Keeping it in the family
Construction
Jacek Korwin-Małaszyński, board member, APP-Projekt:Exactly. Our father, Piotr Korwin-Małaszyński, had previously worked for such international construction corporations as Hochtief and Porr, so he had experience of what project management for the largest investors entails. He also built up from scratch Mercury Engineering, which specialises in sanitary and electrical installations, for an Irish investor. But eventually he decided to go it alone and set up APP-Projekt in 2005. He started out almost as a one-man business, supported by a few specialists. Today our company has 130 employees.
And later Piotr brought his sons, Jacek and Michał, into the company. Did it take a long time to persuade you to join him?It basically happened all by itself, gradually. The company started receiving more and more orders. So early on Dad occasionally asked us to help out with one project or another. And at some point it turned out that my brother and I were in the family business up to our ears. It was not a completely new sector for us because Michał had worked on development projects for a large listed company before that. Meanwhile, I had been forging a career working for an Israeli developer and then running a company specialising in the fitting out of office buildings and logistics centres. We formally started working at APP-Projekt in 2008, when the company was hit by the credit crunch. Fortunately, our projects got through the crisis unscathed, but due to delays in payments from our clients we didn’t receive a salary for many months. However, the company soon had its second wind – and it turned out that 2+2 could equal 5. Fresh blood also usually means new ideas, which in the case of APP-Projekt led to the rapid expansion of the organisation.
Is it difficult working for your dad?
It’s not always easy [laughs]. He’s extremely demanding and precise. He just doesn’t understand the concept of turning a blind eye to something. He’s never said: ‘Oh, it’ll all work out in the end, somehow’. Things are supposed to go according to plan and without any shortcuts. Due to our inexperience this irritated us a bit at the beginning, but after a few years we learnt that you can’t do it any other way. With this approach you can sleep much more soundly – with the confidence that the service for your clients is being carried out professionally. In the next stage of the development of our company, we established a joint stock company in which Michał and I are board members. Dad was given an advisory role and a position on the supervisory board, but he gave us a completely free hand. He knew that we wouldn’t be able to develop ourselves otherwise. We still consult with him on most of the key decisions, because it would be reckless not to take advantage of his experience. However, looking at other family businesses you don’t see this kind of hands-off approach so much: not every senior family member is able to give up control over everything in the company.
Have you and your brother divided the areas of your activity in Poland between yourselves?
You could say that. Michał runs the branch in Poznań for his key clients, while I deal with business in Wrocław and Warsaw. Our family comes from Poznań. We all came to Warsaw more than a dozen years ago, but Michał eventually returned to his old stomping ground. Furthermore, we perfectly complement each other in the management of the entire company – my brother is more startegic while I’m more focused on the ‘here and now’.
At family gatherings you probably talk about work all the time...
Absolutely not – we try to avoid talking shop at all costs. We have weekly meetings in the office where we can discuss all company matters, but we have more interesting topics to talk about at the family gatherings.Your core business is project management, general contracting, project supervision and auditing services, although the full list of services is much longer. Is there a sector that you specialise in above all others?
You could say that they are commercial projects requiring specialist knowledge and an individual approach. We have, for example, carried out hospital ward projects that require specific equipment, such as radiotherapy. But most of the orders we receive are for office projects and for these we are a true project supervisor – in charge of the entire investment process: from the market analyses, through searching for the plots, up to the construction itself. As far as I know, we are the largest family company in this sector in Poland.
As a family company, you probably have a weaker position when it comes to obtaining contracts from large funds. International engineering companies dominate this market.We’ve actually got nothing to complain about in terms of interest from the largest players – if they study the quality of the services of various companies, they will often choose APP-Projekt. However, we have the advantage of being a smaller local company, with our in-depth market knowledge and simplified decision making process. We did try to join an international company once – it looked promising in theory, but when we got down to looking at the details of the multi-stage decision-making process in the organisation, we pulled out of any further talks. We analyse each project carefully, but taking the actual decisions takes little time – and this significantly shortens the entire investment process, thus reducing the costs.
The construction market in Poland is currently quite tricky to negotiate – investors are having problems finding contractors, while deadlines are being extended and construction costs are increasing. Are your prices also going up?Specialist services from the best engineers are always in demand, but our company operates in a specific market environment, so the prices of our services have to be at a balanced, acceptable level. But it’s clear that the market for these services – after some temporary fluctuations caused by the difficult situation in the construction sector – has already stabilised. It’s also noticeable that investors have been treating contractors more and more like partners and so there have been no problems – in normal cases – when it comes to renegotiating the terms of contracts signed, for example, two years earlier, in entirely different market conditions. Investors are also becoming more aware. Investing was less complicated a few years ago. More precision and the use of specialist companies is necessary now – and the number of procedures required has been growing at an alarming rate, while the technology is also becoming more and more complex.
You probably have a large staff turnover with such a large crew and difficult market?It virtually amounts to zero. Most of our employees have been with us for several years. I think that they appreciate the support they have from the company’s management, and – as we are a family business – our genuinely familial approach. We are aware that each of our employees has a private life in which we also try to support them in this. But maybe they don’t leave because we just pay them so well...
Are you planning to recruit more staff?
We’re not planning any major recruitment drive, but we are willing to consider good candidates. We’re also ready to invest in interesting projects.And how is APP-Projekt planning to develop in other fields?
When it comes to our business development, as I mentioned earlier we have recently become a joint-stock company, which will allow us to develop more fully and conquer new markets. Furthermore, we are currently introducing the BIM system. The fact that we have had no problems in terms of quality levels for a long time has been confirmed by our invitation to join the international engineering company association RLB | Euro Alliance. Each European country has only one representative in this organisation – so for Poland it is APP-Projekt – and individual members recommend each other’s services in their home countries.
Does this work?
Yes, it does. For instance, we had an inquiry from a Polish food company that was planning to invest in Italy, so we passed on the contact details to an Italian member of the RLB. Meanwhile, APP-Projekt was recommended by engineering companies in Hungary and Belgium, and we also carried out a project in Kraków as a result of the recommendation of a partner from Sydney. APP-Projekt certainly doesn’t have any complexes in this respect.
Like on the tennis court...
This is true. My brother and myself have both been passionate about playing tennis from an early age. Michał has a whole cabinet full of trophies.
Do you also have any?Well, just a shelf. I have a lot of difficulty beating Michał. But we will be battling it out side-by-side at the annual Eurobuild tennis tournament. However, we no longer win trophies for ourselves, but for APP-Projekt.
