Tight translator market puts pressure on prices
Most of his competitors entered the sector more than a decade ago, before costly full-page advertisements in phonebooks and elaborate Web sites became the norm, creating sometimes prohibitive start-up costs for new firms. Lucrative translation contracts for the government, European Union and major manufacturers are now virtually beyond the reach of the new entrants to the Polish translation market.
“The entrance barrier is definitely much higher,” said Kostecki, president of Translatornia, a firm he helped found in 2000. “We had to invest a lot of money in the beginning. All the companies that are coming in now have to spend a lot more money just to make a name for themselves.”
But when Kostecki set up Translatornia he felt there was still room on the market for a company with some new ideas.
“We wanted to do something fresh, with lots of technology that no one else on the Polish translation market had done before,” he said. One of Kostecki’s ideas was to run an in-house translating department, allowing Translatornia to handle more express translations, which can cost up to 150% of the firm’s standard rate. When his partner Michał Butscher put in his share of the firm’s capital a year later, Translatornia was equipped with computer-aided translation equipment and a computer network that Kostecki claims helps the company cut down its labor costs by 50% compared to other agencies.
The partners now want to find an investor to develop a nationwide chain of Translatornia agencies and delve into new areas of the industry.
“We also want to expand sales to foreign customers,” Kostecki said. “We have ISO 9002 and we want to sell directly to ISO-certified companies in Western Europe and the U.S. so we need more money for marketing.”
Unfortunately, the high cost of launching on the Polish translation market makes any payoff less likely for new entrants. The sheer number of companies on the market has eroded profits, agency owners complain.
“Ten years ago there were seven or eight companies, today there may be as many as 200,” said Władysław Kurowski, plenipotentiary for Joanna Baraniecka, owner of the 100 translation agency. The majority of 100’s translations are instruction manuals and Web sites for manufacturers of household electrical equipment and computer equipment and contracts for law firms. According to Kurowski, the level of competition on the market has prevented the agency from raising its prices in two years.
Focusing on cost
Translation agencies in specialized niche markets like KMK Usługi Biurowe, which translates scientific papers and technical documentation for drug certification, have also had to freeze their prices to remain competitive, said KMK director Elżbieta Pląskowska.
“Both of these areas are good for us, but the Polish economy is in crisis, so perhaps the strength of the large pharmaceuticals companies on our market makes it our strongest area of business at the moment,” Pląskowska said.
To compete for clients, many smaller companies cut prices. “There are agencies that fight for clients at the expense of quality,” said Beata Kander director of Intertext, which earns most of its revenue from providing translation services for about 10 large international conferences a month and the translation of EU legislation for government ministries.
“There is a lot of downward pressure on prices,” said Michał Dembiński, general manager for the Polish division of Berlitz GlobalNET, an international translation agency. We can’t lower prices too much (because we don’t want to) lose out on quality ... we tend to lose out to smaller firms.” He added that the company’s technologies and quality-assurance procedures hinder its price competitiveness. Berlitz is active in 21 countries and benefits from an international network of offices, which attract clients such as Norwegian mobile communications firm Ericsson, which wants documents such as product manuals translated into many languages at once.
Translation agencies were quick to feel the drop in corporate spending resulting from the downshift in the Polish economy last year but they will also be directly affected by a surge in market activity, Kostecki said. “We’re a typical outsourcer, so we’re the first ones to get hit when the economy goes down the drain,” Kostecki said. “But basically things have been picking up since the beginning of the year, and that’s optimistic.”
By Greg Goodale
“The entrance barrier is definitely much higher,” said Kostecki, president of Translatornia, a firm he helped found in 2000. “We had to invest a lot of money in the beginning. All the companies that are coming in now have to spend a lot more money just to make a name for themselves.”
But when Kostecki set up Translatornia he felt there was still room on the market for a company with some new ideas.
“We wanted to do something fresh, with lots of technology that no one else on the Polish translation market had done before,” he said. One of Kostecki’s ideas was to run an in-house translating department, allowing Translatornia to handle more express translations, which can cost up to 150% of the firm’s standard rate. When his partner Michał Butscher put in his share of the firm’s capital a year later, Translatornia was equipped with computer-aided translation equipment and a computer network that Kostecki claims helps the company cut down its labor costs by 50% compared to other agencies.
The partners now want to find an investor to develop a nationwide chain of Translatornia agencies and delve into new areas of the industry.
“We also want to expand sales to foreign customers,” Kostecki said. “We have ISO 9002 and we want to sell directly to ISO-certified companies in Western Europe and the U.S. so we need more money for marketing.”
Unfortunately, the high cost of launching on the Polish translation market makes any payoff less likely for new entrants. The sheer number of companies on the market has eroded profits, agency owners complain.
“Ten years ago there were seven or eight companies, today there may be as many as 200,” said Władysław Kurowski, plenipotentiary for Joanna Baraniecka, owner of the 100 translation agency. The majority of 100’s translations are instruction manuals and Web sites for manufacturers of household electrical equipment and computer equipment and contracts for law firms. According to Kurowski, the level of competition on the market has prevented the agency from raising its prices in two years.
Focusing on cost
Translation agencies in specialized niche markets like KMK Usługi Biurowe, which translates scientific papers and technical documentation for drug certification, have also had to freeze their prices to remain competitive, said KMK director Elżbieta Pląskowska.
“Both of these areas are good for us, but the Polish economy is in crisis, so perhaps the strength of the large pharmaceuticals companies on our market makes it our strongest area of business at the moment,” Pląskowska said.
To compete for clients, many smaller companies cut prices. “There are agencies that fight for clients at the expense of quality,” said Beata Kander director of Intertext, which earns most of its revenue from providing translation services for about 10 large international conferences a month and the translation of EU legislation for government ministries.
“There is a lot of downward pressure on prices,” said Michał Dembiński, general manager for the Polish division of Berlitz GlobalNET, an international translation agency. We can’t lower prices too much (because we don’t want to) lose out on quality ... we tend to lose out to smaller firms.” He added that the company’s technologies and quality-assurance procedures hinder its price competitiveness. Berlitz is active in 21 countries and benefits from an international network of offices, which attract clients such as Norwegian mobile communications firm Ericsson, which wants documents such as product manuals translated into many languages at once.
Translation agencies were quick to feel the drop in corporate spending resulting from the downshift in the Polish economy last year but they will also be directly affected by a surge in market activity, Kostecki said. “We’re a typical outsourcer, so we’re the first ones to get hit when the economy goes down the drain,” Kostecki said. “But basically things have been picking up since the beginning of the year, and that’s optimistic.”
By Greg Goodale
