Because Polish domestic production of safety and security equipment is concentrated on production of simple technologies and products, Poland is heavily dependent on imports. Suppliers with a good reputation for cost-competitiveness, reliability and technical assistance are in for a treat.
In Poland, the most important factors in contract awarding according to U.S. Commercial Service are price, certifications, availability of servicing and training, technical assistance for installations and start-up operation, and then quality.
Most security products require government licenses or certifications for trade. E.U. regulations and standards require product compliance with "CE" mark certification.
The "CE" mark is a passport that allows manufacturers to move industrial products freely within the European Union and attests to the conformity of safety, performance, compatibility and other requirements determined by the E.U. authorities. RoHS compliance is not yet standard in Poland.
"About 30 to 40 percent of the Polish market is high end and only affordable to government agencies and multinational companies," said Edyta Bujak, Sales Manager for Janex International. "Most, if not all, people think about price and performance first, so the best way to expand business in Poland is to offer hands-on opportunities as Polish users like to touch and test equipment."
The same is also observed by Harald Dingemans, President of Linc: "Poles are starting to care about quality more as they don't want to spend money and buy headaches. With ever-increasing labor costs, people here are now concerned about reliability and service."
Mid- and low-end segments account for the majority (around 70 percent) of the overall security market in Poland, said Dariusz Baran, Sales Manager for Merx, seconding Bujak's estimation. "We mainly buy from Taiwan, China and Korea, and there are still many quality products that are accepted and used by government agencies." Baran also provided that the important message for vendors to take home is that they meet the local warranty requirement, which is three years, minimum.
Quality vendors like Panasonic are, thus, feeling the squeeze as their "major competitors are all the well-known multinationals and many large, local distributors with OEM products from Korea and Taiwan," said Dariusz Labedzki, CCTV Product Manager, Solution Business Department, Panasonic Poland.
The security business in Poland is growing at about 10 to 20 percent per year, with 20 percent of the new projects going for IP directly, said Dingemans of Linc. "Some of the notable projects include residential and office buildings, airports, football stadiums and alarm centers."
And all these projects require top-notch, integrated solutions. "From office buildings and hospitals to hotels and stadiums," said Milosz Nowakowski, Product Manager for Arpol, "building management is increasingly adapted."
This requires customizable software that can be modified to suit individual, specific needs. "Polish interfaces are much demanded and considered key to success," added Nowakowski.
In the surveillance space, video content analysis is getting most of the limelight, said Tjeerd Huitema, Vice President of Sales for Bosch Security Systems Poland. "Megapixel technology is only starting to be talked about. High-end access control, which includes biometrics and integration with other systems, is vied over by Bosch, GE, Honeywell, TAC, Tyco and Siemens."
In relations to biometrics, the market needs another two to three years to develop, said Grzegorz Ciechomski, Business Development Manager for PC Therm, as current usage is limited to basic time and attendance and government establishments.
For example, the Europe an Commission is considering a centralized fingerprint database to facilitate the exchange of information among E.U. law enforcement agencies to help tackle organized crime and terrorism.
This database, which may be created as soon as this year, would contain fingerprints of suspects as well as convicted criminals.
Also in store is the E.U. Biometric Passport Program. In Poland, the Department of State Registers at the Ministry of Internal Affairs and Administration is responsible for designing passports and travel documents in accordance with E.U. rules.
The project consists of design of a new passport with a microprocessor containing biometric data, implementation of necessary changes in the passport application form, creation of new staff to collect and control biometric data, selection of the microprocessor, and control and verification of processed data. Also, a new law is being prepared in Poland regarding the e-passport program.
No financial assistance has been granted from the European Union to implement biometrics in passports and travel documents.
In Poland, the e-passport program has been financed by the state budget. Pilot projects started in 2005, and actual project implementation is scheduled for later this year. In order to implement the e-passport project in Poland, it is compulsory to provide all passport-issuing agencies with necessary equipment such as biometric data collecting equipment (digital cameras and fingerprint scanners) and readers to verify collected data.
The purchase of such systems and infrastructure would be carried out in accordance with the Polish Procurement Law. The Polish government is required by law to hold tenders for major procurements.
Information regarding the Office of Public Procurement, public procurement regulations and public tenders (available in English) can be obtained via http://www.uzp.gov.pl.
In order to benefit from public tenders, companies are encouraged to identify a local agent/representative that can provide necessary assistance in positioning the firm to compete for the tender and selling the company's products. Selecting appropriate representatives is very important as a reputable agent/ representative with good contacts can provide important and timely information, which is often not readily available through public sources.
Additionally, in view of complicated tender and import procedures, it is nearly impossible to effectively sell these products without a competent agent.
When questioned about increasing use of alarms, Nowakowski of Arpol said that leading alarm brands in Poland include Satel, Fermax, Paradox and many Israeli ones (zero import tariffs).
Currently, the local alarm market is a bit muddy as both local and E.U. standards are observed. Techom and Polalarm are two governing bodies that certify and sell products at the same time, making the situation even more unpredictable. "It is safe to say, though, that E.U. rules should prevail in two years' time," said Nowakowski.
Poles know full well what they can get from Korea, Taiwan and China quality goods can be obtained at times, said Andrzej Jarzyna, Director of SPS Trading.
As local production only centers around simple technologies like alarms and card readers, there are plenty of opportunities for all foreign manufacturers.
While business potential abounds in the "wild wild east," not everything is rosy for Asian manufacturers wishing to expand their business in Poland, though. Imports from other E.U. member states and Israel are free from import taxation; import tariffs for cameras and DVRs from outside of the European Union are 4.9 percent and 13.9 percent, respectively.
"The price war between Taiwanese and Korean brands is quite fierce," warned Slawomir Nazaruk, Overseas Sales Manager for SimTec System, "and many Poles are confused about who actually makes what."
Asian vendors are thus advised to think carefully before charting out their next course of action in Poland and Eastern Europe.