Polish Business Survey
Selgros to open new stores
The German discount warehouse chain Selgros has announced that it intends to open three new stores in Katowice-Szopienice, Warsaw and Radom. The cost of this investment will be around PLN225m - PLN250m. To present a total of PLN390m has been invested in Poland. This will increase its number of retail outlets to eight.
Last November Selgros announced that it would have ten stores in Poland by the end of 2000. New stores are planned in Gdańsk and Kraków. The company claims it will open further outlets in the future in Bydgoszcz, Gliwice, Lublin and Białystok.
Selgros has refused to publicise its financial records but according to Cal Company Assistance who specialise in giving independant retail reports, the German company had a turnover of PLN290m in 1998. This can be compared to the PLN5.4m turnover of its major competitor Makro Cash and Carry. CAL analysis Grzegorz Ejchart believes that the difference between the two companies will be the same in 1999 although he admits that no calculations have yet been done. Both companies supply businesses and both are found in cities with over 200,000 inhabitants. Ejchart believes that there is clearly room for both companies on the Polish market and the growth of one company has not effected the other. The losers in this expansion are smaller Polish warehouses.
Selgros belongs to OHG Fegro / Selgros based in Neu Isenburg, near Frankfurt on Main. It is owned by OTTO-Versand and food retailers REWE. Poland is the first foreign country in which the company has invested. Horst-Peter Nitz, of the board of Selgros said that his company wants to concentrate on Poland as it appears to be the most dynamically growing country in Central and Eastern Europe.
Plus Discount to double
Plus Discount, a subsidiary of the German Tengelmann, has announced that it plans to invest at least PLN100m in Poland before the end of 2002 in increasing the number of its shops from 96 to 200. It has also indicated that it is interested in acquiring a Warsaw based retail chain.
The company claimed some time ago that it was going to open 1,000 stores in Poland. Managing director Jarosław Lasecki claims that the company has not given up these plans, only that the initial investment period has been lengthened. One of the reasons for this is the emphasis that is being put on increasing market share and profitability in places where the company has already opened.
The company, which employs 1,700 people, has a 12 percent market share in Silesia and southern Poland. The company concentrated on these areas because population densities are highest here. Now Lasecki is claiming that the company will open also in Gdansk and Łódź as well.
At a cost of PLN40m-PLN45m Plus Discount opened its first distribution centre in Poland. Once a further 100-150 stores are opened in northern Poland a further centre may be opened.
Alpinus to go public
Sports clothing producer Alpinus has announced that it intends to go public next year. This was the unanamous decision of the shareholders and is seen as a way of attracting capital for the growth of the company. The company presently belongs to a group of Polish and German private individuals and Renaissance Partners which manages the European Renaissance Capital fund which invested PLN1.5m in Alpinus in 1997. The company has been trading for ten years.
Small wholesalers face bankrupcy
Despite protests from the pharmaceutical business, the treasury has decided to reduce by over thirty percent the margin on imported refundable medicines that wholesalers can have. Some distributors have announced that they will cease investments and warn about small warehouses going bankrupt. The treasury will also lose out as it will weaken the position of state owned companies like Cefarm and thus lower any potential privatisation receipts. It has been learned unofficially that the government also plans to reduce the profits on Polish manufactured pharmaceuticals.
Wandalex to be quoted
Wandalex, a Warsaw based trading company has submitted its prospectus together with a a request for a quotation on the capital s stock market. The company hopes to raise between PLN12m - PLN25m.
Brewery faces large redundancy bill
Redundancies in the beer manufacturing Źywiec group will cost the company around PLN20m this year. This has been caused by the consolidation of the sector and the addition of new companies to the group. Management agreed with the trade unions in March that each person who lost his job would receive between PLN20,000 and PLN60,000 in compensation.
Management is also claiming that there will be no further redundancies next year although this will clearly depend on the state of the beer market. Currently consumption is growing by six to eight percent annually.