Building a strategic presence
to talk about the firm's operations in Poland, its view of the Polish real estate market and the importance of getting along with local authorities
Adam Zdrodowski: Fiege has been present in Poland for over 10 years now. How important has the Polish market been to your company? Have you achieved the goals that were set when you entered the country?
Kris Pauwels: Since its appearance in 1997, Fiege's Polish branch has succeeded in securing the company's most successful and largest operations outside Germany, its country of origin and home market. Over that period - and based purely on organic growth - Fiege in Poland has acquired a steady position in the group of leading international logistics service providers. These facts, together with our recent Logistics Services Provider award in the "Broad Spectrum of Logistics Services Provided" category [granted by Eurologistics magazine and Data Group Consulting], clearly demonstrate that we have achieved our initial goals and that we are well in line with our strategy to become a provider of high quality and highly complex, contract logistics solutions.
What do you think of the business climate in Poland in general? Is it favorable to foreign investors?
Since I arrived in Poland 10 years ago, there has certainly been a giant leap forward with regard to all aspects of doing business. However, the recent stagnation - and even recession - in global business is now also being felt in Poland. Factors such as rising inflation and the increasing cost of living, as well as more careful investors, will slow down future growth.
How is the Polish market different from others in which your company has a presence?
The complexity and fragmentation of the Polish logistics market make it very challenging, rather than different. Although things are very slowly improving, the existing road infrastructure still prevents structural optimization, while the lack of a consistent regulatory framework continues to slow the development of complex and integrated logistics solutions. If this does not change, Poland might lose the advantages of its favorable economic climate and low labor costs, in comparison to Western Europe, to the new EU member states which have carefully watched their neighbors and which are investing in modern infrastructure and a business-friendly investment policy.
What do you predict for the future of the Polish real estate market? Are you concerned about a possible slowdown?
Rather than a slowdown, we have noticed a clear shift in the complexity and functionality requested by clients. Whereas in the past the industrial real estate market focused on speculative building offering standard quality and functionality, the market is now clearly asking for more complex buildings featuring highly sophisticated installations. These include temperature control and industry-specific warehouse automation, or a combination of logistics and production facilities.
These built-to-suit solutions will clearly affect developers' investment and risk policies as well as their approach to the customer. There is a bright future ahead for those willing to pick up on this trend.
What distinguishes your services from those of other companies? How do you aim to outperform your competition?
I still believe that the best unique selling point is following up on your commitment to the customer, together with high and reliable quality. This statement is supported by the fact that Fiege has never lost a running contract in Poland since its appearance on the market. As the contract logistics market will always be a highly competitive arena, a clear profile and identity are an important contribution to success. When we ask our customers why they selected Fiege as their logistics partner, they most frequently mention our lean, family-managed organization - which assures a short decision-making process - close partnership with the customer and high quality of service. They also point to our broad range of supply-chain services and willingness to discuss non-standard solutions.
Fiege provides its services in five logistics centers in Poland, including three multi-user warehouses and two dedicated ones. How do these two types differ in terms of the investment process, profitability, etc? Which type of centers will you develop in the future?
The decisive factors behind the types of warehouse we develop are strategic presence and flexibility. The multi-user warehouses in Mszczonów and Dąbrowa Górnicza are part of the group's Europe-wide backbone of logistics mega centers.
The dedicated locations, for their part, are situated mostly on the customers' premises and allow for specialization and vertical integration in the customers' supply chains. The combination of the two models guarantees European and nationwide coverage and offers excellent synergy effects. In the future, location policy and investment types will be adjusted to enhance our existing coverage and service level.
How would you describe your cooperation with Poland's local authorities in terms of obtaining the necessary permits?
Our strategy and current customer portfolio crosses a wide range of sectors, so in order to guarantee high-quality service, it has been of critical importance to us from the very beginning of our presence in Poland, to maintain excellent relations with a wide selection of authorities and institutions on the local, regional and national levels. Clear communication and strict regulatory compliance - together with professional and detailed project documentation - have gained us a reputation as a reliable and professional company with all the authorities that we cooperate with.
