A capitalist right down to the bone
Krzysztof Zielinski talks to Arkadiusz Mus the owner of Press-Glas Capital Group.
Arkadiusz Mus – lawyer, aged 43 – sole owner of Press-Glas Capital Group. In 1992 he left his post in the prosecutor’s office and bought the bankrupt firm Press-Glas, which went on to become the leading producer of double-glazing glass in Poland. In 2003 the total turnover of the capital group amounted to 250 million zlotys.
– History describes many turning points to us. What are the turning points with relation to Press-Glas?
In 1992 I bought a bankrupt firm, which I had to invest in before it could function properly. Two years later we moved the firm to Nowa Wies, near Czestochowa, after having bought a site there and the dynamic growth of the company started. In 1995 we bought a new production line made by Lisec company, for double glazing glass. This was to become a real trump card, because having a perfectly functioning production line, which can work 24 hours a day assured us of being a credible partner for companies that produce windows. Our client had the certainty that when he ordered glass units from us, they would be delivered by the agreed deadline and according to the specifications. Thanks to our credibility and assurance of high quality goods at attractive prices we were able to gain new clients. So as to meet growing demand we increased our production capacity – every year we bought a new production line for double glazing (at present we have nine lines). In 2001, we bought Celt-Tychy, which became transformed into Celt-Glas and after the restructuring in 2002, the production hall in Tychy was increased from 2000m2 to 11,000m2. In 2004 we built another factory in Tczew, with a production hall of 12,000m2 (which includes 2 production lines).
– How do you assess the position of your firm on the market?
We are undoubtedly the leader in the production of double glazing glass – according to our assessment we serve 25% of the market. In the case of special types of glass, it is more difficult to assess the level of the market, as it is fragmented and companies offer various products – glass for furniture, construction purposes and car manufacturing.
– How do you form your company strategy when on one side there are small firms, that offer low prices and operate on very low profits…?
Globalisation has been in progress for some time now and in construction likewise. This has passed on to the lower market segments, such as window production and the production of double glazing glass. In the era of globalisation the biggest chance of success and development is with large firms while smaller firms will have less significance. We do not compete with smaller firms because they operate in a different market segment. Small glass firms cooperate with small window producers and large companies cooperate with other large ones. I am not interested in a client that produces 100 windows monthly and a factory which produces 2000 glass panes per month is of no risk to me. We cooperate with the leaders of window production and we are only interested in medium sized and large companies.
– … and on the other side large competitors which are supported by international concerns?
Press-Glas is a Polish firm with private capital. We are not dependent on any multinational concern. We feel that if Press-Glas had not been founded 12 years ago, which resulted in the company going on to become an important market player, the market of double glazing glass in Poland would be totally monopolized by big concerns, that would divide the market up between themselves and dictate prices. This is a very important issue for Polish producers of construction materials. When Press-Glas emerged on the market in 1992, the profitability of double glazing glass was between 30-40%. Thanks to the emergence of our company the price of double glazing glass fell and a wider range of modern solutions became available to window producers. It is important to underline that profit is essential for us too, as glass units are produced to generate profits. Profit is the most beautiful thing in the world for the owners of companies.
– How are you coping on the construction market which has been
caught in a crisis for the past few years?
Today the market is very difficult, prices are reduced both in the cases of windows and glass panes. This does not serve the market well in any way. During the years 1999-2002 the biggest curse was the extension of periods of payment up to 150 days, and in some cases even up to a year. The alteration of the periods of payment was a result of the desire to create sales at the highest level possible at all costs and the blame for this lies with the entrepreneurs who allowed such extensions of periods of payments. If there is a firm which earns one zloty on a window, it acts against itself and the branch as a whole. This is only economic ignorance and destruction of the market. The aim of such firms is only to exist on the market, regardless of the consequences.
– Every entrepreneur runs his company at his own risk and sooner or later the market eliminates firms which are badly managed or not according to economic regulations.
I am a capitalist right down to the bone and I would even say orthodox. But what I am about to say will not sound like capitalism – today firms are not run at your own risk and liability. If you employ workers and participate in economic life, you are not like a desert island. You must take responsibility for partners, employees and the environment you operate in. Real entrepreneurs are aware of this responsibility. However, if someone goes bankrupt and does not repay credit loans, his debts influence the state of existence and conditions in which my company operates in. Today crooks go bankrupt, trick suppliers, workers, state institutions and banks. Then with a smile on their faces they proceed to start new firms and create spiralling debts once more. In such cases not only should civil law be made more severe, but also criminal law, as these people should be eliminated from economic life.
– This is to conclude that the best client is one who pays cash?
At present, a client who pays cash is not strange in any way, as the majority of people follow that policy. The problem of payments was most evident in 2002. During 2003 and 2004 our company disposed of all dishonest partners and ceased cooperation with such firms. The same method is used by producers of windows and glass – they want to cooperate with good transparent partners. The market is slowly putting itself into order and dishonest firms and badly managed firms will be eliminated from the market. Of course everybody would like the process to be quicker. At present firms with a specified market position are seeking out credible partners. This is more favourable for our company. We are not generating huge turnover, but we have stable growth up to 10%. If no takeovers are taken into account, there is no possibility in this branch of increasing sales by more than 20% each year bearing in mind the level of sales we have at present (over 200 million zlotys).
– What actions are taken in your company to achieve good quality production?
From the very moment of purchasing the firm, we have always paid attention to quality. We have 13 years of experience in ensuring high quality of production. We have always tried to be attractive price-wise too Our competitors sometimes claim that we bring down market prices, but we have always had an attractive price offer. I would also like to add that the market process comes from all business units operating on the market-from large companies to local producers that have low costs which allow them to offer low prices. We were one of the first firms on the glass market to introduce the ISO system in 1999. We feel that the quality department is not one which only generates costs as it would appear, but one which we fully appreciate. We consciously avail of the opportunities which the ISO 9001 system provides us with. Today department managers come to me and request to see the audits. In other firms it would unheard of and even unimaginable for workers of medium level to ask for audits. A well-run ISO system controls the operation of your company. In order to produce something well, you cannot just use the slogan ”From today we are going to produce good quality products”. It must become a permanent feature of the firm – all managers, foremen, employees and even the cleaning personnel must be aware of quality. Years of experience is also necessary to achieve an appropriate level of quality. We pay constant attention to increasing the qualifications of our personnel in the form of internal training which is run by the quality department, as well as training provided by external firms. We have the best and most modern equipment in Europe. Each position in the firm involves quality control, which is followed up by further controls that are carried out by the quality department. Employees of this department in particular are obliged to constantly learn about and be updated on new technologies and ideas which appear on the market.
– Relations with clients have a significant influence on the company’s results. What is the strategy of the company in this area?
We always propose a number of solutions for cooperation to our clients and such a client can choose the one which suits the particular company best. Our partners are loyal and do not usually terminate cooperation. Of course it happens that we resign from cooperation with certain clients due to a lack of payments. We see relations with clients through the prism of our products – good quality at an attractive price. Personal contact and relations with clients is an extra advantage which has a positive influence on our relations with clients.
– Where do you seek out clients apart from in Poland?
We have documentation which enables our products to be traded in neighbouring countries such as all over Scandinavia, Germany, Ukraine, the Czech Republic, Slovakia and markets further away such as Denmark and Holland. Thanks to the fact that our products fulfil the requirements of European norms, we can also offer them to clients in England, Ireland, Estonia, Latvia, Lithuania and other countries. We do not cooperate with all of these countries, but we are constantly controlling the development of these markets. We always try to find out beforehand about the needs of a foreign client, the potential of a given market and what the perspectives are. Following such preparation we try to reach the leading firms in such a market and offer them our products. These are significant companies, so it is easy to find them and the essence of the matter is to discover their needs in order to fulfil them. We are not planning any major expansion however. A very intensive form of expansion could be a threat to the appropriate level of customer service – thus, at the moment we are concentrating on making both the leading Polish and foreign companies satisfied or even very satisfied with our service and that our cooperation enables them to reinforce their market position.
– What is the role of the new plant in Tczew with regard to your plans?
The Polish market is the fundamental market for us. This factory in Tczew was established to serve the companies which are located in north Poland and the fact that it is also serves companies from north Europe is an additional advantage associated with its location. Currently in Tczew we have space for 5 or 6 production lines – at the moment there are 2 in place and we are transferring one line from Tychy there this year. In the near future we want to install 3 new lines in Tczew, which combined with the current 9 lines would increase production capacity by 30%.
– It is necessary to find clients for the increased production capacity due to the 3 new lines…
The history of Press-Glas so far has indicated that we are able to do so. Today, we are a company which is seen in a favourable light. We do not have to gain clients with price reductions unlike our competitors. At present we have a conscious client to deal with, one who can appreciate not only the price, but also the quality, punctual deliveries and transparency of cooperation. Apart from this we put our hearts into double glazing – which means sharing our knowledge and experience in the area of glass with our clients and providing customer service as required. We know that the construction market in Poland is very difficult and it is necessary to be flexible with clients and not impose rigid rules of cooperation. We often talk to clients and find out what their problems are, and for instance, if there are problems of collecting debts we offer the services of our legal office.
– Please tell me the direction the expansion of your special glass offer will take.
Currently, apart from double glazing glass, you also provide tempered glass, machined glass with drill holes and cut edges and even fireproof glass.
We are considering the purchase of a new furnace for tempering and bending glass, so as to offer processed glass of less width. We also have plans to buy specialized machines which would allow us to offer products that are even more processed than before. We are also considering the possibility of expanding our offer to include final products – glass stairs, partition doors and walls, as well as broadening the product range of façade glass and glass used in interior design.
– What is your recipe for success?
The general recipe for success includes the following requirements: you should be born averagely intelligent, graduate from a rather good school, work very hard and have a little luck on your side. In the case of Press-Glas it was significant that we entered the market in 1992 and 1993 in what was a fast developing segment and the fact that we collected a group of people together who wanted to work hard to achieve success. In those years 500,000m2 of double glazing glass was produced in Poland and it was necessary to wait for months before the ordered glass was collected. Today, approximately 11 million m2 of glass units is produced. As you can see there has been an incredible growth in production which we have been able to avail of.
– What are the principles by which you choose your co-workers and your expectations of them?
I am intuitive – in the first phase of development in the firm I chose the people, whereas nowadays this is taken care of by the management personnel. During the first 10 years of the company’s existence I worked 12 hours a day, seven days a week and I have tried to instil a similar philosophy of a responsible work attitude in my workers The whole Press-Glas Group is in operation all week, including Saturdays and sometimes workers come to work on Sundays. I do not have to force them because they know that for example in 1999 when the firm had good profits they were rewarded financially for their efforts. Young workers here know that if the company is bigger in 5 years’ time their earnings will also be greater. Nowadays, a young person can not easily find a company which would enable him/her to achieve success. In Press-Glas every worker knows that he/she and the respective salaries will grow together with the company itself. We allow people to earn but we also employ the best. If a better IT specialist comes along, we make a worse one redundant and hire the better one. Therefore, people give their best in order to remain the best and not lose their jobs. Weak units in a firm have to be eliminated as this is the way to build an effective company. In Press-Glas we employ people who are the best in a given area at this point of time.
– In what way does Press-Glas participate in the life of the local community?
We support children a lot – mainly schools and playschools. Our support is very fragmented as I am opposed to concentrated and spectacular aid programmes. There are many people with various needs – therefore we try to give a little to many people. Due to this it is less visible, but more efficient in our opinion. The Press-Glas Group includes the firm Tytan, which is involved in debt collection and apart from this, it sponsors the basketball team Tytan Czêstochowa which is in the first basketball league.
Thank you for the interview and I wish you further success.
Interview by Krzysztof Zielinski
Source: Swiat Szkla, April 2005