The Polish Position

A venue for the ISE Roadshow for two year’s running, Poland has been identified as a key market for growth by many technology suppliers in the next few years. We talked to one of the country’s larger distribution and integration firms to hear why.

Poland is considered currently to have one of the fastest growing economies of Central Europe, with annual growth of in excess of 6%. Throughout the 90s the country’s leaders have pursued economic liberalisation, bringing significant achievements in economic performance but having a negative impact on certain parts of its population.

Privatising many of the small and medium state owned firms has lead to a thriving private business sector, creating demand for AV technologies for meetings and general business in several cities across the country. Poland bucks the trend of many countries in that its capital, Warsaw, does not have a monopoly on business investment.

A company that has worked in Poland since the very beginning of liberalisation is Pro Audio AVT. It was established in 1992 and has ridden the wave of foreign and government investment flowing into the country since the start of the 90’s.

The company treads the tightrope of many less developed AV markets, operating as both a distributor and integrator of AV products. As well as serving the AV end user market, the company also has dealings in the IT distribution channel with the lower end of its product offerings – chiefly Epson projectors.

Dominik Lipka has been with the company almost 7 years, joining as an acoustics graduate – a product of Poland’s fine technical university system. He wishes there were more people like him these days, something we’ll touch on later on.

“My primary role at the company is as product manager for Epson, I am responsible for providing technical support for our distribution customers. The other aspect of my role is as an AV consultant for our integration team. I provide advice on control systems, projection and audio solutions.”

“The audiovisual technology market in Poland is strong but highly competitive at the moment. It’s very price sensitive in a lot of cases. This can make it different for Pro Audio to compete as we offer a lot of additional support and technical services, as well as high value brands – we can’t always go as low as our competitors on price.

“In the IT market it’s not such a big problem, every one including ourselves simply moves boxes. Then it’s a straight fight on price. For the AV market it’s much harder, because the market still isn’t too open to our value added services.”

Customer training is one area where distribution firms in other countries have had some success, but Dominik doesn’t see much demand for this from his clients either. They are content to go to him for advice when they need it rather than paying for specific training.

But what about training of his own staff? Well this is where the issues affecting the Polish economy in general have impacted directly on the Pro AV sector.

There is a general shortage of qualified, motivated young people in the employment market to fill jobs that are being created. The economy is growing strongly, and Pro Audio itself has enjoyed 40% growth over the past couple of years, but as Dominik puts it, if he can’t recruit enough staff to do the business that’s out there, how on earth can they afford the time to send people off to be trained.

The simple fact is that a young Pole can walk out of University in Poland and get a good, interesting technical job in Poland, or he or she can move west to Germany, France or the UK and earn more money working in a coffee bar or restaurant kitchen. Given the cut throat pricing market that exists at the moment, it seems unlikely that AV firms will be able to offer the salaries required to retain young people in the foreseeable future.

The InfoComm training scheme also seems to have had limited impact in the territory so far, although Dominik does believe that the company will begin trying to get staff CTS certified moving forward.

In the mean time they rely on supplier training courses: “We go to training events organised by other companies and our manufacturers, for example Comm-Tec, Cue and Kramer. Sometimes these are organised in Warsaw, but generally we have to travel abroad to Holland or the Czech republic. Mostly these sessions are worth our time attending, but sometimes they are “just for paper”. We get given a certificate for turning up, but then we are still reliant on the supplier for detailed technical help.

“It’s hard. In this market it’s vital that we are able to keep up with developments in technology, but at the same time we only have 20 or 25 employees, losing two of those for a few days to attend training makes things difficult. We sacrifice business for it.”

Perhaps ironically, Pro Audio’s strongest market is in education. Government funding for Universities and high schools is at record levels following Poland’s accession to the EU.

“We have good opportunities to sell systems for auditoriums into universities because they require more integration services than just installing cheap projectors. They need good quality products, with control and automation solutions.”

The interactive whiteboard effect has only really hit the Polish education market within the last couple of years and Dominik fears that most of this business will be taken up by the IT sector who will be able to leverage their volume sales to reduce prices. “This will be difficult for us, schools and universities buy in one of two ways. If they need 100 projectors, they go to an IT dealer. If they need an auditorium they come to us for more specialist advice.”

The problem for Pro Audio with the education market is that most of the big projects have to go to tender since they are publicly funded. The EU rules usually require up to five eligible bids for the largest jobs at Universities, which then often brings the polish price competition problem back into play.

However price depression isn’t all bad news. Dominik recognises that an overall lowering of price for entry level products is opening up his potential market significantly. “Even the smallest schools can now afford to buy a simple projector. The market isn’t growing particularly because of technical innovation, but because of volume. The same is true of control systems for our business clients. Even small businesses can now buy simple systems for room control – lighting and electric screens as well as projector functions are within their reach in a basic system.”

Because of this he is also optimistic for future growth. Whilst he doesn’t expect 40% to continue he still believes the company can grow by 30% this year. If the government can act to turn around its emigration problem, he sees no reason why his home of 38.5 million people shouldn’t continue to thrive.

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