The world isn’t flat

Selena defies those who say Polish companies don’t have what it takes to become global players. Over its 20-year history the firm rose from local construction foam retailer to the world’s third-largest manufacturer of chemical adhesives Sergiusz Prokurat Krzysztof Domarecki studied law and philosophy some 30 years ago. In late 1980s he worked at Wrocław University, where he dedicated his time mostly to constitutional court rulings. But that was never enough for him, so after a couple of years, he ditched his academic career and went to India to seek inspiration. He came back with a business idea in the early 1990s, when Poland was experiencing rapid transformation. After trying his luck selling computers, Domarecki quickly swapped them for industrial foam. He saw how badly needed construction chemicals were in a country that was headed for major redevelopment. Around the world in 20 years [caption id="attachment_51693" align="alignleft" width="150"] Krzysztof Domarecki, Selena[/caption]   In 1992 he created Grupa Selena, a trading company specializing in construction products such as polyurethane adhesive foam and silicon sealing. After just three years, Selena was number one in the Polish foam market. Wanting to grow further still, the company started looking for new opportunities, and so its international expansion began. The bar was set very high: the firm aimed to join the international big league almost from the get go. A network of foreign trading companies was created, followed by the company’s own production overseas. In 2011, the firm started production in Nontong, China. In the same year, Selena purchased the remaining 49 percent stake in a Spanish manufacturer and distributor of construction chemicals, Industrias Quimicas Löwenberg (Quilosa), becoming its sole shareholder. New acquisitions and production plants are usually aimed at one thing: conquering new markets. In 2012, the company did just that: it managed to become one of the largest adhesive and plaster manufacturers in the Romanian market. Major leagues Selena currently has a dozen factories located on four continents: in Poland, Brazil, Korea, China, the US, Turkey and Spain. Its trading activities are handled by commercial firms which in total serve over 70 countries. The factories abroad are run both by Poles (e.g. the Chinese, Kazakh and Ukrainian markets), and local market managers (the US and Brazil). At present, the company is the third largest producer of construction polyurethane foams in the world. With employment at around 1,600 people, the group’s revenues for 2012 exceeded PLN 1 billion, with exports contributing 60 percent to the company’s overall sales. The money for international expansion was raised by Domarecki in the Warsaw Stock Exchange, where Selena has been traded since 2008. The China challenge Factories in various locations worldwide serve as production hubs. The company’s Polish factories serve Central and Eastern Europe, the Brazilian plant sells to Uruguay, Argentina and Chile, while Turkey’s area includes the Middle East. In the future, production in China will meet the needs of Southeast Asia. Domarecki treats China as a particular challenge. After all, most Polish companies make money importing from China. Meanwhile, Selena wants to make a mark in Asia, despite the difficulty of competing with the Chinese. “China is the most competitive market and one of the most difficult ones. Additionally, competing there is difficult due to the state bureaucracy’s preference for local firms,” Domarecki said. Going local High-quality products such as Tytan, a high-end polyurethane foam, or Artelit, a firm adhesive, were the first steps taken towards Selena’s global success. “The main element of the firm’s strategy has to be taking part in globalization, although understanding local markets is a must,” said Krzysztof Domarecki. “Thomas Friedman, a New York Times journalist, says that the world is flat. But it’s not. The world is, above all, very diverse. Countries are differentiated by climate, the ways people act and by companies’ organizational cultures,” he added. Selena’s products have different technical specifications and chemical characteristics depending on the market they are destined for. They take into account diverse climates and construction traditions, technical cultures and other local needs. For example, adhesive foams in China are different from those sold in Germany, and adhesives for Brazil differ from those sold in Russia. Simultaneously, these products are always high quality by local market standards. This has been Selena’s modus operandi since the start of its international expansion. Such a value offer is accompanied by an adequately adjusted marketing communication strategy, accounting for language, cultural and historical differences between markets. When Selena wants to communicate a message to clients, it customizes and adjusts it to the local needs of the geographical zone’s construction culture. Make sure you’re ready Domarecki still owns the enterprise but in 2011, he stepped down from being the firm’s chief executive officer and appointed a professional management team. He himself went on to become the chairman of Selena’s supervisory board. Despite working as Selena’s CEO for 20 years, Krzysztof Domarecki’s hierarchy of needs is still topped by the company’s development. Each year he climbs the ranks of the Forbes 100 Richest Poles list (he is currently ranked 58). Although Domarecki says “we aren’t a corporation,” Selena’s success can be a perfect example for aspiring Polish entrepreneurs. As for developing companies he has the following advice: “Concentrate on your presence in markets which are culturally and geographically close to Poland. Especially countries in Europe. You need to make sure you’re ready before you start expanding outside Europe.”