Poland Losing Its Main Attraction - Low Cost Polish Workers

Warsaw, Poland 13 August, 2007 Foreign investors have been flocking to Poland with the expectation of finding a good supply of well educated, low cost Polish workers. But they continue to flee the country as recruiting firms tell companies that they must hire specialists to help them find those that are left.

According to one recruiting Polish recruiting firm, " radical change has (sic) created special challenges for the foreign investors who are looking to benefit from the booming economy, as well as for the companies that have already set up shop in the former communist land."

And those changes strike at the base assumption made by many companies in their decisions to come to Poland of having a good labor pool to choose from.

Poland's Ministry of Labor admits, in spite of an official unemployment rate over 12%, to a shortage of several hundred thousand workers and is looking to the Far East, China and India for talent. Poland Turns To India To Replace Departed Polish Workers And even with that ineffective program in place, it also has opened its labor markets to temporary workers from Russia and Ukraine.

Such admissions have not stopped foreign companies from opening shop in Poland.

Against heavy competition for what is left of the Polish labor force, companies are driving wages up to attract people. And those wages are going up rapidly. Just during the second quarter of this year the average wage went up 8.9%.

But the increased wages have not seemed to phase the Polish workers who want to leave Poland. The outflow of workers continues. And according to polls, millions more want to leave. Millions Of Polish Workers Want To Leave Poland

� the situation has changed since foreign businesses first flocked to the country to tap into the exciting new market at the heart of continental Europe. Then, its work force was young, high skilled and low-cost. Since EU accession, however, wages have risen as Poles have realized that their market value may be higher than their salaries. There has also been a mass exodus of its workers in lower paid professions to other EU labour markets. Special Situation

But it has not been just workers in the lower paid professions that have gone West. The emigration wave has not been discriminatory. All labor sectors have been affected.

With European money pouring into the Country and the expatriate Poles sending money home, the economy is booming. And the boom is creating a higher demand for labor making the shortage worse.

Foreign investors considering Poland do not seem aware that there is a new reality in Poland. And those that are here now, are being brought up short as they are being confronted with a shrinking labor pool and rising wages.

No longer can one just place an advertisement in the help wanted sections of the newspapers and expect results. A company must put significant effort into even getting applications for work openings no less finding the right people for a position.

The problem can get worse if the United States grants visa free travel to Poles. That would create another destination for those frustrated Poles who would choose the United States over Europe.

There is no sign of a change in the desire for Poles to leave Poland and no sign of any significant number of people interested in coming back.

And the realty of the new Poland will slowly sink in as Poland loses its most attractive asset for foreign investors. And that might be too late for some.

Source: masterpage.com.pl

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Finland's Eltel buys Poland's TKC

Finland's Eltel Networks said in a statement Monday it had signed an agreement to buy Polish peer TKC.

"With this acquisition, Eltel Networks will further strengthen its position in Poland as the leading service provider to the Polish telecom industry, servicing both fixed and mobile networks," the statement added, not revealing the value of the deal.

TKC employs some 580 people in Poland

Eltel had bought another Polish telecommunications company, K-Tel, in February.

Source: newsroom.finland.fi

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Poland’s Economy Outperforms Its Quarrelsome Leaders

ntra-European bickering may derail the country’s economic growth.

Conventional wisdom says investors are cautious with countries that have abrasive and controversial foreign policies. So why is Poland, despite increasingly testy relations with Russia, Germany, and other EU countries, still a healthy target for investment? Polish Finance Minister Zyta Gilowska says Poland is facing “five fat years” due to lower deficits, lower unemployment, strong exports, a stable banking sector, and healthy pension and mutual funds. Compared to many of its Central and Eastern European (CEE) neighbors, the country is considered a popular choice for foreign direct investment.

According to the “European Attractiveness Survey 2007,” from Ernst and Young, Poland ranked seventh globally among FDI destinations. Due to its productivity, human capital, low labor cost, and flexible employment force, Poland ranked number one in terms of jobs created by FDI with 31,115 new jobs in 2006. This was a considerable boost since Poland has a smaller population of 38 million people. The UK ranked second with 27,481 new jobs created followed by France with 20,509. The Czech Republic and Romania round out the top five.

Poland is also not going to win any friends by picking fights with Germany.

FDI, according to Matthew Bishop in the book Essential Economics, is investing done mainly by companies in another country, and can include expanding an existing local business. It often takes place trough the target country’s stock market, and this is where Poland has outperformed among its peers. Poland began its mutual fund industry in 1992 and was careful to regulate the industry and bring it along slowly, creating what is now a “strong and confident sector.” The country also enjoys one of the healthiest banking sectors among CEE countries since it managed to avoid the banking scandals that plagued Russia and the Czech Republic.

Poland has also, surprisingly, been selected to host the Euro 2012 soccer tournament—which should be a shot in the arm to future tourism. It is enjoying one its lowest budget deficits and highest GDP growth rate in years. Its Central Statistics Office boasts that last year Poland had a 6.1 percent growth rate and is expected to eclipse 6 percent again this year. Unemployment is finally expected to drop below 10 percent.

However, when it comes to foreign policy, Poland today finds itself in a rather lonely position in the EU. It seems the country can not break away from controversy. The latest incident is an unfortunate Polish magazine cover depicting a bare-breasted German Chancellor Angela Merkel nursing Polish rulers Jaroslaw and Lech Kaczynski. The magazine editors were attempting to show that Germany is in control of Poland and that Merkel acts as an “evil step-mother.” This merited a response from a German newspaper that called the Kaczynskis “poison dwarves.”

The latest EU summit in June was another case in point. Poland, a small nation within the EU, has long advocated an EU voting system based on equality among countries, rather than equal voting power from population. The Poles gave up on this idea almost immediately after the negotiations started, but not before Polish Prime Minister Jaroslaw Kaczynski said that Poland’s population would have been a lot larger if it had not been for the Nazi Holocaust. This comment, infuriated the Germans even more and made other EU countries grumble, since most members of the EU had always observed a moratorium on dredging up the Nazi past.

Although Poland seems to be enjoying a strong economy and is still a good target for foreign direct investment, it is not clear how long the country’s leaders can keep taking a unilateralist and nationalist approach through its relations with the EU and Russia. Most Poles still favor membership in the EU with 86 percent approving of membership in recent polls. Eurosceptic countries such as the United Kingdom can thumb their noses at the EU, but Poland is a long way from the power and prestige of the UK. Poland is also not going to win any friends by picking fights with Germany. All of this quarreling distracts Poland from what should be its main foreign and domestic policy goals—to mend fences with the Russians, improve stability, and grow the economy.

Brent M. Eastwood is an Adjunct Professor at George Mason University School of Public Policy.

Source:By Brent M. Eastwood, american.com

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PKN Orlen Q2 profit up on Mazeikiu, inventory effect; Lotos disappoints UPDATE

(Adds PKN CEO comments from conference call paras 13-14, closing share price)

WARSAW (Thomson Financial) - Poland's largest oil group PKN Orlen beat market forecasts with a 28-pct jump in second-quarter net profit as a recovery at its Lithuanian unit drove sales volumes up and the value of its oil stocks rose on surging crude prices, pushing shares up almost 4 pct.

Earnings at local peer Lotos, which refines four times less oil than PKN, declined 16 pct last quarter, below market expectations, after the company reported weaker sales volumes on lower crude oil production and falling demand for heating oil.

However, both companies, the subjects of merger speculation, posted sharply higher results than in the previous quarter after a 19-pct jump in crude prices increased the value of their oil stocks, while refining margins widened.

Market conditions are likely to be less favourable in the last six months of this year, PKN executive in charge of planning and controlling Jerzy Pazura told a news conference.

'The refining margins will fall in the second half, while the Ural/Brent price differential is unlikely to differ much from what we saw in the first half,' Pazura said.

PKN, Poland's largest company by sales, earned 1.11 bln zlotys in the second quarter compared with an average analysts' forecast of 955 mln zlotys. An inventory revaluation added 479 mln zlotys to its bottom line, the company said.

The group has also benefited from the recovery at its recently acquired Lithuanian unit, Mazeikiu, which swung to an operating profit of 79 mln zlotys in the second quarter from a 262 mln loss in the first three months of the year after a fire almost halved its output.

'Mazeikiu has finally started to earn money,' said Ludomir Zalewski, analyst at PKO BP brokerage in Warsaw. 'The group is consequently raising Mazeikiu's production, and additionally the Lithuanian refinery has benefited from a positive macroeconomic environment.'

PKN revenues jumped 20 pct year-on-year to 16.2 bln zlotys as it more than doubled sales at its retail and chemical units as demand rose in a fast-growing economy. It also said positive conditions in its petrochemicals segment, which earned 349 mln zlotys, should continue for the rest of the year.

PKN chief executive Piotr Kownacki said the company could float its Anwil chemical unit on the Warsaw bourse by the end of this year as it seeks funds for its 3.5 bln zloty annual investment budget.

He also said the company could revisit plans to issue up to 1 bln eur in Eurobonds in September, but does not rule out abandoning the sale if market conditions remain volatile.

Kownacki reiterated he was in favour of a merger with Lotos but said it was up to shareholders, including the state treasury, which holds controlling stakes in both companies, to decide.

'It is clear that such an event would be profitable for the whole Polish economy as well as the companies,' he told a conference call with analysts later.

'But it is not up to us to decide. I would not try to guess when it would happen, or if it will happen.'

Kownacki has launched a charm offensive to convince the government to merge both refiners as part of an attempt to fend off competition from foreign oil majors.

Lotos' response has been tepid and its CEO said earlier this month the group must first complete its multimillion dollar investment programme, which would boost its production by three quarters to 10.5 mln tonnes per year of oil by 2012.

Net profit at Lotos declined to 234 mln zlotys in the second quarter versus 253 mln seen by analysts.

Its revenues fell 6 pct to 3.07 bln zlotys as the company cut production at its small upstream Petrobaltic unit and weaker demand for heating oil drove sales volumes 1.7 pct lower.

'Lotos was less successful than PKN in taking advantage of macro environment as it couldn't offset weaker diesel crack spreads with stronger margins on gasoline,' Bram Buring, an analyst at Wood&Co in Prague, said in a note to clients.

Lotos shares lost 1.9 pct to 47.1 zlotys at close compared with a 2.8 pct gain for the blue-chip WIG 20 index. PKN shares added 3.8 pct to 55.00 zlotys.

Source: By Piotr Skolimowski, forbes.com

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Property in Poland

he market for property in Poland is growing at a rapid rate, it is in demand by locals and foreign investors alike. The Polish economy is booming, unemployment is declining and the country is politically stable. Now is certainly the time to invest.

The property market in Poland has benefitted from the fact that Poland was one of the most successful countries to enter the European Union in 2004. A growing economy has led to job creation, more wealth, greater prospects for Polish people and an overall optimism. Property in Poland has benefitted from the ever increasing number of locals who can afford property and have money to spend.

A main reason why property in Poland is seeing rapid price growth is the fact that there is a high demand for property in the cities. Some cities in particular such as Poznan and Wroclaw are seeing demand far outstrip supply, leading to a shortage of good quality property and therefore capital appreciation, in some cases on a large scale.

The Polish mortgage market has opened up considerably in recent years, locals and foreigners are able to take out a mortgage relatively easily, helping to fuel the demand for property in Poland. Foreigners can often obtain 80% mortgages on properties with little initial outlay.

The current situation in the property market in Poland has shown that it is the smaller cities that in the past have been less well known to investors such as Poznan, Wroclaw, Gdansk and Lodz that are seeing the high property price growth, rather than the more traditional investment markets of Krakow and Warsaw which have in the past seen rapid growth and now are stabilising. These more mature markets are however not to be discounted as they still offer investment potential in the right locations and property types. Many investors make their first steps into the market for property in Poland in these more mature markets.

Poland is receiving large restructuring funds from the European Union to help improve the countries infrastructure. New roads and being built, services are being improved and the property market in Poland is benefitting from this. Poland will be jointly hosting the 2012 European football championships, this is a catalyst for greater investment in infrastructure and the economy as well as helping to showcase the country to Europe, again, we are seeing the benefits to the property market.

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Source: emergingplaces.com

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China, France, Poland top podium in Microsoft Olympics

With the 2008 Olympics in Beijing now less than a year away, we're getting in the mood for medals. And we can consider Microsoft's Imagine Cup, a global technology and creativity competition among students from around the world, the Olympics of software. So, with the winners of this year's cup announced today, let's do a "medal count" -- admittedly an imprecise measure because of inconsistent factors from country to country such as population and resources -- and see which countries have the top young technology talent.

The Imagine Cup has nine events from Algorithm to Short Film. Microsoft lists the top three finishers in each category. There's also an interactive map of the world showing all finalists by category and country.

Both China and France had four teams finish in the top three, the most of any country, but each had only one first place. China's was in the IT Challenge, which asks competitors to "demonstrate proficiency in the science of networks, databases, and servers, as well as the areas of analysis and decision making in IT environments." The French team took first in Web development. (Taiwan also had a second-place finish.)

Poland had three winning teams, all of which finished first. The country dominated the visual arts, winning the photography and short film categories, as well as the algorithm category -- perhaps the most demanding of the event. It's an individual competition comprised of "brain teasers, coding challenges, and algorithmic puzzles."

Romania and Brazil had two top-three finishers each.

In the high-profile software design category, in which teams of students used Microsoft technologies to design applications to improve education, Thailand took top honors, followed by Korea and Jamaica.

The complete results are available here.

The United States had several finalists, but no top-three finishers. Those so inclined to do so might read this as another piece of evidence that the U.S. is lagging the rest of the world in math and science education.

Source: blog.seattletimes.nwsource.com

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Poland reiterates interest in new Lithuanian nuclear power plant, but only at high capacities

Participants of the new nuclear power plant project in Lithuania approved the power plant's projected capacity at above 3,000 MW, although the final capacity will depend on the evaluation of environmental impact of the project and Poland is reiterating its interest only in a large-scale project, said Pawel Urbanski, the president of Polish power grid operator Polskie Sieci Elektroenergetyczne (PSE).

"The parties agreed to the option of more than 3,000 MW, though discussions continue," Urbanski told a press conference Thursday. "The work on the evaluation of the environmental impact needs to be done first. [...] We're interested only in a large project."

According to a Lithuanian bill on the new power plant that is supposed to replace the existing Ignalina plant, the new facility will have capacity of 1,600-3,200 MW. Latvia and Estonia have already declared an interest in the project, but Polish Economy Minister Piotr Wozniak said earlier Poland will not take part in the project if it is not guaranteed to get 1,200-1,600 MW of energy from the plant.

PSE's vice-president Henryk Baranowski said Thursday the work on the environmental impact of the new power plant is going on, with the evaluation supposed to be ready by the end of the first half of 2008.

"It will later be the subject of consultations and should be approved by the end of 2008," Baranowski said.

Source: Interfax

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oland needs specialists for its special situation

Almost three years after Poland joined the European Union, the dust is still settling on the country’s labour market, where radical change has created special challenges for the foreign investors who are looking to benefit from the booming economy, as well as for the companies that have already set up shop in the former communist land.

One clear trend to emerge in the aftermath of EU accession, which prompted a flight of Poles to search for work in other member countries, is the increasing need for specialists to help firms compete in the union’s biggest new market. Now foreign investors need to adjust to a new reality in which the best candidates may no longer be found by traditional means.

According to Andrzej Pieniazek, Head of Operations at Purcon, Poland, a new approach to recruitment is needed. ‘Poland still offers outstanding opportunities for business investment,’ he says, ‘but the search for the right candidates has become more complex.’

Purcon, the leader in permanent recruitment and interim management in Procurement and Supply Chain for more than 30 years, opened its Warsaw office in May, 2006 to extend its reach into Europe. With its nationwide network of capable consultants, it is uniquely placed to help international companies target the highly-skilled Polish workforce.

Andrzej Pieniazek says the situation has changed since foreign businesses first flocked to the country to tap into the exciting new market at the heart of continental Europe. Then, its workforce was young, high skilled and low-cost. Since EU accession, however, wages have risen as Poles have realized that their market value may be higher than their salaries. There has also been a mass exodus of its workers in lower paid professions to other EU labour markets.

Nevertheless, Poland still offers outstanding opportunities for business and investment: 38 million consumers are driving an annual 10% rise in its GDP and the country is ranked fifth in the top 10 global investment destinations. With 52% of the population under 35 and two million of those in higher education, its future prospects are excellent.

To benefit from these opportunities, says Andrzej Pieniazek, new investors and those that already have a manufacturing or distributing base in the country need to adjust their recruitment strategy. Purcon advises on how to avoid the pitfalls of hiring in a market where demand for specialists now exceeds supply. This includes planning recruitment drives well in advance, and remaining aware of rising wages and limited availability.

Andrzej Pieniazek says it’s crucial that companies seeking specialists in Supply Chain, Logistics, Procurement and Manufacturing seek expert rather than generalist advice. In addition to traditional recruitment, Purcon now offers interim management services in Supply Chain at very competitive rates.

But the biggest challenge for foreign investors lies in looking beyond the low-cost labour factor to appreciate the other attractions of doing business in Poland.

Purcon is an international provider of tailored recruitment solutions across all Supply Chain, Procurement and Logistics disciplines. Purcon Poland is a branch of Purcon responsible for the Polish and CEE market.
Source: openpr.com

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Poland chosen Europe’s most attractive investment destination

Poland is the best country to invest in among 31 European states according to the latest rating by The Federation of European Employers.

Apart from Poland, the most attractive countries are: Denmark, Slovenia, Switzerland and Great Britain. The rating gave Poland a 6+ grade, leaving behind all the competitors from the region, i.e. Slovakia, the Czech Republic and Hungary.

Considering the total work costs to work quality ratio, Poland has the most competitive workforce in Europe. “We still have large supplies of highly qualified workers who go onto raising their qualifications continuously”, said Paweł Wojciechowski, President of the Polish Information and Foreign Investment Agency.

According to him qualifications improvement is the best way to combat unemployment.

The major strengths of Poland are considered to be access to young workforce, women’s presence on the job market and availability of temporary employees.

However, Poland was not graded so positively on training investment, the possibility of recruitment from other companies and limitations concerning dismissals. Also the Internet skills of Polish employees leave a lot to be desired.

The rating evaluated 27 EU members, as well as Iceland, Norway, Switzerland and Turkey. 15 factors were taken into account while performing the survey, such as access to workforce, human capital, job market relations as well as its flexibility, inflation and work costs.

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