Polish Business Survey

Alan Heath
05-05-2000, 00:00

Polish Business Survey

Swedes close nappy factory

The Swedish paper concern SCA has declared that it will invest DEM450m in Poland during the next eight years. One of the largest paper products factories in Europe will be built in Oława near Wroclaw and produce paper tissues and toilet paper. The factory will employ between 400 and 500 people, being the second largest production facility that the Swedes have in the world.

At the same time SCA will close their nappy factory in Wroclaw where 119 people are employed. The reason for the closure is cost according to Michael Pedersen, MD of SCA Hygiene Products. Production will be switched to Falkenberg in Sweden. Some of those being made redundant will be able to find new jobs in the nearby Oława factory. The cost of the redundancies has not yet been made public.

SCA Hygiene Products has been in Poland since 1991. It initially had a joint venture with a Wrocław based company which it later bought. It has a 21 percent share of the paper tissue market and its Libero brand of nappy has second position here in terms of sales and19 percent of the market.

Stalexport close to Huta Łabędy

The management of the Huta Łabędy steel works has worked out a financial agreement with Stalexport, who could take a controlling share of the former if the Treasury agrees. This take-over has now been planned for two years.

Huta Labedy has been through difficult times. It specialised in products for the mining industry but was forced to diversify. It now supplies a lot of material to the building industry and is able to export around eight percent of its produce, mainly to the EU. It hopes to be able to produce high quality steel for the motor industry. In 1998 it registered a loss of PLN15m and in 1999 PLN12m when the workforce was cut by one third. There are currently around 800 people employed in the mill.

Press distributor to develop franchises

Kolporter, the largest private press distributor in Poland is hoping to develop the franchising side of its business. In the next three years the company will invest PLN180m opening 3,000 shops and kiosks. The company currently controls a 40 percent share of the press distribution market in Poland. MD Krzysztof Klicki claims that Kolporter may be able to increase this by a further seven percent this year.

This year a centralised 10,000sqm warehouse will be built at a cost of around PLN13m. Kolporter have financed this with their own reserves.

Share hand-out in ports

From yesterday the port authorities in Gdańsk started to hand out 15 percent of the shares in the company that belong to the treasury to their workforce. In two weeks time the dockers at the ports of Szczecin-Świnoujście will also get free shares. In the third quarter employees of the Port of Gdynia will also receive a 15 percent stake in their company without charge.

Two interested in Saturn

The Saturn cement works at Wojkowice in Silesia will be sold off to a strategic investor before the end of this month at the latest. Two companies have shown an interest, Dyckerhoff from Germany and the Czech Cementownia Prahovice which is controlled by Swiss capital. The unions have not yet accepted the social package proposed by the Czech company.

Pension funds face consolidation

Consolidation in the Polish pension market is likely to hot up. The pension funds of Allianz, Arka-Invesco and Winterthur are now looking for acquisitions. It would seem that every company is talking about it. Nonetheless there is a difficulty in assessing the value of the companies. The values range from USD100 per client to the USD1,800 per client that Epoka was offered. The cost of obtaining a client is between PLN200 and PLN1,800.

Fortis loses interest in Warta

The Dutch insurance and banking group Fortis has withdrawn from negotiations concerning the acquisition of a 25 percent share of Polish insurer Warta. AIG, AXA and Allianz are still interested in a share of Warta.

Stock exchange has two years to decide

The merger of the London and Frankfurt stock exchanges to form the largest exchange in Europe is a serious long term threat to the Warsaw exchange. Capitalisation on the new exchange will be over USD4.5bn and the merger will be part of the globalisation of exchanges. The opinion of the boss of the Polish exchange, Wiesław Rozłucki, is that he will have around two years to decide with whom he is going to form an alliance.

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Podpis: Alan Heath

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Puls Inwestora / Polish Business Survey