Polish Business Survey
Customs agreement close
It is believed that Poland could find common ground with the European Union and conclude negotiations on a customs agreement by next spring.
The EU however will first have to be convinced that Poland means what it says about applying European regulations to its customs code.
Despite these hopes, the EU insists that there is still a lot to bedone. Poland still has to simplify its procedures and change rules concerning groupage. It also is hoping for a change for goods which are used for both civil and military use. Finally there is the question of corruption. Brussels is not expecting any major changes here before the spring.
IT systems are going to have to be updated such as the SLEXIS system which will give customs officers access to the latest legal requirements. The financial programme ISZTAR will also have to be enlarged, currently it is in use only in Kraków and Nowy Targ in the south of the country.
Record maker
CD and DVD producer GM Records has announced that it will invest PLN10m on doubling production next year. Funds for these investments come from the companies own resources and from loans.
The company admits that the CD and DVD market is not especially profitable at the moment. However there are new requirements for CDs from publishers and also for advertising and promotional purposes.
Eighty percent of the production of GM Records is now for promotional activities and inserts to magazines. The rest of the production is largely for music and computer games.
There are almost twenty CD producers in Poland, most of which are small businesses. Production only requires one machine and as margins are forced down, so is quality. Therefore larger companies are forced to look to export markets in order to survive.
Other CD and DVD producers are also increasing production capabilities.
Takt, the largest domestic manufacturer, is spending PLN7m on a new production line. Rybnik based Digirec recently increased its capacity to 1.5m units per month.
Too hot for sales
Amongst the six heat production companies quoted on the Warsaw stock market, five have noted increased sales in the first ten months of this year. However profits were not as high as expected due to the unseasonally warm weather this winter (if of course it is winter yet!)
Finishing investments
Polypropelene cloth producer Lenko from Bielsko-Biała is hoping to finish its modernisation next year. In 2001 alone it will invest PLN9m with a total investment cost coming to over PLN45m. It is believed that its change in technological base through these purchases from the Swiss Sulzer for example will enable it to find a strategic partner.
This year the company is expecting to report a profit of PLN1.2m. The main shareholder is the ninth national investment fund, which is managed by PZU NFI Management. They are refusing to comment on rumours of a potential investor.
Marriage of coal-venience
The Boleslaw Śmialy coal mine, part of the Gliwice coal company is hoping to be attached to the Laziska power station which would bring it into the fold of the southern energy group PKE. This would guarantee the survival of the mine, at least for the present.
The mine could join the PKE in March of next year at the earliest.
Before that can take place a difficult restructuring process will be necessary which should make the mine economically viable. By then there should be around 2,000 — 2,100 people working there, down from the present 2,550.
The policy of marrying coal with electricity is very advantageous for the coal mines as it will ensure their immediate survival. Indeed the results of many mines have improved of late. On the other hand it is not so good for the power stations, particularly those who will have to compete with electricity producers not linked up to such a costly partner.
Loudspeaking funds
Tonsil from Wrzesnia near Poznan is in bad need of cash. It is the largest domestic producer of loudspeakers and believes that it will sign a contract guaranteeing a PLN16m cash injection in the next few days.
In the first three quarters of this year its sales dropped by PLN7.7m when compared to the same period of 1999 to PLN38.1m. Losses for this period were PLN11.5m, up PLN1.6m. A loss of PLN15m is expected for the entire year. A court decision recently forced the company to mortgage one of its properties for PLN3.9m in order to pay the social security office ZUS.
Restructuring the company which will involve 400 job losses is about to take place. This will cost PLN3.5m but the company believes that this money will be quickly earned back.