City in Focus: Gdynia the Tri-City business leader
By : Anna Staniszewska
Gdynia (http://www.gdynia.pl) is the major business center and port complex of the Baltic Tri-City region.
First developed in the 1920s to rival the free city of Danzig (Gdansk), Gdynia, with a population of 253,000, is now the area's center of shipbuilding and high-tech industry, outstripping its neighbors, Gdansk and Sopot. Nonetheless, Gdansk remains the administrative and political capital of the surrounding Pomerania (Pomorskie) region.
"There is a saying that you live in Gdansk, relax in Sopot and do business in Gdynia," said the city's deputy mayor, Boguslaw Stasiak.
Since Gdynia was first established as a port, it has relied mostly on shipping and fishing as a mainstay. The result of this continues to be the lowest unemployment figures in the country. The jobless rate for 2000 was 6.9%, less than half the national average of 15%. Many local analysts said that another reason for low unemployment is the high level of education in Gdynia, which has a number of universities, academies and technical institutes. Stasiak said this also helped push up local wages to an average of zl. 2,150 at the end of 1999.
Shipyards, port handling and maritime support services dominate Gdynia's economy. The largest enterprises connected with the port work closely with smaller companies, providing 30% of all jobs in the region.
Poland's shipbuilding industry is the fourth largest in the world, and Gdynia Shipyard the major shareholder in general contractor Mostostal Gdansk and Gdansk Shipyard is the largest employer in Pomerania, with some 8,500 employees. Total sales in 2000 exceeded $1 billion.
"(Gdynia) is one of Europe's most modern and largest shipyards," Stasiak said. Shipping companies based there include the Naval Shipyard, the Nauta Ship Repair Yard and the Damen Shipyard, which was completed in 1991, and which specializes in building tugs, speedboats and yachts.
Ships ahoy: Gdynia has one of the world's largest ports.
The Port of Gdynia Holding (http://www.port.gdynia.pl) occupies an area of 1,400 hectares, and has a cargo handling capacity of 15 billion tonnes annually. It includes a ferry terminal with six weekly connections between Gdynia and Karlskrona, Sweden. Other terminals handle general and bulk cargo.
Gdynia became a NATO base after Poland joined the organization in 1999, and the move has boosted the city's economic development, adding an extra impetus to local and regional development.
One of the companies based in Gdynia is Dalmor (http://www.dalmor.pl) holding, Poland's largest deep-sea fishing and trading company, which is currently up for privatization. The holding comprises Dal-Pesca, a fish processing company, Dal-Mors, which provides refrigerating services, Dalmor-Port cargo storage and Dalmor Baltic, a fishing company. Dalmor also holds the majority stake in World Trade Centre Gdynia.
However, privatization plans have been hindered by a lack of interest from potential investors. Invest-Dal, an employee and management company, withdrew its offer of zl. 33 million ($8 million) for an 80% stake in Dalmor after it admitted the firm could not afford it.
The holding owns about 100 hectares of land on Gdynia's coast, much of it wasteland. "They could make better use of it," Stasiak said. He added that Dalmor and its subsidiary companies could squeeze into a smaller plot and sell off much of the spare property.
Celebrating Polish maritime tradition: a monument to Joseph Conrad on Gdynia's waterfront.
Along with the port and shipping industry, another important sector in Gdynia is information technology. Prokom Software, a leading Polish IT solutions supplier, listed on both the Warsaw Stock Exchange and the London Stock Exchange, has its headquarters there. The firm supplies software to Poland's Social Security Administration (ZUS), Warta insurance company, and Telekomunikacja Polska (TPSA).
Additionally, Gdynia-based Radmor is the country's largest producer of radio transmission equipment, and works with France's Thomson-CSF to fill NATO orders.
The city also plans to establish a technology park on the site of a former bus terminal close to downtown where most of the IT and telecom companies would have their headquarters.
Transport has always played a vital role in Gdynia. In 1993 the city was the first in Poland to issue municipal bonds. The bonds, worth zl. 28 million ($7 million), were used to finance public transport, including the replacement and renovation of trams and buses. Recently, the city issued a new bond series, valued at zl. 206 million ($51.5 million), to sponsor the expansion and modernization of its ailing road network.
The budget has been supplemented with money from European Union funds and the European Bank of Reconstruction and Development. A portion of the grants was spent on the Kwiatkowski Route, a part of the A-1 trans-European highway. The next step involves connecting the port with the Tri-City bypass and the national road network, all of which is to be financed by municipal bonds and outside funds.
One of the key issues in Gdynia is a change of port boundaries. The city council filed a motion with the Transport Ministry to move the boundaries, which would mean incorporating some of the port land into the city. Port of Gdynia Holding and other companies operating on the shoreline eventually struck a deal after protracted negotiations. "We could use this land reserve for other purposes, such as hotels, recreation and retail," Stasiak said. According to him, this would spur hotel, retail and service investments as well as the expansion of financial institutions in the area.
"We are trying to trim down the administrative borders of the port and deed them to the city," he said. "It's a move in favor of investors, which could develop attractive sites." This would also cut through the bureaucracy and make it easier to get all the permits, Stasiak added. "An investor wouldn't have to go through the same procedure twice once at city hall and again at the port administration," he said.
Office
Modern office stock has increased substantially during the past couple of years. "These new buildings provide the basis for companies that want to enter the market," Stasiak said. This has pushed rents in older buildings down, creating a more competitive market, he added.
The first modern office building in Gdynia was Chipolbrok, at ul. Slaska 17, completed in 1991 and developed by the local Chinese-Polish Shipping Society. Germany's Ilbau was the general contractor. Chipolbrok covers more than 4,600 square meters with rents running at $20 per square meter, including service charges.
Chipolbrok's neighbor on ulica Slaska is the Baltic Business Center, financed by Ilbau and Bank Austria Creditanstalt. The 15-story development added more than 16,000 square meters to Gdynia's office space in 1994. Asking rents are DM40 per square meter. Tenants include Pekao bank, Mobil Oil and Gerling, a German insurance company.
The 3,800-square-meter City Arcade office building, located on the same street, was completed in 1996, and charges rents of $20 per square meter.
Gdynskie Centrum Biznesu, situated on plac Kaszubski, has 7,000 square meters. The eight-story building was completed in 1998 and boasts IBM, PZU Zycie and Phillips as tenants. Gdynia office stock also includes the Atrium (8,500 square meters) on ulica Starowiejska, and Alfa Plaza, a 13,300-square-meter office building, whose tenants are General Electric, Norwich Union and Alcatel. Other recent developments include Centrum Biurowe Hossa, which opened in March 2001, offering 7,500 square meters on ulica Abrahama, and the new Prokom headquarters on ulica Podolska.
But the level of supply surpasses demand, according to Tomasz Paszkowski, representing Gdynia-based developer
, Mega, Cadena (http://www.cadena.pl) and Allcom. Private developers make up 10% of the residential market and the rest are housing cooperatives. "The tendency is changing," Stasiak said. "There are more private investors in the residential sector." Gdynia's average price per square meter is zl. 2,300-zl. 3,000. The most popular residential districts are Wielki Kack, Maly Kack and Witomino because of their location and transport links.
