Polish Business Survey
Extra excise hits drinkers
On 1 June a four percent excise increase was put on beer. The treasury is expecting an extra PLN10m to be raised in this way.
This is the second excise rate hike on beer this year. On 1 January a two percent raise came into force. In real terms this is an increase from PLN5.56 to PLN5.78 on each percent of hop extract for every 100 litres of beer. For example a beer with 18 percent hop extract will pay an extra four groszy per litre bringing the total excise bill to PLN1.04.
This will above all hit the small producers. Marek Jakubiak of the Krotoszyn brewery thinks that this will add an extra seven percent on the cost of his beer.
Like in the case of tobacco, the higher rates however do not bother the bigger breweries. Wojciech Radomski of Okocim claimed that the extra costs will not be borne by the customers.
Other producers thought ahead. Adam Brodowski, MD of Strzelec said that his brewery amongst others saw the increase in excise coming and put their prices up in April and May.
Beer will contribute around PLN1.77bn to the budget this year. So far this year it has added PLN310.8m to the State coffers although the drinking season has only just begun. Last year beer sales increased by eleven percent.
New terminal tender imminent
In June the Polish airports authority PPL will probably announce a tender for the construction of the second terminal at Warsaw s Okęcie airport. The contract will be worth between PLN1.1bn - PLN1.3bn and will be fought out at least by Budimex, NCC and Skanska.
The present terminal was finished in 1992 at a cost of DEM200m by the German Hochtief. It handles around four million people per year although with two to three percent annual growth it will soon be too small. It is expected that the new terminal will have a capacity of six to seven million people per year. As well as the terminal other developments will include offices, a hotel and a second cargo terminal for which a separate tender will be held. Work will probably begin in January if the tender is held this month. Two to three years will be required for completion.
Budimex points out that its majority shareholder Ferrioval has a great deal of experience in this field. In Mexico, for example, they have built nine airports. The Swedish NCC who has also built airports in Scandinavia will also be bidding as will their compatriots Skanska who have been involved in such projects in Hungary, Sweden, Ghana and Ethiopia. The German Hochtief may also bid for the contract.
New Gdańsk being prepared
The privatisation of the Gdańsk shipyard has caused more problems. The yard was bought by a consortium consisting of the Gdynia shipyard and EVIP in a move surrounded by controversy and allegations of unfair play which are currently being investigated by the public prosecutor. Nonetheless the new investors have not wasted time and a few months ago founded a company called Synergia 99 whose aim is to develop the 73 hectare site which is located almost in the centre of Gdańsk.
The shipyard is to be broken into smaller pieces of land in which office, retail and housing facilities will be developed. Planning is now underway and is expected to be complete towards the end of next year. Then potential developers will be sought for each of the sites. It is expected that the whole development will take around ten years to complete.
The largest shareholder of Synergia is the Gdynia shipyard although a minority shareholder is also TDA Capital Partners who paid USD12m for their stake. In the second half of this year TDA is expected to get a majority shareholding in the company.
Military sale under fire
Delays in supplying the Indian Army with armoured personnel carriers from the Bumar Łabędy works may lead to the bankruptcy of the company. A contract was signed in April of last year and the Indians paid a deposit of USD10m. However the export credit insurance organisation KUKE does not want to guarantee the sale. Bumar has recently lost a lot of employees, the current work force stands at 3,600, around one thousand were made redundant in the past year.
Elektrim consolidates further
Elektrim has decided to sell two of its local telecommunications companies. The St Olaf and TV-Tel companies are to go under the hammer. At the same time the company is consolidating the Aster City and El-Net parts of its business.
Leasing cars to become unworthwhile
The government is to change the rules on leasing cars which will make it unworthwhile to acquire estate cars and small vans in this fashion. This will make it very difficult for small companies to obtain transport vehicles and the leasing companies will lose a very large percentage of their client base.