SMEs hustle for pre-accession funds

By Karol Chlipalski

Bogdan Skórkiewicz, president of Sportlake, a yacht manufacturer based in Olecko in the Warmińsko-Mazurskie voivodship, advises managers of small- and medium-sized companies to appoint an employee whose main task would be to monitor all information about European Union funds in order to obtain and use them.

That is what Skórkiewicz did, and now he considers it a good move as his company has taken advantage of money from three programs within the EU's Phare pre-accession funding program. As a result, he says that Sportlake can compete with other companies that enter the domestic market after the country enters the union in 2004.

Founded in 1990, Sportlake today employs 240 people and has a turnover of €6.5 million (zł. 28 million). It produces 1,100 boats a year, ranging from small rowboats to 12-meter-long yachts - altogether 14 types of motorboats and sailboats. Foreigners, especially from Germany, France and the Scandinavian countries, purchase about 93% of the boats produced in Olecko.

"The Polish economy suffers from a chronic lack of capital," Skórkiewicz said. "Entrepreneurs have ideas, but they do not have money to apply them. The Phare funds create such a possibility and stimulate the development of companies."

With only a year to go before the country's expected EU membership, more and more small- and medium-sized enterprises (SMEs) like Sportlake are obtaining EU funds to help them prepare for increased competition in the single market. But some are still running into obstacles when it comes to actually getting their hands on the money.

Phare is designed to subsidize SMEs and provide financial support to regions. At the end of 2002, about 95% of EU financing directed to Poland was allotted through fund applications from SMEs and regional governments. The EU has been increasing its financial aid budget for Poland each year. The EU's total funds for the country amounted to E2 million from 1990 to 1999 and €4 billion from 2000 to 2003.

Skórkiewicz said that Sportlake succeeded in obtaining funding from the Phare 1999 Warmia i Mazury program and two different Phare 2000 Social and Economic Cohesion programs - the National Export Development Program and the Investment Subsidies Fund. The company has received E€60,000 in total. Sportlake has used the funds to purchase new production machinery and to cover the costs of participating in international fairs.

Skórkiewicz said that without the Phare money, the new machinery would have been delayed for two to three years.

"It made our company more competitive against western European shipyards," Skórkiewicz said, explaining that Sportlake's new technology has helped the company to reduce costs, which has had an impact on pricing. Thus the firm's lower prices led to more sales.

Sportlake earmarked another part of the Phare funds for participation in trade fairs in Friedrichshafen, Germany, last year.

"With the money acquired form Phare, we financed the transportation of boats (to the fair), stand equipment and the publication of marketing materials," said Krzysztof Konewka from the company's marketing department. The firm's turnover increased by 20% as a result of the trade fairs, according to Skórkiewicz.

Sportlake also created a website with the Phare funds.

While companies like Sportlake have managed to take full advantage, other SMEs are still having problems applying for and obtaining funds, according to the country's Office of the Committee of European Integration (UKIE). Filling out applications forms properly and finding the required matching funds are among the problems facing potential Phare fund applicants. UKIE provides these companies with help by organizing training at the so-called European Information centers.

Meanwhile, those seeking to obtain pre-accession funds specifically for transport and agricultural and rural development have encountered more problems. Both funds have been considerably delayed, so that the percentage of contracted money seems less impressive. The amount awarded as a portion of total available funds within ISPA amounted to 28% for the transport sector and to 8% for the ecological sector. As of the end of 2002, around 3,700 applications for Sapard had been submitted, for a total of €314 million (zł. 1.37 billion), or about 75% of the total funds available.