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Business - In Pole position

News - Poland Doing business in Poland is a whole new game since the country formally joined the EU

Last month Poland became a fully fledged member of the European Union, and 13 years after shaking free of Soviet influence, the Poles once again feel in control of their own destiny. This is not least because they now have control of the money.

During the decade before accession on 1 May EU investment in Poland was controlled by Brussels. With full EU membership, though, national and local government have become responsible for managing EU funding. At the same time, Poland's economy is gathering strength, creating a market of indigenous construction clients. For foreign companies in the country it means a complete change in the way they do business.

UK consultant Scott Wilson formally opened a Warsaw office on 5 June after 11 years operating in Poland but with the business managed in the UK. 'But now we have to be seen as a Polish company, just backed up by an international group, ' says senior project manager for Scott Wilson Poland Tom Krawczyk.

A rather nice party in the garden of a 19th century Warsaw palace was designed to underline this transition to clients.

'In Poland, they want to know the boss of the company, drink vodka, make a deal, ' Krawcyzk explains. And they want to do business in Polish.

When Europe was funding projects directly, the language of tender notices published in the Official Journal of the European Union and of contracts was English. Now it is Polish.

And while the EU placed value on the technical expertise of international groups, national and local governments want to see work being done by local firms and local people at local prices. To compete and grow in the new market, Scott Wilson knows it has to make its business more Polish.

The 50 strong outfit turns over $8M, mainly through higher margin EU-funded technical assistance and supervision work in the water and roads sectors.

Polish engineers are also being used by the group to design UK rail work.

Director Simon Hindshaw has been working in Warsaw for a year establishing a formal business from what had been a more ad hoc, project-based operation. This includes putting in place all the right licences to allow the company to compete for work in Poland.

That Hindshaw - a Scott - is heading what Scott Wilson wants to be seen as a Polish office might be a surprise. But he is there to fight the business's corner in the UK and create an operation that looks, feels and acts like a Scott Wilson company, not a shell company, he says. 'The aim is to have a Pole running the business here as soon as possible, ' he adds.

The brief for the Polish company is to increase turnover to $24M in five years and compete nose to nose with local Polish consultants in what is expected to be a booming market. 'There's a tsunami of work coming, ' says Krawcyzk, particularly in water and transport.' But there are a limited number of Polish engineers and while there is no local skills shortage at the moment Krawcyzk is predicting one.

Poland is also being used as a jumping off point to win work in other accession countries, particularly Lithuania, Latvia, Estonia and Slovakia. Lessons learned from Poland will be applied there and in developing businesses in the next round of accession countries.

Talking to Hindshaw and his fellow director Martin Edge, who has responsibility for the central and eastern Balkans, the big lesson from Poland has been that in the new Europe you need to start the setting up a local company almost as soon as you have a couple of projects on which to base it.

'We would like Belgrade to be the next Warsaw, ' Edge says.

'EU funded projects are the way in but we have learned we can't exist forever on externally funded work. You have to convert to an indigenous business as soon as possible.

The earlier you start to set up the legal entity the sooner you can employ permanent staff and win work from local clients.'

All the signs are good for the future. In Poland bids are in with regional government for multi million pounds of work in the water and transport sector. And in the new accession countries Scott Wilson already has a significant base of work. These include a new crossing of the Danube between Romania and Bulgaria where the company, with Flint & Neill, is acting as management engineer, and a feasibility study for Belgrade city bypass with local partner CIP.

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