Flowcrete was founded in the UK in 1982 when the British inventor Peter Gibbins, tasked by a large, well known confectioner to develop a special type of floor that would not erode when exposed to significant quantities of sugar, succeeded in creating a resin flooring solution that was ideally suited to withstand rigorous challenges of the client’s manufacturing facilities. Since then the company has grown into a global business present in 37 countries in six continents. The firm specialises in seamless resin flooring solutions for industrial and commercial sectors. Barbara Radziwon has been with the company since it entered the Polish market.
Michael Dembinski: How do you currently see market conditions in the construction sector in Poland and across the CEE region?
Rising labour costs and shortages of raw materials are the biggest challenge in Poland nowadays. Although the flooring business is still profitable, since the sector got into top gear in the second half of 2017, everyone is struggling with rising prices. Flooring comes at the end of the project, when budgets are limited, so contractors are pushing for better prices at the very last moment, that is why we are also under great pressure. Nevertheless, I consider Poland to be a mature market. Although one should remember that the current EU budget may be the last – many businesses have already benefited from subsidies to renovate or build new facilities, particularly in the food processing sector where our company is strong. With our Flowfresh range of microbial enhanced polyurethane floors which have been HACCP International certified and meet stringent hygiene standards we are the market leader in food industry.
Across the CEE region, however, there's strong potential on the market, in Russia in particular. The sanctions for import into Russia of certain agricultural products, raw materials and foodstuffs originating in EU member states have led to many new food manufacturing facilities being built there. Our Flowfresh product with an antimicrobial additive, Polygiene®, has all the necessary certification, so it sells well there. It is also very popular in Ukraine, where our turnover currently equals that in Russia. We also see strong export growth in Belarus and Kazakhstan, which have a customs union with Russia.
Is it difficult doing business in those markets?
This is a very challenging region, subject to dynamic changes. We focus a lot of attention on eastern markets, that is why we decided for a business model, in which we have a country manager, not just a distributor, in these countries. Our people report to us directly, which gives us full control over our business development there. There are entry barriers on these markets but our antimicrobial Flowfresh range is unique which gives us a competitive advantage. Definitely this is the right moment for these markets, as there's a lot going on in the food processing industry now.
How about the rest of CEE?
Romania is another very good market for us at the moment with many warehouses being currently built, and a general change in investors’ attitude – no longer are developers going for the cheapest solutions; high quality and durability start to matter. The entire construction industry there is becoming more and more professional. We observe that our country manager in Romania works with a whole network of contractors, while previously number of players on the market was very limited. Finally, there are also nice projects coming up in Bulgaria, involving big companies like Coca-Cola, while in Serbia we recently did our seamless terrazzo flooring Mondéco, a luxurious and durable solution for upmarket shopping malls and commercial venues, in a major shopping centre, and we have employed a representative there.
In total, we are active on 21 CEE markets, to 15 of them we are sending products from our Warsaw’s production facility on a daily basis, while with smaller countries we co-operate on a project-by-project basis. In Lithuania, for example, we recently did the flooring for a shopping mall, but that was a one-off. We are able to deliver our products from our 4,000 m2 factory in Warsaw to these markets within a few days.
Who are your best clients?
Definitely these are investors, who know what they want, who know the long-term costs of operations and thus better understand the need for a good floor. The companies from the food sector are important clients of ours, that's where we are the major player with our Flowfresh antimicrobial floors range. We co-operate with many private and public investors; our Deckshield range is applied in parking lots of the most prestigious buildings in Poland, including office buildings like Warsaw Spire, shopping centres such as Posnania, where 110,000 m2 of Deckshield was applied, or public venues, for instance Philharmonic in Szczecin or Museum of the Second World War in Gdańsk. We are also strong in logistics centres and warehouses, where floors need to be very resilient, and also allow for quick repairs if damaged. Our specialist solutions for concrete (Euclid range) or resin floors make it also possible to repair construction joints within an hour. These technologies can be used outdoors as well as indoors, we are always keen to solve problems together with our clients.
How did Flowcrete come to Poland originally?
In 2002, Flowcrete acquired Peran, a Swedish manufacturer of epoxy resin. Based in the Perstorp chemical park in Sweden, Peran started operations in Poland in 1994. For Flowcrete, the acquisition of Peran gave it a complementary technology – resins alongside concrete – and a ready organisation and strategy. But building the brand on local market took a lot of effort. The word 'Flowcrete' is a challenge to pronounce in Polish, unlike 'Peran' which by 2002 had become a well-known brand here.
In 2007, Flowcrete Poland became the hub for the entire CEE region, while in 2012 we launched a production facility in Warsaw and started manufacturing our products locally. We are managing relationships with customers across Poland and the region. Since 2010, profits of the company have increased ten times. What’s more, we received "The Construction Company of the Year 2017” award from the Polish construction industry monthly Builder.
...and I'd add that you were named “The Industry Personality of the Year 2017” in the construction sector!
I am really proud, but it is the result of the hard work of the whole team. It was a brilliant decision to start manufacturing in Poland. There's been huge growth – profits growing at 20%-30% a year every year since 2012. And with the factory here, we have become a serious distribution centre for the whole CEE region – we have a competitive advantage in logistics – lead times for Flowfresh delivery from UK were costly, it could take up to two-three weeks to get to markets like Romania or Bulgaria – we can deliver within a few days from Poland.
What are Flowcrete's future plans?
This is our future – to work on innovations, introduce new products, improving our service with faster logistics turnaround, offering more special colours and on-time support for clients in urgent situations. I see continued growth in export, growth on the Polish market as well, although we are struggling with the price increases. We stand out on the market as the leading expert in resin flooring – we have better service, provide expert support for general contractors, including measurement and training on the construction site. This differentiates us from our major competitors. We also work with architects from specification to application stage. Keeping our leading position on the market is the most important for us in the future.