GDYNIA, Poland, Mar 5 (Reuters): Trans Polonia Group faces a problem confronting many ambitious mid-sized Polish companies: it is starting to outgrow its home market.
The group's trucks already supply a quarter of the fuel delivered by road to filling stations across Poland, and Trans Polonia (TPG) has decided that to keep expanding it must look West. That means not simply serving foreign clients from a Polish base, but buying a presence abroad.
Western companies, especially those in neighbouring Germany, have been investing in Poland since soon after the fall of communism. Now rapidly increasing amounts of investment capital are flowing in the opposite direction as firms like TPG try to get closer to customers in the biggest European economies.
"If you want to expand then you need to buy a company or companies which are located in the West," TPG chief executive Dariusz Cegielski said. Based near the Baltic port of Gdansk, his group is considering potential targets in Germany, Belgium and the Netherlands with annual turnovers of more than 50 million euros ($60 million).
Mid-sized companies in other central European countries have already had to make international pushes due to their relatively small domestic economies. By contrast, Polish firms have relied for longer on a home market whose population of 38 million is larger than that of the Czech Republic, Slovakia and Hungary combined.
Despite robust economic growth, Polish companies now appear to be testing the limits of the local market. Direct investment abroad more than doubled between 2014 and 2016 alone to $6.4 billion, according to the United Nations trade agency UNCTAD.
TPG already bought Poland's biggest fuel trucking company three years ago. Now it wants to expand beyond this domestic business into a more international industry: intermodal transportation of liquid chemicals, which uses tanks that can be loaded between ships, trains and trucks with container cranes.
Western European petrochemical companies are active in eastern EU member states such as Poland, and further east in Russia. But for transport companies like TPG to tap into this business, they need to use established client relationships which have often been built up at a local level over many years.
"This you can achieve only via potential acquisitions. You cannot realise this through organic growth," said Cegielski.
While TPG is just getting started, some mid-sized Polish firms have already taken the leap, encouraging others.
