Piotr Wojciechowski is co-founder and chief executive of WB Electronics, one of Poland's biggest privately owned defense companies. The firm's acquisition of radio communication systems producer Radmor in 2010 was the first takeover of a Polish state-run defense manufacturer by a private company. Established in 1997, WB Electronics makes a wide range of military equipment, including C4ISR systems, UAVs, battlefield management systems, simulators, and radio communication and radio location equipment.
The company is working on its biggest foreign contract to date, delivering electronic equipment to Malaysia's AV8 eight-wheel-drive armored vehicle developed by DEFTECH. Wojciechowski said the contract, worth 32 million euros ($42.5 million), could help his company establish itself in the international market and seal new deals in 2012.
Q. In 2011, Poland's defense budget was increased, but numerous military procurement programs were slashed. What strategy did your company adopt?
A. After a period of intense development in the years 2009 and 2010, we went through a phase of slower growth last year. With the purchase of Radmor, we had to adjust our structure to the size of our business. But with the consolidation completed, in 2012 we can turn our attention to competing even harder for new procurements, either alone or in partnership with some major industry players, such as Huta Stalowa Wola or WZMS.
Our business model is based on our strengths. As a smaller company, we are able to adjust to the military's needs much faster than big, state-owned defense groups. We are also able to invest a large portion of our profits in further research and development, and to constantly improve the quality of our products. WB Electronics is currently working on various armament sales in a number of countries, but it is too early to discuss the details.
Q. What was the impact of last year's acquisitions of defense companies on your business?
A. With the acquisitions of Radmor and [UAV manufacturer] Flytronic, we have transformed WB Electronics into a multispecialty group. We commenced sales of unmanned aerial vehicles, which have received very positive feedback both domestically and abroad. Besides [UAVs], we will also continue to develop new radio location systems, simulators and our flagship artillery fire-command system Topaz.
Q. After its first year of handling Polish military procurements, what is the defense industry's view of the performance of the Defense Ministry's Armament Inspectorate?
A. Procurement procedures have become more transparent and clear, but there is still a lot to be done to facilitate the cooperation between defense companies and the military. It is also most important that private and state-owned companies are treated equally when the ministry plans to launch new arms programs. Innovation is more easily achieved in smaller, technology-driven companies like ours.
Next year, privately owned companies will most likely continue to increase their share of the Polish defense market, and we will be part of this trend.
Q. In 2012, what will be the biggest challenge for companies operating in the Polish market?
A. The [Ministry of Defense] has announced deep cuts in several of the ongoing modernization programs, but it is still to be determined which ones will be affected the most.
Also, the ongoing financial woes in the eurozone are likely to negatively affect defense spending in many countries, but both the quality and prices of our products are very competitive. The military has planned many purchases, but its funds will be limited, so the competition will be fierce.
-- By Jaroslaw Adamowski in Warsaw.