Documentos de Académico
Documentos de Profesional
Documentos de Cultura
Poland vol.1
A guide to business trends in Poland
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table of contents • TRENDBOOK Poland
vol. 1
Table of Contents
From the editor. . . . . . . . . . . . . . . . . . . . . . . . . 2 The development of Poland’s luxury market. . . . 50-53
Trends as seen by the Chambers of Commerce. . . . 3-4 The development of road infrastructure. . . . . . . 55-58
High-potential sectors for investment . . . . . . . . . 5-6 Legal analysis. . . . . . . . . . . . . . . . . . . . . . . . . 59
Easier financing for real estate investments. . . . . 62-65
TRENDS Legal analysis. . . . . . . . . . . . . . . . . . . . . . . . . 66
Poland’s economic stability despite crisis. . . . . . . 7-11
Expert analysis . . . . . . . . . . . . . . . . . . . . . . 12-13 TRENDSETTERS
Privatization and its effects on the economy. . . . 16-19 Trendsetting companies. . . . . . . . . . . . . . . . . 14-15
The development of nuclear power in Poland . . . 20-22 Sustainable development trendsetters. . . . . . . . 24-25
Renewable energy in Poland. . . . . . . . . . . . . . . . 22 Trendsetting cities . . . . . . . . . . . . . . . . . . . . 36-37
Expert analysis. . . . . . . . . . . . . . . . . . . . . . . . . 23 Trendsetting businesspeople. . . . . . . . . . . . . . 48-49
Legal analysis . . . . . . . . . . . . . . . . . . . . . . . . . 23 Trendsetting real estate companies. . . . . . . . . . 60-61
E-commerce in Poland. . . . . . . . . . . . . . . . . . 26-29
The development of regional airports . . . . . . . . 30-33 Legal trends in Poland. . . . . . . . . . . . . . . . . . 67-70
Legal analysis . . . . . . . . . . . . . . . . . . . . . . . . . 34 Partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Poland’s rise in the European Union . . . . . . . . . 38-42 Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Private health care’s increasing popularity . . . . . 43-47
1
TRENDBOOK Poland • from the editor
2
chambers’ comments • TRENDBOOK Poland
3
TRENDBOOK Poland • chamber’s comments
ports will remain the electromechanical, chemical and food What many Polish companies are missing is a desire to di-
industries. Foreign companies, those from Germany in par- versify their products for different markets. Polish kielbasa is
ticular, have long appreciated Poland’s products, which are definitely the best according to Poles, but the French say the
characterized by high quality and very competitive prices. same thing about their own sausage... This applies to many
The food industry, for example, still has great potential to products, especially those targeted at individual consumers.
reach individual customers with its products – healthy, tasty Try employing an expert on the local market, a native – de-
and largely natural products – at affordable prices. And to- spite the initial cost, this employee could be the proverbial
day’s fashion for healthy food is a tremendous advantage. goose that lays the golden egg!
4
investment in Poland • TRENDBOOK Poland
High-potential sectors of
the Polish economy
In 2009, the year of crisis, FDI in Korean and Japanese markets. PAIiIZ is currently conduct-
Poland fell only by 16 percent, ing nine Korean projects. For the first time, the top set of
whereas the global decrease of foreign investors does not include companies from Germany,” said
investment amounted to 40 percent. Mr Majman.
Clearly, Poland is still attractive to Here are the sectors of the Polish economy that have some
foreign investors
of the best investment potential:
5
TRENDBOOK Poland • investment in Poland
impact on Poland for many years. Many global players that have sector in Poland, which has been constantly growing since
established their manufacturing activity in Poland value the 2003 (the total turnover in 2009 was about zł.2.8 billion,
conducive investment environment that the country offers. and employment in the sector reached 22,000 jobs).
It is said that Polish plants are some of the most efficient A plethora of multinational aircraft-industry corporations
and modern units within the whole of these pharmaceuti- are present in Poland and over 90 percent of production
cal groups. It’s therefore no wonder that global giants like is exported. Poland’s long history of aviation and a skilled
GlaxoSmithKline, Sanofi-Aventis and Teva have recently an- workforce have attracted many investments in the form of
nounced significant re-investments in Poland. privatization (Pratt & Whitney, EADS, AgustaWestland,
The future of the Polish pharmaceutical market will defi- Sikorsky and Goodrich) as well as in greenfield projects
nitely be shaped by other reinvestments, takeovers of state- (Avio, Hispano-Suiza, GE and MTU).
owned companies in the already-ongoing privatization pro- Regardless of the giants, Poland has a strong base of SMEs
cess as well as by the biotechnology sector, which is being constituting a wide chain of suppliers for companies such as
treated as a priority by the Polish government. Boeing, Airbus and Embraer, as well as producers of light
aircraft and gliders.
Electronics These companies continue to develop their operational
Poland’s electronics industry is one of the most significant activities, in contrast to the stagnation seen in many areas
in Europe. Poland is the largest producer of LCD screens around the world. Some examples include:
and the second largest producer of household appliances • Avio – design and implementation of a new component
in the EU. The strong position is a result of foreign invest- for the new GEnx-2B engine;
ments. Many international companies like LG, Sharp, Toshi- • PZL Mielec, Sikorsky – production of the Black Hawk
ba, Bosch, Electrolux, Indesit and Whirlpool have decided helicopter;
to establish their manufacturing bases in Poland. The main • PZL-Świdnik, AgustaWestland – assembly of the com-
reasons for this were: plete fuselage and wings for the PC-12 Pilatus.
• Poland’s favorable location at the crossroads of major The future of the Polish aviation sector looks very positive
trade and transport routes leading from the north to the against the backdrop of the global market slowdown, and
south and from the east to the west of the continent; manufacturers in the sector expect growth this year.
• access to the single European Union market;
• comparatively low labor costs for well-qualified profes- SSC/BPO
sionals. The global economic crisis and the economic slowdown
The electronics industry is highly innovative. The intro- in Poland have significantly impacted industrial output. This
duction of new technologies is very often connected with has slowed the inflow of manufacturing projects, but at the
new investments and this could provide an opportunity for same time increased the need for companies to implement
Poland. Recent investments by Samsung and Jabil have con- cost-optimization strategies. That has been beneficial for
vinced us that Poland will be very successful in attracting the Polish economy – big multinational corporations were
new investors and strengthening its position as a manufac- the first to show their interest in setting up Shared Services
turing center in the EU. Centers – be it in finance & accounting, human resources,
back-office operations or IT support.
Machinery and steel But what has come as a surprise is the growing number
The constant growth of Poland’s economy over the last few of medium-sized companies inquiring about moving part
years has boosted the development of the machinery indus- of their operations into Poland. One plausible explanation
try in Poland. comes to mind: Survivors from the economic storm have
In 2009 the sector was influenced by the global economic become stronger and are going global. Companies’ needs
slowdown, but new trends are being observed. A growing for geographical diversity are well-complemented by the
number of wind farms is resulting in rising demand for wind- growth of Poland’s own internal market, making the country
mill elements, enticing foreign investors to begin manufactur- an attractive place to start doing business.
ing turbines, blades and other such components in Poland. The economic downturn cooled down the SSC/BPO labor
The possibility of including the premises of the former market in Poland’s largest cities, such as Warsaw, Kraków and
Szczecin shipyard into the EURO-PARK MIELEC Special Wrocław, and made those locations more stable and predict-
Economic Zone might additionally stimulate the develop- able in terms of wage inflation and attrition rates.
ment of the machinery sector. The boom for SSC/BPO centers in Poland began five years
Brand new trends are expected in the steel branch as well. ago. As the market becomes more mature, companies feel
Major infrastructure projects connected with preparation more confident about rendering more complex services in
for the Euro 2012 soccer championship are expected to Poland. More emphasis than ever is being put on IT and
boost domestic steel production and consumption. R&D activities, and so the above-mentioned trends are ex-
pected to continue in the future.
Aviation
The Polish aviation sector is strongly connected with the Text provided by
global industry. The difficult situation on the world market the Polish Information and
in 2009 restrained the increase in the total turnover of the Foreign Investment Agency
6
macroeconomics • TRENDBOOK Poland
Stability in
the storm
By Remi Adekoya
7
TRENDBOOK Poland • macroeconomics
“Finance Minister
Rostowski in particular
can be singled out for
keeping his cool during
the crisis”
8
macroeconomics • TRENDBOOK Poland
faced in the early 1990s when the country embarked Polish economy was not as leveraged as in many oth-
on economic transformation from a socialist econo- er countries, its growth had been stable in the last few
my to capitalism. years, avoiding overheating, and it had access to EU
“In the first years of transformation, the country development funds which have mainly been used for
was in a permanent economic crisis. What happened road construction and other infrastructure projects.
in 2008 was nothing compared to what the Polish “Regarding the calm market response to the Smo-
people went through in those years, so Poles are used lensk tragedy, I think it was largely a result of inves-
to difficult situations. That’s why they didn’t panic,” tors’ general confidence in Poland and the fact that
he said. our Constitution laid clear rules providing continu-
He added that as a result of these tough beginnings, ity of government,” Mr Maliszewski added.
Polish companies had learned to be elastic and flex-
ible, adapting quickly to new realities. POLITICALLY STEADY
“We are also a nation demographically younger In the aftermath of the Smolensk tragedy, Prime
than many Western countries, and are therefore Minister Donald Tusk and Bronisław Komorowski,
more optimistic about the future in general. Despite speaker of the Sejm and acting president, moved
the optimism and strong consumption though, Pol- quickly to fill key roles in the government and mili-
ish companies and households are still not as deeply tary. There was no unrest of any kind on the streets as
indebted as their Western counterparts,” he said. some might have feared in a democracy just 20 years
Grzegorz Maliszewski, chief economist at Millen- old. The nation’s financial sector reacted calmly. No
nium Bank, credited tax-cuts for the the economy’s panic was reported in either the currency or equity
resilience. markets.
“Apart from the flexibility of the Polish workforce, This smooth transition was testament to strong
another important factor that has worked in Poland’s governmental institutions in Poland and increasing
favor is the personal income-tax cuts, which had been confidence in them.
passed before the crisis and came into effect in 2009. Despite the fact that Poles often complain about
This really helped to keep consumption strong,” he their political leaders, it would seem that they too
said. have passed the test thus far.
Mr Maliszewski also pointed to the fact that the “On a scale of one to 10, I would give Poland’s po-
9
TRENDBOOK Poland • macroeconomics
litical leaders a solid seven. Even though they might “It is definitely a big plus for Poland that, unlike
argue about a host of issues ranging from the vetting some other countries in the region, it has enjoyed
of former communist secret service agents to foreign political stability in these trying times,” said Piotr
policy, these disputes have no effect on the economy, Kalisz, chief economist at Citi Handlowy.
as all the governments of the past 20 years, be they Mr Kalisz also noted that another of the country’s
right- or left-wing, have pursued the same liberal major advantages is its well-qualified, relatively low-
economic policies. This has helped create a stable cost workforce.
and predictable economic situation,” said Richard
Mbewe, an independent economist. FORECAST: STABLE
He also said that due to Poland’s calm and measured The Smolensk tragedy hastened a presidential elec-
response to these two crises, investors now view the tion originally scheduled for autumn 2010. While
country as a “mature” emerging economy. elections always bring a measure of uncertainty, the
“Finance Minister Rostowski in particular can be tragedy actually eliminated some by forcing Poland
singled out for keeping his cool during the crisis and to decide on its president earlier. As Trendbook went
not succumbing to the pressure that was being put to print, the race was as yet undecided, but Acting
on him to increase spending as [finance ministers in President Bronisław Komorowski of the pro-business
other nations were] doing,” added Mr Mbewe. PO party had a significant lead in the polls.
Political stability in Poland is a factor that cannot And although his main competitor, Jarosław
be overlooked when examining the success the coun- Kaczyński – head of the opposition Law and Justice
try has achieved so far. party and twin of the late president – is ill-regarded
The Czechs and Hungarians both saw governments by many in the business community, he is not exactly
collapse during the financial crisis, while Poland’s anti-business. Personal income tax cuts were passed
ruling coalition of Civic Platform (PO) and the under his leadership as prime minister and Zyta
Polish Peoples’ Party (PSL) remained strong, with Gilowska, a respected economics professor known
Prime Minister Donald Tusk firmly in control of the for liberal economic views, served as his finance min-
political situation. ister and deputy premier.
10
macroeconomics • TRENDBOOK Poland
1.0
0.5
0.0
OECD IMF European Commission
11
TRENDBOOK Poland • expert analysis
How Stable
Is Poland?
Witold Orłowski
Chief Economic Advisor,
PricewaterhouseCoopers
12
expert analysis • TRENDBOOK Poland
noticed any problem, maintaining the stability of the consumer sentiment in Western Europe could slow
złoty. the expansion of Polish exports.
Now we face new problems. The rapid deterioration Nevertheless, Poland is well-prepared to deal with
of the mood on European sovereign debt markets, these problems. The central bank’s reserves are suf-
connected with the risk of the Greek default, is likely ficiently high, and the flexible exchange rate regime
to lead to a long period of nervousness. Poland is not should help in coping with market instability.
a member of the euro zone and the financial situation The banking sector has already proven resistant to
of the country, albeit deteriorated due to the exces- foreign exchange shocks. The fiscal position of the
sive build-up of fiscal deficits in 2009-2010, is quite government, albeit far from ideal, seems to be sus-
comfortable relative to many European economies. tainable in the medium term if only a reasonable ef-
Nevertheless, market nervousness may lead, once fort is made to curb the expenditure increases.
again, to the serious weakening of the currency, as Finally, a weaker złoty may partly offset a possible
well as to an increase of interest rates on domestic slowdown in the Western European recovery.
public debt.
But the overall effect of the turbulence on the Pol- Exaggerated panic
ish economy may not be as dangerous as it looks at Moreover, the panic about the stability of the euro
first glance. What was likely an excessive strengthen- is greatly exaggerated. Taking note of all the problems
ing of the currency previously was widely seen as the of financially weaker euro zone economies, such as
biggest risk for the real economy during 2010-2011. Greece, Portugal and Spain, as well as of the exposure
Now the weaker złoty, due to the Greek disease of many European banks to the sovereign debt of these
spreading across Europe, may once again help keep countries, one should also remember that the financial
Polish GDP growing and unemployment decreas- fundamentals of the euro zone as a whole are more
ing. sound than those of the US. The savings levels are much
higher, and the indebtedness levels considerably lower.
Risks ahead Even if several weaker states face serious financial
Obviously, the list of risks connected with the problems, there is no doubt about the medium-term
turbulence is quite extensive and should be closely sustainability of the fiscal position of the core euro
monitored. An excessive and prolonged weaken- zone economies (Germany, France and the Low
ing of the złoty, as well as problems with access to Countries). Therefore, some elements of short-term
foreign financing and foreign exchange swaps, could speculation is visible in the current market approach
endanger the position of the domestic banking sector vis-á-vis the euro, which is not fully supported by
once again. fundamentals.
Raising interest rates on government debt, as well As a consequence, I expect the mood to improve
as problems with placing the necessary quantity of relatively quickly, bringing the current turbulence to
bonds on the market, may force the government to an end and paving the way to the further acceleration
implement a radical program of spending cuts. of growth in Poland and a renewed process of złoty
Finally, a possible deterioration of business and strengthening. #
13
TRENDBOOK Poland • trendsetting companies
Trendsetting
companies
Alior Bank ranked second in the 2010 ranking of the best places to
work according to the Great Place to Work Institute Polska. Bosses and
managers work in the same open space as regular employees.
Comarch
14
trendsetting companies • TRENDBOOK Poland
PZL Mielec
15
TRENDBOOK Poland • privatization
16
privatization • TRENDBOOK Poland
was made possible after arduous talks between Polish The impressive privatization performance of the
Treasury officials and Eureko yielded a settlement in first half of 2010 is mainly thanks to sales of large-
late 2009, illustrates how far Poland’s political class ish Treasury-held stakes in previously listed com-
and Polish society have come in accepting privatiza- panies. So far, Poland has sold a 10 percent stake in
tion. copper miner KGHM, an 11 percent percent stake in
“The settlement of the dispute with Eureko and the Gdańsk-based fuel refiner Grupa Lotos, a 16 percent
IPO of PZU are positive developments contributing stake in power group Enea and 47 percent in coal
to the development of the capital market in Poland,” miner Lubelski Węgiel Bogdanka.
said Piotr Chudzik, director of Nomura Interna-
tional’s Central European investment banking opera- ACTIVE POLICIES
tions. “It also illustrates that the current government Brokerages and the Treasury said the acceleration
officials heading the privatization drive are pragmatic in sell-offs through the bourse, compared to last year,
and are not afraid of making decisions” is thanks to intensified political will and streamlined,
simplified selling procedures that the Treasury Min-
REVENUES ON THE RISE istry has introduced. Improving market conditions
In the case of PZU, whose IPO was worth $2.7 bil- have also helped.
lion, the sale of Treasury-owned shares will not fill “We are actively going out and seeking out inves-
state coffers, because the funds are needed to com- tors,” said Maciej Wewiór, the Treasury Ministry’s
pensate Eureko as part of last year’s settlement. But spokesperson. “During a trip to the United States,
plenty of other state asset sales will. Minister Grad met with over 30 potential institu-
Since taking office in late 2007, the Civic Platform tional investors.”
party has been steadily laboring away at a four-year “Now, two years of trips and meetings is paying off,”
privatization plan which culminates this year and will he added. “People are starting to realize Poland isn’t
run until parliamentary elections in the fall of 2011. just another country in Central Europe. It’s a fast-
The Treasury Ministry, led by Aleksander Grad, has growing, stable, separate market.”
forecast it will raise at least zł.25 billion in 2010, “They can differentiate between Poland and Hol-
from the sale of assets in sectors as diverse as min- land,” he said.
ing, financial services, refining, telecommunications, Although the government needs these inflows to
power generation, chemicals, insurance and retail. plug a ballooning budget deficit, the ruling party’s
Since hitting a trough in 2006, privatization inflows conviction that private ownership of companies is
have gradually recovered, gaining steam. They nearly preferable to government ownership suggests pro-
tripled year-on-year in 2009 to zł.7 billion – though privatization policies will remain in place following
missing a zł.12 billion target – a result analysts said this year’s sell-off peak.
was still impressive. A Civic Platform win in Poland’s 2011 parliamenta-
This year, privatization inflows reached zł.5.4 bil- ry elections could pave the way for another four years
lion in the first quarter and are expected at around of privatization, although, as Citi Handlowy chief
zł.7 billion for each of the next three quarters. economist Piotr Kalisz notes, there won’t be that
17
TRENDBOOK Poland • privatization
much to privatize by then. The Polish postal service a Warsaw-based analyst at CEEMarketWatch, an in-
and railway carrier, both large state-owned assets, do dependent economic news and research firm. “These
not fall under the Treasury Ministry’s jurisdiction. privatizations are making Warsaw’s large-cap WIG20
“While sales of public firms directly attract foreign index more diversified by adding an insurer and a
investors, privatization also represents a commit- power group.”
ment to market-economy principles, which tends “It makes it more representative of the whole econ-
to raise investors’ confidence,” the OECD said in a omy,” Salembier said.
recent report. The OECD noted that in addition to
filling state coffers, greater private ownership tends BETTER MANAGEMENT
to improve governance of state-owned enterprises The privatization process is often initiated by the
and raises efficiency generally. Treasury listing a stake in a state-owned company on
the Warsaw Stock Exchange but keeping a control-
RIPPLE EFFECT ling stake.
Although privatization is a slow and steady process, Although the government isn’t exiting these invest-
not a dramatic one, its effects tend to ripple out, posi- ments completely, a stock market listing is still ben-
tively affecting various aspects of Poland’s economy. eficial to the companies in question and to the Polish
“One consequence of listing PZU and the big pow- economy as a whole, said Marek Juras, head of equity
er companies is that the Warsaw Stock Exchange will research at UniCredit CAIB in Warsaw.
likely continue to beat the Vienna Stock Exchange “Once a company is listed, it needs to meet quarter-
in terms of total market capitalization,” Michał ly reporting requirements,” Juras said. “This in itself
Popiołek, head of the structured and mezzanine fi- improves the quality of management.”
nance department at BRE Bank in Warsaw. “There Following a partial privatization through the stock
are many American pension funds that can’t invest in exchange, a management team answers not only to
companies that are listed on exchanges with capital- civil servants at the Treasury Ministry, but to actual
izations below a certain threshold.” and potential investors.
“Now they can invest in Polish listed companies,” “It makes them work harder,” Juras said.
Popiołek said. Other analysts noted that a change of ownership to
The big privatizations of 2010 – the PZU debut, a a strategic foreign investor is still accompanied by a
sale of another 10 percent in power group PGE, a sale transfer of know-how, which is invaluable to a post-
of an even larger stake in rival power group Tauron, communist economy.
and a controlling stake in Energa, as well as the War- The potential for efficiency gains inside state-
saw Stock Exchange itself – will attract a lot of public- owned companies is huge. Industry experts say Po-
ity to Poland’s capital markets, analysts said. land’s electricity sector could reduce its workforce
“There’s another silver lining,” said Scott Salembier, by a third without affecting operations. Insurer PZU
18
privatization • TRENDBOOK Poland
is currently in the process of reducing headcount by reform which occurred 10 years ago. Private pension
around over 4,500 people, according to daily Rzecz- funds, in which younger Poles are legally bound to
pospolita, out of a total of 15,550. invest a part of their pension contributions, are built-
in buyers of state assets sold through the bourse and
KNOCK-ON EFFECTS also long-term investors.
Poland’s asset sales also affect the foreign exchange “It’s a good half-way point between Treasury own-
market. In order to buy Polish assets, foreign inves- ership and private ownership,” said Juras of CAIB.
tors must first purchase złoty in order to pay for Certain privatizations have an educational aspect.
them. During the debuts of well-known Polish brands like
“[In 2010] privatization will be a big factor bank PKO BP, PGE and PZU, tranches were ear-
strengthening the złoty, especially in May, June, and marked specifically for individual investors. In learn-
the second half of the year,” said Piotr Kalisz of Citi ing by doing, Poles are familiarizing themselves with
Handlowy. the benefits and pitfalls of equity investing.
The past and future successes of Poland’s many “The privatization drive is also giving investment
IPOs and sales of additional government-owned banks and brokerage houses opportunities to make
stakes in companies such as fuel refiner Grupa Lotos money on fees,” said Tomasz Sokolowski, an analyst
or power group PGE, are underpinned by pension at BZ WBK in Warsaw. #
19
TRENDBOOK Poland • energy
embracing
the atom
By Martyna Olik
20
energy • TRENDBOOK Poland
21
TRENDBOOK Poland • energy
ar plants, producing over 22 percent of their energy. ing decisions on which nuclear technologies will be
Fifty new reactors are being built or planned around adopted, as this might determine further cooperation
the world. with subcontractors.
In the EU, around 30 percent of the energy pro- PGE has already signed two memoranda of un-
duced comes from nuclear power plants; France leads derstanding, with GE Hitachi Nuclear Energy
the bloc, with over 75 percent of its energy produced Americas and EDF, and plans more. Other pos-
using nuclear power. sible partner candidates include Toshiba Corp
subsidiary Westinghouse Electric, Czech power
How much? producer CEZ and Korea Electric Power. The
Estimates on the cost of constructing a 1,000 MW Polish and Japanese governments signed a memo-
plant hover around E3 billion, although Mr Echávarri randum in late March on promoting cooperation
estimates the cost at E3.5-4 billion per 1,000 MW. Ol- in using nuclear energy.
kiluoto 3, a 1,600 MW power plant under construc- Research institutes, consulting companies, equip-
tion in Finland, is estimated to cost E5.2 billion, or ment suppliers and construction companies will all
E3.25 billion per 1,000 MW. benefit from the project. However, the government
PGE has quoted a ballpark cost of around E3 billion has stressed that it will try to involve as many domes-
per 1,000 MW, with the proviso that the cost of the tic entities as possible.
first reactor will probably be higher, as it will cover Polish companies and experts are presently gaining
the cost of preparing the infrastructure necessary for experience by participating in the construction of Ol-
nuclear energy. kiluoto 3, working in a variety of roles, from assembly
to management of the construction site.
Technology choices Some hope Poland could follow in the footsteps of
PGE is to choose a partner for building the nuclear South Korea, becoming a major producer of nuclear
plant and the technology by the end of 2010. “By the technology. The latter nation began its nuclear en-
end of the year we should know with which partner ergy program from scratch in the 1970s and recently
and with what technology we will build the nuclear scored a victory over bidders from Asia, France and
plant,” said Wojciech Topolnicki, deputy president of the US by securing a contract to build four nuclear
PGE. His company will retain a 51 percent stake in plants in the United Arab Emirates.
the consortium. If it is to achieve similar successes, Poland’s nuclear
The technology and key equipment will come from industry has a lot of work ahead of it. But that work
a foreign supplier, and competitors are eagerly await- has the potential to be extremely lucrative. #
So far solar energy has not been effectively supported by the gov-
Though the market for renewable energy in Poland is still small ernment, Mr Hauff noted.
– and is receiving for less nudging from the government than
Poland may also become a significant producer of components
nuclear power – experts say the market has significant potential.
for renewable energy facilities such as wind farms, because of the
In order to adhere to EU regulations, Poland must significantly considerable size of the market and the advantages of lowering
increase the share of renewable energy in its energy consump- the cost of production and transport. Mr Drzał cited the recent
tion to reach 15 percent by 2020. According to the government, example of Danish firm LM Glasfiber – the company opened a
the share of renewables in Poland’s energy consumption in 2009 wind turbine blade production facility in the northeastern town
reached only four percent. of Goleniów in 2009.
22
energy • TRENDBOOK Poland
Expert analysis
The future of nuclear energy in Poland
The renaissance of the nuclear energy pointment of a Governmental Commissioner for Polish Nuclear
industry can be observed around the Energy as well as the “Framework schedule of activities for nuclear
world. There are currently over 50 energy,” prepared by the Economy Ministry.
reactors under construction. Poland The implementation of the governmental program for nuclear en-
is not only a part of this global trend, ergy development requires the execution of a number of tasks re-
but is also making up for lost time. In lated to legal and administrative issues, as well as education of the
accordance with the government’s scientific and engineering personnel.
energy policies, between the years
2020 and 2030 a total of 4,800 MW A change in society’s attitude towards the construction of nuclear
of power from nuclear plants is to be power plants is essential. Despite the fact that the level of acceptance
put into operation. for the government’s plan is growing, we will see a campaign aimed
Adam Smolik at raising Poles’ awareness and understanding, in order to dispel
Board Member at the Government plan doubts and fears about the threats of nuclear catastrophe.
Economic Chamber for Building a nuclear power plant in Po-
Energy and Environmen- land will not significantly change the Investor interest
production structure of primary en- It should be expected that as the progress of the governmental
tal Protection;
ergy, but will allow for its diversifica- nuclear program continues, an increasing number of investors will
President of the Board,
tion – the share of nuclear energy in declare the will to participate in its execution.
ENERGOPOMIAR
Poland’s overall production will not High-quality execution of orders, which is required in the nuclear
even exceed 10 percent. The country’s return to plans related to the industry due to the necessity to ensure security, will be an essen-
construction of a nuclear power plant will not only lead to diversi- tial but certainly feasible condition for the domestic industry to
fication of sources of energy and the improvement of the country’s join this process.
energy security, but will also positively influence the economy,
For some companies in Poland’s industry and services sectors, the
through technical progress and creation of new jobs.
construction of a nuclear power plant in Poland is an opportunity
In 2009 the government approved a special bill on the commence- to gain new competencies – but mainly it’s an opportunity to gain
ment of works on the Polish Nuclear Energy Program and the ap- new contracts.
Legal analysis
Practical legal aspects of wind farm development in Poland
Wind power is by far Poland’s most im- of cable. Personal easements in Poland can only be established for
portant source for generation of renew- the benefit of individuals and not for legal entities. Land easements
able energy. However, the development can only be established for the benefit of the neighboring land
of wind farms in Poland is still being owner. Therefore, cooperation with land owners is essential.
carried out by relatively inexperienced Many Polish municipalities have no zoning plans, as there is no
individuals or small entities. Property, such statutory obligation. Consequently, zoning is regulated by a
administrative and grid-connection permit issued by the mayor. New legal regulations require that in-
conditions are often unsatisfactory for vestors obtain an environmental decision before a zoning permit.
investors. The common lack of zoning
plans obliges investors to obtain addi- Administrative decisions are granted by various authorities and
tional administrative decisions. Land can, therefore, be inconsistent. The most important decisions that
Siegfried Seewald use agreements for wind turbines re- must be obtained include the zoning permit, the environmental de-
Partner, Legal Advisor, quire careful drafting. Incoherent legal cision and the building permit. Relevant decisions must be filed to-
M&A/Energy administrative regulations may cause gether with the application for the building permit. A change in the
delays and additional costs. Investors key factors of the building permit (such as the manufacturer of the
are frequently laden with the costs of wind turbines) may require that the building permit be amended.
the grid’s modernization. Disputes with the Energy Regulatory Office Grid-connection agreements are concluded on the basis of Grid
– concerning connection to the grid in particular – are cost-intensive, Connection Terms (GCTs). Investors often acquire projects with
time-consuming and exhausting. GCTs but without an existing connection agreement. The legal
Usually land is not acquired by the investor. Instead, lease agree- character of GCTs and their transferability are not regulated by
ments are concluded with land owners. Signatures must be certi- statutory laws and are highly controversial.
fied by the notary for the entry of the agreements into the land Significant prepayments must be made upon application for the
and mortgage register. However, the entry into the register is often GCTs with the grid operators. Investors are often charged with the
overvalued by foreign investors and the developers themselves. costs of the modernization of the grid, which is most likely not in
Access to the grid requires the involvement of third-party real es- line with the law. This leads to disputes, which are settled by the
tate. Newly introduced transmission easements allow for the laying regulator in the first instance, but do end up in courts very often.
23
TRENDBOOK Poland • sustainable development trendsetters
Sustainable
development
trendsetters
Impact Automotive Technologies
GDF Suez
24
sustainable development trendsetters • TRENDBOOK Poland
Bioagra
Bioagra has recently completed the
construction of a zł.400 million factory which
produces bioethanol fuel – a green alternative
to fossil fuels. The company plans to produce
140 million liters of bioethanol.
25
TRENDBOOK Poland • e-commerce
Online capitalism
on the rise By E Blake Berry
year. Over 19,000 firms were registered with the Na-
The Polish e-commerce tional Court Register in 2009 and the last decade saw
market is fragmented and not a steady period of growth of new companies.
26
e-commerce • TRENDBOOK Poland
preneurs to launch internet-related companies. generally invest in a brand, preferring sell cheaply.
According to figures from the Polish Direct Mar- He noted, however, that there’s now a trend towards
keting Association, in 2008 there were over 7,000 quality, which could spell disaster for many smaller,
e-tailers active in Poland and around seven million unbranded e-tailers.
customers, generating combined revenues of more “Poles are not just looking for the cheapest prod-
than zł.11 billion. Research by the Centre for Retail ucts anymore, but for the ones with the highest qual-
Research (CRR) and British comparison site Kelk- ity,” he points out.
oo, meanwhile, puts the value of online sales in the Asked about the next big thing, Marek Borzestows-
Polish market at zł.10.4 billion in 2009, with zł.13.23 ki, co-founder of popular web portal Wirtualna Pol-
billion in sales forecast for 2010. ska, director of web communications firm Inteliwise
In fact, CRR and Kelkoo expect Poland to see the and an expert from the Sobieski Institute think tank,
fastest growth this year of large European markets mentions Western phenomenon Groupon. This
– they forecast 36 percent y/y growth, with France “deal-of-the-day” website harnesses the potential
next in line at 31 percent growth. This can be ex- for collective consumerism inherent in the internet,
plained, they say, by an “explosive rise in the number offering massive discounts on services (restaurants,
of first-time customers.” massages, theaters) by directing large groups of peo-
ple to one service provider.
growth Potential Groupon seems a natural fit for large urban markets
Experts in e-commerce, speaking with undisguised in the US and UK, but is Poland ready for it? “I’m
optimism about the market, find little to disagree pretty sure that this sort of portal will be started fairly
with in these figures. soon in Poland,” says Mr Borzestowski. “As far as I
Jakub Połęć, an expert from the Adam Smith Center know, there’s lots of work being done on a project of
and president of online comparison site Peryskop.pl, this sort in all major cities.”
confirmed that the Polish market is expanding at Indeed, April 2010 saw two competing initiatives –
over 30 percent y/y, with growth in certain catego- CityDeals.pl and Gruper.pl – launch in the same week.
ries – such as clothing and white goods – exceeding
100 percent. As online sales increase, the trend is ac- Profit and loss
companied by growth in research-online, purchase- The prospects for Polish e-commerce are good, but
offline behavior. the market is not without tribulation. Many of the
Up to 60 percent of e-tail transactions involve price- biggest companies engaged in online trade still have
comparison sites, Mr Połęć says, and this is especially significant difficulty turning a profit, for example,
true for small and medium-sized shops which don’t even if they see revenue growth.
27
bln zł.mln
42 2004 2005 2006 2007 2008 800
600
31 700
500
bln2 600
zł.mln
TRENDBOOK Poland • 2004
e-commerce
2005 2006 2007 2008
1 500
Private
Online bookseller Merlin, for instance, saw its 2009
30%(zł.27 billion)
well-recognized brand and good market share, but
sales revenues rise six percent y/y, toPublic zł.101 million, has been compared unfavorably to its Western peer
but suffered a net loss of zł.660,000.Private That was an im- Amazon.
30%(zł.27 billion)70% (zł.64
provement
billion)
over the zł.10 million lossPublic
it had in 2008, “This is a company which has never been very well
but the company has struggled for years. It boasts a invested,” says Marek Borzestowski.
Komputronik – Poland’s biggest online retailer in
70% (zł.64 billion)
2009 in terms of sales value, according to Euromoni-
Online sales for selected countries tor International – also endured a net loss. The IT
(in E billions), 70%
2008-2010
(zł.64 billion) sector firm was zł.3.45 million in the red, compared
50 to a 2008 net profit of zł.3.62 million,
50 although its
2008 revenues rose to zł.811 million, from zł.757 million a
400 year earlier. It blamed its fortunes on40a significant fall
2009 in consumption and investment demand.
50 50
300 2008 The Empik Media & Fashion Group 30 was in a simi-
20100
2010*
400 lar position, with its 2009 profit falling
40 9.6 percent
50 50
200 2009 y/y, from zł.96.1 million in to zł.86.720 million last
2008
300 *Forecast year. Its sales revenues were up 18.430percent to zł.2.7
400 20100
2010* 40
100 2009
billion, from zł.2.29 billion in 2008.10EM&F’s overall
200 revenues are obviously larger than those
20 of Merlin or
300 30
� 20100
2010*
*Forecast Komputronik, but revenues from e-commerce
0 activi-
UK Germany Spain Sweden Switzerland Poland Finland UK Germany Spain Sweden Switzerland
100 ties are lower. 10
200 20
Source: Kelkoo, Centre for Retail Research
The biggest fish in Poland’s corner of the net is Al-
*Forecast
� legro, a capital group comprising the 0 eponymous
100 UK Germany Spain Sweden Switzerland Poland Finland 10 UK Germany Spain Sweden Switzerland
auction site as well as a number of popular specialty
40 40
websites and services. According to Jakub Połęć, the
Online sales growth for selected countries
35� Allegro Group accounts for around 60-65 0 35
UKpercent of
Germany Spain Sweden Switzerland
UK Germany Spain Sweden 2008-2009
Switzerland Poland2009-2010*
Finland
30
(in %), 2008-2010 all e-commerce turnover in Poland. 30
40 40
25
Allegro’s auction service has fought 25
off all chal-
35 *Forecast lengers so far, including global giant eBay,
35 which Mr
20 2008-2009 2009-2010* 20
40
30 Borzestowski describes as having been30 “too ignorant”
40
15
35
for the Polish market. 15
35
25 25
2008-2009 2009-2010*
*Forecast Its owner, South African media giant Naspers,
10 10
30
20 30
20
doesn’t list separate earnings for Allegro. Naspers’
5 5
25
15 2009 financial report states that the 25 Polish market
15
*Forecast
% 0
20
10 Poland Finland Spain Switzerland Sweden Germany UK grew “soundly” and that its Polish holding10 Poland
20 contrib- Finland Spain Switzerland Swede
uted greatly to the growth of revenues in its internet
155 155
division.
10
% 100
Poland Finland Spain Switzerland Sweden Germany UK
Nevertheless, in Mr Połęć’s view Allegro’s auction
Poland Finland Spain Switzerland Swede
5 service will have to strive to maintain 5 its preemi-
Source: Kelkoo, Centre for Retail Research nence. “Some shops would like to 120 discontinue their
% 0
Poland Finland Spain Switzerland Sweden Germany UK Poland Finland Spain Switzerland Swede
Broadband Total Internet *Excludes Belgium cooperation with Allegro and are trying to go to dif-
100 ferent e-commerce platforms or offer 100 their products
elsewhere,” he says. Why? “Because120 of the high prices
80 Internet access for enterprises (in %) 80
or margins of the Allegro Group.”
in selected countries, January
Broadband
2009
Total Internet *Excludes Belgium
100 100
60 60
ia
ain
ic
UK
nia
27
nia
an
ar
an
lan
bl
ak
20 20
Sp
ma
EU
ng
pu
rm
nl
Po
Fi
Hu
Ro
Re
Ge
Sl
th
40 40
Li
ch
% 0
profitable enough to continue business.” Finland SlovakiaGermany Spain
Czech Republic
Lithuania EU27* UK
20 20
d
ia
ain
ic
UK
nia
27
nia
an
ar
an
lan
bl
ak
Sp
ma
EU
ua
ov
Po
Fi
Hu
Ro
Re
Ge
Sl
th
20 200
Li
h
ia
ic
UK
nia
ar
an
lan
bl
ak
a
Sp
ma
EU
ng
pu
*Excludes Belgium
rm
nl
ua
ov
Po
Fi
Hu
Ro
Re
Ge
Sl
th
15 15
h
ec
20 20
Cz
10 *Excludes Belgium 10
20
15 20
15
28 5
15
*Excludes Belgium 5
15
10 10
% 0
60 80 60 80
40 60 40 60
20 40
e-commerce
20 40 • TRENDBOOK Poland
% 20 0 20
Finland SlovakiaGermany Spain
Czech Republic
Lithuania EU27* UK Pola
ia
ai n
ic
UK
nd
nia
27
nia
an
ar
an
bl
ak
ola
y Sp
y ma
EU
%
d ung
0
pu
ia rm
nl
ic ua
d ov
UK P
Fi Finland SlovakiaGermany Spain
Czech Republic
Lithuania EU27* UK
ar Ro
ain Re
ak Ge
an S l
b l i th
l an H
pu L
Sp ch
nia
27
nia
e
an
E-commerce turnover
Cz
ma
EU
ng
rm
nl
ua
ov
Po
Fi
Hu
Ro
Top brands in online retailing
Re
Ge
Sl
th
Li
as percentage of total turnover, 2008
h
ec
Cz
20
in Poland,20 2009
Percentage of
20 Rank Brand
*Excludes Belgium total
20 market value
15 15
*Excludes Belgium
1 Komputronik 3.6
15 15
2 Merlin.pl 2.8
10 10
3 Empik 1.9
10 10
4 Quelle 0.8
5 5
- Bonprix 0.8
5 5
6 Mango 0.7
% 0
Finland
Czech Republic
Germany UK Hungary EU27* SlovakiaLithuania Sp
7 Nu Skin 0.6
d
ic
ny
UK
7*
k ia
ain
nd
nia
nia
an
ar
bl
U2
a
ola
* va
Sp
d oma
ng
d pu
ic rm
nl
%
ia ua
0
ar E
27 Slo
ain P
Fi
UK Hu
e
bl Ge
Finland
Czech Republic
Germany UK Hungary EU27* SlovakiaLithuania
ak ith
lan R
lan R
- TV Market 0.6
ov L
Fi zech
nia
nia
an
Sp
ma
EU
ng
C
pu
rm
ua
n
Po
Hu
Ro
Re
9 Vorwerk 0.5
Ge
Sl
th
Source: Eurostat
Li
h
ec
40
Cz
10 Bomi 0.4
Take-up of internet services 35 40
as
40 percentage of population, 2004-2008 11 E Leclerk 0.3
30 35
355 40 12 Neckermann 0.2
25 30
3300 355
- Amway 0.2
20 25
2255 3300
- Apple 0.2
15
15 Hewlett-Packard 20 0.1
2200 2255
10 15
155 2200 Source: Euromonitor International
5 10
100 155
0 5 2004r 2005r 2006r 2007r
5 100
0
%
2004r 2005r 2006r 2007
5
2004 2005 2006 2007 2008
%
Listening to web
2004radio/watching web TV
2005 2006 Reading
2007 magazines/newspapers
2008 online
Listening
Internet to web radio/watching web TV
banking Reading
Ordering magazines/newspapers
goods/services online
for private use
Internet
Selling banking online (e.g. via auctions)
goods/services Ordering
Looking goods/services
for info for private use
about goods/services
Sending emails
“If you’ve bought something in one shop and want turn to the boom of the mid-2000s is highly unlikely,
to buy something new, but the shop has disappeared however.
because it was unprofitable – is that good for you?” “There’ll be stronger growth than last year, definite-
asks Mr Połęć. ly. We’ll have more mature players, bigger shops, big-
The dominance of the Allegro Group isn’t healthy ger distributors,” says Jakub Połęć. “And I think the
for the market either, in his opinion. customers won’t just choose the cheapest price, but
Distribution costs comprise another obstacle for will choose good brands, with good service, which
market growth. Poczta Polska, Poland’s incumbent are well produced. So they will be more mature in
postal services operator, remains a monopolist in all looking for products with after-sales maintenance.”
but name, and experts complain that greater compe- Mr Borzestowski expects to see natural expansion,
tition is needed in order to ease burdens on e-com- but no major changes in terms of annual growth.
merce. For now, the strength of Polish brands and high de-
“Distribution costs are still relatively high com- gree of competition pose a barrier for foreign players,
pared to the price of the transaction … even by Euro- leaving acquisitions perhaps the simpliest means of
pean standards,” notes Mr Borzestowski. entering the market.
In Mr Połęć’s view, “It comes down to the brand – the
2010 and beyond perception of the brand – so if you’re a foreign com-
The years 2010 and 2011 are forecast to see moder- petitor looking to enter the market, I’m pretty sure that
ate consolidation and slow but steady growth. A re- the best idea is to buy out a Polish company.” #
29
TRENDBOOK Poland • regional airports
regional airports
flying high
By Marcin Poznań
Fueled by EU funds and by the
expected influx of tourists for
the Euro 2012 championships,
Poland’s regional airports are
S ince Poland joined the EU and foreign low-
cost carriers began exploring the local civil
aviation market, Polish regional airports have
been experiencing a boom in passenger activity. De-
spite a global decline in commercial aviation in 2009,
taking off Poland is still among the world’s 15 fastest-develop-
ing markets, according to IATA.
To cater to the increasing number of passengers, re-
gional airports have been investing in infrastructure.
By 2012, about zł.3.6 billion will have been spent on
the expansion of Polish airports, according to Polish
Infrastructure Minister Cezary Grabarczyk.
All of Poland’s regional airports are seeing a surge
in investment, but especially those whose cities will
hold Euro 2012 games. In February the European
Investment Bank agreed to lend zł.210 million for
30
regional airports • TRENDBOOK Poland
Selling goods/services online (e.g. via auctions) Looking for info about goods/services
Sending emails
31
TRENDBOOK Poland • regional airports
Route to success For airlines, the forecasts for heavier demand have
From a business point of view, better airport infra- played an important role in deciding on new routes to
structure and regional tourism should draw air carriers’ and from regional airports. Poland’s regional airports
attention. Cooperation between airport authorities are crucial to the strategy of traditional airlines, such as
and local governments is key to developing the poten- Lufthansa, which carries Polish passengers from seven
tial for profit. Most regional airports are jointly owned Polish airports to its German hubs. For low-cost carri-
by their cities or voivodships, which should help. ers such as Ryanair or Wizz Air, they serve as a direct
According to Stanisław Nowak, CEO of Rzeszów-Ja- link with regional airports abroad.
sionka Airport, maximizing this cooperation is crucial. While he said he admired the expansion of Polish
“The most important areas are development, mutual airports, József Váradi, CEO of Wizz Air, pointed out
promotion and co-financing of investment,” he said. a significant weakness.
Dariusz Kuś, CEO of Copernicus Airport Wrocław “There is a lack of proper technical capability of Pol-
agreed, underscoring the need for support in launch- ish airports, which seriously complicates our opera-
ing new routes. “We hope that local authorities will tions in case of bad weather. I’d rather see Polish air-
engage in promoting our region abroad, which would ports invest in modern navigation instruments than
translate into an increase in air travel,” he said. new terminals,” said Mr Váradi.
Total regional number of passengers 2,311,216 2,304,483 -0.29% 11,213,332 10,663,822 -4.90%
airports (exclud-
ing Warsaw) number of operations 28,651 27,932 -2.51% 128,313 122,332 -4.66%
Source: Civil Aviation Office
32
regional airports • TRENDBOOK Poland
33
TRENDBOOK Poland • regional airports
Legal analysis
34
35
TRENDBOOK Poland • trendsetting cities
Wrocław
Known for its young, well-educated populace,
Wrocław’s authorities have made a successful
push to make the city more visible on the
national and international stage. Along with
raising its cultural credentials, the city has
Poznań will be one of the four Polish cities hosting Euro 2012 matches, attracted a number of knowledge-based
Poznań
and is the only one that didn’t have to build an entirely new stadium investments recently, including a Google
from scratch – it’s current soccer stadium is being revamped for the Innovation Center, a HP BPO center and an LG
event. Poznań is at the heart of Poland’s automobile industry and Polish factory. The city is one of four that will host Euro
firms based there – such as bus-maker Solaris – continue to innovate in 2012 matches - a new stadium for this purpose is
terms of fuel efficiency and technology. under development in its Maślice district.
Opole
Aside from attracting investments from innovators like Mitsubishi
Opole is the most likely of Poland’s mid-sized
Kraków
Rzeszów
36
trendsetting cities • TRENDBOOK Poland
Trendsetting cities
Gdańsk
Szczecin Łódź
Poznań
The home of Poland’s Solidarity
Warsaw movement is getting a makeover – not
only will it see the construction of
infrastructure and a new stadium for
Gdańsk
the Euro 2012 tournament, its “Młode
Lublin Miasto” or “Young City” project will
reshape and revitalize the heart of
the city by redeveloping its beautiful
waterfront. It has also enhanced its
status as a trade hub with its Deepwater
Wrocław Container Terminal, the first stage of
Rzeszów
which was completed in 2007.
Opole
Kraków
Szczecin
Though once wholly dependent on the sea, the
western city of Szczecin is branching out. It has
seen IT investments such as a UniCredit BPO This forward-looking city has embarked on a huge infrastructural
center, and a city investment scheme will focus investment program that will include a ring road and a nearby airport. Rich
Lublin
on environmental protection programs. It was in history, this city of 100,000 students also produces some of the country’s
also recently revealed that the city is planning most cutting-edge artists. As the largest city east of the Vistula River,
to build a soccer stadium under a public-private Lublin is the unofficial capital of Poland’s “Eastern Wall” – the region
partnership agreement worth hundreds of including the four easternmost voivodships, which will receive the bulk of
millions of złoty. the country’s EU structural funding over the next decade.
Łódź Warsaw
37
TRENDBOOK Poland • European Union politics
a
A state of growing
influence
By E Blake Berry
It has been no easy feat to
gain respect and weight
in Brussels, but Poland is
on its way to becoming
a significant player in
P reparations for Poland’s turn at the European
Union’s rotating presidency, set for the latter
half of 2011, are in full swing. Its co-hosting of
the Euro 2012 soccer championship with Ukraine will
European politics
put the two countries firmly in the spotlight, provid-
ing opportunities to improve relations with one of the
EU’s biggest and most fragile neighbors.
Meanwhile, Poland’s economic strength during
the global financial crisis has won the respect of its
European peers. And the nation’s stability in the
face of the April 10 Smoleńsk tragedy impressed
38
e 4 Spain
UK
European Union politics • TRENDBOOK Poland
Italy UK Poland
Germany
France S
Spain Portugal
France
n
Germany Finland Sweden
Italy
Change *Includes
in turnout forRights
the Human European Parliament elections in
and the Security Number of standing committee chairs* in the
selected &CEE member states between 2004 and 2009, in
Defence subcommittees
2009-2014 European Parliament
percentage points
++PIE GRAPH++
Chair share 1
1
20 Number of standing committees chairs* in the 2009-2014 1 20
5
15 European Parliament by nationality 1 15
Italy 5
10 France 4 10
Germany 4
5 2 5
UK 3 -0.1 -2.19 -27.4
0 Spain 2 0
Finland
+17.07 1
+12.36 +3.66 +2.67 4
-5 Poland 1 -5
3
-10 Portugal 1 -10
Sweden 1
-15 *Includes the Human Rights and the Security & Defence 4 -15
subcommittees
-20 -20
Source: European Parliament
-25 -25
-30 ++BAR GRAPH++ Italy -30
UK Poland
Estonia Latvia Poland Slovakia Czech Hungary Lithuania Estonia Latvia Poland Slovakia Czech Republic Hungary
Republic
Not so enthusiastic
Source: European Parliament France S
Spain Portugal
Change in turnout at European Parliament elections in
selected CEE member states between 2004 and 2009, in
percentage points Germany Finland Sweden
Estonia +17.07
Latvia +12.36 *Includes the Human Rights and the Security
Poland +3.66 & Defence subcommittees
Slovakia +2.67
Czech Republic -0.1 Source: European Parliament
120 Hungary -2.19
Lithuania -27.4
Source: European Parliament *Excludes Belgium
100 20
15
80 10
foreign investors. In short, Poland’s star is on the reliable, untrustworthy and arrogant. And that label
5
rise and its influence on European politics is grow-
60 of unpredictability had to be removed by the-0.1 new -2.19 -27.4
0
ing, albeit slowly. government, which they did rather successfully,” sug-
+17.07 +12.36 +3.66 +2.67
40 gests Piotr-5Maciej Kaczyński, a research fellow at the
Power games
20
Centre for-10
European Policy Studies.
Power-sharing in the EU is generally approached as There’s -15
a general consensus in Brussels that rela-
-20
a0 zero-sum game. No surprise then, that Poland has tions with Poland have greatly improved under the
had to fight to be heard and taken seriously among present government. -25
Germany even awarded Prime
d
ia
ain
ic
UK
nia
27
nia
an
ar
an
lan
bl
ak
Sp
ma
EU
ng
Minister -30
pu
rm
nl
ua
ov
its fellows.
Po
Donald TuskLatvia
its 2010 Charlemagne Prize,
Fi
Ro
Re
Ge
Sl
th
Li
“Since 2004, Poland has been in a sense trying to for a “valuable contribution in the services of Republic
ch
West-
e
Cz
find a position for itself. To some degree it has been ern European understanding and work for the com-
successful in formal integration … but the three very munity.” What’s less clear is whether better relations
20
large states – France, Germany and the UK – don’t have – or even can – translate into political influence
really like it. I don’t think Spain and Italy like it all in the EU.
*Excludes Belgium
that much either, because obviously if you make
15
space for a sixth large state then there’s a little less Measuring success
space for you, at least as seen in zero-sum terms,” says Quantifying any nation’s influence on EU policy is
10 120
György Schöpflin, a second-term Hungarian MEP a tricky business. As Dr Nathaniel Copsey, a senior *Excludes Belgium
and respected academic. lecturer in100politics and deputy director of the Aston
5 Some of Poland’s difficulties have been self-inflict- Centre for Europe, puts it, “While the impact of the
ed, others are due to the cacophonous nature of Eu- EU on individual 80 nations is often studied, the reverse
ropean politics. The country’s poor PR image during is less often true. It’s very difficult to measure the im-
0 60
the 2005-2007 government’s tenure is seen by many pact of member states on the EU.”
*
d
ic
ia
UK
ain
nd
nia
27
nia
an
ar
an
bl
ak
la
as a case of the former. Its brusque treatment of other Nevertheless, Dr Copsey and his colleague Karo-
Sp
ma
EU
ng
pu
rm
nl
ua
ov
Po
40
Fi
Hu
Ro
Re
Ge
Sl
th
Li
h
member states – including Germany, which had lina Pomorska, an assistant professor in Maastricht
ec
Cz
championed Polish accession – earned it few friends University’s20 department of politics, have attempted
among its peers or the European media. to do just that. The conclusion of their forthcoming
0
“Before the 2007 elections Poland was not trusted, research is that Poland’s influence in the EU has in-
d
ia
ain
ic
UK
nia
27
ni a
an
ar
an
lan
bl
ak
it was alienated, singled out. Nobody really wanted deed increased since accession, but not significantly,
Sp
ma
EU
ng
pu
rm
nl
ua
ov
Po
Fi
Hu
Ro
Re
Ge
Sl
th
Li
to talk to the Poles, they only did so when they re- and that its gaffes have had much to do with this.
h
ec
Cz
ally had to, but they didn’t want to. They were un- Copsey and Pomorska have conducted over 70
20
*Excludes Belgium
15 39
10
TRENDBOOK Poland • European Union politics
interviews with politicians, officials, businesspeople Perhaps the most-cited example of Poland “shoot-
and others in Brussels and Warsaw and one com- ing itself in the foot” is its 2006 veto of a new Partner-
mon complaint is that Poles are still “rough around ship and Cooperation Agreement (PCA) with Rus-
the edges.” For example, one interviewee complained sia over a ban on some Polish food imports. This was
that Poland “needs to learn to play different pianos at seen as an audacious move and it left Poland isolated,
the same time.” even if some states silently applauded it.
In other words, when the Poles have been keen on
concessions in policy area X, they’ve tended to dig The eastern niche
their heels in and make a fuss about things, frustrat- To date, Poland’s impact on EU policy is less than
ing older member states and alienating newer states it hoped for, but greater than most expected. Its most
who might otherwise be allies, but see nothing to visible success has been the Eastern Partnership pro-
gain from engaging in brazen pigheadedness. In gram, which seeks to improve the EU’s relations with
the opinions of some interviewed by Copsey and Belarus, Ukraine, Moldova, Azerbaijan, Armenia and
Pomorska, Poland needs to engage more actively Georgia.
in policy areas in which it may have little direct in- Jas Gawronski, an Italian journalist and five-term
terest, in order to gain leverage for its own ends in MEP, points out, “Few people knew about Belarus
other policy areas. and its problems before the Poles arrived. They have
40
European Union politics • TRENDBOOK Poland
had the great merit of focusing the Parliament’s at- palatable for other member states.
tention on what’s going on in Belarus, and in Ukraine However, as Mr Schöpflin points out, the launch of
as well.” the partnership was a success, but whether it achieves
That the country has made its mark in this area is anything of substance is unforeseeable.
perhaps unsurprising, given its size, location and “After all, the Eastern Partnership and the war
relative stability. against Georgia are difficult to reconcile. The the con-
Even so, some observers say that the Eastern Part- sequences of that war are still around – the fact that
nership almost didn’t happen because many mem- Abkhazia has effectively been detached from Georgia
ber states are loath to annoy Russia. One sentiment for good, or at least for the foreseeable future, says to
in Brussels, according to Dr Copsey, is that “Putin me that there are serious problems. And I don’t see
‘saved’ the Eastern Partnership with the [2008] inva- how the Eastern Partnership is going to solve the fact
sion of Georgia.” In other words, the Eastern Partner- that 20 percent of the territory of Azerbaijan is under
ship program was an opportune vehicle for a policy foreign occupation,” he said.
response.
Dr Pomorska calls the choice of Sweden as a part- Much to learn
ner in creating the Eastern Partnership proposal “ex- Eastern diplomacy may be Poland’s greatest suc-
cellent,” and notes that it marked an improvement in cess to date, but it’s not the only one. The number
Poland’s approach to EU policymaking. Sweden was of Polish politicians occupying high-profile positions
soon to take over the rotating EU presidency, giving in the bloc is impressive. To name just a few: the
it extra leverage to push the partnership, and it was presidency of the EP is held by Jerzy Buzek; The EC’s
able to take the Polish project and “translate it into budget commissioner is Janusz Lewandowski; the
the language of Brussels.” European Conservatives and Reformists are headed
Copsey and Pomorska posit that the experience by Michał Kamiński; Jacek Saryusz-Wolski is a vice
of the Eastern Partnership helped to teach Poland president of the European People’s Party and chair
the value of “constructive ambiguity” in EU policy. of the EU’s NATO delegation; and Danuta Hubner
Sweden’s contribution included bureaucratization chairs the regional development committee.
and depoliticization where possible, making it more But even with Poles in key positions in Brussels,
to advertise, contact:
Kasia Pinkiewicz
kpinkiewicz@wbj.pl
+48 22 639 85 68 ext. 218
41
TRENDBOOK Poland • European Union politics
the decision-makers in Warsaw still have many les- reduce “they don’t know more than us” resent-
sons to learn. ment.
“I would say that Poland is the first of the newer Yet Poland’s relationship with the European Union
member states to learn how to make use of the system is long-term and has only begun in earnest. What it
for its own benefit. But the Poles have a top-down has achieved thus far is significant, but its influence
approach, they knew how to stop things, particularly will probably grow incrementally.
at the last minute, and now they are learning how to “I wouldn’t exclude the possibility of Poland hav-
stop a little bit earlier and trying also to propose solu- ing a much more salient position,” says Mr Schöpflin,
tions,” said Piotr Maciej Kaczyński. noting that Europe has “a certain grudging respect
There’s also a disconnect between officials in for Poland having weathered the economic crisis
Warsaw and Brussels, a feeling of “them” versus quite successfully.”
“us,” which reduces Poland’s influence the EU. He added, “At the moment I’d say the odds are
Better rotation of Brussels-trained talent back into against [its influence growing quickly], but that could
domestic civil service would help this and would really turn around easily in a short period of time.” #
42
private health care • TRENDBOOK Poland
A
a cure in private
health care
By Marcin Poznań
43
TRENDBOOK Poland • private health care
In circumstances like these it is little wonder that ciety will make these services available to the broader
an increasing number of people are turning to private population,” she said, adding that this year will see
health care, despite having to pay for it. private health services develop even more rapidly
“Private health care in Poland has been developing than before.
at a pace of several percent a year, and that is despite
the recent crisis. I assume that as the economy im- Connected vessels
proves this growth will stabilize at 15-20 percent Private health care clinics are part of the same large
annually,” said Adam Rozwadowski, CEO of Enel- system. They are also contracted by Poland’s Nation-
Med Medical Center, a private health care provider al Health Fund (NFZ), as public health clinics are,
in Poland. to perform services for patients that use the public
Indeed, finding affordable private health care is system.
increasingly becoming less of an issue. Industry rep- However, as the NFZ’s budget tightens each year, it
resentatives reject the idea that private health care is more often contracting out its services to the more
services are expensive. Such networks around Poland efficient private clinics. Private clinics are profiting as
have come up with plans to fit almost every budget. a result. For example, Enel-Med saw a more than 20
They also underscore their advantages, which include percent y/y increase in the value of contracts received
fast, easy access not only to a family doctor, but also for surgeries and diagnostic imaging at its hospital in
to more sophisticated specialists and equipment. Warsaw – from zł.10.5 million in 2008 to zł.12.8 mil-
According to Małgorzata Kowalska, deputy presi- lion last year.
dent of the board at Medicover, Poles have begun to Though it might seem that the public sector’s loss is
understand that they should treat their health as a the private sector’s gain, it’s not always quite that sim-
long-term investment. ple. According to Enel-Med’s Rozwadowski, Poland’s
“The number of people using private services keeps private health care sector has felt the effects of the
rising, and the [increasing] purchasing power of so- lack of reform. Growing numbers of NFZ-financed
44
private health care • TRENDBOOK Poland
Growing health
working in a public hospital, have had to adapt to ness development manager at insurer Mondial As-
new a environment. sistance.
And the employees weren’t the only ones who had Apart from clinic chains’ own subscription plans
to change their mindsets. “In smaller municipalities for individual and corporate patients, medical insur-
it was also difficult to convince patients in the begin- ance policies are an important channel of new clients
ning that they don’t have to pay for a service despite for private healthcare providers.
the hospital being private,” explained Mr Gerber. According to Paweł Kalbarczyk, director of health
insurance at PZU Życie, private medical insurance
Private boost should be considered insurance against “a badly
EMC IM’s Gerber predicted that commercial functioning public health care system.”
health care revenue will continue to rise, also thanks He listed a number of factors that in his opinion will
to insurance firms offering more and more medi- contribute to the growth in the market of medical
cal insurance in cooperation with particular private insurance: The public resources dedicated to health
health clinic chains. care in 2010 were reduced in comparison to 2009,
“Even if health reform creates a list of basic services while national health insurance premiums were fro-
financed by NFZ, insurers will come up with a vari- zen at nine percent for 2010.
ety of policies which will cover services not covered As a result, it will be even more difficult to get ac-
by the NFZ program,” agreed Krzysztof Piątek, busi- cess to a public clinic. Looking for a private alterna-
46
private health care • TRENDBOOK Poland
tive, patients will find that it is more affordable to pay “Considering these numbers, I am confident the mar-
monthly installments at a private clinic rather than ket of private health care services will prosper,” said
for each single visit. As a result, revenue in the private Adam Pustelnik, CEO of insurer Signal Iduna Polska.
health care sector will increasingly come from these “It is not only policy holders that benefit from pri-
monthly installments and from insurance, rather vate health care, but also patients of public clinics.
than from direct fees for services. Medical insurance policies contribute to shortening
Mr Kalbarczyk also predicted that a long-awaited the lines in public waiting rooms, thus freeing up
regulation that would codify private insurance as a more public health care [services],” he added.
complement to the public system could soon be on Surprisingly, the market for health insurance poli-
its way. cies in Poland is still far from saturated. PZU Życie
estimates that only about two million Poles regularly
catalyst for change use private medical insurance or have a plan with a
Mondial Assistance’s Piątek argued that the wors- private clinic.
ening public health care situation would arouse more According to Mr Kalbarczyk, total expenditures on
patient discontent and would thus be a catalyst for private health care in Poland amounted to zł.12.7 bil-
change, especially since Poles are ready and able to lion, from which just over zł.2 billion were covered
pay for quality health care. by such plans, while the whole remainder was paid
According to 2009 Social Diagnosis, a survey on for individually.
quality of life in Poland, 50 percent of about 28,000 “From the side of providers, the market is also not
polled stated that they had used private health care fully mature. We are and will be witnessing consolida-
at least once, while the average annual spending on tion of private health care providers into larger net-
private health care amounted to zł.600 per Polish works. These will then be able to lower costs and offer
household. quality service on a nationwide scale,” he said. #
47
TRENDBOOK Poland • trendsetting people in business
According to a 2010 ranking by Forbes, Leszek Czarnecki is Adam Góral is the president of two of the biggest hi-tech
the third-richest person in Poland, with a fortune of zł.4 billion. companies in Poland, Asseco Poland and ABG SA. He
In 1991, he established European Leasing Fund, one of the also sits on the supervisory boards of companies such as
first companies to offer leasing services in Poland. In 2004, he Vistula, Asseco Business Solutions and Asseco Systems.
formed the holding company Getin, offering banking, leasing Under Mr Góral’s leadership, Asseco Poland has made
and insurance services. He is also the founder of Noble Bank, investments in the Czech Republic, Slovakia, Germany
the first Polish bank specializing in private banking. and Romania. Mr Góral foresees many more investments
in foreign countries from his companies, and says his
dream is to build the first Polish conglomerate.
Andrzej Klesyk is currently the president of Polish insurance Alicja Kornasiewicz is the CEO and president of the
giant PZU, which just recently debuted on the Warsaw management board at Bank Pekao. Before taking her present
Stock Exchange. Mr Klesyk has made a number of difficult seat, she was the head of UniCredit CAIB Poland and
decisions, including laying off thousands of workers in order supervised investment banking operations of the UniCredit
to optimize efficiency at the firm. He is also the co-creator of group in CEE. She worked at the EBRD as a senior banker
one of the first internet banks in Poland, Inteligo. He received and then as its representative in Poland from 1993-1997, later
the 2010 “Player of the Year” award by Forbes magazine serving as secretary of state in the Polish Treasury Ministry.
in the category of finance. The award is given to people Ms Kornasiewicz chaired the supervisory boards of Bank
expected to be trendsetters in a given year. Pekao and Bank BPH.
48
trendsetting people in business • TRENDBOOK Poland
Mateusz Morawiecki
Zygmunt Solorz-Żak
49
TRENDBOOK Poland • luxury goods
SLOW to DEVELOP
According to CPP Luxury Industry Management
Consultants, Poland’s luxury market has been devel-
50
luxury goods • TRENDBOOK Poland
oping slowly over the past decade, mainly due to the Eastern Europe, an important goal in our network
fact that wealthy Poles prefer to buy abroad and are development strategy,” he added.
less driven by a need to flash their social status than The first Aston Martin sold by AML Polska in Po-
their counterparts in the region. Although the Polish land was the Rapide, which costs zł.890,000 in its
luxury market did not suffer much during the crisis, it basic variant.
remains one of the least-developed in the region. The company plans to sell 20-25 cars a year. “We
Other experts point out that demand is relatively have set ourselves the following goal: By the 100th an-
low because the Polish market is immature, with no niversary of the Aston Martin, which falls in 2013,
established tradition of buying luxury brands. Nor is we want to sell at least 100 new cars,” the vice presi-
it a market with significant social stratification, as op- dent of AML Polska, Marcin Dąborwski, told auto
posed to, for example, Russia. But as Poles become industry analysis firm Samar.
wealthier, they are bound to spend more on luxury. Premium and luxury brand importers are confident
Another distinguishing factor is that for Poles, lux- when it comes to the market’s prospects. “The sales
ury is somewhat defined differently than in the West. of such cars are very stable, as normally companies
Often that which is treated as luxury in Poland is con- buy them for their bosses and exchange them,” Jakub
sidered merely “premium” in richer societies – that Faryś, head of the Polish Association of the Automo-
includes labels such as Hugo Boss, Tommy Hilfiger tive Industry (PZPM), told Rzeczpospolita.
or Lacoste. Experts say this further demonstrates the According to Samar, in 2009 a luxury car in Poland
market’s immaturity. cost an average of zł.990,000.
Despite all this, luxury brands continue to open up
stores in Poland, indicating that they see strong po- HIGH-END HOUSES
tential for growth. The Polish luxury real estate market is also hold-
ing up well, with prices relatively unaffected by the
TOP GEAR economic downturn and forecasts of demand soon
At the beginning of 2010 Poland’s luxury market outstripping supply.
was dominated by luxury car producers. Aston Mar- Market experts say that high-end residential proj-
tin opened its first dealership in Poland together with ects are a safe investment in both bull and bear mar-
AML Polska in March. Bentley, present in the market kets.
for two years, was due to open an independent deal- “According to our observations, bargain prices
ership in June, and Ferrari is also expected to open practically never occur in this market,” said Michał
a dealership soon. Bentley sold seven cars costing Abramczyk, a real estate market advisor at Noble
around zł.1 million each last year. Bank.
BMW does not plan to open a Rolls-Royce deal- Infinite Investment, a wealth-management com-
ership in Poland yet, but Bielsko Biała-based Inter- pany, estimated that the number of luxury residences
Welm recently became its first authorized service sta- on the primary market is still meager compared to
tion and parts dealer. the rising demand, and that wealthy Poles face prob-
Aston Martin has high hopes for Poland. “We have lems finding suitably luxurious apartments.
been inundated by Polish customers who have ex- “The real estate market, in general, is currently see-
pressed a strong desire to buy our cars. Finally, we ing a slowdown. In the luxury apartment segment,
have the right partner and the right facility in place however, supply is still lower than demand and, as
to serve them directly,” said Dr Ulrich Bez, CEO of a result, interest is not waning,” agreed Mr Abram-
Aston Martin. czyk.
“The luxury car market in Poland is expanding, Typically, the most luxurious residential projects in
both in sales to individuals and businesses. Warsaw Poland cost over zł.20,000 per sqm, with some reach-
will be fundamental to our growth further through ing up to zł.40,000 per sqm.
51
TRENDBOOK Poland • luxury goods
The largest number of exclusive residences are con- vest, an importer of Eurocopter helicopters, says
structed in the vicinity of Warsaw. They include such his company sells several units a year. That there is
investments as Solea, Konstancin Gardenville and increased interest in helicopters in Poland was con-
Oakland Park. firmed when the authorities of Polish ski resort town
Marcin Gutaj, president of residential real estate Zakopane announced in February 2010 that they
firm Magnolia Polska, stresses that the wealthiest plan to build a helipad for private helicopters to cater
Poles are not only looking for great projects, but also for wealthy tourists.
pay attention to additional services. Private jets are also becoming more popular among
“The most demanding and aware [clients] want to affluent businesspeople. “More and more Polish
feel unrestrained in a well-designed building, with businesspeople need unlimited access to first class air
surroundings that offer additional comforts – fit- transportation,” said Mats Leander, managing direc-
ness facilities, a nearby café, an interesting neighbor- tor of NetJets Europe. He believes the healthy state
hood,” he said. of the Polish economy will double the demand for
Developers are responding to demand and now of- corporate aviation services within the next five years,
fer a range of additional services, including concierge a trend facilitated by increased public investment in
services. TS Investment included such services in its local airports. The company estimates the market
offer in the Tesoro Ivory Residences luxury residen- comprises around 200 clients.
tial complex near Gdynia. Platinum Towers, a devel- In 2009, NetJets Europe served around 300 flights
opment comprising two 22-storey towers in Warsaw in Poland, compared to almost 6,500 in Spain and
situated near the Hilton hotel, offers the Platinum around 8,000 in Germany. Customers can buy shares
Residence program for some of its residents – lodg- in one of the planes and use it accordingly or buy a
ers leasing apartments are provided with additional card with a specified number of hours to use. Twen-
services such as cleaning, concierge service and free ty-five hours of flight in a light jet costs E139,000.
membership at a high-end fitness club and spa.
LUXURY LOCATIONS
FLYING IN STYLE Other luxury brands set on entering Poland include
There is also an increasing demand for private air Louis Vuitton, which confirmed in early April that it
transportation. Grzegorz Czwartosz from Heli In- would open a store in Poland by the end of the year.
52
luxury goods • TRENDBOOK Poland
In March 2010, Rolex opened its first Polish mono- luxury potential have been postponed, as infrastruc-
brand store, in cooperation with local jewelery compa- ture investments for the Euro 2012 soccer champion-
ny W. Kruk. The most expensive watch in the store costs ships currently have top priority.
zł.116,000. W.Kruk has been selling Rolex watches for However, things are looking up. Bracka street in
over three years now, with 100 sold in 2009. The com- Warsaw may soon become a mecca for Polish luxury
pany’s representatives estimate that the number will lovers, as Poland’s first luxury department store, Wolf
grow by up to 40 percent over the next three years. Bracka, is to be completed there in Q4 2010, with
Some experts say that one of the barriers to more 21,000 sqm of usable space and almost 12,000 sqm
luxury brands entering Poland is the lack of suitably of leasable space. The investor, Wolf Immobilien, has
luxurious locations. Polish cities, including Warsaw, not revealed which brands have already leased out
lack prestigious shopping streets and exclusive shop- space, but it is rumored that tenants might include
ping centers, they say. Some infrastructure invest- LMVH, owner of such brands as Givenchy, Louis
ments intended to spruce up locations with strong Vuitton and Kenzo. #
53
road construction • TRENDBOOK Poland
road construction
Gaining speed
By Adam Zdrodowski
T
The process of developing he lack of modern road infrastructure has
Poland’s new highway long been one of Poland’s most challenging
and seemingly insurmountable problems,
network is set to shift into but there is hope that a whole network of highways
high gear and express roads could be delivered on time for the
Euro 2012 soccer championships.
With the self-imposed 2012 deadline quickly ap-
proaching and EU funds widely accessible, construc-
tion work on the planned roads seems to have finally
gotten off the ground in earnest in 2009. While at the
end of 2008 there were just 219 kilometers of under-
construction highways in Poland, in December 2009
that figure had already grown to 635.
55
TRENDBOOK Poland • road construction
This acceleration has been of crucial importance to turn, lead to similar numbers of road contracts signed
crisis-stricken construction firms. Over the last year in 2010.
the number of companies participating in road ten- But Lech Witecki, head of the General Directorate
ders grew radically, from approximately 30 to over for National Roads and Motorways (GDDKiA), pre-
270. dicts more than just continuity. He said he believes
As preparation work on most of the major road that Poland will become the largest road-construc-
projects scheduled for delivery by 2012 has now tion site in Europe over the next 12 months.
been completed, analysts and market players predict The directorate’s plans for this year include the start
2010 will see a continuation of the growth trend in of construction on over 536 kilometers of highways
Poland’s road-construction sector. and almost 712 kilometers of express roads. Total ex-
penditure on road construction in Poland for 2010 is
Continued momentum expected to exceed zł.31 billion.
The value of road-construction work should con- Skeptics point out that last year the value of road
tinue to rise this year, due to numerous contracts construction contracts in Poland was also expected
signed in 2009, according to Bartłomiej Sosna, a se- to be approximately zł.30 billion but in the end
nior construction analyst at PMR Publications. The amounted to just zł.18 billion. GDDKiA argues that
market will therefore see some much-needed conti- those numbers were largely the effect of savings re-
nuity of the investment process. sulting from competing contractors’ low bid prices.
“Due to the environmental impact assessments ob-
tained for new projects in 2009 and the first months Roadmap to success
of 2010, the number of announced road tenders Construction companies themselves admit they
should remain at the same level as last year, which foresee a profitable 12 months.
was satisfactory for contractors,” Mr Sosna said. He “We expect many tenders for the construction of
added that stable numbers of road tenders would, in express roads as well as several for the construction
56
road construction • TRENDBOOK Poland
of highway stretches,” said Dariusz Blocher, presi- tial and commercial property sectors, brought about
dent of the management board of Budimex. widespread price wars in the road-construction seg-
“Road construction firms will increase their sales due ment.
to the realization of large contracts signed in 2009.” “Last year the bid prices in infrastructure invest-
He added that the share of road construction con- ments decreased by more than 20 percent; there are
tracts in his company’s portfolio would rise to 70 per- even tenders in which the lowest price amounted to
cent in 2010, from 63 percent last year. 40 or 50 percent of the investor’s cost estimate,” said
Equally optimistic was Krzysztof Andrulewicz, Skanska’s Andrulewicz.
president of the management board of Skanska’s Pol- That price war is set to continue, industry insiders
ish branch, who said that his firm had started the year say.
with a large portfolio of orders related to infrastruc- “The consequences of the financial crisis will force
ture investments. companies from depressed markets to target Poland,
“This year we hope for an increase in the number a major construction site in Europe. Another factor
of tenders announced for the construction of express contributing to the price war is the arrival to the Pol-
roads as well as the modernization of national roads,” ish market of companies from Asia,” said Sonia da
he said. “We hope that in the 2010-2012 period the Fonseca, deputy commercial director for Mota-Engil
funds earmarked for road construction will increase Central Europe, a civil engineering and infrastruc-
in comparison to 2009.” ture construction firm.
“Also, we cannot forget that big international
An end to groups, which already have a lot of experience in the
Polish market, will continue to fight for their market
undercutting? share,” she added.
How prices will react to a continuing high level According to Budimex’s Blocher, contractors do
of construction activity and a seemingly improving not have much room left to undercut prices. On a
macroeconomic situation remains largely unknown, more optimistic note, PMR Publications’ Sosna be-
however. lieves that price trends in the Polish road construc-
Last year growing competition among contractors tion sector could actually rise in the second half of
caused by the emergence of new international play- this year. Bid prices offered by contractors may not
ers in the Polish market, as well as a considerable reflect the rise of concrete construction costs, but
decrease in the volume of orders from the residen- they will probably not be as shockingly low as they
57
TRENDBOOK Poland • road construction
Expert’s opinion
advertorial feature
58
road construction • TRENDBOOK Poland
Legal analysis
59
TRENDBOOK Poland • trendsetting real estate firms
Trendsetting
real estate firms
Dom Development
Echo Investment
As one of the few developers to secure bank WSE-listed Dom Development remains one of the largest
financing in 2010, Echo Investment was able to residential market players in terms of the number of units
go ahead with major investments in a troubled sold. In recent months, the company has led the rebound in
commercial market. Echo’s E100 million credit the housing segment, having already started a number of
agreement with Eurohypo was particularly new projects since the beginning of 2010.
momentous and allowed the developer to expand
the Galeria Echo shopping center in Kielce.
60
trendsetting real estate firms • TRENDBOOK Poland
Panattoni
61
TRENDBOOK Poland • real estate financing
Banks in charge
of real estate recovery
By Adam Zdrodowski
62
real estate financing • TRENDBOOK Poland
in Poland rocket, benefiting local developers and banks, and many also focused exclusively on existing
banks alike, the crisis brought painful lending policy projects or refinancing.
corrections that quickly translated into a consider- Many banks also clearly favored prime projects be-
able decrease in market activity. ing developed by established market players. “Banks
With the first signs of economic recovery in Poland now only select the best projects from reputable de-
and its European peers as well as an ostensible rise in velopers. The procedure to obtain financing is much
demand for housing and commercial space, there is longer than previously, due to banks’ risk analyses,
hope that 2010 could finally bring back growth in the more detailed due diligence and security documents,”
beleaguered property market. said Jeroen van der Toolen, managing director for
But this will largely depend on banks, and how they Central and Eastern Europe at Ghelamco Poland.
will react to the seemingly improving market is still Małgorzata Szwarc-Sroka, director of the economic
unclear. Some developers admit to expecting the department at JW Construction Holding, had a simi-
stringent lending rules to ease somewhat this year, lar view, saying that trusted developers with good
but most players remain cautiously optimistic. business plans could count on obtaining financing
even in the difficult times. She noted that her own
Dried-up wells company had managed to increase the level of financ-
Banks’ influence on the property market was par- ing for its investments a couple of times in 2009.
ticularly visible at the beginning of 2009 when the Even if banks have seemed more willing to lend in
financial taps were almost completely turned off. The recent months, deals are still being struck on their
situation improved a bit later in the year but many terms. Ms Szwarc-Sroka pointed out, for instance,
lending restrictions remained. that banks now require 20-30 percent of units in resi-
As Jarosław Fijałkowski, president of the manage- dential projects to be pre-sold before granting a loan,
ment board of Parkridge Retail Poland, pointed out, a difficult feat to achieve in a market with so many
many banks froze their commercial investment fi- completed apartments. Additionally, banks are now
nancing transactions in 2009 and others even aban- demanding that a developer have ownership of the
doned such services altogether. Financial institutions land before they even agree to consider its applica-
were reluctant to take over loans taken out in other tion for a loan.
63
TRENDBOOK Poland • real estate financing
64
real estate financing • TRENDBOOK Poland
0
financial institutions’
10
-10
lending policies”
20
-20
30
-30
Starts Completions
-40
40
-50
50
9
09
09
09
09
09
09
10
00
00
00
20
20
20
20
20
20
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r2
t2
v2
ay
ne
ly
pt
n
Oc
Ap
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De
Ja
Au
Ju
Se
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M
ment funds and mortgage banks, a theory partly “Some universal banks, which eagerly offered com-
confirmed by mortgage banks refinancing and fi- mercial real estate financing products in the past, are
nancing a number of major commercial projects still struggling to decrease [the weight of] such loans
in the second part of last year, including Galeria in their portfolios. However, only a few of them will
Mokotów in Warsaw and Galeria Echo in Kielce. not re-launch active crediting activities in the near
Parkridge Retail Poland’s Fijałkowski shared a simi- future,” said Mr Pałasz.
lar opinion, saying that investment funds are now in- He added that once the market stabilizes there
creasingly willing to discuss the financing of planned would be no sound reason for banks to renegotiate
and under-construction projects. He added, howev- price conditions for loans or to attempt to reduce
er, that negotiations are still rather difficult. their own engagement in projects, and that cautious
Daniel Pałasz, financial director of Blue Ocean In- optimists in the banks now seem to have the advan-
vestment Group, was even more optimistic about the tage.
prospects for the next 12 months. According to him, “For certain, investors have already arranged the
when it comes to commercial real estate financing, launch dates of most of their new investments. And,
Poland is witnessing the end of a transition period from my point of view, banks have reached an ad-
following the turbulence caused by the global eco- vanced stage of preparation to relaunch investment
nomic crisis. financing,” Mr Pałasz concluded. #
65
TRENDBOOK Poland • real estate financing
Legal analysis
66
law • TRENDBOOK Poland
Legal trends
Paweł Kuglarz
Partner, Legal Advisor,
Real Estate Law and Litigation
in Poland
Under the current construction permit proceedings, neigh-
Several major amendments which are bors can take an active part and appeal the construction per-
expected or have already been introduced
mit at a higher-level administration authority, and if they find
that decision unsatisfactory, they have the option to file a com-
into the Polish legal system will have an plaint with an administrative court. The amended law does not
effect on conducting business activity provide the option for this kind of complaint.
in Poland in the near future. This article The President Kaczyński also felt that the 30-day dead-
provides an overview of these regulations. line for the administration body to oppose a project’s reg-
istration is too short.
67
TRENDBOOK Poland • law
tween particular members of the local society as well If the investor fails to present the information as men-
as between the local society and the gmina; tioned above, the gmina or city executive will refuse to
• the introduction of local urban regulations alongside conclude the urban development agreement.
the local plan, which will allow for the simpler and
cheaper establishment of rules for the area’s devel- Amendments to Public
opment, including development conditions for areas
where the local plan is not required.
Procurement Law
The new regulations for investment locations where no The end of 2009 and beginning of 2010 have brought
zoning plan exists work by eliminating decisions on de- major changes to the Public Procurement Act. Under the
velopment conditions and replacing these with decisions so-called “big amendments,” the EU Directive on the
on the urban development plan. This has come as a result right of appeal was introduced into Polish law.
of extensive criticism of the decisions on development In particular, the major changes apply to means of le-
conditions, which many feel are arbitrary and result in gal protection. These changes are fundamental indeed,
corruption. since the most common method of obtaining legal pro-
In locations where there is no zoning plan, an invest- tection – that is, for a contractor to file a protest against
ment may be approved with a decision on the urban de- the decisions of the ordering party – may no longer be
velopment plan which adopts such a project. The investor applied.
must submit a motion for such approval.
Public purpose investments, farmstead developments Two-step process
and sports and tourist facilities, such as ski lifts and hos- Now, contractors may first lodge an appeal with the Na-
tels, are excluded from this rule. tional Chamber of Appeal (KIO). If dissatisfied with the
KIO decision, contractors may file a complaint directly
Local urban regulations with the district court.
In addition, the amendment provides for the introduction The system has thus been simplified by introducing a
of “local urban regulations.” According to the proposal, the two-step process for fighting decisions made by admin-
local urban regulations would constitute local law, but their istrative authorities.
role would be limited. This proposal is intended to enable The amendment is controversial. Its opponents claim
the realization of zoning policies in areas intended for de- that new, considerably higher fees for filing a complaint
velopment but not included in any local plan. with the district court can mean that an appeal to the
The areas for which the full implementation of local KIO will in fact become the only means of legal protec-
plans is not necessary or useful may be subject to the ur- tion. Some contractors will simply be unable to afford the
ban regulations in a limited scope, referring only to some court payments, which in the worst cases can amount to
principles of the area’s development. These proposals are several million złoty.
designed to adapt to the various requirements of a diverse On the other hand, supporters of the amendment are
array of local laws. right to claim that previously the filing of protests had un-
reasonably lengthened public procurement procedures.
Urban development agreements Filing protests was an easy way to object to almost any of
An urban development agreement is an agreement the ordering institution’s decisions.
concluded between an investor and the gmina, which Under the new regulations, cases are generally heard and
provides for development of the area or establishment of decided by one KIO judge. Only disputes that are particu-
social infrastructure outside a building plot. larly complicated are subject to a decision of a three-mem-
This agreement should be specific as to how the investor ber panel of KIO judges. Previously, it had been standard
will fulfill the agreement’s terms, as well as the contractual for the three-member panel to decide such cases.
penalties for failing to perform or for improper perfor- Considering the complicated nature of the cases heard
mance of the agreement. It should also specify the rules, by the KIO and the fact that a decision made by a KIO
methods and dates by which the expenses borne by the judge may in practice be final, the single-judge system has
investor will be returned, if the development falls within raised some justified fears.
the gmina’s own duties.
The urban development agreement should be conclud- Single-bidder contracts
ed in writing and be subject to publication in the Public Another change relates to the application of procure-
Information Bulletin (Biuletyn Informacji Publicznej), so ment contracts with single bidders, a procedure which
that an analysis of the investor’s fulfillment of the terms had previously been heavily abused in Poland.
can be conducted. Upon introduction of the amendment, ordering parties
The analysis is subject to an opinion of the provincial must notify their intention to award such a contract by
urban and architectural commission. The urban develop- placing the relevant information in the Public Procure-
ment agreement cannot be concluded without a positive ment Bulletin (Biuletyn Zamówień Publicznych) or the
opinion. Non-issuance of the opinion within 21 days is EU’s Tenders Electronic Daily (TED), depending on the
deemed a positive opinion. value of the contract.
68
law • TRENDBOOK Poland
Previously, since such notifications were not required, use the right to establish separate ownership of housing
the ordering institutions often used this procedure to premises developed on the land encumbered with a he-
award contracts on a non-competitive basis. This had left reditary building right.
considerable room for abuse. Without such a possibility, the introduction of the new
Now, contractors at least have the knowledge that a giv- right would make no sense at all for many potential inves-
en procuring institution intends to apply the procedure tors.
and can file an appeal if they have any suspicion that the Under the draft, the hereditary building right may be es-
law is not being followed. tablished for a period of 30 to 100 years and may be sub-
ject to further extension. However, unlike with perpetual
Other provisions usufruct, a hereditary building right holder will have no
Interestingly, under the amendments, contractors may right to claim this extension.
now rely on the knowledge, experience and technical poten- If the hereditary building right is not extended for an-
tial of persons capable of performing the public procurement other period in a respective agreement, once it expires,
contract, irrespective of the legal relationship between these ownership of the constructed buildings will pass to the
persons, be they companies or natural persons. landowner after due compensation is paid to the holder
Contractors only have to present to the contracting of the hereditary building right.
party proof – for example a reliance letter – that they may
rely on the person’s or company’s capacities during the Benefits for investors
performance of the contract. This new regulation is inconsistent with a recent trend
The application of this new provision will show how to reinforce the ownership right through, for example,
the contracting institution reacts to a situation in which a graduate liquidation of a cooperative member’s owner-
contractor intends to rely only on capacities of other enti- ship right to premises.
ties because it has none at its disposal. From this point of view, the introduction of the hereditary
Moreover, under the new regulations private entities building right seems to be a step backward. But to a certain
such as funds, associations and entrepreneurs acting as degree this new right will be beneficial for investors.
ordering institutions for services or goods partly financed The hereditary building right can be established not
by public funds no longer (with some exceptions) have to only on public property but also on land owned by indi-
apply public procurement provisions to receive auxiliary vidual persons.
public funds, in particular from the EU. Such an option could be used by landowners who are
interested in developing their land or realizing an indus-
Changes to Civil Law trial investment project, but have no funds for it and at the
It should be noted that the Polish Codification Com- same time do not wish to sell their land.
mission for Civil Law is in the course of finishing work on From an economic point of view, this new legal institu-
introducing a new legal institution into the Polish Civil tion will simply make the realization of certain investment
Code, namely the hereditary building right. projects easier. When it comes to public use investments,
This right will allow landowners to encumber real estate it may also help to avoid the expropriation of privately
with the right to build, develop or use existing buildings owned land for public purposes.
or other facilities above or below the surface of the land. The introduction of European standards with respect to
Unlike the perpetual usufruct right, the hereditary the protection of the buyer’s premises is necessary for en-
building right may also extend to facilities under the sur- suring the proper development of the residential real estate
face of the land. market, especially as currently no legal regulation in Pol-
Buildings and other facilities – either existing or con- ish law would protect such a buyer against an unfair and
structed – upon or under the surface of an encumbered incompetent developer. An obligatory escrow account is a
property will be owned by the holder of the hereditary solution used in many countries in such cases. Introducing
building right. such an account in Poland (which we already suggested
Establishing new perpetual usufruct rights will become with Prof. Fryderyk Zoll almost 10 years ago), along with
impossible upon the entry of the hereditary building right an information prospectus and a special security against
into force. the insolvency, would civilize that market. For years that
Consequently, as intended by the authors of the draft, concept has had its supporters among various government
the hereditary building right will eventually replace the authorities. Now, it is time to act – “verba docent, exempla
right to perpetual usufruct. trahunt” (words teach, examples lead).
Last but not least, the abolishment of commercial courts
Separate ownership raises serious doubts among the business environment.
That separate ownership of premises can be established Undoubtedly, the hitherto defects of that model should
on a property under the hereditary building right defi- be rectified, as depriving entrepreneurs of such legal pro-
nitely deserves special notice. This is particularly impor- ceedings when pursuing claims would rather complicate
tant for the housing market and developers who would the process, instead of facilitating it. #
69
TRENDBOOK Poland • partners
Key partner:
BEITEN BURKHARDT has been present in We use our local and international experience to offer the full
Poland for 10 years and has longstanding ex- spectrum of restructuring and operational effectiveness services,
perience in providing legal support for invest- including:
ments in Poland.
• Mediation and litigation including arbitration
Beiten Burkhardt in Poland offers comprehensive restructuring • Corporate restructuring and Insolvency
and business recovery services to domestic and international en- • Tax structuring and optimization
terprises. Our lawyers have extensive experience in corporate, fi- • Tax law guidance for group and company restructuring
nancial, commercial and tax restructuring.
BEITEN BURKHARDT P. Daszkowski Sp.K.
The Warsaw office currently employs 32 Polish lawyers. They are ul. Ks. I. Skorupki 5, 00-546 Warsaw
fluent in Polish, German and/or English. www.bblaw.com
% (+48) 22 583 71 00
6 (+48) 22 583 71 09
@ bblaw-warschau@bblaw.com
In cooperation with:
The Polish Information and Foreign Investment PricewaterhouseCoopers is a
Agency (PAIiIZ) has been servicing investors for professional services firm sup-
17 years. Its mission is to create a positive image of porting clients with audit, busi-
Poland in the world and increase the inflow of for- ness advisory, as well as tax and legal services. It comprises
eign direct investment by encouraging international over 163,000 people in 151 countries. PwC in Poland has
companies to invest in Poland. a successful record of cooperation with the largest local and
international businesses and government institutions. Its Pol-
The Agency offers foreign entrepreneurs quick access to infor-
ish Tax & Legal Department was awarded the prestigious title
mation regarding the economic and legal investment environ-
“National Tax Firm of the Year 2010” by International Tax Re-
ment, assistance in finding a convenient investment location,
view monthly. The firm has been recognized for the high qual-
help in obtaining investment incentives, guidance through all
ity, innovative nature and broad scope of its international tax
the necessary administrative and legal procedures and advice
structuring advisory. It was also named the “European Transfer
throughout each phase of the investment process.
Pricing Firm of the Year.”
Contact:
Contact:
ul. Bagatela 12, 00-585 Warsaw
Al. Armii Ludowej 14, 00-638 Warsaw
www.paiz.gov.pl
www.pwc.com/pl
% (+48) 22 334 98 00
% (+48) 22 523 40 00
6 (+48) 22 334 99 99
6 (+48) 22 508 40 409
@ post@paiz.gov.pl
@ pwcpoland@pl.pwc.com
70
partners • TRENDBOOK Poland
71
TRENDBOOK Poland • index
Index
A European Investment Bank 30 LM Glasfiber 22 R
Adamed 14 European Leasing Fund 48 LMVH 53 Rolex 53
Adam Smith Center 27 F Łódź Władysław Reymont Airport 31
Rolls-Royce 51
AgustaWestland 6 Ferrari 51 Lot Polish Airlines 31
Alior Bank 14, 49 Louis Vuitton 52, 53 Ruch 17
Fiat 5
Allegro 15, 28, 29 Lubelski Węgiel Bogdanka 17 Ryanair 32
Forbes 48, 49, 50
Alpine Bau 58 Lufthansa 32 Rzeszów-Jasionka Airport 31, 32, 33
French Chamber of Industry
Amazon 28 and Commerce in Poland 4, 71 M
AML Polska 51 S
Frost & Sullivan 21 Magnolia Polska 52
Amway 29 Mango 29 Samar 51
Apple 29 G
Manufaktura 37 Samsung 6
Association of Regional Airports 31 Gadu-Gadu 15
Mayland 61 Sanofi-Aventis 6
Aston Martin 51 Gallup 8
Medicover 44
AT Kearney 5, 22 Gdańsk Lech Wałęsa Airport 31 Scandinavian-Polish Chamber of
Merlin 28, 29
Audi 49 GDF Suez 24 Commerce 3, 71
MEWW 22
Autostrada Wielkopolska 49 Gdynia-Kosakowo Airport 31
Military Property Agency 31, 33 Sharp 6
Autostrada Wielkopolska II 49 GE 6
Millennium Bank 9 Signal Iduna Polska 47
Avio 6 GE Hitachi Nuclear Energy
Mitsubishi Electric Europe 36
Americas 22 Sikorsky 6, 15
B Mondial Assistance 46
General Directorate for National Skanska 25, 57, 61
Bank BPH 48, 49 Mota-Engil Central Europe 57
Roads and Motorways 56
Bank Pekao 48 MTU 6 Skoda 49
German-Polish Chamber of
Bank Zachodni WBK 49 Industry and Commerce 3, 71 N Sobieski Institute 27
Beiten Burkhardt 23, 34, 59, 66, 67, 70 Getin 48 Naspers 28 Solaris 24, 36
Bentley 51 GfK 43 National Bank of Poland 5, 7 Solea 52
Berlin Hyp 60 Ghelamco 60, 63 National Chamber of Architects 67
Bioagra 25 Givenchy 53 NATO 41 T
Blue Ocean Investment Group 65 GlaxoSmithKline 6 Neckermann 29 Tauron 17, 18
BMW 3, 51 General Motors 5 Netherlands-Polish Chamber of
Bomi 29 Teva 6
Goodrich 6 Commerce 4, 71
Bonprix 29 Google 36 NetJets Europe 52 The American Chamber of
BorgWarner 5 Groupon 27 Nidec Corporation 5 Commerce in Poland 71
Bosch 6 Grupa Inwestycyjna Hossa 64 Noble Bank 48, 51 The International Monetary Fund 8
Boston Consulting Group 49 Grupa Lotos 17, 19 Nomura International 17
BRE Bank 18 The Polish Information and Foreign
Gruper.pl 27 Nu Skin 29
British Polish Chamber Investment Agency 70
GTC 60 O
of Commerce 3, 71 The Renewable Energy Association70
H Oakland Park 52
Budimex 57 Thomson Reuters 11
Heli Invest 52 OECD 18, 21
BZ WBK 19
Hewlett-Packard 29, 36 OeKB 11 Tommy Hilfiger 51
C Hilton 52 Opel 5 Toshiba 6, 22
CAIB 19 Hispano-Suiza 6 Organization for Economic Growth
CEEMarketWatch 18 TP 17
Hoerbiger 5 and Development 8
Centre for European Policy Studies 39 Hugo Boss 51 TS Investment 52
P
Centre for Retail Research 27 TV Market 29
I Panattoni 61
CEZ 22
IATA 30 Parkridge Retail Poland 63, 65 U
Citi Handlowy 10, 17, 19
IBM 36 Pekao Bank Hipoteczny 64
CityDeals.pl 27 UBM 61
IMF 12 PGE 17, 18, 19, 22
Comarch 14 uction facility 22
Impact Automotive Technologies 24 PGE Energia Jądrowa 21
Copernicus Airport Wrocław 31, 32
Indesit 6 PKO BP, 19 UniCredit 37, 48
CPP Luxury Industry Management
Institute of Atomic Energy 21 PMR Publications 56, 57 UniCredit CAIB 18, 48
Consultants 50
Inteligo 48 Poczta Polska 29
Cyfrowy Polsat 49 V
InterContinental 61 Polfa Pabianice 14
D Inter-Welm 51 Polfa Warszawa 14 Vienna Stock Exchange 18
Deloitte Business Consulting 8 Police 17
J Volkswagen 49
Dom Development 60 “Polish Airports” State Enterprise 34
Jabil 6 Vorwerk 29
E Polish Chamber of Civil Engineers 67
JW Construction 49, 63
EADS 6 Polish Chamber of Power Industry W
ECE Projektamanagement 60 K and Environment Protection 70
Warimpex 61
Echo Investment 60, 64 Kapsch TrafficCom AG 58 Polnord 60
Keiper 5 Polsat 49 Warsaw Fryderyk Chopin Airport 33
EDF 22
E Leclerk 29 Kelkoo 27 Polska Grupa Energetyczna 21 Warsaw Stock Exchange 16, 17, 18
Electrolux 6, 36 Kenzo 53 Porsche 49 Westinghouse Electric 22
EMC Instytut Medyczny 45, 46 KGHM 17 Pratt & Whitney 6
Whirlpool 6
Empik Media & Fashion Group 28, 29 Komputronik 28, 29 PricewaterhouseCoopers 12, 70
Konstancin Gardenville 52 Puławy 17 Wirtualna Polska 27
Enel-Med Medical Center 44
Energa 17, 18 Korea Electric Power 22 PZL Mielec 6, 15 Wizz Air 32
ENERGOPOMIAR 23 Kulczyk Investments 49 PZL-Świdnik 6 W. Kruk 53
Eureko 16, 17 L PZU 17, 18, 19
Wolf Immobilien 53
Eurocopter 52 Lacoste 51 PZU Życie 46, 47
Eurohypho 60 Landesbank Berlin 60 Q Z
Euromonitor International 28 LG 6, 36 Quelle 29 ZE PAK 17
72
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TRENDBOOK
Poland vol.1
A guide to business trends in Poland