Polish Business Survey
Bydgoszcz complex opens
On Thursday a shopping and office complex was opened on land belonging to the Bydgoszcz Furniture Factory (BFM).
Other than office space, a 5,300sqm furniture showroom will be built there together with ancillary services. The whole complex cost PLN16m with the same sum again earmarked for building a logistics centre near Bydgoszcz.
Romuald Wawrzyniak, MD of BFM, claimed that this investment will aid the company to improve its warehousing and distribution facilities. The logistics centre will be around 20,000sqm and should come on line in April 2002.
This year saw a lot of investment activity at BFM. Other than the shopping and office complex, two new factories were built at a cost of PLN35m. This brings the overall investments of the German Schieder, the strategic investor in BFM, to over DEM60m.
Wawrzyniak claims that the investors have gained a strong position in the difficult Polish market through this investment. The only major problem is the comparitively weak position of the euro which stops exports from being as profitable as they might be.
BFM exports 65 percent of its production to countries such as Germany, Austria, France, Sweden and the former USSR.
BFM is one of several furniture factories in this country that belong to Schieder which also owns Helvetia Furniture, Flair, Drakonia, FS Favorit Furniture, MMI Olsztyn and SFM Słupsk. Turnover in Poland is around DEM800m.
Schieder employs around 13,000 employees around the world and its yearly turnover is over EUR1bn.
Businesses drop PZU
The conflict between the shareholders of insurance giant PZU is making the every day workings of the company increasingly difficult. As the new year comes in and more policies come to be renewed, many business clients will clearly look to more stable competitors who have a more certain future.
One competitor admitted that it is now open season on PZU's clients.
PZU has a 78 percent share of motor insurance in this country. This is not very profitable. It therefore needs to restructure its client base, especially in non-obligatory policies such as fully comprehensive auto and property insurance.
This restructuring is however made all the more difficult because of the struggle for control of the company which is made all the worse by the out of date insurance conditions that the company offers. The profitable business is likely to go elsewhere.
Tadeusz Soroka, MD of Daewoo insurance also admits that the problems of his main shareholder is making restructuring difficult although he claims that business has not been lost.
The new year will not be bringing good cheer to PZU. In January more board room fighting is already on the cards. The treasury does not hide its hostile intentions towards the Eureko/BIG BG consortium to whom it sold a stake in the company. The consortium has said that it will fight to protect its rights and no doubt the lawyers are already queuing up to get the business. Even if the government did win in the courts, and to make it even more exciting for the competition, there will be elections next year and it is highly unlikely that Andrzej Chronowski will still be in his job at the treasury this time next year.
Tyred of losing
In accordance with the government’s programme for keeping defence contractors in state hands, Stomil Grudziądz was not planned to be privatised.
The difficult financial condition of the company with money owing to the order of PLN135m has forced the cabinet to change its mind. The state now wants to sell its debts in exchange for shares.
Share price investigation
Jacek M. Walczykowski, deputy managing director of Elektrim, has confirmed in an interview in today's Puls Biznesu that only the legal advisors and the board of his company knew of the planned letter of intent with Deutsche Telekom.
The company has requested that the stock market control comnmission investigate why its share price dropped by ten percent in one day in order to eliminate possible suggestions of insider trading.
Up in the air
Poland is being tough with EU negotiators in the question of open skies. It may agree to a free market in aviation in 2004 but only if the EU gives way on one of the Polish demands which has so far fell on unsympathetic ears.
Falling out over vodka
Dividing up the brands of the various Polmos companies looks as though it is going to be a complete fiasco.
In the middle of last year the Polmos companies shared out their brands with each other in order to make privatisation easier. However individual companies have now started to register brands similar to those owned by the competition. For example the Zielona Góra factory has registered Żołądkową Wytrawną which is similar to that owned by Lublin called Żołądkowa Gorzka. Then Lublin counter attacked registering Luksusowa Wytrawna to counter the Luksusowa mark owned by Zielona Góra.
In all it looks like any possible investors are going to have an even tougher choice added to the existing problems of the dispute with Agros.
For the treasury it must be disappointing to see the value of these companies it is hoping to sell off continually dropping.
Airport action
At tomorrow’s shareholders meeting of Poznań's Ławice airport, Poznań local authorities will be demanding that the Polish airports authority PPPL withdraws a plan to limit the rights of minority shareholders.
If this does not prove to be possible it is threatening legal action.
Retailer bankrupt
A Poznań court has declared the bankruptcy of Market Pozperito with PLN80m in debts to 1,500 creditors.
The company was one of the largest regional retailers, which still had 100 stores as recently as last September when the number was reduced to forty.
Arkadiusz Majchrzak, MD of the company, says that one of the reasons for the failure was the lack of access to credits and not having a foreign backer.