally used in the international media.

The city was the place of birth for many internationally renowned scientists and artists, with astronomer Johannes Hevelius, physicist Daniel Gabriel Fahrenheit and philosopher Arthur Schopenhauer among them.

During the communist era, the city became a cradle of anti-government opposition and the birthplace of the Solidarity movement.

Currently, Gdańsk is a part of the Tri-City metropolitan area, along with Gdynia and Sopot. u

LONDON 1,295 KM PARIS 1,285 KM BERLIN 398 KM

MOSCOW 1,212 KM

PRAGUE 554 KM

ROME 2,071 KM

MAYOR: PAWEŁ ADAMOWICZ AREA CODE: 58 AREA: 261 SQ KM NEAREST AIRPORT GDAŃSK LECH WAŁĘSA AIRPORT

POPULATION (DEC. 2013) 461,531

DISTANCE TO THE CITY CENTER 10 KM

HIGHWAYS A1

WORKING-AGE POPULATION (MAR. 2014)

289,430

UNEMPLOYMENT RATE (APR. 2014)

6.7%

MEDIAN PAY (JAN. 2014)

NUMBER OF UNIVERSITIES

NUMBER OF STUDENTS

NUMBER OF GRADUATES A YEAR

21

81,000

28,000

PERCENTAGE OF CITY COVERED BY ZONING PLANS: 75% MAJOR INDUSTRIES: shipbuilding, chemical, energy, logistics, IT, finance

PLN 4,411 MODERN OFFICE SPACE 450,000 SQM OFFICE VACANCY RATE 13.9% PRIME HEADLINE RENTS €12.75-13.5

RECENT MAJOR INVESTORS Bayer IBM Intel Geoban Jeppesen

Kainos Lufthansa Systems Nordea Sony Pictures Thomson Reuters

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TOP SPOTS IN CORPORATE SERVICES Grupa HRC SA Adecco Poland Sp. z o.o.

Grupa Randstad

HR Companies - Executive Search HR Companies - Recruitment & Selection HR Companies - Temporary Work Agencies

PwC Mazars w Polsce HLB M2 Audyt Sp. z o.o., Sp.k.

Morison Finansista Audit Sp. z o.o.

Auditing and Accounting Companies/Large enterpirses Auditing and Accounting Companies/Medium-sized enterprises Auditing and Accounting Companies/Small and micro enterprises Auditing and Accounting Companies/Small and micro enterprises

PwC Instytut Studiów Podatkowych Modzelewski i Wspólnicy Sp. z o.o. – Grupa ISP Kancelaria Ożóg i Wspólnicy Sp. z o.o.

Tax Advisory Companies/ Large enterprises Tax Advisory Companies/Medium-sized enterprises Tax Advisory Companies/Small and micro enterprises

DGA SA

European Union Funds Consulting Companies

PwC Business Consulting Companies/Large enterprises WYG International Sp. z o.o.

Business Consulting Companies/Medium-sized enterprises Doradca Consultants Ltd. Sp. z o.o.

Business Consulting Companies/Small and micro enterprises Grupa Kapitałowa Accenture Sp. z o.o.

BCC (Business Consulting Center Sp. z o.o.)

Immusec Sp. z o.o.

IT Consulting Companies/Large enterprises IT Consulting Companies/Medium - sized enterprises IT Consulting Companies/Small and micro enterprises

Dentons Law Firms Millward Brown SA Market Research Companies ROHLIG SUUS Logistics SA Rödl & Partner (Roedl Outsourcing Sp. z o.o.)

VSC Sp. z o.o.

Business Process Outsourcing Companies/Large enterprises Business Process Outsourcing Companies/Medium-sized enterprises Business Process Outsourcing Companies/Small and micro enterprises

Lionbridge Poland Sp. z o.o. Translation Companies Partner of Promotion Sp. z o.o.

Public Relations Companies

Sodexo Polska Sp. z o.o. Catering Companies Grupa Solid

Security Companies

Biuro Informacji Gospodarczej InfoMonitor SA

Business Information Providers

McDonald’s Polska Sp. z o.o.

Franchisors and Partnership System Coordinators

TRAVEL AND LEISURE Warsaw Marriott Hotel MCC Mazurkas Conference Centre & Hotel Carlson Wagonlit Polska Sp. z o.o.

Business Hotels in Poland /5* Business Hotels in Poland /4* Travel Management Companies

BUSINESS AND INDUSTRY PKN Orlen SA Exporters in Poland Regionalny Park Przemysłowy Świdnik Technology Parks

New List

TOP SPOTS IN FINANCIAL SERVICES Powszechna Kasa Oszczędności Bank Polski SA Banks in Poland Dom Maklerski Banku Handlowego SA Brokerage Firms KRUK SA Debt Collection Companies Raiffeisen Polbank Factoring Companies Towarzystwo Funduszy Inwestycyjnych PZU SA Investment Fund Management Companies LeasePlan Fleet Management Polska Sp. z o.o. Leasing Companies Powszechny Zakład Ubezpieczeń SA Insurance Companies

MOTOR INDUSTRY AND FREIGHT LeasePlan Fleet Management Polska Sp. z o.o. Car Fleet Management Firms Express Sp. z o.o., Sp.k.

Car Rental Companies GK DPD Polska Sp. z o.o. (DPD, ACP) Express Courier and Messenger Firms Universal Express Relocations Sp. z o.o.

Moving and Relocation Companies Grupa Raben Transport, Shipping and Logistics

EDUCATION Grupa ODiTK Training Companies Learning Systems Poland Sp. z o.o.

Language Schools Wyższa Szkoła Bankowa we Wrocławiu Business Schools Akademia Leona Koźmińskiego MBA Programs

IT AND TELECOMS ABC Data SA Computer Hardware and Software Distributors Grupa Orange Polska Telecom Operators and Internet Providers Asseco Poland SA Computer Software Producers Comarch SA Systems Integrators

CONSTRUCTION AND REAL ESTATE

CBRE Sp. z o.o.

Commercial Real Estate Agents Ghelamco Poland Sp. z o.o.

Commercial Real Estate Developers - Office Rondo 1 Office Space in Poland Neinver Polska Sp. z o.o.

Commercial Real Estate Developers - Retail Manufaktura Shopping Malls Skanska SA General Contractors Tebodin Poland Sp. z o.o.

Construction Project Management Companies Sodexo Polska Sp. z o.o.

Real Estate Management Companies SEGRO Poland Warehouse Space Developers Panattoni Europe (Panattoni Poland Sp. z o.o.)

Warehouse Space Operators Robyg SA Residential Developers Kuryłowicz & Associates Sp. z o.o.

Architectural Firms

INSTITUTIONAL PARTNERS

CITYSCAPE / GDAŃSK

1

2014 2015

st

PLACE

Panattoni Europe (Panattoni Poland Sp. z o.o.)

in the Book of Lists 2014/2015 ranking

Warehouse Space Operators

66

Publisher of Warsaw Business Journal Group

Book of Lists Project Manager

Morten Lindholm

Monika Brysiak

J U LY / A U G U S T 2 0 1 4 • W B J O B S E R V E R

1Mazars

2014 2015

st

2014 2015

1

st

PLACE

PLACE

Immusec Sp. z o.o.

w Polsce

in the Book of Lists 2014/2015 ranking

in the Book of Lists 2014/2015 ranking

Auditing and Accounting Companies

IT Consulting Companies

[Medium-sized enterprises]

[Small enterprises]

Publisher of Warsaw Business Journal Group

Book of Lists Project Manager

Publisher of Warsaw Business Journal Group

Book of Lists Project Manager

Morten Lindholm

Monika Brysiak

Morten Lindholm

Monika Brysiak

1

2014 2015

st

2

2014 2015

nd

PLACE

Sodexo Polska Sp. z o.o.

PLACE

TFLS Szkoła Języków Obcych

in the Book of Lists 2014/2015 ranking

in the Book of Lists 2014/2015 ranking

Real Estate Management Companies

Education – Language Schools

Publisher of Warsaw Business Journal Group

Book of Lists Project Manager

Publisher of Warsaw Business Journal Group

Book of Lists Project Manager

Morten Lindholm

Monika Brysiak

Morten Lindholm

Monika Brysiak

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EVENTS / GALA BOOK OF LISTS

BOOK OF LISTS GALA

Images: Roxana Dawid

At the Book of Lists Gala, WBJ Group handed out 35 first place certificates and three Spotlight Awards – Business Innovator (Totalizator Sportowy), B2B Financial Services Provider (Raiffeisen Polbank) and Exceptional Growth Story (RSM Poland KZWS)

Jan Czeremcha, Vice-President (Raiffeisen Polbank) & Jacek Ciesnowski WBJ Editor-in-Chief

Morten Lindholm WBJ Group Publisher & Tomasz Opiela CEO Valkea Media

(L-R) Renata Mordak, Director (WYG International) Paweł Dżurak, Partner (PwC), Ewa Brogosz-Korycka WBJ Project Manager

Anna Paluch, Program Manager Director (Carlson Wagonlit) & Morten Lindholm WBJ Group Publisher

(L-R) Andrzej Siess, Advisor to Board (Grupa Raben) Anna Wiśniewska, Head of Business Development (LeasePlan Fleet Management Polska) Kinga Motyka, General Manager (Universal Express Relocations)

Organizers

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J U LY / A U G U S T 2 0 1 4 • W B J O B S E R V E R

Partners

Radosław Kaczorek, President (Immusec) Jarosław Kroc, President (Grupa Kapitałowa Accenture)

2014 2015

1Rรถdl & Partner st

PLACE

4th place: Auditing & Accounting Companies 4th place: Tax Advisory Companies in the Book of Lists 2014/2015 ranking

Business Process Companies

Publisher of Warsaw Business Journal Group

Book of Lists Project Manager

Morten Lindholm

Monika Brysiak

(L-R) Aleksandra Motławska, Partner( HLB M2 Audyt) Monika Kaczorek, Partner (Mazars w Polsce) Lidia Skudławska, President (Morison Finansista Audit) Krzysztof Szułdrzyński, Partner (PwC)

(L-R) Karol Półtorak, Vice-President (Dom Maklerski Banku Handlowego) Anna Wiśniewska, Head of Business Development and Commercial Support (LeasePlan Fleet Management Polska) Anna Pakulska, Director (KRUK) Paweł Kacprzak, Factoring Head (Raiffeisen Polbank) Barbara Sissons Vice-President (Totalizator Sportowy)

Bartosz Miłaszewski Managing Partner (RSM Poland KZWS)

(L-R) Michał Bugajło, Key Account Manager (Comarch) Paweł Kozyra, Media & PR Director (Comarch) Marek Panek, Board Member (Asseco Poland)

Oscar Kazanelson, Chairman of the Supervisory Board (Robyg)

Agata Słowińska Valkea PR Manager, Tomasz Pawlak WBJ Group Sales Director

(L-R) Michał Hałaczkiewicz, Vice-President (Grupa ODiTK) Jarosław Tomaszewski, Director of International Relations Office (Wyższa Szkoła Bankowa we Wrocławiu) Dorota Żuchowicz, HR Director/Member of the Board (Learning Systems Poland), Ewa Brogosz-Korycka WBJ Project Manager

(L-R)Morten Lindholm WBJ Group Publisher, Andrzej Sarna, Director (Instytut Studiów Podatkowych Modzelewski i Wspólnicy) Tomasz Barańczyk, Partner (PwC)

(L-R) Marta Diop, Business Development Manager (Sodexo Polska) Paweł Trochimiuk, President (Partner of Promotion) Kuba Antoszewski PR Manager (Millward Brown) Paweł Wójcik, New Business Director (Millward Brown)

Monika Blazejewicz (Randstad Polska) & Morten Lindholm WBJ Group Publisher

Adam Skorek Junior Research Analyst (Sodexo Polska) Monika Brysiak BOL Project Research Manager

Jacek Stryczyński, Vice-President (Lionbridge Poland) Arkadiusz Krasnodębski, Warsaw Managing Partner (Dentons)

Renata Kabas-Komorniczak, Partner (Rödl & Partner) Mirosław Marek, Vice-President (DGA SA)

(L-R) Marek Jakubiak, Head of CEE (Deutsche Asset & Wealth Management) Joanna Tomczyk-Bogus, Associate (Deutsche Asset & Wealth Management) Łukasz Kałędkiewicz, Senior-Director (CBRE) Ewa Brogosz-Korycka WBJ Project Manager

OBSERVER PRESENTS

}

Golf with a scenic view ONE OF THE MOST PRESTIGIOUS GOLF COURSES IN EUROPE - FIRST WARSAW GOLF & COUNTRY CLUB (FWGCC) – IS CONVENIENTLY SITUATED ON THE BORDER OF A NATIONAL PARK. THIS IS THE MOST HISTORICALLY IMPORTANT CLUB IN POLAND.

I

t was the first to begin the process of establishing Poland as a modern Central European golfing destination. First Warsaw is considered by many as one of the most challenging golf courses. This beautiful destination was designed by Swedish architect Jan Sederholm – whose objective was to create a mecca of golf in Central Europe.

Although for some, golf is everything, the FWGCC golf course has something more to offer its visitors. Besides sauna and spa facilities, you will find a clubhouse with a restaurant that serves one of the best Italian cuisines in Poland. These facilities plus a conference center are the perfect place to create an unforgettable event, both business and private.

Images: Mateusz Tyszkiewiczz

The course is laid out on 155 acres, rich in natural flora, e.g. 150-year-old weeping willows and majestic oaks, lakes and ponds that lie on the floodplain of the Vistula River. First Warsaw is a sanctuary for nature and wildlife. Besides natural beauty, First Warsaw has the largest short and long game practice facility in Poland.

The first 11 holes of this 18-hole course are a typical parkland course – with wide fairways and surrounding lakes.

The last seven have narrow fairways surrounded by forest. Skills alone are not enough to achieve a good score – the key is choosing an appropriate game strategy.

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}

OBSERVER PRESENTS

NIMROD TAVI BIO Golf is perceived as a difficult and sophisticated sport available only for a select social group. Would you agree?

This perception of golf is true only in Poland sadly enough!

You can play with any budget (minimal or big), at any age and with almost no physical limitation. One of our members lost his sight, yet he still plays.

If you cannot swing properly from the beginning, you can certainly “putt” and “chip” and have fun on your first day!

What does an ordinary person not know about golf?

When you start enjoying golf, you are hooked and all your spare and travel time will be spent on golf course destinations! Golf is not only a game, golf is a lifestyle.

Does golf have any input on business decisions?

Playing golf requires taking a (business) decision before every shot, you must decide which club to use considering the length and other parameters such as wind and grass conditions.

You need to decide if you are willing to take a chance (playing aggressively) or minimize your risks and play safe.

Golf is a gentleman’s game. It demands focus, respect and durability. The same trust is required from any good businessman.

The other natural association is the fact that in most countries the “board room” has moved to the golf course. This is a place where business people meet. They have time alone to think, discuss issues while walking on lush greens full of flora and wild life – a place to relax while staying focused

Born in 1968 in NYC ,USA. Educated at Oxford Brooks University, George Washington University National Law Center and Georgetown. A licensed attorney in NYC and a notary public in The Commonwealth of Virginia.

Career: land developer and former chairman and controlling shareholder of Landmark LTD, a publicly traded company on the TASE (TLV Stock Exchange).

Countries of operations : US, Russia, Romania, Hungary and Poland.

Areas of Operations: residential and commercial real estate.

An art collector and the founder - Founder of “Tavi Art Gallery” in TLV, A board member of Tel Aviv Museum of Art, and the Kibbutz Dance company (world renowned modern dance group)

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LIFESTYLE / RESTAURANTS

Once the mercury rises, Warsaw moves outdoors. But for every picture perfect garden, there’s a flimsy table stuck next to the curb. “Is that SUV going to back into me?” you think while sipping coffee. We bring you our cream-of-the-crop

Papaya itself. Why not join her, on a glorious terrace deck that looks across Foksal’s foxy action. Complimenting the air of urban sophistication is a pan-Asian menu of considerable merit. ul. Foksal 16

to be considered a success story: so lots of logos, designer shades and pricy scents.

Once something of a hipster spot, Na Lato occupies a shaded slice of Powiśle, while late opening hours make it just the place for some after-hours hedonism: the cocktails are a joy. ul. Rozbrat 44

ALE WINO!

At first, you think you’re walking into a car park. Then, it hits you – a beautiful inner-city sanctum with wooden decking, a slanted sail shielding the sun and custommade, funky chairs from the esteemed Studio Rygalik. You want to dwell here for a bit longer than planned: and there’s no harm in doing so. Labeled as one of the city’s best wine bars, Ale Wino’s food is also top-notch.

DAWNE SMAKI

You can tell a new arrival to Warsaw: they’re the ones who sit on Dawne Smaki’s terrace, amid the hubbub of Nowy Świat.

Of course, there’s nothing wrong with this, least not if you want to soak in the atmosphere. But their real attraction is a 360-sqm garden in the back. Bursting with greenery, it’s an inner city oasis amid the clamor outside – the perfect spot to enjoy a candle-lit dinner to remember. ul. Nowy Świat 49

PAPAYA

There she goes, a tall, Slavic beauty with impossible heels. She turns onto Foksal – where else? – before carefully taking position on Papaya’s terrace. Since the world began, this street has been drawing the bright and the beautiful like moths to a flame, but no one does it better than

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BOATHOUSE

The name gives it away, doesn’t it? Situated in what is indeed a former boathouse, this venerable institution comes into its element each summer, when the great and the good of Warsaw go riverside to dine at this restaurant. Set in three acres of manicured parkland, there’s something immensely satisfying about watching the sunset with a glass of wine in hand. Kids are welcome – as the bouncy castle indicates – but the layout of this place means that peace is assured. ul. Wał Miedzeszyński 389A

NA LATO

It’s wrong to label Na Lato a restaurant – while they do serve food, most people go here to simply hang out once the sun reaches its zenith. And the people? They’re either success stories or those who want

ul. Mokotowska 48

Images: Shutterstock, Dawne Smaki, Boathouse, Ale Wino!, Hotel NH Poznań

SECRET GARDENS

LIFESTYLE / HOTELS

HOTEL SPOTLIGHT: HOTEL NH POZNAŃ

I

think that all frequent travelers have cities they love and cities they fear. Fear is maybe the wrong word; it conjures images of tiptoeing down streets scared for your life. But you know what I mean, cities that make you groan when you see them on your schedule. For me, that city was once Poznań.

I hated it. I hated the food, I hated the bars, I even hated those stupid metal goats that’d emerge at noon from the Town Hall clock tower.

Most of all, I hated the hotels, of which I’ve tried many: there was the Don Prestige, with a spider in its bathtub; the Blow Up Hall 5050, where smartypants art came before functionality; and City Park Residence, where I had no curtains. Once, I even booked a private apartment only to discover it didn’t have a bed or any other furniture, apart from an empty bookcase.

I was about to give up entirely on Poznań. Only then I discovered the NH. The NH is not the finest hotel you will ever stay in, but with four stars to its name it doesn’t pretend it will be. But there is something right about it, and I sensed that the first time I checked in.

There’s something immediately atmospheric about NH: behind a charming fin-de-siecle façade, visitors zip through a sliding glass door to a lobby that’s contemporary in style but intimate – there’s none of this anonymous airport lounge-style usually favored by the main chain brands. The welcome is warm and conversational and never feels forced. Upstairs, pitch black corridors light up in sections with each step you take.

The rooms are smart: hardwood floors, slate grey walls and burgundy bedspreads. The tones are rich and comfortable – as is the bed, with its puffy pyramid of pillows. I remain baffled (still) by the numerous light switches, but as someone who thinks free internet should be part of the constitution, I’m pleased that wi-fi

is included. The mini-bar is no great shakes, but decent, and I’m pleased the TV channels include Canal Plus Sport – that means English football for me.

But I’m especially pleased with the bathroom. It is a bathroom in the real sense of the word, not a shower room, and emptying the gels and freebies into the tub, I always allow myself a moment of luxury as I soak in the bubbles. The NH goes beyond being a good hotel. It has changed my very opinion of the city. Where once I saw it as a boring, mind-numbing place, today I look forward to visiting it. I look forward to checking its blossoming nightlife and exploring its streets – and the NH has given me that platform.

Having a comfortable base made me feel human. My opinion of the city blossomed. Walking down art noveau streets, I was inspired before plunging into the gentle mayhem that is Poznan’s old town at night. u

Hotel NH Poznań

Number of rooms: 93 Distance from the airport: 8.2 km Distance from the train station: 1.1 km Święty Marcin 67, Poznań

www.nhpoznan.pl

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LIFESTYLE / RESTAURANTS

ALEX WEBBER EDITOR OF THE WARSAW INSIDER

Wish You Were Here Nothing beats summer vacation in Poland...

E

very year it happens. Usually, it begins in March, sometimes even earlier. “Where are we going on holiday?” What starts as an offhand inquiry, gains steam as the months tick by, before reaching fever pitch about now. My tormentor is, of course, my girlfriend and her questions are as heavy as artillery.

Facebook doesn’t help. There are pictures of Gosia riding an elephant in India; Ryan sitting poolside with a beer and a book; and there are numerous others – grinning, gormless faces with a beach in the background.

But I don’t need that. I don’t need azure skies and cocktails served in coconut husks.

I have Poland.

For my girlfriend the perfect holiday would involve elements like water and sand. Myself, I can’t think of anything more hideous. It’s boring, no? Exploring Poland, on the other hand, is anything but – which is why come the holiday season we temporarily part paths: her to Malta or the Maldives, and myself to destinations such as Mińsk Mazowiecki. I feel like I’ve won.

Traveling around Poland is nothing if it is not a thrill.

I have been lost in underground Nazi tunnels, seen UFOs and discovered derelict Cold War ghost towns. At Reszel Castle, I’ve even been visited by the ghost of the last European woman to be toasted for witchcraft. At times, I’ve felt like a cross between Indiana Jones and Clark Griswold. But it’s not these sights and sounds that make Poland unique. After all, there’s not a nation in the world that doesn’t have a hidden side that’s full of secret kinks and quirks. No. For me Poland’s enduring appeal lies in its unlikely ability to turn a mundane situation into a ludicrous adventure and usually, I’ve come to find, her hotels give a helping hand.

Consider this, for example. I was down in southern Poland on a freelance assignment. Finishing up for the day, I ordered a bag of curry in Kraków and then got a cab to my hotel on the fringe of Nowa Huta. So far, so good.

It’d been a long day and I was bushed. In the room, I got out of my clothes and sat in bed with a lager and vindaloo.

Lovely. But all was not well…

From the corner of my eye, I noticed a suitcase – pink, and not mine. And there was more: a nightdress on the chair; a purse. The realization I was in someone else’s room struck like a pitchfork. I’ve never dressed so fast – all I could imagine was some old dear walking into the room to find me naked in bed with a beer and a bhaji. She might have died.

At least this time my embarrassment was saved. It wasn’t in Poznań. It was Christmas, and I was up there for a fancy dress party. With my usual hotel fully booked, I opted instead for a private rent apartment. It was lovely: ringside views of the Rynek and a huge modern floor plan.

Happy with my lodgings, I went off into the night dressed as a Mexican bandit.

Skip to 3 a.m., and I’m back outside the flat: only I can’t get in. The lock is broken.

Snow is forming in huge heaps, and what few people there are look at me in amusement as they see a shivering Pancho Villa with icicles on his poncho. After thirty minutes of cowering in the blizzard, I am hit by inspiration. I will phone the owner.

Having soaked up my abuse (“what sort of idiot rents a flat you can’t enter, eh!?”), he asks patiently if I’ve tried pulling the door open, not pushing. I reply with a stream of expletives. Only when my tirade is complete do I realize I haven’t. I mutter my apologies and shuffle up the stairs with sombrero in hand. And you know what, I wouldn’t have swapped that story for the world. Keep your Caribbean cruises and your fortnights in France. I’ve got my Poland and wish you were here. u

“TRAVELING AROUND POLAND IS NOTHING IF IT IS NOT A THRILL. I HAVE BEEN LOST IN UNDERGROUND NAZI TUNNELS, SEEN UFOS AND DISCOVERED DERELICT COLD WAR GHOST TOWNS.

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