The bi-weekly business report by Bonnier

POLAND

| No 481 | 27 August 2012 | Creating transparency in emerging markets since 1991 | www.news2biz.com |

” Poland is one of our focused centers of recruiting. Marcus Ryu, CEO of Guidewire Software PAGE 5

MANUFACTURING Sweden's Electrolux sets up regional CEE

head office in Warsaw PAGE 2

FINANCE Agri sector bank BGZ goes 100% Dutch

after Rabobank's hefty bid PAGE 4

PROPERTY & CONSTRUCTION Skanska acquires premium Warsaw site

in controversial deal PAGE 9

ENERGY & RESOURCES Germany's RWE adds two wind farms

to its Polish portfolio PAGE 11

TRANSPORT & LOGISTICS New Modlin Airport receives 0.2m

passengers in first six weeks PAGE 13

FOOD & AGRICULTURE GoodMills Group to invest PLN 50m in

Polish grain processing business PAGE 14

IT & TELECOM Netia expands cooperation with

Sweden's Ericsson PAGE 17

RETAIL & SERVICE France's Carrefour bets on franchise as

way forward in Poland PAGE 19

ECONOMY & POLITICS Poland's five-year bond yields drop to

their lowest level in history PAGE 22

Thousands of Poles fall victim to Ponzi scheme The August collapse of unregulated in-

vestment company Amber Gold left

thousands of Poles wondering whether

they would ever see any of the PLN 90m

they entrusted its founders, and raised a

lot of questions about the effectiveness

of Polish regulatory authorities. Operat-

ing since 2009, Amber Gold was one of a

number of Polish "para-banks" offering

investors higher returns than those be-

ing given by formal banks. Established

by a convicted fraudster, the scheme at-

tracted some 50,000 clients. PAGE 21

Most important updated key figures in this issue Industrial output & PPI in July PAGE 4

Property investments in 1H PAGE 8

Retail sales in July PAGE 21

CPI inflation & company results PAGE 23

SEE ALL KEY FIGURES PAGES 24–26

ALSO IN THIS ISSUE: ▶ news2biz talks to Marcus Ryu,

CEO of Guidewire Software PAGE 5 ▶ PKO orders mobile payment

system from the Swedes PAGE 7

▶ US giant C.H. Robinson to acquire Poland's Apreo Logistics PAGE 14

▶ Danish-owned malting plant ex-

pands on exports to Asia PAGE 15 ▶ US PerkinElmer to launch offshor-

ing centre in Krakow PAGE 21

Bonnier Group/Äripäev publishes similar business reports on Esto-

nia, Latvia, Lithuania and China. As a subscriber you have access to

your country report ten years back through our on-line archives at

www.news2biz.com. Multiple user access available -

write contact@news2biz.com or phone +372 667 0251.

HP seeks to create hundreds of service outsourcing jobs in Lodz. Photo: n2b archive

HP lands in Lodz with giant new project IT giant HP has decided to expand its Global Delivery Centre be-yond Wroclaw, where the US company already employs close to 2,500 staff. At its new location in the central Polish city of Lodz, HP seeks to recruit several hundred employees to provide book-keeping, HR, and CRM services for international clients. PAGE 16

Property investors stay busy Although real estate investments in Central Europe fell by 40% in 1H 2012, in Poland the decline was merely 6% and outlook remains optimistic. With EUR 877m worth of assets transacted in 1H, Poland contributed 70% of the total transaction volume in CEE. PAGE 8

Key CEE market in 1H 2012

Property investment volume in EURm

0100

200

300

400

500

600

700

800

900

Hungary

Romania

Czech Rep.

Poland

Swedish Electrolux, one of the top

investors in Poland's household ap-

pliance sector, has decided to estab-

lish a regional headquarters covering

Poland, Czech Republic, Slovakia,

and the Baltic states, in the Polish

capital.

"We are in the process of setting

up an international team of approx-

imately 20 professionals, based in

Warsaw, who will be coordinating

projects in sales, marketing, control-

ling, human resources and product

development in the countries con-

cerned," Adam Cich, General Man-

ager Eastern Europe North at Elec-

trolux tells news2biz. "A regional HQ

will enable us to react faster to

changing economic environment in

the region. Shared cultural values,

geographical proximity, and similar

customer preferences will help us

maximize synergies of Electrolux

operations in the region."

Little more than half a decade

ago the Swedes chose Poland as

their European production hub. To-

date, the company has invested in

excess of EUR 400m in Poland, with

factories in Zarow (dishwashers),

Olawa (washing machines),

Swidnica (cookers & ovens), and

Siewierz (laundry dryers), together

employing some 4,200 staff.

"In 2010 our production in Po-

land came to 3m units and last year

the figure was 3.4m, so the upward

tendency is clear," says Adam Cich.

"In April we received permission for

a new project in Zarow. At the cost

of approximately PLN 42m we will

launch production of narrower,

45cm-wide dishwashers. Further ex-

pansion will depend on market situ-

ation in Europe," says Adam Cich.

Poland is already home to Elec-

trolux's global bookkeeping centre in

Krakow. With some 450 staff the fa-

cility handles accountancy and fi-

nancial processes for 21 Electrolux

units in Europe and North America.

Unlike Poland's automotive sec-

tor, which has been badly hit by the

Eurozone crisis, the country's white

goods industry continues to experi-

ence robust growth. According to

the domestic equipment makers'

employer association CECED, over

the first half of the year Polish facto-

ries produced 6.1m large appliances,

marking a 5% increase y/y.

"The current economic situation

discourages consumers from really

large investments such as new

homes or even cars, instead making

many of them more likely to embark

on small-scale home improvements

and therefore replace appliances. A

much smaller expense, but still one

that gives some satisfaction. Perhaps

that is why our sector is doing better

than others."

This positive outcome is also

largely the result of huge invest-

ments by global appliance producers

in Poland and relocation of produc-

tion from Western Europe to the still

much more cost-effective Poland.

Italy's Indesit, which has recently

embarked on the construction of a

EUR 30m factory of kitchen hoods

and plastic appliance components

near Lodz, aims to boost the com-

bined output of its Polish plants to

3.8m units in 2012 and 4m units

next year.

South Korean Samsung, which

has recently launched production of

side-by-side refrigerators at the for-

mer Amica plant in Wronki, seeks to

triple its production volume over the

coming three years to become a

number one in Europe. Currently, its

Polish production units can make

2,700 fridges and 1,800 washing

machines per single shift.

Germany's BSH, maker of Bosch

and Siemens appliances, is to main-

tain production at 3m units this

year, while FagorMastercook is hop-

ing for an 11% increase, to 1.3m

units.

The main markets for Polish ap-

pliances are Germany, France, and

the UK, which together receive a half

of the sector's total exports.

Swedish steel and metal trader BE

Group is doing poorly in its Central

and Eastern European business area

which covers the Baltics, Poland, the

Czech Republic and Slovakia. In Q2

2012 sales in CEE declined by no

less than 22% to SEK 239m (11%

during 1H 2012) which almost equal

to the market losses in the compa-

ny's two largest markets, Poland and

the Czech Republic.

Following the Central and East-

ern European business area's Q2/H1

result which came after a loss of SEK

35m in 2011, the BE Group has de-

cided to sell of its Czech operations

which include a production unit in

Prerov and a distribution centre in

Ostrava. Despite the difficulties, the

company remains in Poland where it

has a production unit in Trebaczew

south of Warsaw and a sales office in

Gdynia.

In 2011, BE Group invested SEK

14m in the Trebaczew unit which

covers 45,000 sq.m of which 4,000

sq.m are under roof. The Swedes are

increasing production from the site

gradually during 2012, but so far it

has not boosted sales figures. The

problem for BE Group in CEE has

been that compared to its operations

in Sweden and Finland, it has far too

many small customers.

"We have stopped selling inven-

tory products in Poland, typically for

smaller companies, and focused on

selling pre-processed products from

Trebaczew," says Nikolai Makarov,

head of the CEE Business Area, to

news2biz. "The aim is to focus on

large international clients," says

Makarov who also pints to the fact

that the whole CEE market has seen

dropping steel prices year-to-year.

The facility in Trebaczew is BE

Group's largest investment so far in

Central and Eastern Europe and

production has been in progress

there since the beginning of the

year.

Nasdaq OMX Stockholm listed BE

Group saw a turnover of SEK 5.9bn

in 2011, but made just SEK 20m in

profits after tax. The company,

which is based in Malmö in southern

Sweden, has 900 staff in ten coun-

tries.

Polish Crist shipyard has delivered a

EUR 200m special purpose vessel for

German and Belgian investors. The

"Innovation," which is said to the

most powerful crane jack-up vessel

on the market, marks Crist's

strengthening position as supplier of

vessels and components for Europe's

offshore industry.

The investors behind the "Inno-

vation" are German construction

group Hochtief and GeoSea, part of

the Belgian DEME group, which had

together created a dedicated com-

pany HGO Infra Sea Solutions to

build and operate special-purpose

offshore jack-up vessels.

"Construction of the big offshore

wind farms follow ambitious targets

and timelines," Ulrich Trottnow of

Hochtief Solutions tells news2biz.

"Crist was able to build the Innova-

tion in the requested timeline, quali-

ty and budget and they had deliv-

ered two jack-up platforms for us be-

fore."

The new ship built in Gdynia is

147 meters long, has a beam of 42

meters, and can operate at depths of

up to 50 meters. With an 8,000-

metric-ton payload and 1,500-

metric-ton crane lift capacity, the

vessel is ideally suited for installing

all types of offshore foundations -

and the only one of its kind any-

where in the world. The "Innovation"

can be deployed in erecting turbines

with outputs of 5-10 MW and will

substantially reduce assembly and

service times for this latest genera-

tion of offshore wind turbines.

Hochtief and its partner designed

the ship, which they will together

operate and charter out. The vessel's

first assignment will be at the Global

Tech I wind farm, which Hochtief

Solutions will be building in the

German North Sea.

As demand for special-purpose

equipment exceeds current supply,

the German company has more work

for Crist. Hochtief Solutions has re-

cently commissioned the construc-

tion of a further heavy-lift jack-up

vessel from the Polish shipyard. The

vessel, dubbed "Vidar" is scheduled

is to start operating in 2013. It will

be Hochtief's fourth heavy-duty

craft, following its sister vessel, the

"Innovation", as well as the "Odin"

and "Thor" jack-up platforms, like-

wise delivered by Crist. The "Vidar's

main features will be a 1,200-metric-

ton crane, a loading capacity of up

to 6,500 metric tons, a powerful en-

gine allowing speeds of up to 12

knots, and the ability to work in wa-

ter depths of up to 50 meters. Paral-

lel to this order, Hochtief Solutions

has commissioned the construction

of three large work pontoons.

"We also have to mention, that

almost 70% of the purchasing vol-

ume comes from German suppliers,

for instance Schottel for the drive

systems, Liebherr for the crane and

Siemens for the jacking system,"

Trottnow stresses.

Largely due to its high-performance

fleet made in Poland and innovative

solutions, Hochtief has made a name

for itself as a major player in the off-

shore wind market. The company of-

fers planning, development, con-

struction, and operation of offshore

farms, and is expecting work done in

the triple-figure millions in this seg-

ment in the coming years.

"The offshore business in Germa-

ny, like in other EU-countries, is a

business with European dimensions.

Together with our partner Deme we

will build for example the EnBW

Baltic 2 wind farm in the Baltic Sea."

By 2020, up to 10,000 MW of

capacity is to be installed in German

offshore wind power installations,

and ten years later the figure is to

reach 25,000 MW according to Ger-

man government targets. The Cen-

tral Federation of the German Con-

struction Industry (HDB) expects

that EUR 25–30bn will be spent on

building wind farms in the North

Sea and the Baltic Sea. A considera-

ble chunk of that money is likely to

land with Polish contractors, as the

country's ship making industry has

been realigning lately to focus on

products and services for the off-

shore market.

Crist is the brainchild of two

Polish engineers, who set up the

business two decades ago and have

since turned out 300 ships. With

some 1,100 staff (including seasonal

workers), the shipyard builds vessels

and steel structures for customers

from Poland, Germany, Norway,

Denmark, France, Belgium, Iceland,

the Netherlands and United States.

Its turnover came to PLN 600m last

year. In 2010 Crist acquired a dry-

dock and other key production as-

sets from the closed-down Gdynia

shipyard, where it has since restored

production., for PLN 213m.

Earlier this year, Crist teamed up

with Germany's Bilfinger Berger to

build a factory of steel structures for

offshore wind towers in Szczecin

(see no 476 page 8). The EUR 50m

project is to create 400 jobs.

It took the Polish government an aw-

ful lot of time, despite the huge

premium on offer, to finally agree to

sell its remaining 25.5% stake in ag-

ricultural lender Bank BGZ to Dutch

co-operative Rabobank.

Owning 60% of BGZ, Rabobank

placed a PLN 1.25bn (EUR 287m)

bid in April for the remainder of the

bank (see no 477 page 5), offering a

massive 54% premium to the share

price on the Warsaw Stock Ex-

change. The offer was open to the

Polish state, which had a 25.5% in

BGZ and holders of the 15% free

float. The government floated BGZ a

year ago, after failing to sell its re-

maining holding to Rabobank, alt-

hough it had to reduce the stake it

sold to a mere 12% due to weak

demand.

"BGZ was on the list of scheduled

privatizations of the Polish State

Treasury. Rabobank is committed, as

a long term investor, to develop

BGZ, hence the offer," Rabobank's

Milou Verhaegh tells news2biz.

During the tender offer, which

had been extended since its original

deadline of May 31st, almost all of

the outstanding shares in BGZ were

offered to Rabobank, giving the

Dutch investor nearly 100% of

shares in the Polish bank. According

to many analysts, the long term ex-

tensions of the hefty offer by the

Dutch buyer were indicative of some

kind of backroom bartering with the

treasury ministry. For other inves-

tors, the offer was said to be a no

brainer.

The Dutch bid survived the deep-

ening Eurozone problems in Q2 as

well as downgrade's from Moody's

for both Rabobank and BGZ in mid-

June. In fact, the ratings agency said

it was only the Rabobank offer - and

presumed parental support - that

kept BGZ from a further cut. "The

current three notches of uplift in

BGZ's long-term rating of Baa2 -

which remains one of the highest of

Western European bank subsidiaries

in the region - is driven solely by pa-

rental support assumptions,"

Moody's analysts wrote on June 19.

Earlier reports suggested that the

Dutch bank was looking to offload

some non-core assets in a bid to

raise capital ratios, but their alleged

quest for cash in no way affected

their appetite for BGZ shares.

"Our aim has been and will be to

strengthen BGZ, with a distinct focus

on serving the food and agricultural

sectors and rural communities in Po-

land. There's sufficient room for

growth in this space."

In the first half of 2012 the BGZ

Group saw its net earnings total PLN

39.5m, down from PLN 60.3m in

January-June 2011. This significant

contraction was mainly due to net

impairment losses on loans and ad-

vances, which increased by PLN

104m i.e. 194%. It was mainly the

result of higher impairment allow-

ances for the corporate loans, in-

cluding construction sector, which

saw one of BGZ's large clients file for

bankruptcy.

The bank's assets totaled PLN

35.1bn in June, up from PLN

28.1bn, whereas its solvency ratio

dropped from 11.3% to 9.5% over

the same period.

"This controlling stake gives

Rabobank increased flexibility to

promptly deal with more strategic

issues such as the capital position of

Bank BGZ. The bank will remain

listed at the Warsaw stock exchange,

in line with customary practice in

Poland," says Ms. Verhaegh.

BGZ Bank has 396 branches with

a further nine under development

and manages close to 0.58m ac-

counts, with some 0.2m clients ac-

tively using online banking.

In late 2011 BGZ launched an

online savings platform BGZOptima,

modeled after Rabobank's

RaboDirect.

"BGZOptima can be regarded a

success to date. We launched

BGZOptima in November 2011 and

since then BGZ Optima has acquired

around 55.000 clients and raised

PLN 2.5bn."

BGZ's original plan (see no 468

page 5) was to acquire 100,000 cli-

ents and PLN 2.5bn in deposits in

two years. Looks like the financial

target was met in little more than

half a year.

It came as a bit of a surprise to mar-

ket observers when Poland's biggest

insurer PZU selected an offer from

California-based Guidewire Inc for

its new products-oriented IT system,

instead of awarding to contract to

Polish IT giant Asseco. With a turno-

ver in the region of USD 200m, the

US software firm is approximately

seven times smaller than its Polish

competitor and the PZU deal will

mark their debut in Poland.

Lately PZU has been trying very

hard to shed its image of a rigid, bu-

reaucratic Moloch, dating back to its

monopolistic market position during

communist times. The recent logo

change, supported by a massive ad-

vertising campaign, and the new IT

platform are part of these efforts.

PZU explains that the current 17-

year-old product IT system has

ceased to comply with its needs, es-

pecially due to its lack of flexibility.

PZU sought new underwriting, poli-

cy administration and billing sys-

tems to provide a strong foundation

to bring products to market faster,

better serve its more than 10,000

agents, and support multi-channel

communications with policyholders

and agents. The new system will be

implemented as a pilot project in H1

of 2013, while the client base and

insurance policies will gradually mi-

grate to the new framework by

2015, the company reported.

The NYSE-listed Guidewire Soft-

ware is a provider of core system

software to the global proper-

ty/casualty insurance industry. Be-

sides California, the company has of-

fices in Beijing, Dublin, Hong Kong,

London, Munich, Paris, Sydney, To-

kyo, and Toronto and it has imple-

mented more than 100 core systems

projects in 13 countries. In the fi-

nancial year ended July 2011,

Guidewire's sales revenues came to

USD 172.5m and its net income to-

taled USD 35.6m. Guidewire has

customers in 16 countries, including

the US, Australia, Russia, Japan,

Germany, France, Italy, Finland,

Brazil and the UK.

The flexibility and scalability of

Guidewire solutions was said to be

the main reason PZU chose their

platform. Guideware's CEO & found-

er Marcus Ryu told news2biz

POLAND his company had already

inked another contract in Poland,

with an undisclosed party.

Guidewire has set up a Polish sub-

sidiary Guidewire Software Poland

and its local alliance partners in-

clude Sollers Consulting and Ernst &

Young Poland.

PZU is the market leader in the

Polish insurance services market,

particularly in property and casualty

insurance, with 32.6% market share

at the end of 2011. It is the oldest

Polish insurance group with the

broad range of insurance and finan-

cial products. The principal product

group offered by PZU is a motor in-

surance for retail and corporate cus-

tomers. PZU Zycie is the market

leader in Polish life insurance ser-

vices in terms of gross written pre-

miums - 30.8% market share at the

end of 2011.

Under its current strategy, the

PZU group focuses on maintaining

profitable growth and its lead posi-

tion on the Polish insurance services

market. Since 2009 PZU has down-

sized its workforce by some 3,600

employees, and in July the company

came to an agreement with trade

unions regarding restructuring of

further 955 jobs.

"The new IT system will make it

possible to implement a multichan-

nel, integrated sales and customer

service model aimed at achieving

full process automation," PZU's CEO

Andrzej Klesyk said in a statement.

More automation certainly means

fewer clerks.

Marcus Ryu: The scope of the

PZU implementation is consistent

with other "tier one" implementation

projects which Guidewire is engaged

in. 40% of Guidewire's customers

overall - and 90% of our customers

in Europe - have over USD 1bn in

premiums. We also have 12 custom-

ers with over USD 5bn in premiums.

PZU is in our top 30 customers by

total premium, and in our top 15

customers in its number of policy-

holders.

MR: As with all core system re-

placements for insurance companies,

the PZU project will be highly de-

manding and complex. PZU will

need disciplined scope management,

timely decision-making, and compe-

tent internal staff assigned to the

program. PZU is a high-performing

organization that is well aware of

the requirements to succeed, and

they have put in place appropriate

strategies to mitigate risk.

MR: Guidewire’s Polish subsidi-

ary has four Polish employees since

February and is actively recruiting in

Poland and our other European

countries. We have the ability to hire

employees in England, Ireland,

France, Germany, Italy and Poland.

Guidewire works in 16 countries but

we only open entities in countries

where we hire employees. Guidewire

is actively seeking other opportuni-

ties in the Polish non-life insurance

market, and we have signed a se-

cond customer since the PZU an-

nouncement. It is an insurer we are

not able to publicly name at this

time.

MR: Guidewire is actively recruit-

ing across Europe, and Poland is one

of our focused centers of recruiting.

We typically recruit people with a

computer science background in-

cluding Java or C Sharp skills.

Guidewire employees go through a

recruiting process, an intense 4-7

week training program, and a formal

certification test. Our employees

from Poland have completed our

training and shadow program with

impressive results. We are continu-

ing to recruit in Poland and expect

to significantly increase the number

of full-time Polish employees in our

organization. Our Polish consultants

like all European consultants are

committed to accepting assignments

throughout Europe. We are continu-

ing to recruit across Europe, in the

Americas, in Japan, and in Australia.

MR: Guidewire has a regional

Consulting Services Center in Dub-

lin, Ireland, and we do not have cur-

rent plans for a 2nd regional center.

In the event that we decide to open

a second regional center we will cer-

tainly consider Poland amongst our

choices. We have high regard for the

strong talent pool in the country and

look forward to substantially grow-

ing our Polish subsidiary over time.

MR: Each Guidewire system of-

fers a highly functional set of fea-

tures out of the box - designed to

perform the specific tasks the given

system is intended for. Insurers often

configure their Guidewire systems to

meet their unique geographical or

regulatory requirements. Our sys-

tems are designed to make this kind

of configuration possible and in fact

the changes that the insurer makes

are protected from future version

upgrades they take from Guidewire

which enables them to preserve the

configuration changes they have

made while taking advantage of

functional enhancements provided

by the new software release. Anoth-

er major advantage of a standard-

ized product is that it incorporates

the insights and best practices across

many different insurers - at this

point, the 130+ insurers in

Guidewire's customer community.

MR: Guidewire's software prod-

ucts share a common technology

platform making them more cost-

effective for an insurer to operate,

maintain, and enhance. They share

functional attributes so that the in-

surer's IT staff can work on each sys-

tem interchangeably with little if any

additional training. Our applications

also share a common data model

which facilitates the exchange of in-

formation between them. This is a

key benefit to an underwriter for in-

stance who can now access the claim

information of a policyholder upon

renewal to ensure they are correctly

assessing the risk. They can do this

is real-time which is a huge change

over what the insurer can do with

their existing systems which are of-

ten built on older technology.

Aiming to keep up to date with its

smaller competitors, Poland's lead-

ing lender PKO BP has named the

suppliers of a mobile financial ser-

vices platform: US giant HP and

Swedish Accumulate. The value of

the contract remains undisclosed.

Unlike other Polish banks, which

are testing SIM-centric mobile plat-

forms (whereby one's SIM card es-

sentially plays the role of a payment

card), PKO BP has gone for an appli-

cation-based system. By download-

ing a smart phone app, users get ac-

cess to their bank account or pre-

paid card. After logging in, they can

pay for shopping at stores, make

cash withdrawals, or purchases

snacks from vending machines. All

transactions have to be confirmed

with a PIN code.

"SIM-centered solutions often

store and communicate sensitive in-

formation (like card number, CCV,

expiry date, account number) during

a transaction. In the Accumulate so-

lution no sensitive data is stored on

the mobile nor communicat-

ed/transmitted upon payment," ex-

plains Lars Aase, Vice President

Marketing at Accumulate. Mr. Aase

declined to talk about the PKO deal

citing contractual obligations.

PKO's system will be similar to

the WyWallet service, which Swe-

den's four leading mobile network

operators (Telia, Tele2, Telenor and

3), launched in June. The mobile

wallet joint venture is the first ser-

vice of its kind and one that has

been covering 97% of the mobile us-

ers in Sweden from the start.

Swedish mobile payment solu-

tions company Accumulate has been

part of the development of WyWallet

from the start. The mobile technolo-

gy and security behind the WyWallet

mobile wallet service is based on

Accumulate's mobile financial ser-

vices platform Mobile Everywhere,

which will be also the basis for the

PKO system.

WyWallet enables person-to-

person money transfers, paying for

SMS-services like public transport,

ticketing, voting using WyWallet

mobile app, online shopping, top-up

of prepaid cards. WyWallet also

supports point of sale payments us-

ing NFC (near field communication)

and live tests in Swedish shops have

been underway in since July. Al-

ready after this summer more ser-

vices and features will be launched

for the WyWallet mobile wallet us-

ers.

Boasting best in class mobile se-

curity, PKO's system will handle all

mobile payment, mobile banking

and mobile security fea-

tures/functions on a single platform.

It will work on almost all mobiles:

Android, iPhone, Java, Blackberry

and Windows Mobile/Phone and it

will be independent of mobile opera-

tor, network or mobile subscription

type. Moreover, it allows for easy

updates without having the user to

re-download, reinstall and reactivate

the mobile client app.

With a staff of 30, Accumulate

operates from offices in Stockholm,

London and Beijing. Since its first

commercial launch in 2004 its solu-

tions have seen more than 100m

unique installations.

PKO BP has already inked its

main framework agreement with HP

for implementation of the mobile

platform, and it is currently discuss-

ing details with the two providers.

Accumulate will provide the tech-

nology, while HP is responsible for

project management, all integration

and customer support. The platform

is to be launched by the end of the

year. PKO BP's key competitor, the

Italian-owned Pekao bank is to be

ready with its mobile financial ser-

vices offering in early autumn.

Although in 1H 2012 the CEE real

estate market saw a 40% y/y drop in

volumes transacted, reaching EUR

1.26bn, in the case of Poland the de-

cline came to merely 6%, according

to a recent CEE Investment Market

report by property consultancy Jones

Lang LaSalle (JLL). Poland remained

the most active market over that pe-

riod with more than 70% of the total

volume (EUR 877m).

JLL experts emphasize that in

spite of the general market slow-

down, investor sentiment towards

Poland remains very positive. Total

assets transacted included over EUR

283m in offices, almost EUR 460m

in retail and some EUR 113m in the

industrial sector.

According to JLL, the high trans-

action volume was largely a result of

postponed 2011 closings as virtually

none of the most significant transac-

tions were both initiated and sealed

in the January-June period. The

largest deal completed in 1H 2012

was the sale of the 77% stake in the

mixed-use retail and office scheme

Zlote Tarasy in Warsaw. Dutch ING

Real Estate sold the property to a

consortium of Unibail-Rodamco and

CBRE PFCE for a reported price fo

EUR 475m. Other major transactions

in the retail sector included the sale

of Galeria Tecza in Kalisz by Polish

developer Rank Progress to US

Blackstone for EUR 37m. In another

regional city, Olsztyn, Arka Fund

sold the Alfa Centrum mall to

Rockspring for EUR 84m.

The office market witnessed six

major deals, the largest one being

the sale of Harmony Office Centre II

in Warsaw's Mokotow district to

Spain's Azora for EUR 54m. The

seller was Polish developer Eko Park.

The second largest deal saw Spanish

fund Falcon Investments (arm of

CBREI) sell its Renaissance Building

in Warsaw to GLL Partners for a ru-

mored EUR 27m.

As for the industrial segment, the

full-year volume is likely to reach

the record 2007 level, when EUR

318m worth of properties changed

hands. The 1H saw Hines acquire

the Prologis portfolio at just below

EUR 100m which together with the

sub EUR 10m Ideal Idea deal almost

matched the total 2011 transaction

volume in the industrial segment

(EUR 116m). A number of other sig-

nificant deals are said to be under

preliminary agreements and/or due

diligence.

"We believe that the overall in-

vestment sentiment and outlook for

Poland will continue to be good with

the total investment volume settling

between EUR 2bn and EUR 2.5bn,

marking only a slight decline from

the exceptionally strong 2011, when

EUR 2.75bn worth of properties

were transacted," says Tomasz

Trzoslo, Head of Capital Markets

CEE at JLL.

Indeed, the past few weeks have

seen another two major deals, which

together represent approx. two

thirds of the 1H volume. Apsys,

Fonciere Euris and Rallye have

signed a preliminary agreement with

Union Investment’s UniImmo:

Deutschland open-ended fund for

the sale of the Manufaktura shop-

ping and entertainment center in

Lodz in central Poland. The German

investor has agreed to acquire the

landmark property with a gross

lettable area of 91,000 sq.m for a

reported EUR 350-400m. In the of-

fice sector, another German fund Al-

lianz Real Estate has purchased

Warsaw Financial Center for EUR

210m (see in-briefs).

"At the mid-year point we esti-

mate prime office yields to be at

6.25%, retail yields at 5.75%n and

warehouse yields at around 8.0%.

We forecast prime yields to remain

stable in the short term but this will

highly depend on how the situation

in the Eurozone and the banking

sector evolves in the coming months.

The yield gap between prime and

secondary product is 100 to 200 bps

and we remain this spread to remain

in place."

In related news, Poland ranked

as number 19 globally in JLL's Glob-

al Transparency Index, a survey that

calculates transparency in 97 real es-

tate markets worldwide based on 83

different factors. With transparency

of the country's real estate market

described as "high" Poland was put

on par with Western European mar-

kets such as Germany, Denmark,

Norway, Belgium, Ireland and Spain,

and ahead of its CEE peers.

Skanska Property Poland, the devel-

opment arm of Sweden's construc-

tion giant Skanska has made head-

lines in the Polish media after it ac-

quired an office building in central

Warsaw that houses the Institute of

National Remembrance (IPN), a

controversial state institution creat-

ed back in 2000 to investigate

Communist and Nazi crimes.

The IPN had been renting the

building from the listed press distri-

bution and retail giant Ruch. The

latter used to belong to the state, but

since 2010 majority ownership in

Ruch has been in private hands. As

part of its ongoing restructuring, the

company has been disposing of all

sorts of non-core assets, including

the attractively located IPN property.

The building in question is situ-

ated at Rondo Daszynskiego, at the

corner of Warsaw's key thorough-

fares: Prosta and Towarowa, and sits

almost directly on top of a future

subway station. Its surroundings

have transformed over the past years

from industrial wasteland into one

of Warsaw's top office destinations.

A number of huge office projects,

such as Ghelamco's Warsaw Spire,

are currently under construction in

direct vicinity of the IPN building

and many other skyscrapers are in

the pipeline. This may explain

Skanska's decision to get involved in

the project, despite the unpleasant

political undertones.

Despite its laudable cause, which

is defined as "investigating crimes

against the Polish nation" and shed-

ding light onto certain poorly re-

searched parts of the country's re-

cent history, the IPN has earned an

infamous reputation for its meddling

in current politics. The communist

secret service files, which remain in

IPN's care, have been repeatedly

used by the populist Law & Justice

(PiS) party to bash political oppo-

nents, including the legendary Soli-

darity leader Lech Walesa. Over the

years, PiS leaders have been among

the staunchest defenders of the insti-

tute, which employs many radical

historians. In small wonder then,

that PiS were the first to raise alarm

when IPN's headquarters changed

hands.

IPN used to pay Ruch monthly

rent of PLN 30,000, before the land-

lord raised the figure in excess of

PLN 100,000 in May. Under an

agreement with Ruch from October

2000, the government were to give

Ruch a different property in ex-

change for the IPN building, but no

such transaction has ever taken

place. Ruch also sought to sell the

building to IPN, but the Finance

Ministry failed to provide the neces-

sary funding. Although officially the

lack of additional funding for IPN is

part of the large-scale spending cuts

the government embarked on last

year, the opposition views the deci-

sion as politically motivated.

"We acquired the IPN building as a

business investment and quite frank-

ly it came to a surprise to us that a

transaction like this would stir up so

much political debate. However, we

are a developer; we are not involved

in party politics and we will treat

our tenant the way we would treat

any other. Any issues we will work

out through discussions with our

tenant as we usually do," says

Nicklas Lindberg, President of

Skanska Commercial Development

Europe (CDE), Skanska's business

unit that develops properties in Cen-

tral and Eastern Europe, to

news2biz.

"Our interest in the property in

the longer perspective is also as a

developer - the building is right next

to a future metro station and we be-

lieve that this is where Warsaw's

central business district will expand,

Tishman Speyer is here; our own

Green Corner is here and we have

plans for the area that would con-

nect it to our Atrium developments

on Aleja Jana Pawla. However this

requires some more pieces to the jig-

saw puzzle and we are right now

trying to secure them," says Mr.

Lindberg.

The Swedish-owned construction

group Skanska has launched a new

subsidiary Skanska Residential De-

velopment Poland to join its Polish

office development business and

Skanska SA – one of the largest con-

struction companies on in the coun-

try.

The residential unit has just bro-

ken ground on its first project, Park

Ostrobramska, for which the Swedes

acquired a 7ha site last year in War-

saw's Praga district some 5km east

of the city centre. The project will

include some 1,700 residential units

and its first two buildings (7 & 13

stories respectively, housing a total

of 300 apartments) are already un-

der construction with completion

scheduled for 2013 and 2014. The

average price is PLN 7,000 (EUR

1,700) per sq.m.

The company is getting ready for

another project in Warsaw's

Mokotow district (Jasminowa St.)

with 800 units. Due to its fantastic

location in Warsaw's most sought-

after district, close to major thor-

oughfares but also parks and green-

ery, this undeveloped area is said to

be the new development hotspot in

Warsaw. This is where billionaire

Leszek Czarnecki, owner of the

Getin group, has built his mansion,

so Skanska will be certainly aiming

at wealthy customers with its next

project.

Similar to its sister company, the

office developer Skanska Property

Poland, the residential arm aims to

focus on "building green," reducing

the environmental footprint of its

projects. One shall see whether the

Polish customers will agree to pay

extra to live in eco-friendly apart-

ment blocks. Should the resulting

savings prove substantial (Skanska

argues that its technology may bring

water and energy bills down by up

to 40%), perhaps they will.

Skanska's return to the residen-

tial sector (years ago the company

built an apartment complex in War-

saw's Zoliborz district) at this partic-

ular moment has raised many an

eyebrow, however, as the Polish

market suffers from a record supply

of completed dwellings while banks

are very reluctant when it comes to

financing homes. The worsening

economic conditions are bound to

only aggravate this situation in a

short to medium term. Moreover,

the company's residential develop-

ment business in the Nordics, Czech

Republic and Slovakia has been in

doldrums for some time, forcing the

company to write off SEK 380m in

June and cut about 150 jobs (mainly

in Sweden).

"We want to get into the residential

market to build apartments that

Poles can afford. Most of the resi-

dential units that are left on the

market date back from the boom pe-

riod when developers did not focus

on the price," says Nicklas Lindberg,

President of Skanska Commercial

Development Europe (CDE),

Skanska's business unit responsible

for property development in Central

and Eastern Europe, to news2biz.

A key aspect in building what

Poles can afford to reduce the size of

apartments.

"The standard unit in our

Ostrobramska development is a two-

room apartment of 55 sq.m. Our key

for getting back into the market is to

focus on price, from finding the right

locations, like we have done in

Praga and Mokotow, and in the rest

of the development process as well -

and letting the buyer enjoy the bene-

fits. We are a developer and we have

access to construction from own

group which is a definite bonus for

us," says Lindberg.

In Mr. Lindberg's mind the extra

investments in keeping a green pro-

file for the development do not con-

flict with the focus on price.

"We have seen the sustainability

thinking spread in commercial de-

velopments over the past years and

as for Skanska, this is just the way

we build now and we are sure this

trend will extend into residential

construction as well. We believe that

clients will focus the environment

aspect but also on the fact that in

this way we reduce living costs in

the long term," says Lindberg.

Skanska SA is one of the largest

construction companies in Poland,

with sales of PLN 4.8bn and operat-

ing gains of PLN 489m. The compa-

ny employs some 7,700 staff. In ad-

dition to its construction business as

well as office and residential devel-

opment units, the Swedish giant is

present in Poland via Skanska Infra-

structure Development which partic-

ipates in public-private partnership

projects.

Skanska is one of the world's ten

largest construction companies, em-

ploying 53,000 employees in select-

ed home markets in Europe (Swe-

den, Norway, Finland, Poland, Czech

Republic, Slovakia, Hungary, UK),

the US and Latin America. In 2011,

NASDAQ OMX listed Skanska turned

over SEK 123bn (EUR 13.8bn)

With the acquisition of two wind

farms, RWE Innogy, the renewable

energy division of German utility gi-

ant RWE, has boosted its installed

capacity in Poland up to 152 MW.

The most recent additions to

RWE's Polish portfolio are wind

parks in Krzecin (70km southeast of

Szczecin) and Taciewo (10km

northwest of Suwalki, near the bor-

der with Lithuania), both developed

by Spain's Gamesa.

With 15 wind turbines of the

Gamesa G90 type, the 30 MW

Taciewo borders directly on the

32MW Piecki wind farm commis-

sioned by RWE Innogy back in 2010.

Seven turbines of the same kind,

with a hub height of 100 meters and

a rotor diameter of 90 meters, were

installed at the 14MW Krzecin farm,

which is located near RWE's 35MW

wind farm at Tychowo that has been

supplying electricity to the grid since

the end of 2010.

"Taciewo and 152MW now mark

the midpoint of our Polish develop-

ment targets. We intend to operate

about 300MW in Poland in 2015.

Owing to the excellent Polish wind

sites, we are on a good path and in-

tend to continue our investments

here. At present, our Nowy Staw

wind farm with a capacity of 39MW

is under construction [see no 479

page 8; ed.]. It is due to be commis-

sioned early in 2013," commented

Hans Bünting, CEO of RWE Innogy.

"Development of wind energy is

RWE's priority in Poland," Robert

Macias, Member of the Management

Board of RWE Renewables Polska,

told news2biz. "Our plan is to invest

about PLN 2bn in Poland by the end

of 2015."

Overall, RWE Innogy now oper-

ates six onshore wind farms in Po-

land: Suwalki with over 41MW has

been on stream since 2009, followed

by Tychowo (35 MW), Piecki (32

MW) , Krzecin (14MW) and Taciewo

(30MW).

With more than 72,000 employ-

ees, RWE is one of Europe's five

leading electricity and gas compa-

nies. In fiscal 2011, RWE recorded

just below EUR 52bn in revenue.

The largest RWE subsidiary in

Poland is RWE Polska, which plays a

dual role – of an electricity trading

company and a business unit re-

sponsible for development of the

RWE Group in Poland. In 2011 RWE

Polska sold 6,354 GWh worth of

electricity and its revenues came to

PLN 2.77bn. RWE Polska employs

610 staff.

Warsaw-based United Oilfield Ser-

vices (UOS), which earlier this year

received a EUR 21m capital injection

from private equity fund Enterprise

Investors (see no 475), has just bro-

ken ground on its logistics base in

Łowicz, 75km west of Warsaw.

Thanks to the investment, starting

from next year, the company's brand

new fleet of trucks with fracturing

and drilling equipment will be able

to easily access all of Poland, a third

of which is covered by shale explora-

tion concessions.

Located on a 12-ha site in the

Lodz special economic zone, the PLN

35m project will include seven build-

ings with a combined area of 8,862

sq.m. With Japanese-owned Kajima

Poland as the general contractor, the

investment is to reach completion by

the end of the year, creating some

120 jobs. Around the same time,

UOS is to receive 63 custom-made

trucks with specialist equipment for

fracking which will be stationed in

Łowicz. Overall, the company is in-

vesting USD 118m into customized,

state-of-the-art equipment, including

the said 60,000 horsepower truck

and a production-ready drilling rig.

UOS offers seismic, drilling and

well completion services to compa-

nies involved in oil and gas (both

conventional and unconventional)

exploration and production in Po-

land. UOS founders have many years

of experience in the oil & gas service

industry in the United States. Be-

sides EI as a minority shareholder,

the investors behind UOS include

CSL Capital Management, an ener-

gy-focused private equity firm based

in the US, and a number of private

investors. UOS currently employs

some 110 staff, including 65 special-

ists and by the end of the year its

workforce is to reach 500 people.

Company representatives told

news2biz POLAND that their goal is

to transform UOS into a leading oil-

field services company in the region

with a staff of 1,000-1,200 in a cou-

ple of years.

"As of July we had some 100 em-

ployees, in line with plans, and their

number will continue to grow. The

market is competitive, with many

companies seeking oilfield special-

ists, but we haven't experienced any

recruitment problems so far. We are

seeking both experienced mining

professionals as well as young engi-

neers and technicians," Ryszard

Woronowicz of UOS tells news2biz.

Poland is believed to have sub-

stantial shale gas reserves, with es-

timates ranging from 346bn cb.m to

5.3 trillion cb.m (see no 474 page

10). Some 20 companies, including

global giants, are investing in explor-

ing for these reserves. So far, less

than 23 exploration wells have been

drilled throughout Poland. Another

40 or so are to be completed by the

end of the year.

"We have successfully completed

a number of geophysical projects for

our clients and we see huge demand

for this type of services in Poland

and abroad. When it comes to hy-

draulic fracturing, we hope to be op-

erational by December, and we

should be ready for drilling in Q1

2012. We hope to start drilling the

first well for our clients in Poland at

the beginning of Q2 next year."

Shale formations started to be

commercially exploited to great suc-

cess beginning in the late 1990s in

the United States and subsequently

in other markets. The production of

natural gas from shale formations

has rejuvenated the natural gas in-

dustry where such technologies have

been introduced, giving Poland some

hope for reducing its dependence on

Russian imports. Gas price in the US

have dropped below USD 70m per

1,000 cb.m, while Poland pays Gaz-

prom some 6-7 times the amount.

Poland and Lithuania have made

another baby step towards linking

their natural gas pipeline systems, a

project that they hope will increase

energy security in the Baltics.

The gas transmission operators in

both countries – Gaz-System in Po-

land and Lietuvos Dujos in Lithuania

– have selected Austria's ILF Consult-

ing Engineers Polska to carry out a

feasibility study for the project,

which according to current plans

could be completed in 2018.

Co-financed by the European

Commission within the

TransEuropean Energy Network

Program and the Baltic Energy Inter-

connection Plan, the project is part

of the development of the North-

South Energy Corridor in Europe.

The operators hope that the pro-

ject will lead to enhanced competi-

tion in the regional gas market and

will ensure safer and more reliable

supplies of gas to the Baltic States,

which essentially means making the

Baltic region less dependent on Rus-

sian gas. Both countries are current-

ly building LNG terminals (Poland in

Swinoujscie and Lithuania in

Klaipedos).

The interconnector between Po-

land and Lithuania will provide "a

broader range of benefits, enabling

access both to EU gas and global

LNG markets," Joachim Hockertz, di-

rector of commerce at Lietuvos

Dujos, said in a statement. He added

that the capability to transmit gas in

both directions would lead to "a

higher security of supply for the

connected countries."

Jan Chadam, president of the

management board of Gaz-System

said he expected that a "significant"

portion of the investment would be

financed by Brussels, "because this is

a priority project in the scope of

eliminating energy islands in Eu-

rope," he said. Indeed, most experts

agree that without public aid the

project will not be profitable.

The pipeline will have an annual

capacity of 2.3 cb.m of natural gas

and stretch 562 kilometers, the

companies said, although with addi-

tional investments its capacity could

easily be doubled. According to ini-

tial estimates, the investment is to

cost EUR 472m with Poland ex-

pected to foot two thirds of the bill.

Results of the feasibility study

are set to be available in the first

quarter of 2013, which will deter-

mine further plans for linking the

systems.

During its six weeks in service, War-

saw's new Modlin airport welcomed

more than 200,000 travelers.

Opened on 15 July, the project looks

destined to succeed and according to

estimated in 2013 it will become Po-

land's 5th largest airport with more

than 2m passengers – a capacity its

terminal was designed for. By the

end of this year the figure is to reach

900,000.

Located over 35km north of the

city center, the airport is used by

low-cost airlines for both domestic

and international passenger flights.

Currently it is only the Irish low-cost

carrier Ryanair and its Hungarian

competitor WizzAir that fly to

Modlin but the new airport is likely

to become popular with charter op-

erators, especially at nighttime when

airline traffic at Warsaw's main

Chopin Airport is restricted.

The low-cost Irish carrier Ryanair

says it plans to carry 1.5m passen-

gers on routes from and to Modlin.

The airline will be flying from

Modlin to 19 European airports—

starting with Brussels, Budapest,

Dublin, London, Milan, Oslo, Rome

and Stockholm. The carrier will thus

be operating a total of 109 connec-

tions from 10 Polish airports, includ-

ing Modlin. In 2011, Ryanair carried

a total of 75m passengers, and its

CEO Michael O'Leary told a press

conference at Modlin that his goal is

to carry 5m passengers on routes

from and to Poland this year.

As for Wizz Air, it will fly to

around 20 destinations from Modlin,

to where the carrier has relocated its

Warsaw hub.

It takes around 40 minutes to get

from Warsaw city center to the new

airport by car and only a bit longer

by rail. In June, rail carrier Koleje

Mazowieckie launched a train ser-

vice between Warsaw and Modlin,

with 14 trains daily. Passengers need

to take a bus to get from Modlin

railway station to the airport. The

buses, painted in the railway opera-

tor’s colors, shuttle between the air-

port and the railway station every 20

minutes and can take 70 passengers

on board. Additionally, trains will be

shuttling between the two Warsaw

airports, Okecie (Chopin) and

Modlin.

Travel by train from the Warsza-

wa Centralna railway station in the

city center to Modlin railway station

takes 44 minutes. Then it takes an-

other 10 minutes to get from the sta-

tion to the airport by bus.

Sixteen modern Elf trains are op-

erated on the line from Warszawa

Centralna to Modlin railway station.

Each train has almost 190 seats for

passengers. One taxi company intro-

duced a flat-rate service to Modlin,

at PLN 99 (EUR 25) from downtown

Warsaw .

Despite the launch of its first lo-

cal competitor, Warsaw's Chopin

airport welcomed 1.084m passen-

gers in July 2012, some 9% more

than in the same month of 2011. In

the whole of 2011 the Chopin air-

port handled 9.3m passengers,

which represented 43% of Poland's

total airline traffic.

Starting next year life will get just a

tiny bit easier for Poles with a taste

for luxury shopping and architectur-

al insanity in a desert setting, with

Emirates and Qatar Airways launch-

ing direct flights to Warsaw. Jokes

aside, the two Middle Eastern air-

lines may introduce some much-

needed competition in flights from

Poland to the Middle East, Africa

and Asia Pacific.

Qatar Airways first announced

plans to enter Poland in November

last year, but the exact timeline of

the entry has been undisclosed until

now. In July 2012, its regional com-

petitor Emirates decided to launch

flights from Warsaw to Dubai from 6

February 2013. Qatar Airways re-

sponded with the announcement of

a Warsaw-Doha connection, sched-

uled to launch on 5 December 2012.

The flights will be operated by Air-

bus A320 aircraft, four times a week.

Qatar Airways Chief Executive

Officer Akbar Al Baker said the addi-

tion of Poland and Serbia demon-

strated the airline's commitment to

launch destinations that are largely

underserved.

"Over the past two to three years

we have identified great opportuni-

ties to probe markets across Europe

that are largely underserved by full

service international airlines. We are

delighted to have subsequently

started services to some of these des-

tinations and are extremely pleased

by their performance so far," he said.

The 50% state-owned Qatar Air-

ways has seen rapid growth in just

15 years of operation, currently op-

erating a modern fleet of 110 air-

craft to 118 global destinations.

Based in Dubai, Emirates is the

largest airline in the Middle East, fly-

ing to 122 cities in 72 countries

across six continents. Its fleet in-

cludes 177 Airbus and Boeing air-

craft, and it has orders for 90 Airbus

A380s, 20 of which are already in

service. Emirates is a subsidiary of

The Emirates Group, which has over

50,000 employees, and is wholly

owned by the government of Dubai

directly under the Investment Cor-

poration of Dubai, United Arab

Emirates.

Although neither of the two car-

riers is particularly well known for

bargains, additional competition is

very welcome on the routes from Po-

land to South-East Asia, Middle East

and Australia, which have been

dominated by Russia's Aeroflot,

German Lufthansa, and Turkish Air-

lines. The most prospective destina-

tions include China (Beijing, Shang-

hai), Thailand (Bangkok, Phuket)

and India (Delhi). According to un-

official reports, their competitors are

putting together new price lists

ahead of the upcoming market debut

of Emirates and Qatar Airways on

the Polish market.

Abu Dhabi's Etihad, another air-

line from the Persian Gulf operating

in Europe, has just announced plans

to acquire Irish carrier Aer Lingus.

The European arm of US logistics gi-

ant C.H. Robinson seeks to acquire

Polish forwarder Apreo Logistics.

Although no official confirmation

has been issued as of yet, the inves-

tor has asked the competition

watchdog UOKiK for permission to

seal the deal.

"At this time we do not have a

comment," Mike Wilken, PR manag-

er at C.H. Robinson, told news2biz.

Apreo Logistics offers warehouse

logistics, full truck load as well as

general cargo, bulk transport, sea

and air forwarding, rail forwarding,

refrigerated transport, and tanker

transport services. It covers Europe,

Turkey, the Middle East and the CIS,

managing a fleet of over 500 trucks

with a capacity up to 120 cb.m and

24 tons.

The company dates its origins

back to 2003, when Dutch Vos Lo-

gistics acquired Polish forwarder

Euroad, headed by Grzegorz

Bielowicki. Four years later, Polish-

American private equity company

Tar Heel Capital, in which

Bielowicki is one of managing part-

ners, acquired the ailing former

Euroad forwarding business in Po-

land from Vos Logistics and trans-

formed it into Apreo Logistics.

In December 2010 Apreo and Tar

Heel Capital expanded the business

further by acquiring a significant

portion of assets and business of the

bankrupt operator Equus (including

Transmlecz, EquusFresh, and

Spedycja Kolejowa i Drogowa). Prior

to the acquisition, in 2010, Apreo

had PLN 130m in revenues, and the

following year the figure rose to

nearly PLN 300m.

Founded in 1905, C.H. Robinson

Worldwide, Inc., is a global provider

of multimodal logistics services,

fresh produce sourcing, and infor-

mation services to 37,000 customers

through a network of more than 230

offices and over 8,300 employees

around the world. The company

works with 53,000 transportation

providers worldwide. C.H. Robinson

turned over USD 10.3bn in 2011

and its net profits came to USD

432m. In Poland the company has

offices in Warsaw and Wroclaw.

Europe's number one milling com-

pany GoodMills Group is uniting its

Polish operation under a single

brand with plans to strengthen its

position in the retail segment. Over

the coming three years the Austrian-

owned flour maker plans to spend

some PLN 50m on boosting its pro-

duction, storage, and packing capac-

ity in Poland.

So far, the company's five Polish

mills have been operating under dif-

ferent logos (Diamant, Aurora, VK

Polska) but following the unification

of its European operations,

GoodMills has decided to do the

same in Poland. Officially, GoodMills

Polska will launch on 1 October.

With annual output of 600,000

tons, GoodMills Polska is the leading

supplier of flour to business custom-

ers, but its goal is be just as success-

ful with individual clients. This will

require stronger promotion of its re-

tail brand Maka Basia and improved

cooperation with grocery chains and

wholesalers.

"Becoming a leading grain pro-

cessing company in Poland is one of

our strategic goals for the coming

years," Rafał Salomon, CEO of

GoodMills Polska told a press con-

ference.

The GoodMills Group is located

in Vienna and leads seven country

organizations with in total 29 mills.

With more than 3m tons of wheat

processed and more than EUR 1bn

in revenues, it is the leading milling

company in Europe and one of the

top four players worldwide. The

subsidiaries of the GoodMills Group

are located in Germany, Austria, Po-

land, Czech Republic, Hungary, Ro-

mania and Bulgaria. The Group also

has a minority stake in a leading

Greek milling company. The

GoodMills Group is owned by

Leipnik-Lundenburger Invest

Beteiligungs AG which in turn be-

longs to the financial sector giant

Raiffeisen.

If you ever happen to order a pint of

ale or any other dark beer in Malay-

sia, Cambodia, or Laos, you will be

likely to end up drinking a beverage

made from Polish malt. The main

supplier of caramel and black malt

to these markets is Danish Malting

Group Polska (DMGP), which ex-

pects its turnover to grow by nearly

a quarter this year, largely due to

growing exports.

"They don't grow barley out there

and due to the massive import of

toys and electronic devices we have

from China, the transport costs are

very reasonable," says Kim

Jørgensen, CEO of Danish Malting

Group, to news2biz. "We mount a

big plastic bag inside the container

and fill it up with malt and we ship

it to Asia for USD 1,000 which is

roughly what it costs to send it down

the road here," says Jørgensen.

Part of the Carlsberg Group, Dan-

ish Malting Group entered Poland in

2004 with the acquisition of two

malting plants, one in Sierpc and a

much smaller plant in Strzegom,

thus immediately becoming one of

the leading malt producers in the

country. In Denmark, DMG has one

malting plant located in Vordingborg

100 km south of Copenhagen.

"When we took over the plants,

they looked like something from an-

other planet, but we have invested a

lot in them and expanded capacity,

so that for instance in Strzegom we

now have four roasters," says

Jørgensen.

Following the sizeable invest-

ments, both plants have been largely

automated and computerized, alt-

hough the Strzegom unit still uses its

original, over 100-year-old Galland

and Linz systems to produce small

but unique quality batches of pils-

ner, Munich, caramel and black

malt. The company is sourcing

spring and winter barley mainly lo-

cally in Lower Silesia and it has de-

veloped substantial storage capacity

to maintain constant supply of raw

materials throughout the entire sea-

son.

"The production in Strzegom is

very much a manual one, the vol-

umes are much lower, but the profits

per unit are much higher," says Kim

Jørgensen.

Danish Malting Group sells 90%

of its Pilsner malt to the Carlsberg

group. When is come to special

malts, some 60% of its output is sold

to companies outside the group,

mainly to European breweries and

food companies (malt is being wide-

ly used in the bakery and confec-

tionery sectors as well), but also to

exotic destinations such as the

aforementioned South-East Asian

markets, as well as Sri Lanka, Nepal,

Malawi and the Dominican Republic.

Last year the plant boosted its ex-

ports by a half and this year a fur-

ther 15% growth is expected.

"We are even supplying special

malt to the UK and for Guinness in

Ireland," says Jørgensen.

Unlike dark barley malt, pilsner

malt is a low-margin product, and in

this segment Polish malting plants

have to compete with Czech and

Slovak producers. Of the total pils-

ner malt used by Polish breweries,

some 70% comes from domestic

producers, and the rest has to be

imported.

As Poland's beer market seems to

have reached the point of saturation,

there is little space for growth for

malt producers. Cost-cutting brewer-

ies increasingly often turn to cheap-

er malt substitutes, especially with

barley prices expected to go up as a

result of drought in the US, Ukraine,

and Russia.

"Fortunately, the recent harvest

has given good quality barley in both

Poland and Denmark. However,

globally harvest problems in US and

Russia have pushed feed grains pric-

es to a very high level giving also

very high prices for malting barley.

Thanks to the good harvest, all of

the Danish and Polish barley basical-

ly has the right quality for malt. This

is in big contrast to the harvest last

year, so we only foresee problems

with the price and not the quality,"

says the CEO whose company will

start using the barley from this year's

harvest a month from now.

Last year DMGP turned over PLN

135m and net-earned PLN 8.2m.

This year the respective figures are

to reach PLN 167m and PLN 13m.

The Polish units have a combined

staff of 50.

Following years of solid growth,

dark clouds are beginning to form

over Poland's dairy sector. In the

first quarter of the year prices of key

dairy products dropped by 20-30%

and outlook for the near future is

grim.

Although dairy companies (ex-

cluding ice cream makers) turned

over a record PLN 26.3bn last year,

their financial results declined,

mainly due to higher prices of raw

materials. Milk purchase prices rose

by nearly 14% last year, while retail

prices increased by only 7%. In the

case of processed products the in-

crease ranged from 4% to 8%. Con-

sequently, the industry saw its gross

profit slide by more than 7%, down

to PLN 583m, according to figures

provided by the IERiGZ agri sector

think tank.

Results of the recent census show

that Poland's dairy sector has under-

gone massive consolidation, with the

number of milk producers dropping

by a half over the past eight years.

Over the 2007-2011 period milk

production per farm doubled, reach-

ing 26,000 l per year, while the

number of producers with 10-49

milk cows increased by 5%. Howev-

er, the total stock had been shrink-

ing steadily, from 2.667m cows in

2007 down to 2.466 last year. An-

nual milk production per cow had

gone up by some 10% since 2006,

topping 5,000 l in 2011. The num-

ber of active dairy farmers shrank

from an estimated 480,000 in 2004,

prior to Poland's EU accession, down

to some 167,000 and experts believe

the figure is bound to go down to

100,000 in not-so-distant future.

At the beginning of the year pro-

ducers had been hoping to keep pro-

curement prices unchanged, fearing

that their lowering might bring

about a reduction in milk supply, but

most have since been forced to re-

consider their stance. Hence, dairy

farmers are squeezed between a rock

and a hard place, with fuel, fertiliz-

er, and feed costs going up, and pro-

cessors cutting the price they are

ready to pay for fresh milk. To make

the matters even worse, many farm-

ers are still repaying loans they drew

to pay for upgrading their buildings

and equipment to EU quality stand-

ards.

The situation is hardly better for

small dairy processors, especially

those making only basic types of

products. Retailers are pressurizing

them to cut prices, citing shrinking

spending power and worsening eco-

nomic conditions, while farmers are

demanding better rates on milk,

pointing to growing production

costs.

As of March 2012, 309 dairy

plants were registered with Polish

veterinary authorities, including 18

with suspended operations. The

number of milk purchasers topped

287 last year, of which only two

thirds of which submitted financial

reports.

Although consolidation in the

processing industry is a fact, many

say its pace could be faster. Small

producers and cooperatives are not

exactly enthusiastic about joining up

with the leading players, while the

latter are primarily interested in get-

ting access to more milk suppliers.

Experts argue that in many cases it

may be more beneficial for large

dairy firms to wait for their small

competitors to go bankrupt and then

simply take over their supply con-

tracts. It is insufficient milk supply,

not scarce processing capacity, that

remains the key issue for the sector.

Dairy exports, which have quad-

rupled since Poland's EU accession

to total EUR 1.35bn last year, have

likewise been negatively impacted

by the global situation. In March and

April prices of exported dairy prod-

ucts dropped by 30% on the back of

growing global production, unfavor-

able currency exchange rates, and

economic crisis, which affects a

growing number of countries. Po-

land's dairy industry exports approx-

imately a fifth of its output and pric-

es on foreign markets directly influ-

ence prices at home.

IT & outsourcing giant Hewlett-

Packard is opening a global service

center in the Polish city of Lodz in

Q4 2012, the company announced.

The project will create hundreds of

new jobs for graduates with foreign

language skills.

"Initially we will recruit candi-

dates fluent in Italian and German,

but further languages will be added

in time. One of the key characteris-

tics of our Global Business Centre is

cultural and language diversity and

therefore the linguistic scope of our

Lodz centre will be broad and we do

not intend to limit it to only a few

selected languages," Renata Sima,

managing director of the Lodz centre

told news2biz.

Similar to the Wroclaw center,

the Lodz will support the business

activities of HP global customers,

providing Business Process Out-

sourcing (BPO) services to external

contractors in finance and account-

ing, HR, payroll and customer rela-

tionship management.

"The two centers will operate in

tandem, as a single business unit

and their employees will exchange

experiences, know-how, and sup-

port. It is not our intention to differ-

entiate the two centers based on

their specialization. As for the Lodz

center, however, it will be working

primarily for external clients, at least

initially."

HP's initial plan for Wroclaw was

to recruit 1,000 staff in five years.

The company achieved that bench-

mark in merely three years and cur-

rently it has an estimated 2,500 em-

ployees in the Lower Silesian city,

including some 200 foreigners.

"When HP arrived in Wroclaw

back in 2005 we were operating

from a single office. Now we have

three office locations in Wroclaw

and HP is one of the best known

employers on the local market. We

recruit students, graduates and high-

ly skilled specialists and our goal is

to keep growing to become Poland's

best employer."

The key pull factor in Lodz's case

was availability of qualified staff, as

due to the ongoing investment

boom, competition in Wroclaw is

becoming a problem for BPO em-

ployers. Like others, HP has decided

to spread its service centers across a

number of destinations within Po-

land. The former textile heartland of

Poland, Lodz is located in the middle

of the country, only 130 kilometers

from Warsaw, while the recent

opening of the A2 motorway to the

capital has slashed travelling times.

Education too is a bonus for the city:

Lodz is home to both a university

and a technical university, both of

which have good reputations. Be-

sides its solid talent pool and central

location, HP mentioned growing

traffic at the local airport among

Lodz's main assets.

At 11%, unemployment remains

quite high in Lodz, compared to oth-

er major Polish cities and the local

authorities are hoping the HP project

in the city to catch up in size with

the Wroclaw centre.

"Our goal is constant develop-

ment an innovation, and similar to

the Wroclaw center, the Lodz loca-

tion will be developing over time. At

this moment we are planning to cre-

ate several hundred positions but we

are ready for further expansion in

the future."

HP has signed an agreement to

lease office space in the University

Business Park developed by Globe

Trade Centre (GTC) in Lodz. The

University Business Park is between

Kościuszki Avenue and Wólczańska

Street near the Lodz University of

Technology campus. The first com-

pleted building within the University

Business Park offers 19,300 sq.m m

of Class-A office space and 300 park-

ing spaces. The building has seven

floors, with each floor 2,700 sq.m in

size on average.

As of end of 2011 there were 37

service outsourcing centers in Lodz

with a combined staff of 7,700 em-

ployees, making it’s the fourth larg-

est BPO market after Warsaw, Kra-

kow and Wroclaw. Currently the

largest BPO investor in Lodz is the

Indian giant Infosys. The company's

current Lodz facilities are getting

cramped, prompting the company to

move to a new office building in the

city to house its 1,000 local employ-

ees. According to estimates, total

employment in Poland's BPO sector

will come in excess of 100,000 next

year.

The summer of 2012 has been a

busy period for Swedish communica-

tions technology giant Ericsson's

Polish unit. Shortly after securing a

huge contract with mobile operators

Polkomtel and Aero2 (see no 480

page 16), the Swedes inked a four-

year managed services agreement

with Netia, Poland's leading fixed-

line telecom.

Under the contract, Ericsson is

responsible for the maintenance and

management of Netia Group's net-

works, as well as supporting the

provision of services to the opera-

tor's residential and business users.

Although the deal is an extension of

an earlier agreement with Netia, its

geographical footprint has been ex-

panded to include Telefonia Dialog

and Crowley, two networks that

joined Netia Group in late 2012.

Moreover, as part of the agree-

ment, some 190 Netia employees are

to be transferred to Ericsson

The agreement covers two main

areas: services provision, and the

transfer of contracts concerning em-

ployees, assets and agreements of

Netia Group. About 190 additional

Netia Group employees will be

transferred to Ericsson Poland.

Valter D'Avino, Vice President

and Head of Managed Services, Er-

icsson, says: "The contract we signed

with Netia in 2006 was one of the

first worldwide fixed-line Ericsson

contracts. This is the second time we

prolonged this managed-services

partnership, and it is a clear

acknowledgement from Netia of the

work we have done together to pro-

vide high-quality, unified services to

Netia Group's entire user base, in-

cluding the users added through

Netia's recent acquisition of opera-

tors Telefonia Dialog and Crowley."

The Warsaw-based Netia is one

of the largest Poland-based inde-

pendent fixed-line telephony opera-

tors. Its service portfolio comprises a

range of fixed-line telecommunica-

tions services including voice, data

transmission and internet access, as

well as wholesale network services.

Last year Netia turned over PLN

1.5bn and its operating profit topped

PLN 304m. As of Q1 2012 the com-

pany had 912,000 broadband and

1.77m voice clients. Its workforce of

more than 2,800 employees is to be

downsized by some 500 staff by the

end of 2012.

Earlier this summer, Polish oper-

ators Polkomtel and Aero2 have

chosen Ericsson to supply WCDMA

and LTE infrastructure in Poland.

Under the agreement, Ericsson will

also provide a range of services in-

cluding design, deployment, integra-

tion and support for the upgraded

mobile broadband network for a pe-

riod of three years, followed by an

automatic extension for an indefinite

period. The upgrades will allow for

expanded WCDMA and LTE cover-

age in northern and western Poland

to keep pace with rapid uptake of

smartphones and increased demand

for mobile broadband.

Ericsson has been a partner of

Polkomtel, one of Poland's top three

mobile operators since 2002, provid-

ing and implementing GSM and

WCDMA networks, as well as mi-

crowave transmission, IP and packet

core solutions.

Ericsson's offering comprises ser-

vices, software and infrastructure

within information and communica-

tions technology for telecom opera-

tors and other industries. Today

more than 40% percent of the

world's mobile traffic goes through

Ericsson networks and we support

customers’ networks servicing more

than 2.5bn subscribers.

Founded in 1876, Ericsson is

headquartered in Stockholm, Swe-

den and it is listed on NASDAQ

OMX, Stockholm and NASDAQ, New

York stock exchanges. The company

operates in 180 countries and em-

ploys more than 100,000 people. In

2011 its net sales were SEK 226.9bn

(USD 35bn).

Deutsche Telekom's corporate cus-

tomer arm T-Systems launched its

first data center in Poland in July.

The company has rented a dedicated

unit at 3Services Factory, a newly

built collocation facility in Katowice.

Founded by German industrial

group PCC and Silesian fiber optic

network operator TKP SA, 3Services

Factory is easily accessible from A1

and A4 motorways as well as

Pyrzowice (Katowice) and Balice

(Kracow) airports. The energy effi-

cient, high security data processing

center includes two mirror locations

(in Katowice and Bytom, connected

via an fiber optic cable), ensuring

full backup of customer data. Locat-

ed on a 1.5ha guarded site, the cen-

ter is to be gradually expanded. T-

Systems is renting a part of the cen-

ter under a 3-year Service Level

Agreement.

Its first Polish data center enables

T-Systems to offer its clients com-

prehensive data storage and back-up

services, relocation and infrastruc-

ture consolidation as well as a range

of cloud computing services that are

all the rage these days in the tele-

coms sector.

"Guaranteed continuity of ser-

vice, high technical standards and

full data storage protection are all

key aspects of a data center. Also

important for us was data transmis-

sion speed and power supply securi-

ty, which we achieved via direct ac-

cess to fiber optic network and two

independent power lines," says

Maciej Plebanski, head of sales de-

partment at T-Systems Poland.

Using a global infrastructure of

data centers and networks, T-

Systems operates information and

communication technology (ICT)

systems for multinational corpora-

tions and public sector institutions.

With approximately 47,600 employ-

ees in 20 countries worldwide T-

Systems generated revenue of

around EUR 9.2bn in the 2011 fi-

nancial year.

Katowice is one of 90 data pro-

cessing center worldwide managed

by T-Systems. The company has

more than 120,000 sq.m of data cen-

ter space at its disposal as well as

global IP Virtual Private Network

with 78,000 nods, 1,000 edge rout-

ers and 360,000 routers and switch-

es at customer locations, which

made it one of Europe's top data

center outsourcing firms alongside

HP, IBM, and CSC last year, accord-

ing to Gartner.

Deutsche Telekom is one of the

world's leading integrated telecom-

munications companies with more

than 129m mobile customers (in-

cluding 14.5m in Poland), almost

34m fixed-network lines and 17m

broadband lines (as of March 31,

2012). The Group provides fixed-

network, mobile communications,

Internet and IPTV products and ser-

vices for consumers, and ICT solu-

tions for business and corporate cus-

tomers. Deutsche Telekom is present

in around 50 countries and has over

235,000 employees worldwide. The

Group generated revenue of EUR

58.7bn in the 2011 financial year -

over half of it outside Germany (as

of December 31, 2011).

The past year was tough for French

retail giant Carrefour worldwide as

well as in Poland and the company

is reassessing its position on the lo-

cal market.

Globally, the company saw its

net earnings drop 14%, down to

EUR 371m, while its sales stagnated.

In Poland, Carrefour's sales revenues

dropped from PLN 9.1bn in 2010

down to PLN 8.95bn in 2011 and it

seems the French are lacking any

idea as to how to challenge the Por-

tuguese discount grocery chain

Biedronka that has taken Poland by

a storm. Biedronka's operator,

Jeronimo Martins Dystrybucja

turned over PLN 25.3bn last year,

becoming Poland's fourth largest

corporation.

Carrefour has fallen in the same

trap as other hypermarket operators

- Tesco, Auchan, and Real. Namely,

the Poles seem to have ran out of

time and patience to shop at their

giant outlets. Parading with huge

trolleys amid towering hypermarket

shelves has somehow lost its appeal.

People want to get their shopping

done quickly, without traffic jams

and queues, and be able to find fresh

produce. Hypermarkets score rather

low on all points.

Carrefour noticed this trend a

while ago, when it shifted focus to

smaller formats. Its current strategy

in Poland prioritizes expansion of

the franchise network Carrefour Ex-

press, which includes small super-

markets (with a floor area of 100-

500 sq.m) and convenience stores

(up to 100 sq.m).

"We enter only such projects

where we are certain the will be

beneficial for both parties con-

cerned. We provide shop owners

with a whole range of crucial tools,

including a well-known logo, know-

how, tested format and inventory,

marketing plans, good prices, and

reliable logistics. It's a win-win situa-

tion and the benefits are measura-

ble," Carrefour Polska CEO Jean

Anthoine Milhomme tells news2biz.

"In all of 2012 we plan to open more

than 200 franchise outlets and we

want to maintain that pace in the

years to come," he adds.

That would boost the size of the

Carrefour Express franchise chain

(which currently includes more than

230 outlets), well in excess of 400

stores. The pace indeed has been

impressive – in July alone seven new

shops were added to the chain.

Besides Carrefour Express, the

French retailer operates regular su-

permarkets under the Carrefour

Market logo as well as Carrefour hy-

permarkets – overall more than 500

shops. The company has also 40

shopping centers and a number of

gas stations, adjacent to its outlets.

"As for new hypermarkets, we

plan to launch one by the end of

2013 and another one in the follow-

ing year," says Milhomme.

Last year Carrefour gave a major

facelift to some of its hypermarkets

in Warsaw, making them more cus-

tomer-friendly and appealing. Time

will tell whether this strategy brings

more customers to their stores.

"We upgraded our shops in

Arkadia, Targowek and Reduta

shopping centers and we find the re-

sults satisfactory. Work is underway

in Galeria Mokotow and we have

identified another three outlets in

the most prestigious locations and

with the highest potential, to be

modernized."

Some believe employing more

cash register clerks would make a

much bigger difference than any im-

provements in layout and design,

but the new look certainly does

make Carrefour's superstores a bit

more friendly.

Shortly before this issue of

news2biz went to press, a report by

Reuters suggested that Carrefour

may choose to sell non-core assets in

countries like Romania, Turkey, Po-

land and Indonesia, among others,

aiming to make between EUR 1bn

and EUR 3bn from the sale.

The world's number two retailer

allegedly needs the cash to fund a

revival plan for its struggling Euro-

pean hypermarkets, as tight finances

and dire economic times leave its

new boss with hard choices. Britain’s

Tesco, France's Auchan and U.S.

Wal-Mart are seen as potential buy-

ers of eastern Europe assets. “Its

central and eastern European assets

could represent a great opportunity

for Auchan, an operator who is well

established in Russia, Poland and

Romania," said Milos Ryba, an ana-

lyst at research firm PlanetRetail,

quoted by Reuters.

In a EUR 95m deal to be concluded

by the end of August, Denmark's TK

Development is selling two Polish

projects to US fund Heitman. The

transaction concerns the company's

existing shopping centre Galeria

Tarnovia in Tarnów and a new de-

velopment project in Jelenia Góra.

Through the agreement, the Chi-

cago-based Heitman assumes a 70 %

shareholding in the said projects,

enabling the Danes to realize a small

profit upon completion of the trans-

action, free up cash resources and

obtain an additional, future profit

from fee income from the jointly

owned company in respect of devel-

opment, letting and construction

management services.

Heitman manages approximately

EUR 21bn in assets invested directly

and indirectly in real estate in North

America, Europe and Asia-Pacific.

The firm’s clients include institu-

tions, pension plans, endowments

and foundations, and individual in-

vestors and its European private eq-

uity investments span 15 countries

with approximately EUR 4bn cur-

rently under management. A major

investor in the region, Heitman has

over 50 people across Europe in its

offices in London, Warsaw, Luxem-

bourg and Moscow.

Opened in November 2009 and

fully let ever since, the 16,500-sq.m.

Galeria Tarnovia includes a super-

market of about 2,000 sq.m and spe-

cialty stores of about 14,500 sq.m.

TK Development said the sale price

for this property was in the region of

EUR 40m.

As for the Jelenia Gora project,

the Danes had acquired a plot of

land in the southwestern Polish city

and have an option for additional

land for the development of a shop-

ping centre of approx. 24,000 sq.m.

The project will comprise a super-

market of about 3,500 sq.m and re-

tail, restaurant and service premises

of about 20,500 sq.m. Crucially, the

zoning plan for the area is in place,

and the letting of premises has start-

ed.

"We have the planning permits

for this project and we are preparing

to enter the construction phase,"

Frede Clausen, CEO of TK Develop-

ment tells news2biz. "We retain a

30% share in the Jelenia Gora de-

velopment so we will continue pav-

ing the way for this project."

"It is true that TK Development

has been less active in Poland for the

past couple of years, but I think that

reflects the general decrease in the

number of transactions in that mar-

ket," says Clausen. "There is no

doubt, however, that Poland will

remain a very important market for

us. Just take its size and the coun-

try's economic development. I be-

lieve there are still plenty of oppor-

tunities in Polish retail property sec-

tor. We may have a few weaker

years, but we'll see what happens

later," says Clausen.

Heitman joins the project with a

70 % ownership interest at the cur-

rent development stage, and the fu-

ture development of the project, in-

cluding the construction of the pro-

ject, will take place in partnership

with the US investor. The total pro-

ject value is expected to be around

EUR 55m. According to TK Devel-

opment, the partnership will allow

for a more optimal exploitation of

the group’s resources, including eq-

uity allocation, as Heitman will

make financing available pro rata to

their ownership interest.

The Danish developer intends to

sell its remaining shares in both pro-

jects after 2015.

TK Development, which used to

be a much more active player on the

Polish market, has changed its strat-

egy to focus on forming partnerships

with third party investors for its ex-

isting and future projects in a move

to better allocate the company's eq-

uity, diversify the risk, and capitalize

on its development expertise. The

Heitman deal is in line with this new

approach.

Following in the footsteps of other

global medical technology giants

such as Bayer (see 477 page 3) and

BecktonDickinson (see no 480 page

21), US lab testing specialists

PerkinElmer has decided to set up a

shared services centre in Poland.

"Our new service center in Kra-

kow will provide advanced and lo-

calized support capabilities to both

new and existing customers in

France, Italy, Spain as well as

Southeastern and Eastern Europe,"

Perkin Elmer's Vice President Steph-

anie Wasco tells news2biz. "Perkin-

Elmer will employ approximately 80

personnel in Krakow in a variety of

functions including customer care,

finance and IT."

The center, which is projected to

open by the end of September, is ex-

pected to become operational by the

beginning of next year. PerkinElmer

is at the beginning stages of its re-

cruitment process for the center, in-

cluding recruiting for leadership po-

sitions.

"We looking for highly talented

individuals with outstanding foreign

language skills who have a passion

for making a difference," says Was-

co, stressing PerkinElmer's dedica-

tion to advancing quality and lon-

gevity of life all around the world.

"In Kraków, we are also offering a

rare opportunity to participate in

starting the new Shared Service Cen-

ter."

Krakow is one of the top destina-

tions in Poland for offshoring and

nearshoring projects. According to

estimates, the existing 55 business

process outsourcing and shared ser-

vices centers in the city employ some

26,000 people. Recently Belgium's

Euroclear Bank and US Brown

Brothers Harriman (see no 480 page

4) have confirmed plans to invest in

Krakow, each intending to hire up to

500 employees.

"Although we evaluated several

other locations, PerkinElmer recog-

nized that Poland is becoming a

burgeoning international center with

access to local highly educated and

multi-lingual employee talent. The

Polish government has been very

supportive and helpful as the com-

pany establishes a presence in

Kraków. PerkinElmer applied for

and received a Multi-Annual Support

Programme (MASP) grant, used to

support the creation of jobs within

Poland, from the Polish govern-

ment."

The company supplies lab testing

products and technology for

healthcare and environmental moni-

toring. Its human health division

provides diagnostic, biopharma and

life sciences research instruments,

reagents and software, while its en-

vironmental health unit encom-

passes analytical instrumentation

and laboratory services.

"Poland itself is a market for

PerkinElmer where we supply a

range of solutions and services from

prenatal and newborn screening and

life science research to environmen-

tal and food testing."

A USD 2.1bn global technology

company, PerkinElmer employs

more than 7,000 staff in over 150

countries around the world.

Greed, ignorance and poor judiciary

make for a rather disastrous mix. As

we hinted in our front page article in

the last issue of news2biz POLAND,

the recent downfall of Polish domes-

tic airline OLT was merely a prelude

to a much bigger story involving a

massive Ponzi scheme created by 28-

year-old Polish national Marcin

Plichta.

The collapse of Plichta's unregu-

lated investment company Amber

Gold in August has left thousands of

Poles wondering whether they

would ever see any of the PLN 90m

they entrusted the "entrepreneur"

and raised a lot of questions about

the effectiveness of Polish regulatory

authorities.

Operating since 2009, Amber

Gold is one of a number of Polish

"para-banks" offering investors high-

er returns than those being given by

formal banks, as well as engaging in

high-interest lending, all without

falling under the scrutiny of the

Polish Financial Supervision Authori-

ty (KNF), the banking regulator.

At a time when banks are paying

only about 6% a year on deposits

(backed by state guarantees), which

are also subject to a 19% capital

gains tax, Amber Gold was promis-

ing an untaxed guaranteed return of

up to 16.5% for investments in gold.

The company spent millions on ad-

vertising and even though its ads

and banners could be found virtually

everywhere, Amber Gold never filed

even the minimal accounting results

required of all registered companies,

making it impossible to find out any

details about its investment strategy.

In Poland, the penalty for failing to

issue financial statements is relative-

ly small and therefore companies

that have something to hide often

"forget" to do so.

The KNF has been warning about

Amber Gold for several years, plac-

ing it on a watch list along with 16

other companies for operating with-

out a banking license, but was una-

ble to get the prosecutor's office to

show much interest. The promise of

hefty gains and Plichta's talk of spec-

tacular returns on his investments

was enough for an estimated 50,000

Poles to invest with Amber Gold.

Plichta's business ended up in

media spotlight in July, when his

airline OLT Express, a project he fi-

nanced with Amber Gold's money,

went bankrupt. The airline's down-

fall increased concern over the

health of Amber Gold, which was

running into trouble following a

warning issued by the KNF that

banks dealing with unregulated

lenders face a "reputational risk,"

prompting banks to shut down Am-

ber Gold’s accounts.

Although Plichta denied running

a pyramid scheme and blamed his

troubles on a government conspira-

cy, the media revealed that he had

seven past fraud convictions, which

should have precluded him from be-

ing the chief executive of a legally

registered company. In mid-August

he announced the company would

be liquidated and money paid back

to investors over time, something

most observers find very unlikely.

Although substantial, the value

of Plichta's assets the authorities

have been able to secure to-date,

represents only a fraction of its dues.

Several hundred clients are already

preparing a class action lawsuit,

while the prosecutor’s office is inves-

tigating allegations of fraud. Six dif-

ferent charges were made against

Plichta, including illegal collection of

funds and misinforming financial of-

ficials about the company's dealings.

The opposition is demanding

creation of a special parliamentary

probe to find out how an individual

with multiple convictions was able

to legally establish a financial and

airline businesses on a nationwide

scale. The case has become a politi-

cal headache for Prime Minister

Donald Tusk, in large part because

critics say the government failed to

move more quickly, but also because

his son, 30-year-old Michal Tusk, did

public relations work for OLT Ex-

press.

24 | No 481 | 27 August 2012 | © Bonnier Group/Äripäev | POLAND

KEY FIGURES

INFLATION

-1%

0%

1%

2%

3%

4%

5%

6%

Jul 10

Sep 10

Nov 10

Jan 11

Mar 11

May 11

Jul 11

Sep 11

Nov 11

Jan 12

Mar 12

May 12

Jul 12

Year-on-year

Month-on-month

Source: The Central Statistical Office of Poland, GUS

CONSUMER PRICE INDEX column A: 100 = current 12 months; column B: 100 = previous month

Apr '12 May '12 Jun '12 Jul '12

Sector A B A B A B A B

Food & beverages 103.2 100.2 102.7 100.8 105.4 100.7 105.0 98.0

Alcohol, tobacco 105.0 100.2 104.7 100.2 104.1 100.1 103.8 100.2

Clothing, footwear 97.4 103.1 95.4 99.8 95.0 99.1 94.9 97.6

Housing 106.0 100.9 105.8 100.1 105.8 100.1 105.3 100.2

Transport 108.7 101.2 108.1 99.7 108.2 99.8 106.8 98.8

Communications 101.2 100.0 102.3 100.0 103.3 100.0 103.6 100.0

Gross CPI 104.0 100.6 103.6 100.2 104.3 100.2 104.0 99.5

Source: The Central Statistical Office of Poland, GUS

PRODUCER PRICE INDEX On monthly basis Jan '12 Feb '12 Mar '12 Apr '12 May '12 Jun '12 Jul '12

100 = previous month 100.1 99.5 100.1 100.6 100.4 99.5 99.8

100 = same month prev year 107.9 106.0 104.4 104.3 105.2 104.4 103.7

Year 2005 2006 2007 2008 2009 2010 2011

100 = previous year 100.7 102.0 102.0 102.2 103.4 102.1 107.6

Note: Producer prices are prices of industrial goods excluding VAT and other taxes.

Source: The Central Statistical Office of Poland, GUS

CONSTRUCTION PRICE INDEX On monthly basis Jan '12 Feb '12 Mar '12 Apr '12 May '12 Jun '12 Jul '12

100 = previous month 99.9 99.9 100.0 100.0 99.9 99.9 99.9

100 = same month prev year 101.5 101.4 101.3 101.1 100.9 103.3 100.1

Year 2005 2006 2007 2008 2009 2010 2011

100 = previous year 103.0 103.2 107.4 104.8 100.2 99.9 101.0

RESIDENTIAL CONSTRUCTION Dwellings in '000 2006 2007 2008 2009 2010 2011 Jan-Jul '12 y/y

Permits (no of units) 168.4 247.7 230.1 178.8 174.9 184.1 102.7 -1.8%

Commenced 138.0 185.1 174.7 142.9 158.1 162.2 92.0 -3.0%

Under construction 626.5 677.9 687.4 670.3 692.7 723.0 736.2 +1.9%

Completed 115.4 133.7 165.2 160.0 135.7 131.7 79.5 +22.2%

Source: The Central Statistical Office of Poland, GUS

COMMERCIAL PROPERTY MARKET Industrial properties

by region, 2H 2011

Existing stock,

sq.m

Under const-

ruction, sq.m

Vacancy

ratio

Effective rents

EUR/sq.m/mth

Warsaw central 3.9–5.8

Warsaw suburbs 2,630,000 96,000 17.3%

2.0–3.2

Central Poland 940,000 49,000 10.4% 2.0–3.1

Poznan 946,000 64,000 4.6% 2.4–2.9

Upper Silesia 1,386,000 47,000 7.8% 2.7–3.1

Wroclaw 649,000 63,000 9.1% 2.4–3.0

Gdansk 140,000 30,000 10.9% 3.3–4.0

Krakow 116,000 19,000 8.7% 4.0

Apartments* Offices 1H'12 Retail rents** 2H'11

City Jun '12

PLN/sq.m

Change

y/y

Rents** Vacancy Retail

centres

High

streets

Warsaw 6,960 -11.5% 15-25 7.4% 75-77 83-85

Krakow 5,949 -7.7% 14-15 6.8% 37-40 77-79

Katowice 3,378 -9.1% 12-15.5 9.9% 45-47 56-58

Poznan 5,161 -7.7% 14-16 10.3% 37-40 56-58

Lodz 3,724 -12.8% 11-13 14.5% 32-35 29-32

Wroclaw 5,323 -8.6% 15-15.5 3.9% 37-40 44-48

Gdansk (Tricity) 5,062 -8.0% 12-14 9.1% 37-40 35-38

Source: Open Finance, C&W, JLL *median, transaction-based ** EUR/sq.m/month

INDUSTRIAL OUTPUT INDEX On monthly basis Jan '12 Feb '12 Mar '12 Apr '12 May '12 Jun '12 Jul '12

100 = previous month 94.9 99.0 110.7 92.5 104.5 98.0 97.7

100 = same month prev year 109.0 104.6 100.7 102.9 104.6 101.2 105.2

Year 2005 2006 2007 2008 2009 2010 2011

100 = previous year 104.0 111.6 110.7 103.6 96.5 109.8 107.7

Source: The Central Statistical Office of Poland, GUS

RETAIL TRADE at current prices Mar '12 Apr '12 May '12 Jun '12 Jul '12

Index 100 = previous month 115.7 97.6 100.9 100.2 101.3

Index 100 = same month prev year 110.7 105.5 107.7 106.4 106.9

Year 2007 2008 2009 2010 2011

Turnover in PLN bn 517.4 564.7 582.8 593.0 n/a

Index 100 = previous year 116.0 113.3 104.3 105.5 111.6

Source: The Central Statistical Office of Poland, GUS

GROSS WAGES A: average monthly wages in PLN (without taxes); B: indexed average wages, 100=2005

Sector Q2 2011 Q3 2011 Q4 2011 Q1 2012

A B A B A B A B

Coal mining 6,164 140 6,073 138 7,820 178 5832 133

Manufacturing 3,322 145 3,352 146 3,395 148 3,422 149

Energy, gas, heating 5,339 162 5,560 169 6,132 186 5,937 180

Construction 3,683 157 3,776 161 3,858 164 3,622 154

Retail & repairs 3,253 139 3,233 138 3,370 144 3,357 143

Transport, logistics 3,338 118 3,370 119 3,683 130 3,356 119

IT, telecoms 6,424 167 6,361 165 6,325 164 6,550 170

Finance, insurance 6,275 141 5,891 132 5,823 131 6,384 143

National average 3,573 142 3,593 143 3,771 150 3,664 146

SENTIMENT INDICATORS Economic sentiment and consumer confidence indicators, seasonally adjusted

-40

-20

0

20

Oct 09

Jan 10

Apr 10

Jul 10

Oct 10

Jan 11

Apr 11

Jul 11

Oct 11

Jan 12

Apr 12

Jul 12

60

80

100

120 Consumer confidence (left axis) Economic sentiment (right axis)

The economic sentiment (1990-2010 average = 100) is a composite made up of five sectoral

confidence indicators, which are arithmetic means of seasonally adjusted balances of answers

to a selection of questions closely related to the reference variable. Source: Eurostat

25 | No 481 | 27 August 2012 | © Bonnier Group/Äripäev | POLAND

TRADE Poland exports and imports according to commodity groups, according to SITC classification

EXPORTS in PLN bn IMPORTS in PLN bn

Jan-Jun 2012 Jan-Jun

2011=100

Share

Jan-Jun '11

Share

Jan-Jun '12 2011 Share Jan-Jun 2012

Jan-Jun

2011=100

Share

Jan-Jun '11

Share

Jan-Jun '12 2011 Share

Food and live animals (0) 28,307 120.8 8.8% 9.7% 51,526 9.3% 21,382 109.4 6.6% 6.8% 40,133 6.5%

Beverages and tobacco (1) 3,804 121.0 1.2% 1.3% 6,986 1.3% 1,884 113.3 0.6% 0.6% 3,659 0.6%

Crude materials except fuels (2) 7,234 111.5 2.4% 2.5% 13,044 2.4% 11,214 113.1 3.3% 3.5% 21,217 3.5%

Fuels etc (3) 14,256 108.9 4.9% 4.9% 27,040 4.9% 41,920 115.6 12.1% 13.2% 78,414 12.8%

Animal and vegetable oils (4) 425 96.9 0.2% 0.2% 1,106 0.2% 1,358 108.2 0.4% 0.4% 2,688 0.4%

Chemical products (5) 26,883 113.1 8.9% 9.2% 49,445 8.9% 44,195 101.1 14.6% 14.0% 87,143 14.2%

Manufactured goods by material (6) 62,849 109.7 21.5% 21.6% 117,599 21.2% 56,341 100.8 18.7% 17.8% 111,160 18.1%

Machinery, transport equipment (7) 110,206 104.4 39.6% 37.8% 216,590 39.0% 99,521 104.7 31.8% 31.4% 194,428 31.6%

Other manufactured articles (8) 36,591 109.8 12.5% 12.6% 70,574 12.7% 28,616 101.2 9.5% 9.0% 60,169 9.8%

Not classified (9) 1,106 n/a 0.0% 0.2% 859 0.1% 10,271 n/a 2.4% 2.3% 15,417 2.5%

TOTAL 291,661 109.3 100% 100% 554,769 100% 316,702 109.3 100% 100% 614,428 100%

Poland's ten largest markets, ranked according to 2011 in PLN bn

EXPORTS IMPORTS

No Country Jan-Jun

2012 Share 2011 Share No Country

Jan-Jun

2012 Share 2011 Share

1 Germany 74,295 25.5% 145,764 26.1% 1 Germany 67,298 21.2% 139,087 22.3%

2 UK 19,277 6.6% 36,014 6.4% 2 Russia 46,186 14.6% 75,226 12.1%

3 Czech Rep. 18,408 6.3% 34,837 6.2% 3 China 27,742 8.8% 54,221 8.7%

4 France 18,214 6.2% 34,206 6.1% 4 Italy 16,400 5.2% 33,622 5.4%

5 Italy 15,219 5.2% 29,753 5.3% 5 France 12,591 4.0% 26,013 4.2%

6 Russia 14,940 5.1% 25,109 4.5% 6 Netherlands 11,933 3.7% 23,388 3.8%

7 Netherlands 12,901 4.4% 24,405 4.4% 7 Czech Rep. 11,767 3.7% 23,223 3.7%

8 Sweden 7,897 2.7% 15,931 2.9% 8 UK 7,753 2.4% 16,339 2.6%

9 Hungary n/a n/a 14,314 2.6% 9 USA 7,691 2.3% 14,139 2.3%

10 Ukraine 7,732 2.7% 13,854 2.5% 10 Belgium n/a n/a 13,781 2.2%

Source: The Central Statistical Office of Poland, Glowny Urzad Statystyczny (GUS)

CURRENCY Central Bank average rates

as of 24 August 2012

100 USD 326.80 ↓

100 EUR 410.12 ↑

100 GBP 517.83 ↓

100 CHF 341.47 ↑

100 DKK 55.07 ↑

100 SEK 49.64↑

100 NOK 56.01 ↓

10,000 JPY 416.11 ↓

100 CZK 16.44 ↑

10,000 HUF 147.40 ↑

Source: The Central Bank of Poland, Narodowy Bank Polski

100 USD/EUR against PLN

250

300

350

400

450

500

25 A

ug 11

24 O

ct 11

23 D

ec 11

23 F

eb 12

24 A

pr 12

26 Ju

n 12

24 A

ug 12

EUR

USD

MONEY SUPPLY in PLN m Mar '12 Apr '12 May '12 Jun '12 Jul '12

Monetary base 137,314 155,333 139,298 140,323 141,419

M1 454,287 448,746 464,009 462,655 464,957

- Currency outside banks 99,883 101,302 102,324 103,808 103,003

M2 859,995 854,776 867,102 868,782 869,059

- Time deposits 414,712 415,289 412,434 415,639 415,833

M3 874,496 870,551 884,151 884,725 886,873

- Net foreign assets in EURm 28,519 28,374 33,436 35,769 35,769

Monetary base: Polish currency emitted by the central bank and money on accounts held with it.

M1= currency outside banks + demand deposits M2= M1+ time deposits (inc in foreign currencies)

M3= the broad measure of money supply. Source: The Central Bank of Poland, NBP

CREDIT The financial sector's net lending in PLN bn, loan stock at the end of period

Type of loan Mar '12 Apr '12 May '12 Jun '12 Jul '12

Loans to customers 853,105 859,783 874,989 871,973 864,421

- to private companies 253,670 254,127 259,740 259,397 259,397

- to individuals 455,156 456,933 468,526 463,821 458,218

Total assets of banking institutions 1,509,060 1,512,482 1,571,043 1,558,457 1,546,330

Source: The Central Bank of Poland, Narodowy Bank Polski

INTEREST RATES Average weighted annual interest rates on loans to non-financial corporations

Term / currency Jan '12 Feb '12 Mar '12 Apr '12 May '12 Jun '12

PLN (up to 1 year) 6.6% 6.3% 6.1% 6.2% 6.3% 6.2%

PLN (up to 5 y ) 7.3% 7.3% 7.3% 7.2% 7.3% 7.3%

PLN (over 5 y) 6.8% 6.8% 6.8% 6.8% 6.8% 6.9%

PLN (total) 7.0% 6.9% 6.9% 6.9% 6.9% 7.0%

EUR (up to 1m EUR) 2.9% 2.7% 2.6% 2.4% 2.3% 2.3%

EUR (over 1m EUR) 5.0% 5.2% 3.4% 2.9% 5.8% 3.1%

Warsaw Inter Bank Offered Rate (WIBOR) as of 24 August 2012

Overnight 1 week 1 month 3 months 6 months

4.81% 4.83% 4.91% 5.11% 5.13%

Central Bank (NBP) Base Rates

Reference Lombard NBP deposit Rediscount

4.75% 6.25% 3.25% 5.00%

Source: The Central Bank of Poland, Narodowy Bank Polski

STOCK EXCHANGE Warsaw Stock Exchange, rates in PLN

WIG-20

in alphabetical order

Price

24 Aug '12

Change

10 Aug '12

Change

end of '11

↑ Asseco Poland 46.75 +3% -4%

↓ Bogdanka 123.3 -1% +19%

→ Boryszew 0.51 0% -19%

↓ BRE 314.6 -2% 28%

↑ GTC 6.31 +2% -32%

↓ Handlowy 80 -8% +18%

↓ JSW 91.5 -1% +9%

↑ Kernel 73.7 +1% +6%

↑ KGHM 132.4 +2% +20%

↓ Lotos 26.29 -3% +13%

↓ Pekao 152.7 -1% +8%

↓ PGE 18.5 -8% -11%

↓ PGNiG 4.0 -7% -2%

↓ PKN Orlen 37.92 -4% +12%

↑ PKO BP 34.99 +2% +9%

↓ PZU 362 -2% +17%

→ Synthos 5.59 0% +27%

→ Tauron 4.86 0% -9%

↑ TP SA 16.94 +2% -2%

↓ TVN 7.57 -6% -27%

Source: Warsaw Stock Exchange

WIG Total index 24 Aug

41,852.69 Change 10 Aug 0% →

Change end of '11 +11% ↑

Includes all stocks quoted on the

WSE main market

WIG-20 blue chip index 24 Aug

2,283.08 Change 10 Aug -1% ↓

Change end of '11 +6% ↑

WIG Total closing index

the last three months

36 000

37 000

38 000

39 00040 000

41 000

42 000

43 000

24 M

ay

18 Ju

n

10 Ju

l

01 A

ug

24 A

ug

26 | No 481 | 27 August 2012 | © Bonnier Group/Äripäev | POLAND

Reports for professionals doing business in Eastern Europe & China

news2biz

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GDP at current prices

Period Growth y/y

unadjusted

GDP in PLN bn

current prices

GDP per capita

in USD

Current account

def. in % of GDP

Q1 2012 +3.5% 370,450 n/a -4.4%

Q4 2011 +4.3% 429,665 n/a -4.3%

Q3 2011 +4.2% 376,204 n/a -4.6%

Q2 2011 +4.2% 369,558 n/a -4.9%

2011 +4.3% 1,524.659 n/a -4.3%

2010 +3.9% 1,416,392 19,747 -4.7%

2009 +1.6% 1,344,384 17,989 -3.9%

2008 +5.1% 1,275,432 17,493 -4.8%

Source: The Central Bank of Poland, Narodowy Bank Polski, BZ WBK

CURRENT ACCOUNT excerpts shown in EUR m 2009 2010 2011 Q3 ‘11 Q4 ‘11 Q1 ‘12

Trade balance -5,427 -8,893 -10,112 -2,263 -2,814 -2,165

Services, net 3,427 2,334 4,341 1,138 714 798

Direct investments, net 6,235 3,759 10,340 3,236 2,456 -1,681

Current account balance -12,152 -16,493 -15,917 -4,459 -5,021 -4,344

Source: The Central Bank of Poland, Narodowy Bank Polski

FOREIGN DIRECT INVESTMENT in EUR m

On quaterly basis Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12

in Poland 1,726 3,830 1,382 3,236 2,456 -1,681

Polish DI abroad -1,849 -2,003 -1,484 -131 -687 1,395

Year 2006 2007 2008 2009 2010 2011

in Poland 15,741 17,242 10,128 9,343 6,696 10,340

Polish DI abroad -7,122 -4,020 -3,072 -3,335 4,149 -3,722

Source: The Central Bank of Poland, Narodowy Bank Polski

KEY ECONOMIC DATA FORECAST Indicator *2009 *2010 *2011 2012 2013

GDP change +1.6% +3.9% +4.3% +2.7% +2.5%

Consumer price inflation +3.5% +2.6% +4.3% +3.9% +2.6%

Producer price inflation +3.3% +2.1% +7.6% +4.3% +2.3%

CA balance, % of GDP -3.9% -4.7% -4.3% -3.2% -1.9%

Nominal gross wage change +4.4% +3.6% +5.0% +3.8% +4.0%

Unemployment rate (year-end) 12.1% 12.4% 12.5% 13.4% 13.4%

EUR/PLN 4.33 3.99 4.12 4.26 4.15

Sources: BZ WBK, July 2012. *) actual figures where available

REGIONAL DATA Industrial output

Jan-Jul 2012 *

Monthly wages (PLN)

Jan-Jul 2012 **

Unemployment

Jan-Jul 2012

New dwellings

Jan-Jul 2012

Poland's regions

(main cities indicated

in brackets) Industry Construction Industry Construction in '000 % Number Index *

Dolnoslaskie (Wroclaw) 104.5 105.3 4,015.96 4,007.04 142.4 12.4 7,799 140.8

Kujawsko-Pomorskie (Bydgoszcz) 105.6 103.4 3,196.99 3,102.56 136.4 16.5 3,271 106.0

Lubelskie (Lublin) 109.9 121.4 3,512.91 2,978.05 118.8 12.9 3,900 115.1

Lubuskie (Zielona Gora) 100.6 83.4 3,220.47 2,824.89 57.2 14.9 1,814 114.4

Lodzkie (Lodz) 114.3 101.0 3,453.65 3,166.91 141.9 13.0 3,833 124.2

Malopolskie (Krakow) 105.1 93.4 3,640.51 3,148.36 145.5 10.5 7,963 116.7

Mazowieckie (Warszawa) 102.3 112.9 4,319.00 4,877.22 252.0 10.1 16,379 131.5

Opolskie (Opole) 108.3 90.3 3,378.82 3,109.70 47.4 13.1 865 109.9

Podkarpackie (Rzeszow) 105.4 103.7 3,119.59 2,844.61 140.5 15.1 3,618 118.5

Podlaskie (Bialystok) 108.0 98.9 3,104.15 3,586.65 64.4 13.8 2,230 112.6

Pomorskie (Gdansk-Gdynia) 109.1 109.9 3,750.73 3,194.53 102.7 12.0 6,632 130.7

Slaskie (Katowice) 96.6 114.3 4,453.57 3,470.53 187.1 10.1 5,034 105.3

Swietokrzyskie (Kielce) 103.3 108.8 3,357.26 3,090.21 80.3 14.8 1,603 110.6

Warminsko-Mazurskie (Olsztyn) 103.7 110.8 3,021.91 3,006.15 101.2 19.1 2,477 122.1

Wielkopolskie (Poznan) 108.5 103.1 3,537.15 3,512.61 134.3 9.1 7,780 111.7

Zachodniopomorskie (Szczecin) 105.4 85.7 3,249.73 3,259.48 101.1 16.4 4,340 145.6

National average 104.1 106.6 3,769.46 3,635.55 1,953.2 12.3 79,538 122.2

* Index 100 = same period of the previous year. ** without social taxes

Source: The Central Statistical Office of Poland,

Glowny Urzad Statystyczny (GUS)

UNEMPLOYMENT Registered unemployed, in ‘000 and % of population in working age

1600

1900

2200

2500

Q4 09

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

6

9

12

15 number (left axis)

% (right axis)

Source: The Central Statistical Office of Poland, GUS

GENERAL INFORMATION Population: 38.3m (2011 census)

Currency: Polish Zloty (PLN)

In power: President Bronislaw Komorowski

Most seats in parliament Civic Platform PO (39%,

PM Donald Tusk), Law & Justice PiS (30%).

Elections: 2015 general, 2015 presidential

Most important tax rates:

Income tax: individual 18% and 32% corporate 19%

VAT: 23% (main), 8% (selected goods), 5% (food)

Social tax: 31-35%

COUNTRY RATING Agency rating outlook

Fitch Ratings A- stable

Standard & Poor's A- stable

Moody's Investor Service A2 stable

Source: Rating agencies

REAL EARNINGS

100110120130140150160170

Jul 0

8

Nov

08

Mar 09

Jul 0

9

Nov

09

Mar 10

Jul 10

Nov

10

Mar 11

Jul 11

Nov

11

Mar 12

Jul 12

Wage index CPI index

Development of the average gross wage and inflation.

Index 100 = Jan 2005. Source: GUS