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Abstract
Following a year which was estimated by BMI to have seen continued growth in all freight modes except inland waterway, 2012 will signal further expansion, albeit with the same exception. Total trade is projected to pick up, with our Country Risk desk forecasting a year-on-year (y-o-y) increase of 7.65% in 2012 following an estimated growth of 7.60% in 2011. Road freight is to continue to dominate the sector and is projected to grow by 6% in 2012. The sector avoided the effects of the downturn and so far appears to have defied EU pledges of a decrease in road haulage across the region. That is not to say, however, that sector's market share is safe. BMI notes that rail is the likeliest candidate in Poland's freight transport mix to benefit from any diversification away from road. As major international rail companies, such as DB Schenker, continue to expand into the country's rail freight sector, its competitiveness will increase. Headline Industry Data - 2012 air freight tonnage is expected to grow by 10.4% - 2012 rail freight is forecast to grow by 5.1% - 2012 Port of Gdansk throughput is forecast to grow by 2.5% - 2012 road freight is forecast to grow by 5.7% - 2012 inland waterway freight is forecast to decrease by 6.3% - 2012 total real trade growth is forecast at 7.7%. Key Industry Trends Privatisation Of PKP Cargo Attracts More Interest Russian Railways (RZD)'s interest in the part privatisations of Poland's PKP Cargo and Slovakia's Zeleznicna spolocnost Cargo Slovakia (ZSSK Cargo) highlights the company's desire to increase its exposure to the European rail freight market. BMI believes the company wishes to maximise its role in developing rail freight links between Asia and Europe. A 50% stake plus one share is available in PKP Cargo, as part of the company's privatisation. Best Financial Result Ever Predicted By PKP Cargo PKP Cargo expects 2011 to be 'the best financial year' in its history. According to the company's president, Wojciech Balczun, net profit was recorded at PLN176mn in the first eight months of 2011, with revenue from sales amounting to PLN264mn. So far the company's highest annual net profit was reached in 2002, when it totalled PLN152.8mn. Further Increase In DCT Gdansk Capacity Gdansk's Deepwater Container Terminal (DCT Gdansk) is increasing its annual handling capacity to 1mn twenty-foot equivalent units (TEUs) by investing in additional equipment. In August 2011, DCT took delivery of two new ship-to-shore (STS) cranes from Liebherr Container Cranes together with supporting yard equipment to operate them. DCT's management said it hoped to 'attract regular weekly calls of the biggest vessels in the world to Gdansk'. New Liquid Bulk Terminal To Be Built In Gdansk State-owned PERN "Przyjazn" and Germany's Oiltanking GmbH, a subsidiary of Marquard & Bahls AG, have signed an agreement to create a joint venture (JV) to develop and construct a terminal for the storage and handling of bulk liquids at the Port of Gdansk. The JV agreement was signed on September 20 2011. Risks To Outlook BMI regards the freight modes exposed to the transport of containers as the areas which have risk to the upside, as it is these modes of transport which will benefit from the increase of container volumes on the back of a strengthening consumer base in Poland. Our Country Risk team believes that a strong domestic demand story should insulate potential headwinds from global economic conditions, with the country's real GDP is estimated to increase by 3.8% in 2012. We note Poland's strategic location as a possible gateway for trade into central and eastern Europe. Its position has not gone unnoticed, with the Chinese port of Ningbo showing interest in investing in the Port of Gdansk. Should Poland's role as a maritime gateway develop, this will have a cascade effect on other areas of the country's freight network, with the road and rail sectors to benefit as the conduit of trade from the port to the country's neighbours.