Foreign Direct Investment attractiveness analysis for the automotive sector in the Opolskie Voivodeship

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Contents

• Introduction

• The automotive sector in Europe • Automotive production in Poland • Structure of the automotive market in Poland • The automotive sector in the Opolskie Voivodeship

• Wages/Salaries in the automotive sector in selected voivodeships in Poland • Inhabitants, salaries and the education system in the Opolskie Voivodeship • Location and transport accessibility of the Opolskie Voivodeship • State aid and investment sites in the Opolskie Voivodeship • Why invest in the Opolskie Voivodeship ?

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The publication of “Foreign Direct Investment attractiveness analysis for the automotive sector in the Opolskie Voivodeship” was prepared within the project “Network of Investors and Exporters Service Centres (COIE)”, co-financed by the European Fund of Regional Development, Innovative Economy Operational Program for 2007-2013

Prepared by: PwC Polska Sp. z o.o., Al. Armii Ludowej 14, 00-638 Warsaw Telephone no.: +48 (0 22) 523 4000, Fax: +48 (022) 508 4040, www.pwc.com.pl

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Introduction

• The automotive industry is the second largest sector in terms of turnover in Poland

• Polish factories are among the most modern in Europe. The division of General Motors Manufacturing Poland located in Gliwice was the winner of the internal GM prize for best factory in terms of quality production facility in the Europe Group (GM “Boss” Kettering Award) • Productivity in the automotive industry is nearly twice more than the average for Polish industry. An average employee in the automotive industry generates revenue of PLN 610 000 per year, whereas in Polish industry, the average revenue generated per employee is PLN 348 000 • 75% of the companies in the automotive industry in Poland was planning to undertake new investments in 2011, and one third of them had predicted an increase in employment

Poland has some of the best conditions in the world for the automotive industry, which is confirmed by a study conducted in 2010 by PAIiIZ and published in the report “Automotive Industry in Poland”. The report is based on Business Monitor International

Country

Scoring (no. of points) max. 100

Germany

69.8

United Kingdom

68.4

France

64.5

Italy

64.2

Poland

61.1

4

The main car manufacturers in Europe 1/2 Finland: 18 000 6 346 2

Sweden: 252 287 85 561 15 Netherlands: 59 223 22 284 9

Car production Employees

Factories Germany: 5 526 882 833 837 47

Poland: 840 000 137 000 16

Belgium: 713 076 45 075 9

Czech Rep.: 933 312 126 223 9

United Kingdom: 1 446 619 173 884 31

Slovakia: 575 776 76 000 3

Spain: 1 943 049 159 052 15

Austria: 125 436 33 075 6

Portugal: 132 242 22 590 5

Romania: 231 056 60 281 4 France: 2 144 957 258 304 38

Italy: 659 221 168 435 20

Slovenia: 180 223 12 200 3

Hungary: 342 359 58 806 6

Turkey: 16

5

The main car manufacturers in Europe 2/2 Poland is the second largest car manufacturer in Eastern Europe, after the Czech Republic Approximately 40% of the car and engine factories in the region are located in Poland. More than 90 percent of Polish automotive production is destined for external markets Eurostat data cited in the Report of the automotive industry - 2011 show that in Central and Eastern Europe the Polish automotive industry generates the largest total revenues and employs the highest number of employees Employment in the automotive sector in CEE Slovenia

13 15

Slovakia Hungary

65

Romania Czech Rep.

138

Poland

135

100 Production

65

Romania

99 84 233

200 300 Trade and services

400

14

48

Hungary

74 109

0

15

Slovakia

14

48

Employment in the automotive sector in CEE

13

Slovenia

74 109

99

Czech Rep.

138

Poland

135

0

100

Production

84 233

200

300

400

Trade and services

Largest car manufacturers in Europe: 1. 2. 3. 4.

Germany France Spain United Kingdom

5. Czech Republic 6. Poland 7. Belgium 8. Italy

6

Location of the largest car factories in the CEE BMW 1 Dingolfling 2 Leipzig 3 Munich 4 Regensburg 5 Steyr 6 Graz 7 Kaliningrad DAIMLER 8 Berlin 9 Bremen 10 Dortmund 11 Düsseldorf 12 Ludwigsfelde 13 Mannheim 14 Neu-Ulm 15 Rastatt 16 Sindelfingen 17 Untertürkheim 18 Wörth 19 Kecskemet 20 Aksaray 21 Hosdere FIAT 22 Bielsko-Biala 23 Tychy 24 Kragujevac 25 Bursa 26 Esztergom FORD 27 Köln 28 Saarlouis PORSCHE 37 Stuttgart 38 Leipzig 39 Bratislava

PSA PEUGEOT CITROËN

40 Kolin 41 Trnava RENAULT 42 Colibasi 43 Novo Mesto 44 Bursa TOYOTA 45 Kolin 46 Adapazari VOLKSWAGEN 47 Kvasiny 48 Mlada Boleslav 49 Vrchlabi 50 Chemnitz 51 Dresden 52 Emden 53 Hannover 54 Ingolstadt 55 Mosel 56 Neckarsulm 57 Osnabrück 58 Wolfsburg 59 Zwickau 60 Györ 61 Bratislava 62 Sarajevo 63 Poznań GM 29 Bochum 30 Eisenach 31 Rüsselsheim 32 Gliwice 33 Esztergom 34 Warsaw 35 Kragujevac 36 Zaporizhia

7

52

57 9

8

58

53

63

34

12 10 29 11

2 38

30

51

55 50 59

27 31

48 56

28

15

32

54

37 17

1 14

16

23

22

13 18

49 47 40

61

4

5

39

6

60

3

41 45 26 33 19

43

42 24 35

62

46 25

44

20 21

7

Automotive sector production in Poland – spatial arrangement Delphi Gdańsk

In Poland the preferred location for Companies in the automotive industry are the Silesian, Lower Silesian and Greater Poland voivodeships

Olsztyn

Eaton

Szczecin

Klippan Safety Bridgestone

Białystok

Toruń

Delphi

Delphi

Among the factors determining the location of plants in these provinces are first and foremost the availability of markets (Western Europe), the proximity of highly qualified workers, the proximity to transportation and well developed infrastructure, the proximity to suppliers and vendors

Michelin

VW Faurecia SEW Poznań Zielona Góra

Faurecia

Hutchinson

Gedfa

GKN Faurecia Bosh Wrocław Toyota VW Motor Autoliv Toyota Faurecia

Łódź

Opole

Eaton F.A. Powertrain

Polytec Haering

Lublin

TRW Kielce Katowice

Isuzu

Polish capital

Warsaw

TRW

TRW

Lear

SEWS

Pilkington

Kirchhoff

Delphi Kraków

Rzeszów

Goodyear

Delphi

Lear Delphi

Foreign capital Source: PIM, 2011

8

The largest automotive companies in Poland Warsaw

Tczewi Poznań

Wysogotowo

Volkswagen Solaris Man Skoda Bridgestone Exide Technologies

Kartuzy

Gdańsk

Fota SA

Delphi

Eaton Gardner Poland

Grupa Krotoski-Cichy

Olsztyn

Słupsk

DBK

Kapena Scania Gdańsk

Gostyń Nowa Sól

FSO GK Inter Cars Mercedes Benz Renault Hyundai Continental Iveco GK Carservis Suzuki

Szczecin

Faurecia Białystok

Toruń

Volkswagen Sitech

Zielona Góra

Starachowice

Warsaw

Poznań

Man

GKN Driveline Wrocław

Bosh

Volvo

NSG

TRW Brembo

Łódź

Lublin Kraków

Wrocław

Man Polska Grupa Dealerów

Kielce

Faurecia Toyota Ronal Polska

Opole

Katowice Rzeszów

Dębica

Firma Oponiarska Dębica

Kraków

Praszka

Mielec

Dąbrowa Górnicza

Toyota Simoldes Plasticos

Sandomierz

Częstochowa

Wałbrzych

Jelcz-Laskowice

Scania

Grójec

Polkowice

Mirków

Nadarzyn

Festo

Olsztyn

Wix-Filtro

Gedia Poland

Oleśnica

Raszyn

Neapco

Skawina

Valeo

Brembo

Kirchoff

Sosnowiec

Magnetti Marelli

Żywiec

Hutchinson

Dylaki

Rybnik

Coroplast Gliwice

Opel

Tenneco Automotive Grupa Magro

Czechowice-Dziedzice

TRW Steering Systems

Tychy

Bielsko-Biała

Fiat Ford Lancia

Fiat TI Poland Nemak Poland

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Revenues on sales in the largest companies in the automotive industry in Poland; in PLN thousands, 2010 16 000 000

16 406 001

18 000 000

14 000 000 12 000 000

1 069 096

1 158 354

1 323 231

1 347 143

1 356 924

1 601 385

1 766 938

1 887 914

1 929 227

2 077 563

2 242 022

2 428 281

2 649 193

2 699 795

2 857 156

2 000 000

3 166 981

4 000 000

3 725 648

6 000 000

4 311 566

8 000 000

7 774 141

10 000 000

0

10

Revenues on sales in the largest companies in the automotive industry in Opole in PLN, 2009 600 000 000

1 301 900 3 992 285 6 391 000 7 008 360 8 480 400 10 667 918 13 109 188 17 342 116 34 145 780 34 148 958 36 805 188 51 741 032 52 495 000 71 537 350 114 151 049 175 851 898

289 140 827

100 000 000

398 529 769

200 000 000

412 864 688

300 000 000

553 258 000 500 000 000

400 000 000

0

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The structure of the automotive market in Poland Poland mainly produces cars, including Opel Astra III and IV, the Fiat Panda and 500, Lancia Ypsilon or Ford Ka

Key foreign direct investment in the automotive sector in Poland

Another important sub-sector is the production of engines and car parts, used mainly in the production of vehicles in other factories

4.29%

2.96% 5.58%

parts and components 26.66%

8.24%

engines trucks

12.31% 39.95%

buses trailers and semitrailers others

2.13% 4.46%

2.92%

Company

Polish automotive sector’s export; August 2010 cars and vans

Polish automotive sector’s export; August 2009 cars and vans 6.00% parts and components 37.33% engines 13.79% trucks buses 33.37% trailers and semitrailers others

Fiat Auto Poland S.A.

Capital Total expenditure; employment EUR million 1 800

4 173

Toyota

740

2 000

Volkswagen Poznań Sp. z o.o.

729

5 889

General Motors Manufacturing Poland

650

2 700

Fiat-GM Powertrain

400

1 416

Delphi Automotive Systems

303

6 898

Faurecia

200

1 314

Ispol-IMG Holdings

154

430

Eaton Corporation

100

613

Lear Corporation

65

1 500

5 141

26 933

TOTAL

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The biggest players in the automotive sector in the Opolskie Voivodeship ZEM NAMYSŁÓW

In the Opolskie Voivodeship 26 entities in the automotive industry were identified (excluding service companies) Production in the automotive region in 2008 amounted to approximately PLN 2.5 billion The percentage share of the automotive industry in the country’s industrial production is similar to the Opolskie Voivodeship. In the former case it amounts to 9.51% and in the latter to 8.66%

NEAPCO EUROPE SP. Z O.O. METAL-TECH SP. Z O.O. Namysłów

UNIA GROUP SZMULIKOWSKI SP.Z O.O. PPU

Jastrzębie

KEIPER POLSKA SP. Z O.O.

Praszka

Kluczbork

GZWM SA

Brzeg

Olesno

Skarbimierz Kurznie

GNIOTPOL SP. Z O.O. ZAKŁAD KURZNIE

Dobrodzień Dylaki

Opole

Strzelce Opolskie

Nysa

TOWER AUTOMOTIVE POLSKA SP. Z O.O. ODRA SP. Z O.O. HART SP. Z O.O. OPOLTRANS PHU AUTO POWER ELECTRONIC TRUCK PPHU STANGUM

Krapkowice

Górażdże

According to the Statistical Office in Opole, the capital expenditure of companies in the automotive sector amounted to PLN 29 866 000 in 2009.

Prudnik

MEGA SP. Z O.O. ETN – EURO TRUCK NYSA

KędzierzynKoźle

GNIOTPOL SP. Z O.O. ZAKŁAD ZREMB ODROWĄŻ

SPÓŁDZIELNIA PIONIER

In 2009, the production of automotive-related industries, amounted to over PLN 300 000 000.

Głubczyce COROPLAST

A. BERGER POLSKA SP. Z O.O. NTP POLMAG

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Average monthly gross wages/salaries in the automotive sector in the Opolskie Voivodeship 4000

Gross salary/wage

3688 3900 3500

CEO

3500

3500

PLN 18 283

Middle Management level

PLN 8 460

Lower level executives

PLN 4 332

Senior Specialist

PLN 5 302

3750 3500

3500 3200

Specialist

Unskilled worker

PLN 4 041

3000

3300

PLN od 1 800 do 3 052

The automotive sector currently employs approximately 8,000 people in the Opolskie Voivodeship The largest employers in the region are Coroplast, Neapco Europe, NTP, Opoltrans, HART, and Keiper Poland The study, “National Compensation Study 2010” showed that the average wage/salary in the Opole region was 14% lower than that for the whole of Poland. Among the neighbouring voivodeships, only Łódź had similar results The largest companies in the automotive industry in these voivodeship are paying unskilled workers the lowest gross wages (from PLN 1 800 to PLN 2 500). These wages are supplemented by compensation for overtime and any bonuses to a level oscillating around PLN 3 000

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Average monthly gross wages/salaries in the automotive sector in Poland in the Dolnośląskie and Wielkopolskie Voivodeships. Average monthly gross wages/salaries in the automotive sector in Poland

Average monthly gross wages/salaries in the automotive sector in the Wielkopolskie Voivodeship

CEO

CEO

PLN 18 435

Middle Management level

PLN 8 530

Lower level executives

PLN 4 368

Senior specialist

PLN 5 346

Specialist

PLN 4 075

Unskilled worker

PLN 3 077

PLN 21 330

Middle Management Level

PLN 9 869

Lower level executives

PLN 5 054

Senior specialist

PLN 6 185

Specialist

PLN 4 715

Average monthly gross wages/salaries in the automotive sector in the Dolnośląskie Voivodeship

The wages of unskilled workers (manufacturing), in the Opolskie Voivodeship are lower than the average in the industry in Poland and neighbouring provinces. Also, the average wage/salary for other positions in the Opolskie Voivodeship are the lowest among the analyzed regions.

CEO

PLN 22 475

Middle Management Level

PLN 10 400

Lowever level executives

PLN 5 325

Senior specialist

PLN 6 518

Specialist Unskilled worker

PLN 4 968

PLN 3 560 Unskilled worker

PLN 3 751

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Percentage of working-age population actively searching for employment and average wages/salaries in the Opolskie, Dolnośląskie and Śląskie voivodeships

13.1 % PLN 3 412 Dolnośląskie 13.6 % PLN 3 37 Opolskie

10% PLN 3 528 Śląskie

Registered unemployment rate in 2010 Average gross salary/wage in 2010 Source: Central Statistical Office of Poland, data for 2010

In 2010 in the Opolskie Voivodeship, a higher percentage of the working-age population was actively searching for employment compared with the Dolnośląskie and Śląskie voivodeships. Taking wages/salaries into account, the average gross wage/salary in the Opolskie Voivodeship was 8% and 11% lower compared with the Dolnośląskie and Śląskie voivodeships respectively Source: Główny Urząd Statystyczny, 2011

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Inhabitants of the Opolskie Voivodeship in poviats in thousands (k)

namysłowski

kluczborski 69 k 45 k

44 k 29 k

oleski 67 k 44 k

brzeski 92 k. 60 k

opolski

135 k 91 k

Opole 122 k. 84 k

nyski 144 k. 94 k

prudnicki 59 k 37 k

krapkowicki 66 k 44 k

strzelecki 79 k 52 k

kędzierzyńskokozielski 100 k 65 k

głubczycki 49 k 31 k

Inhabitants of poviats Working-age population in poviat Source: Central Statistical Office of Poland, data for 2010

The most populated poviats in the Opolskie Voivodeship are: Nyski, Opolski, the city of Opole and Kędzierzyńsko-Kozielski 17

Percentage of the population actively searching for employment and average wages/salaries in poviats in the Opolskie Voivodeship namysłowski 25.5% PLN 2833

8.9 % PLN 2732 oleski

brzeski 25.4 % PLN 2796

opolski Opole 6.4% PLN 3542

nyski 18.6% PLN 2733

kluczborski 15.5% PLN 2848

13.1% PLN 2872

strzelecki 11.7% PLN 2930

krapkowicki 10,9% PLN 3799 prudnicki 18.6% kędzierzyńskoPLN 2730 kozielski 13.1% PLN 3519 głubczycki 17.9% głubczycki PLN 2878

Percentage of population actively searching for employment in poviat Average wage/salary in poviat Source: Central Statistical Office of Poland, data for 2010

In 2010, the average gross wage/salary in the Opolskie Voivodeship amounted PLN 3 137 which is equal to approx. 91% of the average gross wage/salary for Poland. In 2010 in the Opolskie Voivodeship the total number of inhabitants ready to take up employment was estimated at 48 755 18

Education system important for the development of the automotive sector in the Opolskie Voivodeship namysłowski

kluczborski 2

2 2

oleski

3 5

5

brzeski

2 5

3 3

opolski

Wyższa Szkoła HumanistycznoEkonomiczna w Brzegu

Opole

6 8

nyski

5 8

strzelecki

2 3

krapkowicki

3 4

2 2

prudnicki

Vocational schools Technical schools

Uniwersytet Opolski Politechnika Opolska Państwowa Medyczna Wyższ Szkoła Zawodowa

Wyższa im. Bogdana Jańskiego we Wrocławiu – wydział zamiejscowy w Opolu Państwowa Wyższa Szkoła Zawodowa w Nysie

Wyższa Szkoła Zarządzania i Administracji w Opolu Wyższa Szkoła Bankowa we Wrocławiu – wydział zamiejscowy w Opolu

kędzierzyńskokozielski

3 6 głubczycki

2 2

Tertiary schools and tertiary education non-resident faculties

Source: Central Statistical Office of Poland, data for 2010

The location of vocational and technical schools in the Opolskie Voivodeship is evenly spread since there are at least2 2 vocational and 2 technical schools in each poviat. Secondary schools dedicated to educating professionals for work in the automotive sector include the Automotive Technical School 5 in Strzelce Opolskie, a complex of Mechanical Schools in Nysa and a complex of Mechanical Schools in Opole 19

Location of Opole and distance from selected cities

Gdańsk

Olsztyn

Szczecin Białystok

Toruń

Zielona Góra

Warsaw

Poznań Łódź

Lublin Wrocław Katowice Kielce Opole

Rzeszów Kraków

Source: Own development

City

Distance from Opole

Wrocław

97 km

Katowice

114 km

Kraków

191 km

Łódź

196 km

Kielce

228 km

Poznań

259 km

Zielona Góra

278 km

Warsaw

314 km

Toruń

326 km

Rzeszów

354 km

Lublin

401 km

Olsztyn

454 km

Gdańsk

499 km

Białystok

511 km

Szczecin

574 km

Thanks to access to the A4 motorway, Wrocław and Katowice are reachable within a little over an hour from Opole

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Distance from selected airports

Gdańsk

Olsztyn

Szczecin Białystok

Bydgoszcz Toruń Warsaw

Poznań

Zielona Góra

Łódź Radom

Wrocław

Lublin

Katowice Opole

Kielce

Rzeszów Kraków

Location

Distance from Opole

Wrocław - Starachowice

103 km

Katowice - Pyrzowice

103 km

Ostrawa - Mošnov

156 km

Kraków - Balice

178 km

Łódź-Lublinek

192 km

Poznań - Ławica

264 km

Warsaw - Okęcie

308 km

Zielona Góra - Babimost

311 km

Bydgoszcz - Szwederowo

332 km

Rzeszów - Jasionka

364 km

Gdańsk - Rębiechowo

502 km

Szczecin - Goleniów

574 km

Source: Own development

International airports and Wrocław and Katowice can be reached within 1.5 hours from Opole. There is a private airport in Kamień Śląski operating charter flights. It is located 26 km from Opole and 8 km from the A4 motorway

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Distance from selected seaports and inland ports Gdynia Kołobrzeg Świnoujście Gdańsk Police Szczecin

Opole

Location

Distance from Opole

Opole “Metalchem”

Opole

Kędzierzyn-Koźle

54 km

Szczecin

488 km

Police

503 km

Gdańsk

506 km

Gdynia

521 km

Świnoujście

582 km

Kołobrzeg

611 km

KędzierzynKoźle

Source: Own development

Thanks to the inland waterways and inland port, companies in the Opolskie Voivodeship can use the water transport infrastructure for their transportation activities. The biggest inland port in Poland is located in Kędzierzyn-Koźle with access to the Gliwice Canal and River Oder, which connects the Opolskie Voivodeship to the Baltic Sea

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Regional State Aid Map for 2007-2013 Gdańsk

50%

40%

Szczecin

Olsztyn

40%

50%

Bydgoszcz / Toruń

Poznań Zielona Góra

50%

Warsaw

40%

50%

Łódź

Wrocław

40%

Białystok

30%

Lublin

50% Opole

50%

50%

50% 40%

Katowice

Kielce Kraków

50%

Rzeszów

50%

The Opolskie Voivodeship offers the highest possible level of state aid for entrepreneurs among the various Polish regions. The values presented above can be increased by an additional 10% for medium and 20% for micro and small enterprises 23

Regional State Aid Map for 2007-2013 Gdańsk

Zielona Góra 50%

Poznań

Olsztyn Bydgoszcz / Toruń Poznań

50%

40%

40%

30% Łódź

Wrocław

40%

50%

40%

Szczecin 40%

50%

40%

Katowice

Wrocław

40%

50%

Warsaw Lublin

50%

Opole

Białystok

50% Kielce

50%

Rzeszów Kraków 50% 50%

Opole

50%

40% Katowice

The maximum intensity of state aid for large entrepreneurs in the Opolskie Voivodeship amounts to 50%, which is the key advantage for the neighbouring voivodeships (Dolnośląskie, Śląskie and Wielkopolskie) 24

Subzones in special economic zones in the Opolskie Voivodeship Namysłów Praszka Kluczbork

Skarbimierz Tułowice

Opole Tułowice Gogolin

Strzelce Opolskie

Nysa Krapkowice WSSE

Prudnik KędzierzynKoźle

KSSE SSSE

Ujazd

Kietrz

In the Opolskie Voivodeship are the subzones of three special economic zones offering investors over 902 hectares of land for investments. More than 670 hectares of this land is available for development 25

Why Opolskie?

• The Opolskie Voivodeship is in a preferential location in terms of its access to the transport infrastructure. The A4 motorway runs through the region, it has active inland ports in Opole and Kedzierzyn-Koźle, with international airports in Wrocław and Katowice, approx. 100 km from the capital of the voivodeship • The proximity of the largest factories in Central and Eastern Europe, the excellent transport infrastructure linking Opole’s major cities that are involved in the automotive sector make it an interesting investment location for highly specialized manufacturers of components and systems for this industry • The Opolskie Voivodeship has a long tradition associated with the automotive industry, which is beneficial to the available workforce with such education profile and work experience • The automotive sector in the Opolskie Voivodeship is one of the pillars of the regional economy. Its value is estimated at 8.66% of the whole of the regional economy • The automotive industry’s percentage share in countrywide production is similar to the share of the Opolskie Voivodeship in regional production. In the former case it amounts to 9.51% and in the latter to 8.66% • The Opolskie Voivodeship distinguishes itself not only in Poland due to having the highest possible level of state aid and volume of available investment areas, but also by having an organized system of services for investors. These qualities were awarded by the Polish Information and Foreign Investment Agency (PAIiZ)

26

Opolskie Centre for Economy Development Investors and Exporters' Service Centre 45-716 Opole Spychalskiego 1a str. Phone: +48 77 40 33 600 Fax.: +48 77 40 33 609 [email protected] [email protected] www.ocrg.opolskie.pl The contractor responsible for preparation of this material editor has made efforts to present accurate and reliable information basing on the data available during the ppreparation of the material. Presented results may serve only for informational purposes. Considering the macroeconomic character and analytical nature of the material, the contractor may not be responsible for the results of decisions and undertakings taken up basing on the presented material. Opole, 2011.

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