India's Reliance Industries plans 300-500 mln eur investments in Poland

WARSAW (Thomson Financial) - Reliance Industries, India's most valuable company, plans to invest up to 500 mln eur in the Polish petrochemical sector in the next five years, the head of the company's European operations was quoted as saying.

'During the next five years we can spend 300-500 mln eur on investments relating to the petrochemical sector,' Mohan Murti told local daily Puls Biznesu.

Reliance Industries unit Trevira now runs a textile business in Poland, in which the company plans to invest 50 mln eur, the paper said.

Source: By Adrian Krajewski, forbes.com

Poland sees Lufthansa interested in LOT: paper

Germany's Lufthansa is interested in buying a majority stake in Polish national carrier LOT LOT.UL, a deputy treasury minister was quoted as saying on Thursday.

Poland's new government is determined to relaunch the stalled privatization of state companies, including LOT, with most of the larger sell-offs planned through the Warsaw bourse.

But recent turmoil on financial markets has raised doubts whether the privatization plans would remain intact.

"Lufthansa is interested in a stake in LOT under the condition that, one, the transaction is fully approved by the Treasury, and two, the Treasury sells a majority stake," Polish Deputy Treasury Minister Zdzislaw Gawlik was quoted as saying in daily Dziennik.

The ministry has said it would like to sell its entire 68 percent stake in the carrier.

Lufthansa, which already cooperates with LOT through their membership of the Star Alliance, declined to comment.

Unicredit analyst Uwe Weinreich said the German carrier would more likely be interested in buying European airlines in rival alliance groupings.

"Europe is certainly the priority for Lufthansa. The need for action is not as great with its own Star Alliance members as with those belonging to rival alliances," Weinreich said.

"Poland is interesting, of course, looking at the market potential," Weinreich added. "If someone else were to be prepared to buy LOT, it would certainly be advisable (for Lufthansa) to take action themselves."

LOT flirted with a bourse listing in recent years, but the collapse of strategic investor Swissair and the changing plans of successive governments thwarted the planned initial public offering.

In the meantime, more nimble no-frills carriers grabbed a large chunk of the growing market after Poland joined the European Union four years ago.

The bankruptcy administrator for Swissair holds a 25 percent stake, with LOT employees holding 7 percent.

Source: By Marynia Kruk and Andreas Moeser, David Holmes/Rory Channing)

Poland may fight for concessions on EU climate change package

WARSAW (Thomson Financial) - Poland is likely to fight to change the European Union's new plan to produce cleaner energy, which it says may hurt its fast-growing emerging economy by forcing coal-fired power companies to raise prices as they seek funds for investments.

The European Commission said yesterday that the power sector will have to pay fully for carbon credits within the 25-member block's emission trading scheme between 2013 and 2020.

The move is a part of the plan to reduce EU's carbon dioxide emissions by a fifth pct in 12 years compared to 2005.

'We have a lot of doubts about the plans presented by the commission,' Mikolaj Budzanowski, a senior official at Warsaw's Environment Ministry told Thomson Financial News.

'In our opinion the package goes a step too far and doesn't take into consideration the specifics of the Polish economy.'

Poland gets 96 pct of its electricity from coal, and its power companies will have to scramble in years ahead to boost their capacity as demand jumps on the back of the booming economy.

Budzanowski said the government was 'particularly concerned' that unlike other sectors like transport or construction, the power companies will be covered by the full auctioning of CO2 emissions as of 2013.

This would pit local power companies, most of which are state-owned and set to float in Warsaw this or next year, against heavyweight utilities like Germany's RWE on the market for emissions rights. Budzanowski said this could force them to raise prices for customers 'sharply'.

Poland is moving gradually toward full liberalisation of its energy markets, although retail prices are currently approved by a regulator. Officials last week approved increases of 12 pct on average this year.

The European Commission yesterday proposed to raise one carbon dioxide emission quota for Poland by 14 pct by 2020 compared to a previous plan. Warsaw's last conservative government took the EU executive to court over the previous plan.

In a separate interview with a local daily today, Environment minister Maciej Nowicki said Poland will continue to push for higher emission targets, but signalled the government was ready to soften its stance.

'We stick to out plan, but we also negotiate,' Nowicki told newspaper Rzeczpospolita. 'I would be happy with a compromise.'

Source: By Piotr Skolimowski,
forbes.com

Dell opens plant in Poland

Dell is now opening a plant in Poland to meet increasing demand and speeding up delivery time to customers in central and eastern Europe.

This 200 million Euro investment in a 37,000 square-metre manufacturing facility in Lodz is designed to complement Dell's existing European operation in Ireland. The facility will have 1200 employees and will initially produce Latitude and Inspiron laptopss.
Source:

Eureko seeks 10 billion euro damages from Poland over PZU

Dutch financial group Eureko is seeking 36 billion zlotys (10 billion euros, 14.5 billion dollars) in damages from Poland in a dispute over Polish insurer PZU, a senior Polish minister said Wednesday.

"Eureko estimates the damages at close to 36 billion zlotys," Poland's Treasury Minister Aleksander Grad told the commercial TVN24 news channel.

Grad said Poland had until the end of February to present its own estimate of the losses incurred by Eureko over a protracted dispute with Poland's Treasury over a 1999 contract in which Eureko acquired a 30 percent share in PZU for 3.1 billion zlotys.

Its stake has since risen to 33 percent minus one share but Eureko insists it is entitled to a further 21 percent under the terms of the privatisation contract.

Poland's treasury currently holds a 55 percent controlling stake in the country's largest insurance company.

The two sides agreed earlier this month to set up a task force that will set down the rules and timetable for further negotiations on finding what Grad called an "amicable solution" to nearly nine years of jousting over Eureko's stake in PZU.

Shortly after taking office in November, Poland's new liberalPrime Minister Donald Tusk pledged that his government would "look for ways and means to avoid a tragic end" to the dispute which could cost Poland dearly.

A string of Polish governments from both the left and right have fought Eureko's bid to take majority control of PZU, provoking a protracted legal battle for control over central Europe's largest insurance company.

In 2005, a London-based international arbitration court ruled in favour of Eureko, saying the Polish treasury had failed to uphold its side of the privatisation deal.

A Brussels-based appeal court also favoured Eureko in November, the same month that Poland's new pro-business government took office.

PZU made a net profit of 3.28 billion zlotys (886 million euros) in 2006 and 1.12 billion zlotys in the first half of 2007.

Sourc: afp.google.com

Poland's Bioton targets 15 pct of Chinese insulin market in 3 years

WARSAW (Thomson Financial) - The chief executive of Polish biotech group Bioton said the company is targeting 15 pct of the Chinese insulin market in three years after it starts selling its products in the country.

Bioton received approval to start selling its insulin products in China in the second quarter after positive medical trial results.

'After three years we want to have 15 pct of the Chinese market, which is now worth 300 mln usd annually and is growing 20-30 pct a year,' Adam Wilczega said in an interview with TVN CNBC Biznes channel.

He said that in the second half of 2008, Bioton plans to fully consolidate results from Ukrainian insulin maker Indar. Bioton wants to raise its stake in Indar to 60 pct from 30 pct by subscribing to a capital increase.

Earlier, Wilczega said consolidation of Indar's annual sales of around 30 mln usd should make 2008 a record year for Bioton.

Source: By Adrian Krajewski, forbes.com

Poles Enjoy Bargains With Weak Dollar

WARSAW, Poland -

There was a time when Poles kept their life savings in dollars tucked under mattresses or hidden in socks, counting on the greenback's strength to help them weather the blows of political turmoil, inflation and their own weak currency.

But no more.

The dollar has not only fallen against the euro, but even against the currencies of emerging economies like Poland's, giving unprecedented spending power to a resurgent middle class since the fall of the Iron Curtain.

"During communism, the dollar seemed like a god," said economist Irmina Kurzawska. "But now the dollar is getting weaker and weaker - it seems to be endless."

In the past year alone, the dollar has fallen 21 percent against the Polish currency, from 3 zlotys in January 2007 to a nearly 13-year low of 2.3949 on Jan. 15. The dollar traded at 2.5263 zlotys on Tuesday.

Gone are the days when Americans could live like kings in the region. Today U.S. expatriates and tourists are being squeezed tighter as the dollar buys them ever less of the local currency.

Meanwhile, Poles, who have historically immigrated in droves to the United States to earn those once-prized dollars, are these days just as likely to catch a direct flight to New York for sightseeing and a show on Broadway - and snap up some bargains while there. The newly opened arrivals hall at Warsaw Frederic Chopin Airport, a spacious new terminal of glass and steel, itself attests to the country's growing wealth.

Ewa Wdowiarska, 37, a company director, returned Friday from a four-week shopping trip in New York with her husband and young daughter - and a car.

"It wasn't my first visit to the U.S., but the first time I went only to shop - and it was because of the weak dollar," she said as she pushed a cart piled high with suitcases through the terminal.

The family picked up a one-year-old Mazda6 for $15,000, a bargain even with transport costs since the same car would cost double that in Poland, she said. They also bought clothing, a cell phone and KitchenAid equipment for a house they just had built.

"I earn money in Poland and spend it in the USA - this is something new for Polish people," Wdowiarska said. "The world has changed."

Michal Mroz, 26, a businessman from Krakow, traveled this month to Chicago for work - but slipped in some shopping while there, picking up $700 worth of clothing from Banana Republic, Eddie Bauer and shoes from Ecco.

"You pay three times as much in Poland for brand clothing," he said. "It's rather cheap in the States."

Other benefits of the weak dollar have meant that oil and gas, which are priced in dollars on the international market, have not risen at Polish pumps as drastically as they have for Americans.

But not all Poles are rejoicing - those who are paid in dollars or who rely heavily on American customers are feeling the pinch.

Take Anna Baczkowska, a small shop owner in Warsaw who sells traditional Polish pottery from the town of Boleslawiec, a highly decorated blue-toned ceramic that is popular with many Americans.

She says the weak dollar has caused her sales to fall by about 20 percent each year for the past several years.

"Customers are always thinking about the dollar, complaining that the dollar isn't so good," said Baczkowska, sitting in her office in the back of her shop, ANKO. "I don't have many Americans buying now."

Poland still has its problems in trying to overcome the economic legacy of communism.

Though salaries are rising amid strong economic growth, they still only average around $1,310 per month, making cross-ocean shopping sprees off limits to many.

The country also suffers from a jobless rate of more than 11 percent, while the low wages have driven hundreds of thousands to seek work in Britain and Ireland since Poland joined the European Union in 2004.

Nonetheless, heavy foreign investments and EU subsidies - which have helped drive the zloty higher - have fueled an economic boom that is bringing new life to the long-embattled middle class.

Marcin Panek, 27, a private banker, returned Saturday from a vacation to Florida where he visited Disney World and soaked up rays in Miami Beach, escaping the cold, dark Polish January. He also bought clothes at Gap (nyse: GPS - news - people ), Banana Republic and Abercrombie and Fitch (nyse: ANF - news - people ), while splurging on a $400 iPhone.

Source: forbes.com

Poland's Petrolinvest plans output at minimum of 5,600 bpd by end-2008

WARSAW (Thomson Financial) - Polish oil exploration venture Petrolinvest plans to produce at least 5,600 barrels of oil per day from deposits in Kazakhstan, the company's chief executive said today.

A report by consultants McDaniel and Associates last week showed that Petrolinvest, which floated its shares last year and has yet to produce oil, has prospective resources of 1.09 bln barrels in its holdings in Kazakhstan.

'2008 is to be the year when we (start) producing,' CEO Pawel Gricuk told a news conference.

'Our two drivers will be contracts in western and central Kazakhstan. I plan the minimum output at 5,600 barrels per day.'

The company also said it plans to spend another 60 mln usd on investments this year.

Source: by Adrian Krajewski, forbes.com

Poland's PKO BP puts off eurobond issue till third quarter of 2008

WARSAW (Thomson Financial) - Poland's second largest bank, PKO BP, has postponed its planned eurobond issue until the third quarter of this year, the bank's chief executive said today.

Earlier the state-controlled bank had planned the issue for the second quarter, with PKO head Rafal Juszczak saying it will be worth substantially more than the 1.6 bln zlotys it obtained from its last debt issue in Poland.

'I stick to the idea of eurobond issue,' Juszczak told reporters on the sidelines of a conference. 'It could take place in the third quarter.'

As part of moves to increase PKO's capital, Poland's state treasury has not ruled out cutting its stake in the lender to below 50 pct by allowing the bank to issue new shares.

Juszczak declined to comment whether a share issue was on the cards.

Source: ByAdrian Krajewski, forbes.com

Poland's pay TV company Cyfrowy Polsat to wait with IPO until markets stabilise

WARSAW (Thomson Financial) - Poland's largest pay-TV operator Cyfrowy Polsat will delay its planned initial public offering (IPO) until the local stock market stabilises following the sharp losses this year, its chief executive was quoted as saying today.

Dominik Libicki told the state news agency PAP the company, whose issue prospectus was approved last week, has not decided on the timing of the issue, seen as one of the biggest ever in Warsaw.

'We haven't taken any decisions about the timing of the initial public offering,' Libicki was quoted as saying by the state news agency PAP. 'We will wait with the decision until the financial markets stabilise.'

Warsaw bourse's blue-chip index has lost more than a quarter of its value since hitting the record high last October and the market is down 13 pct so far this year on the back of global equity sell-off.

Cyfrowy Polsat is the first company to delay its IPO this year after Warsaw bourse saw a record of 81 new issues, mainly from local small-and mid-caps, in 2007, second-largest in Europe after the London Stock Exchange.

Source:By Piotr Skolimowski

forbes.com

Electricity prices soar in Poland

The Polish energy regulator Energy Regulation Bureau (URE) has given its consent to high energy price increases. On average, the price of electricity in Poland will go up by 11.6 per cent.

The newspaper warns that some households will face even higher increases.

The energy regulator has informed that 12 companies supplying electric energy in Poland want to increase their prices by 23 per cent on average. The majority of them operate in Eastern Poland, the poorest part of the country.

URE chairman has said that the electricity price in Lublin (South East Poland) will go up by 30 per cent, while in Rzeszów (also South East) only by 9.2 percent.

Electricity bills in Warsaw will be 19.5 per cent higher.

Annual electricity consumption will cost the average Polish household 100 zlotys more, the newspaper Dziennik predicts.

Source: .polskieradio.pl

Russia lifts embargo on Polish plant products: Warsaw

Russia has lifted its embargo on Polish plant products, ending a long-running dispute that was blocking a new EU-Russia agreement, Poland's agriculture ministry said on Saturday.

"An agreement was signed late on Friday by the Russian and Polish agriculture ministers ... at the Berlin agricultural fair," spokeswoman Malgorzata Ksiazek was quoted by news agency PAP as saying.

Last month Russia lifted an embargo on Polish meat that had been imposed in 2005 amid frosty relations between Moscow and the government of right-wing former Polish prime minister Jaroslaw Kaczynski.

New Prime Minister Donald Tusk has made a point of improving Poland's foreign relations, especially with Germany and Russia, since defeating Kaczynski in elections in October.

"It is an important step in relations between the two countries. The success will be complete when Russia and the European Commission reach an agreement on food security. When that happens, the Russian market will be open to all Polish plant products," the spokeswoman said.

Tusk, who is due to visit Moscow on February 8, has let it be known that he is prepared to lift EU member Poland's veto on a new agreement between Russia and the European Union focused largely on energy cooperation.

Poland's new Foreign Minister Radoslaw Sikorski is due to visit Moscow next week.

Source:

Astaro Opens New R&D Center in Poland

Astaro Corporation (www.astaro.com), a leader in delivering unified threat management (UTM) security appliances, today announced it has opened a new Research & Development center in Bydgoszcz, Poland. The new R&D center is designed to escalate Astaro’s technology into new frontiers of network security approaches and modes of delivery, including next-generation malware detection and blocking, email discovery and messaging, security management and other anti-threat applications. Astaro is also preparing for the release of a new product line in 2008.

The main objective for the R&D center is to drive the development of Astaro’s centralized management product, Astaro Command Center (ACC). Currently staffed by five engineers, plans are already underway to hire additional developers over the next few months to grow the team.

Operations will be managed by Pavel Vassilovski, a former computer scientist with 12 years of experience working for Alcatel-Lucent, where he focused on projects that centered on telecommunications domains such as switching, messaging and network management. While at Alcatel-Lucent, Vassilovski was responsible for the development and deployment of real-time traffic management systems and OSS/BSS services to large telco providers including Vodafone and Verizon.

“We are pleased to be opening a large R&D center in the heart of Poland, where a lot of undiscovered and willing IT talent resides,” said Jan Hichert, Astaro co-founder and CEO. “The new development center will give Astaro the ability to take our product plans from conception to the market place with increased speed and a higher level of quality. We are anxiously awaiting the latest release of ACC which will increase the functionality and visibility of centralized management and network protection.”

Source:darkreading.com

Poland, Eureko seek settlement in PZU insurance battle

WARSAW (Thomson Financial) - Poland announced today that it had begun talks with Dutch-based group Eureko to try to settle a long-running dispute over leading Polish insurance company PZU.

During a meeting in Warsaw, Polish Treasury Minister Aleksander Grad and representatives of Eureko officials agreed that they wanted to 'find an amicable solution' to nearly nine years of disputing over the Dutch group's stake in PZU.

The two sides have agreed to set up a task force that will set down the rules and timetable for further negotiations, a treasury statement said.

In 1999, Eureko bought a 30-pct stake in PZU for 3.1 bln zlotys, then worth some 694.5 mln eur. Its stake has since risen to 33 pct minus one share, but Eureko insists it is entitled to a further 21 pct under the terms of the privatisation contract.

Poland's treasury currently holds a 55 pct controlling stake in the vast company.

A string of Polish governments from both the left and right have fought Eureko's bid to take majority control of PZU, provoking a protracted legal battle for control over central Europe's largest insurance company.

In 2005, a London-based international arbitration court ruled in favour of Eureko, saying the Polish treasury had failed to uphold its side of the privatisation deal.

A Brussels-based appellate court also favoured Eureko in November, the same month that Poland's new pro-business government took office.

Shortly after taking the helm, Prime Minister Donald Tusk pledged that his government would 'look for ways and means to avoid a tragic end' to the dispute.

PZU made a net profit of 3.28 bln zlotys (886 mln eur) in 2006 and 1.12 bln zlotys in the first half of 2007.

Source: forbes.com

Poland's PKN Orlen sees better earnings, no surprises on one-offs in Q4

WARSAW (Thomson Financial) - Fourth-quarter earnings at Poland's largest oil company PKN Orlen should improve on a year ago thanks to roughly stable market conditions, although it is still awaiting final refining results, its investor relations chief said today.

Speaking after PKN's Czech unit warned its fourth-quarter results were 'terrible' thanks to poorer margins and plant shutdowns, Dariusz Grebosz said the Polish refiner had no other exceptional items to report apart from those the company has already flagged.

PKN has said it would book an additional 70 mln usd from shutdowns at its Lithuanian refinery Mazeikiu in the fourth quarter, while upgrade costs at Unipetrol will further depress the bottom-line.

'Rather it should be better than the 160 mln (pre-tax profit) a year earlier,' Grebosz told Thomson Financial News by phone, saying that the refining unit was still to close its books for the fourth quarter.

'We have no one-offs that have not been announced already. The main deciding factor will be the macro environment (which) was not perfect, but did not differ much from what we saw in the same period of 2006,' Grebosz said.

PKN shocked markets in the third quarter with a last-minute announcement of asset write-downs, which forced analysts to revise forecasts and forced net profit down 42 pct compared to a year earlier.

It had a net profit of 76 mln zlotys on 13.12 bln in sales in the fourth quarter of 2006. It publishes fourth quarter results on February 28.

Grebosz said the retail segment was 'still going strong' in the fourth quarter, while results from its petrochemical unit will improve after being depressed by exceptional items a year earlier.

Company earnings in recent quarters have been plagued by a string of write-offs and the costs of maintenance shutdowns related to acquisitions in the Czech Republic and Lithuania.

Source:By Piotr Skolimowski, www.forbes.com