Poland's Agora to launch new daily, hit Q4 results

Leading Polish media group Agora will launch a new nationwide daily in coming months and the project's high start-up costs will significantly depress its fourth-quarter results, the company said on Tuesday.

In its statement, Agora, owner of the upmarket daily Gazeta Wyborcza, did not give specific cost estimates for the project.

"The new daily will be launched this autumn. It will not be a tabloid but a mid-market newspaper. We are not going to compete for readers with other dailies, but rather fill a niche and broaden the readership in Poland," Agora's CEO Wanda Rapaczynska told a news conference.

Gazeta Wyborcza had long ranked first in terms of readership in Poland, central Europe's biggest publishing market, but lost its leading position after German media giant Axel Springer launched its tabloid Fakt in late 2003.

Industry experts were divided on whether Agora's new daily could survive on the cut-throat newspaper market in the European Union newcomer of 38 million people, where four nationwide newspapers compete aggressively for readers.

Some said that with economic recovery underway, growing advertising budgets in Poland and still very low readership of newspapers, the new title could successfully fill a niche between two highbrow dailies and two tabloids.

"We haven't seen the paper yet but it appears that there is a niche to fill in the market and this project has a chance to succeed," said Michal Marczak, analyst at BRE Bank in Warsaw.

Agora, which apart from its flagship Wyborcza also controls radio stations, a billboard firm and a colour magazine business, saw its shares lose 1.7 percent to 67.80 zlotys by 1251 GMT while the large cap WIG 20 index inched down 0.4 percent.

BATTLE FOR READERS

Sold at half of Wyborcza's price, Fakt attracted readers with the skin-and-scandal formula that made its German daily Bild such a success. In the first half of this year, its average copy sales stood at 519,000 compared with Wyborcza's 467,000.

"There will be another war, but I would not expect it to be a costly as when Fakt was launched. Agora has its own resources and can do (this advertising campaign) through its billboard firm or Gazeta Wyborcza," Marczak added.

To defend its flagship newspaper's position, Agora began to launch various publishing projects aimed at boosting copy sales, including editions of a world encyclopaedia, 19th and 20th century classic novels and dictionaries sold with Wyborcza.

In terms of advertising revenues, Agora, targeted at well-educated readers, retained its lead. In the second quarter of this year, it had 43 percent share in the Polish newspaper ad sector, compared with Fakt's 6.5 percent.

Rapaczynska said Agora estimated the advertising market would grow by around 10 percent year-on-year in both the third and the fourth quarters of this year.

(Source: Reuters)

Public Relations in Poland

Poland gives green light to Donbas takeover of Huta Czestochowa

Poland's competition authority has given the green light to Ukrainian group Donbas to take over Poland's second largest steel producer Huta Czestochowa, once a suspected takeover target of Mittal Steel.

Donbas signed a deal with the Polish Treasury in July to buy the steel company, which produces up to 700,000 tonnes of steel per year, mainly for the shipbuilding industry, and 12 subsidiaries for 320 mln eur.

The Ukrainian company promised to invest 440 mln pln in Huta Czestochowa and to obey an EU demand to reimburse a government grant to the steel company of 4 mln eur.

(Source: Forbes.com/AFX/AFP)

Invest in Poland

AEGON Completes Acquisition of Nationwide Poland

AEGON has completed the acquisition of Nationwide Towarzystwo Ubezpieczen na Zycie S.A. (Nationwide Poland) from Nationwide Insurance Company.
The agreement on the acquisition was announced on June 6, 2005. The company will be renamed AEGON Towarzystwo Ubezpieczen na Zycie S.A. (AEGON Poland). The completion of this acquisition reflects AEGON's previously stated strategy of expanding further in Central and Eastern Europe.

AEGON N.V. is one of the world's leading listed life insurance companies ranked by market capitalization and assets. AEGON's head office is in The Hague, the Netherlands. At the end of 2004, AEGON companies employed about 27,000 people worldwide. AEGON's businesses focus on life insurance and pensions, savings and investment products. The group is also active in accident and supplemental health insurance and general insurance, and has limited banking activities. AEGON's three major markets are the United States, the Netherlands and the United Kingdom. In addition, the group is present in a number of other countries including Canada, Hungary, Slovakia, Spain and Taiwan. AEGON is also active in China, Poland and the Czech Republic.

(Source: AEGON N.V.)

Marketing research in Poland

FX Energy signs Poland pipeline contract

FX Energy Inc. on Tuesday said it has hired Poland-based construction company PBG SA to develop a gas well and pipeline in that country.

Under the contract, PBG will construct surface facilities for FX Energy's Wilga-2 well, a 10.6-mile pipeline and connection to a transmission system. Financial terms were not disclosed.

The Wilga-2 was drilled in 2000 and is expected to produce 4 million cubic feet of gas and 230 barrels of condensate, or liquid hydrocarbons separated from gas, per day. FX Energy operates the well and owns an 82 percent interest. The Polish Oil and Gas Co. owns the remaining stake.

FX Energy holds exploration rights to more than 1.7 million acres in western Poland's Permian Basin.

(Source: AP/Business Week)

Recruitment in Poland

EU probes Polish law, regional aid under threat

Poland could miss out on billions of euros in aid because the European Commission has doubts if the country's newly amended environment protection law meets EU standards, Commission officials say.

On the top of that, opaque and complicated procedures for allocating European Union aid in Poland mean the Commission could also delay or even scrap other huge funds, one official said on Monday, asking not to be named.

"The absorption of EU structural and cohesion funds in Poland is worrying," the official said.

A continued slow flow of EU funds would be a major blow for Poland's new centre-right government, which is due to replace the coalition of Social Democrats defeated in general elections last month.

It could also undermine demands by Poland and other EU newcomers for a substantial increase in spending on them in the bloc's hotly debated 2007-2013 budget.

The EU executive has suspended payments to Poland of more than 1 billion euros ($1.20 billion) from the so-called cohesion fund, which finances big infrastructure projects, because the country's previous environment law was not compatible with EU rules.

EU Regional Policy Commissioner Danuta Huebner told Reuters in a recent interview that although Poland had amended the law this year, the Commission is still not certain the new law meets the standards.

"There are differences between the Commission ... and the Polish side in the initial assessment of this law," said Huebner, Poland's former minister for Europe.

She played down the implications of the dispute, saying it is much too early to say that Poland risks losing EU funds, much needed in the ex-communist country to rebuild its outmoded transport and other infrastructure. "We are still in the period in which I still have no reason to be concerned," she said.

But the Commission official said Poland would have to amend the environment law if it was found sub-standard, with "five points of difference" currently under discussion between the EU executive and Poland.

If the revised environment law were deemed incompatible with EU norms, it would delay the release of the cohesion fund.

Additionally, a highly complicated public procurement law and other regulation delay allocations of the so-called structural funds, which finance smaller projects.

"The complex procedures for appealing in public tenders often block them. This has an impact on structural funds," the official said.

The EU has earmarked some 12 billion euros in aid for Poland from 2004 to 2007. Warsaw counts on at least 60 billion euros in the bloc's assistance from 2007 to 2013.

(Source: Reuters)

Marketing research - Poland

CzechRep to provide Poland with legal aid over Unipetrol case

The Czech side will provide Polish colleagues with legal aid in the investigation into the privatisation of the Czech petrochemical giant Unipetrol, the Prague City State Attorney's Office said.

"They have asked for the recording of a discussion between [former head of the Czech PM's office Zdenek] Dolezel and [Polish lobbyist] Jacek Spyra," the office's employee said.

According to information CTK has gained, the Czech authorities will probably also comply with Poland's possible request for certain Czechs to be interrogated.

Neither side would however say who the people are. According to former information and media speculation, Polish investigators might be interested in former Czech PM Stanislav Gross and current Finance Minister Bohuslav Sobotka (both the senior ruling Social Democrats, CSSD).

The above recording, which the Czech commercial television channel Nova has broadcast, has stirred up the scandal around the privatisation of Unipetrol by the Polish concern PKN Orlen last year.

Jerzy Balicki, spokesman for the appellate prosecutor's office in Krakow, said in early September that Poland is planning to send to the Czech Republic another request for legal aid, but did not elaborate.

The Krakow prosecutor's office is interested in the Unipetrol privatisation in connection with the investigation into the "fuel scandal."

The scandal involves extensive fuel frauds, in which some 1300 firms are entangled.

"Within the investigation into the 'fuel scandal' we are trying to gather the maximum possible quantity of information on the key business decisions made in state-run companies, that is in PKN Orlen as well," Balicki said previously.

(Source: Ceske Noviny)

Legal advisory for foreign companies in Poland

Danisco taps Eastern Europe's probiotic dairy trend

Eastern Europe has reinforced its reputation for dynamic dairy innovation as Poland’s Bakoma launches a new range of probiotic yoghurts using Danisco’s HOWARU cultures.

Bakoma, one of Poland's leading dairy firms, will make the probiotic Bifido yoghurts available in plain and strawberry flavours.

“We wanted a premium well-documented probiotic strain to clearly position our new range of health-related yoghurt drinks as a benchmark,” said Krystyna Kotecka of Bakoma.

“Danisco brought us not only a strain with many clinical surveys to support our health claim but also the HOWARU brand which is appealing to young people, one of our key target groups.”

The move signals further development of the branded ingredients trend with the Bakoma range set to be co-branded as BACTIV – HOWARU.

The launch from Bakoma also enhances Eastern Europe's burgeoning reputation as a centre for cutting edge dairy products and innovation.

The Russian dairy sector is considered to be the most innovative within the country's food industry, and recent research showed that dairy was the main sector in which the majority of Russians understood the idea of functional foods and value added foods.

A number of firms have already tapped into this trend. For example, the Lebedeanskii dairy company has begun producing bio-ice cream with orange punch under its Belaya Corova trademark.

Two probiotic products, BioMax and Dr Bifi, have also received large popularity in Russia since being launched by leading domestic dairy firm Wimm-Bill-Dann.

Ingredients firms too are increasing their focus on Eastern European dairy markets. Danisco is currently undertaking a global cultures expansion programme that is expected to include investment for its cultures plant in Olsztyn, Poland.

And recent promotional tour across the region by Danisco's rival, natural ingredients firm Chr Hansen, revealed an array of new product ideas.

Maike Lisberg, Chr Hansen's development manager, offered a kefir product that was specially adapted for the Russian market; using lactate products and yeast instead of traditional funguses. It tastes like usual kefir but also contains fruit aromatisers.

The firm also displayed a variety of value-added product prototypes, such as sintered cheese with cheddar flavor, a liquid drink yoghurt based on 30 per cent whey, a yoghurt desert with chocolate bits and mint flavour as well as a soft cheese with Roquefort cheese flavour and Italian herbs.

(Source: Decision News Media SAS)

Business reports form Poland

Poland will still fight EU sugar reform

Poland is unlikely to curb the country’s strong opposition to EU sugar reforms as Commission representatives look for common ground to break the ‘no’ camp.

A new coalition government between Poland's two main centre-right parties, the Christian democrats and the liberals, now seems likely in Poland after last week's elections.

The new era, partly run by a Civic Platform party more open to free markets, could offer Poland and the EU Commission a chance to reconcile their differences over the proposed reforms to the EU sugar regime.

Yet, this seems highly unlikely according to Dr. Jan Rybski, of the Polish Sugar Federation. Rybski told to Cee-FoodIndustry.com that, from his information, he expected the new agriculture minister to be a Christian democrat.

“If yes, the Polish position to EU sugar reform will remain hard against any solutions,” he said. The Christian democrat Law and Justice Party is still fairly pro state interference.

Current reform proposals include a 39 per cent cut to EU sugar prices over two years; something generally expected to hit sugar and sweetener suppliers but bring cost-savings for food and drink producers.

Rybski said the problem is that the Commission's reform proposals are not only viewed as bad news for Polish sugar beet industry but for the whole Polish economy; something the centre-right parties were elected to improve.

Poland currently has the highest unemployment rate in the EU and has been hovering at about 18 per cent for more than a year.

A recent situation report by the US Foreign Agricultural Service (FAS) said Polish officials opposed EU plans to merge A and B quotas: sugar for domestic use at guaranteed prices and sugar for export at guaranteed prices.

Poland has a small B quota (92,000 tonnes), which means any reduction in a combined quota could force the country to import sugar to meet domestic demand even though it is the EU's third largest sugar producer behind Germany and France.

Rybski said he was also concerned that there was “no money in the proposal for the investments” needed for restructuring. The FAS report said new equipment was a primary need for many Polish sugar producers.

Rybski also believes Polish producers will seriously struggle to cover their production costs. The FAS said a number of beet farmers worried that processors will move beet production to larger, more competitive farms in France and Germany.

Commission representatives recently visited Polish officials for an exchange of views on the current sugar reform proposals.

The worry for the Commission is that it knows Poland's stance could be pivotal in forming an anti-reform alliance in the Council of Ministers, because of the weighted voting system set according to population size.

Poland's opposition, along with that of Italy, Spain, Portugal, Finland, Ireland and Greece, would be enough to block reform plans in the Council and prevent the Commission from making progress before the WTO meeting in December. The WTO has twice ruled the EU sugar regime illegal for maintaining prices at three times the world level.

Britain, France and Germany may look to bring political influence to bear on the ‘no' camp, whose members are not necessarily against all aspects of the reform plans. The Commission believes most countries recognise the need for some reform.

A divide and rule strategy may also break up the bloc, but would also likely lead to some kind of concession from the Commission. The FAS reports that Poland has already been promised the same compensation levels as farmers in the pre-enlargement EU-15.

If the anti-reform bloc continues, it could also give strength to others. Slovenia's agriculture minister, Marija Lukacic, recently said the reform plans were far too radical, according to a local business journal.

Slovenia has long argued that reform threatens the existence of its only sugar production factory. The country would prefer slower reform and more compensation.

(Source: Decision News Media SAS)