Katowice your next business destination

Katowice your next business destination

Spis treści Katowice as the Capital of the Silesia Province...2 In the Very Centre of Europe...5 Silesia Metropolis answer to investor s needs...9 Connections to the World...11 Human Capital...13 Labor market...14 Katowice Office Market...18 Katowice Special Economic Zone...21 Foreign capital...23 Vision for the future - the regeneration of Katowice has started...27

Dear Sirs, For many years, the city of Katowice has been undergoing a visible transformation, and now it faces new challenges resulting from taking on a new role, the leading city of the Silesia Metropolis. To meet these challenges, the city has launched the implementation of several key projects, including an International Congress Center, relocation of the Silesian Museum and National Polish Radio Symphony Orchestra, the Katowice Technology Park and the Katowice Water Park. We have initiated steps aimed at transforming the existing downtown space into a new, functional and people friendly environment. We are appreciative that the city is being recognized on the national investment map as a good location for many foreign investors. At the same time, we are acutely aware that without new investments, the planned pace of transformation may slow down. Therefore, I am pleased to present you with the investment report prepared by our industry specialists, which provides an overall perspective and responds to the questions, and which will help you make a sound decision regarding investments in the Silesia Metropolis. With regards, Piotr Uszok Katowice City Mayor

Katowice as the Capital of the Silesia Province Katowice, the dynamic city of the Silesia Province with population of 306,826 inhabitants is the economic, administrative, academic and cultural heart of the Silesian Metropolis. The city of Katowice offers investors a perfect location, highly skilled human resources, enormous potential and market absorptive power as well as good internal (with neighbouring regional cities) and external (with other Polish and foreign cities) communication. Katowice as the capital of the Silesia Province has some factors that make it very attractive for business: Location The City is located in southern Poland, within a very short distance to important European capitals, such as Budapest, Bratislava, Vienna, Prague, Berlin and capital city of Poland Warsaw. Being at the cross-roads of two important trans-european transport corridors from North to South and East to West connects Katowice easily with all the important locations in Europe and the world. Metropolitan Association of Upper Silesia (GZM) Katowice is the core of one of the biggest and most dynamically developing metropolises in Poland - the Metropolitan Association of Upper Silesia (GZM). The association was established by 14 neighbouring Silesian cities. In the result it created the largest metropolis in Central Europe and the 9 th largest in Europe. GZM covers approx. 1200 sq km with almost 2 million people. 2

GZM partner cities City name Number of inhabitants Area in sq km Katowice 306,826 165 Bytom 167,121 69 Chorzów 108,379 33 Dąbrowa Górnicza 123,619 189 Gliwice 181,346 134 Jaworzno 93,292 153 Mysłowice 73,276 66 Piekary Śląskie 56,967 40 Ruda Śląska 141,009 78 Siemianowice Śląskie 68,702 25 Sosnowiec 211,911 91 Świętochłowice 52,236 13 Tychy 126,703 82 Zabrze 176,140 80 Source: Central Statistical Office 3

Economy & Industry Silesia region is the second most developed region in Poland, creating c. 13% of the national GDP. Upper Silesia being symbol of coal mining and steel industry in the past, is currently becoming an important center of business process outsourcing, automotive, high-tech and tourism industries. Education The Silesia Province is a home to almost 200,000 students, which accounts for about 10% of the total number of students in Poland and makes the Metropolis the 3rd largest academic center in the country. The majority of studies profiles relate mostly to economic, business & administration and technical studies. Basic facts about the city of Katowice City area: 165 sq km Population: 306,826 Population of Metropolis: 1,878,322 Capital of Silesian Province (population approx. 4,635,882) Close distance to Warsaw (290 km), Vienna (430 km) and Prague (450 km) GDANSK BERLIN 620 km WARSAW 290 km POZNAN LODZ KATOWICE OSLO OLM STOCKHOLM BELFAST PRAGUE 450 km EDINBURGH MALMÖ DUBLIN SHANNON KRAKÓW BRATISLAVA 360 km COLOGNE-BONN BUDAPEST 560 km FRANKFURTPRAGUE MÜNICH KORCZOWA GORZYCE VIENNA 430 km LIVERPOOL DONCASTER-SHEFFIELD BIRMINGHAM CORK DÜSSELDORF LONDON EINDHOVEN BOURNEMOUTH DORTMUND BRUSSELS PARIS TERESPOL VIENNA MILAN 1,5 h ROME BURGAS Motorways and national roads 3,5 h CRETE 4 Planned motorways City Capital

In the Very Center of Europe Poland Competitive Advantages Location & economy part of the single market of around 500 mn people part of trans-european transportation corridor 38.2 million of consumers 6 th in the EU 621.4 miles radius 250 mn people Human capital young, well-educated labour force approx. 2 million of university students 461 universities & high education schools increasing labour productivity Investment incentives 14 Special Economic Zones 2007-2013 over 67 billion EUR from the EU structural funds and national contribution of about 20 billion EUR 1,242.8 miles radius 550 mn people Source: Polish Information and Foreign Investment Agency (PAIiIZ) Poland as the business destination Poland has emerged as the leading economy of CEE. This country experienced a rapid rise of 40% in the number of FDI projects that it attracted last year. This resulted in a rise in Poland s market share of job creation from 6% in 2009 to 9% in 2010. The top 15 European countries for FDI Rank Country FDI projects 2010 Change 2009-2010 Share of total Jobs created* 1 United Kingdom 728 7% 19% 21,209 2 France 562 6% 15% 14,922 3 Germany 560 34% 15% 12,044 4 Russia 201 18% 5% 8,058 5 Spain 169-2% 4% 7,723 6 Belgium 159 9% 4% 4,010 7 Poland 143 40% 4% 12,366 8 Netherlands 115 6% 3% 958 5

Rank Country FDI projects 2010 Change 2009-2010 Share of total Jobs created* 9 Ireland 114 36% 3% 5,785 10 Italy 103 3% 3% 627 11 Switzerland 90 30% 2% 673 12 Hungary 88 38% 2% 8,572 13 Sweden 77 33% 2% 1,125 14 Czech Republic 71 16% 2% 4,815 15 Turkey 64 10% 2% 3,830 Other 513 N/A 14% 30,620 Total 3,757 14% 100% 137,337 Source: Ernst & Young s European Investment Monitor 2011 * Job creation for projects for which the information is available Poland has attracted investors in automotive (12%) and business services (8%). With strong economic growth prospects, low costs and growing numbers of consumers, Poland is a very attractive investment destination for industrial and business service companies looking to locate in Europe. For some consecutive years American investors have been in the forefront of business activities in Poland followed by such countries as Germany and the United Kingdom. Top 10 investors in Poland Country FDI projects 2006-10 FDI projects 2010 Market share 2010 Job creation 2006-10 Job creation 2010 USA 146 33 23% 14,604 3,845 Germany 100 15 10% 10,929 943 United Kingdom 52 11 8% 5,915 926 Sweden 36 10 7% 4,660 701 South Korea 21 10 7% 8,179 1,604 Italy 33 10 7% 5,357 641 Switzerland 28 9 6% 1,994 551 France 38 6 4% 2,384 435 Japan 38 5 3% 8,283 354 Finland 20 4 3% 1,607 56 Other 207 30 21% 21,091 2,310 Grand Total 719 143 100% 85,003 12,366 Source: Ernst & Young European Investment Monitor 2011 6

Poland vs other countries in Eastern Europe Poland s employment costs are among the lowest in the whole of Europe. The country s wage costs are not only lower in comparison to western Europe, but also when compared to Slovenia, Estonia, Slovakia, the Czech Rep., Hungary and Latvia. Lower employment costs in national average incomes can only be found in Ireland, Greece and in Italy. When compared to Central and Eastern Europe, lower employment costs are only to be found in Romania. Lithuania and Bulgaria have similar wage levels to Poland. Pay in Poland is increasing more slowly Pay in Poland is increasing more slowly than in the region s other countries than in the region s other countries 20.0% 15.0% Poland Czech Rep. Slovakia Hungary 10.0% 6 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: EIU Source: E I U CEE countries still enjoy a more competitive cost base than their Western counterparts. Average labor costs in these countries remain approximately 15% to 30% of the European average. However, wage costs have increased significantly faster (95% between 2000 and 2008 in Hungary, 68% in the Czech Republic, and 31% in Poland) than the Eurozone average, which increased of 22% over the same period. Some analysts predict that so-called labor convergence will have happened by 2020 the latest. Comparison of costs of employment in selected European countries Hourly remuneration in Hourly USD (2009) remunration in USD (2009) Denmark Germany USA UK Czech Estonia Hungary Poland 0 10 20 30 40 50 60 Source: USDL / BLS 7

Those that have trusted us already BPO/ITO/SSC in Poland BYDGOSZCZ TRICITY SZCZECIN arvato services, BLStream, Coloplast, GaveKal, Sonion, Stream, Tieto, UniCredit Acxiom, Arla Foods, First Data, General Electric, Fineos, Intel, Sony, Thomson Reuters, Geoban Alcatel-Lucent,Atos Origin, Astaro, Teleplan International Tricity WARSAW Accenture, Xerox, Acxiom, AVON, Sitel, IBM, Procter&Gamble, Samsung, Citibank, Teleperformance, Symantec, Itella, General Electric Szczecin POZNAŃ arvato services, Carlsberg, Ciber, Dalkia Services, Duni, MAN, IKEA, Franklin Templeton, GlaxoSmithKline, Lorenz Bahlsen Poznań Warsaw Łódź Wrocław Katowice WROCŁAW Capgemini, Google, Ernst&Young, Geoban, Hewlett Packard, IBM, Credit Suisse, Irevna, McKinsey, Microsoft, Tieto, Nokia Siemens ŁÓDŹ Bydgoszcz Accenture, Xerox BSH Bosch Siemens, CERI, BNP Paribas, Fujitsu Seervices, Infosys, Nordea Bank, SouthWestern, UniCredit, Citigroup KRAKÓW Kraków KATOWICE AGGLOMERATION ArcelorMittal, Capgemini, Contact Center, DisplayLink, ING Services, ista, Kroll Ontrack, Mentor Graphics, NorthgateArinso, PwC, Rokwell Automation, Steria, Tenneco, Timken, Vattenfall, Wipro Lufthansa, Amway, ABB, Capgemini, IBM, Electrolux, Sabre, UBS Intelenet, Motorola, International Paper, Luxoft, Shell, HSBC State Street, HCL Source: Association of Business Service Leaders in Poland (ABSL) Poland your gateway to the European Union Extraordinary business opportunities, created by EU funded aid, are to be taken by interested investors. In the programming period 2007-2013, Poland is the major beneficiary of EU funds. The budget set for support for investments in Poland amounts to EUR 67 bn. EU funds for 2007-2013 Number of accepted projects Value of projects (bln PLN) Silesia Province Poland 5,683 53,561 27.4 263.7 1 USD = 2.9 PLN In addition, different types of regional aid in form of: Government investment grants, CIT exemptions in Special Economic Zones can be accumulated up to the maximum aid intensity level. The basic maximum intensity of regional aid for an investor in the Silesia Metropolis is at the level of 40%. 8

Silesia Metropolis answer to investor s needs Silesia Metropolis The Silesia Metropolis (GZM) is located in the central part of the Silesia Province, covers the area of 1218 sq km and is inhabited by almost 2 million people. The Metropolis is the main administrative center of the Province, and also center of economy and finance, culture, commerce, entertainment and recreation, as well as transport, and logistics. The Silesia Metropolis is situated at the crossroads of trans-european roads and rail transport routes of national and European calibre (inclusive of motorways: A4) and relatively close to a couple of international airports (located in: Pyrzowice 34 km, Kraków 55 km, Wrocław - 170 km, Ostrawa 130 km). Advantageous location of the Silesia Metropolis, from Polish and European perspective, predisposes this area for multifaceted cooperation with the neighbouring metropolises, both, in Poland, and abroad. Out of the total number of the population of the Silesia Metropolis: 66%: people is in productive age group - Metropolis of Silesia is the youngest metropolis in Poland) 52%: women, 15%: people being over 65 years of age. 9

Transport Buses, trams, trolley-buses, and regional railway transport carry over 1.2 million passengers every day. The Metropolis s internal transport is also enhanced by the Cross-Regional Highway (DTŚ) that joins Katowice with five other Silesian cities. Economy The area of the Silesia Metropolis still remains the main industrial center of the country, specializing in the mining, metallurgy, and automotive industries. Other significant industrial sectors are: chemicals, machinery and military. However, the branches of the traditional industry are in the process of continuous modernization and they are becoming increasingly, environmentally-friendly, i.e. more energy-efficient and more land intensive. At the same time, a prevailing role of the service sector becomes more significant over the industrial one, just as is the development of the knowledge-based economy. The employment structure according to individual sectors of the economy is as follows: Service sector (market and non-market services) - 58.7%, Industry and construction - 41.1%, Agriculture - 0.2%. The basic economic potential of the Silesia Metropolis cities is formed by: Katowice Special Economic Zone (KSSE) over 120 investor-companies spread around in three sub-zones, Four economic activity zones, Entities constituting practical connections of various industrial branches with the world of science, inclusive of: Technological parks, Technological incubators (technological centers), Academic entrepreneurship incubators. The Silesia Metropolis (GZM) generates 67% of the region s GDP and 8.7% of the country s GDP. 10

Connections to the World Air transport The 3 rd biggest airport in Poland and the fastest developing airport in Europe - Katowice International Airport in Pyrzowice operates in the distance of 34 km from Katowice. It maintains: approx. 26 direct connections (regular destinations) with European cities such as: Brussels, Barcelona, Dublin, Düsseldorf, Frankfurt, London, Milan, Paris, Rome, Stockholm and Polish capital Warsaw, approx. 38 charter destinations, The Airport provides connections with the USA via the airports in Frankfurt, Munich and Düsseldorf. After opening the new terminal in 2007 the Airport improved its capacity to 3.6 million passengers yearly. In 2010 it provided services to approximately 2.4 million passengers (growth by 1,430 % in comparison to 2000). Additionally on the space of 5,378 sq m there is a cargo terminal which transported 11.2 thousand tons of commodities in 2010. The Airport Katowice has also the lowest number of no flights days due to the unusually convenient weather conditions that prevail here, in comparison with other airports in Poland. Another advantage of Katowice is a smaller airport located in the immediate vicinity of the center Katowice-Muchowiec. It is appropriate for small air traffic, especially business-related. Moreover, within the radius of 100 km there are two additional international airports: Balice Airport Kraków (Poland) and Airport in Ostrava (Czech Republic). Reykjavik Bergen Helsinki Chicago New York Madrid Stavanger Oslo Stockholm Belfast Copenhagen Cork Dublin Edinburgh Doncaster/Sheffield Malmö Leeds/Bradford Liverpool East Midlands Gdańsk Birmingham London Bristol Eindhoven Dortmund Poznań Cologne/Bonn Warsaw Brussels Duesseldorf Berlin Paris Katowice Prague Frankfurt Stuttgart Munich Barcelona Milan Turin Venice Bologna Pisa Forli Vienna Kiev Malaga Alicante Roma Burgas Flights from Katowice Airport Flights from Cracow Airport Trapani Calabria Thessalonica Athens Flights from Katowice and Kraków Airport Malta Chania Heraklion Palos Tel Aviv 11

Railway transport The Silesia region has the highest density of standard railway lines in Poland and accounts for 11,2% of national standard gauge-lines in operation. Approximately 60% of cargo transported in Poland and 11% of the passenger traffic flows through Katowice and the region. Additionally, in Silesia region the only broad gauge (400km long) is situated, which joins the region with the Ukraine, providing fast transportation of natural resources and other goods from the East. Katowice is placed on two significant railway routes. First railroad runs from Dresden through Katowice to Lvov and the second from the southern border of Poland via Katowice and Warsaw to the Baltic areas. Katowice railway station is an important destination and stop for: InterCity and EuroCity. It offers direct express connections with the biggest Polish and European cities. Road transport Silesia Metropolis and Katowice itself are very conveniently located at the crossroads of two out of ten transport trans-european international roads: Corridor III: Berlin Wrocław Katowice Kraków Lvov Corridor IV: Gdańsk Katowice Żylina Bratislava Vienna Moreover almost 12% of Polish motorways and 30% of expressways are placed in the Silesia. At the same time it is ongoing expansion of motorways (A1under construction), expressways, ring roads and the modernization of local roads which improves internal and external transport. 12

Human Capital Silesia Province is inhabited by approx. 4.6 million people which equals approx. 12% of the population of Poland. The highest population density is in the Silesian Metropolis with 2 million inhabitants. However, if one wanted to take a more general look, within a 100-km radius of Katowice the capital of the region there are 9 million people. Higher education The availability of highly skilled and educated people is the undeniable strength of the region. The Silesia is a source of approx. 200,000 students, which accounts for about 10% of the total number of students in Poland. The majority of studies profiles relate mostly to economic, business & administration and technical studies. Three most popular departments (thousand of students per academic year) Economics, business & administration 33.1 Social sciences & humanities 25.0 Engineering & manufacturing 19.0 The Silesia Province is regarded as one of the main Polish higher education centers. Local higher education facilities continue to advance and develop giving more people opportunity to reach a higher level of education. The most important universities placed in Katowice are: University of Silesia, Medical University of Silesia, Silesia Polytechnic, University of Economics, Academy of Music, Academy of Fine Arts, Academy of Physical Education. 13

Labor market Demographics Population of Silesian Metropolis has approx. 2 million people. Over 69% of the population is of working age, with 58% under 45, which (considering the low unemployment rate of 8.9%) makes for a relatively young and productive society. 13% 18% Preproductive Productive Postproductive 69% Cost of labor: remuneration Financial services Average gross monthly remuneration in Finance (gross/month/pln) Junior accountant 2,300 2,800 Accountant 2,500 5,000 Senior accountant 3,000 6,000 HR specialist payroll specialist 3,200 5,000 Financial analyst 4,500 8,000 Finance controller 8,000 15,000 Internal auditor 6,000 10,500 Finance manager 9,500 19,000 CFO 16,000 35,000 Source: Manpower, 2011 14

IT Services Average gross monthly remuneration in IT (gross/month/pln) Java Developer 3,500 9,500 C++ Developer 3,000 8,500 NET Developer 3,200 9,500 SQL Developer 3,000 8,500 Systems Administrator 3,500 10,000 Database Administrator 3,500 9,000 Network Administrator 3,000 7,500 Systems Analyst 3,500 9,000 Project Manager 5,500 14,000 IT Manager/Director 8,000 25,000 SAP Consultant 6,000 25,000 Web Designer 2,500 8,000 Source: Elan IT, 2011 1 USD = 2.9 PLN Components of social security premiums paid by employer and employee Type of insurance % premium Breakdown of premium Employer Employee Retirement 19.52% of remuneration 9.76% 9.76% Disability 6% of remuneration 4.5% 1.5% Accident 0.67% to 3.60% of remuneration depending on occupational risk in a given industry 0.67% - 3.60% - Sickness 2.45% of remuneration - 2.45% Additional contributions: Labour Fund 2.45% of remuneration 2.45% - Guaranteed Employee Benefit Fund 0.10% of remuneration 0.10% - The employer is also obliged to pay a premium to the State Fund for the Disabled (PFRON). The duty to pay the premium to the Fund and the amount of premium depends on the number of people employed, their average remuneration and the total number of disabled employees. 15

Students and Graduates The Silesia Province can be proud of 45 universities. In the acedemic year 2009/2010, the majority of roughly 200,000 students attended public institutions. The Metropolitan Association of Upper Silesia (GZM) comprises almost 72% of all university students in the Silesia Province. Province Silesia Metropolis University education in the academic year 2009/2010 Universities 45 29 Students 187,236 134,076 Graduates 43,637 30,044 Source: GUS - Central Statistical Office in Katowice 2010 The most popular faculties among students and graduates include economics and adminstration, medical studies, humanities as well as science and technical studies. Number of students in the academic year 2009/2010 Number of students in the academic year 2009/2010 62 486 non-public universities 124 750 public universities Source: GUS - Central Statistical Office 2010 Students structure according to studies faculty groups in the academic year 2009/2010 Students structure according to studies faculty groups in the academic year 2009/2010 13,961 4,536 14,430 humanities law medicine 75,568 9,180 13,961 2,840 IT medicine architecture and construction environmental protection economy and administration engineering and technical studies 13,247 47,511 other 16

Graduates structure according tu studies faculty groups in the academic year 2009/2010 Graduates structure according to studies faculty groups in the academic year 2009/2010 13% 18,803 3,540 451 3,104 2,001 951 542 humanities law medicine IT architecture and construction environmental protection economy and administration engineering and technical studies 11,763 other 2,482 Knowledge of foreign languages The Silesia Metropolis has one very important advantage over other investment destinations the availability of language skills. English is international language and the most important language used in business contacts. Majority (66%) of our students learn English language, 25% speak German, 5% French and 3% Russian. Declarative knowledge of foreign languages among students of IT and economic faculties in Silesian Metropolis (n=300) 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% English German French Spanish Russian Italian Japanese Slovak Dutch Danish Swedish 99.6% 72.6% 15.5% 13.3% 12.4% 7.1% 3.5% 3.1% 1.3% 0.9% 0.4% 17

Katowice Office Market Over the recent years Katowice has developed into one of the major regional office markets in Poland. The potential of Katowice, which has been attributed to its location and well-qualified labourforce, has been constantly attracting new tenants and market players. Office stock At the end of 2010, modern office stock in Katowice (class A and B/B+ buildings) was estimated at a level exceeding 180,000 sq m. Similarly to other major regional markets in Poland, the majority of modern office buildings in Katowice (some 50,000 sq m) are located in the city center. The remaining space is located in an area outside the city center. Total office stock by regional cities 2010 Total office stock by regional cities 2010 14% 12% Katowice 15% Kraków Wrocław 25% Łódź Trójmiasto Poznań 15% 19% Source: Knight Frank Office supply In 2010 approximately 227,000 sq m of modern office space was delivered to the Polish regional office markets (Katowice, Kraków, Łódź, Poznań, Wrocław, Trójmiasto). Over 20% of Poland s new office supply (48,300 sq m) was built in Katowice and the number nearly tripled the annual supply recorded in 2009. Three projects completed in 2010 (Katowice Business Point, Centrum Biurowe Francuska and Reinhold Center) delivered A-class office space to the market, increasing the total office stock in Katowice by 27% within a single year. 18

New supply by regional cities New supply by regional cities 8% 3% 21% Katowice 17% Kraków Łódź Poznań 26% Wrocław 25% Source: Knight Frank New supply scheduled to be delivered in Katowice in 2011 amounts to 10,000 sq m and includes two projects Górnośląski Park Przemysłowy offering B-class office for lease and Kostki offering A-class refurbished office space. Moreover, in 2011 commencement of construction work on several office projects is expected. Tenants activity Following 2009 when approximately 14,000 sq m of modern office space was leased in Katowice, in 2010 the local office market witnessed a significant increase in demand as many tenants who had previously put expansion plans on hold, decided to enter the market. As a result, over 20,000 sq m was subject to lease agreements between January and December 2010 in Katowice. In recent years office take-up in Katowice has been dominated by companies from the finance/ banking and insurance sectors as well as service companies. The major office tenants in Katowice are, amongst others: Warta, ING, Nordea, Capgemini, PwC. Vacancy rate At the end of 2010 vacancy rate in Katowice stood at the level of 21%. It is expected that the small amount of supply forecast in 2011, along with the gradual absorption of available office space should contribute to a reduction in the vacancy rate within the next 12-18 months. 19

Total office stock, annual supply and vacancy rate in Katowice (2006-2010) sq m 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2006 2007 2008 2009 2010 22% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0 Stock New supply Vacancy rate Source: Knight Frank Rents In 2010 the rental levels in the Katowice office market stabilized. Monthly asking rents in class A office schemes varied between EUR 13 and 16 per sq m, whilst in B-class buildings they were quoted at EUR 10-13.5 per sq m. At the end of 2010 weighted average office rent amounted to EUR 14 per sq m per month and had decreased by some EUR 0.6 compared to the end of 2009. Additionally to base rent, tenants are obliged to incur further costs, i.e. service charges and parking fees. At the end of 2010 monthly service charges stood at the level of EUR 4-4.7 per sq m and PLN 15-16 per sq m. Underground parking spaces were quoted at EUR 47-80 per space, with surface parking - EUR 30-42 per space. In some buildings offering B/B+-class office space, the additional costs were included in the rent. 20

Katowice Special Economic Zone The Katowice Special Economic Zone (KSSE) is a part of the Polish Systems of Economic Zones established by the Council of Ministers. It was created in 1996 to support and accelerate the transformation of obsolete Silesian industries and to create new jobs. KSSE is the largest of the 14 economic zones in Poland ranked by number of operating companies (16% of all Polish businesses), invested capital (over 25% of capital expenditure in all zones) and jobs created (over 22%). Thus far, the KSSE has attracted more than 200 companies that currently employ more than 45,000 workers. Polish legal regulations allow the establishment of a new location for investors if at least 250 jobs are created or PLN 115 million (approximately EUR 40 million) is invested in regions where unemployment rate is below the national average, with less restrictive requirements for regions with an unemployment rate exceeding the national average. SEZs are designed mainly for manufacturing businesses and selected high-tech companies. However, in recent years, the KSSE has attracted investors from the BPO and R&D sectors and is looking to develop further in this direction. The most important investments in the SEZ include GM Opel, Fiat - GM Powertrain, Guardian, NGK Ceramics, Isuzu Motors, Delphi and Brembo. Investment incentives in the SEZ The tax relief amount -- depending upon the invested funds -- can amount to up to 40% (for large enterprises), 50% and 60% (for medium and small enterprises, respectively) of investment costs. The tax relief amount depending on the number of new jobs created can reach up to 40% of twoyear labour costs of the new jobs for large enterprises, and 50% and 60% for medium and smallsize enterprises, respectively. Businesses operating in the zone are guaranteed a corporate income tax exemption of 40% to 70%, and may be granted an exemption from RET. Employees of the KSSE (zone managing enterprise) help investors acquire land and buildings and offer training opportunities and consulting support. Rental opportunities (office and warehouse space) also are available. 21

Largest investors in Katowice Special Economic Zone AUTOMOTIVE LIGHTING Polska Sp. z o.o. COOPER-STANDARD AUTOMOTIVE Polska Sp. z o.o. NEXTEER AUTOMOTIVE Poland Sp. z o.o. GENERAL MOTORS MANUFACTURING Poland Sp. z o.o. FIAT-GM POWERTRAIN Polska Sp. z o.o. NGK CERAMICS Polska Sp. z o.o. ISUZU MOTORS Sp. z o.o. GUARDIAN INDUSTRIES Poland Sp. z o.o BREMBO Polska Sp. z o.o. DELPHI POLSKA AUTOMOTIVE SYSTEMS Sp. z o.o. GÜHRING Polska Sp. z o.o. HENKEL Polska Sp. o.o. KIRCHHOFF POLSKA ASSEMBLY Sp. z o.o. MAGNETI MARELLI EXHAUST SYSTEMS Polska Sp. z o.o. MAGNETI MARELLI SUSPENSION SYSTEMS BIELSKO Sp. z o.o. MECACONTROL Polska Sp. z o.o. MEIKO TRANS Polska Sp. z o.o. MÜLLER-DIE LILA LOGISTIK Sp. Z o.o. ROCA Polska Sp. z o.o. MAPEI POLSKA Sp. z o.o. ROCKWELL AUTOMATION Sp. z o.o. TENNECO AUTOMOTIVE EASTERN EUROPE Sp. z o.o. TRW BRAKING SYSTEMS Polska Sp. z o.o TRW Polska Sp. z o.o. VLASSENROOT Polska Sp. z o.o. Source: www.ksse.com.pl 22

Foreign capital For years the local authorities of Katowice have run pro-investment policy making significant progress with developing improvements for foreign investors and taking care of creating the most favorable background for investments. The success of the local policy is confirmed by the in-depth research on the Investment Attractiveness of Provinces and Sub-Regions of Poland by independent analyst The Gdansk Institute for Market Economics. It points out that Silesian Province is a clear leader showing a high level of investment attraction. Katowice is worth investing because of undeniable strong assets of the City and the whole region: lower than national average labour costs, large quantity and high quality of human resources, well developed transport infrastructure, high absorption capacity of the output market, high level of economic and social infrastructure, friendly and helpful administration. The attractiveness of economic and non-economic conditions for investing in Katowice has encouraged 150 worldwide known companies from 22 countries to set up and expand their business units. The value of a few hundred foreign investments exceeding US$ 1 million have improved Silesia s economic position. Today it is one of the most dynamically developing area in Poland. Examples of largest investors in the outsourcing industry in the region Company Type of activities Number of employees 4EverNET Sp. z o.o. Call Center 48 Alba Financial 50 Arcelor Mitall Shared Service center Europe Financial 200 Archidoc Other 260 Asseco Poland S.A. IT support 350 Asseco Systems R&D 44 Bombardier R&D 80 CapGemini BPO Financial 220 CapGemini ITO IT support 970 Comarch IT support 170 Contact Center Call Center 500 CYCLAD Polska Sp. z o.o. IT support 40 DHL Logistic Logistics 200 Display Link R&D 15 ENIRO POLSKA Call Center 100 Ernst & Young Financial 57 23

Company Type of activities Number of employees Grant Thornton International Financial 240 ING Polska Call Center 60 Ista Shared Services Financial 550 IT4Q Sp. z o.o. IT support 10 Kroll Background Screening HR 100 Kroll Ontrack IT support 31 Mentor Graphics R&D 200 Neubloc R&D 50 Northgate Arinso Poland HR 120 Pregis Financial 100 PricewaterhouseCoopers Financial 150 Proximetry Poland Sp. z o.o Financial 52 Rockwell Automation Other 390 Steria IT support 180 TP S.A. Call Center 400 Unilever Logistics 92 UPC Call Center 100 Vattenfall Business Services Financial 150 Warta [Assistance Center] Call Center 50 Wipro Financial 140 The largest investors from the USA are: Rockwell Automation, Delphi Automotive Systems, Johnson Controls, Lear Corp, Oasis East, Tenneco and General Motors. 24

Examples of successful investments in the Katowice region Capgemini, one of the world s foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies and is present in more than 35 countries. The Group relies on its global delivery model called Rightshore, which aims to get the right balance of the best talent from multiple locations, working as one team to create and deliver the optimum solution for clients. Capgemini Polska Outsourcing Delivery Center in Katowice now boast over 1100 employees, supporting 40 customers around the world in 29 different languages. Katowice as multicultural city attracts professional people from across the globe along with skilled and dynamic employees from within Poland. Katowice is vibrant and cosmopolitan place that offers individuals a friendly and open-minded environment. It has a clear commitment to focus on the quality of Human Resource and offers a valuable labour market. Being in Katowice enables Capgemini to fully utilize all that the Silesia region has to offer. is a leading world provider of industrial automation power, control and information systems and services. In 2006 it created office in Katowice which is the most important project of Rockwell Automation in Central and Eastern Europe. Employing over 460 professionals it provides services and products in fields of: manufacturing operations, financial shared services, administration, humans resources business services, IT, software, customer care, customer support & maintenance as well as strategic sourcing & purchasing shared services. Rockwell Automation is the vendor to many blue chips in Poland. Our location in Katowice was caused by availibility of highly skilled and well educated resources, well developed infrastructure as well as complex transport system and the vicinity of international airport Katowice Pyrzowice. The company has decided to make their investment in Katowice also because of strong substantial support of local authorities. Source: Sławomir Szpak, General Manager of Rockwell Automation in Katowice Kroll Ontrack is the world leader in data recovery services, data recovery software, computer forensics, data management solutions and legal technologies. Performs over 50.000 data recoveries a year and have the world s biggest team of data recovery engineers. For over 25 years, Kroll Ontrack has been pioneering data recovery services for all types of media and systems. Polish branch with the biggest laboratory in Central and Eastern Europe, offers data recovery and data management software and services to clients in a wide range of sectors and circumstances, from commercial organizations, governments, charities and the public sector, through to home users. Data loss can happen at any time and to any organization or individual. Polish branch has the largest software R&D department outside USA. Kroll Ontrack also provides computer forensics services - it has a team of certified and trained computer forensic experts that routinely work with corporations, law firms and small businesses. Claims of fraud, financial tampering, employee misconduct and other wrongdoing require organizations to piece together digital facts that lead to the truth. Kroll Ontrack computer forensic experts help ensure that no digital evidence is overlooked and assist at any stage of 25

an investigation or litigation, domestically and globally. Kroll Ontrack performed thousands of electronic investigations worldwide. Our example shows that Katowice, considered so far as a heavy industry region, can become a city with a high tech profile, where products or services used by companies from the whole world, are created. Source: Marek Suczyk, Manging Director of Kroll Ontrack Poland PwC (earlier PricewaterhouseCoopers) provides industry-focused advisory, assurance, tax and legal services to enhance value for their clients. More than 162,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. PwC decided to launch Service Delivery Center of audit services in Poland in Katowice. Presently the SDC employs 150 people and provides services to 4 countries in Central and Eastern Europe and to the United Kingdom. Katowice was chosen because we highly value the potential of the local labour market and the quality of human resources there. We also appreciate the positive approach of the local authorities towards new investors - says Richard Bradburn, Partner, PwC Katowice Service Delivery Center. 26

Vision for the future - the regeneration of Katowice has started In order to improve the quality of business, cultural and natural environment of the City in 2010 the local municipalities have given the go-ahead for capital intensive development and modernization projects. As a result Katowice will be soon transformed into a city fulfilling not only all the business needs but also improving the living conditions of its inhabitants. New recreational and active leisure infrastructure, as well as culture and education institutions will attract guests with almost every variety of needs. Downtown transformation The central part of the City covering 150 hectares will be redeveloped. It is unique operation on the European scale. The most important part of the area - 28 hectares will host mixed use facilities proposing 735,000 sq m in form of office and apartment buildings, retail, services and public space development. International Congress Center To make Katowice a perfect place for business and cultural meetings (congresses, conferences, fairs) International Congress Center will be created. The center with multifunctional hall that seats up to 8,000 people in theater style seating arrangement will create a lively place for any types of meetings. The project value is estimated at the level of PLN 303 million (EUR 75 million): ca. 62% covers European Regional Development Fund and ca. 38% covers Katowice City (with funds from European Investment Bank). The center will be ready in 2013. The seat of the National Polish Radio Symphony Orchestra Local municipalities decided to create new seat for National Symphonic Orchestra for 1,800 people with high quality acoustics. The project value is estimated at the level of PLN 265 million, with PLN 122 million support from the European Funds. Modernization of the Railway Station In 2010 the process of redevelopment of old railway station has started. According to the project a new modern railway building will co-exist with retail & services center. The redeveloped railway station will provide transport services of highest quality. The last building work should be finished in 2013. Water Park The project is located 2.2 km away from the railway station and involves the construction of a recreation, sport and leisure center with indoor and outdoor swimming pools, spa facilities, entertainment and commercial zone, outdoor sport infrastructure and a car park. The investment value is PLN 150 million (50 million USD). Technology Park The mission of the Technology Park is to increase economic development of Katowice as one of the most important urban centers in Poland by attracting innovative investors and ensuring optimum support for the development of advanced technologies and organizational solutions by offering customized services and cooperation with science circles. The Park is to be situated on a 39.6 hectare site in the neighborhood of the crossroads of main transportation axis of the city and Poland. The R&D and technology sectors will be supported by infrastructure comprised of hotels, catering, establishments, recreational amenities, administration as well as other business services. 27

Katowice - the City of remarkable events More and more visitors are attracted to Katowice by plenty of concerts and cultural, sporting, entertaining and economic events. Mariacka Street - the new heart of the city deserves special attention. It is a popular area that draws young people willing to have a good time in clubs, pubs and restaurants. The modernised and legendary Spodek Arena is the place of the most spectacular sporting events such as: the Final Round of the Volleyball World League FIVB and the Men Basketball European Championship or EuroBasket 2011 There are organised great concerts of the top world artists representing all kinds of music. Among the regular city propositions are: the Grzegorz Fitelberg International Competition for Conductors, the Rawa Blues Festival, the Metalmania Festival, the Silesian Jazz Festival or Mayday as well as the Tauron New Music events which become more and more popular. In addition, the famous alternative music OFF Festival will take place in Katowice again. Katowice has also an attractive theatre festival offer with the National Art of Directing Festival Interpretations, the International Festival of Puppet Theatres Katowice for Children, A Part Festival and Summer Garden Theatre. The Upper Silesian Festival Ars Cameralis Silesiae Superioris is also recommended to the frequent visitors of cultural events. Close to the city border the Silesian Stadium - the biggest sport facility in the region is located. Apart from all the sport attractions it is also a place of the top music concerts of artists such as U2 and The Police. Changing the image of the city, we cannot forget the tradition and cultural heritage of this place - inviting guests to visit the historic city district Nikiszowiec, representing a monument of Polish history or other interesting places on the Industrial Monuments Route. In 2010 Katowice applied for the title of the European Capital of Culture 2016 - the contest which has been organised in Europe for more than 20 years. The City of Katowice is now in the final round. The position of Katowice in citizen s satisfaction rankings The recent survey conducted by Newsweek magazine shows the rating of Polish cities which secure good job, education and quality of life for people. The magazine was searching for the best cities that are able to convince people, who have university education and are specialists in their field, to stay and start career. Newsweek has compared 15 Polish cities, but not the biggest ones. These were cities which were recognized as centers of regions. Each city was analyzed as far as the quality of job market, quality of life and higher education and residents satisfaction were concerned. According to the survey the city which is very close to offer best opportunity for young people is Katowice. It is the place which links the best features of metropolis and a smaller city. 28

Mateusz Skowroński Mayor s Plenipotentiary for Strategic Investors Katowice City Hall ul. Warszawska 4 40-006 Katowice Phone: +48 32 259 38 23 E-mail: pkis@katowice.eu www.invest.katowice.eu Maciej Grymowicz Metropolitan Association of Upper Silesia ul. Barbary 21a 40-053 Katowice Phone: +48 32 253 04 25 E-mail: grymowicz.m@gzm.org.pl www.silesiametropolia.eu Piotr Wojaczek President of the Board Katowice Special Economic Zone Co. ul. Wojewódzka 42 40-026 Katowice Phone: +48 32 251 07 36 E-mail: ksse@ksse.com.pl www.ksse.com.pl Grzegorz Pytlarz Regional Director Knight Frank Sp. z o.o. ul. Uniwersytecka 13 40-007 Katowice Phone: +48 32 350 50 50 Fax: +48 32 350 50 52 Mobile: +48 697 612 969 E-mail: grzegorz.pytlarz@pl.knightfrank.com www.knightfrank.com.pl Leszek Lerch Partner Ernst & Young Audit Sp. z o.o. ul. Chorzowska 50 40-121 Katowice Phone: +48 32 760 7740 Fax: +48 32 760 7710 Mobile: +48 505 10 30 50 E-mail: leszek.lerch@pl.ey.com www.ey.com.pl Rafał Kijonka KA Business Development Director Manpower ul. Nowogrodzka 68 02-014 Warszawa Phone: + 48 22 50 40 733 Fax: + 48 22 50 40 717 Mobile: + 48 602 351 913 E-mail: rafal.kijonka@manpower.pl www.manpower.pl