WBJ #12, 2012

Industrial production growth slowed sharply in February

Google Street View launches in Poland ahead of Euro 2012

Poland’s American football season kicks off with a new top division 5

21

WWW.WBJ.PL

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VOLUME 18, NUMBER 12 • MAR 26 – APR 1, 2012 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

Since 1994 . Poland’s only business weekly in English

Enter the dragon

REAL ESTATE Lokale Immobilia

The Sino-Polish business relationship grows stronger SHUTTERSTOCK

12-13

COURTESY OF THE EUROPEAN PARLIAMENT

• Z∏ote Tarasy sold • Torus in Tri-city • Skanska offices 15-17

Interview: Martin Schulz The president of the European Parliament calls defending the EU his “biggest task”

8-9

Opinion: Leszek Balcerowicz The former finance minister questions the need for EU bailouts 10

Coalition cracking?

Poland’s governing parties try to bridge the rift over pension reform 3

Lowered expectations Poland could have much less shale gas than originally thought 3-4

SHUTTERSTOCK

In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-4 Business . . . . . . . . . . . . . . . . . . . .5-6 Finance & Economics . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . .10-11 Cover Story . . . . . . . . . . . . . . . .12-13 Lokale Immobilia . . . . . . . . . . .15-17 The List . . . . . . . . . . . . . . . . . . .18-19 Markets . . . . . . . . . . . . . . . . . . . . . .20 Sports . . . . . . . . . . . . . . . . . . . . . . .21 Lifestyle . . . . . . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

NEWS

www.wbj.pl

z∏.1.1 billion was the value of pork imported to Poland in 2011, compared to z∏.579 million worth of Polish pork exports.

4.6%

Anti-Semitism made the headlines around the world last week following a tragic shooting at a Jewish day school in Toulouse, France, that left three children and a teacher dead.

French citizen Mohammed Merah, who carried out the attack, had killed three French soldiers of Arab origin just days earlier, and was himself killed by the police on March 22 after a prolonged standoff.

Merah allegedly said he wanted to “take revenge on the law against the full Islamic veil [in France] and also on France’s participation in the war in Afghanistan and to protest against the situation in Palestine.”

Anti-Jewish sentiment also reared its ugly head in Poland, where in the night between March 18 and 19 a Jewish cemetery in the small town of Wysokie Mazowieckie, Podlaskie voivodship, was dese-

crated. Nazi symbols and slogans were painted on the cemetery gate, over a memorial to the Jewish community and on other tombstones, reported the Foundation for the Preservation of Jewish Heritage. The foundation had helped renovate the cemetery in 2006. As WBJ went to press, the case was still being investigated by local police.

Meanwhile, the AntiDefamation League, a USbased NGO, released a timely report on March 20 which showed that anti-Semitic attitudes in 10 European countries, including Poland, remain at “disturbingly high levels.”

The results are based on a survey of 5,000 adults in Austria, France, Germany, Hungary, Italy, the Netherlands, Norway, Poland, Spain and the United Kingdom. In comparison to the previous study,

which was conducted in 2009, Hungary saw the greatest increase in overall antiSemitic sentiment – rising from 47 to 63 percent. Hungary (63 percent), Spain (53 percent) and Poland (48 percent) were the three countries where surveyed individuals expressed the highest levels of anti-Semitic attitudes.

“The survey is disturbing by the fact that anti-Semitism remains at high levels across the continent and infects many Europeans at a much higher level than we see here in the United States,” said Abraham Foxman, ADL national director. “In Hungary, Spain and Poland the numbers for anti-Semitic attitudes are literally off the charts and demand a serious response from political, civic and religious leaders,” he added.

is by how much Poland’s industrial production grew in February 2012, far less than expected and much lower than the 9 percent y/y increase in January.

€100 million

is the amount of prize money soccer teams participating in Euro 2012 will share. Four years ago, the figure was €55 million.

Quote of the Week “ It is difficult to expect that all data about the bodies was perfect – it is obvious in what state the bodies were found.”

Prime Minister Donald Tusk speaking to parliament prior to the exhumation last week of the bodies of two victims of the April 10, 2010 Smolensk airplane crash. The bodies were exhumed due to doubts about the accuracy of the initial Russian autopsies.

Figures in focus Asylum seekers Asylum applicants per one million inhabitants, selected EU27 countries, 2011 5,000 4,000

Alice Trudelle 3,000

On WBJ.pl

2,000 1,000

ia Po rtu ga l**

in

0 ton

WBJ.pl sits down with energy expert Ernest Wyciszkiewicz for an in-depth discussion on what the new, lower shale gas reserves estimates from the Polish Geological Institute mean for the industry in Poland.

Sp a

Managing expectations

Es

Poland exported €1.2 billion worth of food products in January 2012, an 8.4% y/y increase, reported Dziennik Gazeta Prawna. Exports over the whole of 2012 are expected to increase by 3% to 8%, according to BG˚ Bank economist Micha∏ KoleÊnikow. This means this year’s increase in exports will be slower than 2011, which saw a 11.8% rise.

is the most likely amount of recoverable shale gas lying beneath Poland, according to the Polish Geological Institute. The figures are some 10 times less than had been estimated by the US Energy Information Agency.

an d

Food exports on the rise

346-768 billion cubic meters

UK

Uwa˝am Rze, a conservative sociopolitical weekly launched in February 2011, sold an average of 129,800 copies in January 2012, beating out well-established competitors such as Polityka, Wprost and Newsweek, according to wirtualnemedia.pl. The highest-selling news weekly was Tygodnik Angora, which sold an average of 369,700 copies in January.

Anti-Semitism in Europe

Po l

New weekly outsells rivals

Numbers in the News

Ma lta * xe mb ou rg Sw ed en Be lgi um Fra nc Ge e rm an y

A recent survey conducted by pollster CBOS indicates that 83% of Poles oppose Prime Minister Donald Tusk’s plans to raise the retirement age for men and women to 67. Only 8% fully accept the proposal. Poles are especially opposed to the idea of raising the retirement age for women, with a whopping 91% against the idea.

IN THE SPOTLIGHT

Lu

Few Poles support pension reform

MARCH 26 – APRIL 1, 2012

COURTESY OF WIKIMEDIA COMMONS

2

*Highest in EU27 **Lowest in EU27 Source: Central Statistical Office

Battle for Father Rydzyk’s support Poland’s main opposition party, Law and Justice, and parliamentary group Solidarity Poland are both fighting for the support of Father Tadeusz Rydzyk, the controversial priest who runs Radio Maryja and television station Telewizja Trwam. Both are planning major demonstrations in support of Telewizja Trwam against the National Broadcasting Council’s decision not to allow the station to broadcast digitally. They are due to take place in Warsaw on April 21. ●

DATELINE

March/April MARCH 28

GREAT PLACE TO WORK GALA

Event:

This event honors Polish enterprises using unique practices and human resource management programs that promote the values of credibility, respect, fairness, pride and camaraderie in the relationship between management and employees.

Warsaw Stock Exchange greatplacetowork.pl

Location: Web:

28-30 EMERGING EUROPE 2012 Event:

Location: Web:

Emerging Europe 2012 is the eighth edition of the conference on investment and the economic situation in the countries of Central and Eastern Europe. Speakers will include Ludwik Sobolewski, president of the Warsaw Stock Exchange and prof. Leszek Balcerowicz, a former deputy prime minister, minister of finance and president of the National Bank of Poland.

Warsaw School of Economics emerging-europe.pl

Company index Amber Foods Polska ................13 Euro Styl ....................................16 Meble Emilia ..............................15

29

CONTEPORARY ART AUCTION

Location:

DESA Unicum, Warsaw, ul. Marsza∏kowska 34-50 desa.pl

Web:

Apollo Tyres................................12 Europejskie Centrum

Medusa Group............................17

Apsys ..........................................16 Inwestycyjne ..............................15 Nomura ........................................3 Asseco ..........................................6 Gazprom ......................................5 Nowy Styl....................................13 AXA Real Estate ........................15 GE Capital Real Estate ..............16 Oaktree Capital Group ..............15 Axtone ........................................13 GetHouse Developer ..................15 OBI ..............................................15 Bakoma ......................................13 Golub & Company......................15 Orco Property Group..................15

29-30 FACILITY MANAGEMENT & PROPERTY MANAGEMENT Event:

Location: Web:

Now in its eighth edition, the forum will provide a platform for the exchange of experiences, opinions and problems relating to all aspects of how buildings function.

Hotel Novotel Warsaw Airport scc.com.pl

Bank BPH ..................................16 Golub GetHouse ........................15 PGNiG ......................................3, 5 Bank Handlowy ............................6 Google ..........................................5 Polfa ¸ódê ..................................13 Bank of China ............................12 Griffin Topco II............................15 Provident Polska ........................12 Bank Zachodni WBK....................7 Grupa Black Point......................13 PZU ..............................................6 BG˚ Bank ....................................2 Guangxi LiuGong Machinery ....12 PZU Lietuva..................................6 Bioton ........................................13 Huta Stalowa Wola ....................12 Real ............................................15 BOSE International ....................16 Infosys BPO Poland ..................17 Selena ........................................13 Bumar ..........................................3 ING Real Estate Development ..15 Skanska Property Poland..........17 Capital Park Group ....................17 InterContinental ........................15 Solomon Cordwell Buenz ..........15 CBRE ..........................................17 Irish Development Group ..........15 Sygnity ..........................................6

APRIL 17 CEEQA GALA Event:

Location: Web:

The annual CEEQA Gala is firmly established in the sector calendar as the black-tie gathering of the year for real estate business leaders, and one of Europe’s premium real estate events.

Warsaw ceeqa.com

CBRE Property Fund Central

J.S.K. Architekci ........................17 Tauron ..........................................3

Europe ........................................15 KGHM ..................................12, 13 Tebodin Poland ..........................17 Chevron ........................................3 Kopex..........................................13 Tesco ....................................15, 17 Citigroup Global Markets ............7 Kulczyk Silverstein Properties ..15 Torus ..........................................16 COVEC ........................................13 Lane Energy Poland ....................3 Unibail-Rodamco ......................15 Cushman & Wakefield ........15, 17 LOT ..............................................5 Vanquis Bank ............................12 DLA Piper ..................................17 Makrum Development ..............17 W.Kruk........................................13 Echo Investment ........................15 Margaƒski & Mys∏owski Zak∏ady

Wacom........................................23

eMatic ........................................23 Lotnicze ......................................13 X-Trade Brokers ........................20 Epstein........................................15 Mattia Cielo ................................23 Yingke ........................................12

NEWS

MARCH 26 – APRIL 1, 2012

www.wbj.pl

Tauron lays off 1,300 workers

The ruling coalition

Pension reform reveals cracks in coalition Last Tuesday, a joint press conference during which Prime Minister Donald Tusk and Deputy Prime Minister Waldemar Pawlak were expected to announce an agreement on plans to raise the retirement age in Poland was unexpectedly called off.

Hours later, government spokesperson Pawe∏ GraÊ said that Mr Pawlak, the leader of the junior coalition partner, the Polish People’s Party (PSL), was “not ready” to support the government’s pension reform plans. He added that leaders of the ruling Civic Platform (PO) party would meet to discuss alternative possibilities for winning support for the PM’s plans. The next day, PO’s top members met and agreed that Mr Tusk should look for support for the reforms outside of the coalition if PSL continued its opposition.

All of this raised a flurry of speculation in the media as to whether the coalition would survive the disagreement. The retirement-age change is Mr Tusk’s flagship project this parliamentary term, and as such is a battle he can ill afford to lose.

However, since the height of the storm, the two leaders

Katowice-based energy group Tauron will spend the next couple of months negotiating a voluntary departure program for some 1,300 workers, reported Puls Biznesu. The move forms part of a program to improve efficiency within the group, which was put in place in 2010 and is expected to eventually bring z∏.1 billion in savings. This year, Tauron hopes to save z∏.339 million and improve on its results from last year.

have met to dispel forecasts of the coalition’s doom and assure the public that there is still room for compromise.

But after a Thursday meeting with the PM, Mr Pawlak said he and Mr Tusk were still looking for a “solution that

“The retirementage change is Mr Tusk’s flagship project this parliamentary term, and as such is a battle he can ill afford to lose.” would be a convincing compromise.” When asked whether he thought the coalition would survive, he replied enigmatically, “Different scenarios are possible. In my political life, I’ve seen various scenarios.”

Sticking points Poland’s pension system is outdated and losing money.

Currently, men can retire at the age of 65 and women at 60, but many are allowed to retire earlier than that. To help reform Poland’s public finances, PO wants to increase the retirement age for both men and women to 67 –

Aging population slows economy

COURTESY OF KPRM

The ruling PO-PSL coalition is experiencing the most serious face-off of its five-year history

PM Tusk (left) and Waldemar Pawlak have failed to reach agreement over pensions have lost their jobs or resigned just before reaching retirement age.

Mr Pawlak’s party has also proposed reducing the retirement age for women by three years per child.

Prime Minister Tusk has said he is ready to discuss some of the proposals, but has rejected others outright. As WBJ went to press, it was unclear which of PSL’s proposals were on the table, with Polish media providing conflicting reports.

by the year 2020 for men and by 2040 for women.

PSL, on the other hand, has proposed increasing the retirement age by two years for both sexes over the period up until 2020. That would put the retirement age at 67 for men, but at just 62 for women.

PSL also wants partial retirement schemes for women aged above 60 and for men who are above 65. The party also wants full retirement benefits for people who

What next?

As of press time, it was still not clear if PO and PSL would reach a compromise or if Mr Tusk will have to look for support among other parties.

Most political observers agree that the PM is determined to see the reform through (though he might agree to a somewhat watereddown version), but is unlikely to break off the coalition with Mr Pawlak’s party, even if PSL doesn’t back him this time Remi Adekoya around.

Shale gas

Industry still positive after lower shale gas reserves estimates According to an eagerly anticipated report from the Polish Geological Institute (PIG), made public on March 21, Poland’s shale gas reserves stand at between 0.35 and 0.77 trillion cubic meters (tcm).

That’s about 10 times less than the 5.3 tcm estimated by the US Energy Information Administration (EIA) in April 2011. It is also a figure the London-based ratings agency Fitch has described as “disappointing.”

Based on Poland’s current annual gas consumption of 14 billion cubic meters, these esti-

mates, described as “conservative” by Treasury Minister Miko∏aj Budzanowski, would still be sufficient to cover Polish needs for 25-55 years. And with Poland currently importing about 70 percent of the gas it uses, “even if we managed to produce 5-10 bcm a year, it would mean a strategic shift for the country and the region,” said Ernest Wyciszkiewicz, an energy security expert.

‘Still a huge volume’ Market players contacted by WBJ seemed to share that

opinion. “The amount of recoverable gas estimated in this report is still a huge volume for both foreign and Polish companies to seek to extract,” said Kamlesh Parmar, country manager for Lane Energy Poland, whose parent company, 3Legs Resources, plans to drill its third well this year.

A spokesperson for PGNiG, Poland’s gas monopoly and holder of the largest number of the licenses doled out so far by the Environment Ministry for shale gas exploration, said that “even with PIG’s conservative estimates, there is a chance for a significant increase of production, and therefore shale gas explo-

If demographic forecasts about Poland’s aging population and economic growth turn out to be accurate, in eight years the country’s economy may shrink by as much as 1%, reported Parkiet.

According to analysts from the National Bank of Poland, raising the retirement age may partially alleviate the problem of a decreased labor supply, provided that the health of older people greatly improves.

Bumar CEO dismissed Edward Nowak has been dismissed as CEO of the Bumar Group, a stateowned Polish supplier and exporter of armaments and military equipment. Mariusz Andrzejczak was designated acting CEO until a permanent replacement for Mr Nowak is found, Puls Biznesu reported. The official reason for the decision has not been given, but Polish media have speculated that board members were unhappy with Mr Nowak’s management style.

Nomura raises Polish GDP forecast SHUTTERSTOCK

Despite Polish estimates of shale gas reserves that Fitch described as “disappointing,” industry players still feel overwhelmingly positive

3

Shale gas reserves could be 10 times less than previous estimates had indicated ration constitutes a priority.”

Currently PGNiG produces over 4.3 bcm of natural gas from domestic resources.

Gra˝yna Bukowska, a spokesperson for Chevron Polska Energy Resources, said PIG’s report “does not change

Chevron’s plans in Poland. We remain committed to exploring potential for natural gas on our concession areas.” The US oil giant plans to drill at least three exploratory wells by the end of 2012.

Continued on p. 4 ➡

International financial services group Nomura has increased its forecast for Poland’s GDP growth in 2012 from 2.8% to 3%.

The reason behind this is expectations of a stronger domestic economy and of a rapid growth in exports. In comparison, the National Bank of Poland expects the country’s GDP to grow by 2.5 % this year. ●

4

NEWS

www.wbj.pl

Industry still positive after lower shale gas reserves estimates ➡ Continued from p. 3

More data needed Both market players and experts contacted by WBJ emphasized that neither PIG’s estimates nor those of the EIA take into account data from wells drilled since Poland launched shale gas prospecting in 2010. The EIA based its estimates on the US experience and prospective reserves, while PIG used archive data collected from 39 wells between 1950 and 1990. “[PIG’s] are not really results and I do not consider the publication to be disappointing. The original EIA report was in itself an estimate only,” said Mr Parmar.

Companies also emphasized that their own research carried the heaviest weight. “The analysis of the results from our own wells will be critical,” said Jadwiga Âwi´cicka, media relations adviser for the Polish arm of Canadian giant Talisman. “We believe that every company had thoroughly analyzed the gas potential prior to making an investment. The report has no influence on our plans.”

Experts agree that harder data on Poland’s shale gas reserves will only be available in three to four years’ time. At that point equally important information regarding the actual profitability levels of production is also expected to surface.

In the meantime, technological breakthroughs could also be a game changer, said Grzegorz Pytel, an energy expert.

“Experience shows that typically once production starts, the results are much better than initial estimates. I expect in time Polish reserves to be more than 5.3 tcm. We still can expect a technological breakthrough that could make some options currently unavailable commercially viable in the future. If gas prices continue to go up, it will also change things.”

Caution prevails Despite this generally positive assessment, experts warned that for the time being, the Polish government should be careful when commenting on PIG’s comparatively low estimates. Any indications that investing in Poland’s nascent

MARCH 26 – APRIL 1, 2012

Bodies of two Smolensk plane crash victims exhumed

shale sector could prove riskier than previously thought could provide companies with strong arguments to negotiate advantageous production conditions, they said.

“Getting into assessment of potential reserves is an extremely risky business. In my opinion this report carries little credibility and weight, and is setting up the scene for Poland to lose billions in potential tax revenues,” said Mr Pytel.

A statement from John Porretto, communications specialist for US behemoth Marathon Oil, seemed to indicate Mr Pytel might be on to something. “We believe the new estimates of shale gas potential reflect the level of risk that could be expected in the early stages of shale gas exploration activities in Poland. It will be important for the regulatory and fiscal terms to be established by the government to reflect this uncertainty to allow for the full potential of the country’s possible gas resources to be realized,” he told WBJ. Alice Trudelle

Two bodies belonging to victims of the April 10, 2010 Smolensk airplane crash were exhumed last week, following doubts about the accuracy of initial Russian autopsies.

The body of former Polish Deputy Prime Minister Przemys∏aw Gosiewski, who was among the 96 who died in the Smolensk tragedy, was disinterred at Warsaw’s Powàzki Military Cemetery last Monday on the orders of Poland’s Chief Military Prosecutor, following a request by his widow.

Using his Polish medical records as a comparison, Polish medical examiners discov-

ered that Mr Gosiewski’s height and weight had been estimated incorrectly by Russian medical officials. Rafa∏ Rogalski, a plenipotentiary of the Smolensk victims’ families, told radio station RMF FM that during the Polish autopsy of Mr Gosiewski’s body, “Some items were found that shouldn’t have been there.”

On Tuesday of last week, the body of former Institute of National Remembrance (IPN) head Janusz Kurtyka was exhumed at a cemetery in Kraków, also due to doubts about the Russian autopsy.

The results of the Polish

autopsy were unknown as WBJ went to press.

Speaking to parliament when the decision to exhume the two bodies became known, Prime Minister Donald Tusk said, “I do not understand the determination of families to exhume the bodies of victims of the disaster, but you have to respect their needs.”

He added that after a catastrophe like the one at Smolensk, “It is difficult to expect that all data about the bodies was perfect – it is obvious in what state the bodies were found.”

Gareth Price

Polish officials seize $100 million in fake US bonds, detain eight suspects Polish authorities arrested eight people in connection with the discovery and seizure of $100 million in fake US treasury bonds last week.

The suspects, three Poles, two Italians, two Ukrainians and a Moldovan, were questioned on counterfeiting charges by the Lublin prosecutor’s office.

The raid was carried out by Central Anti-Corruption Bure-

au (CBA) agents and operatives from BOA, Poland’s antiterrorist unit, in mid-March in regions near to Kraków and Lublin, in southeastern Poland.

It was the biggest-ever seizure of fake bonds in the history of the CBA. Citing a source close to the case, the Polish Press Agency wrote that the gang had been working with Italian mafia organizations.

“The fake bonds worth $100 million, they wanted to sell for several million z∏oty,” the source said.

Earlier this year, Italian anti-mafia prosecutors seized $6 trillion in fake US bonds from three safety deposit boxes in Zurich, Switzerland.

At the time, the amount represented half of the US’s public debt.

Gareth Price

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BUSINESS

MARCH 26 – APRIL 1, 2012

www.wbj.pl

5

EU regulation

Airlines outside the bloc are fighting the regulations, which will likely also have a negative effect on the market in Poland

Although the European Court of Justice ruled in December 2011 that carriers outside the EU must abide by the bloc’s rules, China and India have barred their airlines from complying, and similar legislation is pending in the US. China has also put contracts with Airbus worth billions of dollars on hold. But EU Commissioner for Climate Action Connie Hedegaard has said the EU will not back down under political pressure and that its plan will be replaced by a more ambitious global agreement.

While the inclusion of the global aviation industry into the EU’s emissions trading system (ETS) this past January has sparked talk of a trade war in China, India, Russia and the US, Poland has kept a relatively low profile.

But market players in the country are worried it could hinder growth.

The view from Poland The bone of contention

Poland has not seen publicly aired opposition like that of British Airways, Virgin Atlantic, Lufthansa, Air France, Air Berlin and Iberia, who have all come out against the EU plan.

LOT, the country’s flagship carrier, says although the cost of buying extra CO2 emissions permits could be “considerable in relation to the company’s turnover,” it does not expect that costs will be offloaded onto passengers in the near future. The main rea-

Several international airlines, industry organizations and even governments have made clear that they will not accept the EU’s imposition of a cap on CO2 emissions on international flights that arrive at or depart from an EU airport.

Currently, all airlines flying to or from the EU receive a certain number of emissions permits. If their actual emissions exceed that amount, they will have to buy additional emissions allowances.

son is that a price hike would be difficult to implement due to fierce competition in the market, the firm said. However, the airline was careful not to exclude this scenario entirely, citing highly volatile prices for CO2 emissions permits.

Warsaw Chopin Airport, which accounts for over 40 percent of the country’s air traffic, says it hasn’t seen an impact from the scheme yet.

But spokesperson Przemys∏aw Przybylski said he expected that airlines would eventually increase ticket prices and that traffic growth would slow, although he didn’t foresee airlines cutting their number of flights to Warsaw.

Experts from Poland’s Civil Aviation Office (CAO) were significantly more pessimistic. In their opinion, in the long run passengers will indeed bear a part of the cost of the ETS system, which is shaping up to be “significantly higher” than previously thought. This spells bad news for the Polish aviation market, as the uniform cost of emission allowances across the EU is expected to hit more severely both the Polish

COURTESY OF LOT

Emissions rules to hamper Polish air industry?

Lot says the EU’s plans could affect the firm’s turnover industry and Polish consumers.

Poland’s industry faces a higher cost and more difficult access to capital than in Western Europe, explained experts at the CAO. They also face increasing fuel costs, which put pressure on already low profit margins. Meanwhile Polish consumers, with smaller incomes than their Western European counterparts, are expected to react strongly to even small changes in ticket prices. CAO says a

Technology

significant decrease in the growth of the number of passengers due to the impact of

the program in the next decade is now possible.

Alice Trudelle

Aviation represents 2 percent of global CO2 emissions. The International Air Transport Association (IATA) estimates that in 2012 airlines will emit about 650 million tons of carbon while carrying 2.8 billion passengers and 46 million tons of cargo. By 2050, the organization calculates this will rise to 16 billion passengers and 400 million tons of cargo. IATA forecasts the global cost of the ETS in 2012 at €900 million and €2.8 billion in 2020. IATA, which represents 240 airlines comprising 84 percent of global air traffic, estimates that its members recorded a combined profit of $7.9 billion for 2011, and forecasts a $3 billion profit in 2012, on the back of rising oil prices. ●

Gas

Google Street View now in Poland PGNiG’s Q4 profit

smashes forecasts

The company plans to introduce “Business Photos” in the future

Issues of privacy The service, which first encountered privacy issues concerning its photo-taking of streets and buildings, was eventually approved by the Polish Inspec-

COURTESY OF GOOGLE

In anticipation of the 2012 European soccer championships set to be held in Poland and Ukraine, Google officially launched its Google Street View service in Poland last week, showcasing images of the games’ host cities and of other cities throughout the country.

While the service is not new, having been initiated in the US in 2007, the company says that tourists coming to Poland for the games will have a familiar tool at their disposal when seeking directions or images of tourist sites and other locations.

The Street View service, which captures images from the ground level, allows users to move an icon on a computer, smartphone or tablet, allowing them to view the area from the street level virtually. The company reported that since last year the service was more frequently used by mobile users than those using a computer.

Google representatives expect that trend to continue.

More expensive Russian gas imports were offset by cheaper, alternative sources

Warsaw’s Palace of Culture on Google Street View tor General for Personal Data Protection (GIODO), the Polish data protection authority.

“They inspected our cars and methods of image taking and were satisfied with their privacy requirements,” said Michael Valvo, manager of communications and public affairs for Google UK. Added measures to protect privacy now include the option to blur a photo or report one as a “problem,” which the company says it then removes within hours from its service.

With privacy seemingly no longer an issue, Google hopes images of Poland will allow tourists to take advantage of the service during the games.

Host city representatives, meanwhile, said they hoped the service would help to attract tourists even before the Euro 2012 soccer championships by drawing them to major points of attraction in their cities.

A grander vision But Google’s ambition goes further than just making it easy for tourists to find their way around Poland’s larger cities during the tournament. “Our aim is to bring all of Poland” into the Google Street View service, Mr Valvo said. He added that the company plans to come back to Poland for more photos “as soon as possible,” but could not give a pre-

cise date on when service throughout all of Poland would become available.

Google’s next venture, Business Photos, which is still in its pilot stage, is currently being tested out in Paris, the UK and the US. According to Mr Valvo, the pilot project takes the idea of Street View further by inviting customers inside businesses.

Companies wishing to promote themselves can use Google’s Business Photos to showcase their interiors directly online to potential customers. For now, however, it may still be a while before the project is actually launched in Poland and other countries.

Ella Pa∏ka

Polish state-controlled gas monopolist PGNiG reported a much higher-than-expected net result for the fourth quarter of 2011, on the back of cheaper alternative supplies that offset more expensive imports from Russia.

PGNiG earned a profit of z∏.302 million in the last three months of 2011, compared to a loss of z∏.171 million forecast by a Reuters poll of analysts. The result nevertheless represented an annualized fall of 73 percent. For full-year 2011, the company recorded a profit of z∏.1.63 billion, a fall of z∏.831 million year-on-year due to losses incurred on gas sales.

Poland, which imports around two-third of the gas it uses, saw the price of imports rise in Q4. Roughly 90 percent of these are sourced from Russian gas monopoly Gazprom. PGNiG’s gas-import agreement with Gazprom links the price of gas to a ninemonth moving average of oil prices, which rose 44 percent y/y in the fourth quarter, PGNiG said in a statement.

Nevertheless, the company was also able to tap into a broader and more diversified range of gas-import sources in Q4, helping it to book a profit. In that period PGNiG began importing Russian gas from Germany, for which it pays a lower price than for direct imports from Russia.

The company also launched a new pipeline across the Polish-Czech border, which provided it with another source of cheaper gas.

PGNiG board member Rados∏aw Dudziƒski told journalists last week that the company plans to reduce gas purchases from Russia in 2012 to 85 percent of the maximum level contracted with Gazprom.

The company, which has not revealed its dividend plans for this year, filed a lawsuit against Gazprom earlier this year at an arbitration tribunal in Stockholm, which it hopes will allow it to lower gasimport prices in its contract with Gazprom.

Earlier in March, Poland’s Energy Regulatory Office approved an increase in consumer gas prices of between 7 and 10 percent, effective from April, following several months of talks with PGNiG. Gareth Price

6

BUSINESS

www.wbj.pl

MARCH 26 – APRIL 1, 2012

Stock exchanges

The EC says the proposed merger would have stymied competition to an unacceptable degree Following the European Commission’s decision to block a merger between Deutsche Börse and NYSE Euronext, the German stock exchange has said it plans to appeal the decision to the European Court of Justice.

If the merger had been approved, it would have created the world’s largest stock exchange.

also each other’s biggest rivals.

According to the EC, “Eurex and Liffe are of comparable size in terms of their membership base and portfolio of contracts they offer for trading and clearing, and they both focus on European financial derivatives, namely European interest rate and equity derivatives.”

Both Deutsche Börse and NYSE Euronext had said that a merger would bring benefit to customers through greater liquidity and because customers would have to provide less collateral for security.

Last Thursday, NYSE Euronext said it would not be

The EC opposed the deal largely because of what it would have meant for the global derivatives market.

“Together, the two exchanges control more than 90 percent of global trade in these products. The Commission’s investigation showed that new competitors would be unlikely to enter the market successfully enough to pose a credible competitive threat to the merged company,” the EC said in a statement.

Eurex and Liffe deal with derivatives and belong to Deutsche Börse and NYSE Euronext respectively. They are

joining Deutsche Börse in its appeal, explaining that it was not in the interests of shareholders or of the company to be embroiled in a lengthy legal battle.

“Our sole focus has returned to executing our strategy and leveraging the significant opportunities we have to grow the business and continue to create long-term value for our shareholders, customers and employees,” NYSE Euronext said in a statement.

Representatives from Deutsche Börse could not be reached for comment.

Ella Pa∏ka

COURTESY OF WIKIMEDIA COMMONS

Deutsche Börse to appeal blocked NYSE Euronext merger

The merger would have created the world’s largest stock exchange

IT

Asseco’s net profit falls, firm plans further expansion

WBJ ARCHIVES

Poland’s largest insurer, PZU, has announced plans to expand to both Latvia and Estonia in the second half of 2012.

PZU, which already owns Lithuanian insurance firm PZU Lietuva, wants to increase its foothold in the Baltic region as part of its

2012-2014 strategy.

“PZU chose Lithuania as a country from which it will expand further to Latvia and Estonia,” PZU Lietuva CEO Marius Jundulas said in statement.

“A strong position on the Lithuanian market will allow us to plan operations in other

low of 21.64 last week, valuing the company higher than Asseco’s offer.

Asseco’s bid for rival Sygnity, at z∏.21 a share, is final, says the Polish IT firm

PZU plans expansion into Latvia and Estonia in H2 this year

PZU has allocated z∏.6-7 billion for international acquisitions

the offer price is too low. And indeed, the company’s shares traded at a high of 22.10 and a

Baltic states. … Customers and business partners use PZU Lietuva services to a large extent to develop business in Latvia and Estonia, so we intend to provide them with high-quality insurance services in these countries,” Mr Jundulas added.

The insurer has allocated z∏.6-7 billion to make international acquisitions over the next few years. A newly formed entity, PZU International, is set to manage PZU Group’s acquisition activities and foreign operations during this period.

In 2011, PZU made a net profit of z∏.2.34 billion. Gross premiums for direct and indirect insurance amounted to z∏.15.28 billion in 2011, an increase of z∏.738.2 million on figures from one year earlier.

David Ingham

Asseco Poland is also eying overseas markets, and is still mooting the idea of a $200-$300 million listing on the Nasdaq stock exchange and potentially expanding into Asia.

“We are meeting seven banks this week to chose our eventual partner for the Nasdaq listing,” Mr Góral said.

Asseco Poland’s management board announced in a statement that it recommends a dividend of z∏.169 million for the financial year 2011, which works out at z∏.2.19 per share.

Gareth Price

Bank Handlowy to slash workforce and shutter branches Bank Handlowy, the Polish arm of Citigroup, has announced a restructuring process that will see the loss of some 590 jobs and the closure of 40 percent of the firm’s branches in Poland.

The aim of the restructuring process, which will see around 60 branches close their doors for good, is to save the company some z∏.60 million a year, once the process is complete. The company expects to save roughly half that amount in 2012, Bank Handlowy CEO S∏awomir Sikora said at a press conference last week.

In order to cover the costs of implementing job cuts and branch closures the company has set aside z∏.43 million.

“The board decided to create a restructuring reserve of z∏.43 million, including the costs of bene-

fits for employees whose employment relationship shall be resolved ... as well as costs directly related to our branch network,” the bank wrote in a statement.

Mr Sikora said, however, that the bank plans to open new stores in several major

Polish cities, adding that further details would be revealed in May this year.

For full-year 2011, Bank Handlowy recorded a net profit of z∏.721.29 million, compared to z∏.748.03 million a year earlier.

David Ingham

WBJ ARCHIVES

Poland’s largest IT company, Asseco Poland, recorded a higher-than-forecast net profit of z∏.397 million in 2011, compared to z∏.414 million a year earlier. The company attributes the 4 percent year-onyear drop to lower margins and the fact that several of the firm’s long-term contracts have drawn to a close.

Analysts polled by Reuters

important one.”

Several of Sygnity’s stakeholders have, however, said

had expected a 9 percent drop, to z∏.378 million.

Asseco hopes to expand its presence in the Polish market, having recently bid z∏.21 a share for a 100 percent stake in rival Sygnity. That values the company at z∏.250 million, an amount company president Adam Góral said was Asseco’s final offer.

“We are paying a lot for Sygnity and we cannot afford more,” he told reporters last week.

“Sygnity is one of three [planned] takeover projects at Asseco. It would strengthen us, but it is not the most

SHUTTERSTOCK

The z∏.250 million bid for rival Sygnity is the firm’s final offer, Asseco’s president said last week

The restructuring will see the loss of 590 jobs

FINANCE & ECONOMICS

MARCH 26 – APRIL 1, 2012

www.wbj.pl

Production

Development

Industrial output growth decelerates in February

EBRD commits €500-600 million for Poland in 2012

Gareth Price

Temporary blip?

Annualized growth in industrial output, February 2011-February 2012 (in %) 12 10 8 6 4 2

01 1 p2 01 1 Oc t2 01 No 1 v2 01 De 1 c2 01 Jan 1 20 1 Feb 2 20 12 Se

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0 Feb

Poland’s industrial output growth slowed in February, suggesting the economic slowdown in the euro zone is starting to take a toll on the Polish economy.

According to Central Statistical Office data, industrial output growth slowed to 4.6 percent year-on-year in February, following growth of 9 percent y/y in January. Output fell 1 percent on the month. “[This] could be partly due to poor weather conditions but also due to weaker economic activity abroad,” Bank Zachodni WBK wrote in a statement.

“In our view, data on output – similarly as earlier data from the labor market – indicate that monetary tightening is not necessary, as activity [in] the Polish economy is waning and there are no conditions for inflationary pressure to build up,” it added.

Analysts at Citigroup Global Markets wrote in a report

percent in January to 12 percent.

Marek Belka, president of the National Bank of Poland, has looked to calm concerns.

“Data shows that the economy is slowing down, but there is no need to raise alarm,” Mr Belka told journalists.

He explained that past experience has often shown slowdowns in output to be temporary, citing figures from last summer, when deceleration proved to be short-lived.

that the output data “could be a first sign confirming the negative impact of falling orders on output growth as well as the negative impact of a stronger z∏oty on export growth.”

The scale of the downturn in industrial production took many analysts by surprise, since the market had expected growth to fall only slightly.

But the onset of freezing temperatures in February affected production in the construction sector, where y/y growth declined from 32

Ma

Poland’s economy is starting to show clear signs of slowing down

Source: Central Statistical Office

The EBRD said funding is lower than a year earlier, but is at a more “sustainable level” The European Bank for Reconstruction and Development (EBRD) will continue to provide significant investment funding in 2012 for Poland, with its activities mainly focused on finance and energy.

Established in 1991, the EBRD helps former communist countries transition to the status of market economies.

Poland is the bank’s fourthlargest recipient with the total value of EBRD-funded projects in the country now standing at €22.6 billion. In 2011 the bank invested €900 million in Poland, a much higher amount than in previous years (between 2005 and 2010 annual investment stood at between €115 million and €440 million).

Last year saw an “outstanding increase,” said the bank’s president Thomas Mirow during a conference held last week in Warsaw. He added that there was an understanding among Polish colleagues that this was

not a sustainable amount. This year, the EBRD has earmarked around €500-600 million for Poland.

For 2012, Mr Mirow expects the financial and energy sectors to “stand out,” with the EBRD focused on deepening Poland’s capital markets and modernizing its energy sector.

Mr Mirow said funds would be directed into renewables projects, into increasing the distribution of gas and electricity, and into increasing the efficiency of power generation. Funds will also be invested in developing inter-connectors linking Poland to neighboring countries.

“We agree with Polish leaders that Poland is a remarkable success story … and that its economy proved much more resilient [than expected],” Mr Mirow said. “We continue to expect Poland to graduate [from EBRD aid] over time, but not in the immediate future,” he added.

Who will lead the EBRD? Mr Mirow, who has served as president of the EBRD for four years, may stand for

7

reelection once his term ends in May, in what would be the first contest for the top job in the bank’s history. One of the other candidates he faces is Jan Krzysztof Bielecki, a former Polish prime minister and the current head of Prime Minister Donald Tusk’s economic council. The head of Poland’s central bank, Marek Belka, submitted Mr Bielecki’s nomination last week.

When asked whether the EBRD, which until now has been headed by French and German citizens, was ready to be led by someone from a former Eastern-bloc country, Mr Mirow said that the bank’s shareholders would have to make that decision.

Regarding his chances for a second term, Mr Mirow said he did not want to speculate on “chances.”

He added that, “It’s up to shareholders to decide whether they prefer a continuation or a reset.”

A vote to decide on EBRD’s future president is scheduled to be held at EBRD’s London headquarters between May 18-19.

Ella Pa∏ka

8

INTERVIEW

www.wbj.pl

MARCH 26 – APRIL 1, 2012

The EU

In defense of the Union Martin Schulz, president of the European Parliament, talks to WBJ about the road to recovery and the role of ideology in the EU Ewa Boniecka: Your leadership of the European Parliament has coincided with a time of financial and political crisis in Europe. How do you see the road to recovery?

Martin Schulz: The current sovereign debt crisis poses a challenge like no other in the

history of the European Union. If it is allowed to spiral out of control, it may destroy the EU as we know it. Growing poverty and unemployment in some countries are destroying confidence in politics and faith in European integration.

Fortunately, there are more and more signs that the worst is behind us. I believe that 2012 can become a breakthrough year in the fight against the crisis.

Greece and private investors recently signed a debt-restructuring agreement which paved the way for that country to receive the second, €130 billion, aid package from the EU and the International Monetary

Fund. A disorderly Greek default, which would have disastrous consequences for the euro zone and the whole global economy, has been averted.

There is still much to be done before Greece returns to financial health. I hope that a Greek government that emerges from the coming elections will continue reforms.

Secondly, yields on Italian and Spanish bonds have fallen,

removing, at least for now, a threat that those countries may have problems with servicing their debt. The euro zone is also finishing work on the permanent bailout fund, the European Stability Mechanism, which will serve as a firewall preventing the flames of the crisis from spreading.

So there are reasons to be optimistic, although there is no room for complacency.

What tools do you have at your disposal to strengthen the role of the European Parliament in preventing the EU from dividing into a “twospeed” union?

There are already areas in the EU where member states move at different speeds.

Some countries do not belong to the Schengen Area and some are exempt from the obligation of one day adopting the euro currency. But these differences are not fundamental and they do not threaten the unity of the EU. The overwhelming majority in the European Parliament is firmly against any new divisions in the EU. For example, I strongly oppose turning the euro zone into some kind of exclusive club.

The key to preserving the coherence of the EU is to keep what is known in Brussels as the community method of decision-making. This means strong involvement of the European Parliament and the European Commission; this means reconciling the interests of smaller and bigger countries, basing decisions on the principles of solidarity and democracy; this means placing the common good above the interests of the most powerful.

I must admit that I am worried by what I have observed in recent months and years. I notice the attempts of many politicians, many governments to weaken EU institutions and to shift power towards national governments. Recently, they are doing that under the pretext of fighting the crisis. They create new bodies – [like the] the European Stability Mechanism – outside the EU framework.

Defending the EU and its powers is perhaps my biggest task as the president of the European Parliament. I will fight for the European Parliament’s right to hold other institutions and governments accountable. Not just to increase the parliament’s power for power’s sake, but in order for the EU to serve its citizens better. If necessary, I am ready for confrontation on that with national leaders.

Is the fiscal treaty the only mechanism necessary for helping members of the euro zone to recover from the financial crisis?

I share the view of the majority in the European Parliament that the fiscal compact is not really necessary. Current EU laws on fiscal discipline are sufficient, especially after the adoption last year of the socalled six-pack that deepens mutual budget surveillance and provides for more auto-

INTERVIEW

COURTESY OF THE EUROPEAN PARLIAMENT

MARCH 26 – APRIL 1, 2012

The time of solidarity in the EU is not over, says EP President Martin Schulz matic sanctions for those who break budget rules.

I also regret that the fiscal compact is not an EU treaty but an intergovernmental agreement. I very much hope that in the coming years the agreement will become part of EU legislation.

But if the treaty increases investor confidence in the euro zone, it can only be good.

I understand that some countries, such as Germany, needed the treaty as an iron-clad guarantee that fiscal rules will never again be broken. They needed this guarantee to extend more aid to other countries in financial trouble.

The treaty does not change much for Poland, because its constitution already has a provision which prevents public debt from exceeding 60 percent of gross domestic product.

How do you see the position of countries that have not adopted the euro but have nevertheless signed the fiscal treaty, in securing their influence in the EU? It is good that non-euro countries such as Poland have signed the treaty. I also hope that Poland will not abandon its efforts to join the euro zone.

Despite the currency area’s current problems, it is still worth [it] to adopt the euro.

I am glad non-euro signatories of the treaty will be allowed to attend euro-zone summits in the majority of cases.

How is Poland going to be affected by changes to the mechanisms of the EU?

Not much, I think. All major decisions will still be made by bodies involving all EU member states – the European Council or ministerial meetings. The overwhelming majority of new laws will still be made [jointly] between all governments and the European Parliament.

As a social democrat, in what ways do you think socialist groups in the EU can influence the policy of the bloc, or is it the case that ideology no longer has any real meaning in the activities of the Union?

I am now the president of the whole European Parliament,

“We should not idealize the past by perpetuating the myth of some golden age when everything was perfect” so my role within the institution is different and I cannot speak on behalf of the group.

But in general, the Socialists and Democrats are the second-biggest group in Parliament and as such it has a major influence on decisionmaking. For example, the Socialists had a big impact on all recent legislation related to the crisis and the economy, such as on clearer rules on trading derivatives, credit default swaps, bonuses at financial institutions, hedge funds, new financial supervision bodies and in many other areas. Thanks to the position

of the Socialists, parliament significantly strengthened the regulation of financial markets to prevent [a repeat of the] excesses that led to the recent financial crisis. The Socialists have had clear successes in fighting financial speculation.

On a more general note, I do not agree that ideological colors are fading. On the contrary, they are gaining importance. European parties and European party politics are slowly emerging. Look at the French presidential elections.

President Sarkozy is openly supported by his colleagues from the EPP. What happened to our European dream of solidarity and unity? Is it over, or just pushed to one side for the time being?

I disagree that the time of solidarity is over. We should not idealize the past by perpetuating the myth of some golden age when everything was perfect. There have always been disputes over the EU budget and how to spend the money.

Solidarity in the EU does exist. Economically poorer regions do receive tens of billions of euro every year to build roads, clean up the environment and create jobs.

Huge sums are spent on scientific research, education and innovation.

Germany is sometimes accused of lacking solidarity.

But Germany provided €211 billion in guarantees for the European stability fund, or more than half of the country’s budget. This is not a negligible sum. ●

www.wbj.pl

9

10

OPINION & ANALYSIS

www.wbj.pl

MARCH 26 – APRIL 1, 2012

The bailout bias

T

he seemingly never-ending debate over the euro zone’s fiscal problems has focused excessively on official bailouts, in particular the proposed purchase of government bonds on a massive scale by the European Central Bank. Indeed, we are warned almost daily – by the International Monetary Fund and others – that if bailout efforts are not greatly expanded, the euro will perish.

“Massive purchases of government bonds by the ECB would be the worst type of bailout” For some, this stance reflects the benefits that they would gain from such purchases; for others, it reflects mistaken beliefs. Creditors obviously support bailing out debtor countries to protect themselves. Many political leaders also welcome official crisis lending, which can ease market pressure on them. The media, meanwhile, always thrives on being the bearers of bad news.

Mistaken beliefs, on the other hand, are reflected in metaphors like “contagion” and “domino effect,”

which imply that financial markets become blind, virulent, and indiscriminate when they are disturbed. Such terms provoke fear that, once confidence in any one country is lost, all others are in danger.

According to this logic, it follows that only a formidable countervailing power – such as massive official intervention – can halt the ravenous dynamics of financial markets.

Widespread use of expressions like “aim a bazooka at the euro zone,” and “it’s them or us,” demonstrates a pervasive Manichean view of financialmarket behavior vis-à -vis governments.

Markets aren’t blind But financial markets, even when agitated, are not blind. They are capable of distinguishing, however imperfectly and belatedly, between macroeconomic conditions in various countries.

This is why interest-rate spreads within the euro zone have been widening, with Germany and the Nordic countries benefiting from lower borrowing costs and the “problem” countries being punished by a high-risk premium.

Another, related, fallacy is the assumption that reforms can reap benefits only in the long run. This misconception reduces the short-term solution to affected governments’

sharply higher borrowing costs to bailouts. In fact, properly structured reforms have both short- and longterm effects.

For example, one does not need to wait for the completion of a pension reform to see reduced yields on government bonds. Markets react to credible announcements of reforms, as well as to their implementation.

The countries that have been severely affected by the financial crisis illustrate the impact of reform. One group – Bulgaria, Estonia, Latvia, and Lithuania (BELL) – experienced a surge in yields on their government bonds in 2009, followed by a sharp decline. Another group – Portugal, Ireland, Italy, Greece, and Spain (PIIGS) – has had more mixed outcomes: yields have soared on Greek and Portuguese bonds, while Ireland’s were falling until recently.

These differences can be explained largely by the variations in the extent and structure of these countries’ reforms. Proper reforms can produce confidence and growth.

Official crisis lending can buy time to prepare, and it can help to stop a banking-sector crisis, but it cannot substitute for reform.

Moral hazard All bailouts can create moral hazard, because they weaken the incentive to

implement reforms that will avoid bad outcomes in the future. To some extent, official crisis lending replaces the pressure from financial markets with pressure from experts and creditor countries’ politicians.

Among the proposed euro-zone bailouts, none has come under the spotlight as much as the idea that the ECB should purchase massive quantities of the problem countries’ bonds.

Advocates of this approach stretch the concept of “lender of last resort” to suggest that providing liquidity to commercial banks is the same as funding governments. They also present the alternative to a bailout as a “catastrophe.” Finally, they cite similar policies implemented by the United States Federal Reserve, the Bank of England, and the Bank of Japan – as though merely mentioning past examples is evidence that ECB lending will work.

These rhetorical devices must not overshadow careful analysis of the various options. There has been surprisingly little comparative analysis of the effects of quantitative easing (QE) in Japan, the US, and Britain.

Yet the evidence indicates that QE is no free lunch. Although it may offer potential benefits in the short run, costs and risks invariably emerge later.

In Japan, QE may have con-

Leszek Balcerowicz tributed to delays in economic reform and restructuring, thereby weakening longer-term economic growth and exacerbating fiscal distress. In the US, it failed to avert the slowdown during 2008-2011. In Britain, economic growth is even slower. And these countries’ QE has also fueled asset bubbles in the world economy.

Massive purchases of government bonds by the ECB would be the worst type of bailout. The fact that such purchases are potentially unlimited would exacerbate the problem of moral hazard. It would also increase the risk of inflation, along with other negative economic consequences.

Moreover, such a bailout could undermine the ECB’s trustworthiness as guardian of the euro’s stability, particularly in light of the new political power that it would obtain. And it would further undermine the rule of law in the EU at a time when confidence in the Union’s governing treaties is already fragile.

The key to resolving the euro-zone crisis lies in properly structured reforms in the ailing countries.

Indeed, experience shows that there is no substitute. ● Leszek Balcerowicz is a former governor of the National Bank of Poland and deputy prime minister Copyright: Project Syndicate, 2012

The future of China’s growth Justin Yifu Lin

T

he slowdown of China’s economy has captured the headlines in recent weeks. Whether it is a permanent or temporary adjustment, the Chinese authorities have much work to do in laying the groundwork for strong economic performance in the medium and long term.

Despite extraordinary growth since the start of its transition to a market economy in 1979, China is facing serious challenges simultaneously: rising inequality, large and growing levels of environmental degradation, stubborn external imbalances, and an aging society.

Fortunately, China’s 12th FiveYear Plan (2011-2015) recognizes the need to deepen market-oriented reform, change the country’s development model, and focus on the quality of growth, structural reforms, and social inclusion to overcome the rural-urban divide and stem the rise in income inequality.

In line with this bold, long-term approach, a new report by a team from the World Bank and the Development Research Center of China’s State Council, China 2030, proposes reforms that the country needs to develop a mature, well-functioning market economy by 2030.

Long-term view China 2030 calls for structural reforms that would redefine the role of government, overhaul state-owned enterprises and banks, develop the private sector, promote competition,

and deepen liberalization of the land, labor, and financial markets.

While providing relatively fewer tangible public goods and services directly, the Chinese government will need to provide more intangible public goods and services like rules, standards, and policies. Such policies and institutional improvements increase productivity, promote competition, facilitate specialization, enhance the efficiency of resource allocation, protect the environment, and reduce risks and uncertainties.

In the enterprise sector, the focus will need to be on increasing competition in all sectors, reducing barriers to entry and exit for private companies, and strengthening state-owned enterprises’ competitiveness.

In the financial sector, the banking system must be commercialized, thereby gradually allowing interest rates to be set by market forces, while capital markets must be deepened in tandem with the development of the legal and supervisory infrastructure needed to ensure financial stability.

In the labor market, China needs to accelerate reforms of the hukou (household registration) system to ensure that, by 2030, workers can move more freely in response to market signals. Currently, anyone who moves to another part of the country without a hukou risks losing access to education, social services, and the housing market. China’s policymakers also need to introduce measures to increase labor-force participation

rates, rethink wage policy, and make social-insurance programs portable nationwide.

Finally, farmers’ rights need to be protected, the efficiency of land use must be increased, and policies for acquisition of rural land for urban use should be overhauled.

Enlightened strategy China’s medium-term success will also require creating an open system in which competitive pressures encourage Chinese companies to engage in product and process innovation, not only through their own research-and-development efforts, but also through participation in global R&D networks. The priority is to increase the quality of R&D, rather than just its quantity. Policymakers will need to focus on increasing the technical and cognitive skills of university graduates, and on building a few world-class research universities with strong links to industry.

An enlightened strategy must encourage China to “grow green,” as opposed to growing rapidly now and facing massive environmental costs later. Encouraging new investments in low-pollution, energy- and resource-efficient industries would lead to greener development, spur investments in related upstream and downstream manufacturing and services, and build an international competitive advantage in a global sunrise industry.

China 2030 also calls for expand-

ing opportunities, promoting social security, and reducing the country’s relatively high social and economic inequality by addressing the ruralurban disparities in access to jobs, finance, and high-quality public services. Doing so will require greater sustained attention to underserved rural areas and migrant populations, and to restructuring social policies in order to ensure secure safety nets.

Moreover, it is vital to strengthen China’s fiscal position by mobilizing additional revenues and ensuring that local governments have adequate financing to meet their rising expenditure responsibilities. Such reforms can help to ensure that budgetary resources are available at different levels of government (central, provincial, prefectural, county, township, and village), and are commensurate with expenditure responsibilities.

Global stakeholder Last but not least, China should become a proactive stakeholder in the global economy. By continuing to intensify its global trade, investment, and financial links, which have served it well over the past three decades, China would benefit from further specialization, increased investment opportunities, and higher returns to capital, as well as mutually beneficial flows of ideas and knowledge.

China must remain committed to resuscitating the stalled Doha Round of multilateral trade negotiations, and support a global agreement on

investment flows. Global integration of China’s financial sector will require opening the capital account, which will have to be carried out

“China should become a proactive stakeholder in the global economy” steadily and with considerable care; but it will be a key step toward internationalizing the renminbi as a global reserve currency.

With the global economy entering a dangerous phase, China’s government will need to respond to new risks, shocks, and vulnerabilities as they arise. But, in doing so, it should adhere to the principle that policy responses to short-term problems must uphold, not undermine, longterm reform priorities. ● Justin Yifu Lin, chief economist and senior vice president for development economics at the World Bank, founded the China Center for Economic Research at Peking University.

His latest book is “Demystifying the Chinese Economy.”

Copyright: Project Syndicate, 2012. project-syndicate.org

OPINION & ANALYSIS

MARCH 26 – APRIL 1, 2012

www.wbj.pl

11

The real disappointment about shale gas Andrew Kureth

“P

olish official shale gas estimates disappoint” read the headline that went up on WBJ.pl last week, when the Polish Geological Institute finally, after several months of delay, published its official estimates of Poland’s shale gas reserves. The Polish agency predicts that there could

“Poland will eventually have to deal with the reality that it must move towards sustainable sources of energy” be 10 times less gas under Poland than originally estimated by the US Energy Information Agency, which said Poland could have as much as 5.3 trillion cubic meters – enough to last the country some 300 years at current consumption levels.

The headline garnered some strong reactions from readers, who pointed out that industry players are not disappointed at all. Indeed, at the low end of the Polish institute’s estimates, some 346 billion cubic meters, still ensures there will be shale gas

business to be had here for at least 24 years. Moreover, the US agency’s estimate was wildly optimistic to begin with, they added. Our story (see pp. 3-4), makes the industry’s continued bullishness on shale gas prospects in Poland abundantly clear.

That’s all well and good. But don’t tell that to the government, who had played up the possibility of expected near-immediate energy independence, saying Poland could become a “second Norway,” and banking on shale gas revenues to plug holes in its budget. The “average Kowalski” was likely hoping for better as well. Poland will clearly need more than shale gas if it is to break the shackles of its dependence on Russia for most of its natural gas needs.

But the media response to the institute’s low estimates was quick and fierce indeed. The data was not at all disappointing, said experts and commentators. There is still plenty of gas, sang the chorus. Some went as far as to say that the lower estimates were good news, as they would encourage the government to push forward with plans for producing nuclear power in Poland by 2020.

Missing the point It’s good that businesses, both foreign and domestic, will continue to invest

in shale gas. Poland needs all the investment it can get, and any reduction in Poland’s dependence on Russian gas is welcome. It also needs to continue its plans to invest in nuclear power, as Europe pushes to decrease its carbon emissions by 20 percent by 2020.

But pinning Poland’s energy hopes on either of these is missing the point. Neither is sustainable. Shale gas – as the Polish Geological Institute’s estimates emphasize – is limited, and even if some of the more serious environmental fears are allayed, it is still a carbon-emitting fuel.

Nuclear power has its obvious dangers, and then there is the matter of waste disposal. These are not problems that Poland will be able to put off forever.

Instead, both shale gas and nuclear energy should be seen as “bridge” energy sources that will buy Poland time to find more sustainable sources of energy. But that won’t be easy. The most promising sustainable energy technology for Poland so far is wind power – but space for turbines is limited and they currently still only provide energy when the wind is blowing.

Even if those problems are solved – or if a better sustainable technology eventually comes along – there’s still

the 800-pound gorilla in the room that no one seems to be talking about: the upgrading of Poland’s electricity infrastructure.

Short-sighted Poland produces over 90 percent of its electrical energy from coal, and much of its energy transmission infrastructure is outdated, unable to handle the new technology required for sustainable solutions.

It may not be as sexy as the possibility of shale-gas riches or nuclearpowered energy independence, but investment in upgrading Poland’s energy transmission infrastructure is what the government really needs to focus on.

The EU must help as well. The European Commission has recommended that a minimum of 20 percent of the national European Regional Development Fund resources be put towards energy efficiency and renewables, including investment in infrastructure. Since no budget for the 2014-2020 period has been agreed upon, it’s unclear how much that would come to for Poland, and even less clear how much would end up going towards improving transmission infrastructure. What’s clear is that moving away from a coal-based economy is

going to be expensive. The Polish Chamber of Commerce found that implementing an EU-proposed road map to cut carbon emissions by 80 percent from 1990 levels by 2050 would cost Poland some z∏.22 billion a year from 2030.

No wonder then that Poland stood alone in rejecting the above-mentioned road map a few weeks ago.

While there are prospects for large amounts of investment coming in relatively quickly when it comes to nonsustainable sources such as shale gas and nuclear, renewables are initially cost heavy and potentially profitable only in the long term.

But like it or not, Poland will eventually have to deal with the reality that it must move towards sustainable sources of energy. It would be better if it started now, rather than waiting until the environment or EU legislation forces it to do so.

Unfortunately, it looks like the government, and indeed society, are more interested in focusing on the potential profits from non-sustainable solutions in the short to medium term. And that is a real disappointment. ● Andrew Kureth is Warsaw Business Journal’s editor-in-chief. Read his blog “From the editor” on WBJ.pl.

Could the coalition government disintegrate?

Remi Adekoya

C

ivic Platform (PO) and the Polish Peoples’ Party (PSL) made history last year by leading the first coalition government to last the whole four-year parliamentary term in postcommunist Poland.

The stability with which the coalition ruled the country from 2007 to 2011 is credited by most political observers as being one of the main reasons voters were kind to them during last October’s parliamentary elections.

With stability having led to success, few political observers expected much discord between the coalition partners over Prime Minister Donald Tusk’s planned pension reforms.

Of course PSL politicians, including party leader Waldemar Pawlak, had voiced doubts about Mr Tusk’s intention to raise the retirement age for both men and women to 67. This was to be expected. PSL, whose core electorate is made up of mostly rural folk, positions itself as a party that is in the government to fight for the rights of the common people in case PO goes overboard with it’s economically liber-

al tendencies. PSL’s official party slogan, “People are most important,” sums up the idea rather succinctly.

When it comes to the proposed pension reforms, PSL’s main contention was with the fact that women (and especially those with children), who can currently retire at 60, would not be given a fair deal under the planned changes and should be given more favorable terms of retirement.

Mr Pawlak’s party provided a flurry of proposed changes, ranging from allowing women to retire earlier based on the number of children to whom they had given birth (three years less per child), to allowing women to choose whether to stop working earlier (with a reduced pension) or at 67 (with a bigger pension).

Regardless, most commentators were sure the coalition partners would reach a compromise. But to everyone’s surprise, no such agreement has come about. For the first time in five years, the coalition partners are now at an impasse. PSL is unwilling to accept the reforms as proposed, while PO is

decidedly skeptical of PSL’s solutions, and has now announced it will also be looking for support for its reforms outside of the coalition.

New partner needed, elections?

Can the coalition survive this fracas?

Some are predicting that PO could take on a new coalition partner or call snap elections, sending Poland into a state of political uncertainty.

Both scenarios are unlikely.

Elections now would not benefit Prime Minister Tusk, whose party won roughly 40 percent of the vote in last year’s parliamentary elections. Currently, PO is polling at less than 30 percent and would probably end up with far fewer MPs than it has now. Mr Tusk will therefore do what he can to avoid snap elections.

And when it comes to forming a new coalition government, PO doesn’t have much choice over prospective partners. The Democratic Left Alliance (SLD) has only 26 MPs, meaning any potential PO-SLD coali-

tion would have 232 members of parliament – giving it just a two-vote majority. That wouldn’t make Mr Tusk’s life any easier.

A coalition with the conservative Law and Justice (PiS) is out of the question. The animosity between Mr Tusk and PiS leader Jaros∏aw Kaczyƒski is simply too great. In this case it’s not a matter of “never say never in politics,” it really is never.

That leaves Palikot’s Movement (RP), which has enough MPs to allow it to form a coalition with PO that would have a comfortable majority. There are, however, a few problems.

RP’s leader, Janusz Palikot, craves attention. A junior coalition partner is supposed to be in the shadows and stay quiet. That is certainly not Mr Palikot’s style. He would be a very difficult coalition partner for Mr Tusk.

Also, RP’s MPs are largely unknown, a rag-tag army of small-town businessmen who are new to politics and might not all have the most sterling of pasts.

So far, these new politicians have been able to fly somewhat below the radar: As minority opposition party members, the media has taken little interest in them. But if RP were to join in a coalition government with PO, its members would come under much more scrutiny – and that could lead to some embarrassing revelations and potentially damage Prime Minister Tusk’s standing.

Still his best option Mr Tusk would be taking the greatest risk of his political life in forming a coalition with RP, and the prime minister is not known for being a gambling man.

And so, despite PSL’s stubbornness over his planned pension reforms, the PM will most likely stick with the stoic and drab Mr Pawlak as a coalition partner, since it is simply his safest option – at least for now. ● Remi Adekoya is Warsaw Business Journal’s politics editor. Read his blog, “The business of politics” on WBJ.pl

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

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COVER STORY

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Indian firm may invest €200 million Indian tire producer Apollo Tyres may invest €200 million in building a tire factory in the south of Poland, reported Puls Biznesu, citing an anonymous source. The investment may turn out to be the largest direct foreign investment project in Poland this year.

WIG20 profits rise by 40% Companies on the bluechip WIG20 saw an increase of more than 40% in y/y profits in 2011.

The 20 companies – which include banks, utilities and a broadcaster – earned a total of z∏.38.6 billion, or z∏.11.5 billion more than the previous year. The largest contributor to the growth was KGHM, Europe’s second-largest copper miner. The company’s z∏.11 billion profit made up just under 30% of the profit of all the companies on the WIG20.

Loan market attracts UK bank Competition in the highrisk loan sector is continuing to grow in Poland, with British Vanquis Bank set to enter the country’s market, reported Gazeta Wyborcza. Vanquis Bank will become a direct competitor to lender Provident Polska, which lent a total of z∏.1.6 billion in 2011. ●

MARCH 26 – APRIL 1, 2012

Sino-Polish business

Eastern promise

Joanna Sopy∏o

Despite a number of hiccups, business relations between Poland and China are beginning to blossom Following a number of disappointing years, business ties between China and Poland have strengthened perceptibly in recent months. Expectations are that relations will continue to improve, although Polish investors are still not as active in the Chinese market as they could be.

Chinese interest in the Polish market was clear for all to see in March, when two banks – the Bank of China (BoC) and the Industrial and Commercial Bank of China (ICBC) – moved closer to establishing branches in the country. The BoC is due to open its first Polish branch in April while the ICBC has received regulatory permission to begin operations in Poland, provided it adheres to a number of conditions. The two lenders are also being joined in Poland by Chinese law firm Yingke.

In mid-March, meanwhile, it was announced that Chinese sovereign wealth fund China Investment Corp had inked a deal with the Polish Information and Foreign Investment Agency (PAIiIZ) that could see it buy up a number of Polish state-owned assets. The Polish government is looking to China as a potential source of funds for its asset-sale program, whose progress has been stalled due to the euro-zone crisis.

PAIiIZ will be looking for projects in which China Investment Corp can invest in Poland, the agency’s head, S∏awomir Majman, told Reuters.

“As for the size of their investments, the sky is the limit,” he added.

Similar deals were signed with China Development Bank and China’s National Development and Reform Commission (NDRC) during Polish President Bronis∏aw Komorowski’s official state visit to China in December 2011.

“The deal with NDRC is especially important, because it defines benchmarks for annual investments by 2015,” Mr Majman said, without elaborating.

A momentous visit Much was made beforehand of Mr Komorowski’s trip to China, which it was hoped could pave the way for an increase in Polish business activity in that country and a growth in Chinese investment in Poland.

Following the visit, it has become clear that business relations between Poland and China have stepped up another level.

“It is a breakthrough,” said Rados∏aw Pyffel, head of the Poland-Asia Research Center. “[It was] the first Polish official presidential visit for 14 years, the first time that business issues, and not human rights issues, were the most important, and a strategic partnership deal was signed,” he added.

“The visit will be a door-

COURTESY OF PRESIDENT.PL

12

The Polish president’s recent trip to China has been heralded as a great success for Polish-Chinese business relations opener in Sino-Polish relations,” said Tomasz Ostaszewicz, director of the Bilateral Economic Cooperation Department at Poland’s Ministry of Economy.

A series of significant meetings, contracts and announcements were held and made during or immediately after Mr Komorowski’s visit. Polish stateowned copper miner KGHM, for one, signed a long-term deal to sell copper cathodes to China Minmetals Corporation between 2012-2016. The agreement, signed by the heads of the two firms during Mr Komorowski’s visit, could be worth

$3.5 billion to KGHM. Since the visit, Chinese company Guangxi LiuGong Machinery has signed a final

construction machinery. The value of the deal is estimated at more than z∏.250 million.

Coming in droves

“President Komorowski’s visit will be a door-opener in Sino-Polish relations” agreement to buy the civilian equipment construction arm of Huta Stalowa Wola, a Polish state-owned manufacturer of

Chinese companies are especially interested in Poland’s power engineering, raw materials, chemical and infrastructure sectors. The country’s relatively stable macroeconomic environment is also proving attractive.

“Poland attracts China by having a stable economy in a time of crisis, an expanded local market and competent human resources,” S∏awomir Majman told WBJ.

COVER STORY

MARCH 26 – APRIL 1, 2012

Chinese firms have been heavily involved in infrastructure projects in Poland, which is using EU funds to complete such projects ahead of the 2012 European soccer championship. There have been setbacks, notably with the termination of Chinese road builder COVEC’s contract for the construction of two key sections of Poland’s A2 highway, after its subcontractors refused to work when they did not receive payment on time.

Even this well-publicized debacle, however, hasn’t served to discourage Chinese investors, whose representatives are visiting Poland in droves. Last year PAIiIZ hosted over 60 delegations from China’s ministries and regions, and by mid-February of this year a total of 20 delegations had visited Poland.

Moreover, PAIiIZ has set up a center for economic cooperation between China and Poland, whose aim is to be the first point of call for Chinese investors in Poland.

Making the leap While the Sino-Polish business relationship has been dominated by Chinese activity in Poland, more Polish firms are trying their luck in the Chinese market as well.

Just a few years ago it seemed as if Polish businesspeople were reluctant to capitalize on the opportunities that many others were benefiting from in China. Most appeared to prefer operating in markets closer to home. “[Back] then, when we were inviting businesspeople to go to China with official delegations; they weren’t interested.

Now we don’t have such a problem and we even need to make a selection,” said Mr Ostaszewicz of Poland’s Ministry of Economy.

Now that many of Poland’s major companies have managed to stabilize their positions in European markets, the allure of greater profits is drawing their attention to China. They are also receiving support from the Polish government, which is important in gaining respect from China.

Chinese business culture places a major emphasis on official relations and formal gestures, so Mr Komorowski’s December visit was crucial for improving Poland’s standing in the eyes of Chinese business leaders. Moreover, Polish government bodies have put on

Polish firms in China Company Amber Foods Polska Axtone Bioton (in China as SciGen) Grupa Black Point (in China as Eco Service China) KGHM Kopex (in China as Shandong TAGAO) Margaƒski & Mys∏owski Zak∏ady Lotnicze Polfa ¸ódê Selena workshops for potential Polish exporters to China, to educate them about Chinese culture.

In other ways, Poland has drawn closer to China in recent years, starting in 2008 when Polish Prime Minister Donald Tusk was chosen as one of the representatives of Europe at the Asia-Europe Meeting in Beijing. Then came Expo 2010 in Shanghai, where Poland’s pavilion was visited by over eight million people – more than the number who visited the pavilions of Germany and the US.

On the ground Now, Polish authorities are trying to encourage the country’s entrepreneurs to enter the Chinese market in greater numbers. Foreign Affairs Min-

“Despite all the enthusiasm ... there are signs that the road ahead won’t always be smooth.” ister Rados∏aw Sikorski and Economy Minister Waldemar Pawlak will soon visit China with a group of businesspeople. Moreover, PAIiIZ plans to launch a program called “GoChina” which is aimed at encouraging Polish entrepreneurs to invest in the world’s second-largest economy.

On the ground, over 200 representatives of Polish firms accompanied Mr Komorowski on his December visit to China, where they took part in economic and investment forums and met with their actual or potential Chinese business partners.

“This visit was not only helpful because we met with our Chinese counterparts, but also because we had a chance to exchange our thoughts with Polish businessmen [who are] thinking about investments in China,” said Marko Dolçan, CEO of Polfa ¸ódê, a Polish

Industry restaurants rolling stock pharma/biotech toner/ink cartridges mining mining equipment aviation pharmaceuticals chemicals

pharmaceutical company.

Polfa ¸ódê first began thinking about developing its business in China two years ago when a Chinese entity became one of its stakeholders. The company now has plans to start operating there under its Sensilab brand, selling dietary supplements at the beginning, before expanding.

“We are thinking about building a factory in China. If it turns out to be cheaper than production in Europe, we may also import products from China to Europe,” said Mr Dolçan.

“We’ve also met with two potential partners whose products we could sell in Europe,” he added.

Selena, a Polish chemical company, has already expanded into China. “Poland used its promotional opportunity in China very well during President Komorowski’s visit,” said Krzysztof Domarecki, chairman of the company’s supervisory board. “Selena has been present in China for the past five years. As a target we plan to create in China a center of geographical expansion for the rest of Southeast Asia and the Pacific region.”

Meanwhile Margaƒski & Mys∏owski Zak∏ady Lotnicze, an aviation company, has managed to secure a Chinese investor that wants to invest in the production of its Orka aircraft, partly in Poland and partly in China. Production in China is expected to increase in the future.

Other companies, such as dairy producer Bakoma and jewelry company W.Kruk, which both attended December’s meetings, are also in advanced negotiations with Chinese partners but don’t want to reveal any details right now. Both say, though, that they have big plans for the Chinese market.

Cautionary tales Despite all the enthusiasm surrounding the development of

China around the world After China finished implementing a number of major internal reforms in the 1970s, it began to expand its economic influence around the world – first in East and Southeast Asia. Some of the most visible Chinese investments in recent years have

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been made in Africa, in countries such as Zambia, Kenya, Cameroon and Ethiopia, where Chinese companies are building railways, stadiums and other infrastructure.

China’s main markets are located in nearby Asian countries, such as Japan and South

Korea, as well as in major Western countries including the US and Germany.

Eastern Europe has not, historically, formed a major plank of China’s trade and investment activities, meaning Polish-Chinese business relations require nurturing. ●

Connection to China in China since the end of 2011 in China since 2001 in China since 1988 in China since 2010 in China since 1998 in China since since 2007 has Chinese investor since end of 2011 in the process of entering to China in China since 2007

business relations between the two countries, there are signs that the road ahead won’t always be a smooth one.

Watt, a producer of solar collectors, has tried several times to strengthen its relations with Chinese companies, but without success. “Every time we’ve tried, something went wrong – whether Chinese companies were not trustful or they were promising something else than they were in fact doing. Therefore we decided to import only one part for one type of collector and not go beyond that. We will see what the future brings and if we find the right partner we’ll consider cooperation,” said Watt spokesperson Dawid Musio∏.

Moreover, several Chinese media outlets, including the English-language China Daily, have commented on the difficulties of investing in Poland, such as the dense legal regulations and the fact that the

nearby euro zone is in a state of crisis.

Rados∏aw Pyffel of the Poland-Asia Research Center suggests that such worries will not affect the largest Chinese companies. “We need to differentiate between big, stateowned Chinese companies and small, private business.

Though the second group may be afraid of crisis, the first group’s actions are strongly related to political decisions, so they will do what the authorities say.”

So, while Poland and China figure out how to surmount the early, and perhaps unavoidable problems that often come with a fast-flourishing business relationship, most of the omens point to a bright future. Polish entrepreneurs are increasingly keen to explore the advantages offered by China, while the Chinese state appears to have a keenly interested eye on the opportunities afforded by the Polish market. ●

13

Polish exports to Norway rise Polish exports to Norway are booming, according to data from the Ministry of the Economy. In 2011, Poland exported €2.77 billion worth of products to Norway, a 54% y/y increase. This is the highest increase in exports in the history of economic relations between the two countries, reported Puls Biznesu.

Nowy Styl wants Brazil contract Furniture maker Nowy Styl will take part in a tender to become the sole supplier of stadium seating in 15 Brazilian stadiums, as the South American country begins preparations for the 2014 World Cup. The estimated value of this contract may be worth approximately $150 million, according to Tomasz Strza∏a, the director of Forum Seating, a subsidiary of Nowy Styl. The firm is also the provider of stadium seats for all Polish stadiums participating in Euro 2012. ●

Torus could invest up to z∏.800 million in Alchemia in Gdaƒsk in the next few years

Construction on the Makrum mall in Bydgoszcz will launch in the upcoming months

16

17

LOKALE IMMOBILIA

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

Real hypermarkets in Echo Investment malls The Real retail chain will open its hypermarkets in four of developer Echo Investment’s malls – in Tarnów, Jelenia Góra, Piotrków Trybunalski and Radom. The total value of the contracts signed by the two entities amounts to €38.15 million. The Echo Investment-Real deals have been signed for a period of 10 years with the latter company expected to take up the leased space in the four shopping centers in January next year.

Carrefour hypermarkets now operate in the malls in question. ●

In this issue Złote Tarasy sold . . . . . . . . . . . .15 Golub GetHouse offices . . . . . .15 Meble Emilia sale . . . . . . . . . . . .15 Torus interview . . . . . . . . . . . . .16 Euro Office Park lease . . . . . . .16 Property-related stocks . . . . . .16 Makrum building permit . . . . .17 Green Horizon phase II . . . . . . .17

Z∏ote Tarasy shopping center in Warsaw changes hands The transaction is part of ING’s strategy of decreasing its presence in the property market ING Real Estate Development has sold its stake in an entity that owns 77 percent of the Z∏ote Tarasy retail-office complex in downtown Warsaw. As a result of the transaction, the company is decreasing its exposure to the Polish property market by €475 million, ING said in a statement.

The buyer of the stake is a fund managed by AXA Real Estate and CBRE Property Fund Central Europe, in which Unibail-Rodamco, the current economic co-owner of the mall, is a shareholder. Property Fund Central Europe remains an

economic co-owner, as well, ING said.

“This is the last step in the project in which we were involved for the last 14 years.

The sale constitutes a milestone in ING strategy which envisions a decrease of the company’s presence in the real estate industry,” Hein Brand, president of ING Real Estate Development, said in the statement.

Opened in February 2007, the Z∏ote Tarasy complex comprises a total of 225,000 sqm of space, including 66,200 sqm and 47,300 sqm of leasable retail and office space, respectively.

The investment features 1,600 parking spaces and is visited by over 20 million customers a Adam Zdrodowski year.

SHUTTERSTOCK

The Endurance Real Estate Fund, an entity managed by developer Orco Property Group, has appointed Cushman & Wakefield as exclusive advisor in the sale of its Galeria Orkana shopping center development in Lublin, Lubelskie voivodship. Galeria Orkana, which opened for business in August 2006, is located on Lublin’s ul. Orkana, opposite Tesco Extra and OBI stores, and offers almost 8,000 sqm of leasable retail space on two floors.

MAR 26 – APR 1, 2012, LI 17/12

Shopping centers

The Z∏ote Tarasy complex comprises a total of 255,000 sqm of space

Kulczyk Silverstein Properties Golub GetHouse to build office high-rise interested in Meble Emilia sale Golub GetHouse Property Fund FIZ, a property fund managed by development company Golub GetHouse (GGH), plans to build a highrise office building in Warsaw that will stand over 80 meters tall and comprise approximately 21,000 sqm of leasable space. The fund has recently purchased a plot of land for the investment on the capital’s ul. Grzybowska from Irish Development Group.

Originally, the seller was planning a residential tower in the same location. Architects from the Warsaw office of Epstein and from Chicagobased Solomon Cordwell Buenz are now working on a new architectural concept for the skyscraper, which will be the first investment of Golub GetHouse Property Fund FIZ. Construction is expected to

launch by the end of this year.

“We anticipate that the location on the prestigious ul.

Grzybowska, near the [underconstruction] Rondo Daszyƒskiego metro station and within an area which is gradually becoming a new city center of Warsaw, will position the development for great success,” Czarek Jarzàbek, coowner and president of GGH, said in a statement.

Focused on the residential and commercial property sectors in Poland, Golub GetHouse is a joint venture created by Chicago-based Golub & Company and Warsaw-based GetHouse Developer. Affiliates of the company were involved in the construction of projects including the Warsaw Financial Center.

Adam Zdrodowski

SHUTTERSTOCK

Galeria Orkana shopping center on sale

•

Meble Emilia’s properties include a shop located between the InterContinental Hotel (center) and the Warsaw Financial Center (right) Three entities – Europejskie Centrum Inwestycyjne (ECI), Griffin Topco II and Kulczyk Silverstein Properties – have submitted bids for the purchase of an 85-percent stake in Warsaw-based furniture retail-

er Meble Emilia, the Treasury said in a statement last week.

The state-owned company has a number of properties in and around Warsaw including a furniture store nestled between the city’s InterConti-

nental Hotel and the Warsaw Financial Center towers. It is expected that the new owner will replace it with more profitable, modern commercial space.

The Treasury will announce whom it will invite for further negotiations concerning the sale this week. This is the second attempt to sell Meble Emilia – no bids were submitted in a tender that was announced in autumn last year. The bid price then was over z∏.172 million.

ECI is known in Warsaw for a number of office projects in the Mokotów district. Griffin Topco II is a private equity fund that belongs to Oaktree Capital Group, while Kulczyk Silverstein Properties is a joint venture in which Polish billionaire Jan Kulczyk is involved.

Adam Zdrodowski

LOKALE IMMOBILIA – REAL ESTATE

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MARCH 26 – APRIL 1, 2012

Developers

Chrzanów’s CH Max to be expanded

Torus sees growth potential in the Tri-city market

The Centrum Handlowe Max shopping center in Chrzanów, Silesia voivodship, will be expanded, with the mall’s area expected to increase by 5,000 sqm to a total of 14,000 sqm. The number of stores at the facility will increase from the current level of over 60 to more than 90. The architectural concept of the expansion has been prepared by BOSE International.

Construction on the expanded mall is should launch in Q4 this year.

Apsys-managed malls BREEAMcertified Three of the shopping centers managed by Apsys Polska – Centrum Janki near Warsaw, Korona in Wroc∏aw and Rondo in Bydgoszcz – have obtained BREEAM In-Use certification that is granted to already existing facilities. All three malls are owned by GE Capital Real Estate and are over 12 years old. ●

The company plans to invest up to z∏.800 million in its Alchemia office project in Gdaƒsk Gdaƒsk-based developer Torus, to date mostly known for its Arkoƒska Business Park office scheme in the city, is building the first phase of another major commercial project in the quickly developing northern Polish market.

Construction on the first two buildings of the company’s Alchemia multifunction facility located on Al. Grunwaldzka in Gdaƒsk’s Oliwa district launched in October last year and is scheduled to finish in the third quarter of 2013.

This phase of the development, which is expected to be LEED-certified, will deliver a total of more than 21,000 sqm of leasable space, over 16,000 sqm of which will be office areas. A recreation area including sports facilities will take up 4,000 sqm.

The whole Alchemia investment will be much larger, when completed, said S∏awomir Gajewski, president of the management board of Torus. A total of seven buildings, including six structures

standing on a joint four-storey base and one taller standalone building, are being envisioned.

“We launched the first phase in October; we will probably soon officially confirm the construction of the second one. If the market allows it, seven innovative buildings will ultimately be built in this very dynamically developing research and business part of Gdaƒsk,” Mr Gajewski said.

He added that the value of the first phase of the Alchemia project amounts to over z∏.160 million, while the cost of the whole investment could, depending on the situation in the market, even reach z∏.800 million within the next 10-12 years.

Commercialization started just recently, but according to Mr Gajewski, tenant interest in the development is already strong, and talks with a number of potential occupiers are underway. “We will certainly sign the first deals by the end of this year,” he said.

COURTESY OF TORUS

16

Construction on the first phase of the Alchemia office project launched in October 2011 major assets of the agglomeration he mentioned high quality of life, relatively low costs and access to its highly qualified labor force.

“All of this makes us draw the attention of potential investors and increasingly strengthen our position as the third, after Wroc∏aw and Kraków, [regional] market [in Poland],” Mr Gajewski said. He added that the number of companies opening their offices in the region in on the rise.

Growing market Mr Gajewski pointed out that the Tri-city area has seen considerable demand for office space of late. Among the

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏. mln)

BUDIMEX

87.40

2.22

64.00

109.20

94.60

25,530,098

2,231.33

CELTIC

17.71

7.01

15.55

22.70

21.00

34,068,252

603.35

DOMDEV

38.00

-2.19

23.50

50.80

45.90

24,670,397

937.48

ECHO

4.28

5.42

3.05

5.55

4.63

420,000,000

1,797.60

ELBUDOWA

112.00

-3.45

87.00

168.00

158.00

4,747,608

531.73

ENERGOPLD

1.95

-3.47

1.81

4.10

3.79

70,972,001

138.40

ERBUD

18.90

-12.09

14.65

41.45

48.00

12,644,169

238.97

GANT

8.00

-18.78

5.85

14.20

15.99

20,499,953

164.00

GTC

6.10

-14.21

6.10

21.79

21.08

219,372,990

1,338.18

HBPOLSKA

0.82

-21.90

0.70

2.55

2.61

210,558,445

172.66

JWCONSTR

6.10

-17.01

4.36

15.50

14.44

54,073,280

329.85

LCCORP

1.37

3.79

0.85

1.62

1.69

447,558,311

613.15

MARVIPOL

9.60

-2.04

7.22

9.95

9.24

36,923,400

354.46

MIRBUD

2.05

-6.39

1.94

4.63

4.40

75,000,000

153.75

MOSTALWAR

15.87

-17.30

15.40

45.69

47.01

20,000,000

317.40

MOSTALZAB

1.41

-10.76

1.07

2.89

2.87

149,130,538

210.27

ORCOGROUP

16.02

-5.99

14.00

40.00

32.55

17,053,866

273.20

PBG

34.35

-23.24

34.35

188.00

195.50

14,295,000

491.03

PLAZACNTR

2.75

5.36

1.80

5.15

4.00

297,174,515

817.23

POLAQUA

6.34

-10.07

4.53

18.99

19.49

27,500,100

174.35

POLIMEXMS

1.32

-14.84

1.23

3.64

3.45

521,154,076

687.92

POLNORD

15.21

-13.78

11.03

33.55

30.98

23,798,439

361.97

RANKPROGR

14.00

-17.50

8.60

16.97

10.18

37,145,050

520.03

ROBYG

1.70

17.24

1.04

2.13

1.86

257,390,000

437.56

RONSON

1.02

-11.30

0.77

1.58

1.41

272,360,000

277.81

TRAKCJA

1.25

0.00

0.65

3.72

3.61

232,105,480

290.13

ULMA

70.00

-2.64

57.00

88.00

83.30

5,255,632

367.89

UNIBEP

5.54

-5.78

4.47

8.07

8.93

33,927,184

187.96

WARIMPEX

4.15

-3.94

2.95

10.89

10.75

54,000,000

224.10

ZUE

7.80

1.96

5.07

13.60

14.00

22,000,000

171.60

Adam Zdrodowski

COURTESY OF EURO STYL

Closing price on Mar 22

Tri-city market is dominated by local developers who are showing that they are not inferior to the international leaders [in the office market],” Mr Gajewski said.

Torus itself plans, at least for the time being, to solely focus on its home market. “A long investment process related to Alchemia is still ahead of us. However, we are not excluding anything,” Mr Gajewski said.

Bank BPH leases out entire Euro Office Park complex in Gdaƒsk

Property-related stocks Security

The Tri-city region has recently been attracting investors from the business process outsourcing/sharedservices center (BPO/SSC) sector. Citing the example of Torus’ Arkoƒska Business Park, Mr Gajewski also mentioned IT, R&D and financial companies as some of the major groups of tenants in the market.

He stressed that Tri-city developers have been responding with the delivery of high-quality office space. “The

Bank BPH will be the only occupant in the 19,000-sqm facility Bank BPH has selected developer Euro Styl’s planned Euro Office Park office complex in Gdaƒsk as its future headquarters in the city. The company, which currently employs almost 3,000 people in Gdaƒsk, will be the only occupier of the 19,000-sqm facility.

“We made the decision to choose a new headquarters in Gdaƒsk because so far we have been working in five different locations [in the city],” said Krzysztof Nowaczewski,

vice president of the management board of Bank BPH. Located approximately seven kilometers from downtown Gdaƒsk, between ul.

Leszczynowa, ul. Kartuska and ul. Armii Krajowej in the city’s Jasieƒ district, the Euro Office Park project will comprise three buildings, each of them five-storey structures.

The scheme will be developed in two phases with the first two buildings scheduled to be delivered in the third

quarter of next year. The third building of Euro Office Park should be ready at the beginning of 2014.

Present in the market since 2007, Euro Styl is a major residential developer in Tri-city. To date, it has completed nine investments comprising a total of over 100,000 sqm of space. Last year the company launched Opera Office in Gdaƒsk, its first investment in the commercial property market.

Adam Zdrodowski

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Construction on Makrum shopping center in Bydgoszcz set to launch launch construction within the next three months,” Rafa∏ Jerzy, president of Makrum Development’s management board, said in a statement.

With its leasable space of 56,000 sqm, Makrum is expected to be the largest retail and entertainment scheme in the region. The project will include a 35,000sqm shopping gallery, as well as a Tesco hypermarket and a DIY store.

The investment, which will accommodate 180 retail and service units, has been designed by the J.S.K. Architekci studio. It will sit on 9.6 hectares of land located at the intersection of Bydgoszcz’s ul. Kamienna and ul. Su∏kowskiego.

New tenant at Eurocentrum Office Complex

COURTESY OF MEDIADEM CONSULTING

Makrum Development has received a building permit for its planned Makrum shopping and entertainment center in Bydgoszcz, Kujawsko-Pomorskie voivodship. Construction on the mall is scheduled to launch in the next few months and finish in the first quarter of 2014.

Makrum Development is now working on the project’s commercialization and is talking to banks about financing for the project. The company has already started the process of selecting a general contractor for the scheme.

“We are also in talks with potential partners, which we plan to finalize along with the selection of a general contractor. We plan to

Construction on the mall is due to be completed in Q1 2014

Adam Zdrodowski

COURTESY OF QUESTIA

Second phase of Green Horizon office project in ¸ódê gets underway

The second phase will deliver 14,000 sqm of leasable space

17

COURTESY OF MEDIADEM CONSULTING

MARCH 26 – APRIL 1, 2012

Developer Skanska Property Poland has launched construction on the second building of its two-phase Green Horizon office complex in ¸ódê. When completed in the second quarter of 2013, the newly-launched phase of the 33,000-sqm development will deliver 14,000 sqm of leasable space.

“Green Horizon is one of five projects that we are currently working on – two of them are being developed in Warsaw, while the remaining three are regional invest-

ments. Skanska believes in the potential of regional cities, therefore we decided to start construction of the second phase of Green Horizon,” Marcin ¸apinski, regional director at Skanska Property Poland, said in a statement.

Construction on the first phase of the Green Horizon complex commenced in Q2 last year and is scheduled to finish in Q4 2012. The building is almost fully commercialized with Infosys BPO Poland having leased 15,000

sqm in the project. The building’s general contractor, Skanska, will also have its offices in the scheme.

Designed by the Medusa Group architectural studio and featuring seven-storey tall structures, the class-A Green Horizon complex is located at ¸ódê’s SolidarnoÊci Roundabout. The facility will be characterized by sustainable building solutions and is expected to be both LEED- and EU GreenBuilding-certified.

Adam Zdrodowski

Tebodin Poland has leased over 2,000 sqm of office space at the Eurocentrum Office Complex project that developer Capital Park Group will build on Al. Jerozolimskie in Warsaw’s Ochota district.

The deal, which was brokered by Cushman & Wakefield, is the second lease transaction secured by the developer for the investment. Imtech leased more than 7,000 sqm of space in the development last year.

DLA Piper in WFC building in Warsaw Law firm DLA Piper has renewed and expanded its lease agreement for space at the Warsaw Financial Center building in the Polish capital.

Following a transaction brokered by CBRE, the tenant will occupy over 2,300 sqm in the facility.

Warsaw Financial Center is a class-A high-rise office building located on ul. Emilii Plater in downtown Warsaw. The tower comprises 50,000 sqm of leasable office area. ●

18

THE LIST

www.wbj.pl

MARCH 26 – APRIL 1, 2012

Financial Services

Commercial Banks Ranked by revenue from interest and fees in 2010

www.bookoflists.pl

Rank

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

Revenue from interest and fees (z∏. mln)

Total revenue (z∏. mln)

Net profit (z∏. mln)

Gross profit on banking operations (z∏. mln)

Costs/Income ratio

Current accounts / Savings accounts / Hard currency accounts

banking / Commercial Phone Online banking / loans / Private Retail loans / banking / Mortgages Debit cards

Investment banking / Securities trading / Leasing / Factoring

Own ATMs / Forex tellers

Total employees / Year founded in Poland

Top local executive / Title

CFO

Bartosz Drabikowski

1st half of 2011 / 2010 / 2009 / 2008

Powszechna Kasa Oszcz´dnoÊci Bank Polski SA ul. Pu∏awska 15, 02-515 Warsaw 1 22 521-8440/22 521-8470 prasa@pkobp.pl www.pkobp.pl

7,502.2 14,296.2 12,366.7 12,178.5

7,851.8 15,128.6 13,927.0 13,261.6

1,838.3 3,216.9 2,305.5 3,120.7

5,315.6 10,197.6 8,607.0 9,096.7

39.9% 41.7% 47.9% 45.8%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓

26,490 1919

Zbigniew Jagie∏∏o

Bank Pekao SA ul. Grzybowska 53/57, 00-950 Warsaw 2 22 656-0000/22 656-0004 info@pekao.com.pl www.pekao.com.pl

4,930.0 9,348.0 9,464.0 11,047.0

5,332.0 10,192.0 10,527.0 12,122.0

1,362.0 2,530.0 2,421.0 3,541.0

3,772.0 7,218.0 7,053.0 7,834.0

48.4% 50.6% 52.1% 48.3%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓

20,509 1929

Luigi Lovaglio CEO

Marco Iannaccone

Bank Zachodni WBK SA ul. Rynek 9/11, 50-950 Wroc∏aw 3 61 856-4017/61 856-4015 rzecznik.prasowy@bzwbk.pl www.bzwbk.pl

2,405.0 4,686.2 4,761.0 4,839.0

2,621.3 5,058.6 5,171.0 5,088.0

671.5 1,040.6 939.0 954.0

1,900.6 3,537.7 3,288.0 3,258.0

47.9% 49.9% 50.0% 51.4%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓

9,463 2001

Mateusz Morawiecki

Eamonn Crowley

BRE Bank SA ul. Senatorska 18, 00-950 Warsaw 4 22 829-0000/22 829-0033 info@brebank.pl www.brebank.pl

2,465.7 4,600.5 4,454.0 4,509.0

WND WND 5,223.0 5,527.0

550.5 660.9 131.0 857.0

WND WND 2,758.0 2,589.0

WND WND 54.2% 55.1%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓

8,043 1986

Cezary Stypu∏kowski

5 ul. Domaniewska 39B,

2,293.0 4,109.0 3,538.0 1,809.0

3,018.0 4,298.0 3,715.0 1,987.0

795.0 460.0 314.0 369.0

1,860.0 2,233.0 1,714.0 1,204.0

21.8% 32.8% 36.5% 35.7%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ -

✓

5,200 2010

Krzysztof Rosiƒski President

Rados∏aw Stefurak

ING Bank Âlàski SA ul. Sokolska 34, 40-086 Katowice 6 801-222-222 mampytanie@ingbank.pl www.ingbank.pl

2,188.0 4,066.0 4,163.0 4,376.0

2,244.0 4,141.0 4,276.0 4,414.0

446.0 753.0 595.0 445.0

1,460.0 2,690.0 2,480.0 2,079.0

56.0% 58.3% 58.8% 70.5%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓

8,398 1989

Ma∏gorzata Ko∏akowska

Miros∏aw Boda

7 Al. Pokoju 1, 31-548 Kraków

1,485.0 3,195.0 3,397.0 2,876.0

1,496.0 3,261.0 3,448.0 2,940.0

104.0 -135.0 53.0 321.0

1,000.0 2,225.0 2,269.0 2,223.0

65.6% -68.8% -64.5% -70.05

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓

✓ ✓

6,757 1989

Richard Gaskin

Bank Millennium SA ul. Stanis∏awa ˚aryna 2A, 8 02-593 Warsaw 801-331-331/22 598-2563 www.bankmillennium.pl

1,603.6 2,985.3 2,950.0 3,060.0

1,712.1 3,264.5 3,307.0 3,274.0

216.4 326.0 1.5 413.0

964.4 1,771.7 1,514.0 1,866.0

60.8% 63.1% 70.4% 64.5%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓

6,251 1989

Bogus∏aw Kott

Bank Handlowy w Warszawie SA(3) ul. Senatorska 16, 00-923 Warsaw 9 22 657-7200/22 692-5023 listybh@citi.com www.citihandlowy.pl

1,316.0 2,719.0 2,759.0 3,040.0

1,486.0 3,199.0 3,325.0 3,493.0

333.0 755.0 504.0 600.0

1,180.0 2,563.0 2,423.0 2,313.0

60.4% 54.0% 54.0% 62.3%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓

6,128(4) 1870

S∏awomir S. Sikora

Kredyt Bank SA ul. Kasprzaka 2/8, 01-211 Warsaw 10 22 634-5400/22 634-5335 biuropr@kredytbank.pl www.kredytbank.pl

1,378.3 2,631.5 2,723.9 2,701.5

1,479.3 2,863.2 3,006.4 3,034.0

221.9 185.9 34.6 324.9

778.4 1,588.4 1,798.7 1,585.9

59.7% 56.9% 63.8% 67.5%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓

WND 1990

Maciej Bardan

Credit Agricole Bank Polska SA Pl. Orlàt Lwowskich 1, 53-605 Wroc∏aw 11 801-331-111/71 355-3005 info@credit-agricole.pl www.credit-agricole.pl

912.9 1,965.1 WND WND

926.4 1,992.9 WND WND

64.1 42.7 WND WND

653.7 1,416.5 WND WND

62.2% 55.8% WND WND

✓ ✓ -

✓ ✓ ✓

✓ ✓ ✓

-

-

6,138 1991

Romuald Szeliga

916.2 1,682.3 1,556.0 1,698.4

1,004.5 1,882.5 1,862.5 1,963.3

60.3 112.3 100.6 213.0

558.6 1,024.0 933.0 1,009.0

78.1% 75.2% 77.0% 70.8%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓

✓ -

5,565 1975

Jacek Bartkiewicz Geert Embrechts President

737.3 1,373.5 1,376.0 1,526.0

925.5 1,706.5 1,759.4 1,968.3

167.3 238.2 118.0 315.0

613.2 1,143.3 989.1 1,137.0

53.7% 54.6% 57.4% 52.6%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓

2,743 1991

Getin Noble Bank SA (1) 02-675 Warsaw 22 541-5158/22 541-5159

Bank BPH SA(2) 801-889-889 www.bph.pl

12

Bank BG˚ ul. Kasprzaka 10/16, 01-211 Warsaw 22 860-4340/22 860-5900 www.bgz.pl

Raiffeisen Bank Polska SA ul. Pi´kna 20, 00-549 Warsaw 13 22 585-2001/22 585-2585 moje.pytania@raiffeisen.pl www.raiffeisen.pl

President

President

Karin Katerbau

President

President

Acting President

President

George Newcomb

Julianna Boniuk

Witold Zieliƒski

President

President

President

Piotr Czarnecki President

Piotr Sztrauch

Rados∏aw Ksi´˝polski

Piotr Konieczny

THE LIST

MARCH 26 – APRIL 1, 2012

www.wbj.pl

19

Rank

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

Revenue from interest and fees (z∏. mln)

Total revenue (z∏. mln)

Net profit (z∏. mln)

Gross profit on banking operations (z∏. mln)

Costs/Income ratio

Current accounts / Savings accounts / Hard currency accounts

Commercial Phone banking / Online banking / loans / Private Retail loans / banking / Mortgages Debit cards

Investment banking / Securities trading / Leasing / Factoring

Own ATMs / Forex tellers

Total employees / Year founded in Poland

Top local executive / Title

CFO

Jan Bujak

1st half of 2011 / 2010 / 2009 / 2008

BNP Paribas bank Polska SA ul. Suwak 3, 02-676 Warsaw 14 22 566-9000/22 566-9010 info@bnpparibas.pl www.bnpparibas.pl

549.0 1,113.0 1,089.0 1,196.0

579.0 1,218.0 1,087.0 1,153.0

10.0 42.0 -429.0 78.0

379.0 849.0 570.0 532.0

WND WND WND WND

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ -

✓ ✓

3,004 1991

Frederic Amoudru

Nordea Bank Polska SA ul. Kielecka 2, 81-303 Gdynia 15 58 669-1000/58 669-1001 poczta@nordea.com www.nordea.pl

525.4 890.1 803.5 827.3

634.6 1,125.9 975.2 957.8

135.4 259.3 145.2 136.4

443.6 788.7 593.4 487.1

57.5% 55.9% 64.7% 63.2%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

✓ ✓

2,200 1992

S∏awomir ˚ygowski

BOÂ SA Al. Jana Paw∏a II 12, 00-950 Warsaw 16 22 850-8720/22 850-8891 bos@bosbank.pl www.bosbank.pl

459.0 799.0 720.0 710.0

508.0 909.0 734.0 770.0

28.0 63.0 27.0 0.3

237.0 462.0 400.0 367.0

76.7% 76.6% 83.4% 77.3%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓

1,750 1991

Mariusz Klimczak

Bank Polskiej Spó∏dzielczoÊci SA ul. P∏ocka 9/11B, 01-231 Warsaw 17 22 539-5231/22 539-5233 pr@bankbps.pl www.bankbps.pl

438.0 733.0 661.0 725.0

493.0 861.0 742.0 768.0

47.0 86.0 57.0 54.0

167.0 286.0 251.0 223.0

63.0% 68.0% 71.0% 71.0%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓

✓ ✓ ✓

✓ ✓

1,185 2002

Miros∏aw Potulski

Alior Bank SA Al. Jerozolimskie 94, 00-807 Warsaw 18 22 555-2222/22 555-2323 kontakt@alior.pl www.aliorbank.pl

440.0 618.0 274.0 65.0

636.0 882.0 349.0 65.0

51.0 -93.0 269.0 134.0

432.0 591.0 143.0 61.0

69.0% 96.0% 240.0% 292.0%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓

✓

3,600 2008

Wojciech Sobieraj

Santander Consumer Bank SA(5) ul. Strzegomska 42C, 19 53-611 Wroc∏aw 71 323-6210/71 330-9910 biuro@santanderconsumer.pl www.santanderconsumer.pl

843.9 594.3 716.7 719.2

890.1 635.2 795.3 879.8

163.8 26.3 24.5 105.6

637.3 341.3 405.5 357.0

39.0% 39.0% 36.0% 40.0%

✓ -

✓ ✓ -

✓

✓ -

-

2,563 2006

Piotr ˚abski

Bank DnB NORD Polska SA ul. Post´pu 15C, 02-676 Warsaw 22 524-1000/22 525-1001 www.dnbnord.pl

262.2 488.0 467.9 460.9

323.0 648.2 529.4 457.9

30.7 46.8 -71.2 6.5

181.1 338.0 253.5 241.2

64.5% 68.7% 85.4% 90.6%

WND WND WND

WND WND WND

WND WND WND WND

WND WND WND WND

WND WND

WND 2002

Bartosz Chyt∏a

Bank Pocztowy SA ul. Jagielloƒska 17, 85-959 Bydgoszcz

193.1 332.2 305.2 296.1

198.2 353.0 315.1 306.2

8.8 14.4 5.9 23.2

121.6 221.2 221.5 201.4

87.4% 88.3% 80.5% 80.4%

✓ ✓ -

✓ ✓ ✓

✓ ✓ ✓

-

✓

1,461 1990

Tomasz Bogus

INVEST-BANK SA ul. Ostrobramska 77, 04-175 Warsaw 22 22 514-5107/22 514-5106 twoj.doradca@investbank.pl www.investbank.pl

91.0 190.6 214.0 234.0

98.6 208.7 232.0 256.0

1.2 4.4 2.0 10.0

59.0 118.8 139.0 148.0

94.0% 94.0% 88.0% 89.0%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

-

✓ -

1,034 1991

Volkswagen Bank Polska SA Rondo ONZ 1, 00-124 Warsaw 23 22 538-7000/22 538-7070 info@vwbank.pl www.vwbank.pl

85.0 180.0 203.0 212.0

111.0 216.0 236.0 241.0

20.8 32.0 17.0 37.0

65.0 115.0 112.0 109.0

81.0% 57.0% 62.0% 62.0%

✓ ✓ -

✓ ✓ -

✓ ✓ ✓

✓ -

-

317 1997

Jaros∏aw Konieczka

DZ BANK Polska SA Pl. Pi∏sudskiego 3, 00-078 Warsaw 24 22 505-7000/22 505-7442 info@dzbank.pl www.dzbank.pl

WND 119.0 108.0 139.0

WND 120.0 114.0 142.0

WND 19.0 27.0 22.0

WND 103.0 103.0 103.0

WND 62.0% 63.0% 57.0%

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓

199 1990

Rainer Fuhrmann

Wielkopolski Bank Spó∏dzielczy/Bank Spó∏dzielczy ul. Grochowe ¸àki 4, 61-752 Poznaƒ 25 61 851-2504/61 852-4118 neobank@neobank.pl www.neobank.pl

62.4 100.1 77.6 66.3

63.9 101.7 88.2 68.9

9.2 10.2 12.6 4.2

39.6 60.2 46.0 40.3

62.6% 68.3% 74.2% 87.7%

✓ ✓ -

✓ ✓ ✓

✓ ✓

-

✓ -

538 1961

Waldemar Francik

HSBC Bank Polska SA ul. Marsza∏kowska 89, 00-693 Warsaw NR 22 354-0500/22 354-0501 infopolska@hsbc.com www.hsbc.pl

WND WND WND WND

WND WND WND WND

WND WND WND WND

WND WND WND WND

WND WND WND WND

✓ ✓

✓ -

✓ ✓ ✓ ✓

✓ ✓ ✓

-

285 2004

Janusz Dedo

20

21 52 349-9100/52 327-0407

informacja@pocztowy.pl www.pocztowy.pl

Notes: NR = Not Ranked, WND = Would Not Disclose. Research for the List was conducted in November 2011. Number of employees is as of October 2011, unless stated otherwise. All information pertains to the companies’ activities in Poland. Companies not responding to our survey are not listed.

Footnotes: (1) Getin Noble Bank was created as a result of a merger of Getin Bank and Noble Bank in January 2010. Financial data for 2009 include consolidated data of both banks, financial data for 2008 data pertain only to Getin Bank; (2) Consolidated financial data of Bank BPH and GE Money Bank; (3) Financial data of Grupa Kapita∏owa Banku Handlowego w Warszawie; (4) As of September 2011; (5) Financial data for 1st half of 2011 are consolidated data of Santander Consumer Bank and AIG Bank Polska.

President

President

President

President

President

President

President

President

S∏awomir Ronkowski

Stanis∏aw Kolasiƒski

Anna Zawada

Niels Lundorff

Jose Luis Sanchez Diaz

Olaf Seidel

Pawe∏ Sp∏awski

Gra˝yna Niewolik Jacek Sieniawski President

Bartosz Piech

President

President

President

President

Marcin ˚ochowski

Anna Zaleska

Daniel M. A. Jones

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

20

MARKETS

www.wbj.pl

MARCH 26 – APRIL 1, 2012

Stocks report

world stock indices DJIA

NASDAQ

13,046.14 (Mar 22 close)

S&P500

3,063.32 (Mar 22 close)

-1.56% (for the week)

FTSE100

1,392.78 (Mar 22 close)

0.23% (for the week)

DAX

5,845.65 (Mar 22 close)

-0.70% (for the week)

-1.60% (for the week)

The WIG loses steam

NIKKEI225 6,981.26 (Mar 22 close)

10,127.08 (Mar 22 close)

-2.28% (for the week)

0.04% (for the week)

CHANGE: 5.23%

CHANGE: 15.65%

CHANGE: 9.06%

CHANGE: 2.56%

CHANGE: 14.91%

CHANGE: 18.31%

(year to Mar 22)

(year to Mar 22)

(year to Mar 22)

(year to Mar 22)

(year to Mar 22)

(year to Mar 22)

52-week high: 13,289.08

52-week high: 3,090.08

52-week high: 1,414.00

52-week high: 6,103.73

52-week high: 7,600.41

52-week high: 10,207.91

52-week low: 10,404.49

52-week low: 2,298.89

52-week low: 1,074.77

52-week low: 4,791.01

52-week low: 4,965.80

52-week low: 8,135.79

Andrew Nawrocki WBJ market analyst Poor macroeconomic data throughout the week, as well as some profit-taking, were the overriding reasons for both the WIG and WIG20 losing ground from Monday to Friday.

The week started off poorly, with indices throughout Europe opening lower on Monday, March 19. The situation was not helped by poor industrial production data from Poland for February. It was not until an hour before closing that both the WIG and WIG20 regained some losses, after news that the world’s most valuable company – Apple – would pay out dividends. Both indices closed 0.58 percent lower.

On Tuesday, concerns surrounding China’s economy spooked investors, after growth in retail sales from Asia’s largest economy came

Major indices WIG

40,834.43 (March 22 close)

WIG20

2,261.86 (March 22 close)

22.03

21.03

20.03

19.03

16.03

15.03

14.03

13.03

12.03

09.03

08.03

07.03

06.03

22.03

21.03

20.03

19.03

16.03

15.03

14.03

13.03

12.03

2,200

09.03

40,000

08.03

2,240

07.03

40,600

06.03

2,280

05.03

41,200

02.03

2,320

01.03

41,800

29.02

2,360

28.02

42,400

27.02

2,400

24.02

43,000

05.03

52-week low: 2,089.84

02.03

Change year to March 22: 3.09%

01.03

52-week low: 36,549.47

29.02

52-week high: 2,932.62

Change year to March 22: 6.57%

28.02

Change for the week: -3.51%

27.02

52-week high: 50,371.74

24.02

Change for the week: -3.42%

Top 5 RESBUD WARFAMA IFCAPITAL BEST POLLENAE

Closing 58.00 1.48 8.37 32.90 8.69

% change (week) 52-week high 92.37 68.85 85.00 1.86 80.39 8.37 49.55 36.50 20.86 11.29

52-week low 2.88 0.66 0.45 4.60 7.19

Top 5 PKNORLEN LOTOS PGNIG BZWBK CEZ

Closing 37.91 26.66 3.88 230.00 134.40

% change (week) 2.38 1.14 -0.51 -0.86 -1.54

52-week high 58.85 49.50 4.65 240.00 155.00

52-week low 30.33 21.30 3.25 190.10 116.10

Bottom 5 DSS CAPITAL PBG REINHOLD HBPOLSKA

Closing 4.62 1.69 34.35 1.02 0.82

% change (week) -27.59 -24.22 -23.24 -22.73 -21.90

52-week low 4.57 0.95 33.70 0.90 0.66

Bottom 5 PBG POLIMEXMS GTC GETIN BRE

Closing 34.35 1.32 6.10 2.34 284.00

% change (week) -23.24 -14.84 -14.21 -11.36 -7.94

52-week high 191.90 3.66 21.79 15.29 357.90

52-week low 33.70 1.19 6.06 2.01 203.30

52-week high 23.75 2.28 191.90 4.97 2.58

Currency report

Z∏oty hurt by uncertainty

Other indices sWIG80

10,174.59 (March 22 close)

NewConnect

42.45 (March 22 close)

52-week high: 12,932.00

WIG-Banki

5,837.41 (March 22 close)

SOURCE: WSE

22.03

21.03

20.03

19.03

16.03

15.03

14.03

13.03

12.03

09.03

08.03

07.03

24.02

22.03

21.03

20.03

19.03

16.03

15.03

14.03

13.03

12.03

09.03

08.03

07.03

5,700

06.03

42.0

05.03

5,800 02.03

5,900

42.4

01.03

42.8

29.02

6,000

28.02

43.2

27.02

6,100

24.02

6,200

43.6

06.03

52-week low: 4,944.19

05.03

Change year to March 22: 5.31%

02.03

52-week low: 40.00

01.03

52-week high: 7,387.49

Change year to March 22: 2.31%

29.02

Change for the week: -4.57%

28.02

52-week high: 59.10

27.02

Change for the week: -1.42%

44.0

Adam Narczewski X-Trade Brokers DM SA

22.03

21.03

20.03

19.03

16.03

15.03

14.03

13.03

12.03

52-week low: 8,218.71

09.03

06.03

05.03

02.03

22.03

21.03

20.03

19.03

16.03

15.03

14.03

13.03

12.03

10,000

09.03

2,400

08.03

10,120

07.03

2,440

06.03

10,240

05.03

2,480

02.03

10,360

01.03

2,520

29.02

10,480

28.02

2,560

27.02

10,600

24.02

2,600

01.03

Change year to March 22: 18.25%

29.02

52-week low: 2,076.52

28.02

Change year to March 22: 12.99%

27.02

Change for the week: -3.43%

24.02

52-week high: 2,987.72

08.03

2,474.87 (March 22 close)

Change for the week: -3.38%

07.03

mWIG40

in at its worst level in three years. Indices throughout Europe closed lower, with the WIG and WIG20 falling about 1 percent.

Wednesday started off well, with hopes of a minirelief rally present in the early hours of trade. Market bulls were unable to overcome the bears, however, with both the WIG and WIG20 finishing marginally lower.

On Thursday, a string of poor macroeconomic data pushed markets lower. Poor PMI data from both China and the euro zone for March heightened worries for solid global growth, with both the WIG and WIG20 dropping by about 1.5 percent.

On Friday the WIG closed 0.92 percent higher, while the WIG20 closed up 0.99 percent. ●

The Long-Term Refinancing Operation (LTRO) rounds of cheap financing introduced by the European Central Bank, as well as good Purchasing Managers Index readings have lifted indices and helped emerging-market currencies this year. This past week, however, currencies were hurt by worse-thanexpected PMI reports from euro-zone countries and China.

The z∏oty behaved unusually, not following the EUR/USD as it normally does. The euro gained throughout the week – after unsuccessfully trying to break the support at $1.3150, it rebounded to test its monthly high at $1.3285. The large spike came on Friday after rumors spread around the market that the People’s Bank of China might de-

crease the reserve requirement rate for banks.

The local currency regained some ground against the euro and the dollar in the first part of the week, but later on headed south. CPI inflation in Poland was lower than expected, reducing the chances of an interest-rate hike.

Funds were sucked out of emerging markets, causing the z∏oty to depreciate, with the EUR/PLN testing its monthly high at z∏.4.17. The USD/PLN, after climbing to z∏.3.17, retreated to z∏.3.15.

After a period of consolidation, the CHF/PLN broke crucial resistances and climbed to its monthly high of z∏.3.46.

The overall outlook for the z∏oty has not changed, with a chance for appreciation. ●

currency rates 3.8011 23.03

3.7186 21.03

SOURCE: NBP

3.7368 20.03

3.8265

3.7760 19.03

22.03

3.7849

23.03

22.03

21.03

20.03

19.03

16.03

0.1071

0.1077

0.1068

0.1070

0.1078

PLN-100JPY

4.0

3.5

16.03

3.4588

3.4548 23.03

0.10

0.1072

PLN-RUB

0.12

22.03

3.4306 21.03

3.4221 20.03

19.03

3.4260 16.03

5.0065

4.9837 23.03

3.3

3.4205

PLN-CHF

3.6

22.03

4.9443 21.03

4.9642 20.03

19.03

4.9810 16.03

3.1680

3.1417 23.03

4.8

4.9657

PLN-GBP

5.2

22.03

3.1173 21.03

3.1288 20.03

19.03

3.1688 16.03

4.1694

4.1649 23.03

3.0

3.1361

PLN-USD

3.5

22.03

4.1364 21.03

4.1282 20.03

19.03

4.1367 16.03

4

4.1270

PLN-EUR

5

SPORTS

MARCH 26 – APRIL 1, 2012

www.wbj.pl

21

Cross-country skiing

American football

New gridiron season kicks off Doctors operate on Kowalczyk after World Cup defeat

COURTESY OF MARCIN FIJA∏KOWSKI/WWW.PLFA.PL

Polish cross-country skier Justyna Kowalczyk went under the knife last week following the end of the FIS CrossCountry World Cup. The three-time World Cup winner had arthroscopic surgery on her troublesome knee in an attempt to cure injury problems that have affected her for large parts of the season.

And although doctors deemed the surgery a success, Ms Kowalczyk will now have to wait and see if she recovers in time for the start of pre-season training on May 1.

“If I could change one thing about this season? For sure it would be that my knee did not hurt me since June, and then I wouldn’t have to lie down on the operating table,” Ms Kowalczyk said prior to surgery.

On Wednesday, following successful surgery, she added “I’ll miss the snow and skiing.

Especially when I’m confined to a hospital bed, the longing [to ski] is large.”

A few days before the operation Ms Kowalczyk failed in her bid to once again take home the Crystal Globe, the trophy for finishing as overall leader at the end of the

The Crew Wroc∏aw and Devils Wroc∏aw battle it out in last year’s SuperFinal

The NAC SuperFinal VII is set to take place at Warsaw’s National Stadium The Polish American Football League (PLFA) began last Saturday with the Warsaw Eagles taking on Koz∏y Poznaƒ in the inaugural match-up of the newly formed Topliga.

At a promotional event prior to the start of the new season, representatives of the Polish American Football Association (PZFA) were keen to stress the progress that has been made since the first PLFA game back in 2006.

J´drzej St´szewski, the president of the PLFA, told journalists that as far as the future for American football in Poland is

concerned, “the sky’s the limit.”

This year the Topliga will comprise six teams: Devils Wroc∏aw; Koz∏y Poznaƒ; Warsaw Eagles; Kraków Tigers; Seahawks Gdynia and AZS Silesia Rebels.

The top two teams from the Topliga will battle it out in SuperFinal VII, which is due to take place at Poland’s new 58,500 capacity National Stadium, on July 15.

“Playing the Super Final at the National Stadium will be the next breakthrough for the League, after last year’s televised final,” said Mr St´szewski.

“The success of this event could bring football in Poland to previously unseen heights.”

The game itself will be just one of numerous attractions for

fans on the day, with a concert and picnic also due to take place as part of the entertainment package.

There are also plans to screen the match on Polish TV but Mr St´szewski said the PLFA was not yet ready to announce the name of the broadcaster. He did, however, confirm that starting next year the PLFA wants to show one game a week on TV in a “game of the week” format.

If 2011’s final is anything to go by, then fans could be in for an exciting encounter. Last year, The Crew Wroc∏aw defeated city rivals Devils Wroc∏aw 27-26, with the Devils just missing a 40-yard field goal with the final play of the game.

COURTESY OF WIKIMEDIA COMMONS

The Polish skier failed in her bid to win a fourth consecutive Crystal Globe

Poland’s Justyna Kowalczyk came in second place in the cross-country skiing 2011/2012 World Cup World Cup season.

With the final two races taking place in Falun, Sweden, between March 16-18, the 29year-old Pole needed something close to a miracle to overcome her arch rival, Norway’s Marit Bjørgen.

In the penultimate race of the season, the 10km Classic Mass Start, Ms Kowalczyk did everything she could to make one last-gasp bid to wrestle back the lead from Ms Bjørgen, winning the event in a

time of 32:03.7 minutes. But it was all in vain, since the Norwegian finished in fourth place with a time of 32:25.4, taking an unassailable 160-point lead in the standings to ensure she claimed the overall title with one race to go.

Ms Bjørgen then capped off a tremendous season with victory in the 10km pursuit.

Ms Kowalczyk, having already conceded the title, finished a disappointing sixth.

David Ingham

Soccer

David Ingham

¸ódê to get new z∏.300 mln stadium

Soccer

Anderlecht defender Marcin Wasilewski could face a lengthy ban from Belgium’s Jupiler League after he elbowed Koninklijke Sint-Truidense Voetbalvereniging (STVV) player Peter Delorge during a 2-2 draw last week.

The incident occurred when the Polish international knocked Mr Delorge to the ground with an elbow as the ball was being played into the box from an STVV corner. At the time the referee, who awarded a free kick, did not even give the Anderlecht player a yellow card, despite many in the stadium calling for a straight red.

The Belgian midfielder, who was on the ground for a number of minutes, was left with a broken nose and concussion.

After the game the presi- victim of a horrendous foul in dent of STVV, Jan-Pieter 2009 when Benfica midfielder Martens, said, “I hope that for Axel Witsel (then of Standard the good of soccer Wasilewski Liège) broke his leg by stompwill be suspended for at least ing on his ankle.

David Ingham eight matches. His behavior was outrageous.

It reminded me of Mike Tyson.”

Mr Delorge, who said he felt the attack was deliberate, told journalists “Wasilewski wanted to hit me. If I had not turned a little, then I would have suffered more.”

“I was unconscious for three minutes. I did not feel my arms and legs. But luckily only my nose was broken,” he added.

Mr Wasilewski Marcin Wasilewski was himself the

Fans at Widzew ¸ódê’s current stadium

The city’s authorities last week announced a tender for the construction of the planned 30,000 allseater project COURTESY OF WIKIMEDIA COMMONS

Marcin Wasilewski was likened to Mike Tyson after his foul on Peter Delorge

COURTESY OF WIKIMEDIA COMMONS

Belgian outrage at Polish elbow

The mayor of ¸ódê, Hanna Zdanowska, announced the start of a tender process for the construction of a new allseater stadium in the city. The stadium is expected to have a capacity of between 33,00034,000 and meet UEFA

requirements for modern soccer arenas.

The z∏.300 million development, which will be the new home of Widzew ¸ódê, will be built as part of a public-private partnership between the city’s authorities and private investors. ¸ódê authorities expect to spend around z∏.125 million on the new development, with part of the money set aside to improve the transport network around the structure.

Offers for the tender con-

tract must be submitted by May 7, with the final decision set to be made by October 2012.

Widzew’s new stadium is not the only new soccer ground set to be built in the city, with local rivals ¸KS ¸ódê also set to have a new 16,500seat arena by December 2013.

A contract to build the stadium was signed between the city’s authorities and a consortium of Budus and Mostostal Zabrze in February this year.

David Ingham

22

LIFESTYLE

www.wbj.pl

MARCH 26 – APRIL 1, 2012

Concert

Exhibition

And all that jazz

A modern relationship

Chris Botti April 7, 6 pm Sala Kongresowa Palace of Culture and Science Pl. Defilad 1 Warsaw

New Sculpture?

Until May 13 Zach´ta National Gallery of Art Pl. Ma∏achowskiego 3 Warsaw

all, and Roger Daltrey, the lead singer of legendary rock band The Who. His latest album, “Impres sions,” which features guest performances from Herbie Hancock, Mark Knopfler and Italian tenor Andrea Bocelli, is due for release on April 17. ●

A newly opened exhibition at Warsaw’s Zach´ta gallery aims to explore the relationship between contemporary sculpture and the different branches of modernist art.

The sculptures and installations on show are arranged in a way that aims to highlight artistic reactions to the traditions of modernism while identifying different points of interaction between the work.

Each artist participating in

David Ingham

For more information, log on to kongresowa.pl

the exhibition approaches the modernist tradition from a different perspective. For example, the work of Scottish sculptor Martin Boyce makes reference to the cubist concrete trees of the Martel brothers, while Swiss artist Mai-Thu Perret refers to the Russian avantgarde and the emergence of communes in the 1960s, by using mannequins in her art work.

Other artists whose sculp-

tures are on display include Thea Djordjadze, Kasia Fudakowski and Jerzy Goli szewski. ● David Ingham

For more information, log on to zacheta.art.pl

COURTESY OF MONIKA SOSNOWSKA/GALERIE GISELA CAPITAIN KÖLN

Jazz musician and two-time Grammy winner Chris Botti will visit the capital this April for a concert as part of his latest European tour. The trumpeter and composer is one of the best-known jazz musicians

in the world, with four of his records having reached number one on the Billboard jazz chart, and his total album sales standing at more than three million.

Since dropping out of university in his senior year to tour with Frank Sinatra, the American trumpeter has gone on to perform with such esteemed company as Paul Simon, Aretha Frank lin, Joni Mitchell, John May-

Festival

COURTESY OF WIKIMEDIA COMMONS

16th Ludwig Van Beethoven Easter Festival March 25 – April 6 Various venues throughout Warsaw

Chris Botti

Spice and charm India Curry ul. ˚urawia 22 Warsaw indiacurry.pl For those looking for an authentic taste of Indian cuisine right in the heart of the city, India Curry is hard to beat.

Located just off ul. ˚urawia, the restaurant offers great value with set weekday lunches, featuring two curried dishes, with meat and vegetarian options available, as well as rice, naan bread and dessert, priced at just z∏.25.

As well as a set lunch menu that changes every week, the restaurant, which has been on the block for 12 years, also has a wide variety of traditional dishes from across Indian regions on its regular menu. With typical starters such as samosa and onion bhaji, and mains including the southern Indian specialty Chicken Chettinad or the Goan Fish Curry, there is something for every palate.

Our chosen meals were the Bhuna Chicken and Chicken Rogan Josh, both of which were

its flavor is delightfully unexpected. An added pleasure was topping off the lunch with the restaurant’s own fantastic blend of coffee.

Parking is available free of charge directly in front of the restaurant, making a visit there all the more convenient. All of which means, whether you are looking for a great quality/value business lunch location or just the perfect place to experience the real taste of Indian cuisine, India Curry is definitely not to be missed.

Ella Pa∏ka Reservations: 22 438 93 50 indiacurry@bojwani.pl

David Ingham

For more information, log on to beethoven.org.pl

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

WBJ’s restaurant review feature

cooked to perfection with a subtle blend of spices and herbs.

The Rogan Josh combined cardamom, cinnamon, Indian herbs and yogurt for a spicier mix, while the Bhuna Chicken featured a more exotic blend of traditional spices. The portion sizes were large, especially with the freshly baked naan and pilau rice that came included with the meal.

India Curry’s desserts also deserve a special mention. The ice cream, which is made at the restaurant, takes close to four hours to prepare. Rich in flavor but delicate in its use of spices,

The Ludwig Van Beethoven Festival is an annual two-week event that sees performances of many of the great composer’s most famous works, as well as the work of his contemporaries.

The theme of the 16th festival will be “Beethoven: War and Peace,” with the performance of Pyotr Tchaikovsky’s 1812 Overture set to be one of many standout performances.

Once again the festival’s organizers have managed to

attract some of the greatest living classical musical talent to perform in the capital. They include Russian conductor Andrey Boreyko, classical pianist Rudolf Buchbinder, who featured in the award-winning documentary “Pianomania,” and Lithuanian violinist Julian Rachlin.

The festival will close with a performance of the “Martyrdom of Saint Sebastian,” by Claude Debussy, a piece which first debuted in Paris in 1912. ●

COURTESY OF WIELKANOCNY FESTIVAL LUDWIGA VAN BEETHOVENA

Celebrating a master

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

Simonis Gallery ul. Burakowska 9 www.simonisgallery.com

Katarzyna Napiórkowska Art Gallery ul. Âwi´tokrzyska 32, ul.

Krakowskie PrzedmieÊcie 42/44 and Old Town Square 19/21 www.napiorkowska.pl

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

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

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

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

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

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

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

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

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

LAST WORD

MARCH 26 – APRIL 1, 2012

www.wbj.pl

23

Tech Eye

Mattia Cielo bracelet/watch going on outside, Techeye was busy spewing half-digested chunklets of bread into a toilet. Mostly into a toilet.

So forgive us if this week’s column is a little scattershot. It’s not easy to write a coherent text in between desperate sprints to the bathroom.

Ordinarily we’d just phone it in –

eSport Clip mock North Korean Retard-for-Life Kim Jong-il for 150 words or so, and toss in a gadget or two – then cheerfully return to hugging our artfully bespeckled toilet. Unfortunately for us, Jong-il is now taking a long dirt nap (promoted to Retard-for-theAfterlife, presumably) and it’s considerably less rewarding to ridicule him.

And so, dear readers, we give up.

On to the gadgets.

The first item on this week’s agenda doesn’t have a name, per se.

For lack of a better descriptor, we’ll call it a shiny, extremely swank watch/bracelet thing. It’s part of the “Iguana” collection designed by Italian bling-crafter Mattia Cielo (mattiacielo.com).

The Iguana watch/bracelet thing attracted a lot of buzz at the Baselworld watch and jewelry show earlier this month. Details are scarce – rose gold (a gold-copper alloy) appears to be a prime ingredient and the watch face has some sparkly diamonds in it.

Other than that, the only thing you really need to know is that it’s expensive. No pricing info has been released, but judging by other Mattia Cielo jewelry, you can expect to spend low to mid five figures on it.

From the wildly expensive, we move to the Walmart-friendly. Feast your eyes on the eSport Clip personal media player from Ematic (ematic.us). The eSport Clip has 4GB of flash memory (enough for about 20

hours of video), a 1.8-inch display and a five megapixel camera. The “built-in clip” is apparently a hot-selling feature, allowing the user to “just attach the device onto their clothes while working or exercising for a more enjoyable experience.”

The eSport Clip is available for a paltry $22 at the aforementioned US retailer (and about $29 on Amazon).

With a price point like that, this will definitely be the hit of the season in Appalachia – it’s the perfect gift for coal-miner cotillions, debutant hootenanties and shotgun weddings.

Last up this week is a little something for the doodlers out there – the Intous5 range of professional pen tablets from Wacom (wacom.com).

These aren’t tablets in the iPad sense of the word, but rather graphic input devices that make life easy for graphic artists, designers, photographers and other such creative types.

The Intous5 comes in three sizes, from the $229 small version (24.18 square inches) to the $469 large one (102.4 square inches). Each one offers a “best-in-class 2,048 levels of pen pressure,” which is astounding. Really, it’s impressive enough that some monkish aesthete out there should hide somewhere for the next 20 years, writing haikus extolling the virtues of each individual level of pen pressure.

Oh hey, look at that – the article is done. Now, if you’ll excuse us, we’ve got a bathroom to befoul. ●

COURTESY OF WACOM

COURTESY OF MATTIA CIELO

Spring has arrived and Techeye is delirious with joy. Birds are starting to blossom, flowers are running to and fro whilst giggling madly, and the sweet chirping of children fills the air.

The world outside our window is beauteous.

Wait, did we say delirious with joy?

Sorry, we meant to say delirious with nasty, gut-churning, public healthmenacing stomach flu. While all those wonderful, spring-tastic things were

COURTESY OF EMATIC

The coming of spring and the great upheaval

Intous5 Ever reveled in the sweet chirping of children in the springtime? Let us know: techeye.wbj@gmail.com

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