Poland

December 2008

ECONOMY - Polish economic situation is stable enough for the 2009 budget not needing to be revised. The macro assumptions for 2009 are: 4.8% GDP growth and 2.9% annual inflation (3.5% y-o-y in Dec. 2008).

INDUSTRIAL PRODUCTION - Industrial production increased by just 0.2% y-o-y, being below the 2% forecast. Metallurgic and automotive industries, with drops of 23% and 10% have been the worst hit.

INFRASTRUCTURE - A consortium of twelve Chinese companies has been formed to target big, EU funded contracts such as road, railroad, stadiums and energy projects.

EMPLOYMENT - 73.5% of Polish companies are making a profit compared to 77.8% a year ago. Large companies are not immune to the development as they have announced mass redundancies of 7 500 people, 5 500 of them being from stock-listed enterprises. The biggest reductions are in the glass sector with Glass Mill KHS planning to terminate 1 200 jobs.

INVESTMENTS - Corporate investment outlays (among firms employing over 50 people) grew 7.9% y-o-y after three quarters of 2008. Investments in fixed assets grew by 7.9% y-o-y while investments in construction and building grew by 9.9% y-o-y. In industry, investment outlays grew by 10.9% year on year.

REAL ESTATE - 30% of the land in Warsaw is classified as agricultural land. As of January, much of this land will lose that designation and be classified as commercial, residential, etc. land. Real estate developers say this will cause land prices to fall as supply will be larger. It also means that property taxes will be higher than for agricultural land.

PACKAGING - Walki Group, Finnish producer of protective packaging materials and technical laminates, acquired Polish Ekopak-Jatne S.A., which in 2007 had a turnover of 30 M EUR and employed 270 people.

OUTSOURCING - IBM gears up to launch a new R&D facility in Gdansk by the end of 2008. The center is expected to create 100 jobs for IT consultants. Earlier this year IBM has already launched an R&D centre in Warsaw, which employs some 70 persons.

FOOD PRODUCTION - Cadbury plans to invest 250 M EUR and employ 750 persons expand its factories in Skarbimierz and Bielany Wroclawskie. The Polish governement supported the project with a 3.6 M EUR grant.

ENERGY - Vattenfall invested 400 M EUR to increase its shareholding to 18.7% in soon to be listed energy group Enea.

ENERGY - Fuel transit firm OLPP plans to build a fuel pipeline capable of importing 2 mln tons of fuel annually from Belarus.The company plans to complete the construction in 2011. The pipeline will be financed with company's own funds.

ENERGY - Stora Enso has embarked on the construction of a new 137 M EUR power plant at the Ostroleka mill site in Poland. The power plant project is set to reach completion in Q3 2010, further improving the cost competitiveness of Stora Enso's Polish operations.

RETAIL - Tesco wants its Polish partners to reduce prices by 5-20% due to the financial crisis, decreasing prices of milk, grain, oil, fruit and vegetables and aggressive pricing policies by discount shops like Lidl and Biedronka.

FOREIGN INVESTMENTS - Danish Kongskilde, manufacturer of soil preparation and grain handling equipment for the agri sector, invests 10M EUR in Kutno, 120 km West of its Warsaw plant. The plan is to add 6 000- 7 000 m2 to the existing 12.000 m2 facility, which was constructed in 2003.


October 2008

FOREIGN INVESTMENTS - According to an investment attractiveness survey by Ernst & Young, Poland is considered as the most promising country in Europe, ahead of e.g. Germany and Russia.

ECONOMY - Polish economy is on track for 4,5% Q3 GDP growth. The global slowdown is expected to start to effecting in the coming quarters.

CORRUPTION - Poland ranked 58th in an index of the most corrupt countries in the world prepared by Transparency International, sharing the spot with Lithuania and Turkey.

BANKRUPTCIES - Number of bankruptcies has during 1-9/2008 was 10% lower than for the same period a year ago. However, the rate of decline is slowing and more companies are having difficulties paying liabilities on time.

CONSTRUCTION - Construction companies recorded a 25% increase in revenues during the first six months of the year as compared to the same period of 2007.

ENERGY - Tauron, second biggest power generator in Poland, and chemicals firm ZA Kedzierzyn want to jointly build a 900 M EUR polygeneration power plant based on coal gassification that would produce electricity, heat and gas necessary for chemical production.

ENERGY - RWE, a German power engineering company, plans to invest 1.5 Bn EUR in the construction of a 800 MW coal-fired power plant in Silesia. The plant is expected to be completed in 2015.

STEEL PRODUCTION - ArcelorMittal, the world?s largest steel producer, will invest over 0.56 Bn EUR into its Polish subsidiary ArcelorMittal Poland.

PLASTICS - PKN Orlen, Poland's largest fuel company, will invest 1.1 Bn EUR to the construction of a purified teraphthalic acid (PTA) plant in Wloclawek, central Poland. The construction works are expected to be completed by late 2010.


August 2008

FDI - Ernst & Young European Attractiveness Survey 2008 ranked Poland as the top European location for FDI. With 18 400 new jobs created in 2007, Poland was second in terms of number of new jobs. However, this figure is a 41% drop when compared to the 31 000 new jobs created in 2006.

SPECIAL ECONOMIC ZONES - Poland's Special Economic Zones brought positive results in 2007, attracting a further 3 M EUR of investment in new projects and a 25% rise in new jobs to 36 000. Krakow region led the growth figures, thanks to 126 M EUR investment by MAN Trucks in Niepolomice.

WAGES - Polish average corporate gross wage measured 985 EUR in June, a rise of 12.0% y-o-y.

IT - The IBM Software Development Laboratory wants to hire an additional hundred employees at its technology laboratory in Krakow. IBM is seeking software development managers, testers and software service consultants.

TECHNOLOGY - Samsung wants to double the number employees in its Centre for Mobile Technologies Development. At the moment, the R&D center has nearly 100 employees specializing in mobile phone software testing and development.

REAL ESTATE - Poland has the second most attractive real estate market in Central-Eastern Europe (CEE) and the ninth most attractive market in the world, according to a ranking by the AT Kearney.

IT - The Polish IT market was worth 7.3 Bn EUR in 2007, which is 16.5% higher than previous year.

Swedish furniture giant IKEA plans to invest 165 M EUR on a shopping and leisure complex in Lublin. The complex will be completed by 2011.

BROADBAND - Poland has taken its first tentative steps to introducing real IPTV over Fibre-to-the-Home by creating the Chamber of Ethernet Communication. Its members are small Ethernet companies with a combined total of around 250 000 Ethernet sockets who at present offer internet access.

PRODUCTION - Fiat Powertrain Technologies Poland will invest 178 M EUR in Bielsko-Biala, creating 460 jobs.

AUTOMOTIVES - Ford is returning to Poland by investing 200 M EUR into a new plant. The plant will manufacture 120 000 Ford Ka's annually.


May 2008

ECONOMY - According to the National Bank of Poland, the Polish economy is still enjoying a period of strong growth. Due to the fact that the economic forecasts for the Euro area have become bleaker and the slowdown of the US economy, the Finance Ministry is predicting a slower, still strong growth of 5.5% for 2008. The forecasted growth is still twice as fast as in the EU as a whole.

MACHINERY INDUSTRY - MTU Aero Engines, a German aviation company is soon starting to build a factory in Jasionka, South East Poland. The project will be worth 70 M EUR and the factory will mainly produce rotating blades for low-pressure turbines.

IT OUTSOURCING - Acxiom, the American company specializing in the supply and management of information for businesses, has chosen Gdansk as the headquarters of its new global operations department. The company is going to employ 100 people at its new branch this year, with the possibility of hiring up to 500 people- mainly IT-specialists. The initial opening date for the office is expected to be in July.

PAPER INDUSTRY - Stora Enso, the Finnish paper producing company, has been awarded tax exempt status in the Warminsko- Mazurska SEZ and intends to apply for EU support. This concerns construction of a plant in a 355 M EUR project, which will produce 93% of its paper from recycled materials. The plant is expected to employ 100 people. The representatives of the company stress, however, that the investment is yet to be confirmed, but it is certain that the company is only considering location in Poland.

INDUSTRY - German firm Bosch, the diversified industrial giant, announced it would spend 30 M EUR on new projects in Poland this year. Lion's share of the sum will be spent on a new diesel particulate filters plant in Mirków near Wroclaw, a joint venture with Japan's Denso.The facility, which is due to start operations in 2009, will employ about 250 people.


March 2008

SPECIAL ECONOMIC ZONES - Special economic zones (SEZs) in Poland are hoping to attract over 200 new companies, 16.000 new jobs and investments worth more than EUR 3 bln in 2008. The government has also promised that the foreign investors will receive more transparent service in 2008 than earlier through close co-operation between the foreign company, the Polish Information and Foreign Investments Agency and the SEZs. As a good example, a group of foreign companies gained recently clearance to proceed with investment of approximately EUR 110 mln, creating 800 jobs in the Lodz SEZ. The largest investment will be made by an IKEA supplier, Correct, with its investment of close to EUR 50 mln and 100 new jobs.

AUTOMOTIVE INDUSTRY - Poland and Romania are the front-running sites for a new Daimler car factory. Both countries have low labor costs and convenient locations enabling easy transportation to Western Europe. Daimler wants to produce Mercedes A- and B-Class cars in the new factory.

TRANSPORT - PKP Intercity, the Polish rail company plans to invest EUR 140 mln to upgrade its customer service. In 2008, the company will also invest approximately EUR 120 mln to modernize its rolling stock and buy new train cars. This is continuation to its last year's project worth of EUR 55 mln. PKP Intercity hopes to increase its sales in 2008 by at least 10% compared to 2007.


January 2008

CONSUMER GOODS - FMCG producer Procter & Gamble (P&G) will invest a total of $100 (zl.247) million in Poland, according to Marek Kapucinski, the company's local executive. Firm would invest $50 (zl.123) million in its existing diaper factory in Warsaw, as well as another $50 million in a new cosmetics factory.

WHITE GOODS - Italian white goods producer Indesit will double its investment in Poland by 2009, said the company's president Vittorio Merloni. So far the company has invested 120 million euros (zl.440 million) in Poland since 1999 and will spend another 120 million euros on two washing machine and dishwasher plants under construction in Radomsko in central Poland. Indesit also plans to expand its kitchen stove and refrigerator facilities in Lódz.