After a series of security incidents and terrorist attacks in the United States and Europe, Poland has placed a significant emphasis on security of critical infrastructure within the country and its borders. In Poland, security at major airports and ports, border crossings and government buildings is considered national security and considerable amounts of resources have been allocated to protect such interests. There are several other factors driving sales of security products and services in Poland, the most important of which is being the cohost of the EURO 2012 Football Championships.
After a series of security incidents and terrorist attacks in the United States and Europe, Poland has placed a significant emphasis on security of critical infrastructure within the country and its borders. In Poland, security at major airports and ports, border crossings and government buildings is considered national security and considerable amounts of resources have been allocated to protect such interests. There are several other factors driving sales of security products and services in Poland, the most important of which is being the cohost of the EURO 2012 Football Championships. Poland's geographic location makes it a logical gateway for legal and illegal immigrants entering the European Union. Law enforcement experts point out that drug and weapon traffickers transporting their prohibited goods into the rest of Europe also use similar pathways used by illegal immigrants, according to U.S. Commercial Service. Furthermore, there are strong requirements within the European Union for added security at Polish airports, seaports and land borders. Polandˇs military involvement in Iraq and Afghanistan also contributes to a heightened interest in security products and services against terrorism.
Poland has long been considered a comparatively low-threat country for terrorist attacks and ordinary crime, with the exception of car theft and pickpocketing. Nevertheless, since Poland became a member of the European Union in May 2004, all external security matters must comply with the ¨Common European Security and Defense Policy," which defines external action through the development of military and civilian management capability.
As a member of both NATO and the European Union, Poland shares the same security priorities as its U.S. and European allies and is heavily involved in stabilizing Iraq and Afghanistan. In addition, Poland is not immune from numerous threats that do not originate in the country, but could nevertheless pose serious challenges for its territory — including risks arising from international terrorism, organized crime and illegal immigration.
Most parts of the country, said a U.S. Commercial Service representative, have experienced a significant drop in numbers of criminal acts, and the rate of solving criminal incidents has improved as well. Residential break-ins are also diminishing in frequency. Overall, crime figures are down 12 percent in the past year, and auto theft — the highest percentage drop recorded among crimes — has fallen 42 percent during the past year. In general, most people (including foreigners) are comfortable moving about public areas in Poland.
Many Polish cities today have increasing problems with juvenile delinquency and the so-called ¨football gangs" in particular. The EURO 2012 games are expected to draw hundreds of thousands of football fans; therefore, more and more municipalities in Poland have introduced surveillance systems in high-risk areas and city centers with concentrations of sport facilities, bars and pubs, train stations, bus stops and other popular public places. For the period of 2007 to 2013, the European Union has injected billions of Euros in building roads, hospitals and other infrastructure for Poland. ¨We are doing everything we can to make EURO 2012 happen," said Harald Dingemans, President of Linc.
EURO 2012 — KEY MARKET DRIVER
Biggest users of security equipment in Poland are government agencies — including border control and special units of surveillance (customs and antifraud, for example), police (national, regional and urban), special forces, fireman and civil protection units, national military forces (army, navy and air force), airports and harbors administration and management agencies, and foreign organizations (embassies and consulates) — as well as private corporations (multinational companies, financial institutions, telecommunications, etc.), private security firms and software companies providing computer network protection.
¨Everyone is now focusing on EURO 2012, which is expected to attract some 350,000 football fans from all over Europe to two hosting countries, Poland and Ukraine," said Edyta Bujak, Sales Manager for Janex International. ¨As a result, a huge number of projects such as stadiums, hotels and shopping malls are being built as we speak. Additionally, airport upgrades , apartment buildings and office towers can also be seen, though at a slightly slower rate.〃
Polandˇs current airport network consists of one central airport (Warsaw Okecie), one regional central airport (Krakow Balice), nine regional airports, 42 small airports, 31 sporting and training airports owned by the Polish Aeroclub, 14 post-Russian military airports, and five facilities owned by manufacturing enterprises.
All Polish airports have major expansion/modernization plans to accommodate growing numbers of the Civil Aviation Office predicts that the total number of passengers served by Polish airports will reach 30 million in 2015 and 41 million in 2020. Since Warsaw Okecie airport (Terminal I and new Terminal II) is expected to reach its capacity in 2010, there are plans to build a new passenger-cargo airport near Warsaw — Warsaw II, which could accommodate 7 million passengers per year.
Because of EURO 2012 Championships, a lot of investment dollars are coming in Polandˇs way, said Tjeerd Huitema, Vice President of Sales for Bosch Security Systems Poland, seconding Bujakˇs opinion. ¨Coupled with expected changes of governments in both Poland and Ukraine, public thinking and general atmosphere are quite positive.〃 Active projects for Bosch include entertainment and recreational facilities, corporate buildings, shopping centers, hotels and banking institutions.
According to Huitema , the overall security market size is estimated to be US$540 million — including fire and cabling — and growing at 15 to 20 percent per year. When it boils down to pure sales of surveillance, access control, alarm and perimeter systems, the number should be between $200 and $250 million, which can be confirmed with Sony's and other vendors' figures.
For Sony, Poland, the Czech Republic and Serbia are the top three Eastern European countries in terms of sales, said Marta Malecka, Retail Transport and Venues Sales Manager for Sony Poland. ¨The high-end video surveillance market in Poland is valued at around $35 million." In terms of sales, 85 percent of Sony's new security projects demand IP-enabled products, even though there is still room for improvement in Polish IP infrastructure.
Other Verticals
¨The security market grows 15 percent per year,〃 said Andrzej Jarzyna, Director of SPS Trading. ¨Main verticals for us include education, small and medium enterprises, hotels and city surveillance.〃 Similar market segments were also suggested by Axis Communications: ¨We have a channel partner program, of which our golden members generate the most revenue, from verticals like education, retail, transport and banking,〃 said Lars Wilson, Channel Manager CEE.
Of the 16 Eastern European countries (17 if Kosovo is included), Poland is the largest market with the highest potential in terms of security, said Hideo Hiraishi, General Manager, Security System Solutions, Panasonic Eastern Europe. ¨Major projects for us include K-12 schools, electronics factories and government facilities like courthouses and prisons.〃 At the moment, more than 50 percent of Panasonicˇs projects are specifying IP-enabled systems, echoing Sonyˇs description of current IP development.
In Poland, six stadiums (three brand new and three upgrades) are designated for EURO 2012, and the same number applies to Ukraine. Funds have been provided by the European Union for building surrounding infrastructure that includes training centers, hotels and roads. ¨Our main projects now include business parks/zones in Warsaw and corporate users like Vodafone and Orange, as well as banks, malls and railways,〃 said Malecka of Sony. The company is also installing intelligent cameras in some rental apartment buildings (owned by municipalities) and has city surveillance projects in Torun, Szczecin and Bydgoszcz.
¨In our economic zones and industrial parks,〃 said Milosz Nowakowski, Product Manager for Arpol, ¨there are many foreign factories — for example, LCD ones from Japan and Korea — which all need security systems.〃 Poland also has a large number of historical sites like museums, churches and theaters that require state-of-the-art, wireless systems which are specified and paid for by the European Union.
Market Penetration
Poland is the sixth largest country in the European Union, with a population of nearly 40 million. Its 1,100-kilometer eastern border is now the longest external border in Europe. The assistance package of $490 million has been allocated from the Schengen Fund to secure Polandˇs eastern border in accordance with E.U. rules and regulations. The project, according to U.S. Commercial Service, consists of border security and surveillance systems, including the purchase of IT and monitoring equipment (sensors, cameras and observation towers) as well as an integrated command and control system.
Major channel players in Poland, said Nowakowski of Arpol, include Honeywell, GE, Johnson Controls, Janex, ElektroMonta2, ElektroTim and Qumak-Secom. ¨In system integration,〃 said Mariusz Klos, Key Account Manager, Siemens Building Technologies Poland, ¨Poland has players such as Siemens, Tyco, Honeywell, TAC, Secom and Noma2 (local), competing on banking, hospital and stadium projects.〃
Direct purchases from foreign suppliers are very rare and it is important that
companies work through an established agent/ distributor so that equipment installations are done properly and adequate after-sales service is provided. Ability to provide back-up service is often the most important criterion for successful product marketing in Poland.
Foreign investors and joint venture partners with local firms, suggests U.S. Commercial Service, can take advantage of government incentives. Many businesses in Poland have entered into joint ventures, with Polish counterparts set up to handle sales in the market. Some technology firms have been successful in setting up local offices and doing well.