PKP CARGO Chairmain of the Board of Directors Dariusz Seliga presented the revision of PKP CARGO Group’s Strategy for 2019-2023 at a press conference on Tuesday. He informed that the Group’s strategic goal remains to become No. 1 in the Three seas area and on the New Silk Road routes within the European Union in terms of freight work and weight carried in 2023, and to strengthen this position in subsequent years. Another objective is to achieve a 50% share of the Polish market in terms of freight work by 2027.
– Making changes to the Strategy was justified, as first the COVID-19 pandemic, and then the Russian aggression against Ukraine and the ongoing war in that country have dramatically changed the macroeconomic environment in which the PKP CARGO Group operates – explained Chairman Seliga. – We are aware that 2023 is marked by serious challenges related to the economic slowdown in Europe, the energy crisis and the destabilisation of supply chains in the global trade exchange – stated Dariusz Seliga.
Vision, mission and goals
The Chairman emphasised that the vision enshrined in the strategy does not change: PKP CARGO Group will strive to strengthen its role as a Central European leader in rail freight by gaining a dominant position in the Three seas area and on the New Silk Road. The same is also the mission of the PKP CARGO Group: to provide a comprehensive logistics service on the rail freight and intermodal services market giving the position of first choice supplier.
– Our main strategic objectives are, firstly, to be No. 1 in the Three seas area and on the New Silk Road routes within the European Union in terms of freight work and weight carried in 2023 and to strengthen this position in the following years. And secondly, to achieve a 50% share in the Polish market in terms of freight work by 2027 – said CEO Dariusz Seliga, pointing out that PKP CARGO’s strengths and market opportunities for the Group “are a strong position on the Polish market and a strong brand, effective internal structures, large personnel and rolling stock resources, as well as Poland’s geographical location.”
The key actions to enable PKP CARGO to achieve its strategic objectives include high sales activity, continuous improvement of the sales process and customer service, and improvement of transport and maintenance processes. The implementation of the designated measures will be carried out within the framework of individual strategic initiatives:
– Organic growth in the domestic market
– Securing rolling stock resources
– Logistics efficiency
– Human resources management
– Digitalisation and computerisation
– Asset management
Acquisitions only suspended
The Chiarmain of the Board of PKP CARGO was asked by journalists and analysts, among other things, whether the company was abandoning acquisition plans on the Polish and foreign markets.
– Acquisitions on domestic and foreign markets remain an important element and pillar of the Group’s strategic development. Many of the processes underway were suspended in earlier years due to pandemic constraints. We are currently already seeing a significant recovery in the capital markets. As a company, we are actively monitoring, analysing potential acquisition targets. First and foremost, we need to strengthen PKP CARGO economically, as it was only in 2022 that the group started generating positive financial results – the company’s net result for three quarters of 2022 was -5 mil. PLN, but for the third quarter it was already +38 mil. PLN – and it must take some time for us to have financial capabilities allowing for domestic or foreign acquisitions – explained Dariusz Seliga.
Participants of the conference were also interested in the impact of a significant increase in energy costs and salary increases introduced in the company on the implementation of tasks included in the strategy. – Of course, I would like to emphasise that a significant part of our activities is focused on compensating for the increase in energy costs with improved transport management processes. Our aim is to maintain a favourable and competitive offer to our customers. It is important for us to ensure that our customers feel the effects of energy price increases to a maximum limited extent – said the Chairman of PKP CARGO.
In turn, referring to the issue of pay rises, Dariusz Seliga confirmed good relations with the employees representatives and that an increase in employees salaries is an element desired by the Management Board. – The value for us is the sustainable development of the organisation and further development of the Group based on the foundation of an attractive employer – said Chairman Seliga, reminding that this is already the fourth broadly defined pay rise for PKP CARGO employees since he became the head of the company’s Management Board in April last year.
PKP CARGO and Ukraine
The implementation of the strategy in this and subsequent years will certainly be affected by the situation in Ukraine. The Chairman pointed out that PKP CARGO, as the national freight carrier, is actively involved in cargo handling between Poland and Ukraine. – As a Group, we have become heavily involved in handling the transport of grain, petrochemical products, vegetable oils and other industrial products for which the previous transport routes were disrupted as a result of Russia’s aggression. We believe that ultimately the PKP CARGO Group will actively participate in the process of rebuilding the Ukrainian infrastructure from war damage. The excellent relations we have developed with customers and the Ukrainian railways will definitely pay off in the years to come. We are convinced that Poland will be a key transit country in the process of handling Ukrainian trade – explained Dariusz Seliga.
The war unleashed by Russia triggered a reaction from the West, which introduced sanctions against Russia and Belarus. However, the sanctions have resulted in a reduction in transport along the New Silk Road and PKP CARGO has been faced with the challenge of how to compensate for these losses. – We are going to be even more active in the Three seas area, especially as the carriage of intermodal cargo between ports and terminals is much greater than the carriage potential of the New Silk Road. Indeed, more than 95% of all containerised cargo is transported to Europe by sea. To take advantage of this opportunity, we are investing in the purchase of modern rolling stock, and our position in the Three seas area will be enhanced by the new multimodal terminal in Zduńska Wola Karsznice. I see a big role in this process for our subsidiary PKP CARGO INTERNATIONAL, which is becoming more and more active in the Adriatic region – replies Dariusz Seliga, Chairman of The Board.
EU sanctions have also resulted in the suspension of Russian coal imports and this raw material has been replaced by coal from other continents, which PKP CARGO hauls from ports to customers across the country. This meant a reversal in the direction of haulage, as traffic from ports had previously been relatively low. The company therefore faced a difficult task, but it managed it. Importantly, it did so on market terms, without reaching for the financial aid declared by Prime Minister Mateusz Morawiecki. – PKP CARGO is the future. We have proved ourselves at the most important moment. We are spreading ourselves more strongly in Europe. My personal dream is for us to be the most powerful carrier in the European Union, so that we can compete mainly with the German DB and win this competition – summarised CEO Dariusz Seliga.
The Head of PKP CARGO announced that in the fourth quarter of this year we will get to know the Long-Term Development Plan of PKP CARGO Group for the years 2024 – 2028.
