Elektrobudowa goes east
Construction firm Elektrobudowa has announced it is increasing its expectations for this year's consolidated net profit, from zł.11 million to zł.16.8 million. In addition, the firm's consolidated sales revenue will also increase from zł.383 million to zł.448.
"Poland's market is growing rapidly and therefore we are participating in various new projects and are winning tenders," Jacek Faltynowicz, Elektrobudowa's president, explained.
Elektrobudowa's largest project currently under development is the construction of the last three metro stations on Warsaw's first subway line, which is valued at zł.70 million.
Expansion of operations into eastern markets has become a common trend among Polish companies and Elektrobudowa is no exception. The company has set the ambitious goal of gaining a minimum 10-percent share of CEE construction market over the next few years.
"The Russian market is very absorptive and is developing like no other in Europe," Faltynowicz said.
According to Faltynowicz, the analysis has shown that Elektrobudowa could gain a competitive advantage in the CEE and Russian markets that would be impossible for the company to reach in Western markets.
He added that his company's expansion to the east is connected to Elektrobudowa's 51-percent ownership of Kruelta, a private St. Petersburg company.
According to the ninth annual CEO Survey recently conducted and prepared by PricewaterhouseCoopers, Central and Eastern Europe is the primary location for foreign business operations of Polish companies. Over 40 percent of the survey's respondents pointed to CEE as their target, with Estonia, the Czech Republic and Slovakia garnering the most interest. After the CEE area, the post-Soviet region ranks second in terms of Polish companies' planned expansion territory.
Professor Witold Orłowski from PricewaterhouseCoopers' office in Warsaw said that Polish companies now have more funds to invest abroad, and that investment in CEE, Russian and Ukrainian markets will continue.
"For the past 15 years Poland has been attracting foreign investments, and now the time has come for Poland's investments in foreign markets," said Orłowski. However, Polish firms can face a number of obstacles in eastern markets when dealing with local authorities.
"It is not always the corruption, but rather the administrative sluggishness and inefficiency which are often the problem for Polish firms," Orłowski said.
