It might seem wildly ironic that a condom company located in one of the most devoutly Catholic countries in the modern world is in a position to take over Europe's largest condom maker, Condomi AG. But, believe it or not, this is indeed all part of the latest speculation surrounding a new share issue to come out at the beginning of October, set to bring in zł.100 million for Unimil, Poland's leading condom producer.
"We want to make an investment, but it is not to build a factory" is all that Grzegorz Winogradski, president of Unimil, is willing to reveal. "So far we have very good feedback from investors," he says, adding that he hopes it will lead to a successful project-whatever that may be.
Which one's Goliath?
What makes the latest speculation over a possible takeover even more surprising is that Unimil has actually been a subsidiary of Condomi AG (the very company it may be in a position to take over) ever since the German condom king bought a majority stake in Unimil back in 1999. Looks as though the tables have turned.
When asked about Unimil's relationship with their majority shareholder, Winogradski simply points out that Unimil's current market value, up near zł.58 million (?13.7 million)-as listed on the Warsaw Stock Exchange (WSE)-is in fact higher than the market value of its owner, Condomi AG-listed on the Frankfurt exchange-which now sits at around U7.5 million.
Needless to say, the German giant hasn't performed well of late. Back in 2001, Condomi AG was the toast of the condom investor world, as its share price peaked out around ?30, but it has spiralled down dramatically in the three years since, and now sits at around ?1.4 per share. Thus Unimil appears to be the anomaly in their portfolio, and the current state of affairs indeed reveals a remarkable success story for the Polish condom brand.
"I came on in 2000," says Winogradski, "and in four years our share price has increased 400 percent, and profits have increased by 250 percent. Every year has been better than the year before." And the conclusion of the last financial year on June 30 revealed a 25 percent sales increase and a 50 percent increase in profits over the previous year. Winogradski unabashedly says these results are due in large part to the excellent management board, of which he is president.
With these stellar results, along with a market share of close to 60 percent, perhaps it is not surprising how well their stock has done on the WSE. And, clearly, investors are optimistic about future condom usage in this county.
Poland's sex factor
It's safe to say that the 'safe-sex' message in Poland is hardly what it is in places like Germany or America. Most school curriculae teach a Catholic view of human sexuality, which definitely does not include instructions on how to use a condom, much less whether that's even an option.
Nevertheless, the fact that a condom producer in Poland could be so successful is a strong indicator that they are indeed an established part of life here, especially for the young market. Not surprisingly, Durex, the country's number two brand-which covers over 35 percent of the market-targets 18-25 year-olds almost exclusively, at least in their advertising.
"The Polish market is not much different from other developed countries," says Wiktor Fila, the general manager of SSL Healthcare-the company that manages the Durex brand in Poland. "We have just finished our main thrust in May, July and August," he says of their advertising effort, which included a television campaign on TVN. As with most condom producers, spring and summer is prime time for pushing their wares.
The rankings
Fila is particularly excited about Durex's Global Sex Survey, featuring an interesting series of sex-related questions, which this year enjoyed over 84,000 respondents in Poland-a better turnout than for the same survey done in China, he is quick to point out.
According to the Durex survey, Poland ranks 16th-sandwiched between Australia and New Zealand-in terms of the frequency with which people are having sex, with an average of 126 times per year (the winners in this category were Hungary and Bulgaria). Also noteworthy is that 39 percent of Polish respondents said that they had experienced a one-night stand, compared to the global average of 45 percent, and that the Polish were ranked the 7th sexiest nationality in the world, with the Brazilians, Americans and the French rounding out the top three.
Whether these results have any implications for business is a tough call, but it is safe to say that Poles aren't too shy about casual sex after all, and now it seems this country just might be set to become the headquarters of Europe's condom industry-if the widespread takeover speculation is on the mark.
Peaks and valleys
Although Winogradski is unwilling to discuss what Unimil plans to do with the zł.100 million to be raised next month-a sum that will triple the company's capital-he is willing to talk about other aspects of the condom industry, such as sales patterns.
"During the warm season of April through September there is a little peak [in sales]," he explains. And in fact, both of Poland's top two condom producers have noticed this trend.
Fila reports that condom sales jump when people have time off from work-like during the May and June holidays, for example.
Meanwhile, Winogradski has an even more interesting observation:
Although the usual sales peak occurs in spring/summer, he says, "In the last few years-I don't know why-there has been a peak in January."
When asked what might explain these phenomena, Winogradski laughs and says: "Maybe our shareholders were using our product."
Michael Lars White
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