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Interview

Polish Defence Holding is Planning to Invest 700 million USD in Innovation in the next Five Years

Mr. Krzysztof Krystowski,CEO of Polish Defence Holding assessed new structure of PDH, capabilities,marketing strategies,cooperation with Turkish Defence Industries and future plan of PDH for Defence Turkey Magazine.

Issue 47

Defence Turkey: Mr. Krytowski first of all thank you very much for the interview. We know that Bumar took the new name of Polish Defence Holding in last May. Could you please inform us about the new structure and what is the reason behind of this new formation?

There are many reasons to underline that we are now new type of the company. We have decided to have a new strategy recently. It was adopted in December last year and in this new strategy we decided to change a lot our methods of operation. So first of all we decided to be very much focused our customer needs, this is the first and the most important. All efforts we could do are to be related to our customers’ expectations. And our main customer is Polish Ministry of Defence and Polish Army. So the second we decided to be very consequent to build new holding structure, not to be like it was in the past, the group of companies which in fact cooperated within themselves but not in very tight relations. We decided to build one common structure to be prepared to compete in the global market, to find more synergy inside the group and to build stronger and more reliable solutions. That’s why we finally built a structure which consists of headquarter and three divisions; the divisions which are focused on some specific markets and specific fields of products. First division is electronics, the second one is ammunition and missiles and the third one is land systems. Now we are the group of company which consists of more than 20 companies, more than 9.000 people. 50% of Polish market of Defence equipment is controlled by our company. The turnover for the last year was more than 1 billion dollars. So this is also the change of a name, this is also the signal of closing some era of restructuring and internal improvements. Because Polish defence industry was in very difficult situation twenty years ago, Polish defence industry in 1980s was one of the most important branch of Polish economy. But we are very much focus on some deliveries and cooperation with Soviet Union and former countries from Soviet bloc. Now when Iron Curtain disappeared it was all of us, we are citizens of Poland, we were happy from that but not that so much about the defence industry because we had to reduce defence industry in Poland from 250.000 employees to around 20.000 today which half of those number are located in my company, so it means we had very tough years. 1900s and then beginning of 2000 were very tough years; years of cutting cost, years of restructuring. So finally we decided to say ok it happened, it was not easy but finally we have to close this period of time and say now it is time of improvement, development. There are two main pillars of this strategy. First one is internationalization, and the second one is innovation. So everything is focused very much on customer needs but to be open for cooperation with foreign partners, treat our competitors as a partner, this is very specific type of business we are providing. This is business in which sometimes you are competing with somebody, sometimes you are in partnership, sometimes you are customer, sometimes you are supplier. This is global business completely new approach, and this new approach has to be underlined also by us, by this new glance to say hello we are new company, we understand this global rules, we would like to spend a lot of efforts to be more innovative. And this is the second plan I mentioned is related to our innovation effort. We plan to spend more than 2 billion Polish zloty in the next five years only to invest in innovation, 2 billion Polish zloty is roughly 700 million dollars. It means we would like to spend around 8 percent of our turnover every year on innovation. For example this year we will spend more than 10 percent of our turnover as an investment on R&D.