Pawłowicz replaced Miron Maicki as Ruch president in February. „The strategy accepted in April 2005 turned out to be a completely unrealistic fairy tale. A rich investment program was planned and the company is not prepared to spend and gain the money,” Pawłowicz told Puls Biznesu.
He said that the company‘s new strategy will concentrate on two areas. Firstly, Pawłowicz wants to centralize the spheres of accountancy, HR and IT. When it comes to business activities, such as sales and distribution, more responsibility will be passed to the regions. The strategy also mentions cost reductions, which will be mostly based on renegotiating trade contracts.
Although Pawłowicz did not mention cutting employment, he wants to alter the agreement that was signed by the previous board with its employees and which guarantees them employment and high damages in the case of redundancies. According to the agreements, some of the best-earning directors in the company could receive up to zł.500,000 as part of a severance package, and the present management board wants to try and convince employees to give up some of their privileges.
Thanks to the restructuring, next year Ruch‘s sales revenues could increase to zł.100 million. Its goal for 2005 was to achieve a zł.24.5 million net profit. However, the company‘s authorities are now convinced that it will finish the year with a loss, which it is still estimating.
Ruch will have to try hard to strengthen its leading position on the market. In the last three years the company‘s market share shrank from 58 percent to 44 percent. At the same time, Ruch‘s main competitor, Kolporter, gained 42 percent. While Ruch owns a network of 35,000 sale points, Kolporter already distributes papers to 28,000 points. The market that both companies are now fighting for is worth some zł.5 billion a year.
The IPO of Poland‘s biggest newspaper and magazine distributor, Ruch, should take place in September or October this year, said the Deputy Minister of the Treasury, Paweł Szałamacha.