A ‘Dane in Szczecin/Poland’ 7th February 2013

Jens-Chr. Møller BIC Group

Business in North-West Poland

Old pictures from our “family album”

Demex electric (DK) decided in 2000 to start production to Poland 7th February 2013

The turning point for local management

• 2004: Demex electric Polska Sp. z o.o. => KK Polska Sp. z o.o. • 2006: Local management decides to start own business ⇒ A win-win solution in both Denmark and Poland. (more than 1.000 jobs in Denmark and Poland have been creased over the last decade) 7th February 2013

The start-up in Szczecin 2006

”Headquarters” in Struga First staff meeting at ”Niko”

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2007-2009 Fast growth: – 0 -> 60 employees • New headquarters at Pomorska street:

Profit before tax 2008 DKK 2 M 7th February 2013

Fine summer parties

2007

2008

2009 7th February 2013

The crises came to BIC in 2009



From 60 to 35 employees. – Focus on cost and change of the company at the same time



New competences and new markets in 2010 => bottom line 2010 = - ½ M DKK

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“BIC Group” today

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“BIC Group” today

Employees 90 “blue-collar*” 8 “white-collar / incl. management” 7th February 2013 98 employees altogether

Blue-collar* (1)

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Blue-collar* (2)

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Mission and vision (1) Mission The BIC group has the competences necessary to run a multi-lingual and multi-cultural organisation with knowledge about European industry, labour market and essential technical skills. Our main office is in Goleniów, Poland from where all activities, except sales, are run. We have a sales representative office in Herning, Denmark, from which we market our Polish company all over the world.

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Mission and vision (2) Business scope: The primary focus area: To work as a competent Polish subcontractor doing all kinds of electrical assembly and installations. Secondary focus area: To sell switchboard assembly and supply labour. Customer scope: Industry and contractors. Place for doing the contracting: All over the world.

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Mission and vision (3) We do not want to: • Purchase components and materials, with the exception of:  In Poland for service projects we will purchase, if the customer requires full delivery.  In special cases for Danish projects we will consider purchase if the customer requires full delivery.  When we purchase components we always do it to a particular project. • • • •

Build up any stock of components or materials at all. Do design, development and engineering. Sell to end-users. Do L-AUS tasks since these are beyond the range of the BIC group’s area of business at the moment.

Outsourcing is not applicable in our case. 7th February 2013

Mission and vision (4) Core Values  Loyalty  Honesty  Quality  Flexibility towards our colleagues, the customers and the company

Vision We aim to increase the competitive power and turnover of our business partners.

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Mission and vision (5) Core Competences  HR (especially labour law across borders and working according to all rules and regulations)  Project management  Quality management  Sales and marketing We aim to have in the company all competences and certificates needed to make full-size low voltage electrical installations in buildings and on machinery in Poland, Denmark, Norway and Sweden. Each of those certificates and competences should be shared by at least 2 persons in the company.

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Authorisations

Authorisation in Denmark, Norway, Sweden and Poland

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Quality

ISO 9001, 14001 and SKS

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Qualifications

Pre-qualified as supplier / contractor on-shore and offshore

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“Jobs around Europe 2012” 1. Poland (workshop) 2. Poland (on-site) 3. Denmark (on-site) 4. Norway (on-site) 5. Sweden (on-site) 6. Finland (on-site) 7. The Netherlands (on-site) 8. France (on-site) 9. Greenland (on-site) 10. Great Britain (on-site) 11. Denmark (offshore) 12. Poland / Denmark (relocation of business) Profit 2012 in BIC Group before tax: 5 M DKK 

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Poland - workshop • Control cabinets for cooling and airconditioning • Control panels for air filtration • Control panels for stearing of pumps • Control panels for concrete production • Control panels for refrigeration

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Poland – on-site

• Palletising facilities • Waste water treatment plant 7th February 2013

Denmark – on-site

• Electrical installations in shops • Electrical installation in Arla dairy • Electrical installations in Cool Gray printing facilities 7th February 2013

Denmark – on-site

• Installation of transportation facilities in cold storages • Assembly of containers with measuring equipment for the industry • Assembly of industrial switchboards 7th February 2013

Norway – on-site

• Postal sorting facilities • Tunnel projects in Stavanger and Bergen 7th February 2013

Norway – on-site

• Waste sorting facilities in Oslo • Several projects in large dairies 7th February 2013

Sweden – on-site

• Postal sorting facilities • Concrete plant 7th February 2013

Finland – on-site

• Greenhouse production lines 7th February 2013

The Netherlands – on-site

• TNT postal sorting facilities 7th February 2013

France – on-site

• Electrical installations facilities in window factory

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Greenland on-site

• New power station

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Great Britain - on-site

• Conveyor facilities for printing house

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Denmark - offshore

• Electrical installations and service on Maersk Oil and Gas platforms 7th February 2013

Poland / Denmark – relocation of business

• Relocating production to Poland for Danish companies 7th February 2013

ReLocation of business

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The Process Projectestablisment Planning

Strategy

Challenges

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Completion Action - Detailed planning - Project management - Status and follow up - Contract negotiations - Legislation and employment - Production planning - Forming network - Risk minimizing - Opportunity optimizing - Quality control - Physical moving plans - Physical moving

How is it there?

 Fast access to information, experience, businesspartners, assistance and network 7th February 2013

Founded 25 May 2012 Addresses: Secretariat Ryvangs Alle 46 2900 Hellerup Administration Birk Centerpark 40 7400 Herning

Patrons:

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Members (A-Z) Advokatfirmaet Stakemann Ammeraal Beltech Sp. z o.o. Baltic Composite Supplies Aps BIC Consulting A/S BIC Electric Sp. z o.o. C Media Danmark A/S Coloplast Shared Services Sp. z o.o. Copenhagen Institute for Futures Studies Dansk Miljøentreprise ApS Energicenter Nord ApS Focus Products A/S Gindeskov Administration Hulgaard Advokater P/S lindberg&benjaminsen ApS Mehl Advokatfirma NIRAS A/S Nordea Bank ORFO Sp. z o.o. Peter Nielsen & Partners Law Office Postawa Business Development Pressebureauet Silkeborg PS Polska Sp. z o.o. / Point Services RSM Plus A/S SE Big Blue System Transport A/S Windspace ApS

PDCC activities in 2012 (1) Opening conference - Poland – A European Powerhouse? with 116 participants Topics: • Why is Poland still an attractive country to do business and to invest in? • Growth and expansion through networks • Regional business development and business support in Poland • Success of Danish discount retail abroad – the story of NETTO’s expansion in Poland • Scandinavian banking in Poland and the view on Poland from a banker’s perspective • Why did Coloplast decide to place the centre of its financial operations in Szczecin and was it a good decision? • The devil is in the details - a handful of reflections on Polish-Danish trade relations Speakers: • Ambassador of Poland to Denmark, His Excellency Rafał Wiśniewski • Andrzej Dycha, Polish Deputy Minister of Economy • Pia Olsen Dyhr, Danish Minister for Trade and Investment • Freya Petersen, Head of Commercial and Economic Department, Danish Embassy in Warsaw • Marshal of the West Pomeranian Province, Olgierd Geblewicz • Bent Holm, International Operations Director, NETTO International • Egil Rindorf, Head of Nordic and International Corporate Banking; Nordea Bank • Wojciech Faszczewski, Managing Director, Coloplast Shared Services • Jacek Wójcikowski, Commercial Counsellor at the Embassy of Poland in Denmark

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PDCC activities in 2012 (2) Opening conference - Poland – A European Powerhouse? with 116 participants

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Activities in 2012 (3) The seminar – WHAT YOU SHOULD KNOW ABOUT POLAND with 61 participants Topics: • … when you are (to be) responsible for employees in Poland (Leadership & Organization when you start up) • … when you (want to) attract Polish experts to come working in Denmark (Important and relevant Polish and mainly Danish laws and regulations) • … when you are (to be) an expatriate working in Poland (Tax issues and more) • … when you (are to) cooperate with Polish partners and sub-suppliers (Culture and practices) • How can companies manage their outsourcing process and why should they source from East Europe? • Case Story from the Real Life: How Arla set up a strategically important part of their organization in Poland Speakers: • Arne Sørensen - Director, Arla Shared Service Centre, Gdansk • Brian Lang - Director, Global Risk & Compliance, Arla Foods • Egil Rindorf - Head of Nordic & International Corporate Banking, Nordea Bank • Jan Østergaard - Partner, Hulgaard Advokater, Aarhus • Jens Nielsen - Head of sourcing, Nordea Bank • Katarzyna Ryszard - Tax Adviser, PNPLAW, Warszawa • Mikkel T. Jørgensen - Associate, Hulgaard Advokater, Aarhus • Peter Tærø Nielsen - Lawyer, Founder & Senior Partner, PNPLAW, Warszawa • Poul Erik Christiansen - Associate Professor, Copenhagen Business School

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Activities in 2012 (4) The seminar – WHAT YOU SHOULD KNOW ABOUT POLAND with 61 participants

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End 2012 – 12/12-12 •

(we are not superstitious )

Insert in Børsen published in 70,000 copies TÆT PÅ POLEN – CLOSE TO POLAND Insert in Børsen produced for PDCC in cooperation with the Polish Embassy in Copenhagen and Invest in West Pomerania. A unique possibility to tell the good stories about Poland and the opportunities for cooperation. Consists of 50% editorial content – articles with interesting people giving their perspective on Poland and international cooperation and 50% advertisements from relevant companies and organisations.

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PDCC activities in early 2013 • • • •

Business in North-West Poland - 7 February 2013 – Herning (today) Study tour to North-West Poland - 11-12 April 2013 Poland as a tourist destination - 18 April 2013 – Copenhagen Building industry in Poland - 19 June 2013 – Herning

More events and details at www.PDCC.dk

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General strategy for PDCC (Update is in progress) • Mission PDCC is the voice of Polish-Danish business network in Denmark.

• Vision PDCC’s vision is to increase cross border business and network between Poland and Denmark in order to promote growth in wealth, welfare and common understanding between the two countries and their citizens.

• Goals:  100 members  Fulltime working manager / director

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Danish production boarding in Szczecin – Poland. My experiences over the last 15 years:

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External logistics 2000: • 8 hours between borders via Germany • Long time from Herning in a truck (changed in 2005) • Good and fast access to ferries at the Baltic Sea 2013: • 5 hours between borders via Germany • 10 hours (one day) in a truck from Herning. - Cheaper than driving goods in the same truck from Herning to Copenhagen • Good and fast access to ferries at the Baltic Sea • The coming Femern-connection will provide faster access to the rest of Scandinavia • Good and cheap access by plane from Berlin to all over the world

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Internal logistics 2000: • Very bad roads in Poland • Not possible to get any materials supplied from Poland to our production in the right time and to the right price • Expensive domestic planes • OK domestic train connections in Poland 2013: • Much better roads in Poland (increase in 2011 and 2012) • Possible, but not easy, to get materials supplied from Poland to our production in the right time and to the right price. – Still far away from “just in time” • Cheap domestic planes. – No problem going to Warsaw and back within one day • “General standard” of trains is better than DK 7th February 2013

Labour market – 2000 (1) • Very high unemployment

– People keen to get job... Many too keen

• Level of education

– High level of technical knowledge – Not enough people speak English



Situation on the labour market (flexibility of labour)

– Very high flexibility – Extremely ambitious employees – Easy to hire and fire 7th February 2013

Labour market – 2000 (2) • Salary level, blue collar labour (electricians, smiths etc.) Cost price incl. overhead pr. hour: • Szczecin (NOT Warsaw +30-50%) DKK 25 / PLN 12,5 • Herning DKK 200 / PLN 100  Saved pr. hour: DKK 175 / PLN 87,5

• Very complicated administrative procedures – Difficult to find help – No help from authorities 7th February 2013

Labour market – 2013 (1) • High unemployment – People keen to get job but not too keen (you still have to be careful)

• Level of education – High level of technical and financial knowledge – Many more people speak English

• Situation on the labour market (flexibility of labour) – High flexibility – Ambitious employees – Easy to hire and fire (even easier and more flexible than 10 years ago)

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Labour market – 2013 (2) • Salary level, blue collar labour (electricians, smiths etc.) Cost price incl. overhead pr. hour:

• Szczecin (NOT Warsaw + 20-40%) DKK 50 / PLN 27* • Herning DKK 250 / PLN 125  Saved pr. hour: DKK 200 / PLN 100 » Increase in hourly profit over 12 years: DKK 25 / PLN 12,5

*In many “smaller municipalities” (like Herning ) you can get:    

20.000 PLN (35.000 DKK) in subsidies pr. hired employee - 100 jobs => 3.5 M subsidies  Loyal labour to PLN 14 / DKK 25 pr. hour (more than 25% unemployment) Special training of labour arranged by authorities Talk to our friends from Szczecinek about more details.

• Different administrative procedures (than in Denmark) – Easy to find help and get assistance (prices very variable) – Fine professional help from authorities (better than in Denmark) – Good Danish network in North-Western Poland 7th February 2013

Performance... Based on more than 15 years of experience

1:1 7th February 2013

General attitude of the Danish industry 2000...

“It is not possible to produce complicated one of a kind products in Poland” 7th February 2013

General attitude of the Danish industry 2013...

“It is not feasible to produce complicated one of a kind products with more than 10 % labour cost in Denmark” 7th February 2013

3 major advantages: I.

Competitive labour (price / performance) 

II. Fast and easy access to suppliers and customers  III. Large network of Danish companies 

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Being on the Polish B2B market • Growth of purchasing power in general • Increasing demand for renewable energy technology • Growth in GNP!!!! (one of the fastest growths in Europe)

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2. How is it in NW Poland? ( from  to ) a)

Competitive labour (best price / performance) I. Blue-collar ; White-collar ; Management.   II. Flexibility on the labour market (hiring and firing)  III. Working culture – Business culture 

b)

Access to suppliers and customers I. How easy and how fast can you get your materials to your production?  (seen from DK perspective) II. How easy and how fast can you get there?  III. How easy and how fast can you reach your customers?  IV. Highway , rail , ship , plane  (because of Berlin) and via electronic media? 

c)

How easy can you get started? I. Business setup – founding a limited - establishing accounting and business procedures. (in Poland you need an address before you can found a limited and a limited before you can get an address)  II. Getting the right place for your operation. (90 % would like to rent facilities)  III. Public administration and obstacles. 

d)

How comfortable does it feel here? I. Are there already Scandinavian companies like me here?  II. How do they feel here? 

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Experience to share • Electro-technical regulations in Poland and Scandinavia • Labour market and regulations in Poland, Denmark and rest of Europe • HR in Poland and Denmark • Performance and competitiveness in PL/DK industry • Markets (B2B) in Poland and Denmark • Direct mail from Poland to Denmark • PL/DK business culture and labour culture • Getting started and getting going

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North-West Poland – the centre of Europe with many opportunities • If you need professional sparring - you are always welcome to e-mail or call me: Jens-Chr. Møller CEO in BIC Group +45 21 77 25 10 [email protected] www.BIC-group.dk 7th February 2013

Thanks! – Any questions?