Poland seen as untapped trade partner

It is by far the largest of the new countries in the European Union (EU), which in May of 2004 gained fast-track membership into the biggest commercial club on earth.

In fact, with nearly 40 million people, Poland accounts for roughly half of the population and half of the GDP of all 10 new EU members, and in the first three quarters of 2004 alone, Poland's total exports rose by more than 30 percent.

But despite the fact that Polish industrial output swelled by 6.4 percent in 2004, Mexican businessmen have so far welcomed this new potential trade partner with resounding disinterest.

Although the free-trade accord Mexico signed four years ago with the EU now includes access to all 25 member nations of the expanded bloc including Poland two-way trade between Europe and Mexico registered just over a 16-percent rise between 2003 and 2004, going from US23.5 billion to US27.5 billion. In the case of Poland, the increase was even more unimpressive: from US225 million combined trade in 2003 to 250 million dollars in 2004.

For 2005, the comparable figure is expected to be US260 million, up only 4 percent compared to last year.


"Geographic distance is certainly a factor in discouraging bilateral trade," explained Polish Ambassador to Mexico Wojciech Tomaszewski in an interview with The Herald Mexico last week. "And there is a certain degree of unawareness on both sides as to what can be accomplished in terms of commercial cooperation."

The fact that most Mexican exporters have their eyes firmly fixed on their northern neighbor doesn't help much either, although Tomaszewski was too diplomatic to point this out.

"The balance of trade is fairly even, but the numbers just don't satisfy the economic expectations or potential on either side. What we are seeing is really an untapped potential."

But Tomaszewski said that the Polish government is anxious to increase its commercial ties with Mexico, and to that end, it has been encouraging the exchange of trade delegations on both sides of the Atlantic.

This year, two business missions from the states of Jalisco and Mexico visited Warsaw looking for ways to boost bilateral trade, and next month a commercial delegation from Poland is due to come here to scout for Mexican exporters and importers.

"I would be very happy to see our combined trade show a significant increase in the next 12 months," Tomaszewski said.

"There is a solid basis of friendship for our commercial ties to build on. Our two countries have similarities in our history, and Mexico has long shown its solidarity with the Polish people. Mexico was one of the first countries in the world to condemn the invasion of Poland by the Nazis, and even took in about 2,000 war orphans in the 1940s. The friendship is definitely there, we just need to build more commercial bridges."

Tomaszewski added that Mexico now constitutes Poland's second largest trade partner in Latin America, after Brazil.


Currently, Poland is working to broaden its portfolio of products its sells to Mexico, he said.

Two years ago, the envoy said, about 37 percent of Poland's sales to Mexico were composed of enriched dried milk powder to the state-run Liconsa dairy company. Today, powdered milk accounts for just 8 percent of Poland's exports to Mexico.

Poland is now selling Mexico a wide range of goods, including auto parts and other manufactured products, he said.

Mexico, in turn, sells Poland agricultural products, semiconductors, electronic parts and razor blades.

"It is interesting to note that about 90 percent of the manual razors sold in Poland today come from Mexico," Tomaszewski said.

As for investment, Tomaszewski said that, according to Mexican government statistics, there are 12 Polish companies with capital holdings here the most important one being the Nowy Styl furniture factory in the State of Mexico, which opened a few years ago.

"I think that total Polish investment amounts to less than US2 million," he said. "And there is as yet no Mexican investment in Poland, although Cemex is considering building a plant somewhere outside Warsaw."

Because both countries are net recipients of foreign capital, there is not likely to be much increase of joint-venture projects in the near future, he said.

"So, for now, we are pushing to build two-way trade," he concluded. "This will be beneficial to both sides."

Source: The Herald Mexico

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Poland-Hungary Strategic Cooperation for Railways

Heads of PKP and MAV - Andrzej Wach and Gyula Gaal signed the first agreement on strategic bilateral cooperation on freight transport. The agreement was signed during a meeting of directors of rail companies from Slovakia, Czech Rep., Poland and Hungary held in Wysehrad in October.

Opening the rail freight market scheduled for 2007 creates new tasks and opportunities for CEE railways - Andrzej Wach said.

CEE railways representatives also discussed means of financing regional passenger services, common action in the scope of liberalization processes and coordination of works in EU institutions. Participants agreed that the most important issues for the moment are access fees to rail networks and engaging governments to take actions towards developing rail markets.

Gyula Gaal declared that he is interested in taking advantage of PKP's experience in company's reform as at the moment MAV is planning to separate infrastructure management from operations. Hungary spends four times more on MAV development per capita than Poland (28 vs 7 euro).

Source: Railway Market magazine

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Western Manufacturers Fight for Orders in Poland

Swiss rolling stock manufacturers want to employ 300 to 500 people in Poland to manufacture EMUs. There is only one condition - Stadler has to sign a contract to supply them. The company is fighting for three contracts in Poland: 11 EMUs for PKP Regional Operator (PKP PR) and for Silesia and Mazovia regions (14 EMUs), as well as 15 low-floor trams for Warsaw urban traffic operator.

The first two tenders are about to be finished; it is possible that winners will be known by the end of the year.

Besides Stadler also Bombardier and Polish manufacturers: Newag, ZNTK Mińsk Mazowiecki and PESA Bydgoszcz.

The Mazovia/Silesia tender is supposed to be finished months ago, but because of protests by Polish manufacturers signing of the contracts was postponed. Polish manufactures claimed that they were discriminated as the ordering part requested that any bidding supplier has to prove his experience in EMUs manufacturing during last 3 years. No EMUs have been manufactured in Poland since 1990s. The court sustained this condition and now it is only Stadler and Bombardier fighting for the contracts worth 350 million PLN (88 mln EUR).

It is also said that this order is jut the first of a number of orders that are to appear in the nearest future.

Stadler announced that it is going to build a manufacturing facility in Siedlce (Mazovia) and invest 12 million EUR. Stadler Poland is going to launch in 2006.

At first the Siedlce facility is going to be engaged in final assembling of units produced in Switzerland. In the future Siedlce will manufacture aluminum car bodies. Stadler sees Siedlce and Poland very attractive for this kind of task due to our country's good geographical position.

Siedlce could produce 2 Flirt type units and 12 bodies a month.

At present Stadlers competitor employs in Poland 1200 people with another 2000 employees working for the company's cooperators. Office for purchases coordination for CEE region is also situated in Poland. What is more creating a maintenance center in Mazovia is planned. Ordered units could be manufactured in Bombardiers facility in Wroclaw (former Pafawag).

Source: Railway Market magazine

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he deal signed by Russia's Gazprom and Germany to run a pipeline under the Baltic sea leaves Poland increasingly isolated, both on its eastern and western flanks, and the country is looking decisively to the United States as a strategic partner, rather than Germany, which has "betrayed" it, George Kolankiewicz, director of London University's School of Slavonic and Eastern European Studies told Adnkronos International (AKI).

After the conservative Law and Justice party's candidate Lech Kaczynski's secured the Polish presidency on Monday, and the party's narrow general election victory last month, "the country's tone towards Moscow and Berlin will become more shrill and its stance more confrontational," Kolankiewicz predicted.

The four billlion euro pipeline deal signed in September between Gazprom and Germany which approved a 1200-kilometre pipeline under the Baltic Sea between the Russian port of Wyborg and the German city of Greifswald is still "an open wound" with Poles, he said.

The planned pipeline bypasses the Baltic countries and Poland - for whom the rights for existing pipelines that cross the country are an important source of revenue, heightening Poland's mistrust towards Germany and Russia, which dates from World War Two, Kolankiewicz said. The pipeline will from 2010 provide vast supplies of gas to western Europe, notably Germany and - in the future - Britain.

The pipeline's initial capacity will be around 27.5 billion cubic metres per year, which will eventually double to 55 billion cubic metres. Gazprom has a 51 percent stake in the pipeline, and the German Ruhrgas and Wintershall groups each hold a 24.5 percent share. The deal has stirred up bitter controversy in the eastern European countries, who have vowed to oppose the project on environmental grounds and to lobby Germany's new government over the issue.

Gazprom currently provides one-quarter of Europe's gas, and Germany is its largest customer. "The problem is that even if the European Union wanted to show it understands Poland's worries, it can't afford to jeopardise the new climate of 'rapprochement' with Russia, which it needs if Europe is to resolve its energy problems," Kolankiewicz concluded.

(Source: AKI)

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France Telecom cuts forecast as Poland goes mobile

France Telecom on Thursday cut its sales growth forecast for the year, blaming an erosion in the customer base of its Polish residential business. In mid-afternoon trading, the partly state-owned French group's shares had dipped 5 per cent to €22.02

In its scheduled third-quarter sales announcement, France Telecom had said that it was expecting "nearly 3 per cent" pro forma sales growth in 2005. It had previously been targeting an increase of between 3 and 5 per cent.

In many markets, traditional fixed-line connections have been under attack from services that allow people to make cheap telephone calls through the internet, such as Skype.

In Poland, however, France Telecom said customers had been shunning traditional fixed-line connections to rely on their mobile telephones instead. Like-for-like sales at its Polish residential business fell 7.9 per cent in the third quarter as a consequence.

In contrast, like-for-like sales for its mobile division in Poland grew by 13.1 per cent – but this was not enough to compensate for the decline in fixed-line revenue, France Telecom said.

The French company, owner of the Orange mobile telephone brand, also said that it would reshuffle its assets in Poland. It is selling its 34 per cent stake in Centertel, Poland's second-biggest mobile telephone operator, to TPSA for 4.88bn zlotys (€1.2bn).

France Telecom will retain a controlling 47.5 per cent stake in TPSA. Michel Combes, the France Telecom executive in charge of "financial balance and value creation", said the move would simplify the structure of TPSA.

Overall, France Telecom's group sales rose 3.8 per cent to €12.3bn in the third quarter. It confirmed that it was on track to meet its full-year target of more than €18.5bn gross operating profit, having posted €4.862bn in the third quarter.

Although growth was strong in the French mobile telephone division, the France Telecom arm aimed at business clients saw sales fall 7.4 per cent.

Mr Combes said France Telecom wanted to distance itself from "multiple rumours in the Anglo-Saxon press" about possible acquisitions. The French group has been touted as a possible buyer for the UK's Cable & Wireless.

On Thursday, however, it said there was "no need for any major acquisitions in Europe" to implement its new three-year strategy. It is not thought to be interested in C&W. However, the French group said that it would consider deal opportunities "in countries with high growth potential".

(Source: FT.com/MSNBC)

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France Telecom to sell 34 pct stake in Poland's Centertel for 4.88 bln zloty

France Telecom said it has agreed to sell to Telekomunikacja Polska (TP) a 34 pct stake in their joint venture Centertel, for 4.88 bln zloty.

TP, in which France Telecom holds a controlling 47.5 pct stake, will own 100 pct of Centerel after the transaction.

The deal will have no impact on France Telecoms net debt position.

It will allow TP to implement an integrated operator strategy, while enhancing its capital structure and ensuring sufficient financial flexibility for future dividend distribution policy, the French incumbent operator said.

Centertel is Poland's second largest mobile phone operator, with a market share of 33.5 pct at end-September. It had sales of 5.64 bln zloty in 2004.

(Source: AFX)

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POLAND: Ambra FY profits on the rise

Ambra has posted a healthy rise in profits for its fiscal year to 30 June. The Polish wine maker and distributor said yesterday (26 October) that consolidated net profit for the year hit PLN15.6m (US$4.8m), up from PLN10.5m in the corresponding period a year earlier.

Operating profit and gross profit also increased, to PLN29.3m and PLN25.2m from PLN26.6m and PLN19.5m respectively.

Consolidated sales fell sharply in the year, however, to PLN370.7m from PLN523.8m.

Earlier this year, Ambra forecast consolidated net profit for fiscal 2005-2006 of PLN20m on revenues estimated at reaching PLN440m.

(Source: just-drinks.com)

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POLAND: High hopes for Carlsberg by 2010

Carlsberg’s Polish unit is looking to up its market share by the end of the decade. Carlsberg Polska said yesterday (26 October) that it hopes to increase its share in the country’s beer market from the present 14% to 15%, to nearer 20% by 2010.

Making the claim to local reporters, company spokesperson Leszek Siwecki did not provide any further specific details.

For this year, the brewer forecasts sales of between 4.3m and 4.4m hectolitres, a slight rise from 2004, when Carlsberg sold 4.16m hectolitres, a year-on-year increase of 8%.

For the first nine months of 2005, the company saw beer sales also rise by 8% year-on-year to 3.4m hectolitres, with sales in the third quarter coming in at 4% above the same period a year earlier at 1.3m hectolitres.

(Source: just-drinks.com)

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TPSA cuts sales forecast, to buy rest of mobile unit

Dominant Polish telecoms provider TPSA cut its sales forecast for the second time this year after a weak third quarter, but kept other targets and said its dividend would triple year on year.

The company also said on Wednesday it had struck a deal with its strategic investor France Telecom to buy 34 percent of mobile unit Centertel for 4.88 billion zlotys ($1.50 billion), giving TPSA full control of Centertel.

Taking 100-percent ownership of the unit is part of TPSA's strategy to become an integrated operator and boost its presence in the growing mobile segment.

TPSA said nine-month sales fell by a deeper-than-expected 1.5 percent, and cut its forecast for full-year sales from flat year-on-year to a decline of 1.0 to 1.5 percent -- after ditching a forecast of 1 percent growth just three months ago.

"We want to be cautious -- this is the second time we've changed the forecast this year, and the market is changing quite rapidly," Chief Financial Officer Roger de Bazelaire told a conference call with investors.

In 2003 and 2004, TPSA was also forced to cut its sales growth targets mid-year, as competition from mobile operators and alternative fixed-line players proved tougher than management had expected. It missed the new targets both times.

De Bazelaire said the price for Centertel valued the entire company at just under seven times EBITDA, or earnings before interest, tax, depreciation and amortisation. He declined to give the precise EBITDA value he used for this calculation.

"In my view, it would be slightly below seven (times EBITDA). That's quite a fair price if you look at what's happening in the wireless world -- you've seen transactions at much higher prices," De Bazelaire told the conference call.

Before the deal was announced TPSA shares closed with a loss of 2.1 percent before the deal was announced, underperforming the blue-chip WIG 20 index's 0.9 percent loss.

Analysts credited TPSA for keeping both financial and operating costs under control and reducing its tax bill, but during the conference call the company confirmed analysts' earlier expressed belief that the improvements were one-off events rather than fundamental changes.

(Source: Reuters)

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China National Coal unit signs jv deal with Poland's Zabrzanskie

A subsidiary of China National Coal Group has signed an agreement to set up a joint venture with Zabrzanskie Mechanical Works, a Polish company, to tap into the coal shearer manufacturing business, the China Daily said quoting company officials.

China National Coal Mining Engineering Equipment Group Corp's (CME) vice-president Dai Qiuliang said investment details still had to be finalized.

CME also signed two co-operative deals with the UK's David Brown Engineering Ltd and Parsons Chain Co yesterday.

(Source: AFX/Forbes)

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TenStep, Inc. Announces Opening of New Warsaw, Poland Office

TenStep, Inc., a methodology development, consulting and training company founded by industry veteran Tom Mochal, announced the official opening of a new office in Warsaw, Poland, to support and service the Polish-speaking marketplace. This announcement coincides with the October launching of the official www.TenStep.pl website, and the recent TenStep Worldwide Global Conference in Rome, Italy.


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Potato and onion at half price in Poland comparing to Ukraine

Fast vegetable price growth has been observed in Ukraine recently, so that prices on major vegetables increase the price level for the same products in the neighboring Poland.

We'll remind that vegetable prices used to be lower than in Ukraine for many years, but this year the prices are equal for the first time. Moreover, for some time Ukrainian prices were lower than in Poland. In fact, it meant absent supplies of cheap Polish vegetables on Ukrainian market. However, vegetable prices stabilized in Poland, and in Ukraine they go on growing dynamically. It concerns potato at most, as severe deficit on this product is obvious on Ukrainian market.

The prices on this commodity exceed in average 70% over relatively high potato prices in Poland. White cabbage prices surprise the most, as they nearly 50% higher the wholesale prices in Poland, despite of the absence of any fundamental reasons for that. Onion price has grown to such extent in Ukraine that it exceeded 80% wholesale price in Poland. Large wholesale volumes of bulb onion can be bought USD 0.12-0.14/kg on Bronishe market near Warsaw, and even cheaper on farms. Wholesale price on this product reaches USD 0.25-0.29/kg in Ukraine. Only carrot price differs insignificantly in both countries. Wholesale prices on red beets are just a little bit higher in Ukraine than in Poland.

Despite of the fact that prices on Polish and Ukrainian markets do not depend much from each other to the present moment, from year to year they tend to. At the nearest future price dependence of two large produce countries will increase, according to the evaluations of the Agricultural Marketing Project.

(Source: FreshPlaza)

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Fortum Oyj: Fortum grows in poland

Fortum has signed a contract with the city of Wroclaw in Poland regarding the acquisition of a majority holding in the city's district heating company MPEC Wroclaw S.A. Fortum has also issued a public tender offer for all outstanding shares in the company. The acquisition is an important step in implementing Fortum's growth strategy. After the acquisition Fortum will have three heating companies in Poland, with aggregate net sales of more than 110 million euro and annual heat sales of 3400 gigawatt-hours (GWh). MPEC Wroclaw is a listed company with net sales of 70 million euro and annual heat sales of 2100 GWh in 2004. The company employs 260 people. By virtue of the contract, Fortum undertakes to purchase the preferred and ordinary shares held by the city that jointly grant a majority in the MPEC Wroclaw S.A. The city of Wroclaw will sell shares representing 48.7% of the share capital and 70.1% of the voting rights. Together with a share transaction completed earlier this year, the acquisition will increase Fortum's holding in the company to 53.7% of the share capital and 73% of the voting rights. Fortum has issued a public tender offer for all minority shareholders in the district heating company as well. The sales price of each ordinary share is PLN 9.6 and the price of each preferred share is PLN 13.6. Fortum will pay a total of PLN 275.4 million (i.e. 70.5 million euro) for the shares held by the city of Wroclaw. Fortum will additionally pay up to PLN 182.6 million (i.e. 46.7 million euro) for the minority shareholders' holdings if they accept the offer. According to the legislation applicable to the privatisation of public companies, the employees of MPEC Wroclaw are entitled to receive 8.6 % of the share capital as a consequence of the acquisition. Employees may not sell these shares before two years have passed after the completion of the acquisition. Fortum will negotiate the purchase of shares with employee representatives. "Poland is an important market area and we participate actively in the privatisation of its heat sector. Wroclaw is the fourth biggest city in Poland and the acquisition of its heat distribution company is an important step to Fortum", says Senior Vice President Timo Karttinen from Fortum.

(Source: Fortum Corporation)

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Playboy TV to Be First Channel Carried Via Poland's ASTER Internet Network

ASTER, one of the largest providers of telecommunication services, has launched a pilot project in Warsaw and surrounding areas to deliver television via internet network. Playboy TV is the first channel made available by ASTER. ASTER is the first telecommunications operator in Poland to offer this innovative service.

This service allows ASTER subscribers to access a TV channel using a computer connected to the ASTER internet network. TV signal is transformed into IP transmission and then passed via internet network to all connected ASTER subscribers. It can then be seen through the internet browser using the RealPlayer application. This is the first time that the capabilities of IP Multicast technology have been applied in Poland. This technology allows for the optimum use of the existing infrastructure and ensures the maximum quality of a transmitted signal.

The program may be accessed via www.aster.pl. The service may be purchased through the Wilga Independent Administration System available on the ASTER website. Playboy TV may be accessed after logging onto the system with the use of the ASTER internet link and unique log-in and password.

(Source: PRNewswire)

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Poland is “at the heart of GKN’s global manufacturing strategy”

GKN plc, the UK’s largest Tier 1 automotive supplier, has formally opened a new automotive precision forging plant in Olesnica, Poland, the latest result of a €75 million investment programme by GKN in Poland.

GKN Chief Executive Kevin Smith said at the event attended by the entire GKN board: “We have a young and highly motivated team in Poland and they have achieved remarkable success. They have transformed our business in Olesnica from a purely domestic supplier to a truly European operation supplying components to eleven customers in nine countries.

“Today our plant in Olesnica is at the very heart of our global manufacturing strategy.

“We intend to use this new technology to develop Olesnica which is rapidly becoming one of our most important plants in Continental Europe. Our experience in Poland has been a happy one and confirms the competitive advantages which are claimed for this country such as a central position within the European mainland and skilled, dedicated people.”

In 1996 GKN acquired the driveline manufacturing operation of Fiat located in Twardogora and within a year had started the construction of a new plant in Olesnica which was formally opened in 1999. In 2002 GKN employed 300 people in Olesnica. Next year the workforce will number almost 500. Since 2002 sales from Olesnica have increased by 300% and its customers now include Fiat, Ford, Honda, Hyundai, Opel, Suzuki, Toyota, Volvo and Volkswagen.

(Source: Industry news)

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Poland to Keep Interest Rates Unchanged, Surveys Show

Central bank in Poland will probably leave its benchmark interest rates unchanged on concern government spending is stoking inflation, surveys of economists show.
In Poland, the Law & Justice and Citizens' Platform parties are squabbling over spending cuts in talks to form a coalition cabinet following Sept. 25 elections. At risk are central bank plans to lower rates to the European Central Bank's 2 percent level before adopting the euro.
Poland's annual inflation rate was 1.8 percent in September and may rise as economic growth spurs consumer spending and the new government proves unwilling to trim the deficit, central bank policy maker Dariusz Filar said Oct. 19.

The Law & Justice party and Citizens' Platform, which took first and second place in Poland's parliamentary election, have been unable to form a coalition for a month partly because of disagreements over welfare spending, the size of tax cuts and a target date for adopting the euro.

Law & Justice, which will control the premiership and the Finance Ministry, wants to ditch the outgoing government's plan to adopt the euro in 2009 so it can slow the pace of budget cuts needed to make the deadline.

(Source: bloomberg.com)

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