poland today business review+ no. 66

No. 066 / 22nd December 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter

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POLITICS & ECONOMYNovember industrial output weaker than expected page 2

MANUFACTURING & PROCESSING

Azoty breaks ground on new polyamide unit in Tarnów page 2

Bosch-Siemens to buy FagorMastercook's Wrocław business page 3

BANKING & FINANCEMarsh & McLennan to create hundreds of jobs in Poland page 4

PROPERTY & CONSTRUCTIONVienna Insurance Group buys two office buildings in Warsaw page 6

HOSPITALITYUnion Investment buys Warsaw's Hampton by Hilton hotel from S+B page 7

France's B&B to build hotel in Katowice page 7

TRANSPORT & LOGISTICS

Polferries tender attracts top Baltic Sea ferry operators page 9

P3 Logistic Parks begins huge BTS project in Mszczonów page 10

UPS acquires pharma logis-tics firm Poltraf page 10

PKP Cargo sees fewer takeover opportunities after CTL talks page 11

KEY FIGURESUp-to-date macroeconomic figures, currency & stock market data and lots of other hard-to-find info pages 15-17

The Agros-Nova deal is Maspex's 17th acquisition and its largest one to-date. Photo: Maspex

Maspex acquires Maspex acquires Maspex acquires Maspex acquires key key key key part of Agrospart of Agrospart of Agrospart of Agros----NovaNovaNovaNova Poland's top juice and pasta producer Maspex has agreed to ac-quire the preserves and ready-made food business of Agros-Nova, another key player in the sector, from private equity fund IK Investment Partners. The transaction, which includes two factories and a portfolio of leading brands, boosts Maspex's turnover in excess of PLN 4bn, strengthening its position as one of the largest Polish-owned food companies. page 8

Invesco pays EUR 226m for Plac UniiInvesco pays EUR 226m for Plac UniiInvesco pays EUR 226m for Plac UniiInvesco pays EUR 226m for Plac Unii Warsaw-listed developer BBI Development and its Flemish partner Liebrecht & wooD have sold their flagship development, the mixed-use complex Plac Unii in Warsaw, to Invesco Real Es-tate. The transaction topped EUR 226, making it one of the larg-est deals on the Polish market in 2014. page 5

weekly newsletter # 066 / 22nd December 2014 / page 2

POLITICS & ECONOMY

November industrial November industrial November industrial November industrial output data weaker output data weaker output data weaker output data weaker than expectedthan expectedthan expectedthan expected

Industrial output growth decelerated to 0.3% in No-vember (0.2% in seasonally adjusted terms), following a 1.6% increase in October, confirming fears about Q4 being the weakest quarter of the year for the Polish economy. The November result proved considerably worse than consensus forecasts (+1%), showing the weakest growth since May 2013. The most considerable increase was recorded in ex-ports-oriented sectors such as computers, electronic and optical devices (+13% y/y) or furniture (+11.1% y/y). Construction and assembly output contracted in November by 1.6% y/y (-1.1% seasonally adjusted).

Industrial output & producer prices

-4%

-2%

0%

2%

4%

6%

8%

Mar

13

May

13

Jul

13

Sep

13

Nov

13

Jan

14

Mar

14

May

14

Jul

14

Sep

14

N

ov-

14

Industry output, y/y change

Producer Price Index, y/y change

Source: GUS, the central statistical office

"The monthly industrial output data confirm some de-celeration in the economic activity in Q4 2014 vs. the previous quarter. We anticipate that in the final quar-ter of 2014 the GDP growth could drop below 3% but we expect this to be only a temporary phenomenon, lasting no more than six months). Next quarters should bring a recovery due to, among others, rebound in the euro zone," BZ WBK bank analysts commented on the data. Producer prices dropped significantly in November, by 1.6% y/y (vs. decline by 1.3% y/y in October ) and 0.5% m/m (vs. -0.4% in the previous month). In annual terms, the most visible decline was seen in manufac-turing (-2%), especially and in the fuel segment, and was caused chiefly by the downward trends on inter-national commodity markets. "In our opinion, PPI inflation is likely to remain well below zero until the end of Q3 2015, and then to grad-ually increase towards 1% y/y at the end of 2015," BZ WBK said.

IN BRIEF: Poland's average corporate gross wage measured PLN

4,004.8 in November, rising by 2.7% y/y and by 0.6%

m/m. Economists surveyed by PAP Polish news agency

expected a 3.6% y/y corporate wage growth on a

monthly increase of 1.3%.

Poland's corporate employment measured 5.551 million

people in November, up by 0.9% y/y and by 0.1% m/m.

Expectations were for employment to rise by 0.8% in

annual terms and edge up 0.1% in monthly terms.

Polish consumer prices edged down by 0.6% y/yin No-

vember after a 0.6% y/y decline in the month prior.

Prices fell 0.2% month on month.

Source: Central Statistical Office (GUS).


Azoty breaks ground Azoty breaks ground Azoty breaks ground Azoty breaks ground on new polyamide unit on new polyamide unit on new polyamide unit on new polyamide unit in Tarnówin Tarnówin Tarnówin Tarnów

Chemicals firm Grupa Azoty has commenced the construction of a new polyamide unit at their industri-al site in the southern Polish city of Tarnów. The PLN 320m project is to reach completion by the end of 2016, boosting the site's annual production capacity by 80,000 tons of polyamide. Last week Azoty signed an agreement with the general contractor, Germany's Uhde Inventa-Fischer. Located in the Kraków special economic zone, the new plant will use caprolactam feedstock produced at the site. Azoty said the new plant reflects rising de-mand for polyamide from the automotive sector and other industries using structural fibres. It also creates a captive outlet for the company's caprolactam pro-duction in the face of falling retail prices for the poly-amide feedstock due to global overcapacity. Due to the oversupply in China, the Polish company has aban-doned plans for a production facility there. "The key benefit of the project will be the extension of our production chain and increased output of high-margin products," Grupa Azoty's CEO Paweł Jarczewski said. According to Azoty, the increased supply of polyamide 6 should stimulate development of value-added polymer-based production in the Tarnów area. "The global polyamide consumption totals 9m tons. Thanks to the increased production capacity Grupa Azoty will be better positioned to deal with any mar-ket fluctuations as well as reduce its dependence on


external recipients. Moreover, the investment will en-able us to shift our target market from Asia to Europe," added Witold Szczypiński, deputy CEO. Azoty's total investments in Tarnów are to come in ex-cess of PLN 900m over the coming four years. Besides the polyamide unit, the company will invest PLN 140m into a new fertilizer granulation plant, and im-plement a number of other upgrades.

Uhde Inventa-Fischer and Azoty executives seal the deal on the new polyamide 6 plant in Tarnów. Image: Azoty

Grupa Azoty, which has an estimated 80% share in Po-land's fertilizer market, has been the target of a hostile takeover by Russia's Acron, which managed to ac-quire a 20% share in the company. Earlier this year, the Polish government has reaffirmed the "strategic asset" status of Grupa Azoty, and said it had no inten-tion of reducing its stake in the chemicals conglomer-ate. Acron, indirectly held by Russian oligarch Vyatcheslav Kantor, began to increase its ownership in Grupa Azoty's legal predecessor ZA Tarnow following a 2012 PLN 1.87bn tender offer for a 66% stake. Following the bid, in which Acron bought just over 12%, Acron has

been gradually increasing the stake in the firm. Facing an increasingly realistic prospect of some of Poland's key industrial assets falling into Russian hands, the government used its decisive say in Azoty Tarnów and another major nitrate producer ZA Puławy to merge the two businesses, creating the number two fertilizer producer in Europe. Following the merger, in March 2013, Poland capped voting rights at what is now Grupa Azoty to 20% for all shareholders other than the State Treasury as well as gave the firm's CEO a tie-breaking vote on the management board.

Grupa Azoty key figures

0.0

2.0

4.0

6.0

8.0

10.0

201 0 201 1 2012 2013

200

300

4 00

500

6 00

700

Turno ver, in PLNb n, lef t axis

Net result in PLNm, right axis

Source: Grupa Azoty

Last year Grupa Azoty turned over PLN 9.8bn (up from PLN 7.1m in 2012) and more than doubled its net earnings that reached PLN 714n against PLN 315m in the prior year. Although so far the government has managed to keep Acron at bay, Azoty remains depend-ent on the Russians to a significant degree due to gas, which, which prior to their merger represented some 30% of raw material costs for Tarnów and as much and 60% for Puławy – the group's two key industrial assets. The group's product range encompasses inor-ganic fertilizers (nitrogenous & multicomponent), caprolactam, structural materials and other highly

processed chemicals, such as OXO, plasticizers, titani-um white, melamine & AdBlue. The group is also the largest supplier of ammonia and phosphoric acid in Poland. Grupa Azoty is ranked fifth among European producers of polyamides and is the only producer of polyacetal (POM), OXO and titanium white in the country. The group has its own research facilities. As for the Berlin-based Uhde Inventa-Fischer, the German contractor has recently completed another major contract in Poland - a large-scale revamp of a PET plant in Włocławek, Poland, owned by Thai In-dorama Ventures. As a result of the modernization, the plant's capacity increased from 160,000 to 216,000 tons per annum, and production costs have been con-siderably reduced.


BoschBoschBoschBosch----Siemens Siemens Siemens Siemens to buyto buyto buyto buy FagorMastercookFagorMastercookFagorMastercookFagorMastercook's's's's Wrocław businessWrocław businessWrocław businessWrocław business

Creditors of the FagorMarstercook factory in Wrocław, which makes cookers, washing machines and kitchen hoods, have agreed to sell it to Germany's BSH Bosch und Siemens Hausgeräte GmbH. The value of the transaction may reach PLN 90m, with another PLN 120m to be invested in the facility. The initial asking price for the factory was PLN 270m, but the offer failed to attract any bidders. The new owner, which obtained regulatory permission to take over the Fagor business earlier this year, said it would reduce factory's workforce from 830 employees to just 500. The collapse of FagorMastercook Wrocław follows the bankruptcy of its Spanish parent Fagor Electrodomésticos. The latter was hit hard by slump-


ing consumer demand and had been scrambling to se-cure financing to continue operations and pay down a debt of EUR 850m. The investor and its Wrocław’s subsidiary filed for bankruptcy, which was approved by the San Sebastian court. Fagor acquired the Wrocław business (then known as Wrozamet) in 2002 where it has since been producing a range of white goods (ovens, hobs, hoods, dishwashers, washing ma-chines, and fridges) under three brands: Mastercook, De Dietrich, and Fagor. The Wrocław plant remains operational thanks to a PLN 86m order from Algeria's Cevital.

FagorMastercook's three Polish production plants in Wrocław have so far failed to find a new owner.

Image: Fagor With 3,600 employees (of which 2,000 in Łódź's washing machine, dryer & dishwasher plants), BSH is Poland's leading producer of household appliances. The company has three factories in Łódź, making washing machine, laundry dryers and dishwashers in Łódź as well as the former Zelmer plant in Rzeszów, producing small appliances. Poland is also home to R&D and logistics facilities as well as a shared services center that handles IT, bookkeeping, payroll, purchas-ing and other processes for the BSH group. Over the

past two decades the company has invested more than EUR 0.5bn in Poland. Over the coming years BSH seeks to boost the production capacity of its Łódź fac-tories by 80%, resulting in 500 new jobs, CEO Konrad Pokutycki told reporters at a recent press conference, celebrating the 20th anniversary of BSH's presence in Poland. With sales in 2013 of about EUR 10.5bn and a work-force numbering around 50,000, BSH Bosch und Sie-mens Hausgeräte GmbH is currently the world’s third largest company in the home appliance sector. BSH manufactures its products in 40 factories, and with over 80 companies, has a presence in 47 countries. Poland is Europe's top producer of household appli-ances alongside Italy. A number of top global white goods makers, including Electrolux, Whirlpool, BSH, LG and Samsung, have established factories in the country. Poland-based home appliance manufac-turers as a whole, boosted their large appliance output by 9% y/y in January-August 2014 (reaching 12.3m units), reported the industry organization CECED. Last year Poland exported some PLN 14bn worth of home appliances, some 10% more than in 2011.

BANKING & FINANCE

Marsh & McLennan Marsh & McLennan Marsh & McLennan Marsh & McLennan tttto o o o create hundreds of jobs create hundreds of jobs create hundreds of jobs create hundreds of jobs in Polandin Polandin Polandin Poland

US professional services, risk management, and insur-ance brokerage group Marsh & McLennan Compa-nies has chosen Poland as the location for its first shared services centre, which will handle various back office, administrative and HR functions for most of the group's companies in continental Europe. The project

is to create 50 new jobs by 2015 and grow to some 200-300 positions over the nect two-three years. "Poland is an attractive investment destination both in terms of skilled workforce as well as its geographic lo-cations and therefore we are expecting to deliver more projects of this type in the coming years, including new Marsh & McLennan group shared services cen-ters and hubs," Dominika Kozakiewicz, CEO of Marsh Polska tells Poland Today. At the beginning of next year will be moving its War-saw offices to a new location next year, to keep up with the fast-paced expansion of its Polish business. The company has secured 5,800 sq.m at the Nimbus office building, developed and owned by Austria's Immofinanz Group.

Located at Aleje Jerozolimskie 98, close to Plac Zawiszy, Nimbus Office building is Immofinanz's first office development in Warsaw. The LEED-certified project offers 19,000 sq.m of office GLA and 200 parking spaces.. Image: HB Reavis

Marsh & McLennan Companies are represented in Po-land by four companies: Marsh, Mercer, Oliver Wy-man and Guy Carpenter, with a combined staff of


600. The Polish arm of Marsh, the insurance broking and risk management consulting unit, serves more than 1,400 clients from different industry sectors (for instance finance, energy, and transportation), as well as public institutions, other organizations and individ-uals. Its revenues came in excess of PLN 41m in 2013. "Over the past couple of years the Polish Marsh team has grown by 20%, and currently comprises of 120 staff, including more than 75 licensed brokers. They are serving both global corporations and domestic, Polish clients," says Dominika Kozakiewicz. With PLN 50m worth of revenues in 2013, the Polish Mercer unit provides human resources consulting and other HR services to some 500 companies in different sectors, such as FMCG & retail, pharmaceuticals, au-tomotive, financial services, technology and BPO/SSC. "Mercer's Warsaw Operations Centre employs some 300 analysts and specialists who handle payroll re-ports and other related products for global clients," Ms. Kozakiewicz says. A reinsurance intermediary, Guy Carpenter works with clients from the insurance industry, whereas Oli-ver Wyman, which entered the Polish market earlier this year, is a management consulting firm. "Oliver Wyman already has since taken on 70 employ-ees who provide support to our consultants," adds the CEO. In Marsh & McLennan Companies had approximately 54,000 employees and recorded an annual revenue of USD 11.9bn. In 2013, it was ranked the 228th largest corporation in the United States by the 2013 Fortune 500 list, and the 5th largest US company in the diversi-fied financial industry.

PROPERTY & CONSTRUCTION

Invesco acquires Plac Invesco acquires Plac Invesco acquires Plac Invesco acquires Plac Unii project in WaUnii project in WaUnii project in WaUnii project in Warsaw rsaw rsaw rsaw for EUR 226mfor EUR 226mfor EUR 226mfor EUR 226m

Warsaw-listed developer BBI Development and its Flemish partner Liebrecht & wooD have sold their flagship development, the mixed-use complex Plac Unii in Warsaw to Invesco Real Estate. The value of the transaction (EUR 226m or ca. PLN 950m), makes it one of this year's largest deals in Poland's real estate investment market. It's also a huge win for the devel-opers, as according to earlier statements by BBI, the capex on Plac Unii had amounted to PLN 600m. The transaction gives the two partners significant funding for future developments, including another joint-venture scheme - the commercial section of the Praga Koneser Center in Warsaw. Plac Unii – located next to the Unii Lubelskiej Square – is one of the largest commercial properties delivered to Warsaw’s market in recent years. It comprises three buildings offering 41,300 sq.m of A+ class office space, as well as a three-level shopping centre – Plac Unii City Shopping – with a total rentable space of 15,500 sq.m hosting dozens of top-brand shops, service points, cafes and restaurants. Following the completion of Plac Unii, BBI & Liebrecht & wooD are working on another major of-fice & retail scheme in Warsaw, the Koneser project in the Praga district. Located on a 5ha site between Ząbkowska, Nieporęcka, Białostocka and Markowska streets, the project will comprise over 300 housing units, 22,500 sq.m of retail and service space and 22,000 sq.m of offices (some 75,000 sq.m of usable space in total). Liebrecht & wooD joined forces with

BBI Development to develop the retail & office section of Koneser, which constitutes around 59% of the total space at the complex. The investment value is set at PLN 450m, and the completion of the project is planned for 2017.

Despite its central location, the retail section of Plac Unii is yet to find its place on the highly competitive Warsaw market. Image: BBI

BBI has just recently broken ground on a 15,000 sq.m office & retail building Centrum Marszałkowska, lo-cated on top of Warsaw's Świętokrzyska subway sta-tion. The company's other major future undertakings will be include 180-metre class A office skyscraper in the very centre of Warsaw, at the corner of Emilii Plater and Nowogrodzka streets (55,000 sq.m). In the residential segment, BBI has also delivered the Rezydencja Foksal project near Warsaw's high street Nowy Świat, with 7,500 sq.m of luxury condos. The company has also teamed up with US investment fund Amstar to complete the Złota 44 luxury residen-tial skyscraper, which was left unfinished by its origi-nal developer Orco. BBI and Amstar have just agreed with Italy's Inso, the original general contractor of the project, to return to the building site. With 54 stories


and approx. 37 000 sq.m of usable space, Złota 44 is to be delivered to the market in 2016 as one of Europe's tallest residential buildings. Over the past two decades, Liebrecht & wooD have de-livered a number of projects throughout the CEE re-gion, including office buildings, office parks and mix-use developments in Warsaw (Kopernik Office Build-ings, Jerozolimskie Business Park, Flanders Business Park, Batory Office Buildings, Plac Unii) and Bucha-rest (Victoria Park), as well as some of the first outlet centres in Poland, Romania and Russia under the Fashion House Outlet Centre brand. Its property man-agement unit weCARE will continue to manage Plac Unii following the change of ownership. Invesco opened its Warsaw office in March this year with former Colliers and AIB PPM executive Anna Duchnowska as Director of Asset Management. Prior to the Plac Unii acquisition, Invesco's Polish portfolio included eight properties with c. USD 570m under management. The company transacted EUR 300m in the region in 2013 including the EUR 180m acquisi-tion of Kraków's Galeria Kazimierz shopping center from GTC, one of the largest retail acquisitions in Po-land last year. Invesco Real Estate is a global real estate firm, which has been providing real estate investment and proper-ty asset management services since 1983, first in the US and then expanding into Europe and Asia. Globally, Invesco Real Estate had USD 55.7bn of assets under management as of end of last year including EUR 706m in 18 CEE assets.

PROPERTY & CONSTRUCTION

Vienna Insurance Vienna Insurance Vienna Insurance Vienna Insurance Group buys two office Group buys two office Group buys two office Group buys two office buildings in Warsawbuildings in Warsawbuildings in Warsawbuildings in Warsaw

One of the most active foreign investors in Poland's in-surance sector, Austria's Vienna Insurance Group AG (VIG) has acquired two office buildings: Jasna 26 and Libra Business Centre in Warsaw from Polish de-veloper Mermaid Properties. Jasna 26 has been converted by Mermaid Properties into pre-dominantly class A offices, offering approxi-mately 5,700 sq.m of office space spread over seven levels as well as 49 underground car parking spaces. The majority of the building was prelet to Sołtysiński Kawecki & Szlęzak, a leading Polish law firm. Located next to Al. Jerozolimskie on Daimlera Street, Libra Business Centre opened at the beginning of 2013 and provides 16,000 sq.m of Class A offices. Current ten-ants include Infovide-Matrix, Wydawnictwo Naukowe PWN and Canon Polska. VIG has recently merged its life insurers Compensa TUnŻ and Benefia TuNŻ, making the former the number three player in Poland's life segment. Earlier this year the company had also concluded the acquisi-tion of another life insurer Skandia Życie TU from UK's Old Mutual Group. Following a number of acquisitions in recent years, the Vienna Insurance Group is represented in Poland by three non-life insurance companies, Benefia, Compensa and Interrisk, and three life insurers, Benefia Life, Compensa Life und Polisa Life. Premi-ums at VIG’s Polish group companies Compensa, InterRisk, Benefia and Polisa totaled some PLN 4.8bn

(EUR 1.2bn) in 2013, making VIG one of the country’s top three insurers. The group companies recorded non-life premiums of about PLN 2.4bn. The company reported a particularly good result in the non-motor segment, where year-on-year growth reached about 13%. VIG’s premiums in the life insurance segment were also about PLN 2.4bn. VIG's posted a EUR 49m gross profit in Q1-Q3 2014, up by 0.3%y/y, on EUR 809m in gross written premiums collected (-3.7% y/y), according to the official statements.

Libra Business Center, one of the two office buildings acquired by VIG in Warsaw. Image: Mermaid Properties

The entire VIG Group, which operates also in Austria, the Czech Republic, and several other markets, raised EUR 7bn in gross written premiums over the first three quarters of the year. Listed in Vienna and Pra-gue, VIG is the leading insurer in Austria and a major player in the CEE region with about 23,000 employees and 50 companies in 24 countries. The Austrian com-pany considers Poland, where it has operated since 1998, its core market with a significant long-term growth potential. The insurance density (annual pre-mium payments per capita) figure in Poland tops EUR 400m, compared to EUR 2,000 in Austria and close to EUR 600 in the Czech Republic.


HOSPITALITY

Union Investment buys Union Investment buys Union Investment buys Union Investment buys Warsaw's Hampton by Warsaw's Hampton by Warsaw's Hampton by Warsaw's Hampton by Hilton hotel from S+BHilton hotel from S+BHilton hotel from S+BHilton hotel from S+B

Germany's Union Investment has added the first ho-tel to its Polish real estate portfolio with the acquisi-tion of Hampton by Hilton Warsaw City Centre from Austrian developer S+B Gruppe. The value of the deal, which according to Polish sources had been sealed prior to the official opening of the hotel in June 2014, has not been disclosed. With 300 rooms on 17 floors, the property is Hamp-ton's largest hotel outside the US and one of the big-gest hotels to open in the city centre in the last few years. The property was the first hotel in Warsaw to receive the LEED Gold Certification, in recognition for its eco-friendly construction and energy efficiency. The scheme was delivered by Austria's S+B Gruppe, which acquired the unfinished 55-tall edifice a few years ago from the original investors who had sought to fill its 12,500 sq.m of floor space with offices, before their business went bust. S+B decided to turn the pro-ject into a hotel at the cost of approximately EUR 40m. Located on 72 Wspólna St., close to the Marriott hotel and the central station, Hampton by Hilton Warsaw City Centre offers easy access to a number of Warsaw key tourist attractions as well as a wide range of shop-ping and dining venues. The new hotel is the second Hampton by Hilton in Warsaw following the recently completed property near the Chopin airport, and number four in Poland, alongside hotels in Gdańsk and Świnoujście. Other Hilton brands available in Poland are Hilton Garden Inn (Kraków, Rzeszów), DoubleTree by Hilton (War-

saw, Łódź) and Hilton (Warsaw, Gdańsk). The Hilton brand is yet to appear in Wrocław, where two projects (Hilton and Hilton Graden Inn) experienced serious delays due to financing problems on the part of inves-tors, but according to recent reports they are about to take off. A Hampton by Hilton property is also under construction in Bydgoszcz.

Hampton by Hilton Warsaw Cite Centre opened in June 2014. Image: S+B Gruppe

Hilton Worldwide is the leading global hospitality company, spanning the lodging sector from luxurious full-service hotels and resorts to extended-stay suites and mid-priced hotels. Its brands are comprised of more than 4,100 hotels and timeshare properties, with 685,000 rooms in 92 countries. The Union Investment Group, based in Frank-furt/Main, Germany, was founded in 1956, and is today one of Europe’s leading asset managers for private and institutional clients with EUR 224.6bn worth of assets under management as of September 30, 2014. The company, in which DZ Bank AG and WGZ Bank AG are the principal shareholders, employs more than 2,500 staff who service 4.2m client investment ac-counts.

Union Investment purchased also S+B Gruppe's previ-ous development, the 18,200 sq.m Zebra Tower build-ing, for EUR 76m. The Austrian developer is currently working on a boutique office project króLEWska in central Warsaw. The building is to reach completion by early 2016 with a GLA of 6,000 sq.m. S+B has also acquired the former Universal building by Warsaw's Rondo Dmowskiego, which is to be replaced by new office high-rises.

HOSPITALITY

France's B&B to build France's B&B to build France's B&B to build France's B&B to build hotel in Katowicehotel in Katowicehotel in Katowicehotel in Katowice

Following the launch of their third Polish location in Wrocław, the French budget hospitality operator B&B Hotels has announced details of their next investment in the country. The company has acquired a site in Ka-towice, close to the city's main railway station, where a brand new, two-star, seven-storey hotel with 105 rooms will open in 2016. "This investment is a step towards strengthening our position on the Polish market, which still offers large expansion opportunities in the budget hotel sector. Katowice is an important centre of business, sports and culture, where this type of accommodation is much needed," says Beatrice Bouchet, CEO of B&B Hotels Polska. The first B&B hotel in Poland was opened in Toruń, near the historic Old Town. Next, the company launched its B&B Hotel Warszawa-Okęcie, located a 10-minute drive from Warsaw's Chopin Airport. It was built in a record time of ten months, as the developer was determined to complete the project before arrival of football fans for the UEFA Euro soccer champion-


ships in June 2012. The chain's latest project in Wrocław opened a year ago, bringing the total number of hotel rooms B&B has in Poland to 387. The company is actively seeking further suitable locations for new hotels in Poland.

Katowice will be B&B's 4th location in Poland. Image: B&B

Back in 2011, B&B representatives said they wanted to develop 10 hotels in Poland in 3-4 years at the cost of PLN 300m, mentioning Gdańsk, Kraków, Łódź, Poznań and Katowice as their next target locations. A year ago Ms. Bouchet told Poland Today her company, which had previously relied mainly on owned proper-ties, was shifting towards the operator model. "We are working on a number of projects in Poland's largest cities whereby B&B would become the opera-tor of leased properties. This is currently the preferred expansion formula for our brand," Ms. Bouchet said, but so far it does not seem like the new approach has yielded much result. Established in 1990, Groupe B&B Hotels owns 318 ho-tels (including 228 in France, 70 in Germany, 16 in Ita-ly as well as a handful of properties in Poland, Portu-gal, Morocco and the Czech Republic. Its formula re-

lies on affordable, standardized rooms, with bath-rooms, satellite TV and Wi-Fi internet, targeting pri-marily short-term business travelers. In 2010 the busi-ness was acquired by US private equity giant Carlyle Group for EUR 480m.

FOOD

Maspex Maspex Maspex Maspex aaaacquires cquires cquires cquires keykeykeykey partpartpartpart ofofofof AgrosAgrosAgrosAgros----NovaNovaNovaNova

Nordic private equity fund IK Investment Partners has agreed to sell part of Agros-Nova, a leading Polish maker of branded fruit and vegetable products to Polish Maspex Group. The transaction, the terms of which remain undisclosed, is Maspex's 17th acquisi-tion and its largest one to-date. It strengthens the company's position as a leading Polish food producer, with two production plants and a portfolio of popular brands, and boosts its turnover in excess of PLN 4bn. Headquartered in Warsaw, Agros Nova is a leader in all three of its business segments, comprising fruit and vegetable preserves, ready-made food and non-carbonated beverages. The company owns three man-ufacturing plants in Poland and employs around 2,000 people. Maspex is to acquire the preserves and ready-made food businesses which include Łowicz, Kotlin, Krakus, Włocławek and Fruktus brands, two factories in Łowicz and Wąsosz as well as related private label products. Additionally, Maspex is to acquire non-carbonated beverages brand Tarczyn and functional products brand Dr Witt. The IK 2007 Fund will re-main as owner of the non-carbonated beverages busi-ness with brands Fortuna, Garden and Pysio as well as the production plant in Tymienice, the distribution centre and related support functions. Last year Agros-Nova sold a processing plant in Włocławek to Poland's

leading sugar producer, the state-owned Krajowa Spółka Cukrowa (KSC). "After more than four years under IK’s ownership, completing our internal restructuring and relaunches of our strategic brands, handing over the company to a reputable peer such as Maspex is a very natural step. Maspex will guarantee long-term investments into brands, production sites as well as employees. I am particularly proud that the transaction will allow our employees to develop within the biggest food group in CEE," said Marek Sypek, CEO of Agros Nova. "I will remain the CEO of both business pillars until the take-over of the acquired assets and sales force structures is completed by Maspex. Thereafter I will focus solely on managing the non-carbonated beverages business, which will remain under IK ownership," he added.

Maspex's turnover in PLNbn

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0.5

1.0

1.5

2.0

2.5

3.0

3.5

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

*20

14

Source: Maspex *) projected

Based in Wadowice near Kraków, Maspex is Poland's number one producer of juice, which generates some 70% of the group's turnover. The company has been consolidating its position in the juice segment since the 1999 acquisition of Tymbark, which remains Po-land's leading juice brand. Maspex's Tymbark and Kubuś brands represent roughly a half of total juice sales in Poland, which explains why the company could not take over Agros-Nova's juice business.


In 2003 Maspex acquired the Lublin-based pasta pro-ducer Lubella, becoming a leader also in this category. Its investments in Tymbark and Lublin have since amounted to PLN 180m. Besides juice and pasta, Maspex produces also instant beverages. Its 2014 turnover is expected to reach PLN 3.3bn, up from PLN 3.1m in 2013, which gave Maspex the number six posi-tion among Polish food producers. The Agros-Nova deal, which still requires an approval by Poland's competition authority UOKiK, adds some of Poland's best known food brands to Maspex's portfolio, making the company a top player also in the jam, sauce, ketch-up, soup and soup concentrate categories.

Poland's most popular jam brand Łowicz is joining Maspex's portfolio . Image: Agros Nova

Maspex has also emerged as a major regional player via a string of acquisitions that gave the Polish compa-ny a strong position in Romania, Hungary, Slovakia, Russia, Bulgaria, and the Czech Republic. It also ex-ports its products also to the Baltic States, the British Isles, and North America. Exports represent roughly a third of Maspex's turnover. IK Investment Partners is a Pan-European private eq-uity firm focused on investments in the Nordics, DACH region, France, and Benelux. Since 1989, IK Funds have raised more than EUR 7bn of capital and invested in over 85 European companies. IK Funds in-vest together with management teams in mid-sized companies that have strong improvement potential,

operating in the business services, care, industrial goods and consumer goods sectors. The current port-folio comprises 20 companies.


Polferries tender Polferries tender Polferries tender Polferries tender attracts attracts attracts attracts toptoptoptop Baltic Sea Baltic Sea Baltic Sea Baltic Sea ferry operferry operferry operferry operatorsatorsatorsators

Having cut the asking price by more than a half, the Polish ministry of Treasury may finally succeed at pri-vatizing the state-owned ferry company Polska Żegluga Bałtycka, better known under the Polferries brand. The tender has attracted Denmark's DFDS, Finland's Finnlines (part of Italy's Grimaldi Group), Germany's TT-Link Estonian Tallink, Polish state-controlled PŻM group (owner of Unity Line), as well as two other domestic investors. PŻB's fleet in-cludes three ferries serving routes between Poland, Denmark and Sweden, each more than 30 years old and the company seeks to acquired a 4th vessel. The company employs 129 staff. DFDS, which has been eyeing Polferries for nearly half a decade, said in a brief statement that its participation in the sale process is driven by its strategy of expand-ing the route network through value creating acquisi-tions, but refused any further commentary citing "the nature of the process". The Polish ministry of treasury has put its 91.64% stake up for sale several times since 2009. The first time PŻB was put up for sale, in Q4 2009, the ministry ended up canceling the tender finding none of the two offers (from Sweden's Stena Line and DFDS) satisfac-tory. The tender was repeated almost immediately, in Q1 2010, but this time only the Danes placed an offer,

which according to the ministry referred only to se-lected PŻB assets and not the company as a whole.

Polferries operates three Swedish-built vessels. Image: Wikipedia

Discouraged by these experiences, PŻB managers de-cided to restructure the business before embarking on the subsequent sale attempt. The remedial measures taken to make PŻB more appealing included closure of the unprofitable Gdynia-Copenhagen connection, layoffs and employment restructuring, and divestment of problematic assets, such as port facilities in Kołobrzeg and Gdańsk. PŻB's financial condition had been gradually worsening, to reach PLN 175m worth of revenues and PLN 20m in net losses in 2010. Anoth-er tender, in 2011, likewise yielded no outcome. More recently, the ministry was in talks with TT-Line, which led to accusations that the German operator's true intention was to obtain commercially sensitive data about its Polish competitor. In the end, the ministry cut the price from PLN 95m to PLN 39m, and this new valuation has clearly stirred some interest among potential buyers. A response from the Polish ministry is expected by 23 January 2015.



P3 P3 P3 P3 beginsbeginsbeginsbegins huge BTS huge BTS huge BTS huge BTS project project project project in Mszczonówin Mszczonówin Mszczonówin Mszczonów

P3 Logistic Parks has broken ground on a 46,230 sq.m built-to-suit warehouse for its French client ID Logistics. Based at the P3 Mszczonów park, 50km southwest of Warsaw, the project is to reach comple-tion by Q3 2015, becoming a regional hub for one of the French forwarder's international clients. Stock market listed ID Logistics is a France-based con-tract logistics provider serving retailers, DIY, industri-al, textile, cosmetics and e-commerce groups. It oper-ates from 170 sites in 14 countries in Africa, Asia, Eu-rope and Latin America and its services include de-tailed order picking and other value-added solutions in supply chain management. The company established a Polish affiliate in 2008 and it has become one of the country’s most dynamic logistics contractors, with cli-ents that include Auchan, Bricomarché, Carrefour, Ferrero and Lindt. Thanks to its location close to Warsaw and with direct access to key roads linking central Poland with Kato-wice, Łódź, Poznań and Berlin, Mszczonów has emerged as one of the country's key logistics hubs. Once fully built-up, P3 Mszczonów will comprise close to 320,000 sq.m in 12 buildings. Currently the park's three largest tenants are Fiege, Jeronimo Mar-tins Dystrybucja (operator of Poland's top retail chain Biedronka) and ID Logistics Polska, which currently occupies close to 15,000 sq.m at the park. "P3 Mszczonów offers great potential as a multi-modal freight centre, while we have scope to develop more

than 160,000 sq.m of additional warehousing there," said Andrzej Wroński, country head of P3 Poland. P3's other key Polish facility, P3 Poznań offers up to 195,000 sq.m of warehouse space, including more than 131,000 sq.m of zoned land for further build-to-suit developments. Key customers include Hager, DAMCO, Jeronimo Martins Dystrybucja, ND Poland, CEVA, and PF Concept. The parks have planning con-sents for new warehouse developments, while P3 is al-so able to offer other locations for BTS projects near key Polish cities, including Warsaw, TriCity, Wrocław, Kraków, Rzeszów, Bydgoszcz and Lublin as well as in the industrial regions of Upper Silesia and Legnica.

P3 Mszczonów can be expanded by an additional 160,000 sq.m. Image: P3 Logistic Parks

Two months ago In Poland, P3 acquired two projects in Poland as part of a larger deal with CA Immobilien Anlagen AG. The first one is 177,000 sq.m park in Błonie, some 30 km west of Warsaw city centre,. The Błonie park offers 17 ha of development land and good access to the A2 motorway to Poznań and Berlin. Ten-ants include Bayer, IBM, Orange, Triumph and online retailer Allegro. The second park lies near Piotrków, south east of Łódź in central Poland. It provides 75,000 sq.m of space and direct road links to Warsaw, Wroclaw and Katowice. The park is on a 120 ha. plot,

offering scope for development. Kühne & Nagel, FM Logistic and InPost are among the park’s largest ten-ants. "After the transaction, P3 will increase warehouses in ownership in Poland from eight to 23 and lettable area from 200,000 sqm to 450 000 sq.m. We will also own almost 1m sq.m of developable land bank in Poland," Peter Bečár, P3’s Managing Director for Central & Eastern Europe, told Poland Today.


UPS acquires pharma UPS acquires pharma UPS acquires pharma UPS acquires pharma logistics firm Poltraflogistics firm Poltraflogistics firm Poltraflogistics firm Poltraf

Merely three months after it announced two large pro-jects in Poland – a parcel sorting facility and a shared services centre – the US logistics giant UPS has un-veiled plans for another strategic investment in the country. The company has agreed to acquire a phar-maceutical logistics company Poltraf from a Poland-based investment fund ORTIE. UPS expects to final-ize the deal, the terms of which have not been dis-closed, in the first half of 2015. "This acquisition brings greater capability to our glob-al healthcare network," said Cindy Miller, president, UPS Europe. "Poltraf complements our mainland Eu-rope expansion plan and we are now able to provide healthcare companies access to a single source for lo-gistics solutions across the continent, helping to achieve greater supply chain efficiencies and compli-ance with relevant guidelines." Based in Błonie near Warsaw, Poltraf has been operat-ing in the healthcare logistics sector for the past nine years, offering temperature-sensitive warehousing and


transportation solutions. The company utilizes a fleet of approximately 170 temperature-controlled vehicles, all of which are equipped in an end-to-end GPS and temperature-monitoring system, and deliveries are supported by an advanced scan-based tracking pro-gram. In addition, 10 field stocking locations, strategi-cally placed across the country, support the timely de-livery of the pharmaceuticals and medical devices. Poltraf's customers include some of the best known healthcare brands in the world.

Orbis plans to open a new Mercure hotel in Kraków by the end of 2016 . Image: Orbis

The acquisition will add three facilities with advanced warehousing management systems, full quality assur-ance services, and an experienced workforce to UPS's existing European healthcare network, now totaling 14 healthcare facilities. Since 2011 UPS has acquired healthcare logistics companies in Italy (Pieffe), Hun-gary (CEMELOG), and the UK (Polar Speed). The company's European network now includes dedicated healthcare distribution centers in the Benelux area, Eastern Europe, Central Europe, Southern Europe, the Iberian Peninsula and the United Kingdom. Besides specialized transportation and distribution services. UPS's healthcare network also offers services such as

temperature-sensitive around-the-clock monitoring and transportation capabilities, geography-specific regulatory compliance, monitoring and security, kit-ting and labeling, as well as order management and ac-counts receivable. Back in September, UPS said it would invest USD 25m in a new parcel sorting hub and center in Stryków as well as a shared services centre in Łódź. Developed by Panattoni, the Stryków hub will have a floor area of 13,000 sq.m and a sorting capacity of 15,000 per hour. The new UPS Global Business Services (GBS) center in Łódź will complement an existing site in Wrocław., where more than 600 people are employed today. Af-ter launching services at the center in Łódź, the com-pany will ultimately employ more than 900 people at both GBS sites combined, UPS said. Globally UPS delivers over 16.9m packages every day which adds up to 4.3bn parcels and documents per an-num. Its global revenue for 2013 was USD 55.4bn and net income totaled USD 4.37bn. UPS first entered the Polish market in 1992 through a service partner PPS Polkurier, which UPS acquired in March 2001. In 2005, UPS acquired Messenger Service Stolica S.A. to further strengthen its capabilities on the Polish mar-ket, where it currently has 2,300 employees, a delivery fleet of 1,700 vehicles (operated by subcontractors) and a national network of 40 depots with a combined warehouse space of 38,000 sq.m. The company does not disclose any operational data with regard to its in-dividual markets.

TRANSPORT AND LOGISTICS

PKP Cargo sees fewer PKP Cargo sees fewer PKP Cargo sees fewer PKP Cargo sees fewer takeover opportunitiestakeover opportunitiestakeover opportunitiestakeover opportunities after CTL talks after CTL talks after CTL talks after CTL talks

Polish PKP Cargo, the European Union’s largest listed rail freight company, has terminated talks with the private equity company Bridgepoint regarding the acquisition of 100% in Warsaw-based operator CTL Logistics. Although the letter of intent PKP Car-go and CTL's owners signed back in September was warmly received by the markets, the two parties "have not reached an agreement on the conditions of the purchase," PKP Cargo said in a communiqué last week. Bridgepoint did not give PKP Cargo exclusivity in the CTL talks, and therefore one can assume that negotia-tions with other potential buyers continue. CTL Logis-tics is Poland’s leading private rail logistics company and one of the largest private rail operators in Europe. It provides tailor-made logistics solutions focusing on long distance national and international rail logistics, siding management and corporate waste disposal for the coal & coke, fuels & oil, chemicals, construction material and steel industries. A majority stake in CTL, which had PLN 726.6m of sales last year, was sold by its founder Jarosław Pawluk to the UK private-equity fund Bridgepoint in 2007 for an undisclosed sum. Ac-cording to independent estimates, the business may be worth some PLN 450-650m. The news came only weeks after PKP Cargo and its partner, the coal trader Węglokoks had lost a bid to acquire Port Gdański Eksploatacja, a stevedoring company operating in the Port of Gdańsk. The latter


chose to engage exclusive talks with Mariner Capital Limited of Malta. The Polish rail freight giant continues, although no more on an exclusive basis, to discuss the potential takeover of the Netherlands-based Advanced World Transport, which holds a 8% share in the Czech mar-ket and has operations in other CEE countries, special-izing in transport of coal, steel, and car parts. With EUR 282m in sales revenues and 2,000 employees, the company realized freight transport of 2.72m ton-kilometers gross in 2013. Apart from the Czech Repub-lic, the firm operates in Slovakia, Slovenia, Hungary, Poland, Germany, Romania, Bulgaria, and Croatia. In the end, of its four planned acquisitions, PKP Cargo is closest to sealing a deal with the Polish copper min-ing giant KGHM concerning up to 50% of shares in the latter's rail freight unit Pol-Miedź Trans. The two firms signed an MOU in September.

Poland's top rail freight operators Share in total cargo transported by rail in Jan-Oct 2014

Other

19%

PKP LHS

5%

Lotos Kolej

5%

CTL

6%

PKP Cargo

48%

DB Schenker

Rail

19%

Source: UTK

"We are sitting on some PLN 800m of cash, which we intend to put to good use by acquiring domestic and foreign businesses that complement PKP Cargo," PKP

Cargo's CEO Adam Purwin told Poland Today in a re-cent interview (reprinted hereafter). Cargo’s net in-come rose 67% y/y to PLN 128m in the first half of 2014. PKP Cargo is the European Union's second largest railway freight company after Deutsche Bahn AG and the first publicly listed one, following its recent PLN 1.42bn IPO on the Warsaw Stock Exchange, which saw the state-owned Polish railway operator PKP sell 20.9m shares in the business. A few weeks ago PKP reduced its stake in the business by a further 7.63m shares, down to 33%. The 17% stake in PKP Cargo was sold for PLN 580m.

PKP Cargo key figures

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2010 20 11 2012 2013

0

100

200

300

400

500

600

Turnover, in PLNbn, left axis

Net result in PLNm, right axis

Source: PKP Cargo

PKP Cargo saw its revenues top PLN 4.72bn in 2013, down from PLN 5.16bn in 2012, while its net earnings slumped to PLN 74m from PLN 268m, due to econom-ic slowdown and an almost PLN 200m worth privati-zation bonus. Last year the company carried around 114m tons of freight, mainly hard coal and building materials. Based on the volume of transported goods and the distance travelled, PKP Cargo had a 56.7% share in the Polish market in 1H 2014.

25 YEARS OF TRANSFORMATION

New ways of doing New ways of doing New ways of doing New ways of doing thingsthingsthingsthings

Poland Today talks to: Adam Purwin, CEO at PKP Cargo

Photo: PKP Cargo

• PT: What stage of your life were you at in 1989 at what are your memories of that period? Adam Purwin: I was 14 at the time so my impressions of the transformation have a lot to do with access to Western culture, music and art. Suddenly travelling became so much easier. I was fortunate in that my parents made sure I got to see the world. Going to London as a teenager I witnessed the West with my own eyes for the first time and I could sense that things were organized in a very different way over there. But at the time, not even in our wildest dreams could we expect that one day Poland would resemble that world. In those days, returning to Warsaw from the West felt like travelling back in time. I don’t get that feeling any more when I land here. Now it’s just another European city. I cannot say that as youngsters we felt particularly oppressed under communism. We were not aware of the limitations of the reality we in-


habited, and at the same time we were not conscious of what to expect of the new world unfolding before our eyes. At the time no-one really dared to dream that achieving what we have achieved would be attainable. • PT: Was there a moment you felt the country was on the right track? AP: This has been such a gradual process that I cannot name a single defining moment like that. The gap be-tween Poland and the West was so immense, one lacked any vision of how to bridge it. I don’t think people really believed we ever would. There was a definite sense of something ending, but no-one knew what the next step would be. • PT: How about the early days of your career? What are your impressions of that period? AP: I went to law school, spent some study abroad time in Canada, and travelled across the US. Looking back at that road trip, it made me feel like the catching up that awaited Poland simply could never be done. The distance was simply too far. And yet, here we are. At my first job at BRE Bank, where I spent a couple of years, learning the ropes of currency markets and par-ticipating in big international projects, and later at Pekao SA’s corporate desk, I met people similar to my-self; people who took up challenging jobs at interna-tional corporations in order to learn all those essential things no university could teach us, for instance teamwork or project management. A whole generation of people were consciously trying to learn different ways of doing things, because the old ways in Poland were incompatible with the emerging new reality. A lot of credit always goes to the Solidarity movement for setting off political change, but I’d say that it’s our generation, the 30- to 40-year-olds, who were the true catalysts of transformation. We have been the ones who implemented the modern ways in business and administration. But our mundane day-to-day efforts are not something that gets applauded or even noticed, even though this is how true change is being made.

• PT: What would you say was Poland’s biggest achievement? AP: The fact that all this immense change took place without deep conflicts and bitter divisions in the na-tion. Poland is still work in progress, in many ways – a country that is still being pieced together from differ-ent cultures, religions, and legacies of foreign powers that used to occupy us. The contrast in affluence be-tween the east and west of the country remains deep. Coming from Białystok, near Poland’s eastern border, I myself can testify to that. Different regions vary also in their sensitivity to history. Yet, despite all those dif-ferences and the huge change the country has under-gone, we remain largely united, especially the younger generation. • PT: Was there anything we could have done better, as a country? AP: I regret the loss of Polish art and culture, and by this I mean music, architecture or design. I feel like what’s available out there is way below our potential. Take, for instance, the chaotic way Polish cities and streets look these days. Polish design from the 1960s or architecture a few decades ago were world class. Something got lost along the way while we were busy catching up with Europe economically. Could it be due to many of the creative people who could have con-tributed to Poland’s cultural and aesthetic refinement having left the country? Fortunately, Polish culture is beginning to re-emerge, perhaps because we’ve gotten better off, but a nation of 40 million people is certainly capable of achieving more. • PT: What should Polish companies do in the future in order to remain competitive? AP: They should open up to the world and foreign competition. That’s the only way to grow, learn and test their existing business models. The easy sources of growth, such as EU subsidies, are about to run out and this will be a true reality check for us. The earlier

we start confronting our models with established, global ways of doing business, the better we will be prepared for this crucial test. Another important issue is innovation. We can’t do without it. • PT: Innovation has become a bit of a buzzword. We all know we need more of it, but how do we go about getting there? AP: I believe there has to be a grassroots drive to inno-vate among entrepreneurs and more appreciation of innovation and innovators in the society. State-run programs and artificially created ‘innovation clusters’ cannot substitute a natural hunger for progress. The past two decades we were busy catching up and then spending EU money, and as a result we may have lost some of that thirst and awareness that drives innova-tion. But the Poles are finally getting over the fever of transformation and I am sure we’ve still got what it takes to excel. Looking at other countries, I don’t see innovation as something ingrained in the DNA. The Poles can be just as innovative as other nations. The society simply has to recognize and appreciate creativ-ity, starting from school curricula, proper infrastruc-ture and friendly regulations. The ferment is already there and with the right environment we can simply help it achieve its momentum faster. • PT: Let’s talk a little bit about the railway sector. Why has the change been so slow there, as opposed to other key industries? AP: This is a pan-European issue really. I don’t think Poland is doing so much worse in this respect than other European countries. The liberalization has been slow, because we are talking about complex ecosys-tems that involve problems with infrastructure, ageing rail stock, state ownership, strong trade unions and a legacy of employee benefits and inefficient manage-ment. The attitude in Europe has been as follows: as long as it functions somehow, we better not touch it. Against this backdrop, Poland’s rail freight sector is doing very well. PKP Cargo is the number two player


in Europe after DB Schenker, and we hold a 60% share in the Polish market. • PT: What’s your recipe for success? AP: You have to believe it can be done. When we were getting ready for PKP Cargo’s IPO, people doubted us, because there had been no listed national rail freight firm in Europe before. We proved that you can make a profitable, well-managed business out of a former state-owned enterprise without an external, foreign investor. This was done by Polish managers only. We focused on our clients and on numbers, trimmed the fat where necessary, realigned our resources, and changed the way work was organized across the entire company. But it will always be a work in progress. In today’s economy, no-one can afford to be resting on their laurels. Of course, all our achievements aside, PKP Cargo owes a great deal to the way Poland’s PKP railway group was restructured, which left all debt in the parent company. Hence, since the moment PKP Cargo was spun-off from the group, we’ve been able to fully focus on operational improvements without hav-ing to deal with financial restructuring. I feel that we are now well-placed to begin expanding. • PT: Considering your already strong position in Po-land and Europe, what’s the next step? And what are your strengths vis-a-vis European competitors? AP: For one, we are benefiting from Poland’s location at the crossroads of Europe, with access to seaports. There is, and will be, a natural movement of goods across the country and we are tapping into that. Fur-thermore, PKP Cargo is now a well-run, well-financed business, which is not always the case with our rivals. We are sitting on some 800m złoty of cash, which we intend to put to good use by acquiring domestic and foreign businesses that complement PKP Cargo. We are currently in talks on a number of acquisitions, in-cluding CTL Logistics and Pol-Miedź Trans in Poland and the Advanced World Transport B.V., which oper-ates primarily in the Czech Republic.

• PT: Isn’t the competition watchdog going to throw a wrench in your plans? PKP Cargo already controls 60% of rail freight in Poland.

AP: Prior to restructuring, we had a 100% share in the Polish market and we believe it makes sense for us to try to win back at least some of what we lost. Most of the remaining rail freight players in Poland are sub-sidiaries of large industrial groups, such as KGHM or Grupa Lotos, and serve their own logistical needs. Should those companies decide it’s better for them to outsource freight to PKP Cargo, who’s to call that an attack on free competition? Moreover, we think of PKP Cargo as a European company and therefore we believe market concentration issues should be consid-ered at the European, not national, level. We are li-censed to operate in eight European countries are we are seeking to enter more. Last but not least, it is in Po-land’s interest to channel more goods traffic to rail-ways and strengthen this sector. The containerization level – the ratio of the number of containers per capita – is six times lower in Poland than in the EU, which translates into more truck traffic, more congestion, and more pollution. This is something the authorities should definitely take into consideration.

• PT: Your business largely relies on shipping coal and aggregates. As Europe pushes for cleaner sources of energy and Poland’s infrastructure development programs reach completion, what will your trains carry?

AP: Whether we like it or not, coal will remain a key element of Poland’s energy mix for many years to come. I don’t see that changing any time soon. Whether it’s extracted locally or imported from abroad, someone will have to carry it and I hope it will be us. As for aggregates, it’s true that the sector is nearing its peak, after which the volumes will gradu-ally decrease. We believe their place will be taken by containers and this is why our investment focus is on developing intermodal transport. Transporting highly

processed goods in containers will be the way of the future. PKP Cargo was a partner of Poland Today's Poland

Transformed conference.

FROM STATE-RUN MONOPOLIST TO EUROPEAN GIANT PKP Cargo is the European Union’s second largest

railway freight company after Deutsche Bahn AG and

the first publicly listed one, following its recent IPO on

the Warsaw Stock Exchange. The state-owned railway

group PKP currently holds a 33% stake in the compa-

ny, which carried around 114m tonnes of freight last

year, mainly hard coal and building materials. PKP

Cargo saw its revenues top 4.72bn złoty in 2013, down

from 5.16bn złoty in 2012, while its net earnings

slumped to 74m złoty from 268m złoty, due to eco-

nomic slowdown and over 200m złoty worth one-off

privatization bonus.

The company has emerged from the brink of bank-

ruptcy caused by the economic crisis at the end of the

last decade. In 2008 and 2009 it posted net losses of

179m złoty and 498m złoty, which prompted an in-

depth restructuring that saw some 20,000 positions

cut, and many redundant side businesses and regional

units closed down. The overhaul proved effective as

the business is back in the black and expanding

abroad. PKP Cargo has obtained licenses to inde-

pendently operate in Austria, Belgium, the Czech Re-

public, Germany, Hungary, Lithuania, the Netherlands

and Slovakia. Warsaw-based PKP Cargo had a 60.3%

share in the Polish market in 2012 and controlled 8.5%

of total rail freight in the EU. That compares with DB

Schenker’s 28% and 5.4% shares in the EU and Poland,

respectively.


KEY STATISTICS

Consumer PricesConsumer PricesConsumer PricesConsumer Prices

Data in (%) Aug '14 Sep '14 Oct '14 Nov '14

Sector y/y m/m y/y m/m y/y m/m y/y m/m

Food & bev -2.1 -1.6 -2,0 +0.1 -2.2 -0.2 -2.5 -0.1

Alcohol, tobacco +3.8 0.0 +3.6 0.0 +3.6 0.0 +3.6 +0.1

Clothing, shoes -5.1 -2.7 -4.7 +1.1 -4.6 +3.4 -4.6 -0.2

Housing +0.6 +0.1 +0.5 +0.1 +0.5 +0.1 +0.4 0.0

Transport -1.5 0.0 -3.2 -1.0 -3.0 -0.8 -3.7 -2.0

Communications +3.9 +1.3 +4.0 0.0 -0.4 -0.3 +3.0 -0.7

Gross CPI -0.3 -0.4 -0.3 0.0 -0.6 0.0 -0.6 -0.2

IIIInflationnflationnflationnflation

-1%

0%

1%

2%

3%

4%

No

v 1

2

Ja

n 1

3

Ma

r 13

Ma

y 1

3

Ju

l 13

Se

p 1

3

No

v 1

3

Ja

n 1

4

Ma

r 14

Ma

y 1

4

Ju

l 14

Se

p 1

4

No

v 1

4

y/y m/m

Retail TurnoverRetail TurnoverRetail TurnoverRetail Turnover

Month Jun '14 Jul '14 Aug '14 Sep '14 Oct '14

m/m (%) -1.1 +4.7 -1.1 -0.9 +4.2

y/y (%) +1.2 +2.1 +1.7 +1.6 +2.3

Year 2009 2010 2011 2012 2013

Turnover in PLNbn 582.8 593.0 646.1 676.0 685.7

y/y (%) +4.3 +5.5 +11.6 +5.6 +2.3

Residential ConstructionResidential ConstructionResidential ConstructionResidential Construction

Dwellings

(in '000 units)

2009 2010 2011 2012 2013 Jan-Nov

2014

y/y

(%)

Permits 178.8 174.9 184.1 165.1 138.7 144.4 +14.3

Commenced 142.9 158.1 162.2 141.8 127.4 139.5 +15.3

U. construction 670.3 692.7 723.0 713.1 694.0 709.7 +0.3

Completed 160.0 135.7 131.7 152.5 146.1 127.6 -1.8

Source: Central Statistical Office (GUS)

GGGGross Domestic Productross Domestic Productross Domestic Productross Domestic Product (ESA2010)

Period Growth y/y unadjusted

GDP in PLN bn current prices

Current account def. in % of GDP

Q3 2014 +3.3% 426.836 n/a

Q2 2014 +3.5% 418,317 -1.2%

Q1 2014 +3.4% 403,121 -1.2%

Q4 2013 +3.0% 463,855 -1.3%

2013 +1.7% 1,662,052 -1.3%

2012 +1.8% 1,615,894 -3.6%

2011 +4.8% 1,553,582 -5.0%

2010 +3.7% 1,437,357 -5.1%

Key Economic Data & ProjectionsKey Economic Data & ProjectionsKey Economic Data & ProjectionsKey Economic Data & Projections

Indicator 2011 2012 2013 *2014 *2015

GDP change +4.5% +1.8% +1.7% +3.2% +3.2%

Consumer inflation +4.3% +3.7% +0.9% +0.0% +0.0%

Producer inflation +7.6% +3.4% -1.3% -1.2% +0.7%

CA balance, % of GDP -5.0% -3.7% -1.4% -1.8% -2.4%

Nominal gross wage +5.2% +3.7% +3.4% +3.5% +4.0%

Unemployment** 12.5% 13.4% 13.4% 11.5% 10.9%

EUR/PLN 4.12 4.19 4.20 4.18 4.12

Sources: NBP, BZ WBK, PKO BP, GUS *) projections **) year-end

GrosGrosGrosGross Wagess Wagess Wagess Wages A: avg monthly wages in PLN B: indexed avg wages, 100=2005

Sector Q4 2013 Q1 2014 Q2 2014 Q3 2014

A B A B A B A B

Coal mining 8,615 196 6,333 144 6,382 145 6,044 137

Manufacturing 3,690 161 3,663 160 3,743 163 3,747 164

Energy 6,736 205 6,358 193 6,020 183 6,392 194

Construction 3,895 166 3,706 158 3,884 166 3,872 165

Retail & repairs 3,456 147 3,544 151 3,577 153 3,532 151

Transportation 3,913 138 3,666 130 3,650 129 3,710 131

IT, telecoms 6,695 174 6,987 181 6,835 177 6,835 177

Financial sector 6,602 148 6,747 152 6,738 151 6,360 143

National average 3,823 152 3,895 155 3,740 149 3,781 154


Construction OutputConstruction OutputConstruction OutputConstruction Output

Month May '14 Jun '14 Jul '14 Aug '14 Sep '14 Oct '14 Nov '14

m/m (%) +14.0 +16.9 +0.9 -5.4 +19.8 +7.2 -9.4

y/y (%) +10.0 +8.0 +1.1 -3.6 +5.6 -1.0 -1.6

Year 2007 2008 2009 2010 2011 2012 2013

y/y (%) +15.5 +12.1 +5.1 +4.6 +11.8 -0.6 -12.0

Source: The Central Statistical Office of Poland, GUS

Sentiment IndicatorsSentiment IndicatorsSentiment IndicatorsSentiment Indicators

Economic sentiment and consumer confidence indicators

-40

-20

0

20

Fe

b 1

2

Ma

y 1

2

Au

g 1

2

No

v 1

2

Fe

b 1

3

Ma

y 1

3

Au

g 1

3

No

v 1

3

Fe

b 1

4

Ma

y 1

4

Au

g 1

4

No

v 1

460

80

100

120 C onsumer confidenc e (le ft a xis)

Economic se ntiment (right axis)

The economic sentiment (1990-2010 average = 100) is a composite made up of 5 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

Producer PricesProducer PricesProducer PricesProducer Prices

Month May'14 Jun'14 Jul'14 Aug'14 Sep'14 Oct'14 Nov'14

m/m (%) -0.2 -0.1 -0.1 +0.3 0.0 -0.4 -0.5

y/y (%) -1.0 -1.8 -2.1 -1.5 -1.6 -1.3 -1.6

Year 2007 2008 2009 2010 2011 2012 2013

y/y (%) +2.0 +2.2 +3.4 +2.1 +7.6 +3.3 -1.3

Construction PricesConstruction PricesConstruction PricesConstruction Prices

Month May'14 Jun'14 Jul'14 Aug'14 Sep'14 Oct'14 Nov'14

m/m (%) -0.1 0.0 0.0 0.0 0.0 0.0 -0.1

y/y (%) -1.5 -1.4 -1.2 -0.9 -0.8 -0.7 -0.7

Year 2007 2008 2009 2010 2011 2012 2013

y/y (%) +7.4 +4.8 +0.2 -0.1 +1.0 +0.2 -1.8

Industrial OIndustrial OIndustrial OIndustrial Outpututpututpututput

Month May '14 Jun '14 Jul '14 Aug '14 Sep'14 Oct'14 Nov'14

m/m (%) -1.7 -0.1 +2.0 -8.5 +16.5 +3.5 +0.3

y/y (%) +4.4 +1.7 +2.3 -1.9 +4.2 +1.6 -7.5

Year 2007 2008 2009 2010 2011 2012 2013

y/y (%) +10.7 +3.6 -3.5 +9.8 +7.7 +1.0 +2.2


TTTTraderaderaderade

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

EXPORTS in PLN bn IMPORTS in PLN bn

Jan-Sep 2014

y/y (%)

share (%)

2013 share (%)

Jan-Sep 2014

y/y (%)

share (%)

2013 share (%)

Food and live animals 54,009 +4.3 10.7 69,304 10.9 36,296 +3.9 7.2 47,906 7.4

Beverages and tobacco 7,729 +19.9 1.5 8,624 1.4 3,158 +5.8 0.6 4,150 0.6

Crude materials except fuels 12,459 +2.1 2.5 15,744 2.5 16,368 +07 3.2 21,585 3.3

Fuels etc 21,003 -6.1 4.2 30,013 4.7 55,523 -0.5 11.0 75,539 11.7

Animal and vegetable oils 1,471 +4.7 0.3 1,864 0.2 1,985 -0.6 0.4 2,646 0.4

Chemical products 46,392 +4.3 9.2 59,103 9.3 75,454 +6.7 14.9 92,917 14.3

Manufactured goods by material 101,308 +2.8 20.1 129,915 20.3 90,508 +6.9 17.8 112,392 17.3

Machinery, transport equip. 190,119 +5.1 37.8 239,434 37.5 167,104 +4.0 32.9 216,608 33.4

Other manufactured articles 68,030 +10.3 13.5 82,816 13.0 51,133 +16.6 10.1 58,210 9.0

Not classified 678 n/a 0.2 1,782 0.2 9,714 n/a 1.9 16,242 2.6

TOTAL 503.198 +4.6 100 638,599 100 507,243 +4.8 100 648,195 100

Poland's ten largest trading partners, ranked according to 2013

EXPORTS in PLNbn IMPORTS in PLN bn

No Country Jan-Oct 2014

share 2013 share No Country Jan-Oct 2014

share 2013 share

1 Germany 148,094 26.1% 162,548 25.1% 1 Germany 124,792 21.8% 142,161 21.7%

2 UK 335,966 6.3% 42,138 6.5% 2 Russia 62,706 10.9% 79,578 12.1%

3 Czech Rep. 35,430 6.2% 40,110 6.2% 3 China 59,368 10.4% 61,127 9.3%

4 France 32,011 5.6% 36,367 5.6% 4 Italy 31,056 5.4% 34,940 5.3%

5 Russia 25,034 4.4% 34,069 5.3% 5 Netherlands 21,277 3.7% 25,409 3.9%

6 Italy 25,808 4.5% 27,958 4.3% 6 France 21,780 3.8% 25,041 3.8%

7 Netherlands 23,358 4.1% 25,707 4.0% 7 Czech Rep. 20,302 3.5% 24,054 3.7%

8 Ukraine 10,922 1.9% 18,020 2.8% 8 USA 13,693 2.4% 17,431 2.7%

9 Sweden 16,331 2.9% 17,581 2.7% 9 UK 14,687 2.6% 17,184 2.6%

10 Slovakia 14,368 2.5% 17,099 2.6% 10 Belgium 14,125 2.5% 15,137 2.3%


CurrencyCurrencyCurrencyCurrency

Central Bank average rates

as of 19 December 2014

100 USD 347.91 ↑

100 EUR 427.05 ↑

100 GBP 544.50↑

100 CHF 354.83 ↑

100 DKK 57.40 ↑

100 SEK 44.98 ↑

100 NOK 47.12 ↑

10,000 JPY 291.45 ↑

100 CZK 15.49 ↑

10,000 HUF 135.77 ↑

100 USD/EUR against PLN

300

350

400

450

10 Jan 14

19 M

ar 14

28 M

ay 14

5 A

ug 14

13 O

ct 14

19 D

ec 14

USD EUR

MMMMoney Supplyoney Supplyoney Supplyoney Supply

in PLN m Aug '14 Sep '14 Oct '14 Nov '14

Monetary base 167,008 166,104 171,649 169,090

M1 574,529 578,485 574,606 583,682

- Currency outside banks 124,986 124,389 125,902 127,107

M2 1,003,128 1,003,354 1,011,930 1,017,659

- Time deposits 448,037 444,514 457,106 453,769

M3 1,020,561 1,021,824 1028,665 1,033,418

- Net foreign assets 162,129 159,513 157,084 160,634 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: NBP

CCCCreditreditreditredit

The financial sector's net lending in PLN bn,

loan stock at the end of period

Type of loan Aug' 14 Sep' 14 Oct' 14 Nov' 14

Loans to customers 950,774 954,978 958,641 966,268

- to private companies 277,482 280,248 279,124 282,031

- to households 587,136 590,208 592,068 593,456

Total assets of banks 1,718,251 1,737,728 1,742,288 1,755,746

Source: Central Bank NBP

IIIInterest ratesnterest ratesnterest ratesnterest rates

Average weighted annual interest rates

on loans to non-financial corporations

Term / currency May '14 Jun '14 Jul '14 Aug '14 Sep '14 Oct '14

PLN (up to 1 year) 4.4% 4.5% 4.4% 4.4% 4.4% 4.1%

PLN (up to 5 y ) 4.8% 4.8% 4.7% 4.8% 4.7% 4.5%

PLN (over 5 y) 4.7% 4.7% 4.7% 4.7% 4.7% 4.5%

PLN (total) 4.7% 4.7% 4.7% 4.7% 4.7% 4.4%

EUR (up to 1m EUR) 2.0% 1.9% 1.7% 1.6% 1.6% 1.6%

EUR (over 1m EUR) 2.7% 3.4% 3.1% 2.5% 2.5% 2.5%

Warsaw Inter Bank Offered Rate (WIBOR) as of 19 Dec 2014

Overnight 1 week 1 month 3 months 6 months

2.11% 2.08% 2.08% 2.06% 2.05%

Central Bank (NBP) Base Rates

Reference Lombard NBP deposit Rediscount

2.00% 3.00% 1.00% 2.25%

Stock ExchangeStock ExchangeStock ExchangeStock Exchange

Warsaw Stock Exchange, rates in PLN

WIG-20 stocks in alphabetical

order

Price 19 Dec '14

Change 12 Dec '14

Change end of '13

↓ Alior Bank 76.6 -1% -6%

↓ Asseco Pol. 51.56 -2% +12%

↓ Bogdanka 98 -5% -22%

↑ BZ WBK 375.25 +1% -3%

↓ Eurocash 38.11 -2% -20%

↓ Grupa Lotos 25.9 2% -27%

↓ JSW 17.4 -10% -67%

↑ Kernel 29.39 +1% -23%

→ KGHM 111.95 0% -5%

↓ LPP 7563.95 -7% -16%

↑ mBank 491.05 +2% -2%

↓ Orange Pol. 8.34 -6% -15%

↓ Pekao 181.3 -1% +1%

↓ PGE 18.53 -6% +14%

↓ PGNiG 4.31 -4% -16%

↑ PKN Orlen 48.8 -1% +19%

↓ PKO BP 35.32 -3% -10%

→ PZU 475.8 0% +6%

↓ Synthos 4 -1% -27%

↓ Tauron 4.91 -4% +12%

Source: Warsaw Stock Exchange

Key indices

as of 19 December 2014

WIG Total index

55551111,,,,222297979797....12121212 Change 1 week -2% ↓

Change end of '13 0% →

WIG-20 blue chip index

2,2,2,2,333311110000....88888888 Change 1 week 0% ↓

Change end of ' -2% →

WIG Total closing index

last three months

50,000

51,000

52,000

53,000

54,000

55,000

56,000

19 Sep 14

13 O

ct 14

4 N

ov 14

27 N

ov 14

19 D

ec 14


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New Business Consultant

Tomasz Andryszczyk

RRRRegional Dataegional Dataegional Dataegional Data

Poland's regions

(main cities indicated

in brackets)

Industrial output

Jan-Oct 2014 *

Monthly wages (PLN)

Jan-Oct 2014**

Unemploy-ment

Oct 2014

New dwellings Jan-Oct 2014

Indus-

try

Constru-

ction

Indus-

try

Constru-

ction

in '000 % Num-

ber

Index *

Dolnośląskie (Wrocław) 102.6 109.3 4,367 4,219 121.6 10.6 11,000 81.1

Kujawsko-Pomorskie (Bydgoszcz) 104.4 99.2 3,462 3,343 123.1 15.3 5,046 99.0

Lubelskie (Lublin) 101.7 84.2 3,756 3,135 111.9 12.2 4,534 86.8

Lubuskie (Zielona Góra) 115.9 105.3 3,492 3,099 46.3 12.6 2,432 93.6

Łódzkie (Łódź) 100.9 110.2 3,736 3,336 124.4 11.8 5,226 101.8

Małopolskie (Kraków) 100.4 101.0 3,846 3,415 134.8 9.6 12,466 101.5

Mazowieckie (Warszawa) 100.1 110.3 4,630 5,081 248.6 9.8 25,056 107.6

Opolskie (Opole) 105.7 122.4 3,662 3,597 41.3 11.7 1,636 113.1

Podkarpackie (Rzeszów) 100.9 107.6 3,437 3,131 131.7 14.2 5,163 105.2

Podlaskie (Białystok) 106.8 114.9 3,341 3,937 58.9 12.8 3,454 112.9

Pomorskie (Gdańsk-Gdynia) 109.2 116.4 4,048 3,498 94.3 11.1 7,982 81.2

Śląskie (Katowice) 100.6 105.9 4,580 3,575 174.9 9.6 8,209 93.3

Świętokrzyskie (Kielce) 107.3 101.2 3,453 3,362 73.8 13.9 2,693 123.8

Warmińsko-Mazurskie (Olsztyn) 104.6 109.1 3,307 3,213 93.3 18.1 3,608 108.5

Wielkopolskie (Poznań) 106.2 102.2 3,771 3,829 115.3 7.7 11,136 99.4

Zachodniopomorskie (Szczecin) 103.5 100.0 3,569 3,506 90.6 15.1 4,594 100.0

National average 103.3 106.7 4,021 3,859 1,784.8 11.3 114,235 98.0

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

Sources: Central Statistical Office GUS, NBP, C&W

Foreign Direct Investment (EUR m)Foreign Direct Investment (EUR m)Foreign Direct Investment (EUR m)Foreign Direct Investment (EUR m)

Quarter Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14

in Poland 2,886 175 -3,020 1,885 -2,899 2,771

Polish DI -1,203 957 2,588 -1,449 1,575 562

Year 2008 2009 2010 2011 2012 2013

in Poland 10,128 9,343 10,507 14,896 4,763 -4,574

Polish DI -3,072 -3,335 5,484 -5,935 -607 3,684

Current Account (EUR m)Current Account (EUR m)Current Account (EUR m)Current Account (EUR m)

Period 2011 2012 2013 Q4 '13 Q1 '14 Q2 '14

Trade balance -10,059 -5,175 2,309 138 159 71

Services, net 4,048 4,642 5,249 1,941 1,684 2,013

CA balance -18,519 -14,191 -4,984 -1,324 -1,403 -553

CA balance vs GDP -5.0% -3.5% -1.3% -1.3% -1.1% -1.2%

Source: NBP, BZ WBK, PKO BP

UUUUnemploymentnemploymentnemploymentnemployment

Registered unemployed, in ‘000 and

% of population in working age

1,800

2,000

2,200

2,400

2,600

Q3 1

1

Q1

12

Q3

12

Q1

13

Q3

13

Q1

14

Q3 1

4

6

9

12

15 number (left axis) % (right axis)

Source: Central Statistical Office GUS

IndustrIndustrIndustrIndustrial ial ial ial PropertiesPropertiesPropertiesProperties

by region, 1H 2014

Existing stock, sq.m

Under const ruction, sq.m

Va-cancy ratio

Effective rents EUR/ sq.m/mth

Warsaw central 617,000 8,000 14.7% 1–5.0

Warsaw suburbs 2,137,000 14,000 11.3% 1.9–3.2

Central Poland 1,107,000 59,000 11.7% 1.9-3.1

Poznań 1,100,000 316,000 1.9% 2.3–2.9

Upper Silesia 1,576,000 57,000 7.9% 2.3–3.1

Wrocław 939,000 315,000 6.2% 2.4–3.0

Tri-city 215,000 45,000 4.2% 2.2–3.7

Kraków 159,000 11,000 1.9% 3.5-4.0

Homes & CHomes & CHomes & CHomes & Commercialommercialommercialommercial PropertiesPropertiesPropertiesProperties

City

New apartments* Offices 1H'14 Retail rents**1H'14

Q2 '14

PLN/sq.m

Change

y/y

Headline

rents**

Vacancy

ratio

Retail

centres

High

streets

Warsaw 7,924 -2.0% 11 -25 13.35% 100-120 148

Kraków 6,389 +6.0% 13.5-14.5 3.6% 35-40 78

Katowice 5,602 -3.7% 11.5-13.8 5.4% 35-40 50

Poznań 6,552 +3.3% 14-15 11.5% 35-40 62

Łódź 4,936 +2.6% 11.5-12.5 10.6% 35-40 78

Wrocław 6,092 +2.0% 14.15 10.9% 35-40 45

Tricity 6,092 -4.9% 12.8-13.5 11.5% 35-40 40

*avg, offer-based ** EUR/sq.m/month; Prime units 100-150 sq.m

Country Credit Country Credit Country Credit Country Credit RatingsRatingsRatingsRatings

Agency rating outlook

Fitch Ratings A- stable

Standard & Poor's A- stable

Moody's A2 stable

Source: Rating agencies

Real EarningsReal EarningsReal EarningsReal Earnings

Average gross wage vs inflation.

100

120

140

160

180

Nov10

Jul11

Mar12

Nov12

Jul13

Mar14

Nov14

Wage CPI

Index 100 = Jan 2005. Source: GUS

No. 066 / 22nd December 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter

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Newsletter Editor: Lech Kaczanowski

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POLITICS & ECONOMYNovember industrial output weaker than expected page 2


Azoty breaks ground on new polyamide unit in Tarnów page 2

Bosch-Siemens to buy FagorMastercook's Wrocław business page 3

BANKING & FINANCEMarsh & McLennan to create hundreds of jobs in Poland page 4

PROPERTY & CONSTRUCTIONVienna Insurance Group buys two office buildings in Warsaw page 6

HOSPITALITYUnion Investment buys Warsaw's Hampton by Hilton hotel from S+B page 7

France's B&B to build hotel in Katowice page 7


Polferries tender attracts top Baltic Sea ferry operators page 9

P3 Logistic Parks begins huge BTS project in Mszczonów page 10

UPS acquires pharma logis-tics firm Poltraf page 10

PKP Cargo sees fewer takeover opportunities after CTL talks page 11

KEY FIGURESUp-to-date macroeconomic figures, currency & stock market data and lots of other hard-to-find info pages 15-17

The Agros-Nova deal is Maspex's 17th acquisition and its largest one to-date. Photo: Maspex

Maspex acquires Maspex acquires Maspex acquires Maspex acquires key key key key part of Agrospart of Agrospart of Agrospart of Agros----NovaNovaNovaNova Poland's top juice and pasta producer Maspex has agreed to ac-quire the preserves and ready-made food business of Agros-Nova, another key player in the sector, from private equity fund IK Investment Partners. The transaction, which includes two factories and a portfolio of leading brands, boosts Maspex's turnover in excess of PLN 4bn, strengthening its position as one of the largest Polish-owned food companies. page 8

Invesco pays EUR 226m for Plac UniiInvesco pays EUR 226m for Plac UniiInvesco pays EUR 226m for Plac UniiInvesco pays EUR 226m for Plac Unii Warsaw-listed developer BBI Development and its Flemish partner Liebrecht & wooD have sold their flagship development, the mixed-use complex Plac Unii in Warsaw, to Invesco Real Es-tate. The transaction topped EUR 226, making it one of the larg-est deals on the Polish market in 2014. page 5

poland today business review+ no. 66

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