Jard-Press acquisition is music to Kolporter's ears

Kielce-based Kolporter, Poland's largest private press distributor, last week bought all remaining shares in Jard-Press, a Warsaw-based regional press distributor. In May, Kolporter, part of the Kolporter Group, purchased an 18% stake in Jard-Press. Kolporter upped its stake to 100% following approval by the Office for Competition and Consumer Protection (UOKiK). "We plan to finalize the merger by the end of this year," said Maciej Topolski, Kolporter's spokesman. "Our networks are perfectly complementary. After the merger, we will distribute publications to more than 20,000 newsstands across the country. Due to synergies we might cover more than 40% of the market in Poland by the end of this year." The nation's biggest press-distribution market merger comes at a time when the Treasury Ministry is still uncertain as to when and how to privatize Ruch, Poland's largest press distributor. Last year Ruch operated 34,000 outlets and had a 57% market share. Kolporter told the Treasury Ministry in 2001 that it might be interested in acquiring Ruch. But according to Topolski, the ministry has recently been quiet about its plans for the distributor.

"We know nothing about its (Ruch) privatization, neither about its valuation nor about the size of the package on sale, (so) we cannot respond to any questions about our potential domination on the market," Topolski said. According to the Treasury Ministry's press office, Ruch's pre-privatization analysis, put together by PIM, a company selected by the ministry last year to advise on Ruch's privatization, is still being studied. "We're the largest private player on the market, though, so we're closely looking at the market and of course we couldn't say we're not interested in Ruch," Topolski said. "On the other hand, its privatization is a difficult issue because of the lawsuit filed by the HDS (Hachette Distribution Service) and due to the terrible atmosphere surrounding the privatization of state-owned companies these days." Ruch's privatization has been dogged by a legal battle that began after the planned sale of 40% of the company to French firm HDS, part of the Lagardere group, was canceled by the treasury. HDS, which in 2001 owned 134 Inmedio newsstands in Poland, sued the government in 1997, and the matter ended with no decisive ruling. Last year, the ministry decided to start Ruch's privatization again. Topolski said that Ruch's privatization could be complicated by several other problems. "Its sales structure is not up to the current market conditions," he said. "It has two or three trade unions and lots of real estate that a private company would have gotten rid of years ago. It also has too many employees and their effectiveness is relatively low. (The company) had (2001) revenue threefold more than us, but our profit was almost twice as high. That speaks for itself."

Kolporter Group, which owns seven companies including Kolporter, earned zł. 11 million ($2.68 million) in profit last year on zł. 1.1 billion ($260 million) in revenue. Kolporter alone logged a zł. 7.8 million ($1.9 million) profit. By comparison, Ruch made zł. 5.3 million ($1.3 million) in profit on zł. 3.85 billion ($962 million) in revenue. Kolporter, which employs 2,000 staff, distributes press to 17,000 outlets including 200 of its own (Saloniki prasowe) established by franchisees. Jard-Press operates 3,300 outlets in central and northern Poland. Topolski said that after the merger the Kolporter Group should earn a profit of zł. 16 million-zł. 18 million ($3.9 million-$4.4 million) on zł. 1.6 billion ($400 million) in consolidated revenues this year.