September 2014vol. 7 no. 6(44)Price: 20 zł

China’s capital flowsChina Exim Bank’s $500 million commitment to invest via CEE Equity Partners is largest, tangible sign that a wave of Chinese capital is on the way to Poland.

Advisory:ZUS inspectors coming

Energy:Israelis enter wind sector

FDI:Euro 30 million in Łódź

grupaazoty.com

Independent Poland’s chemical industry was born in Tarnów in 1927. Since then, history has come full circle. Polish chemistry is being reborn in Tarnów these days – conscious of its strength and fully secure. Grupa Azoty is the fusion of everything that we, the Poles, have been able to do best in this industry.

We are ready to transcend new boundaries – because Grupa Azoty is a project focused on the future. This is the way it has always been. We’ve come a long way. We’ve changed. We are now competing with Europe’s largest chemical companies. And thanks to the recently completed great consolidation, we are prepared for this better than ever before.

We have defined our aims in the strategy adopted for the years 2012-2020. Due to the Group’s well-conceived architecture, we are able to offer our clients an even broader product portfolio – from nitrogen and phosphorus fertilizers as well as constructions plastics to OXO alcohols, plasticizers and pigments. We have no competition in this regard as of today. We possess our own logistics infrastructure, as well as research, development and servicing facilities, which also allows us to provide services.

We want to use these assets in further building the Group’s value and that of the companies which form part of it – keeping our shareholders, employees and the local communities in which we operate in mind. The two main lines of our current strategy are taking advantage of the increased scale of operations and maximizing the effects of synergy – this means full use of the potential gained through consolidation.

We are chemists. We are the architects of matter. The architects of the future. We know what we are due to those who have come before us. We know what we owe to those who will follow us. We owe them a world which will be a better place to live.

Powering Creation

Powering Creation

Advisory13 Tenant Rep in Poland – Edition #1

14 ZUS inspectors target select employment contracts

15 You against the mob (part 1)

16 Market outlook for Renewable Energy begins to improve

Table of Contents

Details at subs@bizpoland.pl or call +48-22-831-7062

September 2014vol. 7 no. 6(44)

Published by: BiznesPolska sp.z o.o.ul. Długa 44/50, bud. D, lok 704, 00-241 Warszawatel.: 022 831 7062

General Manager and Editor:Thom Barnhardt (tb@bizpoland.pl)

Editorial staff and writers:Leon Paczyński, Monika TutakResearch team coordinator:Magda AdamczykAdvertising Sales: Wiktor Gliński (wglinski@biznespolska.pl)tel.: 022 831 7062Graphic Design: Sławek Parfianowicz (sparfianowicz.wordpress.com)

Subscribe to BizPoland MagazineAnnual subscribers to BizPoland Magazine receive our monthly magazine, as well as all our business supple-ments for free: CEE Shared Services & Outsourcing, City Invest Poland, Top Shopping Centres Poland, Wind Energy Poland, Food Exports Poland, Luxury Brands Poland, Equities Poland. 500 zł for one year.

Cover Story4 China’s capital flows

9 Polish-Chinese Time-line:

Report11 Family businesses look to the future with

increasing optimism

Energy (17) Israelis in wind investment; Nordex to install 38MW Polish project

(18) Balamara brings in partner for Lublin coal mine; CEB sells interest in

Mariola Thermal Coal Project; EIB grants $96 mln loan to Polish energy

firm Tauron (19) More investment needed for Polish LNG terminal (20)

Lithuania and Poland seek EU funding for a gas link; Landis+Gyr to deliver

smart meter products to RWE (21) KGHM Financing

Defence22 Poland aims for military modernisation and new

equipment procurement

FDI News (24) Major investment by VPK Packaging near Wrocła; Great Maple

Company to open Polish PP film plant (25) BASF opens mobile emissions

catalysts plant in Wałbrzych (26) Specialisation in healthcare draws VC

and PE investments (27) Poland invites Raytheon to participate in final

phase of WISLA competition; 3M to expand Polish car parts factory (30)

Czech Republic buys 500th Solaris bus; WindMobile invests in United Arab

Emirates; Automotive industry in Poland (31) Exports to Russia decline;

Germany up; Polish tights in Italy; Polish food export is growing

Cities News (32) Poznań; Gdańsk/Gdynia (34) Katowice (33) Wrocław (34) Koszalin; Olsztyn

Chamber of Commerce News (40) Austria; Japan (41) Korea; Netherlands (42) Portugal; Taiwan;Thailand; UK

45 BPO/Shared services News

46 Calendar

Events48 Arabian Horse Days Auction brings in €2 million

Life Styles50 Business gentleman by coolhunter

4

September 2014

www.bizpoland.pl

million equity investment in Polish Energy Partners announced in June – reinforces the stated intentions of its Chinese partners. “They are very interested in energy investments, broadly. That includes conventional, renewable and energy infrastructure, such as gas transport and distribu-tion, as well as waste-to-energy and recycling”, said Rafal Andrzejewski, investment director at CEE Equity Partners. CEE Equity Partners was chosen by China Exim Bank, after multiple interviews with fund management companies, to manage the $500 million fund, which could quickly expand to $1.5 billion. The in-vestment management firm is exclu-sively advising the China-CEE Fund.

The China-CEE Fund will an-nounce its next major investment of about $50 million – in Poland’s wind sector – in September.

Speaking about the working relationship between the Poland-based fund advisor and the Chinese partners, Andrzejewski said that “the China Exim Bank executive is very outward-looking, and comfortable in international environment. I am really impressed by the professional-ism of the Chinese. We see them often as world-class in investment banking and due diligence. “ He

“The Poland-China relationship is just starting. For 95% of the delega-tions who have visited, it is their first time to Poland”, said Andrzej Szewczyk, a director of PAIZ’s Poland-China Economic Cooperation Center. He was earlier respon-sible for Poland’s Expo presence in Shanghai in 2010. “We can feel the interest from Chinese companies”.

The China-CEE Fund’s first major investment in Poland – a $75

The visit of Chinese Premier Wen Jaibao to Poland in April 2012 marked the starting point of Poland’s modern economic relationship with China. “That was a “game-changer”, said Rafal Andrzejewski, investment director of CEE Equity Partners. Premier Wen’s commitment to invest $20 billion in the economies of central eastern Europe – in a wide range of sectors from infrastructure, food processing, manufacturing and

energy - was the endorsement that private Chinese companies needed to enter the market.

Since that state visit, more than 120 Chinese business delegations have come to Poland to investi-gate and analyze the market.

While Chinese FDI in Poland remains meager at an estimated $400 million, the $500 million investment in the China-Central and Eastern Europe Investment Cooperation Fund, to be managed by CEE Equity Partners, finalized in spring 2014, will accelerate Chinese investment in Poland. Backed by the China Exim Bank, the huge financial commitment is the strongest sign yet that Chinese investment in Poland is set to gush. The China – CEE Fund will target the energy, telecommunication, infra-structure and manufacturing sectors.

Cover Story

China’s capital flowsChina Exim Bank’s $500 million commitment via CEE Equity Partners is largest, tangible sign that a wave of Chinese capital is on the way to Poland.

The Poland-China relationship is just starting.

The Chinese are still doing market research and

investigating the market.– Andrzej Szewczyk, director of PAIZ’s

Poland-China Economic Cooperation Center

5

2014 September

www.bizpoland.pl Cover Story

added that they are seeing inter-est from China on multiple levels, including delegations from many regions, interest in direct investment, and also in Warsaw’s IPO market.

“We are already seeing bigger and more groups of Chinese coming to Poland – and they always want to see us. And in China, it’s very important who you know, connec-tions”. “Sometimes the Chinese have not found the right advisors in Poland”, said Andrzejewski.

CEE Equity is interested in publicly-traded companies, especial-ly in controlling stakes or enough of a stake to control. The area of infrastructure, broadly defined, is of strong interest, including areas such as waste-to-energy, recycling, glassworks and steelworks, and gas transport. Outside of Poland, the firm see opportunities with wind

projects in Serbia, PV and wind in Romania, gas-to-energy in Hungary, and waste-to-energy in Czech.

Jacek Slotala, investment director at CEE Equity Partners, made his first trip to China nearly 30 years ago. He’s considered the “in-house guru” when it comes to China culture and interpersonal relations, and he offers up some hardy advice:

On doing business with China: “you have to be in the right place, at the right time, with the right people.”

On time: “Chinese have a completely different perspec-tive on time than we have.”

On values: “We too quickly judge China by our European values. We are too quick to confront, while the Chinese are more likely to adapt. The Chinese have managed to create a Third Way”.

On why Chinese investment in CEE is still small: “We were not ready. We’ve not been ready to accommodate them. But they’ve been looking at us for a long time. The Chinese are coming to CEE because it’s a new market, and they are interested in infrastruc-ture, as well as lots of “sleeping technologies” in Poland and CEE that have not been commercial-ized because they haven’t found enough capital to develop.”

On Chinese shale gas: “Chinese shale gas fields are the largest in the world. When China exploits shale gas, the whole world will change.”

The China – CEE Fund’s stra-tegic partner is banking giant ICBC, which set up operations in Warsaw in 2012. General Manager Li Xiaobo said that China’s inter-est in Poland is growing: “To enter Poland is to enter the EU. It’s a gateway to Europe. Yet Poland offers lower costs, lower labor costs, and many Chinese see Poland as a good manufacturing base for Europe.”

Mr. Li also said that the Polish food and agriculture sector is attracting interest from China. “China is in need of meat and milk”. Chinese firm New Hope plans to invest in Poland’s meat processing sector, with a new greenfield investment planned.

While Chinese direct investment into Poland (FDI) has surpassed $400 million (according to data at

year-end 2013 from NBP), barriers remain. Mr. Li: “To build busi-ness, both sides must create a more friendly business environment. It’s difficult to find good local partners, and they must find a solid, local partner. And we need to continue to meet each other more often, be introduced to each other.”

“PAIZ has organized top-level and multi-level contacts and delega-tions, and in China, the government leads business. On PAIZ’s intense push in China: “I know Mr. Majman very well. He has been trying very hard to bring our two countries closer together. When Chinese come to Poland, they usually spend their first day with PAIZ.” PAIZ launched its “Go China” initiative in 2012, and continues to actively promote Polish food export to China via participation in food trade fairs.

According to Andrzej Szewczyk and Ivy Yu Yang (Head of Poland-China Economic Cooperation Center) at PAIZ, “for 95% of the delegations from China, it is their first time to Poland. We are still waiting for Poland to be discovered by Chinese capital”.

“Both countries need time”Szewczyk was responsible for Poland’s Expo presence in Shanghai in 2010. This Poland-China agency within PAIZ is to help Chinese investors expand in Poland, and Polish inves-tors to expand in China. The agency

Jacek Slotala, investment director at CEE Equity Partners, made his first trip to China nearly 30 years ago

Management at CEE Equity Partners – Advisor to the China – CEE Fund:Keith Mellors, Managing Partner. Mellors is Founder and Managing Director, and was previously Managing Partner of Copernicus Capital Partners, manager of a PE fund in Croatia and Serbia. He earlier managed the creation of a new Investment Fund at a Polish state-owned Bank on behalf of the UK Know-How Fund. He is a UK Chartered Accountant and MA, Kings’ College, Cambridge. Rafal Andrzejewski is Investment Director, Poland. He co-operated with Abris Partners on a number of management restructring within their portfolio. Previously served as CEO at Arka – Invesco Pension Fund, Bertelsmann, Avery Dennison; Head of Global Financial Services Practice , Amrop Executive Search. BA University of California and BSBA Ohio State University, in the US; MA Economics, Poznan University.Rafal Andrzejewski, Investment Director, Poland. Co-operation with Abris Partners on a num-ber of management restructring within Portfolio. CEO at Arka – Invesco Pension Fund, Bertelsmann, Avery Dennison; Head of Global Financial Services Practice, Amrop Executive Search. Education: MBA University of California and BSBA Ohio State University, in the US; MA Economics, Poznan University, in Poland. Jacek Slotala, Investment Director. According to Andrzejewski, the fund’s “China expert” is Jacek Slotala, Investment Director. He is founder and Managing Director of Manzoil Ltd, a company set-up to produce biofuels in Poland, a Supervisory Board member in Bank Zachodni WBK, USAID and EBRD – and for many years ran J. Walter Thompson-Parintex in Poland. He began visiting China 30 years ago.

6

September 2014

www.bizpoland.plCover Story

oversees the GoChina initiative, a series of seminars and conferences for Polish entrepreneurs, including busi-ness missions to China. PAIZ main-tains a “rep” office in Shanghai, and recently coordiated the June trade fair in NingBo (part of the “Bucharest” initiative). About 20 Polish compa-nies participated, most of whom are focused on exports to Poland.

Ms. Yang at PAIZ says the Chinese are still doing market re-search and investigating the market.

“And the set-up of Chinese banks and China desks (at law firms, for example), is a first step in this process”, she said. “Chinese always want detailed market research.”

Mr. Szewczyk said that “we can feel the interest of Chinese companies in Poland. But before you make business, you need to make friends”. He sees inter-est in the sectors of machinery, energy, food sector, and in-frastructure. “Many Chinese investors are waiting on pas-sage of the new Energy Law.”

“We are encouraging Chinese companies to invest in Poland in areas such as IT and tele-communications, research and development, car parts manufac-turing and food processing,” said Slawomir Majman, prezes of PAIZ. “The Chinese are strongly interest-ed in the Polish energy sector. But I think that the future of Chinese capital in Poland lies in machinery manufacturing and IT,” he added.

One opportunity that some Chinese have found in Poland is the Warsaw Stock Exchange. In summer 2014, two Chinese com-panies listed their shares on the Warsaw Stock Exchange: Peixing International Group and JJ Auto. PKO Bank’s securities operations have been involved in the Chinese IPOs in Warsaw. Mr. Li, of ICBC Bank, explained that it’s difficult to

list in China, more complicated and a long line of companies are wait-ing to be listed. “The Warsaw Stock Exchange is easier and quicker.” Industry insiders say that a third Chinese IPO is likely before year-end.

Other initiatives that point to growing trade and investment from China:

a) Deepwater Container port in Gdansk – direct from China

Australia-based Macquarie’s 200 million euro investment in Gdansk’s Deepwater Container Terminal (DCT), combined with government investment in Poland’s A1 motorway network, means Poland is taking business away from German and Dutch ports, said Adam Zolnowski, the CFO of DCT Gdansk.

And as DCT plans its next major expansion – T2 – capacity will be doubled, with the 600-metre dock able to accommodate the larg-est container ships in the world. Gdansk is blessed with deepwater access of 16 metres. Combined with the recent major capital invest-ments in the port infrastructure, it is now directly receiving 18,000 TEU ships from China and Korea.

b) Rail connectionsRegular rail connections began with weekly scheduled Express Rail Cargo from China to Lodz, launched in 2013 by Hatrans Company. Hatrans is the exclusive logistics provider for this connec-tion, on the route China – Central and Eastern Europe as well as to the EU countries. Goods from China are loaded in terminal in Chengdu (Sichuan province) then shipped to Poland/Lodz. Transit countries are Kazakhstan, Russia and Belarus. Each train con-sists of 41 wagons, 40’ of loaded

containers. Railway transport from the time of loading to the rail ter-minal in Lodz takes 14 days.

c) High-level government con-tacts – Minister of Defense in SeptemberWhile the visit of Premier Wen Jaibao to Poland in 2012 paved the way for more than 100 business delegations since that time, China’s

Chinese Investments in Poland

Chinese target Polish solar energy China-based Yingli Green Energy is teaming up with AMB Energia Wytwarzanie to co-develop 30MW of solar projects in Poland. Under the agreement, AMB Energia will develop the facilities as a local partner with “the strongest support from Yingli throughout all project stages”. The turnkey facilities will be sold to investors.

“In this strategic alliance, the partners will jointly work on a diversified project portfolio to be ready for inclusion into the auction system in 2015,” said Yingli Green Energy International head of project business Manuel Seiffe. “As a leading developer in Poland, AMB Energia will engage in all stages of the development phases of the solar PV projects. This partnership will furthermore enhance our strong position in the project business as well as in the Polish market.” AMB Energia chief executive Przemyslaw Pieta added: “We believe that the investment in a pipe-line of early-stage project opportunities will bear fruit as early as in 2015.” n

China Exim Bank Founded in 1994, the Export-Import Bank of China (“China Eximbank”) is a state bank solely owned by the Chinese government with Total Assets in excess of $250 billion as of December 2012. The Bank is headquartered in Beijing. Its international credit ratings are comparable to the national sovereign ratings, which currently are S&P AA-, Moody’s Aa3, Fitch A+. China Eximbank aims to provide strong financial support to stimulate exports and imports growth as well as to help facilitate China’s overseas investments. Since 2007, China Eximbank has successfully established or initiated seven funds (ie Italy and South America), denominated in both RMB and USD. n

We should not be afraid

of Chinese money– Rafal Andrzejewski, CEE Equity Partners

7

2014 September

www.bizpoland.pl Cover Story

Minister of Defense plans an early September 2014 visit to Warsaw, significant particularly in light of Poland’s rapid military moderni-sation and the Russia/Ukraine conflagration.

d) Poland-China Business Roundtable formedEdward Zhu of Poland-China Business Roundtable (Polsko-Chinska Rada Biznesu - PCHRB.pl). According to founder Edward Zhu, who has lived in Poland nearly 20 years, Chinese investment in Poland is “still mostly focused on raw materials, trade and manufac-turing, but the interest in energy is increasing quickly”.

e) “China desks” at Consultants and Law FirmsThe interest of China in Poland has sparked growth in the niche of “China desks” at various profes-sional firms. In addition to China desks at all Big 4 consultancies and Mazars, law firms are also tar-geting China business. One of the largest Chinese law firms, Yingke Law Firm, with offices in major business and commercial centers throughout China, and elsewhere

(New York, London, Sao Paulo, Hong Kong), officially opened its Polish branch in February 2012.

f) New Silk Road initiative launchedWith its population huddled on its eastern seaboard, China has started turning inwards to secure develop-ment, stability, access, and energy in its continental interior; it is China’s ‘own counterbalance’.

China offers the Eurasian ‘heartland’ investment, trade and security assistance, and in return gets a lock on Kazakh oil and Turkmen gas. Beijing cherishes the goal of ‘breaking through’ to the Indian Ocean, the Persian Gulf and Europe.

China proposes three broad sys-tems as part of its new Silk Road: a northern railway to Europe which eventually converges on the Trans-Siberian, the pipelines to Kazakhstan and Turkmenistan and possibly beyond to Iran, and the southern highway corridors.

Three hundred freight trains have so far plied between Europe and China, a journey of 14-16 days; ocean-going ships take twice as long.

g) Growth of the wholesale mar-ket outside of Warsaw: GD CenterGD Center is an enormous market for imports from Asia. Located in southwest Warsaw, the market operates in 6 buildings, for differ-ent distributors. More than 1,000 dealers/wholesalers operate here. This is the biggest market in CEE for imports from Asia including China, Vietnam, and more than 10 other Asian countries – with further distribution throughout CEE and western Europe. About 50% of the

Chinese Investments in Poland

Select Major Chinese investments in Poland:Jiangsu Lantian Aerospace Industrial Park (JLAIP).

JLAIP acquired all the stock of Aero AT Sp z o.o. in Poland in 2013 and joint-venture established Airey Ott (Jiangsu) Aircraft Industry Co., Ltd in China later.

Xiangyang Automobile Bearing Co., Ltd (ZXY) belongs to Tri-Ring Group Corporation. ZXY ac-quired KFLT in Poland in 2013.

LiuGong Machinery. The largest Chinese invest-ment in Poland (approximately 300 million). Liugong Machinery (Poland) belongs to Chinese company Guangxi Liugong Machinery Co.. Ltd – a world leader in the production of wheel loaders. Liugong pro-duces not only loaders but also excavators, cranes, dumpers, rollers, graders, forklifts, backhoe load-ers, asphalt pavers, milling, drilling, concrete mixer trucks, concrete pumps and power units, engines and hydraulic components. In the top ten world producers of construction and mining equipment. In February 2012, Liugong Machinery (Poland) purchased the plant producing construction equipment and its commercial division – Dressta company from Huta “STALOWA WOLA” SA.

YunCheng (Poland) Sp. zo.o - manufacturer of pulp and paper, publishing and printing.

Nuctech Warsaw Company Ltd. - a security inspec-tion product manufacturer and security solutions supplier specialized in radiation imaging technology and featured by providing high tech security inspection products of independent property rights.

TCL Operations Polska (in Żyrardow) - manufactures televisions and LCD monitors.

ChungHong (Poland) Sp. z o.o. - a service provider of one-stop PCBA and OEM solutions for the elec-tronics industry.

Dalian Talent Poland - a candle manufacture.GD Poland Investments Sp.z o.o. (trade center) and

SCC trade centre.Huawei – TelecommunicationsNew Hope – plans for greenfield investment in the

agricultural sector (meat) Nexteer Automotive (China-based Pacific Century

Motors bought firm from GM in 2010; operations in Poland). n

Slawomir Majman, Prezes, PAIiIZ

8

September 2014

www.bizpoland.plCover Story

traders are Chinese, and the rest are predominantly Vietnamese and Turkish.

Areas in need of improvement in the Poland-China trade relationship

a) Trade DeficitPoland currently has a significant trade deficit with China, with Polish exports to China amount-ing to $2.1 billion in 2013, while Chinese exports to Poland stood at $19 billion. The disparity is already decreasing, Sławomir Majman, head of the Polish Information and Foreign Investment Agency (PAIiIZ) told the Polish Press Agency. “In the first quarter of this year, we observed a three-percent growth in Polish exports,” he said. Majman stressed that equal values are out of reach, but it would be satisfactory if Polish exports rose to one sixth or one fifth of what China sells to Poland, rather than one tenth. In his opinion, Polish exports have the potential to grow, especially those in the food sector, such as milk, dairy products and meat. Poland does have to over-come an obstacle in one of these spheres. In February this year,

China introduced an embargo on Polish pork after cases of African Swine Fever were recorded in Poland. Majman said he is count-ing on a positive outcome of bilateral talks.

b) Immigration. “Poland still not welcoming lots of immigration from China”, accord-ing to one of our interviewees. Hungary, by contrast, has had a more flexible visa program with China, since at least 1993.

c) Direct flights still minimal. LOT Airlines considering adding more China flights to additional cities.

d) Stereotypes. Chinese are often considered as traders, or that manufactur-ing is low-quality. But high-profile deals like the takeover of Volvo are quickly shifting the perception.

“The Poland-China relation-ship is just starting”, said Andrzej Szewczyk, summarizing the state of business affairs between the two countries. And the success of the $500 million China – CEE Investment Cooperation Fund will be watched closely, with another

$1 billion to be made available if the Chinese view the results posi-tively. n

China – CEE Investment Cooperation FundThe China-Central and Eastern Europe Investment Cooperation Fund (the ”China – CEE Fund”) was announced by former Premier Wen Jiabao in April, 2012. The China – CEE Fund is established by China Eximbank in partnership with other cornerstone investors, to capitalize on investment cooperation opportunities between China and countries of CEE. The China – CEE Fund targets the energy, telecom-munication, infrastructure and manufacturing sectors. The Fund has an underwritten initial commitment of US $500 million. Potential access to US $10 billion debt facility to strengthen investment capacity of the Fund. Extensive network allowing for establishing strategic partnerships with companies from China.Target investment sectors: Energy: Conventional energy production and renewable

technologies (wind, solar, geothermal, biomass, biofu-els, hydro) and equipment used in energy sector.

Telecommunications: Infrastructure and equipment related to the telecommunication business.

Conventional Infrastructure: Transport infrastructure, environmental infrastructure (including waste manage-ment and oil & gas distribution and storage). Also equipment and materials used in these sectors.

Specialist Manufacturing: most areas, but particularly engineering, industrial equipment and materials, as well as new and innovative technologies. n

Mr. Li Xiaobo, General Manager, ICBC (Europe) S.A. Poland Branch

9

2014 September

www.bizpoland.pl

• Komorowski visits China.

The state visit of the President of Poland Mr. Bronisław Komorowski to China in December 2011 ushered in a new era in the history of Polish-Sino relations. In the common statement signed by President Komorowski and President Hu Jintao both countries agreed to lift their relations to the level of strategic partnership. A number of important agreements were also signed dur-ing the visit, including a memorandum of understanding considering the mutual opening of cultural centers in both countries and an agreement on cooperation in the area of higher education.

• Chinese Premier Wen Jaibao visits Poland and CEE in April 2012. Announces “CEE strategy” and “blesses” further engagement with CEE.

• 2 major Chinese banks enter Poland: ICBC and Bank of China.

• June 2012 – LOT Airlines launches first direct flights to Beijing

• September 2012 - Radosław Sikorski, Minister of Foreign Affairs, visits China.

• PAIZ launches “Go China” program.

In April 2012 Prime Minister Wen Jiabao visited Poland as the first head of Chinese Cabinet since 1987. An important part of the visit was the first ever summit of prime ministers from China, Poland and 15 other countries of Central and Eastern Europe. During the meeting Premier Wen announced 12 initiatives for intensifying the cooperation between China and CEE countries in various fields. Prime Minister Wen Jiabao said that China wanted to double trade with the countries of CEE to $100 billion a year by 2015, and pledged billions in loans to help promote investment in the region. Mr. Wen made the announcement at a gathering in Warsaw that brought together business and political leaders of countries stretching from the Baltics to the Balkans that are eager to do business with China.

Cover Story

Polish-ChineseTime-line:

Infrastructure, high technology and green technology are target areas for growth, Mr. Wen said, announcing that Beijing would set up a $10 billion line of credit to support investment in these specific industries. He also pledged an additional $500 million in funds to be made available to Chinese companies seeking to make first-stage investment in the region (China – CEE Investment Cooperation Fund).Mr. Wen’s visit to Poland was the first by a Chinese prime minister since 1987. He met with the Polish prime minister, Donald Tusk, and the leaders of 15 other countries from the region to pledge China’s sup-port for economic development in the area. “The Chinese side understands concerns among eastern European countries over trade imbalances and will boost imports from those countries,” Mr. Wen said at the forum.

The main theme of the visit paid by Radosław Sikorski, Minister of Foreign Affairs of Poland, in September 2012 was to discuss specific platforms of dialogue and coopera-tion between Poland and China. Both sides agreed to establish an Inter-Governmental Committee headed by both Ministers of Foreign Affairs.

ICBC opened an office in Poland in November 2012, and oversees the CEE region from the Warsaw office. With a full banking license, ICBC offers corporate and investment banking services, as well as M&A advisory. Its primary target is assisting Chinese investors in the local markets. While the China-sourced business represents 90% of their business, 10% is purely local. The bank is particularly keen on industries such as energy, infrastructure, agriculture, and manufacturing. The bank is a strategic partner with the China Exim Bank-backed CEE Equity Fund.

2012:

10

September 2014

www.bizpoland.plReport

• More than 90 Chinese delegations visit Poland on fact-finding visits.

• Establishment of Poland-China Business Roundtable by Edward Zhu.

• June 2013: Speaker of Polish Sejm Ewa Kopacz paid an official visit to China.

• June 2013: Visit of the Vice Minister of Economy Ilona Antoniszyn-Klik in Beijing, Nanjing and Shanghai.

• Leaders of China and CEE countries met in Bucharest in November 2013, where Premier Li Keqiang and 16 leaders of CEE countries jointly ap-prove the Bucharest Outline, ascertaining 6 fields for cooperation, deepening and bringing forward more than 30 specific measures for cooperation promotion.

• China-Central and Eastern Europe Investment Cooperation Fund established, with a “first close” of $435 million (December 2013).

• Poland records significant trade deficit with China, with Polish exports to China of $2.1 billion in 2013, while Chinese exports to Poland reach $19 billion.

In June 2013 the Speaker of Polish Sejm Ewa Kopacz paid an official visit to China. Besides official meet-ings in Beijing (with Chairman of National People`s Congress Zhang Dejiang, Vice President of PRC Li Yuanchao, and Vice Chairman of People`s Political Consultative Conference Wang Jiarui) she also visited Guangzhou, Tianjin and Zhuhai. The focal point of the visit was the intensification of economic relations be-tween both countries, for example in the field of capital investment and possible future mutual energy projects (shale gas, water and wind energy).

Talks about the economic dimension were continued during the visit of the Vice Minister of Economy Ilona Antoniszyn-Klik in Beijing, Nanjing and Shanghai in June 2013. The main aim of the visit of Daria Lipińska-Nałęcz, Vice Minister of Science and High Education of Poland, in the same month was the growth of academic cooperation.

2013:

2014:

• June: China-CEE Fund announces first major investment by China in Poland’s en-ergy sector, via a Euro 75 million stake in Polish Energy Partners (PEP), a Kulczyk-controlled renewables energy utility.

• June: First of 2 Chinese IPOs on the Warsaw Stock Exchange (Peixin, followed by JJ Auto). 3rd imminent.

• June: NingBo Trade fair for CEE. More than 20 Polish companies attend. (mostly export-oriented).

• September: China-CEE Fund announces 2nd major energy deal – in the Polish wind sector.

11

2014 September

www.bizpoland.pl Report

respondents (49%). At the same time, this is the second most common problem signalled by family entrepreneurs in Poland.

Family businesses primarily expect simplified tax regulationsThe KPMG survey has shown that the simplification of tax legislation is the most awaited change among Polish and European family businesses (mentioned by as many as 61% of Polish and 52% of European respondents). Polish enterprises hope for a lower tax burden as the second most important aspect (46%). Such expectations were also reported by 40% of European companies. European respondents relatively frequently

whereas 51% have plans regarding other European countries.

Andrzej Blikle, President of the Family Business Initiative Association, commented: The reasons behind the moderate interest in international expansion may lie in the ‘demography’ of Polish family businesses’, characterised by attributes such as young age and relatively low human and material potential. Moreover, the type of their business is not easily extendable into international markets. Many founders of family businesses do not have sufficient knowledge or awareness of foreign markets. Our observations indicate that the young generation is more open to international presence and we can anticipate an increase in exports from family businesses once the younger generation has taken over.

Growing labour costs as the major issue of Polish family businessesMore than a half of Polish respondents (55%) claim they are currently struggling with rising labour costs. This signals a problem that Poland’s economy will need to face: relatively cheap labour cannot be the key source of growth in a longer run. In Western Europe, where labour costs are much higher but rise more slowly, this problem was mentioned by only one in ten respondents.

On the other hand, the major problem reported by European family businesses is the declining profitability, indicated by nearly a half of the

Three quarters of family businesses plan new investmentsAs many as 74% of Polish and 75% of European family businesses claim they plan new investments. As regards Poland, the vast majority of respondents (81%) consider investments in their core business but much less frequently into diversification (49%) or internationalisation (24%). Only a small percentage of the respondents claim they want to exit their investment (7% of Polish and 3% of European companies).

As regards geographies, Polish family businesses plan their investments primarily on markets they already know. As many as 88% of them said they would invest in Poland to increase their share in the domestic market

Family businesses look to the future with increasing optimismThe vast majority of family businesses surveyed by KPMG believe that

their economic situation in the next six months will be very good or

good. The degree of optimism among European family entrepreneurs

is much higher than that demonstrated by Polish respondents –

these are the findings from a KPMG survey conducted in Poland and

seventeen other European countries.

Andrzej Bernatek, Partner, Tax Practice, KPMG in Poland, commented:

Polish family businesses represent the success built in the course of the last 25 years, with the first generation of entrepreneurs still behind the steering wheel. Members of that generation continue to be interested in dynamic growth of their businesses and dream mostly of a more straightforward tax system. Worth remembering is that this postulate also entails an expectation that the legislation should be stable. If a legal system undergoes modifications a few times a year, it cannot be simple or friendly to business. Unlike European entrepreneurs, Poles are not afraid of the succession process. This is mostly because Poland has very favourable legal regulations concerning tax exemptions on inheritance and donations between immediate family members.

Andrzej Blikle, President of the Family Business Initiative Association, commented:

It is noteworthy that the majority of Polish family businesses were founded in early 1990s and their founders are either planning the handover of their businesses to the next generation or are already in the process of doing it. In the meantime, we have seen significant developments in information technologies and management methods and younger family members feel naturally more at ease in those spheres. On the other hand, the founders have a broader experience and feel more responsible for the fate of their families. The future of their business will depend on whether or not they find common language and build good family relations. Harmony in the family is the foundation of a successful succession, which is an essential process in family businesses and often takes more than ten years.

12

September 2014

www.bizpoland.plReport

patterns of business conduct (41%). In turn, European businesses often believed that their assets included staff loyalty and commitment (49%), as well as a strong brand or market position (44%). n

ability to win customers or build consumer loyalty (54% of Polish and 56% of European respondents). Nearly the same share of Poles mentioned customer service (51%) as well as their business values and

(45%) mentioned the problem of taxation and procedures accompanying the take-over of the business by younger generations.

When asked about their strengths, family businesses usually mentioned their

About the Report:

“The Family Business

Barometer” is the

second edition of

a European survey

conducted by KPMG

in selected countries of

Europe.

The full version of the

report is available from

kpmg.com/pl/

firmyrodzinne.

Source: KPMG in Poland report entitled “The Family Business Barometer”

13

2014 September

www.bizpoland.pl

AD

VIS

OR

Y

Real Estate

are the remaining cities that are typically classed as the “main regional markets.” These three cities each boast around 300,000 square metres of office space.

Though the Warsaw market has been growing steadily since the last financial crisis, and is considered by many to be becoming a mature market, in European terms the jewel in the Polish crown is still a relatively small market. Frankfurt (12m sqm), Vienna (11m), Munich (20m) and even Amsterdam (7m) are much larger mar-kets, and compared to Paris and London – both over the 40m mark, Warsaw is still fairly small. However in re-gional terms, Warsaw can rightly claim to be the leader of the CEE region, with a larger market than Prague or Budapest – the two other cities most often considered along with Warsaw for potential CEE headquarters. Prime prices in Warsaw are approaching 25 EUR/sqm – on a par with Brussels, Berlin and Vienna - though the range here is very large, with good quality, modern and reasonably new office stock available for as little as 12/13 EUR/sqm at “headline” level (what headline is will be ex-plained in the next column…) a little further from the city centre.

Warsaw, is, as has been mentioned, the largest office market in Poland and can be seen as being comprised of four major areas of concentration. These are the CBD (Central Business District); Służewiec Przemysłowy (whose correct pronunciation will see beers bought for you by locals) – which is also known as Mokotów Business District, though it isn’t strictly Mokotów; the Aleje Jerozolimskie corridor – running southwest out of the city and also known as the Ochota Business District; and Wola – directly adjacent to the city centre, to the west, and usually, thankfully only referred to as Wola.

The CBD, is the longest established area of office space concentration, and has over 1.1 million sqm of rentable office stock. The most prestigious and prime office build-ings in Poland are found here and are often the flagships of their portfolios. Rondo 1, the Metropolitan building, and coming soon The Spire, Q22 and Generation Park are all notable buildings in their own right and lend a degree of exclusivity to their tenants.

Mokotów Business District rose from what were previ-ously open fields not more than 20 years ago and is now the 2nd area of office concentration in the city, almost ri-valling the city centre in terms of stock, but offering much cheaper rents. On the downside, traffic here can be hor-rendous, even in the traditionally quieter times of day.

Aleje Jerozolimskie offers a cheaper alternative to the CBD and doesn’t suffer the congestion complications of Mokotów, yet also has no nearby Metro link, whilst Wola offers something of a compromise – with cheaper rents than the city centre, yet with quick links to the city cen-tre, both by road, and public transport, especially when the second Metro line of the city opens later this year. It will be this year, won’t it? n

I will be writing about a range of topics and aim to give you the benefits of my experience on the Polish mar-ket, including working through the last financial crisis (nothing to do with me I can assure you) and into what is currently a very buoyant market in both Warsaw, and further afield. The major regional cities, especially Kraków, Wrocław and Gdańsk have recently all experi-enced impressive spurts of growth and investment and some of the secondary cities are now also starting to make waves, if only smallish more ripply ones, in a mar-ket still dominated by the capital.

This first edition of what will be a quarterly feature, should the editorial team decide that my written ram-blings are deemed decent enough, will give a brief out-line of the Polish and the Warsaw office market, with a brief summary of the norms and nuances for lease agree-ments here in good old Poland to follow in the next.

As mentioned, the Polish office market is dominated by Warsaw. The total stock of modern office space in the capital is slightly over 4 million square metres, if you in-clude the owner-occupied stock. (“Modern office stock” does not fall under any strict definition but if you think of purpose-built office buildings with shiny facades and reception areas with security guards, built anytime from the 90’s onwards, rather than an ad hoc office in a residential apartment block you are on the right track). This is by far the largest and most important market in Poland, and is larger than all six of the main regional markets’ stock put together. Kraków is the second largest market with over 600,000 square metres, Wrocław has the third largest amount with close to 550,000 square metres and the TriCity area of Gdynia, Gdańsk and Sopot, takes 4th spot, approaching half a million square metres. For those of you who are interested, the vast ma-jority of the space in the the TriCity can be found in the Wrzeszcz region of Gdańsk. Łódź, Poznań and Katowice

Tenant Rep in Poland – Edition #1

Though the Warsaw market has been growing steadily since

the last financial crisis is still a relatively small one

This column will aim to provide useful, hopefully insightful

and possibly even up- to-the-minute advice to anyone

responsible for the property side of their business, from a

one-man operation to the Global Director of Real Estate

for a “Mega Corporation” and his minions.

Hamish Potts works

as a Senior Negotiator

for Knight Frank and is

happy to answer any

questions regarding the

office market, and in

particular any Tenant

issues that you may

have. Knight Frank have

been present on the

Polish commercial real

estate market for over

20 years and offer a

wide range of real estate

consultancy services.

by Hamish PottsKnight Frank

14

September 2014

www.bizpoland.plA

DV

ISO

RY

Tax

Directors’ fees: Membership of management and supervisory boards is outside the scope of the Labour Code and fees paid to board members are exempt from ZUS. For any company that is able to make use of this exemption, appointment of senior colleagues to the board is a financial opportunity worth considering.Self-employment: As well as saving on costs driven by the Labour Code, freelance contracts allow each party potentially substantial savings in ZUS costs. ZUS is a payable by the contractor based on deemed earnings of just under 2,250 zł per month. This is discounted to just 504 zł per month for the first two years of a newly regis-tered business. As well as potentially significant ZUS sav-ings, contractors can deduct business expenses and may elect to pay a flat rate of 19% income tax on their profits.

The financial benefits of self-employment are po-tentially so significant that the authorities are kept ex-tremely busy combating perceived abuse. Typically chal-lenges are based on two issues:• freelance contracts used where the true nature of the

relationship is employment• flat rate tax on earnings from management services

If a self-employed arrangement is used for an employee, the employer may rightly expect trouble. On the other hand, the risk of attack should not be a reason for avoid-ing self-employment where it may be properly justified. Fortunately Polish law helps us to determine when self-em-ployment is acceptable. Specifically, article 5b of the Income Tax Act defines self-employment as existing provided that at least one of the following three tests does not apply:• the “employer” is liable to third parties for any claims

arising from work carried out by the contractor• the contractor works under the supervision of, and at

the place and times dictated by, the “employer”• the contractor does not bear commercial risks associ-

ated with his/her activities.Perhaps the most obvious example of commercial risk

that should be faced by a contractor is that remuneration may be variable, depending on the quality and quanti-ty of services supplied. A typical contractor should not expect to receive any fees at all if there are no services being delivered, so it’s unsurprising that apparent self-employment arrangements which involve a flat rate of pay even whilst on holiday are liable to attack.

In most cases, if an employee switches to self-employ-ment, the 19% flat rate tax option is not available until the start of the next tax year. However, the flat rate is avail-able immediately in the event that self-employed activi-ties are outside the scope of the previous employment.

The flat rate tax option is not available for services re-lated to management provided self-employed businesses and this is a common area of attack by the tax authori-ties. However, this does not mean that management services cannot be provided by self-employed businesses under the beneficial ZUS regime. n

Earlier this month the employers’ confederation Leviatan reported a significant increase amongst their mem-bers in attacks by ZUS against specific task contracts (umowy o dzieło). What’s going on?

The cost of employment contracts in Poland is not cheap. On a monthly salary of 10,000 zł the share of total costs tak-en by the state is approximately 50%: a 12,000 zł total cost produces 6,000 zł net pay. That’s before taking into account costs of PFRON (State Fund for Rehabilitation of Disabled Persons) contributions, sickness and other absence costs, health and safety, etc. It’s no wonder that employers and often employees look to make savings by using alternative forms of remuneration. When it comes to maximising take home pay, nothing beats a specific task contract.

As well as being outside provisions of the Labour Code, specific task contracts have two major features that make them relatively cheap: an income tax allow-ance of 20% and full exemption from ZUS. The tax cost of 10,000 zł gross pay is effectively approximately 15%, producing 8,500 zł net pay.

The financial attraction of specific task contracts inevi-tably creates risk of abuse and it is unlikely that ZUS has embarked upon a crusade against them without some de-gree of justification. As the name suggests, these contracts are only applicable when the “employee” is a contractor engaged to carry out a specific task with an identifiable outcome. It is not applicable where there is a continuing engagement, or where the true nature of the relationship is employment. Examples of specific tasks could include delivery of a training course or creation of a computer pro-gramme or web site. On the other hand software mainte-nance and web site maintenance are continuing tasks, so specific task contracts would not be acceptable.

If you are using specific task contracts and there is any doubt as to whether they are acceptable, it does not necessarily mean that the full costs of employment con-tracts are inevitable. Below is a summary of the alterna-tive options which may be applicable, depending on your particular circumstances.

Continuing assignment contractsA contract for a continuing assignment (umowa zlece-nie), like the specific task contract, is outside the Labour Code. The financial benefits are avoidance of all the employment-related costs discussed above, plus a 20% tax allowance. In most cases there is no ZUS saving, so we might expect that the ZUS inspectors will take little interest in these arrangements. However, there is an alternative threat provided by the State Employment Inspectorate and often with good reason: it is often diffi-cult for an employer to step back and avoid the degree of control and management that would indicate an employ-ment relationship. This leaves them open to challenge from disgruntled employees who believe they have been denied their employment rights.

ZUS inspectors target select employment contracts

By Steven FosterPartner, Process

Solutions Sp. z o.o.

Steven Foster

Partner, Process Solutions

Sp. z o.o.

T: +48 22 630 8604

steven.foster@ps-bpo.

com

15

2014 September

www.bizpoland.pl

AD

VIS

OR

Y

Corporate Risk

Like shaved-headed dwarfs the crew plotted and schemed into the night. Even when the vodka was close to taking hold the conversations turned to “cwany” intricacies; to twists and turns that sobered up the artists, cracked up the thugs or—when the conversations became serious—dropped each and every person into the house into hushed conversations kept well away from the ears of a former journo like myself.

Now ask me how often they have such “parties.” Oh, just about every night. Which means—and I must emphasize this point—

you can’t compete with these guys. They are always working against you, always adapting, always figuring out one more scheme.

So what to do? The key here is in fact not to scheme, but to be diligent

about diligence. The answer is to put real guards in place. Sounds easy, but most companies that we have helped simply have no idea what they are doing. They have “hir-ing practices” and “compliance systems.” They have “em-ployee training” and “ISO checklists.”

In short, they have a bunch of jargon. That’s it. Or let me be clear: they are hardly worth the paper they are never printed on. And why are these systems as useful as a bunch of jargon? The answer is simple: those enforcing such systems are simply too damn polite.

At this point, I admit, some of those reading will switch off. No worries. You are exactly the kind of mark my bud-dies would scam. In short, you are not hard enough, nor disciplined enough to make such systems work.

And there are tens of thousands of you out there. The types that allowed the Arthur Andersen scandal, Enron, the mortgage crisis, the current “IT Affair” and more. In each case (in fact in almost every case we have ever seen—and these range from real estate to international arms companies) the systems were in place. In fact, often there was even a sense of discipline. What was missing, however, was basically the “will to kill.”

Of course, I don’t mean give the death penalty to thieves. No, I am simply speaking of the attitude neces-sary to make true compliance and anti-fraud systems work. On the compliance side it is much too easy for said officers to feel too comfortable at work. The bank VP sees the cut off the top, but hey, he has to live with these peo-ple. The board member of a pharma company knows his head of sales has a network of his own and that kickbacks for drug sales are a likelihood—but wait a minute: this is the guy bringing in the profits. I mean… we don’t want to shoot ourselves in the foot.

Which means you are exactly the marks who will go down next. Or in other words, it’s time to understand that compliance, anti-fraud protection and everything in be-tween is no fun. It is the antithesis of the party. You need internal bulldogs to vet and vet and vet. You need persons who are enabled to ask hard questions as a matter of course.

Sounds awful, doesn’t it? That’s because it is. Good questions, my friend. Key questions, in fact.

And I’ll get right to them, I promise, in my very next column. n

You against the mob (part 1)Not too long ago I was invited to a late night, drinking-man’s card game. I have to admit that these days I’m neither a drinking man or a card player, but the wild boys from the old days told me to show up anyway—“for old time’s sake.”

So I showed up. Here I must admit that I never, ever do anything for

old time’s sake, and the old times on the mind of the card players in question were not necessarily those I’d like to remember. For these were boys from the bad old days: jail birds, martial arts practitioners (not knocking mar-tial arts, but they had long since put their skills to poor use) and all kinds of “kombinatorzy” in between.

Then there was me, certainly the only foreigner and most likely the only person in the house who had not devoted any portion of his existence to a life of crime.

Funny how these things work. Among a few of us lay the “music connection.” (Guitar players can forgive each other anything but too much volume). Among others lay the 1990s/early 2000s “leak to the press connection” and finally there were a few who I had met through the “prostitution connection”—i.e. one had served a “fixer” who had actu-ally arranged interviews with local mafia kingpins when I worked as an investigative journalist in the mid-2000s.

And as usual, out came the vodka, the kielbasa and chips. The tv came on to awful disco polo and the card players placed their bets—and then they began to plot.

Please forgive the fact that my journalist credentials—while somewhat stretched in this phase of my life—will not allow me to explain the details of what I heard. And honestly, many of the details were hidden from me or simply not within my current frame of reference. These were plots of the east, but the point was: they were plots and these guys were having fun.

Which actually does lead me to my point: as an honest businessman or entrepreneur you cannot compete with the scammers of our world either in creativity or effort. Your goal may be success, but if you are sane, only slight-ly imbalanced or even if you are certifiably workaholic, your goal will invariably be to build a business, if you’re lucky stack up cash and then get home to sleep, spend time with your family and enjoy it.

Get it? Your goal is to finish work. That is the differ-ence. For these guys the means was just as much the goal as the money itself. It was easy to see they lived for this. In fact, even though the typical disco “lalunia” girls showed up late, they were for the most part ignored. Far more fun, interesting and in fact you could say “the life of the party” itself were the scams.

How to classify them? Kansas City shuffles? Credit card switches? Social engineering? It honestly does not matter.

By Preston Smith

Preston Smith is the

managing director of

CEE Consulting Group, a

regional risk consultancy

and licensed detective

agency specializing in

pre- and post-trans-

action due diligence,

multi-jurisdictional asset

trace investigations,

FCPA checks and on-the-

ground investigation and

surveillance.

The key here is in fact not to scheme,

but to be diligent about diligence.

16

September 2014

www.bizpoland.plA

DV

ISO

RY

Legal

For example it is yet unclear what would happen if cer-tain RES generators chose to leave the Green Certificate scheme and joined the auction scheme. In this case the Ministry of the Economy declared to lower the quota re-quirement for green energy (as currently imposed on re-tailers) accordingly so that the move of installations from one scheme to another should not change the demand-supply balance in the Green Certificate Market, and/or the “free” option to participate in new auction for existing installations [a RES generator can bid in the auction while staying under the old regime and may stay in the old re-gime if the bid in the auction was unsuccessful].

New large scale installations (>1 MW) in Poland will compete for renewable support in technology neutral auctions from 1 January 2016 (it is likely that the 1MW threshold will be reduced to 500kW in order to align it with EEAG rules). For such units the bid parameters will be strike prices in contracts for differences (“CfD”) and the volume of electric energy (spread over a 15 year pe-riod). Bidders are limited in their bid price to a technology specific reference price. The reward will be pay as bid. The reference prices – which have not yet been issued – will be decisive in determining which technologies will be most

viable. The expectation is that this will be onshore wind, although due to grid constraints certain limitations might be implemented. Investors with good sites and technolog-ical concept will most likely be able to obtain an adequate return. Price risks will initially be absorbed through con-tracts for differences. However, there is a possibility that the contracts for differences may later be replaced to make the Polish regime compliant with new EU-Guidelines on State Aid concerning operating aid for RES-E instal-lations. If such a change were to happen – i.e. change to a market premium - the longterm wholesale price risk would need to be borne by the renewable investor in the first instance but it could be shifted to other parties who are prepared to take them over for a respective fee.

Small new installations (< 1 MW) will be promoted via feed-in tariffs respectively CfD support system. For in-stallations larger than 40kW these would be established in an auction process. So, within this auction basket RES generators from 41 to 499 kW will be promoted via feed-in tariff and RES generators from 500 kW to 1000 kW will be promoted via a CfD support system. For the smallest units up to 40 kW the feed-in-tariffs would be set administratively, although these would also be tech-nology neutral. n

Starting from a 13% share of renewable energy supplies from electricity (RES-E) in 2013, Poland wants to raise this share to 20% by 2020, and might be furthermore mo-tivated to increase this share to 25% by 2025, 27% by 2030 and 30% by 2035.

Due to remaining high share of coal and lignite power plants, this will require significant new investments to double RES-E production by the end of 2020. The trend in policy instruments for future renewable investments in Poland and Europe is clear. Improved cost efficiency (e.g. by means of technology-neutral support schemes and competition among RES-E technologies) as well as market integration of RES are key principles of future RES-E promotion in Europe. This also includes a strong trend towards shifting market risks and balancing re-sponsibility towards larger RES-E installations. These principles will also apply to Poland.

Poland is on course to overhaul its renewable support scheme from a Green Certificate scheme with a quota ob-ligation on retailers to a scheme of auctions for renewable support which shall enter into force by beginning of 2016. These reforms in Poland have been prepared independent of political moves at the EU level to define an energy and climate policy to 2030 (the recent policy only extended to 2020) and to define new State Aid guidelines for support to RES-E (“EEAG”). However, the political developments at the EU level provide a relevant backdrop to the Polish reform as a full notification of the support system is re-quired. They could imply that Poland may one year later retune its new support regime to make it fully compliant with EU policy and guidelines, i.e. by beginning of 2017.

Details of the future Polish support scheme will be cru-cial for its financial impact on existing and future RES-E investments. While regulatory uncertainty is still high – there are risks and opportunities from the new legislation:

We expect that all RES-E investments will benefit in the medium term to longer term from increasing whole-sale market prices in Poland. Rising wholesale prices will be driven by the reduction of overcapacity in the European power plant park and rising fuel and CO2-prices.

Existing RES-E installations in Poland will most likely benefit from increasing Green Certificate prices (subject to political decision on setting the quota and “closing” the supply in order to use the current “oversupply” of GCs); however, there are still some political risks about the details of the parallel continuation of the existing Green Certificate scheme (for existing installations) and a new auction scheme (for new installations).

Market outlook for Renewable Energy begins to improve

Frontier Economics

Ltd, Christian Schnell,

wysokienapiecie.pl,

DNV-GL, BOS Ekoprofit

and Tomasz Tomasiak

contributed to a

“Renewables Investments

in Poland. A market

outlook for investors.” For

more information please

contact Christian Schnell

at csdp@interia.pl .

The EU and Poland have ambitious targets to increase

the penetration of the energy and electricity market with

renewable energy supplies.

by Christian Schnell

While regulatory uncertainty is still high – there are risks and

opportunities from the new legislation

17

2014 September

www.bizpoland.pl Energy

announced plans to invest in Poland’s wind energy sector.

Enlight is part of the Eurocom Group, one of the largest com-panies in Israel, controlled by Shaula Elovitcha. Born in Poland, the entrepreneur is one of the richest and most influ-ential in Israel, with his most important business being Bezeq telecommunications, listed on the Israeli stock exchange.

Enlight Renewable Energy, a firm controlled by Israeli group Eurocom, plans to build wind farms in Poland with a target output of 200 mega-watts. The investment is to be carried out with Polish partners and may amount to as much as about 300 million euros, Enlight Chief Executive Gilad Yavetz told Puls Biznesu daily.

In recent months, mul-tiple new investors have

“Our plan involves the construc-tion in Poland, together with local partners, of wind farms with a total capacity of at least 200 MW. Investments will be financed partly by debt and partly with equity from our partners”, said Gilad Yavetz, head of Enlight. Although he did not say the full investment amount, based on the cost of construction of 1 MW of wind power,, the total investment costs would be nearly 300 million. The first transaction will be disclosed soon. n

Events Ltd.CEE Energy Conference10th annual

Ensuring Energy Security in the CEE Region 1-2 October 2014 The InterContinental Hotel, Warsaw

Associate sponsors:

Key topics:- Context of global and CEE trends- The future of the CEE energy market- Gas market integration, infrastructure and trading- Potential of shale gas- The scale of the coal market- Nuclear power prospects in CEE- RES: overcoming obstacles

Endorsed by:

BizPoland readers are eligible for a 15% discount on registration, please quote BP15 on your booking form and return to hayley.creasey@eelevents.co.ukFor more details contact EEL Events on +44 207 275 8020

Israelis in wind investment

Nordex to install 38MW Polish projectNordex is to supply turbines with a capacity of 37.5MW for installation on a wind project in Poland. The Orla development will be made up of 15 of Nordex’s N100/2500 turbines. The first nine of these ma-chines will be installed imminently, with commissioning due as early as December.

The remaining six turbine are expected to be up and running

by the middle of 2015. Due to the harsh winter conditions at the site in eastern Poland, the tur-bines have been adapted to deal with extreme cold weather.

Orla is being developed by Nordex’s development arm, making it the first project re-alised by Nordex in Poland. The wind farm is owned by C&C Wind, an international

private-equity investment vehicle. Project finance has largely been provided by the European Bank for Reconstruction and Development.

Poland has an installed capac-ity of 3.4GW, with nearly 900MW added last year. However, regula-tory uncertainty has put a brake on development, with significantly less capacity expected to be installed this year. n

18

September 2014

www.bizpoland.plEnergy

Balamara brings in partner for Lublin coal mine

CEB sells interest in Mariola Thermal Coal Project

EIB grants $96 mln loan to Polish energy firm Tauron

Australia-listed Balamara Resources’ major shareholder Ample Skill has thrown its support behind the company’s plans to expand its European coal strategy by agree-ing to subscribe to some $5-million in shares. The share placement,

comprising 66.5-million shares at a price of 8c (Australia dollars) each, would be undertaken subject to shareholder approval.

The share placement in Balamara would happen in lieu of a previ-ously announced direct invest-ment into Balamara subsidiary Coal Holdings, which holds the rights over the Nowa Ruda project, in the Lublin basin.

The previous investment in-volved a 15% strategic investment by Ample Skill in the Nowa Ruda project for a total of $5 million.

However, since the deal was originally inked in July, Balamara has introduced two further Polish coal projects into its existing

portfolio, and both the company and Ample Skill have now recog-nised the need for the cash invest-ment to be used across all three assets, instead of just Nowa Ruda.

As Coal Holdings had not yet issued any shares to Ample Skill, Balamara would make the share placement at a corporate level in lieu of the major shareholder cancelling its previously agreed 15% equity position in the subsidiary.

Balamara was hoping to de-liver a maiden Joint Ore Reserves Committee-compliant resource at the newly acquired Mariola and Sawin projects, and to complete ini-tial concept studies at Nowa Ruda and Mariola. n

CEB Resources PLC saw its shares jump after it said it sold its entire investment in the Mariola Thermal Coal Project in southern Poland to Balamara Resources Ltd at a premium.

CEB Resources acquired an initial 10% stake in Polish mining company, Carbon Investment Sp. z o.o., which controls the rights to the Mariola Thermal Coal Project, in February. It bought the stake for GBP200,000 in cash plus 20 million CEB shares, and under the terms of the option agreement with Carbon

investment, held the right to increase its shareholding to 49% of Carbon Investment’s share capital.

The resource development company said that following an approach from Balamara Resources to acquire the investment, it has agreed to assign the option agreement to Balamara. Balamara Resources is CEB Resources farm-in partner at its Peelwood Base Metal Project in Australia.

Under the deal, Balamara is to pay AUD 100,000 or

approximately GBP55,000 in cash to CEB Resources, plus 15 mil-lion Balamara shares with a value of approximately GBP 643,500.

In addition, the 20 million CEB ordinary shares previously issued to Carbon Investment under the terms of the Option Agreement will be returned to CEB and cancelled.

CEB said that it considers the assignment to Balamara in its best interests, as its at a significant pre-mium to the amount it initially paid for the investment. n

The European Investment Bank has granted a 295 million zlotys loan to Tauron Polska Energia to help Poland’s No.2 energy producer develop its distribution network and invest in renewable energy, the EIB said. “We welcome this agree-ment with Tauron, as the project will ensure a secure supply to new customers through the expansion of the company’s electricity network and the roll-out of a smart meter-ing pilot programme,” the European Union’s bank said in a statement.

It marks the fourth EIB loan for made available to Tauron totalling 1.7 billion pln to support

investments including the construc-tion of a biomass-fired power unit at the Jaworzno III power plant.

Poland produces about 90 percent of its electricity from coal and heavy investment is required to cut its greenhouse gas emissions to meet European Union requirements. The country’s four largest state-controlled energy producers plan to invest 120 billion zlotys by 2021.

Warsaw also wants to improve its energy security, as imports from Russia cover nearly two-thirds of Poland’s annual gas consumption. Russia also supplies over 90 percent of the oil Poland needs every year. n

19

2014 September

www.bizpoland.pl

Mazur, a spokesman at Polskie LNG. “There is no basis in fact to say that anybody has plans to terminate the contract. Both sides have the same goal. They want to finish the project on time and with the highest quality.”

He said there was no risk of de-lays. The construction is to be fin-ished at the turn of 2014 and 2015. The first tanker is expected at the end of the first quarter next year.

The terminal at the port of Swinoujscie will be able to accept 5 billion cubic meters of gas per year, with plans to expand it to 7.5 billion. At full power, the termi-nal could handle around half of Poland’s current annual gas usage.

Poland still relies on imports for roughly two thirds of its annual gas usage of around 16 billion cubic meters, mostly from Russia.

The gas to supply the new LNG plant will come from Qatar. Under the contract between Poland and Qatar it will be substantially more expensive than Russian gas. n

the country’s reliance on imported Russian gas.

The consortium comprising Italy’s Saipem, Techint, and Polish construction firm PBG, is due to receive 2.4 billion zlotys, according to the contract signed with entity that commissioned the project, state-controlled Polskie LNG.

“The discussion is conducted in a very good climate, because every-body wishes the terminal to be fin-ished within the agreed schedule”, PBG spokesman Jacek Balcer said.

“Of course one of the issues being addressed is the fact that due to changes in Polish law the investment will take more time than it was expected at the be-ginning and because of that we will incur higher”, he added.

An official with Polskie LNG also said that were talks on the contractors’ payment. “In justified cases, when we are dealing with events which occurred through no fault of the general contractor, we are ready to talk,” said Maciej

The consortium building Poland’s first liquefied natural gas (LNG) terminal is in talks to increase the amount it is being paid, but there is no risk to the completion of the project, one of the contractors told

Reuters. The import terminal is be-ing built on Poland’s Baltic coast, at a cost of about 3 billion zlotys, to cut

Energy

More investment needed for Polish LNG terminal

20

September 2014

www.bizpoland.plEnergy

Lithuania and Poland seek EU funding for a gas linkLithuania and Poland have asked the European Union to cover up to 75 percent of the costs of a gas link between the two countries, their national gas grid companies said.

The link is a part of an EU plan to end the energy dependency of the three ex-Soviet Baltic states, which currently rely totally on natural gas imports from Russia.

“The submission of a joint ap-plications for the EU support is an important step into the imple-mentation of the project aimed to integrate the isolated gas markets of the Baltic States into the EU gas market,” said Saulius Bilys, general manager of Lithuania’s gas trans-mission grid operator Amber Grid.

The link would also increase the security of natural gas supply and competitiveness of the regional market, he added. The 500-km link, estimated to cost 558 million euros, will be able to carry 2.3 billion cubic metres (bcm) of gas per year.

Lithuania plans start import-ing liquefied natural gas (LNG)

from Norway in 2015, but planned imports will cover only about 20 percent of consumption.

The request for EU funding was sent after the European energy agency ACER solved a dispute over its cost distribution. Baltic states,

which will be the main beneficia-ries of the gas link, will have to pay 85.8 million euros in compensation to Poland, which will bear about three-quarters of total costs or 422 million euros, the agency has ruled.

Source: Reuters

Landis+Gyr to deliver smart meter products to RWE For installation in residential build-ings located in the city of Warsaw, deliveries are due to start in September, with system installation scheduled for the end of 2014. “We are proud to have been selected by RWE for this inaugural smart me-tering deployment in Poland,” said Andreas Umbach, Landis+Gyr’s President and CEO, “RWE’s vision of enhanced grid functionality is a great match with Landis+Gyr’s experience and capabilities.

Under the terms of the agree-ment, Landis+Gyr will deliver its Gridstream end-to-end solution, including 50,000 smart meters and Gridstream AIM software to RWE in Poland. The system will have an interface to RWE’s existing IT infrastructure, and is designed to support its asset management needs, as well as its billing services. A four year service contract is also included in the contract terms.

RWE operates a number of com-panies in Poland, including RWE

Polska and RWE Stoen Operator. RWE Polska, together with RWE East, is responsible for supporting the development of the Group in Poland. RWE Stoen Operator man-ages the Warsaw power network.

“Implementation of the smart grid concept in the area of our operation will essentially improve the level of energy efficiency of the system as a whole,” says Agnieszka Nosal, Board Member of RWE Stoen Operator and also respon-sible for AMI investments. “It will also allow for the development of distributed generation which is to play a major role in the future energy market. Investment in AMI will bring many benefits to end-consumers, providing them with access to actual consumption data, as well as enabling the utility to rapidly identify any interference in the network. The introduction of flexible product sales tailored to the lifestyle needs of individual custom-ers will also come in the future.”

Between 2014 and 2019, RWE foresees that 25 percent of its investments will go into smart infrastructure, which totals 420 million PLN. In the first stage of the project, which is due to be complete by the end of 2014, RWE will install 25,000 smart meters in residential buildings in Warsaw; full project comple-tion is scheduled for December 2015. RWE will also invest in its network, overhead high voltage lines, as well as in medium volt-age cable lines in urban areas.

There has been rapid smart metering development in Poland in recent years. The signing of a dec-laration in June 2009 by the Polish National Energy Conservation Agency as well as the country’s three largest consumer organiza-tions each called for the introduc-tion of smart metering in Poland to increase energy efficiency for indi-vidual, institutional and industrial customers. n

21

2014 September

www.bizpoland.pl Energy

KGHM FinancingEurope’s No.2 copper producer KGHM has signed a five-year revolving credit deal worth $2.5 billion with a group of international and local lenders to finance mining projects and facility upgrades, it said on Friday.

The Polish state-controlled miner said the credit would also be used to refinance the $700 million debt of KGHM International - the subsidiary controlling its foreign assets. Warsaw-listed KGHM, which has a market value of $8.1 billion, said that the loan may be drawn in up to 25 renewable tranches and that it secured a possibility of two one-year extensions at its request.

Lower global copper prices at the end of 2013 and for much of this year have weighed on KGHM’s profitability. Analysts polled by Reuters expected KGHM to book a net income of 2.26 billion zlotys ($742.7 million) this year, its lowest since 2004. The miner, almost debt-free before the deal, added it was in talks with the European Investment Bank (EIB) on another loan.

It reiterated that the ceiling for its debt levels was double its annual earnings before interest tax, depreciation and amortisation (EBITDA). The company posted EBITDA of almost 5 billion zlotys last year. KGHM just launched production at its Chilean copper project in Sierra Gorda, one of the world’s largest copper projects. Earlier this year, it said that Sierra Gorda’s costs may exceed $4 billion.

The miner, which is also the world’s largest silver producer, has other projects in Germany, Canada, and the United States. However it said that 60 percent of the credit facility would be used for projects in Poland. Its invest-ment plans, pegged at 4.3 billion this year alone, include smelter upgrades and other projects aimed at cutting its mining costs.

Source: Reuters

Meetingof Leaders

Meetingof Leaders

Meetingof Leaders

22

September 2014

www.bizpoland.plDefence

It is rumoured that the numbers of the Special Operation Forces will significantly increase and more resources will be devoted to train and equip t his branch of military. New training facilities for Special Operation Forces are likely to be established and new train-ing centres will be opened. The current focus will be on training the reserve soldiers in combating the covert and terrorist operation of the kind we see in Ukraine. By all means, a new sort of war will be

The main focus of the programme is to enhance the deterrence capabili-ties of the Polish Armed Forces. This includes the apparently imminent procurement of JASSM cruise mis-siles launched from aircraft and an-other squadron of coastal based NSM cruise missiles. It is being decided now whether the Navy will be com-missioned with a new fleet of modern submarines with AIP propulsion sys-tem equipped with long-range cruise missiles. Those weapons, along with a very long range (up to 300 kilome-ters) rocket artillery systems (coded “Homar”), are meant to constitute the deterrence package - or as Prime Minister Tusk neatly christened them , the “Polish Deterrence Tusks”.

The well-known Polish medium and short-range anti-missile/anti-aircraft procurement plans aside, the decision-makers are currently pon-dering acquisition of modern UAVs of different classes (both strike and reconnaissance) and/or, procurement of new squadrons (up to 64 planes) of aircraft of V generation (i.e. F35s). It is obvious that Poland needs its own AWACS and satellite operations in order to achieve autonomous battlefield situational awareness - and some plans to that end should be in the making in the Ministry of Defence. Last but not least as regards the Polish Air Force, valu-able assets including planes should be adequately dispersed to avoid being annihilated on the ground in the opening minutes of a war.

Poland aims for military modernisation and new equipment procurementIn the wake of the US rebalancing towards the Western Pacific, impressive

modernisation of the Russian armed forces, and, more recently, an

unfolding crisis in Ukraine that directly threatens broadly-conceived

Polish security interests, Poland has begun preparations for its largest-

ever military modernisation and procurement programme – intended to

ensure that the future Polish Army be capable of fielding troops sufficiently

prepared, trained and equipped to defeat the adversary in a real war.

Jacek BartosiakNational Centre for

Strategic Studies

The National Centre for Strategic Studies (NCSS) is an independent, non-partisan analytical and research institute established to invigorate debate, promote creative and innovative thinking as well as provide expertise on broad spectrum of national security issues. The Centre will focus par-ticularly on planning and investments options for the future Polish Armed Forces and developing its capabilities. The National Centre for Strategic Studies strives to develop the culture of strategic thinking in Poland; its objectives are to be achieved through qualitative and quantita-tive analyses, academic research, publishing and educational activities. In our research activities we cooperate with the high-ranked national and foreign think-tanks.

23

2014 September

www.bizpoland.pl

Rosomak - based mobile automatic mortar systems. The Army is sup-posed to obtain further deliveries of Krab howitzer systems and Mesko- manufactured Spike anti-tank weapons. All this will be accom-panied by further development of individual soldier Tytan programme including the deliveries of the brand new MSBS rifles manufactured in a new rifle factory in Radom.

The Navy, as mentioned above, will remain focused on a new submarine procurement but will try to maintain some surface vessels including ORP Ślązak corvette and will invest considerably in mod-ern mining and counter-mining warfare capacities. Additionally, the Navy should take delivery of the aerial platforms (planes and UAVs) allowing for tracking potential targets beyond-the-horizon.

In the process of modernisa-tion the Polish military must not neglect the proper functioning and upgrading of command, control and communication systems and train its troops for cyberwar as well as for all other methods of confrontation against a cyber foe. n

for almost a decade. The Polish industry has undertaken to deliver a long-awaited new infantry fighting vehicle that will replace hundreds of antiquated BMP 1s. At the same time, a new batch of Rosomak wheeled armoured vehicles was ordered along with the innovative

diligently studied by those who are going to teach modern warfare.

The Army has just received the recently-purchased Leopard 2A5 main battle tanks as well as it is eagerly waiting for modernisation/upgrade of the Leopard 2A4 tanks that have been already in service

Defence

24

September 2014

www.bizpoland.pl

Pan European food, drinks and fast moving consumer goods (FMCG) markets. This invest-ment consists of the extension of the production site of Aquila Radomsko corrugating plant, close to Warsaw, with production space.

“This is a major step forward in the expansion of VPK in Poland. By building these two new plants, we are giving ourselves the means to match our ambitions, and intend to continue to develop our presence in Central Europe”, according to Pierre Macharis, the Group’s CEO. n

of the three plants in Poznan, Warsaw and Wroclaw region will cover the full Polish geography. “This expansion will increase the service and product range offered to our cus-tomers and create additional econo-mies of scale”, said Pawel Rogalka, Managing Director of Aquila.

Under VPK Packaging the company will also start production of corrugated packaging to supply the Polish locations of European Key Accounts of the VPK Packaging Group. VPK Packaging aims to supply corrugated packaging to

VPK Packaging Group NV is

investing €40 million in the

expansion of its activities in

Poland.

A new plant will be built to develop the ‘Aquila’ capacity and footprint. Additionally, a first ‘VPK Packaging’ plant will be built to serve interna-tional FMCG customers. The invest-ments will be realized in 2014. The new Aquila plant will start in first quarter of 2015.

Today VPK Packaging Group operates two sheetfeeders under the Aquila brand in Poland. VPK realized a consolidated turn-over of €110 million in Poland in 2013. The new investments will increase this figure to €170 million.

Under Aquila, VPK will build its third sheetfeeder plant for the Polish market. A sheetfeeder produces cor-rugated sheets, ready to be converted by customers to manufacture pack-aging for niche markets. Location for this green field project is close to Wrocław and will be identical to the existing plant of Aquila Radomsko, equipped with 2,8m width corruga-tor. This will increase the total capac-ity of Aquila business in Poland by 50%. The focus is to reduce delivery distance to customers. The location

FDI News

Major investment by VPK Packaging near Wrocław

Great Maple Company to open Polish PP film plant The firm is aiming to invest at least PLN 110m in setting up the factory, and take on at least 70 new workers. Under the plan, the investment in Szprotawa is to be completed by the end of 2017.

The new facility will be located in the Wałbrzyska special economic zone (WSEZ) in the country’s south-west. The zone has already awarded a permission to Great Maple Company to implement the project in Szprotawa, owing to which the producer will benefit for preferen-tial tax treatment for its investment.

Szprotawa is located about 53km from the city of Zielona Góra. Great Maple Company was established in late 2013 and is headquartered in Warsaw. n

Poland-based manufacturer Great Maple Company has announced plans to open a new

production facility in Szprotawa. The plant is to make PP film, and its output will be

supplied to producers of consumer goods, laminates and labels.

25

2014 September

www.bizpoland.pl

lines with an initial workforce of 100. The company plans to carry out additional expansions, raising the total investment to around €150m. All the ten light-duty and heavy-duty catalysts production lines at the Środa Śląska site are expected to reach full capacity by 2016 and employ more than 400 people.

The facility will produce selec-tive catalytic reduction (SCR) systems, SCR on filter (SCRoF) solutions and PremAir-branded ozone destruction catalysts for the automotive industry.

BASF catalysts division presi-dent Kenneth Lane said: “The launch of this new production plant provides a vital addition to our global manufacturing net-work for innovative automotive emissions control technologies.

BASF central Europe business centre head Joachim Meyer said:

“Due to its attractive location and its positive economic development, Poland is an attractive place for BASF to invest. This new facility strengthens our position as a sup-plier of innovative solutions to the markets of central Europe.” n

the plant commenced in late 2012 with an initial investment of €90m and production trials began in April this year.

Last month, BASF started two emissions catalysts manufacturing

BASF has opened a new mobile emissions catalysts production plant in Środa Śląska, near Wroclaw. The 40,000 sqm. facility is said to be BASF’s largest emissions catalysts plant in Europe. Work on

FDI News

BASF opens mobile emissions catalysts plant in Wałbrzych

26

September 2014

www.bizpoland.pl

in the long-term prospects but the short-term is different,” says Rusiecki.

Despite the tantalising long-term outlook, challenges await those look-ing to invest in the sector. Though exits are likely to characterise the space this year, valuations are high. Both American Heart Poland and Polmed, bastions of the first wave in Polish healthcare invest-ment, are expected to be put on the block soon, presenting potential opportunity for hungry buyers.

“The biggest challenge in the healthcare market is seller expec-tation, which is very high,” says Karwacki. “We have seen transac-tions where sellers are exiting with

margins above 15x EBITDA. It can be very difficult.” And entrants may have to contend with a new breed of buyer. “The wholesalers that distrib-ute pharmaceuticals are competing with private equity at the moment, because the list of state-subsidised drugs is not as long as it used to be,” explains Karwacki. “As a result, pharma distributors are looking for sectors in which they can grow, so it is quite common that in the auction processes regarding the sale of pri-vate healthcare clinics, you see these wholesalers as the main competitors to private equity and trade buyers.” But is the competition worth it? According to Karwacki: “You have to learn long-term. There are 38 million citizens in Poland, and people are getting richer. They will want private healthcare,” he says. n

International’s 2011 investment in American Heart Poland exemplifies this particular segment’s attrac-tion for earlier vintage funds.

“The big question is how quickly that gap between present and future can be closed,” Rusiecki says. “That obviously depends on the ability of the Polish government to fund cancer care. Generally our view is that healthcare is a very important

determinant of quality of life, so as Poland’s economy improves the government will seek to improve access to, and standards of, care.”

Improving cancer care is un-derstood to be high on the list of governmental priorities in Poland, where the survival rate is just 30%, below the 50% rate seen in the rest of Europe, according to Rusiecki. Despite the scope for improvement, the space is not without challenges; a recent moratorium put on the regular tender for speciality areas by the national health fund – a cycle upon which Enterprise Investors had pinned its hopes when building its latest radiotherapy centre – may see the GP reap returns later than anticipated. “Our revenue picture is very much different to what we originally assumed; we still believe

The healthcare sector has consistently ranked among the top three sectors for private equity investment in Poland. Historically, GPs have focused on generalist healthcare providers – Krokus Private Equity’s investment in Polish general hospital Polmed in 2009 and Mid Europa’s 2007 invest-ment in Lux Med, for example. But a glance at 2013 statistics from unquote data suggest the sector’s popularity is waning, nudged off the podium and into line with tourism, hardware and industrial engineering.

However, Enterprise Investors’ recent commitment to an oncol-ogy project suggests the sector still has something to offer, but specialisation is the order of the day. The GP committed €10.5m from Polish Enterprise Fund VII to the construction of a ra-diotherapy centre at Tomaszów Health Center, taking its total investment in oncology to €25m.

“General hospitals are no longer especially interesting for private eq-uity houses, but specialised clinics with attractive margins are a strong opportunity,” says Michal Karwacki, attorney-at-law and newly ap-pointed head of the private equity practice at Squire Patton Boggs, Warsaw. And Michal Rusiecki, head of healthcare investment at Enterprise Investors, agrees:

“Oncology is currently the area where there is the biggest visible gap between what a well-organised and well-funded future could look like, compared to how it stands today. Poland has taken huge strides in dealing with the other major killer – heart disease – where the survival rate of heart attacks has reached the European level, also thanks to a massive inflow of funding into the segment.” Advent

FDI News

Specialisation in healthcare draws VC and PE investmentsHaving long been a favourite sector, healthcare investments

in CEE are losing popularity. However, a trend is now

emerging for more specialist healthcare deals.

27

2014 September

www.bizpoland.pl

Big 5 trade fair in DubaiUnder the umbrella of promo-tion of Polish companies in United Arab Emirates programme, PAIiIZ invites companies to participate at the “Big 5” trade fairs in Dubai. The event will be held on 17-20 November 2014. “Big 5” is the largest trade fair of construction and building industry in the region, visited by over 35,000 visitors each year. Polish companies will have the opportunity to present their materials at trade stands and in informational folders prepared by PAIZ (English and Arabic versions). The Agency will also help to ar-range meetings with local business during the event.

4th China Expo PolandBetween 4 and 6 September, the 4th China Expo Poland 2014, arranged by Targi Polska and Pol-Chin Consulting, is dedicated to interior decoration and house appliances, lightning, electronics and textiles.

Business mission to ScandinaviaPomeranian Regional Development Agency organizes business mis-sions to Norway and Denmark. Companies representing Polish ICT and eco-friendly agri-food sectors from Pomerania can apply for financing the participation in those missions. The mission to Norway will be held between 13 and 16 October. Oslo is said to be the major centre for ICT and new technologies in the country. Over 60% of Norwegian ICT companies are located in Oslo. The program of the mission includes meeting with Norwegian companies, B2B talks and study visits. The second mission, to Denmark, will be ar-ranged between 24-26 November. Participants will take part in Agromek 2014 - one of the biggest exhibitions of the agricultural sector in Europe. Both economic missions to Scandinavia are organised by the Pomeranian Regional Development Agency in Słupsk under the project entitled “Invest In Pomorskie II - Promotion of investment attractive-ness of the region of Pomerania in the Nordic countries and Germany.”

FDI News

Poland invites Raytheon to participate in final phase of WISLA competition

3M to expand Polish car parts factory

Poland’s Armaments Inspectorate announced that it has concluded the technical dialogue for its medi-um-range missile defense system,

“WISLA.” As a result, Raytheon - offering Patriot - is invited to take part in the formal procurement pro-cess. The EUROSAM consortium (Thales and MBDA- France) offering SAMP/T is the other contender.

The two-stage technical dialogue was part of the analytical and

conceptual phase of the WISLA program. It established detailed tactical and technical require-ments for the new medium-range air and missile defense system. The final solutions were required to (1) be operational, (2) be de-ployed by NATO countries and (3) ensure significant involvement of Polish industry in manufac-turing, servicing and continued modernization of the system.

“We are very pleased to be selected as a final contender for Poland’s WISLA program,” said Dan Crowley, President, Raytheon Integrated Defense Systems. “We are mov-ing ahead to provide Poland with the most advanced air and missile defense system in use today by 12 countries around the world and look forward to partnering with Polish industry to build the next generation Patriot system.” n

U.S. manufacturer 3M has announced plans to add new products at its plant in Wrocław, in south-western Poland. The company is aiming to launch production of a wide range of plastic components which will be mainly intended for the auto industry.

The project is to be carried out in the Wrocław subzone of the Wałbrzyska special economic zone (WSSE), the zone said in a state-ment. Under the plan, the firm will invest at least 189 million zloty ($62.1 million) to expand the facil-ity’s product range, and take on at least 80 new workers in Wrocław.

The new products are to include plastic parts, adhe-sives, tapes and fibers.

3M, based in Minnesota, is plan-ning to complete the investment by the end of December 2019. The project will be implemented by the group’s local subsidiary 3M Wrocław which launched operations in Poland in 2006, the statement said. The Wrocław-based plant has a total floorspace of 40,000 square meters, according to data released by 3M. n

28

September 2014

www.bizpoland.pl

zone (KSSE) which enables the manufacturer to obtain preferen-tial tax treatment for its planned investment. Last year, local media reported that Valeo aimed to take on some 433 new workers at the factory in Skawina with the aim of increasing the plant’s out-put. The facility is located about 17km from the city of Kraków.

Valeo entered the Polish market in 1996 with the launch of its first car parts plant. Currently, the French group operates five produc-tion facilities in Poland. Valeo says it has 124 production facilities in 29 countries where the group employs a global workforce of about 74,800.

French car parts manufacturer, Valeo SA, is planning to increase au-tomotive wiper output at its produc-tion facility in Skawina, in Poland’s southern Małopolskie region.

The company has awarded a contract worth 25.6 million PLN to expand the factory to local con-struction firm Erbud. The invest-ment is to be completed by January 2015, the construction business said in a statement. “Under the contract terms, Erbud will expand the plant … by adding a production hall, laboratory, storage and office facilities,” the statement said.

The facility is located in the coun-try’s Krakowska special economic

FDI News

PAIZ plans 50 events for the coming Autumn

To the end of 2014, PAIiIZ will be involved

in over 50 events promoting Poland, its

investment attractiveness and encouraging

Polish companies to global expansion.

The Agency also goes abroad to look for new foreign investors - especially from the manufactur-ing sector. PAIiIZ president Sławomir Majman:

“We are a kind of hunting society that never stops to hunt for investors. We have just finished the investment mission to the US. As a result, PAIiIZ acquired 10 investment projects”, he added. This year, the Agency’s representatives will look for investors in Germany, Japan and South Korea.

PAIiIZ also announced that it is going to ex-pand the investment support for Polish companies developing their business in the country. As far as supporting Polish exporters and investors in their global expansion, PAIiIZ will take businessmen from Eastern Poland macro-region to food fairs in Paris, Bucharest, Shanghai and Abu Dhabi. Representatives of yacht sector will visit fairs in Hamburg while metal sector will go to Paris and Jönköping (Sweden). This Autumn, PAIiIZ has also planned to take companies form Eastern Poland to a fact fining missions to Ethiopia, Tanzania, Togo and Senegal. In addition two Polish - African forums will be arranged this year: Poland - Zambia business Forum in Warsaw, and POLANDAFRICA Congress that will be held in Łódź. The Agency has also planned to arrange series of trainings and a study tour to London for Polish exporters. “We are focused not on giants but on relatively small and high - tech Polish companies that look for business opportunities outside Poland”, ar-gued Aleksander Libera, Advisor to the PAIiIZ Board for Polish Investments Abroad.

PAIiIZ is also developing Go China programme as the interest of Polish companies in China market is growing. In September, under this programme, Polish exporters will visit the China International Fair For Investment & Trade (CIFIT) in Xiamen.

In the Autumn - Winter season PAIZ will co-organize significant economic events in Poland: European Congress of Small and Medium Enterprises in Katowice, the aviation industry conference in Lubin and the Eastern Economic Congress in Białystok.

By the end of the year, the Agency plans to present 11 reports, including 4 surveys dedicated to particular sectors such as: automotive, food, pharmaceutical, BPO and wind energy and R&D. PAIiIZ will also survey American investments in Poland, examine the employment plans of Polish companies as well as the investment climate and investment attractiveness of Polish regions. n

Valeo expanding wiper plant in Poland

Messer to invest €30m in Łódź Messer is investing €30m to build a new production plant for air gases such as oxygen, nitrogen and argon, plus another €3m in the construc-tion of a filling plant for techni-cal gases in cylinders. After the two-year construction phase, the air separation unit in the special economic zone Łódź in Turek is scheduled to begin operations at the start of the third quarter of 2015. The filling plant is due to be commissioned one year later, in the third quarter of 2016. The new air separation unit will produce 400 tonnes of liquid oxygen and nitrogen per day, which corre-sponds to the capacity of 20 tankers. The new production location will enable Messer to produce gases of the highest purity, for example for use in the medical, pharmaceuti-cal and research sectors, and will

also satisfy the stringent statutory requirements for manufacturing of food gases. With this investment, Messer also creates around 25 new jobs – 15 of these for operating the air separation unit and ten in the filling plant.

Compared with other central European countries, the Polish gas market has recorded consistently high growth rates in recent years.

Dirk Fünfhausen, Managing Director of Messer in Poland, ex-plains the goals of the investment as follows, “With this investment in central Poland, we wish to share in the intense economic growth in Poland and further increase Messer’s market share.” The invest-ment is the result of a consistent development strategy and is the second plant of this type after the air separation unit in Rybnik. n

29

2014 September

www.bizpoland.pl FDI News

MEDI-SEPT factory in SEZ EURO-PARK MielecMedi-Sept is developing a new plant where 10 employees will find a job. The investment is located in Lublin subzone of EURO-PARK Mielec SEZ. The investor plans to start a production of professional cleaning products and disinfectants. The proj-ect will be completed by 2017. Medi-Sept is a Polish company, producing professional products and systems for maintaining hygiene, addressed to special clients as hospitals. The company’s products are available on European markets and also in Asia.

AB to invest PLN 103 m for the new distribution centerAB - a Wrocław-based company will build one of the largest fulfillment centre in Central and Eastern Europe. AB’s new fulfillment centre will be lo-cated in Magnice, near Wrocław and will be designed for the distribution of electronic products and toys. The total area of the facility will reach 27,000 m2 therefore the capacity of distribution will be improved to even 120,000 packages a day. The total value of investment, including the purchase of land, will reach PLN 103 million, of which over PLN 24m will be co-funded by the EU. The new fulfillment centre is expected to be open in the first half of 2015.

Lifting of Łódź Technology IncubatorAfter seven years of activity, Łódź Technology Incubator has been fully modernized to focus on at-tracting high-tech companies. Łódź Technology Incubator had received a major facelift. Today, it offers at least 1,110m2 of modern office space and laboratories tailored to the needs of start-ups representing new technolo-gies and innovation sector. Tenants are also offered professional business advice. The total value of investment amounted to PLN 1.3 m (85% came from EU funds). The incubator has al-ready attracted new tenants. The first is the PortalE company which creates advanced e-technologies for the treatment of anxiety disorders using technology of virtual reality. Another is Tomorrow company providing specialised e-learning services. The company works on creating business simulators and Serious Games.

Ethiopia and Tanzania - new directions for companies from Eastern Poland

Impressive KGHM investment in Chile

After numerous trade fairs and busi-ness missions in Europe, Asia, and the US, PAIiIZ expands promotion of Eastern Poland macro-region to Africa. In October 2014, companies from Eastern Poland will look for new business opportunities in Ethiopia and Tanzania. The mission will be held between 8-13 October. It’s open to Eastern Poland companies whose activity is related to the production of food, machinery, chemicals and energy. Currently PAIiIZ is recruting the participants of the mission.

“Africa is a very attractive economic area where companies from Eastern Poland have a lot to offer. We see the great interest on African markets for the Polish food and for agri - food machines made in Poland, that is why we have arranged a trade mission to

Ethiopia and Tanzania. Some of the Polish companies have already been active on the African continent. For example, last year Polish tractor manufacturer from Lublin - Ursus company, signed a contract for the delivery of 3,000 machines to Ethiopia”, says deputy president of PAIiIZ Monika Piątkowska. n

KGHM Polska Miedz SA, the copper producer with the largest European output, began produc-tion in August in its Chilean mine, acquired two years ago as part of a record Polish takeover transaction abroad.

The Sierra Gorda mine will operate at full capacity at the start of 2015 and will produce 120,000 tons of copper a year, the Lubin, Poland-based company said in a regulatory statement. KGHM will also produce 50 million pounds of molybdenum, used to toughen stainless steel, and 60,000 ounces of gold annually in the mine.

KGHM acquired the Sierra Gorda project as part of its $2.9 bil-lion takeover of Canada’s Quadra FNX Mining Ltd. in 2012. The state-controlled company expands outside Poland as it seeks to cut production costs and raise output.

“The start of Sierra Gorda pro-duction will help us cut unit cost in the group,” Chief Financial Officer Jaroslaw Romanowski said. “This is mainly due to addi-tional products from the site, like gold as well as molybdenum, whose price is currently one fourth above what we initially estimated.”

KGHM produced 666,000 tons of copper in its Polish and north-ern American sites last year at an average cost of $1.85 a pound, which includes $0.53-a-pound impact of Polish copper taxes imposed in 2012. The production cost at Sierra Gorda is estimated at $1.13 a pound.

The company owns 55 percent of the Sierra Gorda project, while Sumitomo Corp. and Sumitomo Metal and Mining Co. Ltd hold the remain-ing stake. KGHM forecasts Sierra Gorda will produce 220,000 tons of copper a year in the 20 years of its estimated life if owners decide to start the second phase of the project. n

30

September 2014

www.bizpoland.plFDI News

Czech Republic buys 500th Solaris bus

Automotive industry in Poland

WindMobile invests in United Arab Emirates

The 500th Solaris bus has just arrived in the Czech Republic. This is the Solaris Urbino 18 that was ordered by the city of Brno. Since 2000, Solaris has delivered 500 buses to the Czech Republic. This country was the first foreign market entered by Solaris. In 2001, Solaris established its subsidiary Solaris Czech in Ostrava. A recent order of the city of Brno consists of 36 Solaris Urbino articulated buses. n

According to the PZPM’s and KPMG’s quarterly report, the automotive industry is becoming more optimistic as the production of automotive parts and accessories together with the export of the sector is improving. The authors of the report argue that the first half of 2014 was successful for manufac-turers and exporters of automotive parts and accessories. The sold pro-duction of automotive factories in

Poland increased by 4.9% y/y bring-ing 58 billion PLN income to the sector. Over the first six months of 2014 at least 323,300 new cars were produced in the country, which is 3.3% more than the year before. The improvement was caused by the growing level of LCV and truck’s production. Also the production of buses increased by 26,6%.

It was a good period for Polish exporters. The sale of Polish

automotive industry is related to the growing demand for vehicles in the EU. In the first quarter, exports of Polish automotive products increased by 6.6% y/y reaching €6.3 billion. The sale of components and car parts (including engines), which was higher by 9.4% comparing to the first quarter of 2013 (€4.2 billion) is considered as the main factor of the exports’ growth. n

WindMobile plans to buy the company from the United Arab Emirates. The Polish-based IT company decided to enter the UAE market to offer its products to the Saudi telecommunication industry. The Polish manufacturer of mobile applications has started the expansion to the mobile market of Saudi Arabia. Currently, WindMobile is in final stages of taking over a Saudi company. This acquisition will let the company to expand the business into other Gulf markets. In the first half of 2014, WindMobile reported a four-fold increase in income and also more than two-fold increase in net profit compared to the last year. Net profits has amounted to more than PLN 18.4 million bringing an increase of the value of sales by 368%. Now, the company also plans to enter the Warsaw Stock Exchange. n

31

2014 September

www.bizpoland.pl FDI News

Exports to Russia decline; Germany up

Polish tights in Italy

Polish food export is growing

Polish Central Statistic Office (GUS) has published data on Polish foreign trade in the first half of 2014. Exports from Poland increased by 5.4% compared to the first half of 2013, reaching €80 billion. Imports amounted to €80.2 and it was higher by 4.5% than a year ago. As a result, the trade defi-cit has been reduced to €0.2 billion from €0.8 comparing to the first six months of 2013.

Good results in foreign trade have been achieved among devel-oped countries. Exports increased by 7.2% exceeding €66.9 billion, and imports went up by 2.5% to €52.2 billion. As a result, the surplus of trade with these countries increased by €3.2 billion to more than €14.7 billion. There is a noteworthy differ-ence in a rate of growth of exports to the eurozone (by 8.5%) and other Member States (by 4.3%). The value

of sales to Germany - the main mar-ket for Polish exporters - reached €20.7 billion and was by 8.8% higher than a year ago. Foreign trade with non-EU developed countries increased by 6.6%, to €5.7 billion. Also exports to Australia went up by 34.7% and Canada by 28,4%.

Other foreign markets where exports increased: United Arab Emirates (by 64%), Saudi Arabia (by 45.5%) and Serbia (by 21%). n

Polish company Ferax plans to open 10 - 15 Gatta’s new stores in Italy by the end of 2014.

Currently, Gatta owns 14 stores located in major Italian cities, including tourist resorts. Products with Gatta label are manufac-tured in one of the biggest and most modern factories in Europe. Gatta’s expansion has also entered Qatar, the United Arab Emirates, Oman and Bahrain, as well as Mongolia and Australia. Gatta has a showroom located in Berlin and plans the opening of another showroom in Germany, in Siegen. It also owns retail stores in Iraq and Lithuania. The company is also considering entering the Chinese market. n

According to the Agricultural Market Agency, during the first five months of 2014, Polish food export reached €8.8 billion, while at the same period of 2013 it was estimat-ed at €8 billion.

The positive balance of food trade products between January

- May was higher by €400 m y/y reaching €2.5 billion. At this time, the value of imports amounted to €6.1 billion and is improved by €0,2 billion comparing to the first 5 month of 2013. Export of meat, fruits and vegetables decreased. In contrast, the sales

of grain, milk, and dairy products increased significantly. After 10 years of being a member of the EU, Polish imports recorded an 3.5-fold increase while exports by 4,5 fold. Trade balance went up from €0.5 billion to over €6 bil-lion. n

www.FDIPolandAwards.pl

32

September 2014

www.bizpoland.pl

Transline Group has opened an office in Poznan as it seeks to capi-talise on an under-serviced Eastern European market. Transline’s research valued the Polish recruit-ment market at £1 billion, with year-on-year growth of 15%. A per-manent office space has been estab-lished in the Old Market Square in the heart of Poznan. Six permanent employees operate from the site.

Jon Taylor, joint CEO at Transline Group, said: “We view our expan-sion into Poland as a key milestone in the growth of our international business. There is a real hunger for our services amongst key sectors in Poland. Establishing a team on the ground will allow us to capitalise on a growing market and service cli-ents in Eastern Europe in a genuine way as we understand their market.“

Transline provides innovative and high end service delivery through-out the temporary recruitment and supply chain staffing industry.

Paul Beasley, joint CEO at Transline Group: “This is a tremen-dously exciting time for Transline. Our international business has grown significantly in the past few

years. It is a strategic priority that we not only expand across borders, but maintain our service levels for every business that engages Transline regardless of location or sector.“

Transline saw a 52% increase in turnover compared to 2012, as its UK sales climbed to £107.9m in 2013. The business was also recently

named ‘Best Temporary Recruitment Agency’ at The Recruiter Awards for Excellence 2014. The Poznan office has launched a recruitment drive to ensure demand for Transline’s services can be met. Popular roles include warehouse operatives, class 1 and 2 drivers and mobile phone technicians. n

Cities News

PoznańTrafford Park recruitment firm comes to Poland

Gdańsk/GdyniaPort of Gdansk sees new prospects in the cruise industry Tthe huge sailing cruise ship “Club Med 2” docked in late July at the Defenders of Westerplatte Quay in the Port of Gdansk, sharing the mooring with the smaller ves-sel “Serenissima”, Port of Gdansk Authority says. The Baltic itinerary of “Club Med 2”was scheduled in the way that a significant number of cruise passengers finished their holiday in the Gdansk port and the new ones embarked. Around 170 passengers disembarked in Gdansk

and vacated cabins for a similar number of those newly arriving to start their voyage.

This was the first passen-gers’ turnaround operation which tested the efficiency and skills of port services, as well as city transport, hospitality and catering business opera-tors. In acquiring the status of a turnaround port as a base port facility on the Baltic cruise ships itinerary, new prospects

of growth open up for Gdansk bringing the increased numbers of visitors and expanding the cruise industry in the Baltic Sea.

“Club Med 2” sailing under the French flag is a five-masted sailing ship with additional two diesel-elec-tric engines. Upon leaving Gdansk, she visited Visby, Stockholm, Saint Petersburg, Tallinn and Helsinki. According to the ship’s agent Maritime Agency Gdynia, she docked again at the Defenders of

34

September 2014

www.bizpoland.plCities News

Westerplatte Quay on 20 August for the passengers’ turnaround.

“Club Med 2”, which was launched in 1996 in Le Havre, France, has 187 metres in length, 20 metres beam and 5.1 metre draught. She offers eight decks with an area of 2,400 square metres, with a maximum carrying capacity of 386 passengers catered to by a 214-member crew. This has been the 24th cruise visit to the Gdansk port this year. The 2014 cruise season was launched on 11 May with arrival of the “Delphin” operating under the Bahamian flag and is due to close on 4 October by the same flag cruise ship “Astor”.

The six ship agents includ-ing: Starboard Shipping Agency, Maritime Agency Gdynia, Polsteam Shipping, Marbalco Shipping, Jupiter Shipping Services and Baltic Gateway have notified a total of 39 cruise ship arrivals in the current cruise season. This is expected to bring an estimated number of 12,000 visitors to Gdansk. n

Distributor firm Lynka has formed a strategic partnership with German-based Berendsohn AG, the companies have announced. The deal, made public in late August, will provide Lynka will additional capital and support systems. It will also formally mark the business exit of Hanseatic Finance and Arco Capital, which had been Lynka’s financial backers.

“I am so pleased that Lynka has found Berendsohn as our strategic partner for the fu-ture,” said John Lynch, Lynka’s founder. “I couldn’t have wished for a better, more professional and financially sound partner.”

According to a press statement, Lynka and Berendsohn will remain as separate business units operat-ing under their own respective brands. Lynka will continue to be headed and co-owned by John Lynch, who founded the firm and has been its CEO for 22 years. “As

a world-class apparel player, Lynka is a perfect fit for Berendsohn, from both a cultural and a strate-gic perspective,” said Berendsohn CEO Jorn Lambertz. “I am very pleased to become partners with John and to welcome Lynka into the Berendsohn family.”

Founded in 1992 in Krakow, Lynka is a leading European

provider of promotional cloth-ing, accessories and decoration services. Headquartered in Hamburg, Berendsohn AG was established in 1833 as a pub-lishing house. Re-launched as Günther Berendsohn in 1948, the firm focuses today on promo-tional products and specialty gifts. n

Kraków Lynka partners with Berendsohn

35

2014 September

www.bizpoland.pl

to detect when you enter a retail store or spend time in close proximity to a particular product and showing you relevant offers, for example. However, Niederhofer says other applications include security, home and office automation, care of patients, children and the elderly, asset and warehouse management, and indoor navigation.

In fact, Kontakt.io‘s founders — Tomasz Kozminski, Tomasz Kolek, Rafal Janicki and Szymon Niemczura — first set out to build an indoor navi-gation system for the blind, only to realise that Beacon technology could solve this problem and many others.

“Many deployments are still at proof-of-concept stage, but we have seen some phenomenal initial results,” says Niederhofer. “From a VC perspective, this is a bit like Cisco in the late 80s. We’re building the hardware and software that is the backbone of the new network.”

Furthermore, he argues that anyone making a mobile app that has some relevance to the offline world should either be contemplating build-ing their own Beacon infrastructure or piggy-backing off someone else’s.

To that end, Niederhofer doesn’t rule out further Beacon-focused investments. “I do believe that killer apps for specific use cases will emerge,” he says. “But I’m keen to invest in the Google, not the Altavista. So we’re going to take our time and let the entrepreneurs figure out what works and what doesn’t. I don’t think it’s the last investment with a Beacon angle that Sunstone Capital will do in the next year or two.” n

accelerate international expan-sion and evolve its product line.

“We think this is a rapidly grow-ing, potentially very large market with high margins, in which you can build a really meaningful business,” says Niederhofer, citing a recent ABI Research report that estimates within 5 years we’ll see shipments of dedicated Beacon hardware reach

over 60 million. “To some extent I see this as an infrastructure build-out play, where Beacons are the routers and pipes of a new network infrastructure on which we’ll see some very interesting applications.”

With the technology still pretty nascent, however, and despite Apple throwing its might behind the concept, what Beacon’s ‘killer’ application will be is still open to debate. Retail is thought to be just the start — with Beacon transmit-ters enabling an app on your phone

“Bluetooth Low Energy and iBea-con are the building blocks of the next wave of computing,” says Max Niederhofer of the micro-location technology that lets your smartphone trigger events based on how close you are to a Beacon transmitter. “It’s a cli-ché, but the possibilities are endless.”

If he sounds bullish, that’s because Niederhofer’s VC firm, Sunstone

Capital, has just closed a $2 million investment in Kontakt.io, a Polish startup that offers its own Beacon platform, including the supply and customisation of Beacon hard-ware, underpinned by an open API and SDKs for iOS and Android.

The Kraków-based com-pany, which counts Y Combinator alumni Estimote as a competitor, already boasts big-name custom-ers such as Google, Facebook, Apple and Siemens, and says it plans to use the new capital to

Cities News

The budget for 2013 was one of the best achieved in recent years. The revenue projections of the city were achieved in 99.7 % and the planned expenditures were only 97.4 % of planned. The result was a budget sur-plus of 96 million pln, far higher than initial estimates of 10 million pln.

Compared to 2012, when the city recorded a deficit of 42.5 million pln, it means the city has done an excel-lent job controlling expenses. The city also reduced its debt levels. At year-end 2013, the total debt of the city stood at 1.84 billion pln, repre-senting per-capita debt of 2602pln

per inhabitant. The average debt/in-habitant of Poland’s largest 12 cities is 2971pln. By comparison, Warsaw is 3442pln; Wroclaw 3333 pln; Lodz 2965 pln; and Poznan 3371 pln.

Standard & Poor’s recently rated the creditworthiness of Krakow at ‘A-’. n

Sunstone Capital backs Beacon Platform Kontakt.io with $2 Million

Kraków reports strong financial condition, budget surplus

36

September 2014

www.bizpoland.plCities News

KatowiceNew air route to Katowice unveiled by Wizzair

Fitch Affirms City of Katowice at ‘A-’; Outlook StableFitch Ratings has affirmed the City of Katowice’s Long-term foreign and local currency Issuer Default Ratings (IDR) at ‘A-’. Fitch has also affirmed the city’s National Long-term rating at ‘AA+(pol)’. The Outlooks are Stable.

KEY RATING DRIVERS: The af-firmation reflects Fitch’s expectation that Katowice will maintain its sound operating performance, despite a weaker 2014, given the city’s still high flexibility on revenue and spending. The ratings also factor in an expected decrease in direct debt from 2015 as Katowice aims to finance its invest-ments mainly from its own sources. This self-financing will partially absorb the city’s significant cash reserves although the liquidity buffer should remain more than sufficient to ensure smooth debt service.

Fitch expects the city to increase its operating balance close to PLN190m or 12% of operating revenue by 2017, from PLN147m in 2013, as part of the city’s focus to improve operating perfor-mance over the medium term. In 2013 the operating margin fell to 10.7% as expected by Fitch and was the lowest level since 2009. Nevertheless, the operating bal-ance of PLN147m was sufficient to

cover debt service (including debt repayments and interest) by 5x.

In Fitch’s view, operating revenue growth will only slightly exceed opex growth in 2014-2017. This is because despite the city’s flexibility on revenue and expenditure, Katowice refrains from significantly raising lo-cal taxes and fees in order to support local business and the cost of living.

PULL-QUOTE: Despite the city’s flexibility on revenue and expenditure, Katowice refrains from significantly raising local taxes and fees in order to support local business and the cost of living.

Revenue growth, however, is sup-ported by the wealthy economy, a growing tax base and Fitch’s expec-tations of faster economic expan-sion in Poland over the medium term. On expenditure Fitch expects the city to make the same sav-ings as it did in the previous year at 5% of operating expenditure.

Fitch expects Katowice’s capex to peak at PLN540m or 30% of total expenditure in 2014, with the completion of major infrastructural investments, before declining to average PLN330m annually (20% of total expenditure) in 2015-2017. Fitch projects that capital revenue

(mainly EU grants) and the cur-rent balance will finance on average 60% of capex. The remainder will be funded with the city’s high cash reserves and debt (only 2014-2015).

The city’s cash reserves of PLN390m at end-2013 will be partially absorbed by capex, but should not fall below PLN150m by 2017. This should still enable the city to comfortably cover annual debt service, projected by Fitch at PLN35m on average. Due to the city’s high cash levels, its net direct debt was only PLN210m at end-2013 or 15% of current revenue. Cash on deposits generated higher interest than interest paid on its debt in 2013.

As a result of capex funding Katowice’s direct debt may rise to PLN670m by end-2014 or a moder-ate 47% of current revenue, from PLN600m (43%) at end-2013. The city has already secured all its debt-financing needs for its 2014-2015 investments, with PLN105m available under the contracted long-term loans with European Investment Bank and Council of Europe Development Bank. From 2015 debt is likely to decline to 42% of current revenue by 2017, as the city implements its policy to limit new debt. n

A direct flight from Belfast International to Katowice has been announced, bringing to nine the number of new routes secured by the airport this year. Low-cost operator Wizz Air will start the twice-weekly service next March.

The airline recently announced plans for a flight between Belfast International and Vilnius in Lithuania - a service that will begin operating next April. Since the start of the year, EasyJet, Jet2, Virgin Atlantic and Thomas Cook have also committed to forthcoming services out of Belfast International to destinations such as Reykjavik,

Rome, Prague, Las Palmas, Zante, Orlando and Las Vegas.

Wizz announced the new Belfast to Katowice service as it unveiled wider plans for expanding its operations into Poland. Chief executive of airline Jozsef Varadi said: “Wizz’s ever-expanding network and increasing frequencies on existing routes will certainly attract more passengers travelling on leisure or business.”

The airline, which is focused on central and eastern Europe, operates a fleet of 53 Airbus A320 aircraft on more than 300 routes from 18 bases, connecting 102 desti-nations across 36 countries. n

37

2014 September

www.bizpoland.pl

including DX255LC and DX340LC models, have been chosen among the machinery for the job. Depending on needs, they are being used to carry out various works, from sand excavation and loading, through to slope shaping and laying nonwoven geotextiles covered with rock.

The DX255LC excavator is equipped with a 5,700mm boom, a 2,900mm arm and a bucket with a capacity of 0.92m3. It also features a fuel-efficient, direct-injection Doosan DL06 ‘Common Rail’ diesel engine. The engine is integrated with the state-of-the-art Electronic Power Optimising System (EPOS), which optimises machine performance while reducing fuel consumption.

The second, larger excavator, the DX340LC model, has a Doosan DL08 ‘Common Rail’ diesel en-gine. This machine has a 6,500mm boom, a 3,200mm arm and a bucket with a capacity of 1.48m3.

“The machines are compliant with all necessary standards. They make the work really efficient,” said Emilian Marczak, an operator on one of the Doosan excavators. “The best thing about my excava-tor is the cab: it is spacious and comfortable, and provides excel-lent visibility in all directions.”

The modernisation project encom-passes seven different infrastructure investments, all of which will lead to one goal – flood prevention. The first of the four contracts was entrusted to the consortium Energopol-Szczecin S.A, a well-known contractor in the hydrotechnical engineering market and the largest construction busi-ness in the West Pomerania region of Poland, with many Doosan excavators in its machinery fleet.

The contractor has turned the previously quiet river landscape into a huge construction site. Crawler exca-vators, dumpers and articulated haul-ers work throughout the week and at weekends to complete the project on time. n

of 1997 clearly showed that such defences were simply not enough.

In order to prevent the situation from 1997 and 2000 from hap-pening again (the city was flooded by an enormous flood wave), any changes have to be radical and implemented with great determi-nation and on a massive scale.

A flood wave exceeding 3600 m3/s is a major threat to the city – and it is worth noting that this alarm-ing level has already been exceeded more than once. As a result, works

are being carried out on the hydro-technical structures, in the river bed, on Wroclaw’s bridges and in the city centre. They are being carried out by a team of nearly 900 people.

It is clear that this costly but more than necessary infrastructure invest-ment needs to be implemented. Apart from increased protection, the city will also gain in attractiveness for its inhabitants and tourists. New paths for pedestrians and cyclists as well as amphitheatre stairs by the river will be constructed. Within the next three years, approximately 375 million Euros will be allocated to this project.

The contractors have to meet strict deadlines, but the water and land environment is not the easi-est to work in. Doosan excavators,

The floodway system in the city of Wroclaw is currently undergoing modernisation. Due to the size of the project and level of technology being used, the works have been divided into four contracts and seven differ-ent investments. Among the items of equipment being used to save the city from future flooding are a number of Doosan excavators.

Wroclaw is called the Venice of the North, which is a title both honour-able but also troublesome. The city is in danger of flooding by the Oder

from almost every side. It is a tourist attraction that is sometimes a threat to the city’s inhabitants. Hence, the authorities could no longer delay the reinforcement of the flood defenses.

It is said that the construction of Wroclaw’s stadium for the Euro 2012 football championship is nothing compared to the large-scale and extremely complex modernisation of the Wroclaw floodway system.

It is unsurprising as this is one of the largest systems of waterways and hydrotechnical structures within an urban area in Europe.

Originally, the system was de-signed to ensure that a flood wave with a flow of up to 2400 m3/s did not pose a threat to the people and build-ings but, unfortunately, the floods

Cities News

WrocławKey role for Doosan excavators in Polish flood control project

38

September 2014

www.bizpoland.plCities News

KoszalinRobert Thoma to invest 40 million pln in new plant

Eastern PolandOlsztyn selects new tramway contractors

Swiss manufacturer Robert Thoma has announced plans to set up a new production facility in Koszalin, in Poland’s north-west. The factory will produce plastic buckets and various types of containers, reported local news agency PAP. The Swiss company is aiming to launch the facility on a 100,000 square metre site purchased in the Slupska special economic zone (SSSE). In the first phase of the investment in

Koszalin, the firm is to create at least 45 new jobs.

Under the plan, Robert Thoma will invest about PLN 40m to launch production at the factory. The new plant is scheduled to be lauched by 2019. To implement the Polish manufacturing project, in late June 2014, Robert Thoma set up local subsidiary Rhoto sp. z.o.o., with an initial capital of PLN 8.4m.

Beata Hezemans, a member of the company’s management

board, said that the Koszalin-based investment is designed to allow Robert Thoma to expand its sales in a number of Central European and Scandinavian mar-kets. According to Hezemans, the Swiss firm evaluated nine loca-tions in Poland before it decided to set up a plant in Koszalin. These included Wrocław, Legnica and the Słubicko-Kostrzyńska special economic zone, the company repre-sentative said. n

Skanska signed a 150m złoty con-tract with the city of Olsztyn on August 19 for the construction of 6 km of tram route by September 2015. Construction of the standard gauge network officially began in September 2012, but in 2013 the city terminated FCC Construcción’s contract, citing a lack of progress.

The scope of works includes a double-track section from Osiedle Jaroty to ul Obiegowa and a single-track branch along ul Tuwima to the University of Warmia & Mazury,

including a passing loop. A recti-fier substation for the 600 V DC traction supply is also to be built.

The city has selected Torpol as the contractor for the remaining 5 km section. The 61m złoty contract covers construction of tracks north from ul Obiegowa to the railway station. Completion is due 400 days from contract signature. The project is 85% financed by EU funds. Solaris Bus & Coach is to supply 15 low-floor trams under a €30m contract signed in 2012. n

FDI Poland Investor Awards16 October 2014

Hotel Intercontinental, Warsaw

www.FDIPolandAwards.pl

40

September 2014

www.bizpoland.pl

Austria New Director at Advantage Austria

Chambers of Commerce News

Advantage Austria’s director Ernst Kopp, after seven years in Warsaw, has

returned to Vienna. He was replaced in August by Mr. Karl Schmidt.

JapanSummer event: Japan Day

On the initiative of Minister of Economy and Deputy Prime Minister Janusz Piechociński, on 3 July 2014 the event entitled “The Japan Day” was held at the Ministry of Economy. The event was con-ducted with the support of the Embassy of Japan, JETRO Warsaw Office and PARP. The main purpose of the event was to summarize the Polish-Japanese experience in economic cooperation as well as to discuss investment opportunities and prospects for the future.

The Japan Day was attended by representatives of many Japanese and Polish institutions: Deputy Prime Minister and Minister of Economy Mr. Janusz Piechociński, Ambassador of Japan, Mr. Makoto Yamanaka, president of JETRO, Mr. Satoshi Miyamoto, President of PAIiIZ, Mr. Sławomir Majman, Director of PAIiIZ, Mrs. Iwona Chojnowska-Haponik, Deputy Foreign Affairs Minister, Mrs. Katarzyna Kacperczyk, Director of JETRO London Office, Mr. Jun Arima, President of Shokokai, Mr. Yoshito Okada, President of Techno-Invest Park Wałbrzych

Special Economic Zone, Mrs. Barbara Kaśnikowska, Professor Jan Bossak from Polish-Japanese Economic Committee, Director of National Centre for Research and Development Mr. Leszek Grabarczyk.

There were also many representa-tives from business sector attending the event : Director Jan Błaszczyk (Nano-Carbon), Director Izabella Gazda (POLMOS Warsaw), Director Paweł Gołębiowski (Mitsubishi Corporation), President Toru Takeuchi (Toyota Manufacturing Poland), President Osamu Ishikawa (NGK Ceramics Poland), Director Dave Deane (Fujitsu Poland GDC ).

The Japan Day brought together over 200 participants who had the opportunity to listen not only to various presentations (such as the presentation of the JETRO London office director Mr. Jun Arima entitled “What is happening in Japan: new opportunities and growth”, but also to participate in two panel discussions during which the main prospects and obstacles to investment in bilateral trade rela-tions were outlined. In his speech,

the Director Arima indicated that that the new economic policy of the country (Abenomics) brought clear effects. He emphasized also the fact that new opportunities arising in investment sector in Japan, may bring major ben-efits to the Polish companies.

Nifco to expand Polish plastic car parts factoryJapanese car parts moulder Nifco is continuing to invest in increasing the output capacity of its produc-tion facility in Poland’s Wałbrzyska special economic zone (WSEZ), in the country’s south-west.

Following the launch of a €14.5m project to expand the plant earlier this year, the firm recently secured another permis-sion from the zone to increase its factory’s output and workforce, the WSEZ said in a statement.

Under the plan, Nifco will invest at least PLN 45m and take on at least 150 new work-ers at the Polish facility. The investment will allow the manufacturer to launch produc-tion of various plastic compo-nents which will be supplied to the automotive industry.

“The company is plan-ning to complete the invest-ment by December 31 2020 at latest,” the zone said in the

statement. The project will be implemented by the company’s local subsidiary Nifco Poland.

Nifco’s product portfolio in-cludes fasteners, dampers, interior trim items, buckles and console components, according to data released by the firm. The manu-facturer’s production facilities supply their output to Toyota’s offshoots in the UK, France, Poland and the Czech Republic, and also to Suzuki’s factory in Hungary.

41

2014 September

www.bizpoland.pl

KoreaSouth Korea’s pension fund to invest $800 mln in Poland

Chambers of Commerce News

NetherlandsFarm Frites celebrates its 20th anniversary

South Korea’s National Pension Service (NPS) plans to invest about 820 billion Korean won ($800 mil-lion) in real estate assets in Poland, a fund spokeswoman confirmed in August.

The world’s fourth-largest pension fund decided to invest

the money in two shopping malls and a power transmission tower in Poland. The spokeswoman declined to comment on further details as the investment con-tract has not yet been signed.

NPS had invested 21.4 tril-lion won, or 4.9 percent of its

assets under management in overseas alternative assets such as real estate as of the first quarter. The fund plans to in-crease investment in alternative assets to more than 10 percent of its total holdings by end-2019, NPS has previously said.

FFP was established in 1993 as a joint venture by two Dutch potato process-ing producers: Farm Frites and Aviko. A factory was built and a line of French fries initiated in the autumn of 1994, within twelve months of the start of construction in Lębork.

Initially, FFP employed 80 work-ers and the annual potato process-ing amounted to 40,000 tons. In

July 2004, a new line for potato pan-cakes was introduced and in July 2011, a new line for potato flakes.

At present, there are over 190 people working at Farm Frites Poland, and the amount of pota-toes used for production annu-ally is close to 200,000 tonnes.

The company has three clients: Farm Frites, Aviko and McDonald’s.

The cooperation with McDonald’s started in 1995 and at that time French fries were delivered only to two markets. Nowadays, French fries from Lębork are delivered to almost 900 McDonald’s restaurants in twelve European countries: Poland, Czech Republic, Slovakia, Ukraine, Latvia, Lithuania, Estonia, Russia, Belarus, Serbia, Sweden and Bulgaria.

42

September 2014

www.bizpoland.pl

Dutch-Polish rail corridorPoland and the Netherlands are working hard to cooperate more closely on logistics and to improve the reliability of transport by rail. This is the main purpose of the consor-tium set up by the two countries - Linked by Rail. The con-sortium partners are ERS, Pantea, Nijhof Wassink, Nijman Zeetank, ECT, vd Bosch, CLDN and Seacon Logistics.

A European research programme is currently being prepared that will explore how to improve other intermo-dal rail corridors to Eastern and Southern Europe. Seacon Logistics is also participating in this programme.

Dutch water sector to work in PolandThe Dutch water sector has been given additional encour-agement today to go to work in Poland. During the state visit, a consortium signed two agreements in the presence of Dutch Minister Ploumen, King Willem-Alexander and Queen Máxima. The consortium consists of Deltares, Rothuizen, Arcadis, EuroLandscape and RDH. The first

agreement to be signed was ‘Partners for International Business’ (PIB), together with the Netherlands Enterprise Agency (RVO). The PIB is designed for a group of com-panies and research institutes who want to move into a foreign market together, with the RVO smoothing the way for trade and investment. The second agreement was for a specific project in Poland for the navigability of the Wisła river on behalf of the Polish government.

Problems with Wisła river The Wisła is the longest and largest river in Poland. However, it is not navigable for vessels with large draughts, particularly in the area of Warsaw, as the river is usually too shallow to be navigated, meaning that commercial shipping is no longer possible. To solve this problem, the seventeen Polish municipalities in the vicinity have got together, asking the consortium to develop an integrated approach for the river area between Warsaw and Gdańsk covering issues such as flood risk management, hydrology and spatial planning.

Chambers of Commerce News

Seacon Logistics continues building intermodal corridorsTheir Majesties King Willem-Alexander and Queen Máxima of the Netherlands attended the celebra-tions in Poznań marking the second anniversary of the daily freight train connection between Poznań and Rotterdam. The celebrations also marked the start of a new terminal expansion project in Poznań. The occasion saw the opening of a second shuttle link between Rotterdam and Łódź. Three freight trains are already operating on this link every week. The new terminal expansion project

in Poznań also had its official start and the new terminal area will be ready for use in mid-2015.

In addition to the royal couple, who were on a state visit to Poland, the celebrations were attended by the Polish Minister for Infrastructure and Development, Elżbieta Bieńkowska, and the Dutch Minister for Foreign Trade and Development Cooperation, Lilianne Ploumen. Both ministers emphasised the growing economic significance of this trade corridor and the importance of mutual cooperation.

NorwayNorwegian plans huge coastal development in Poland

Haakon Sæter, a 50-year-old Norwegian entrepreneur from Fredrikstad, has bought up about 2.5 kilometers of Baltic coastline in Poland and plans to build as many as 4,000 holiday apartments on it.

He calls the beaches west of Gdansk “shockingly beautiful.”

Newspaper Dagens Næringsliv reported that Sæter is moving forward with what could be the largest Norwegian real estate project ever carried out abroad. He and his investment partners started buying up property along the coast at Mielno, not far from the German border, in 2003 and now have ambitious prospects for the area due south of the Danish holiday island of Bornholm.

“This is two-and-a-half kilo-meters of beachfront,” Sæter told DN. “You suddenly realize the world has more to offer than the coasts of Østfold and Sørlandet.”

Around 200 holiday apartments are already completed and sold. He expects total investment in the project to approach EUR 900 million, as it unfolds, financed by sales in development phases over the next several years.

His target buyers are Polish sum-mer tourists who want their own holiday homes. “We Norwegians often think of the Poles as construc-tion workers, but there’s quite a bit of affluence in Poland and economic growth.” Sæter and his cousin Stein Knutsen envision develop-ment “of a whole new destination” at Mielno and they’re calling the project “Dune,” after the sand dunes that characterize the area.

particularly on reform of national security and defence apparatus, development of capabilities for the future Polish Armed Forces, strategic industrial policy and cooperation with like minded allies and partners of Poland. In our activities we cooperate with most prominent institutions worldwide.

NCSS’s goal is to enable key decision makers to make informed decisions on key matters of national security strategy, security and defence sector. NCSS encourages thoughtful participation of all relevant actors in the development of national security strategy and policy.

and system analysis methods in order to recommend the priorities of modernization of Armed Forces of the Republic of Poland. NCSS focuses also on problems of deterrence strategy as well as defence resources management reform in Central Eastern Europe. We are open to partnerships in these undertakings.

National Centre for Strategic StudiesAl. Solidarności 115/2, 00-140 Warsaw, phone: +48 695 660 613

44

September 2014

www.bizpoland.plChambers of Commerce News

PortugalPortuguese Business Mission to Poland – 13-16 October

Taiwan2014 Taiwan Hardware and Hand Tools Trade Mission

ThailandThai delegation to Poland – 26 September

UKBPCC 22nd Annual Ball, 25th October

Portuguese Chamber of Commerce and Industry and International Confederation of Portuguese Entrepreneurs (CIEP) are organizing, in cooperation with Polish-Portuguese Chamber of Commerce, Business Mission to Warsaw. The Mission will take place from 13th to 16th October 2014. The principle aim is to organize a number of bilateral business meet-ings which will gather official entities, potential trade partners and local cus-tomers. The multi-sectorial Business Mission is addressed to Portuguese companies which plan to export or to

invest on the Polish market. The or-ganizers of the Mission intend to pro-vide the members with various oppor-tunities, such as creating the ground where new contacts with local players can be established: Get to know business environment in Warsaw, Krakow and Katowice; Bilateral business meetings with Polish entrepreneurs; Possibility to keep in contact with Portuguese Ambassador in Warsaw and with AICEP; Contact with Polish-Portuguese Chamber of Commerce and with CIEP counselors; Opportunity of establishing contact

with Polish local authorities in order to gain the investment support; Get to know main players in the sectors of the entrepreneur’s interest, charac-teristics of competition and Polish consumers’ profile; Establishment of contacts with local Portuguese businessmen.

There are 14 companies partici-pants in the Business Mission, the majority represent food sector. In order to obtain more details about the event please contact the Polish-Portuguese Chamber of Commerce: weronika@ppcc.pl or 22 322 76 67.

9 September; Hotel Golden Tulip Warsaw Centre, Warszawa. Taiwan External Trade Development Council (TAITRA), the most im-portant of Taiwan’s non-profit or-ganization promoting foreign trade sponsored by the government, cor-dially invites you to a free of charge

business meetings with a group of 10 Taiwanese companies special-izing in the production of tools. Companies come to Poland to ac-quire potential business partners. Taiwan is a country renowned for its innovative technology and high quality products. Meetings of the

Taiwan Trade Mission is a unique opportunity to take a possible trade cooperation. Contact: Emilia Kolodziejska. E-mail: info(at)ttcw.it.pl; warsaw(at)taitra.org.tw; Phone: 22 288 82 05; 22 288 82 0001; http://warsaw.taiwantrade.com.tw

Join us at this prestigious social event to celebrate 22 years of the BPCC’s suc-cess, 25 years of Poland’s democracy and 10 years of Poland’s EU member-ship. Entertain your preferred clients or celebrate in style with your closest business partners. To be held at Sofitel Victoria Warsaw Hotel.

Urszula Dudziak, a leading Polish jazz vocalist will be performing live

at the BPCC 22nd Annual Ball. We guarantee a special programme of culinary excellence, fine wines and a wealth of splendiferous entertain-ment! We’ll also be holding a charita-ble raffle with some tempting prizes. Early-bird tickets until Monday 8 September! For more information please visit www.bpcc.org.pl/22ball ball@bpcc.org.pl Tel: 604 16 01 16.

A business delegation from Thailand will visit Warsaw on 26 September 2014, to be held at PARP. More details via Mr. Sathaworn

Subsoontorn; Director of Thai Trade Center Warsaw; Tel. 22 620 15 08; www.ttcw.pl.

45

2014 September

www.bizpoland.pl

French firm Intitek is opening an IT outsourcing branch in GdanskIntitek Poland is an engineering company specializing in consulting, technical support, and R & D activities. Employees in Gdansk will provide engineering services for the design, automation and electrical industries as well as in the field of IT outsourcing – helping to minimize development and software testing. They’ll also create a platform for engineers dedicated to the maritime sector, including designers of ships and engineers with experience in the offshore industry and shipbuilding. Tomasz Ławiński will be the new director of Intitek in Gdansk. First-round hiring estimated to be 60 people.

World’s largest office supplies company to open Shared Services centreStaples, based in Boston, is in advanced planning to open a new Shared Services centre in Poland. The executive in charge, Greg Lipper, visited in July/August to the cities of Gdansk, Warsaw, Krakow, Katowice and Poznan. Although the decision is not yet final, Gdansk is likely to win the new centre.

BPO/Shared Services

Oracle, Expedia, Coca-Cola, SAP, and Barclays Capital. The company is looking for programmers and special-ists in the field of databases, business analysts and testers. Developers of the Tri-City will create and develop technologies for customers in the USA and Canada, but also from the UK and Western Europe.

American company EPAM Systems announced that it will hire 100 jobs by the end of the year, and incre-assing to nearly 500 in near-future. The company is a leader in the IT industry and the largest in CEE in the field of creation of modern software. EPAM’s clients include Thomson Reuters, UBS, Microsoft,

EPAM Systems to hire 500 in Gdansk

Intel to expand in Gdansk

REC Global expands in Szczecin

US firm SolarWinds to open in Krakow

Swedish firm deal in Krakow

Intel Technology Poland will hire addi-tional 300 people in its Gdańsk branch, the center of research and development (R & D). This year, the company wants to increase employment for 1250-1300

employees. The R&D center is working on internal group projects, including USB 3.0, built-in graphics processor, and HD audio interfaces which will control voices in a natural environment.

One of Poland’s top exporters of software engineering services, the Wrocław-based REC Global, has set up its 7th R&D unit in the northwestern city of Szczecin. Recruitment has been underway since June with REC Global planning to onboard at least 45 special-ists in the areas of Embedded Systems, Linux, Android and C/C++.

“Szczecin has many educated and cre-ated engineers with huge potential. Every year, around 500 IT students finish their studies but only about 30% remain in Szczecin. We are creating the conditions to keep a greater number of graduates in the area they already live in,” said REC Global Vice President Seweryn Krajewski.

REC Global currently employs over 400 engineers at its seven R&D centers, which are being backed by 13 sales and

support offices across Europe and the United States. The company’s software development competences are focused on a number of key areas, including automotive, industry and automation, telecommunications, energy, telemat-ics and M2M, healthcare and more. Its systems have been used in home devices, industrial machinery, cars, solar panels and a whole variety of other applications.

The company was established in 2007 by Polish entrepreneur Krzysztof Kuliński, who from the very start be-lieved in multi-site delivery – a network of specialized development centers in cities with top technical universities. The first unit was launched in Wrocław, followed by Koszalin, Zielona Góra, two centers in Slovakia, one in Croatia and now Szczecin.

SolarWinds, listed on the New York Stock Exchange, announced a new IT office in Krakow. The firm pro-vides purpose-built products that are designed to make IT professionals’ jobs

easier, and that solve a broad range of IT management challenges – are related to networks, servers, applica-tions, storage or virtualization.

Getinge Shared Services is expanding in Krakow, leasing an additional 2,000 sm of office space.

Getinge AB is a publicly-listed, Swedish-based group of companies. The Getinge Infection Control busi-ness area consists of two divisions; Healthcare and Life Science. For the Healthcare sector, GETINGE

provides solutions for infection control whereas for the Life Science sector, GETINGE is a key pro-vider of solutions for contamination prevention. Worldwide, GETINGE ranks among the leading providers of disinfectors and sterilizers within the healthcare and life sciences segments.

46

September 2014

www.bizpoland.pl

FDI Poland Investor Awards 2014

Warsaw, 16 October 2014

fdipolandawards.pl

Poland’s top international direct investors will be present-ed with awards of acknowledgment - by an independent Jury - for their economic commitment to the Polish economy, judged by size of investment, employment levels and strategic importance.This event will attract top international executives, from more than 25 countries, with support from many international Chambers of Commerce – who invite their foreign executive members to attend.

The European Forum for New Ideas

Sopot, 1–3 October 2014

efni.pl

The European Forum for New Ideas is an international discussion meeting of the business milieus focusing on the future of Europe and its economy in the broad, global context.Each year hundreds of new ideas are produced around the globe aimed at changing various aspects of reality. Only a handful of them will lead to a suc-cess. And these are the ideas we talk about in Sopot.

24th Economic Forum

Krynica-Zdrój, 2–4 September 2014

www.forum-ekonomiczne.pl

The Economic Forum in Krynica–Zdrój is the largest conference in Central and Eastern Europe.Every year the Forum, organized at the beginning of September brings more than 2,500 guests. These are political, economic and social leaders as well as approx. 500 journalists. The guests come from over 60 countries in Europe, Asia and America.

22nd International Defence Industry Exhibition MSPO

Kielce, 1–4 September 2014

www.mspo.pl

MSPO is an exceptional event of special significance for the Poland’s defence industry.MSPO is the forum which brings together potential buyers and suppliers; this is the showcase for cutting edge armaments, military technologies and prod-ucts, the stage to present customers’ needs and demands.

Calendar

16Oct.2014

1–3Oct.2014

2–4Sep.2014

1–4Sep.2014

2nd annual FDI Poland Investor Awards, recognizing top foreign companies operating in Poland More than 250 international guests. Top executives from 23 countries. Awards categories for 19 countries/regions. Special discounts for 17 Chambers of Commerce members:

UK, France, Japan, Korea, Poland-China Chamber, Spain, Portugal, Switzerland, Austria, Germany, US, Italy, Scandinavia, Belgium, Netherlands, Canada, Ireland.

WWW.FDIPOLANDAWARDS.PL

FDI Poland Investor Awards16 October 2014

Premier Sponsor

Associated SponsorsAwards Sponsors

Supporting Chambers of Commerce

Organizer Organizer

48

September 2014

www.bizpoland.pl

of the Janów Podlaski Stud, Andrzej Kryszałowicz. The record price was set 6 years ago, when for the mare Kasztanka from the Michałów Horse Stud was paid an amount of 1,125 mln euro. It is the only horse in the history to win twice the World Championship Salon du Cheval.

“The most expensive horse of this year’s auction was the mare Piacolla from Michałów, which achieved a price of 305,000 euro. The second most expensive purchase was Norma, a mare from Michałów Stud, bought by a buyer from Saudi

Arabia who paid for this 10-year-old mare 250,000 euro. – says Grażyna Kapelko, Spokesperson for the Agricultural Property Agency.

The most expensive horse from Janów Podlaski Stud was a mare Cenoza. Hosts of the Arabian Horse Days and auction achieved an amount of 240,000 euro for this 10-year-old mare, which was purchased by Shirley Watts, a wife of the Rolling Stones drummer. American breeders paid 220,000 euro for the mother mare of Perfirka from the Stallions’ Stud in Białka. Perfirka, was the last years’ win-ner of the Triple Crown, won the gold medal at the All Nations Cup in Aachen and two silvers in European Championship in Verona and World Championship in Paris.

This year’s result is slightly better that this from 2013. Last year, the auction of 22 mares raised 2.072 million euro. In 2012, for 19 horses, auction proceeds were 1.325 million euro. n

Gift from King of BahrainA surprise of this year’s National Pure Arabian Bloodstock Horse Show was the desert stallion from the King of Bahrain Stud, which was given as gift for Poland in recogni-tion of the level, merits and impact of the Polish Arabian horse breeding on the world’s breeding.

On this occasion, the grandson of the King of Bahrain, Prince Isa, came to Janow Podlaski and presented Deputy Prime Minister and Minister of the Agriculture, Janusz Piechociński, a modern representative of the Kuhailan Afas tribe. Dusky stallion Kuhailan Afas Maidaan is a descendant of one of the first Arabian horses that almost one hundred years ago was brought to Poland by Prince Roman Sanguszko.

„Pride of Poland” – mares has been sold for over 2 mln euroThe second, equally important event is the auction of Arabian horses „Pride of Poland”, which was organized for the 45th time. First auction was organized in the sum-mer of 1969 by the former director

This year’s 45th auction in Janów Podlaski stables raise more than 2 million euro in auction proceeds. The most expensive horse turned out to be the mare Piacolla from Michałów, which achieved a price of 305,000 euro. Horses will go to breeders mainly from Saudi Arabia and Great Britain, and also to Qatar, Iran, Belgium, Germany, Switzerland, Sweden and Russia, and two stayed in Poland.

Arabian Horse Days are covered by two important events among breeders and horse lovers: the National Pure Arabian Bloodstock Horse Show and international auction „Pride of Poland”.

The most exciting for the families are Arabian Horse Championships organized un-der the National Pure Arabian Bloodstock Horse Show. Mares and stallions of every age category battled for the title of champion. Moreover, horses bred in the Polish stables have won many prestigious championships not only in Poland but also abroad – Verona, Moorsele, Prague, Aachen and Paris.

Events

Arabian Horse Days Auction brings in 2 million euro Between 15th and 17th of August in Janów Podlaski, the annual Arabian

Horse Days was held, with specific events such as: National Pure Arabian

Bloodstock Horse Show and international auction „Pride of Poland”.

50

September 2014

www.bizpoland.plLife Style

socialize. Every weekend brings another theme – there are classes of dress code and savoir-vivre, tastes, el-egance, sport, automotive, health and much more. More details are available on our website. n

You are a coolhunter. What does it mean?Coolhunting is a new profession that is not only following trends in all areas of life, but also advising clients about smart venues to go, elegant brands, scents or tastes.

Szkoła Męskiego Stylu is your original project. Please, tell us more about that.

Szkoła Męskiego Stylu is the result of many years of my own observations and conversations with custom-ers. Being a coolhunter, I have tended to associate with businessmen and it results in being able to give them piece of advice in fashion, style and savoir-vivre.

My goal was to create a unique place where ex-perts’ knowledge is combined with experience and tradition of best upscale brands as well as network-ing with other open-minded business people.

What kind of knowledge one can get at Szkoła Męskiego Stylu?

In Szkoła Męskiego Stylu we teach about: how to dress well – according to certain context of situ-ation, savoir-vivre, politeness in business, art of cooking. Additionally, there are also art and auto-motive classes. We try to cover all areas of gentle-man’s life.

We cooperate with the best brands and their experts to efficiently deliver practical knowledge for our students. Thanks to us, they would know how to dress well, smell nicely and find exquisite food.

Who is attending Szkoła Męskiego Stylu and when does the course begin?

Our offer is addressed to businessmen and entre-preneurs who want to improve their self-confidence, find new hobbies, get new skills and broaden their minds.

The classes will started on 6-7 September – i.e. weekend – at Sobienie Królewskie Golf&Country Club. Saturday is a Visitors’ Day. All readers of BizPoland are invited.

Why businessmen should participate in Szkoła Męskiego Stylu?

Participation in the course is a perfect solution to become a real gentleman. Men come here to learn, relax and

Business gentleman by coolhunterRecently, a growing interest among men in style, dress code, savoir-vivre and lifestyle classes can be

observed. According to Agnieszka Świst-Kamińska, coolhunter and owner of Szkoła Męskiego Stylu (Male

Style Academy), businessmen are becoming more and more aware of the impact of their appearance and

lifestyle on perception of their company by customers and business partners.

22.09.2014 - 19.30

FOR THE FIRST TIME IN POLAND

TEATR WIELKI - OPERA NARODOWA - WARSAW

SANDRO MONETTI - on-stage interviewer | ADA GOSTKOWSKA - host

PRODUCENT:

PATRONI:

CHARITY PARTNER:PARTNERTECHNOLOGICZNY:

PARTNERMOTORYZACYJNY: PARTNERZY:

ONE NIGHT ONLY - LIVE ON STAGESANDRO MONETTI - on-stage interviewer | ADA GOSTKOWSKA - host

CHARITY PARTNER:PARTNER TECHNOLOGICZNY:PARTNER MOTORYZACYJNY: PARTNERZY:

PRODUCENT: PATRONI MEDIALNI:

17.11.2014 - 19.30HALA STULECIA - WROCLAW

SchwarzeneggerArnold