The road continues east

Already active on the Polish market for six years, the Portuguese construction company Mota & Companhia recently won an important tender in a consortium with Strabag, to complete a further section of the A4 motorway. Currently steadying itself in the competitive market here, it is looking to go further east, once it has consolidated its Polish base. Eurobuild talked to the firm's General Manager for Central Europe, Antonio Castro

Why did you establish Mota & Companhia in Poland?
We made this decision six years ago when our strategy was to build local companies in the region, because there was a strong prospect of Poland joining the EU. We have two Polish subsidiaries: KPRD in Kraków and PBM Lubartów in Lublin and there is also the Mota branch, which works on big contracts, such as that of the A4 motorway. We finalized the contract for this work on April 16th.

How did you get involved with Strabag?
Relationships between companies are often linked to those between their managers and because of the work we have already done on earlier sections of the A4 motorway, I have a very good professional relationship with the President of Strabag, Mr. Slotwinski. They were very keen on winning the contract for the concrete section and they knew we have a strong team for bridges, so we entered into this joint venture with some confidence in one another.

What other areas of construction are you involved in apart from that of roads?
Our company is the biggest construction group in Portugal and we do all types of work there. Here in Poland, our main companies are KPRD and PBM Lumbartów, the first of which concentrates mainly on roads and the second bridges, but we are also going to invest around EUR 10 mln in a new plant in the special economic zone in Kliwice and we are about to set up another company in steel construction. It is also possible in the near future that we will be involved in real estate investment.

What sort of real estate?
Mainly office buildings and apartments. This is something we already do in the Czech Republic, will begin shortly Hungary and once better times arrive in Poland, will start here as well.

How effectively do you feel you work with Polish companies?
At the beginning of our work here in Poland, everyone viewed us with a certain degree of suspicion because they weren't used to dealing with companies from Portugal, so it wasn't easy for us then. Now, because of the work we have done on the motorway and the other projects, people here know we, KPRD and Lumbartów are reliable companies. Our relationship with both big companies and sub-contractors is now very good. We are involved in joint ventures with Dromex and Strabag and a lot of Polish sub-contractors work with us. Sometimes we also have dealings with medium-sized Polish companies such as PRInz. I think we can say that our group is very well settled in this market.

Have you any experience dealing with 'payment delays' in Poland?
Our experience is that compared to other markets, the situation in Poland is not so bad and we have no problems with our sub-contractors, because as soon as we receive, we pay. We find that things here are actually quite positive, because if there ever are delays, they are never very long and sometimes it's surprising how easily clients beat payment deadlines.

So which markets compare badly to Poland?
As far as Central Europe is concerned, it is in Hungary where there are big problems with payment. This is because the previous government's policy on motorways and big contracts didn't meet with the approval of the EU and this caused a lot of problems with general contractors.

How well do you think tenders are managed in Poland?
It's true that we haven't always had great experiences with tenders, because despite coming first in some cases, we haven't in the end won those contracts and the explanations given haven't been very convincing. The opposite has also happened however, when we've emerged as winners. My feeling is that the credibility of evaluation committees could be improved and that they could be more reliable.

How have you managed to survive in such a tough market for construction companies?
A lot of Polish companies were not prepared for a free market. This was because of very big indirect costs, out-of-date equipment and that they operated on a regional basis. After purchasing KPRD we encountered precisely all these problems.
We first reduced our indirect costs dramatically, rationalized the work force and then brought in more modern equipment and over a period of three years, we managed to change the company's mentality. It is very important for us to recruit young staff, particularly as engineers. They often spend anything from six months to a year working on big motorway contracts in Portugal and come back to Poland with very valuable skills and knowledge.
We first introduced these changes to KPRD, then PBM, and now PBM's turnover is significantly higher than it was when we took over, something like six times higher.

You must believe that Poland has a lot of potential, given that you've been here so long.
Of course in the future this market has very big potential but that also goes for Ukraine and Belorussia for example. This is why we decided to create a base here. Though we are active in Central Europe, the aim is to go further east from here and we can't do this from a Portuguese base.