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Key Sector Update


2001-02-01

Financial

In the second half of 2001 DB24, a retail bank and Deutsche Bank subsidiary, will start operating in Poland. Deutsche Bank took over Bank WspĂłĹpracy Regionalnej (BWR) at the turn of 2000 and 2001.

On December 20th, 2000, a decision was made to merge Wielkopolski Bank Kredytowy and Bank Zachodni. As a result, the two banks’ brokerage houses will also merge and are expected to take more than 4% of stock market turnover.

Because of financial liquidity problems at Bank CzÄstochowa, a Banking Supervisory Commission management team is now in place. At the same time, the Commission has sanctioned BRE Bank’s acquisition of Bank CzÄstochowa shares giving 75% voting rights.

In the first nine months of 2000 the Polish banking sector was developing faster than in the same period of 1999. After three quarters of 2000, the investment fund companies had reported a net loss of almost PLN 31 million, while at the pension companies, a net loss of over PLN 693 million was seen.

In 2000, turnover on the spot market in Poland was almost PLN 147 billion, over 95% up on 1999. Turnover on the share market was over PLN 143 billion, 105% up on 1999. CDM Pekao S.A. accounted for most of this.

In 2000, the total value of transactions on the regulated over the counter market was PLN 567 million, 29% down on 1999. The Bank ĹlÄski and Pekao S.A. brokerage houses had the biggest share of the market with 21.1% and 20.3% respectively.

In 2000, Polish commercial banks opened about 700 new outlets. At the same time, employment in the sector fell by 2,000. PKO BP, which opened 105 new outlets, was the most active of the commercial banks in this respect.

In 2000, Nationale Nederlanden added 85,000 new customers and was the most successful of the pension funds in this respect. Only two other funds have more customers than Nationale Nederlanden’s 1.7 million. These are PZU with over 1.7 million and Commercial Union with 2.5 million.

PKO BP is the leader among the municipality issues agents on the number of programmes it is participating in, 47. The bank started 30 new programmes last year. In total, municipality bonds now serve about 100 programmes worth a total of PLN 1.5 billion.

By the end of 2000, PLN 6.56 million had been raised by investment funds operating in Poland. This is 108% up on 1999. The increase is mostly owing to an inflow of new sources to dividend funds set up in 2000. This apart, there was a rather slow increase in investment fund assets.

In 2000, the biggest loan-agency companies granted loans of over PLN 7 billion for part payment purchases. This was 40% up on 1999. Lukas of WrocĹaw had the biggest share with PLN 2 million worth of loans granted.

Between them, banks operating in Poland have a total of 11 million personal accounts. On end of 2000 figures PKO BP had the most with over four million. But its share of this market fell from 42% to 37% in the same year.

IT

On December 14 2000 the Minister of Posts and Telecommunication signed a series of decisions concerning the rules for settling accounts between Polish Telecommunications (TP S.A.) and Netia 1, which is to offer long-distance telephone connections. The decisions cover the rates of account settlements between the two operators. Bills made out by TP S.A. must include services rendered by Netia1 to TP S.A. subscribers.

Elektrim is to sell 51% of shares in its stationary telephony and data transmission companies to Deutsche Telekom. The sale is to go through by the end of February. The companies concerned are RST El-Net S.A., Telefonia Regionalna Sp. z o.o., Elektrim Tv Tel Sp. z o.o., InterNet Polska Sp. z o.o., VNP Services Sp. z o.o. and Polish Phonesat Sp. z o.o.

TP S.A., the biggest telecommunications company in Poland, is to borrow EURO 400 million from the European Investment Bank to cut waiting times for terrestrial connections in the seven largest Polish agglomerations.

Interia.pl, one of the leading Polish Internet companies, went public on January 2 this year. The capital raised is to be invested in new technology and promotion with some of it going on takeovers of other Internet companies.

More and more TV companies want to offer an Internet service. Wizja TV and UPC Telewizja Kablowa (Cable TV) have already started offering net access to their subscribers. Polsat intends to introduce an Internet service in 2001 and Cyfra+ is considering it.

At the end of December 2000, Energis Polska, the former NG Koleje Telekomunikacja, and its divisions PKP (Polish Railways), PT Centrala, National Grid and Energis were awarded a concession to provide long-distance telephone services.

As initial data show, at the end of 2000 there were about 6.9 million mobile telephone users in Poland, up by over 70% on the end of 1999. Subscriber numbers at the respective companies for the end of 2000 were: PTK Centertel -1.65 million, Polska Telefonia Cyfrowa 2.1 million and Polkomtel - 2.4 million.

On January 1 2000, Computer 2000, an IT products distributor owned by the American Tech Data Corp., changed its name to Tech Data Polska. The company generated PLN 700 million in sales revenues in 2000.

TP S.A., the leading Polish telecommunication company, has announced its investment plans for the next three years. The company is to spend PLN 11 billion in 2001, PLN 8.5 billion in 2002 and PLN 7.5 billion in 2003. PTK Centertel, the GSM mobile telephony company owned by TP S.A., is to increase its share of the market to 29% in 2001, and in the long term is aiming to become market leader.

It is forecast that ComArch, an informatics systems producer, will report revenues for 2000 of over PLN 140.8 million. The value of sales for 2000 is expected to amount to PLN 120 million with net profit of PLN 8 million.

Food And Beverages

Moet Hennessey, a company belonging to the Moet Hennessey Louis Vuitton group that specialises in distributing high-end alcoholic drinks and other luxury products, has signed an agreement with the American Millenium Import Co. to distribute the ‘Belvedere’ and ‘Chopin’ vodka brands through its retail network. The Millenium Import Co. has been selling ‘Belvedere’ and ‘Chopin’ for four years in Northern America.

ZakĹad Mazury of EĹk was the only one of the six plants of Animex, a meat and meat products exporter, to report a net profit after the first eleven months of 2000. Mazury performed better than the other plants by reducing operating costs and making organisational improvements. Company president, Robert Ĺťulewski, has stated that the viability of the other plants will be assessed strictly on profit. He also announced a review of employment and employment structure at the company.

Wawel of KrakĂłw, a confectionery producer, has improved its financial results and now intends to increase its present market share of 5% by taking over another company or by developing a partnership. Wawel would also like to be exporting 20% of its production.

2000 was the best ever year for sugar in terms of productivity and daily processing. The sugar beet crop was 13.16 million tonnes, up on the 12.56 million tonne crop of 1999. The sugar market must now be regulated to prevent a plunge in prices.

The spice producing companies Kamis of Poland and Podravka of Croatia are to increase advertising expenditure in an attempt to stay market leaders. Competition is so strong that the leading companies are very tight lipped about marketing and investment plans. A series of mergers are expected in this market during the next two to three years.

Igloomeat – SokoĹĂłw of DÄbica, a salami producing firm, and a subsidiary of the meat producer SokoĹĂłw, had profitability of 3% of total assets last year. SokoĹĂłw has more than 60% of Igloomeat shares and wants to see further development of Igloomeat, which now has more than 35% of the Polish salami market.

Automotive

By the end of November 2000, 451,500 new cars had been sold in Poland, almost 130,000 down on 1999 figures. Comparing to other countries, Poland noted the biggest slow-down in sales of new cars.

In 2001, less new cars will be sold but they will cost more. According to Samar, a consulting firm that specialises in the area, the motor vehicle market will not develop in Poland under the current legislative and regulatory framework.

The motor vehicle production plant Jelcz S.A., sold 18% fewer trucks but 18% more buses in 2000 than it did in 1999. Jelcz has received the AQAP 110 truck production certificate that recognises a production standard acceptable to NATO. Jelcz hopes to become an army vehicles supplier.

Construction

On December 19 2000, Elektrobudowa S.A. began re-purchasing its own shares in order to improve its quotation. In 2000, its shares went down by 40%. In 2001, the company is forecast to generate net profits of 18.3 PLN million and 350 PLN million in revenue.

e-Business

The chances are that Internet and other up-to-date channels for distributing and placing financial products will remain only a supplement to banking activity carried out at traditional branches. It seems that customers prefer to carry out their business face to face at branches. Among the financial institutions only the brokerage houses are winning a significant numbers of Internet customers.

In March 2001 a second virtual bank, Inteligo, will begin operating. It has been co-established by the German Bankgesellschaft Berlin and a group of people with e-banking experience at other institutions. The German bank has 40.8% of Inteligo shares with the Dutch Inteligo Financial Services holding the remainder.



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