Opole cashes in on heritage
Opole, in southwest Poland, is different from the rest of the country, economically and culturally.
The region called Slask Opolski (Opole's Silesia) was historically settled by the Slazacy Silesian people, a nation influenced by both Germany and Poland.
Today the Opole region's cultural and business links with Germany are more visible than anywhere else in Poland and the city has a reputation for its cleanliness and wealth.
"Slask Opolski is generally well organized," said Wojciech Gatkiewicz, president of the Opole-based Braas Polska roofing producer, owned by France's Lafarge Group. Gatkiewicz has been living in Opole for five years, ever since Braas set up its manufacturing plant and head office in the city.
As a border town, Opole has obvious links with Germany. Before World War II, it was part of Germany but local residents also had close relations with Poland.
When Poland shifted westward after the war, Germans were expelled from most of the new territories. But Opole and the surrounding area were an exception. While the German heritage was effectively wiped out in other areas, Poland's communist authorities retained and "polonized" Silesians because of their links with the country, said Zdzislaw Lukowicz, who now is a president of the Opole-based Cementownia Odra cement company, owned by Germany's Miebach.
In the 1950s, Lukowicz took part in the census for the Opole region in which Silesians were encouraged to declare that they were Polish. As a result, the pre-war culture of the region was saved.
Following Poland's shift to a market economy in 1989 and its improved relations with a newly united Germany, Silesians could once again talk openly about their unique identity. Today as many as 30% of Opole region's 1 million people consider themselves German.
This vocal German minority and the unique character of the region has helped Opole acquire the status of the regions' capital.
Opole is small by Polish standards with just 130,000 people. The city is less than 100 kilometers away from Wroclaw and Katowice, with their regional populations of 1 million and 3 million respectively.
Both cities are easily reached from Opole and communications will become even easier with the completion of a planned motorway linking the three cities in two years.
When the central government redrafted Poland's administrative system in 1998, Opole wasn't given regional capital status. But the city lobbied for special status because of its unique ethnic make-up and eventually the government agreed to establish the small region of Wojewodztwo Opolskie, with Opole as the capital.
"Keeping the Silesian identity was a strong argument for its own voivodship," Lukowicz said.
Wojewodztwo Opolskie is the second-smallest region in the country, only the western Lubuskie province has a smaller population. The region lacks heavy industry but has a well-developed agricultural hinterland and a tradition of small business activity.
Unemployment in Opole city is 8.3% compared to 14% for the region. The national average is 13.6%.
Local sources said the region is probably wealthier than official statistics indicate. "The unemployment figures are not real because many people work in Germany," said Gatkiewicz of Braas-Polska.
But while many residents may earn their living in Germany, they spend money in Opole. "There has always been unofficial support from Germany," Lukowicz said. "Those money injections from families in Germany were always significant."
As a result, the city's budget is larger than that of any other Polish city of the same size, said Bozena Kulesza-Knapik, promotion director in Opole's city hall.
The city's most important industry is the cement business. The Opole area has three large cement plants in Gorazdze and Strzelce Opolskie, both owned by the Belgium-based CBR Group. A factory in Odra is owned by Miebach, which invested DM 31 million in the plant, Lukowicz said. In total, the facility can produce about 4 million tons of cement annually, while total consumption in Poland is about 14 million tons, Lukowicz said.
"The cement industry has always been strong here," Lukowicz said.
Odra sells up to 32% of its output to Opole city, with the rest sold throughout southwestern Poland. The region also attracts greenfield projects, mostly from German manufacturers. These companies include Schiedel, which set up a factory specializing in industrial smokestack systems; Kludi, which produces plumbing appliances in Opole and Braas, which invested more than DM 30 million to set up roofing production. Braas is still a German-based company, although it was bought two years ago by France's Lafarge Group, Gatkiewicz said.
Five years ago, Braas moved its Polish headquarters from Poznan to Opole along with its first Polish manufacturing site. "It was a compromise between the market and raw materials," Gatkieiwcz said. Braas needs cement to produce roofing materials and the Opole area is a large market for the roofing industry.
"Opole is one of the most developed markets for roofing (in Poland)," Gatkiewicz said. "It's bigger than cities of a similar size because of its roofing tradition."
Industrial/Warehousing
Strong communication links with nearby cities have been crucial for Opole's industrial and distribution developments. The main drawback has been that the market in Opole is not large enough to attract speculative developments. Most investors wanting to own a facility in Opole have to build it themselves. When Braas arrived, it bought 4.5 hectares of land and 3,000 square meters of unfinished warehouse space, Gatkiewicz said. Other industrial investors also usually buy land and build their own industrial properties, he said.
Opole hopes to attract more light industrial investment in the future, said Bozena Kulesza-Knapik of the Opole city hall's promotion department. The city owns seven hectares of land in the industrial southeast suburb where Braas and Scheidel have their facilities. "The city plans to sell the property to one large industrial investor," she said. As a result, so far Opole has failed to sell the property even though many buyers are willing to divide the site into several small parcels and purchase them, she said.
Office
Most investment arriving in Opole is in the industrial sector, and these investors usually build their own offices. Therefore, the commercial office market in Opole has suffered accordingly. "Opole doesn't have a commercial office space yet," Kulesza-Knapik said.
The new office blocks going up in the city have been concentrated in renovated buildings in Opole's downtown district.
PZU Development, a Warsaw-based developer owned by Powszechny Zaklad Ubezpieczen (PZU) insurance company, is building a 5,500 square-meter office block on ulica Ozimska in the city center, the company said. PZU acquired the property a small, unfinished shopping center in 1997 with an eye to building offices to accommodate a regional headquarters for the insurance firm, said Aleksander Dzoga, marketing manager with PZU Development.
But PZU will only use part of the building with 2,000 square meters to be sold or rented, Dzoga said. The developer, which has already signed a few small-scale local tenants for the building, is asking $19 per square meter a month, Dzoga said. The building is planned for completion in the first quarter of next year.
Also, Krakow-based Bank Przemyslowo-Handlowy (BPH) is building its own regional office in Opole, said Lukasz Mazurczak, manager with Krakow-based Centrum Biznesu Lubicz, the project's contractor.
Retail
Like any other city with more than 100,000 people, Opole has been targeted by hypermarket developers. So far the only hypermarket in town is Real, developed by Germany's Metro a couple of years ago. The 15,570 square-meter Real is enjoying the highest turnover of more than 30 outlets in the country. "Real hit the bull's-eye here," Kulesza-Knapik said. But Real's monopoly may not last much longer as demand is warranting construction of additional hypermarkets. "At least one more hypermarket is needed," Kulesza-Knapik said.
Other projects are in the pipeline as well. Metro has applied for a construction permit to build a 10,600 square-meter semi-wholesale Makro Cash and Carry in northern Opole. U.K.-based Tesco is currently signing off on a 16,000 square-meter outlet covering 7.4 hectares of land owned by a local furniture maker, Kulesza-Knapik said. France's Casino has secured 10 hectares of land but hasn't applied for a construction permit yet, she said. Also Germany's OBI obtained a permit to build a hardware supermarket, according to the city hall.
In addition, Opole lacks modern retail outlets downtown. "This is not Wroclaw, this not Warsaw," said Gatkiewicz of Brass. But several upcoming projects could bridge that gap. Budexpol, owned by Sweden's Skanska, plans to build a zl. 100 million ($21 million) mixed-used retail project on plac Kopernika, according to city hall.
The project, to be called the Copernicus Center, is planned for completion in 2002 and will include retail space, a multiplex cinema and bowling and hotel space, city hall said.
Residential
Opole has historically had a large amount of residential space. As such, under communism those setting up in the city were given state-owned apartments sooner than in other cities, Kulesza-Knapik said.
As the number of people living in Opole has been relatively stable since 1990, the demand for new homes has not been strong. "Opole is getting saturated," said Lukowicz of Cementownia Odra.
Last year, 231 homes were built in Opole about 17 homes per 10,000 residents This ranks Opole below cities like Gorzow Wielkopolski, which last year had 53 apartments per 10,000 residents or Bydgoszcz, where the figure was 33.
City hall's strategy on residential developments calls for construction of about 200 residences annually to keep pace with demand.
The city has also set up a joint venture with local developer Dobre Domy to build homes. Dobre Domy plans to build 425 units, city hall said. Kulesza-Knapik declined to comment on the developer's timetable.
Other small-scale residential developments are going up in Opole by local developer Invest-Cema and Wiarus, a cooperative. The average asking price for new homes in Opole is zl. 2,200-zl. 2,400 per square meter, Lukowicz said.
