’˜Cut the red tape’

Even after a grim year, which saw the continuing financial crisis maintain its icy grip on Europe, the AV market in Poland still has reasons to be cheerful. However, Anna Mitchell hears that excessive bureaucracy presents a serious challenge.

In November 2009 financial news source, Bloomberg reported that Poland had avoided the recession that had either visited or was still plaguing most of Europe. In particular Poland has been hailed as a shining light against the backdrop of the hard-hit economies of many other post-communist counties.

“We still have a little growth,” agrees Tomasz Trzaskalski owner of C4i Consultants for Industry. “Poland is in a much better situation than other countries around us for example, I have clients from some Baltic countries and they have enormously big crisis.”

C4i is an AV distribution company with a focus on switching and distribution products. Trzaskalski started the business in 2006 but has worked in the Polish AV market since 2003, initially focussed on the distribution of Kramer Electronics products. Looking back to the period before he started the company, Trzaskalski remembers the AV market was still very small. “Only a few providers were known and then gradually funds started to flow in, new companies were established, installation projects were growing and with that the business of every company and supplier in our industry.”

Jaroslaw Kolcun, vice director of the Audio Video-Systems Department at Microtech, goes back even further as he recalls the conception of his company. “Microtech was established in 1990. It was a good time to start a company. Communism in Poland was finished and the market economy had been started. Companies established at this time didn’t really have any competitors.” In recent years Kolcun says the company has been very active in AV projects related to medical, residential, cultural, corporate and government installations.

As a distributor, C4i rarely deals directly with the end user. However, Trzaskalski still has his finger on the pulse when it comes to lucrative markets for AV equipment in Poland. He says distributors and installers have enjoyed an active education market recently but he sees the projects diminishing. “In the last one and a half years I see the market lowering,” he explains. “I think this is because of some general trends like the ageing population reducing the number of young people in the country. Although Poland still has a high number of schools and universities when compared to the rest of Europe I now see this market diminishing.

“Instead I see some industrial sectors growing in importance,” he continues. “And, hospitality will be a very big focus. However, percentage wise, education is probably still a bigger market for AV at the moment.” Trzaskalski has also noticed an increase in government projects and adds that cultural installations are enjoying a boom largely due to EU funding, particularly for the country’s museums.

Kolcun agrees that museum related projects are a good source of income for AV companies and adds that the education and hospitality arenas also represent great opportunities. Unfortunately he adds that transport, retail and residential projects have really taken a battering over the past year or so, probably due to the continuing global economic problems.

Both Kolcun and Trzaskalski are in agreement that there is one overriding event that will offer major a boost to the country’s AV industry: The European Football Championship in 2012. In anticipation of the event Poland is busy building and updating, not just its stadiums, but a whole host of other related properties; from transport infrastructure to hotels. This obviously carries with it fantastic opportunities for the AV industry. Trzaskalski: “With Poland and Ukraine hosting this important event in 2012 there are several big stadiums to be built and other infrastructure such as hotels to be considered. This is good business for our clients and therefore, good business for us for the next two to three years.”

There are mixed feelings about the economic situation in Poland and how it is effecting the AV industry. On the one hand Poland has, in relative terms, escaped the crisis largely unscathed. On the other, the severity of crisis meant that its ripples were felt far and wide. “You can see the crisis and especially the lack of money,” says Trzaskalski. “Some of my clients have no money because their clients are not paying them and it creates a chain that causes problems for all businesses. The lack of money in the market is limiting bigger business and having a bank loan is very risky. A few companies went into bankruptcy and this is largely because of the activities of banks that aggressively promote their services with ‘special future offers’.

“Furthermore the currency fluctuation, in my case, is absolutely not good,” he continues. “Although currency levels have stabilised slightly compared to a year ago you are still never sure of how much you are paying for imports. Currently Poland has not had the chance to change currency to the euro. However, having our own currency does have its own advantages as it allows us greater flexibility.”

Trzaskalski continues to launch a stinging tirade against the Polish Government. “I would say they never help companies,” he begins. “Despite having a party which is known to the people as very liberal, they are not – whatever they say. In the reality of everyday life, all laws that are made or the activities of Government that should help companies conduct their business do just the opposite. For example, I am trying to create a new company. It’s very simple, I just want to start a new company with one of my partners. But the bureaucracy involved means you can only submit papers in one window. If you make even a small mistake on one paper, all your papers are rejected.”

He continues to explain that social insurance is high in the country and people do not feel it is reasonable. “If you pay money you have to see what you get for it,” he argues. “The pension services on offer do not meet the value of the money. People cannot be sure they receive their pension after they retire.” Looking at customs duties Trzaskalski concedes that the situation has improved recently. “Now it’s much better, it is easy to get goods from inside the EU, although there is still plenty of paper work. However, it can be very unpleasant to import goods from outside the EU because you are never sure how much you will be charged.” C4i has to import goods from China, Korea and Taiwan and Trzaskalski says sometimes a charge of 14 per cent is levied. He claims that the company suffers from incorrect evaluation of goods and the subsequent incorrect tariffs and suspects that the Government merely tries to claim as much money as possible.

“Generally our business is good when the Government does not try and destroy it,” he continues. “I would prefer that they don’t talk about business rather than say that they help us. They don’t help, they destroy! This is very strange because I started my career just after communist times so remember the way it was then and it’s not that different now. In terms of the relationship we have with the Government and their attitudes, it’s quite similar.”

However, despite the obstacles AV companies face in Poland everyone knows it could be much worse. The positives are precious as the world starts to emerge from one of the worst, if not the worst, financial crisis of modern times. Young Poles that fled high unemployment in search of higher salaries in Western Europe are returning in large numbers, Kolcun claims Microtech increased its AV division by 80 per cent in 2008 and Trzadskalski says the Polish AV industry is growing and will continue to strengthen. Despite the bureaucratic hindrances there are still multiple reasons to be cheerful.

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