New PKP CARGO Group Strategy addresses the challenges and opportunities on the Polish and international markets. The Group does not intend to limit its role to a rail operator only: it will also increasingly provide comprehensive forwarding services.
The strategy defines the PKP CARGO Group’s vision and mission for 2019-2023, including an outlook to 2038. This is the Group’s key document setting out the directions for its development, but it is also an element of its integration.
In five years’ time, the PKP CARGO Group should become the leader on the Central and Eastern European market by becoming the No. 1 in the area of the Three Seas Initiative, i.e. in the pan-European north-south transport corridors. PKP CARGO also intends to achieve a dominating position on the New Silk Road routes within the European Union. In both cases, this is in terms of freight volume and freight turnover. The leading position that the Group wants to achieve by 2023 should be consolidated between 2023 and 2038.
At the same time, PKP CARGO’s share of the domestic market should also increase. At present, the Group controls less than 50% of rail transport in Poland in terms of freight turnover, while in 2023 this figure is expected to increase to 65%. - We are setting an ambitious goal, but it is achievable – assures Czesław Warsewicz, CEO of PKP CARGO S.A. – Some of the growth will be driven by the Group’s organic growth, but acquisitions will also be important. I do hope that we will be able to report on our first decisions in this respect – explains Warsewicz.
Acquisitions are also to be conducted on international markets, since this is the faster and easier way of implementing the Group’s expansion program on Eurasian markets.
In its Strategy, PKP CARGO discontinues its image as a rail operator that simply accepts and executes orders for the transport of freight by train. In order to implement the objectives set out in the strategy, the Group needs to expand its business profile. - Because of that, it will be important to make PKP CARGO a specialized logistics operator that provides comprehensive door-to-door freight services, especially in the intermodal sector – explains Czesław Warsewicz.
To this end, PKP CARGO will strive to devise the most competitive offer for business partners on the New Silk Road in the European Union and in the area of the Three Seas Initiative CEO Warsewicz emphasizes that the Group wants to quickly address the challenges driven by globalization and use its natural advantages, that is Poland’s quick economic development and the resulting improving international position of our country. And the advantage that many experts believe is key: Poland’s location at the crossroads of critical trade routes.
The domestic and international expansion process will be supported by improvements in operational efficiency through digitalization and computerization as well as optimization of transport processes. The PKP CARGO Group will also increase efficiency of the rolling stock utilization and modernization processes and improve management of assets of all companies.
Better organizational efficiency is equally as important. It should improve through optimization of decision-making processes and adaptation of the PKP CARGO Group’s structure to its operations and through development of its organizational culture. The Group will implement management by objectives (MBO), adopt a project management policy and establish a central Project Management Unit (PMO).
CEO Warsewicz emphasizes that 2018 did not only mark the commencement of preparation of the strategy for the next five years. Some of the solutions that became priorities in the strategic document were already starting to be implemented. Improvements in the organization of work, transport processes, higher level of market competition, attracting customers with increasingly better offers, also in terms of price – these factors were the main reasons why the PKP CARGO Group posted excellent financial results.
After three quarters of the year, revenues were PLN 3.84 billion, up by 11% from the corresponding period of 2017. We must note that the level of revenues was the highest since 2013, i.e. since PKP CARGO S.A. was listed on the stock exchange. The same can be said about EBIDTA (PLN 702 million). The strategy requires the Group not only to maintain those excellent results, but also to improve them. For example, starting in 2019, the net profit should amount to at least 5% of revenues, and as of 2023 – at least 8%.