What a closet

Polish firms may be bogged down by economic gloom, but one company flush with good news looks set to buck the trend - portable toilet company Toi Toi.

The now-familiar white and blue outdoor portable cabin has been a notable success among Poland's scatologically challenged populace, while for the business community Toi Toi is a reassuring reminder that even during hard times, relief is at hand.

Toi Toi Systemy Sanitarne is one of four regional subsidiaries of the Germany-based Toi Toi & Dixi, the world's biggest provider of portable outdoor toilets. After Germany, the company's moves into Central and Eastern Europe have been no less successful.

"It's all my wife's fault," said Ryszard Głuchowski, president of the Warsaw-based Toi Toi Systemy Sanitarne. He said in 1993 one of his wife's friends, a crane operator, told them how impressed he was about the portable plastic biffies on German construction sites. Knowing that Polish construction workers were short of luxury on the lavatory front, Głuchowski saw a business opportunity and became the German firm's representative in Warsaw.

Since then, the number of Toi Toi's outdoor conveniences in Poland has increased from zero to more than 10,000 and now accounts for 85% of the outdoor portable toilet market.

Głuchowski, who holds a 5.3% stake at the Warsaw-based firm, said the firm's four Polish branches - Warsaw, Poznań, Wrocław and Dąbrowa Górnicza - will consolidate into Toi Toi Polska by March 2002.

Some 70% of the company's portable lavatories are hired by building firms for construction sites. Elsewhere, bars and local authorities account for about 20% of Toi Toi's business, while the remaining 10% of clients are organizers of mass events such as music concerts or Papal visits.

"We delivered about 1,100 units to the mass celebrated by the Pope in Gdańsk in June 1999 and another 400 for his visit to Elbląg on the same day," said Jacek Sobiech, Toi Toi's commercial manager. "Some 600,000-800,000 people attended the mass in Gdańsk alone.

The popularity of Toi Toi's toilets is also often the company's undoing. With their distinctive color and shape, the toilets are often attacked by vandals, many overturned and even stolen. "We had 22 toilets in Gdańsk last year and all of them were burned down within three months," Sobiech said.

While Toi Toi & Dixi already has subsidiaries in Slovakia and the Czech Republic, in October it launched a subsidiary in Ukraine. Sobiech said there's still no competition there, as Ukrainian construction firms still use old wooden backhouses or nothing at all.

"Ukraine is like Poland was 10 years ago, so I expect that the demand will grow just like it has in Poland," Głuchowski said. Toi Toi hopes to exploit the large Ukrainian market and also look to Poland's other neighbors. "We're also eyeing Belarus, Lithuania, Latvia and Estonia," Głuchowski said. The company plans to start a satellite operation in Lithuania next year.

Though earnings are modest, they are growing, he said. The firm made a 3% profit on some zł. 30 million ($7.3 million) in revenue last year, 20% higher than 1999. Głuchowski expects similar growth in 2001, with the number of units to increase to 40,000 in Poland during the next 10-12 years, as the quantity of toilet cabins continues to catch up with Western Europe.

In Germany, one portable toilet serves about 600 inhabitants, while in Poland it's shared by 3,000 people. "We estimate that there will be some 1,000 people per one cabin in 10-12 years," Głuchowski said.

And more toilets are urgently needed, according to Maria Łopatek of the Central Sanitary Inspectorate, a health ministry agency that monitors hygiene in Poland. She said there are simply not enough public toilets in the country given the population. "The number of toilets is rising, but there are still too few," she said.

This lack of lavatories is good news for Toi Toi, which is the only portable toilet company serving the entire country. But on regional markets it's forced to compete with smaller firms - the main threat to Toi Toi's plans, Głuchowski said.

"Some new companies try to enter the market by slashing prices from the start," he said. "Today, this is a nonsensical strategy because the market is still not saturated and there's no need to compete on prices."

But it isn't only the competition that is trying to eat into Toi Toi's turnover.

Like most firms in Poland, Toi Toi is feeling the plunge in the economy, and the construction industry in particular. "In Warsaw, the problem is no longer to rent out the toilets, but to collect our receivables," Głuchowski said. "Construction firms have started to have problems with their financial liquidity."

Although construction firms may not stop renting plastic biffies, they may decide to order fewer of them. "Each discharge means another expense to the company," Łukawski said. "As a result, the toilets are often really full and thick."

Robert Wylot