Polish Business Survey
LG to invest in TV factory
From 2001 the Korean giant LG Electronics hopes to produce one million television sets annually from the current 600,000. To this end it is investing USD4m in a new factory in Mława, 120kms to the north of Warsaw. A new production hall will be shortly completed and the assembly line, bought from Curtis Electronics last year will be the strategic base for the Korean company in Europe. Choong Bong Cho, MD of LG Electronics Mława said that the decision to increase the target production was made last year. Employment at the plant also rose from 426 to 600 people.
The Mława factory is the largest LG factory in Europe. Last year the company discontinued assembly in Germany and closed a factory in Newcastle in the UK. Some of the production lines from the British factory were brought to Mława More than 80 percent of the televisions will be exported, chiefly to France, Germany, UK and Hungary.
Poland currently produces around six million televisions annually.
Telecom share offers today
This afternoon, just before four, France Telecom and Telecom Italia will no doubt be making their official offers for a 35 percent slice of former telecoms monopoly TPSA. Analysts suspect that the offers will be similar, priced at around PLN30 - PLN32 per share. This would mean that the treasury could expect to receive between PLN14.7bn to PLN15.7bn. If the offers result in being within one or two zloty of each other then the winner will be the side that offers the best package of restructuring and development for the company.
In order to improve its chances France Telecom entered into an agreement with the Polish Kulczyk Holding. The Italians have also sought an alliance with a Polish company but so far have not found a partner here.
Fertiliser producer to be sold
This week negotiations will begin concerning the sale of Szczecin based artificial fertiliser producer Superfosfat. A consortium made up of Police Chemical concern (ZCP) and Inmarc from Szczecin are interested in buying 80 percent of the company from the treasury. Superfosfat produces around 45,000 tons of fertiliser each year and around 1,000 tons for garden use. It has a five percent market share in this country with sales of PLN24.5m although its operating costs were PLN23.7m. This year the company plans a PLN100,00 profit by increasing sales by PLN1m.
Eurocast buys share of Radio Wawa
The German Eurocast has bought a 33 percent holding in Radio Wawa from the Irish Modular Investments. Eurocast owns five commercial radio stations in Germany and is considered to be the market leader in those provinces where it is present. Modular Investments decided to pull out of the radio station in March 1999 due to conflicts between the Polish share holders. Polish law permits a maximum foreign holding of 33 percent in radio stations.
IT report sees growth this year
According to a report issued by the research company DiS, Poland imports software from 210 companies in 19 countries, mainly the USA, UK and Germany. The value of this market is USD493m. Nonetheless local family and single person firms have been able to create a special niche for themselves catering for very specific clients. The value of the entire IT market in Poland is around USD2.8bn. It is estimated that it will increase to PLN3.4bn this year.
Power plants unite
The management of the energy concerns of Białystok and Warszaw-Teren want to form a joint company that could be privatised as one business. They hope that their request for privatisation will land on the treasury ministerŐs desk before the end of next month.
Whereas the Warsaw plant sees no problems with the privatisation application all is not so clear in Białystok. Zenon Karwowski, financial officer of the Białystok plant warns that their are still ownership difficulties relating to land which need to be cleared up and the stance of the trade unions will depend on what conditions an investor is prepared to offer. Other than this the two companies have similar problems: high maintenance costs over a large area for a comparitively small amount of major clients.
Most energy privatisations so far have involved a packet of several companies. The only exceptions are likely to be the Upper Silesian Energy Concern (GZE) from Gliwice and Warsaw provider Stoen.
Four want to buy Hydrobudowa Gdańsk
Four companies have expressed an interest in the purchase of a fifty percent share of Hydrobudowa Gdańsk. Three are Polish: Polimex-Cekop, Budimex and Energopol Warszawa and one Swedish: the Nordic Construction Company. The investor will be chosen before the end of June and the deal will be finalised in the third quarter of this year.