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Invest in Poland


									Invest in Poland

E- Newsletter

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London

No. 8
April / June 2010

E- Newsletter

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London

No. 8
May - June 2010
Invest in Poland

                                      It is time to present you the 8th edition of our e – newsletter!

                                      April was a very exciting time for our Team – three capital
                                      P’s defined our focus. Our Section together with such great
                                      partners like PricewaterhouseCoopers, HOGANLOVELLS
                                      and IFSL organized a series of events targeted at promoting
                                      Polish PPP projects within the London business

                                      For this copy we have prepared a very interesting set of
                                      information – we have managed to have an interview with
                                      the Director of the Economic Development Dept. Mr. Jerzy
                                      Ceranowski – City of Płock as well as two very interesting
                                      articles from our pool of experts – Chris Hume Managing
                                      Director of AE Resourcing International puts some light on
              Bolesław Gryzel         the Polish talent pool in the UK and Mr. Radomir Szwed –
                                      Director of Bestfoods Ltd. shares his experience in trade

          Our colleagues from the Ministry of Treasury prepared also a very interesting case study
          of the privatization of PZU. We are also delighted to present the first set of
          macroeconomic information prepared for us by HSBC.

          Besides that we present you the usual coverage of our events, and many more!

          I wish you a great time reading this newsletter!

          Bolesław Gryzel
          First Councellor
          Head of Trade & Investment Promotion Section
          Embassy of the Republic of Poland in London

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                  -2-
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                   This E – Newsletter is brought to you in association with:


Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                          -3-
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          Table of Content:

             1. News
             2. Events
             3. Macroeconomic data: HSBC
                Purchasing Manager Index
             4. Ministry of Treasury:
                Privatization of PZU
             5. Warsaw Stock Exchange News
                – Short selling on the WSE
             6. From a professional perspective
                    a. London to Warsaw – new
                         direction for Polish
                    b.   Importing into UK –
                         practitioners tips.
             7. Region focus:
                City of Płock

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                           -4-
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          Good news for Poland’s economic growth

          Poland’s GDP growth is expected to reach 2.7% in 2010 and 3.3% in 2011 - such
          projections were presented by the European Commission. Analysts from the Ministry of
          the Economy expect a slightly weaker growth at the level of around 3% in 2010.

          According to the European Commission, in 2010 Poland will be the fastest developing
          country in the UE and 2011 should still see the country among economic leaders. The
          spring EC forecast is more optimistic both when compared to the Commission’s autumn
          forecasts and their update from last February. Analysts of the Ministry of the Economy
          describe the projection as balanced and prudent. They lean toward a more optimistic
          version of a 3% growth for the Polish economy.

          The EC emphasises what it describes as an extraordinary performance of Poland’s
          economy in 2009. It attributes the good economic results to the country’s sound banking
          system, limited openness to international trade, positive changes in the labour market,
          substantial weakening of the Polish currency the zloty and appropriate economic
          policies. One of the major tasks ahead of the country’s economy, according to the EC,
          will be the maintenance of competitiveness in the face of a looming weakening of the
          Polish currency. This is because the positive assessment of the country’s economic
          condition may contribute to pressure of currency appreciation as a result of foreign
          capital inflow which in turn may cause changes in Poland's export structure.

          There are also some concerns about the condition of Poland’s public finance. The
          Commission estimates that this sectors deficit in Poland should not fall below 7%. GDP
          growth in the years 2010-2011 may result in an increased public deficit which according
          to the EC may reach in 2010 59.3%, what against the backdrop of other EU countries
          (83.8%) and the euro zone (88.5%) is not drastic. The Commission observes that in the
          long run the future of public finance in Poland seems brighter mainly due to changes
          introduced in the pension reform. (MoE/RK)


Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                -5-
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          Polish government offers PLN 115 m support to foreign investors.

                                                               The Polish government has extended
                                                               public aid to 15 foreign investors
                                                               between April 2009 and March 2010,
                                                               the Government Information Centre
                                                               (CIR) said in a communiqué.

                                                               The total value of the support
                                                               reached PLN 115.4 million.The Inter-
                                                               Departmental Team for Foreign
                                                               Investments has been operating
                                                               since mid-November 2004.

                                                               It coordinates the process of granting
          public aid to foreign investors who wish to locate investments in Poland significant for its
          economic development.

          ‘The team has recommended granting aid to 15 investors including Nokia Siemens
          Network, IBM Polska and Samsung Electronics. Two of the 15 projects will be carried
          out in the electronics sector, two – in R&D, three – in the automotive sector and eight –
          in BPO’ the CIR communiqué says.


          Additional EUR 633 million from European Funds for Poland for the years 2011-


          Additional EUR 633 million was made available for Poland, EUR 237 million for the
          Czech Republic and EUR 138 million for Slovakia. The top-up is a direct consequence of
          stronger economic growth than forecast in these countries. Economic growth in Poland
          in the years 2007-2009 reached 8%, more than expected in the EC prognosis. Slovakia
          and the Czech Republic experienced respectively a growth higher by 10.8 % and 7.5%
          than expected.

          We publish an excerpt from the European Commission’s communiqué from April 19th,
          Poland, The Czech Republic and Slovakia will share extra EUR 1 billion from Structural

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                  -6-
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          Funds in 2011-2013. Poland will receive an extra EUR 633 million, the Czech Republic
          EUR 237 million and Slovakia EUR 138 million in structural funds. The top-up is a direct
          consequence of stronger economic growth than forecast in these countries. The
          Interinstitutional Agreement on the 2007-2013 financial framework between Parliament,
          Council and Commission foresaw automatic adjustments for countries whose GDP had
          varied by more than 5% cumulatively over 2007-2009 compared to the forecasts when
          drawing up the framework.

          Economic growth in Poland during this period reached 10.8% more than expected in the
          EC prognosis. Slovakia and the Czech Republic experienced respectively a growth
          higher by 10.8 % and 7.5% than expected.

          Commenting on this decision, Financial Programming and Budget Commissioner Janusz
          Lewandowski said: "Congratulations to the countries concerned for having managed to
          beat so convincingly growth forecasts made in 2005, despite the difficult environment!
          The funds will help them continue to modernize their economies and prepare for the

          Source: Ministry of Regional Development

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                -7-
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          PricewaterhouseCoopers         opens     a   Shared     Services     Centre    in   Katowice


          PricewaterhouseCoopers expands its business in Poland and opens a new Shared
          Services Centre in Katowice. The centre will support PwC in the field of audit services
          provided    within   the
          Central and Eastern

          The first part of the
          Katowice - based centre
          started     operating    in
          December 2009 and has
          been using the best
          market practices, tools
          and technologies. Today,
          after 4 months, the
          centre      employs     50
          specialists     in    audit
          services who support
          PwC teams in providing
          services to clients in
          Poland,      the     Czech
          Republic, Hungary and From the left: Paweł Pepliński, Managing Partner in charge of
          Slovakia.     Within   the the Audit section of PricewaterhouseCoopers, Piotr Uszok,
          coming four years the President of Katowice
          specialist team working in Katowice is expected to expand and finally include 250

          Thanks to the centre the company will now be able to streamline a number of processes
          included in audit services provided and improve the effectiveness of business operations
          what will translate into a higher quality of services for clients in Poland and the rest of the
          CEE region. The development of the Centre constitutes an inseparable part of the PwC
          development strategy in our region.

          - I am very glad that PricewaterhouseCoopers chose Katowice and located its Shared
          Services Centre here. The fact is all the most satisfying when we take into account how
          competitive the CEE region is when it comes to international investments. We are
          convinced that Poland offers investors considerable development opportunities, among
          others, thanks to the country's high quality of human capital. Beside the region of
          Katowice the major beneficiaries of the project will be clients who operate on the Polish

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                    -8-
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          market because Poland will be the major region to which the Centre will provide
          services. - said Paweł Pepliński, Managing Partner in charge of the Audit section in
          Poland. - In the complex economic situation like the one we are experiencing now, it is
          especially important to plan business and create appropriate structures which will make
          it possible to provide clients with additional value and thus allow generate considerable
          business opportunities.

          Poland was chosen as the best destination for the Centre because of a relatively good
          economic situation the country had in 2009 and its bright development perspectives for
          the coming years.


          Sony Pictures Financial Centre opens in Gdynia

                                                              Sony Pictures Entertainment has
                                                              announced the official opening of its
                                                              latest venture in Poland - a financial
                                                              centre of Sony Pictures Global
                                                              Business Services in the Baltic port
                                                              city of Gdynia.

                                                              The ceremony took place at the
                                                              Gdynia Łuzycka Office Park. It was
                                                              attended by Gdynia deputy mayor
                                                              Michał Guć and Gdańsk deputy
                                                              mayor Andrzej Bojanowski as well as
                                                              by President of investGDA Alan

          The new Sony financial centre will support financial and accounting operations of Sony
          Pictures Entertainment in Europe and on other continents. In the future the project is
          expected to generate up to 150 job: mainly for experienced accountants and analysts
          involved in financial support for European companies which form part of the group. The
          Centre is currently under construction. Sony chose Gdynia ahead of other attractive
          locations such as Berlin, Prague and Budapest.

          InvestGDA President Alan Aleksandrowich said: “Shared services centres, financial
          centres and IT centres employ a minimum of 10,000 people in the Gdansk-Gdynia-Sopot

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                 -9-
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          area and occupy nearly 100,000 sq m. Such centres bring the working culture from
          world’s biggest agglomerations, the know-how and experience as well as a possibility of
          a good start for young professionals. The benefit of this type of investment spreads over
          all cities of the agglomeration, not only in the form of profits from the rental of office
          space, or taxes on business, but also from the fact that highly qualified staff from the
          region may work here and develop the region’s competitiveness, also in the international

          On the international level, Sony Pictures Entertainment (SPE) focuses on production and
          distribution of films, television programmes, investments in world-wide channels,
          management of production studios, development of new products, services and
          technologies for the use of entertainment and film distribution in over 130 countries.
          (Gdańsk City Council/RK)


          Atos Origin IT Services company invests in Bydgoszcz

                                                              Atos Origin IT Services of France will
                                                              invest EUR 1.5 mln in the northern
                                                              Polish city of Bydgoszcz where the
                                                              company plans to develop an
                                                              existing IT processes support centre
                                                              to offer advanced IT services to
                                                              corporate and institutional clients.
                                                              The project will generate 250 new
                                                              jobs for Bydgoszcz specialists from
                                                              the BPO sector.

                                                                The new Centre will offer services in
                                                                line with the ITIL methodology, i.e.
                                                                through the implementation of the
                                                                best practices in the field of IT
          infrastructure management and the IT infrastructure adjustment to the constantly
          changing needs of business clients. Within the scope of the project, the company will be
          responsible for delivering IT services in the following fields:

          technical support in application processing procedures - Service Desk monitoring of IT
          infrastructure (server, networks, data bases etc.) - “Network Monitoring Centre”

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                 - 10 -
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          management of IT operations based on the company’s newest IT solutions, i.e. desktop
          management, server management, the management of Local Area Network (LAN) and
          Wide Area Network (WAN), Security and Firewall Management and Application

          IT advisory services. The Atos Origin Group ranks among the fastest-growing IT
          companies in Europe. It is a global supplier of IT technology services and specialises in
          providing IT solutions for the telecommunications, production, banking, finance and
          commercial sectors. The company offers a package of solutions within the scope of
          consulting, system integration and management of IT infrastructure. The company has
          been present on the Polish market since 1997 and since that time it has been offering IT
          advisory services and technological support to Polish clients. (PAIIZ/RK)


Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                - 11 -
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          PPP in Poland Seminars 27-28 April 2010

                                                                        The Trade & Investment
                                                                        Promotion of the Embassy
                                                                        of the Republic of Poland
                                                                        in     conjunction     with
                                                                        HOGAN LOVELLS and
                                                                        IFSL organized a set of
                                                                        events      targeted     at
                                                                        promoting Polish PPP
                                                                        projects within the London
                                                                        business community.

                                                                    Two investment seminars
                                                                    and one study tour helped
                                                                    both Polish and London
                                                                    City    delegates       to
                                                                    understand the potential
                                                                    of PPP in Poland. With
          over 30 projects presented worth approx. 1.5 bln EUR the range was wide – airports,
          hospitals, waste management systems, etc.

          The Trade & Investment Promotion Section will prepare a special edition of our e-
          newsletter focused only at PPP.

          NEC, Birmingham, SUBCON 2010 8 – 10 June 2010

          The International Subcontract Manufacturing Show is a perfect opportunity to make new
          contacts and forge new partnerships with key decision makers from such sectors like:
          aerospace, defense, automotive etc.

          During the fair representatives of the Section had the opportunity to establish important
          contacts with manufacturers, sourcing managers etc. from the UK heavy industry. The
          event was also a great possibility to present the manufacturing opportunities of Poland to
          a broad audience of sector specialists and experts.

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                 - 12 -
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          Macroeconomic data

          HSBC Purchasing Managers’ Index
          Press Release
          1 July 2010

          HSBC Poland Manufacturing PMI

          Key points
          • PMI rose to thirty-four month high of 53.3.
          • Fastest growth of new export orders for four-and-a-half years.
          • Manufacturing employment increased slightly.

          HSBC survey data covering Polish manufacturers indicated the strongest improvement
          in the business climate for almost three years in June, boosted by export demand. The
          headline HSBC Poland Manufacturing PMI® rose to 53.3 in June, from 52.2 in May. The
          PMI has remained above 50.0 for the past eight months, and the latest figure signaled
          the fastest improvement in operating conditions since August 2007.

          The main contributor to the upward movement in the headline index in June was faster
          growth of new orders. New workloads have increased every month since October 2009,
          and the rate of expansion in the latest period was greater than the long-run survey
          average. In particular, new export orders rose at the fastest rate since December 2005.

          Higher new orders supported output growth in June. The current sequence of expansion
          now stretches to eleven months, and the latest rate of increase was the fastest in three
          months. Moreover, backlogs of work continued to fall as capacity was expanded.

          Polish manufacturing employment rose at a marginal rate in June. Previously, the
          sector’s workforce had contracted every month since May 2008 with the exception of last
          December. Recruitment was linked to rising output and an improving economic outlook.

          The latest survey findings showed further broad-based upward pressure on firms’ cost
          burdens in June. Input prices rose on average for the eleventh successive month, and
          the rate of inflation remained marked despite easing since May. Survey respondents

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                - 13 -
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          reported a wide range of items up in price during the month, including metals, fuel,
          plastics, rubber, cardboard and paper.

          Manufacturers operating in Poland raised their output prices for the third month running
          in June. Although the pace slowed sharply since May, over the second quarter as a
          whole charges increased at the fastest average rate since Q1 2008.

          Reflecting the impact of recent flooding and strengthening demand for inputs, suppliers’
          delivery times lengthened at the joint-second fastest rate in the survey history in June.
          Vendor performance has deteriorated every month since September 2009.

          Commenting on the Poland Manufacturing PMI survey, Kubilay Ozturk, economist at
          HSBC, said:
          “The rate of expansion in Polish manufacturing output picked up further in June, thanks
          to improving demand in both domestic and external markets. Barring the impact of
          recent waves of floods, the dissipation of unusually severe winter conditions probably
          had a role to play vis-à-vis the former. At the same time, upbeat export orders are likely
          to have been supported by cumulative zloty weakness since early-April and a
          protractedly strong dollar globally, as the latter is conducive for enhanced
          competitiveness of the Eurozone, the main destination of Polish exports. More
          importantly, the rate of job creation turned positive, albeit only slightly, for the first time
          this year, in tandem with recent declines seen in unemployment at the national level, but
          whether this improvement could be sustained during the rest of the year still remains to
          be seen. A slight deceleration notwithstanding, input prices continue to surge, while the
          pass-through effect of rising raw material costs and currency weakness is still apparent,
          with output price inflation reaching its highest level in April-June since 1Q08. Overall,
          sustained economic progress seems to have remained undisrupted in June, which points
          to another upbeat GDP growth figure in 2Q10 after +3.0% y-o-y in the preceding

          For more information visit:

          Notes to Editors:
          The HSBC Poland Report on Manufacturing is based on data compiled from monthly replies to questionnaires sent to
          purchasing executives in over 200 manufacturing companies. The panel is stratified geographically and by Standard
          Industrial Classification (SIC) group, based on regional and industry contribution to Polish Industrial Production. Survey
          responses reflect the change, if any, in the current month compared to the previous month based on data collected mid-
          month. For each of the indicators the ‘Report’ shows the percentage reporting each response, the net difference between
          the number of higher/better responses and lower/worse responses, and the ‘diffusion’ index. This index is the sum of the
          positive responses plus a half of those responding ‘the same’.
          The Purchasing Managers’ Index (PMI) is a composite index based on five of the individual indexes with the following
          weights: New Orders - 0.3, Output - 0.25, Employment - 0.2, Suppliers’ Delivery Times - 0.15, Stock of Items Purchased -
          0.1, with the Delivery Times index inverted so that it moves in a comparable direction.

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                                 - 14 -
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          Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing
          direction of change. An index reading above 50 indicates an overall increase in that variable, below 50 an overall
          Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from
          time to time as appropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying
          (unadjusted) numbers, first published seasonally adjusted series and subsequently revised data are available to
          subscribers from Markit. Please contact

          HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers
          worldwide from around 8,000 properties in 88 countries and territories in Europe, the Asia-Pacific region, the Americas,
          the Middle East and Africa. With assets of US$2,364 billion at 31 December 2009, HSBC is one of the world’s largest
          banking and financial services organisations. HSBC is marketed worldwide as ‘the world’s local bank’.

          About Markit:
          Markit is a leading, global financial information services company with over 1,400 employees. The company provides
          independent data, valuations and trade processing across all asset classes in order to enhance transparency, reduce risk
          and improve operational efficiency. Its client base includes the most significant institutional participants in the financial
          market place. For more information, see

          About Markit Economics:
          Now available for 26 countries and key regions including the Eurozone and BRIC, Purchasing Managers’ Indexes (PMIs)
          have become the most closely-watched business surveys in the world, favoured by central banks, financial markets and
          business decision makers for their ability to provide up-to-date, accurate and often unique monthly indicators of economic
          trends. To learn more go to

          The intellectual property rights to the HSBC Poland Manufacturing PMI provided herein is owned by Markit Group Limited.
          Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is
          not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the
          content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any
          actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages,
          arising out of the use of the data. Markit, PMI and Purchasing Managers' Index are all trademarks owned by The Markit

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                                  - 15 -
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          Ministry of Treasury News
          Explore Poland's investment opportunities


          PZU, the biggest insurance company in Poland and Central & Eastern Europe,
          debuted on the Warsaw Stock Exchange on May 12th 2010. It was one of the key
          projects conducted by the Ministry of Treasury in the scope of the Privatization
          Programme for the years 2008-2011.

          The privatization, of one of the largest and oldest insurance groups in Poland in terms of
          written premium, was one of the major goals set for 2010 by the Ministry of Treasury,
          although it was not without challenges. When developing the schedule for the Initial
          Public Offering of PZU, advisors had to consider the uncertain situation on the financial
          markets and the cautiousness of stock exchange investors. In spite of these factors, it
          took only 5 months supported by six investment banks, five law firms and many
          other auditors and advisors, to successfully achieve one of the most challenging
          and spectacular transactions the Warsaw Stock Exchange has seen.

          As it turned out, with a value of almost £ 1.65
          billion, PZU’s IPO has been the largest in
          the CEE region since the beginning of
          economic reforms, and the largest in
          Europe since the end of 2007, with investors
          acquiring 25,819,337 existing shares (29.9% of
          the share capital of the company). The
          structure of the offer allowed for more than 250
          thousand individual investors to subscribe for
          PZU shares, where they acquired more than 7
          million shares (approx. 28% of the entire offer)
          – a record number in recent years. The
          remaining shares have been acquired by institutional investors, both from Poland and
          abroad, including institutions representing three continents, among them the world’s
          biggest pension and investment funds. The offer was nine times over-subscribed.

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                 - 16 -
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          The privatization of PZU was the first major project in which Aleksander Grad, the
          Minister of Treasury, implemented his idea and vision of citizen ownership. The
          concept behind this idea is to invite Polish citizens to participate in the privatization
          process and at the same time raise citizens’ awareness regarding the subject of
          privatization. In the case of the PZU offer, individual investors were able to purchase a
          maximum of 30 shares and thanks to the the subscription process, their purchase was
          carried out without reductions, queues and unnecessary loans.
          “I am exceptionally happy with the significant participation of individual investors
          in this offer. Without a doubt, we can emphasize that from now on that 250
          thousand Polish people are co-owning the biggest Polish insurer PZU” -
          commented Aleksander Grad, the Minister of Treasury. “We will also continue the
          idea of citizen ownership on the occasion of other planned privatizations on the
          capital market” – he added.

          Several factors influenced the success of PZU’s public offer. One of the most important
          has been raised by the Polish Prime Minister Donald Tusk, who said during the first
          listing of PZU that “the success of this offer would not be possible without the
          strong Polish economy”. In 2009, Poland was the only country in the whole of the
          European Union to avoid recession and to achieve a GDP growth rate of 1.8%. This
          result has proved attractive to foreign investors, who look closely at Poland in terms of
          their investments, and PZU’s IPO, in which a significant part of shares have been bought
          by foreign institutional investors, is a good example.
          Factors which mostly influenced Polish GDP performance included strong institutions, a
          resilient economic structure and a well designed economic policy during the crisis. High
          levels of trust in the government ensured that statements by politicians about the
          strength of economic fundamentals and of the financial system were credible. GDP
          forecasts for 2010 are equally promising for Poland and according to several European
          financial institutions, Poland will achieve a GDP growth rate of between 2% and 3,1% in

          The huge success of the offer was further
          endorsed at the end of the first session when
          PZU’s share price increased by over 15%.
          According to an initial analytical report related to
          PZU shares published by BRE Investment House,
          PZU shares should cost PLN 358,80 in the next 9
          months, which is a further increase of 15% on the
          price at which the shares were purchased by

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                 - 17 -
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          Poland’s Ministry of Treasury is not planning to slow down the pace of privatization
          processes. Among the biggest projects scheduled for the second half of this year is an
          IPO of the Warsaw Stock Exchange. Additionally, the Ministry plans to continue the
          privatization of companies which are already listed on the stock exchange, particularly
          from the power sector, including PGE or Enea, and will focus on the privatization of other
          companies operating in over 40 different branches of Polish economy.

          Are you interested in the Polish Privatization Programme? Are you an investor
          considering investing in Poland? If so, contact the Investor Relations Centre.
          The Investor Relation Centre (IRC) was created by the Ministry of Treasury in July of
          2009, in order to provide information and assistance to investors interested in companies
          participating in the privatization process. Employees of IRC provide answers to phone or
          e-mail enquiries. They also help potential investors contact the persons supervising
          particular companies, organize meetings and provide information on the privatization
          program to all those who visit the Ministry.

          Aleksandra Karpowicz, Marzena Feldy
, tel. +48 22 695 90 01 or +48 22 695 90 02

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                 - 18 -
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          Warsaw Stock Exchange News

          Short Selling on the WSE: New Rules

          The WSE will make short sale transactions available under new rules as of 1 July
          2010. The new short sale rules developed by Polish capital market institutions are
          based on the best international standards. The rules create conditions for
          effective and comprehensive use of this investment technique by experienced
          investors. In those markets where short sale is used effectively, it has a positive
          impact on the liquidity of trading and the effectiveness of valuation of financial

          In a short sale, you sell securities you don’t have on your investment account at the time
          of the sale. At the settlement date (typically three days after the transaction date), you
          must own the securities in order to deliver them to the buyer. Otherwise, the settlement
          of the transaction will be suspended and you will pay a penalty under the agreement with
          your brokerage house. The most popular way of obtaining securities for settlement is to
          borrow them (for instance from your brokerage house).

          Short sale is one of the most popular investment strategies allowing positive returns
          when share prices fall and as a part of complex strategies, for instance arbitrage
          strategies using derivative instruments and shares. Short selling contributes to the
          quality and attractiveness of the market and makes it more effective. It improves market
          liquidity (through securities lending and short selling, shares in investment portfolios of
          long-term investors “return” to the market and increase the number of shares in trading)
          and mitigates the risk of overvaluation of securities. Short selling activates the securities
          lending market and gives lenders an opportunity to earn extra income. Short selling is
          also important in shares and index derivatives trading.

          In order to ensure safety of trading, short selling is subject to limitations and close
          monitoring by the WSE and the National Depository for Securities. The main limitation is
          that only the most liquid instruments are allowed for short selling. The list of securities
          available for short sale orders as of 1 July was presented by WSE CEO Ludwik
          Sobolewski on 15 June 2010. The list includes 36 shares and 40 Treasury bonds (a
          separate list of 141 shares and 40 bonds has been approved for short sale orders of
          Exchange Members operating as market makers).

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                  - 19 -
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          The list of securities is available on the WSE website at -> Investor
          Centre -> Short selling and securities lending -> Securities available for short selling.

          The launch of effective short selling on the Warsaw Stock Exchange is a long-awaited
          milestone in the development of the Polish exchange market.

          Written by: Krzysztof Mejszutowicz, Financial Instruments Department

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                - 20 -
Invest in Poland

          From a professionals perspective

          London to Warsaw – new direction for Polish professionals?

          Written by Chris Hume, Managing Director – AER International

                                               For the many young professional Poles who came
                                               to The UK over the last few years, there were very
                                               good reasons to do so. Employment and career
                                               opportunities in London and elsewhere in the
                                               country were abundant, pay was significantly higher
                                                than at home and for many the lure of experiencing
                                               life abroad and improving their language skills was
                                               very strong. When the UK and Ireland opened their
                                               borders, many young Polish professionals saw a
                                               green light to develop themselves and their careers
                                               in an exciting new world.

                                               For a significant number this opportunity has led to
                                               the establishment of strong roots here in the UK.
                                               This is particularly so for those who may have
                                               settled down with non-Polish partners. The idea of
                                               going back to Poland has not necessarily figured
                                               strongly in their thinking up to now. This is borne out
                                               by recent figures from Poland’s Central Statistical
          Office (CSO) that estimated the number of Poles in Britain in 2008 at 650,000. This
          represented a drop of just 40,000 on the 2007 figure, suggesting that most Poles were
          opting to stay. However, the situation has moved along somewhat even since then.
          Whilst the UK has entered recession, Poland alone amongst EU states managed to
          avoid this fate during the crisis and was Europe’s number one performing economy in
          2009. Many of the original economic drivers are no longer as powerful as they were. The
          Exchange rate PLN/GBP has moved from 7:1 to 5:1 wage rate differentials have
          narrowed and the UK is no longer creating opportunities at the same rate for young

          Aside from economic factors there are other personal and family factors which we see
          increasingly causing many Polish people to seriously consider whether it may be time to
          return home. Most Poles who came to the UK and undertook white collar work in

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          occupations such as Banking, Accountancy, IT, Media and Marketing were graduates,
          and aged in the 23-34 demographic. After 4-7 years in the UK, many have seen their
          personal circumstances change considerably. Many may now be married or with a long-
          term partner, have children approaching school age, parents getting elderly etc. At this
          stage in life it is often a ‘crunch’ decision whether to stay or to return. Once children are
          in schooling in particular it becomes increasingly difficult to uproot them.

          Therefore as a result of both economic and personal circumstances, we are seeing an
          increasing number of Poles in professional occupations looking to move ‘home’. A key
          concern and question for many is ‘what are the job/career prospects at home really like,
          compared to the UK’? Obviously, this will vary greatly according to each individuals
          experience, skills etc which we will look at later but in general terms they are very good
          indeed. Why is this? Well there are a number of drivers but the four main ones are as
               • Simply, Poland is creating more professional white collar jobs than the UK. In
                  onesector alone – the BPO sector, there were 45,000 new jobs created between
                  2000 and 2008. It is anticipated that this sector will create a further 25,000 jobs in
               • As all the large global firms expand their activities in Poland they run into
                  difficulties finding highly skilled, professionally qualified English speaking staff
                  with specialist managerial and international experience. This is partly because of
                  the history and demographics. Most indigenous Poles over 40 years old were
                  educated wholly or mainly in the ‘old’ system and do not have the typical suite of
                  skills and experience that international companies require at that level.

             •   Many Poles came to the UK and prospered. Given opportunities they worked
                 hard and proved themselves to be energetic, dedicated and fast learners. In an
                 expanding economy this was a win-win for employers and employees. However
                 at a certain point, it becomes increasingly difficult to make the next step
                 careerwise. This is because as a mature open market economy the UK has a
                 large number of highly educated, qualified and skilled people at this level at its
                 disposal. London in particular and Britain generally, attracts talent from all over
                 the globe. This makes competition for the most senior roles extremely fierce.
             •   Individuals with business experience gained abroad, allied with (where
                 appropriate) professional qualifications and advanced language skills, bring a
                 high quality alternative to expensive ex-pats. Additionally they understand the
                 local culture and language. This is a big ‘pull’ factor for international employers

          All of these factors together mean that at a certain point, career advancement for
          returning professionals is often more rapid and exciting than for those who remain.

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          In terms of specific positions and sectors that see the most demand for people with UK
          experience they are as follows: Accountancy and Finance, FMCG, Marketing, Banking,
          IT, Telecoms/Media/Technology.

          In areas such as accounting and finance, people with professional qualifications like
          CIMA and ACCA are particularly sought after. Those with broad international experience
          and additional foreign languages are in demand, particularly for international companies
          who have European-wide operations in Poland.

          In terms of salaries, whilst not normally at quite UK (or certainly London) levels they are
          not too far behind. Each individual case varies of course and salary levels vary between
          Warsaw and regional cities in most cases. Two very recent examples of people moving
          back to Poland give examples of this;

          Case Study 1

          34 year old, Masters in Economics from Krakow, ACCA, fluent in French
          Position in the UK: Financial Controller – Leasing Company
          Number of Years in the UK: 9
          Main reasons for moving back: Career path, family reasons, wife wanting to be close to
          elderly relative
          Salary in the UK: £74,000
          Position obtained in Poland: Head of Regulatory Reporting - Global Financial Institution
          Salary in Poland: £53,000

          Case Study 2

          36 year old Economics graduate.
          Position held in the UK: Marketing Manager (UK and Ireland) – Global FMCG Company
          Number of Years in the UK: 4
          Main reasons for moving back: Husband moving back to Poland with his job, and son
          about to start school
          Salary in the UK: £95,000
          Position obtained in Poland: Marketing Director Poland and CEE – Global FMCG
          Company Warsaw
          Salary in Poland: £84,000

          In terms of taxation, the Polish system is (thankfully!) more straightforward than the UK
          one. After a small tax free allowance (PLN 550), for those earning up to PLN 85,528 pa
          (c£20,000) the rate is 18%. Over this amount and after a tax free allowance of PLN
          14839 (c£3.5k) then tax is levied at 32%. Additionally, pension and healthcare insurance
          is together 19% so it is important to bear in mind that the total tax rates on a salary of

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          £40,000 are slightly higher in Poland but it is by 1 or 2%. The expectation is that Polish
          tax rates may well stabilise or fall in the coming years whilst UK rates go up to help
          tackle the deficit, but this is not certain of course. Polish salaries are typically quoted on
          a monthly basis rather than an annual basis but we have used annual amounts here.

          Despite all the opportunities and benefits of moving back to Poland there are of course
          some pitfalls to beware of for people considering this step. It is not right for everybody.
          We recommend that you should look to spend at least two years here in The UK before
          moving back if you want to have the ‘added value’ aspect to your career. We also
          recommend that those in professions such as tax accountancy take some Polish tax
          courses to familiarize themselves with local regulations before looking to move as
          otherwise you will actually be less valuable than domestic employees with experience
          and knowledge of local practices.

          Also - and it is important to remember this – Poland has changed a lot in the last few
          years! It will take a bit of re-adjustment and a willingness to re-learn in certain cases.
          This is particularly true for professions such as accountancy where regulations and
          reporting rules are subject to constant change. It is also important to bear in mind that
          whilst Poland is a dynamic and fast moving economy it is still not at the same level as
          the UK and certain aspects of bureaucracy in particular can be frustrating.

          To make the most of the opportunities in Poland it is crucial to bring a level of humility
          and willingness to learn as well as confidence and leadership. Finally, whilst cultural life
          in Poland is rich and growing in diversity, if you couldn’t bear living without the depth and
          variety of London bars, restaurants, theatres etc then perhaps best to stay a while!

          Christopher Hume is the Managing Director of recruitment firm AER International. They
          specialise in bringing professional Polish people back from the UK to Poland. In recent
          months the numbers of people contacting them to discuss moving back to Poland has
          increased three fold on a year before. AER International is the main sponsor of Polish
          Professionals in the UK and recruits for many international firms in Poland.

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          Importing into UK – practitioner’s tips.

                                                              Written by
                                                              Radomir Szwed
                                                              Managing Director
                                                              Best Foods Ltd.

                                                       The British market seems like a paradise to the
                                                       potential importer: 62 millions consumers, each
                                                       spending on average £15,000 every year, with
                                                       the significant trade deficit on goods and small
                                                       domestic production (UK main export lies in
          services) 1. It seems that there is nothing easier than flooding Britain with foreign
          products and harvest the reward. With only little hassle to establish an enterprise in the
          UK and an easy access to market data online (practically for free), this land of
          opportunities attracts many. Is it really so easy to sell Polish products into UK?

          As Best Foods Ltd. we have been importing food products and food ingredients into the
          UK for the last 8 years. We have grown significantly. Below you can find my thoughts on
          how have we done it.

          Quality of products
          The first myth of the UK market (or any developed market, for that matter) is that the
          great product will sell itself. Yes, the quality is very important, but in a saturated market it
          has to be matched by your selling skills. When we’ve started our company 8 years ago,
          we were confident about the product, but only our persistence and a consistent
          development of network of contacts allowed us to really succeed. Don’t be shy about
          your products, but be honest. Also it is important to have relevant certificates and audits
          done – often manufacturers in Poland see it as a costly nuisance, but without such
          investment your UK partners will not trust you. We have put a lot of energy into
          explaining our suppliers in Poland, how it works – that certificates are a starting point,
          standards to adhere to, not ultimate awards that place you in front of the others in the

              Source: Office for National Statistics – website accessed in June 2010.

Trade & Investment Promotion Section
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          Value of things
          Another pitfall for Polish manufacturers entering the UK market is the difference in value
          of services and products between developed and emerging markets. Current crisis has
          brought some changes in this matter, but still the principle is that services are valued
          much higher than physical products. Also, one should not be afraid in pricing the
          services! Many Polish businesses cut on the service fees, taking all the profit from the
          mark-up on the product price. UK market is service oriented and while your partners will
          try to negotiate your fees down, they do respect that you have to earn money for your
          work. It is not easy to understand your business partners when you value things
          differently – and understanding your customers is the key to your profit.

          With some cultural and business differences already undermining your business
          relationship, it is important to communicate effectively with your foreign business
          partners. Polish suppliers often delay answers simply because they don’t have all the
          facts yet or are trying to compose a perfect offer. It is important to be professional and
          answer all the questions, but it is more important to keep your customers updated. When
          we recently audited job descriptions in Best Foods, we have once again realized how
          critical it is to inform the customers at all stages – it turned out that all our employees are
          in contact with our clients. Your sales force should be good, but your back office also has
          to be prepared to discuss issues with the customers. The important bit – keep the
          communication channels open. Tell the customers what’s the time frame and stick to it or
          update it realistically. This is counter-intuitive for so many Polish businesses as they tend
          to avoid talking about the setbacks. British business partners are not here for charity, of
          course they will try to exploit your weaknesses. But they also value honesty and respect
          mutual business relationships. Keep your end, if you want them to keep theirs.

          So you have your products, found demand for them on the UK market, established
          profitable business model and started trading. Decent opinion on Polish products in UK,
          easy logistics and polished customer service – can you just sit back, relax and wait for
          your money? Nothing more wrong.
          Poland and UK are both members of the EU, but we have our own national currencies
          and there is a high risk involved in settling the payments. Exchange rates are volatile
          and differences of 10% and more are possible in a short period of time. It can eat your
          margin completely. It is important to know how to disarm these risks especially that the
          two countries are not likely to join the euro area anytime soon.
          Developed market means plethora of players on it. Often the chain from the Polish
          producer to a British consumer can be quite long and involve many companies on the
          way. Tough price competition, just-in-time production processes, sales results driving the
          next orders – you have to know the way that your product is taking to the market. It pays
          back to keep in close contact with your business partners – you have the common goal

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          in keeping the business going. You can of course sign restrictive contracts and try to
          enforce them when something goes wrong. But you have to remember, that UK
          approach to business is common sense rather than rules and regulations. It is not easy
          to renegotiate the deal down the way, but it is definitely worth trying. What is crucial for
          Polish producers to understand is that a long lasting partnership is more valuable than
          quick gains in the short term. Of course, the risk of losing money is on you.

          We are all in it together
          Polish companies are young, comparing to their British counterparts. They are still new
          to long term strategies and looking for quick wins. While there is nothing wrong with
          instant profits, developed markets are much more complicated. It has taken Best Foods
          several years of relation building to land some bigger contracts and win the trust of big
          British businesses. We have been helped on the way by our business partners, but we
          have also invested a lot, to prove that we are stable and we want to trade long term. Our
          Clients often requested commitment, but it was mutual.
          There is also a lot of assistance available from Polish institutions, chambers of
          commerce or specific promotional initiatives. Sharing experience with other companies
          on the market pays back – it is the easiest way of tracing the marketplace.

          Polish companies should feel confident when entering British market. We have the
          products, the skills and the knowledge to flourish here. But our markets are different,
          conquering the British one is not easy, requires a lot of work and a fine touch – how to
          be in a close business relationship with British partners, yet not to lose your competitive
          advantage. My advice is simple: look for assistance, work hard, use common sense –
          and enjoy the rewards.

Trade & Investment Promotion Section
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          Regional Focus: City of Płock

                                                                  Interview with Mr. Jerzy
                                                                  Ceranowski – Director of the
                                                                  Development Department, City
                                                                  of Płock.

                                                                     1. Why Płock?

                                                                  Płock – full of magnificent
                                                                  monuments, the oldest city of
                                                                  Mazovia Region is picturesquely
                                                                  located on a steep, nearly 50
                 meter high, Vistula riverbank.

          In the Middle ages the city was one of the most important administrative and culture
          centers in Poland. On the turn of 11th and 12th century Płock served as permanent
          residence of Polish rulers and the capital of Poland.
          The city possesses good venues for active relaxation and recreation. Visitors as well as
          citizens benefit from sports stadiums, tennis courts, in-door swimming pools, artificial
          skating-rinks and a water resort Sobótka located on the Vistula River. One can also
          enjoy the yachting club and a sport airfield. Another attraction is the Zoo and boat
          cruises along the river.

Trade & Investment Promotion Section
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                                                         An unquestionable trump of the city is the
                                                         direct   vicinity    of    vast   forests   and
                                                         numerous lakes of the Gostynińskie Lake
                                                         District which creates ideal conditions for
                                                         hiking and cycling as well as water sports.

                                                              2. Does Płock have a focus in
                                                                  terms      of    attracting   Foreign

                                                         Płock offers ideal conditions for the
                                                         service of Polish market - the biggest in
                                                         Central Europe (nearly 40 million people).
                                                         It is a resilient economic centre with a
                                                         sizeable industrial potential and well-
                                                         developed business market.
          Investment offer connected with the petrochemical industry, convenient location and
          transport facilities, as well as efficiently managed local government open to the needs of
          entrepreneurs create the ideal conditions for various initiatives. Investment expenses of
          Płock per capita belong to the highest in Poland.
          City authorities support potential investors through several investment incentives,
          especially within the borders of Płock Industrial and Technological Park – PPP-T.

          PPP-T is an investment area of nearly 200 ha. It is a common venture of the City of
          Płock and Polish Oil Concern ORLEN (the biggest refinery - petrochemical company in
          East-Central Europe which is located in Płock). The Park is divided for several
          investment zones of a various character where the wide range of activities might be
          conducted in different branches: chemical, pharmaceutical, textile, automotive, plastics,
          varnishing and paint manufacturing, etc.

Trade & Investment Promotion Section
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          The majority of the investment zones are equipped with the newly-built asphalt roads,
          rain water, sewage and central heating systems as well as light-pipe telecommunication

              3. Three biggest advantages of Płock?

          •   Wide investment offer
          •   Favorable location of the city and available infrastructure
          •   Competitive investment incentives

              4. What kind of help can the City of Płock offer foreign investors?

          City authorities support local economic initiatives as well as foreign entrepreneurs
          planning to set up their businesses in Płock through:
              1. Participation of municipal infrastructure operators in the financing of the
                  necessary infrastructure and media supply system.
              2. Competitive real estate tax allowances according to domestic law (several acts
                  for different business sectors).
              3. Assistance in joining the company to the sub-zone of Łódź Special economic
              4. Maximum acceleration of administrative procedures within the City Hall of Plock
                  competences, including project coordinator support.
              5. Close cooperation with the universities in order to provide relevant faculties at
                  Plock schools.
              6. Assistance in the recruitment of technical personnel in cooperation with Municipal
                  Job Office in Płock.

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                                                                 5. Interesting case study?

                                                           Płock is an attractive city for foreign
                                                           investors. American „king of jeans”
                                                           LEVI STRAUSS built its factory in
                                                           Płock. From 1992, the company has
                                                           been successfully producing clothes
                                                           here. BIZON, Poland’s only producer of
                                                           combine-harvesters, was transformed
                                                           into CNH International Corporation.
                                                           Basell    Orlen   Polyolefins,   operating
                                                           since 2003, opened in Płock two
                                                           world’s    biggest   polypropylene    and
          polyethylene production plants. Other companies with foreign shareholding also operate
          in Płock; these are: Hoppenstedt Bonnier Information, Dr Oetker Polska, A. Schulman,
          Ponzio Polska Sp. z o.o., Henczke Budownictwo Sp. z o.o., Remondis Sp. z o.o., KTI
          Polska SA, PCC Rokita SA, Bildau&Bussman Polska Sp. z o.o. and Brenntag Polska Sp.
          z o.o.
          Besides the companies mentioned above, the biggest enterprises in Płock include:
          BUDMAT SADROB Poultry Works, OLPP Liquid Fuel Logistic Operator – leader in the
          sector of storage and reloading of petroleum products in Poland, Centromost River
          Shipyard (Poland’s biggest and one of Europe’s biggest).

              6. Economical crisis – what is the impact on Płock?

                   Polish economy is the most resistant one in comparison to other countries from
          Central Europe. Similarly, the City of Plock despite numerous difficulties, managed to
          sustain stable level of public finances, which was confirmed by the rating agencies.

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          In spite of global crisis in 2009, 136 companies more were registered in Płock in
          comparison to the year 2008 and its total number amounted to 12,200.

             7. Besides business – what is the city's development strategy?

          Płock plans to increase the city attractiveness for tourists as well as the comfort of
          citizens. Planned and realized investments in sports and recreational infrastructure will
          broaden the entertainment offer and enable development of sporting passion of citizens
          who want to stay fit. The planned investments include a yacht port which could hold up
          to 300 floating units and a few ships. It is to be located on the Vistula River nearby the
          existing sailing club “Morka“. The investment includes building a modern port
          infrastructure, which is to contain hangars, workshops, a petrol station, a sailing club and
          sanitation sports. A restaurant will be built at the end of the pier while the nearby walking
          route by the Vistula would gain a new surface, green areas, benches and car parks.

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          The city is also planning a series of investments to be realized in cooperation with
          private investor. This offer includes building a sports and recreational complex including
          a ski slope on the site situated on the Vistula escarpment. In the aforementioned area, in
          addition to the slope, a sledge track, car park, and service functions are also acceptable.
          Płock is also going to extend its recreational offer with an aquapark which is planned by
          the city to be built as an enterprise in the form of a public private partnership.

             8. Last words

          The advantages of Płock described above together with the dynamic development of the
          city prove the attractiveness of this location.
          Number of students attending Płock universities creates the priceless human capital
          which is necessary for further progress of the city. Entrepreneurs have great
          opportunities for development and success in different industry sectors. Purchasing
          power of citizens connected with high level of salaries generates vast internal demand,
          favourable for development of all kinds of consumer services.
          The city authorities are open for cooperation with potential investors and ready for the
          assistance. You are cordially invited to Płock – your place for success.

          Contact details:

          Płock City Hall
          Economic Development Office
          Department of City Development
          Stary Rynek 1, 09-400 Płock

          phone: +48 24 367 15 84, fax: +48 24 268 89 75

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          This information service of the Trade and Investment Promotion Section Embassy of the
          Republic of Poland, referred to as e-newsletter, is provided by as a general information
          guide only. The information is provided 'as is', without any representation or
          endorsement made and without warranty of any kind whether express or implied.

          Whilst every effort has been made to ensure that the information provided is accurate, it
          does not constitute legal or other professional advice.

Trade & Investment Promotion Section
Embassy of the Republic of Poland in London                                - 35 -

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