Chipping off the old bloc

The decision of London-based design consultancy Dragon to open an office in Poland makes it the latest in an ever-increasing line of groups exploring opportunities in Eastern Europe.

Many international brands see the region as an important growth area. Design groups are taking advantage of this, linking up with native consultancies which have local capabilities and flexibility.

Dragon is acquiring Polish design consultancy Haas Polska Design, which has worked on many of the country’s major brands over the past five years, including DHL, Finlandia Ballantiens, UDV and Unilever.

The 14-strong office launches today, headed by managing director Malgasia Leniarska. Using the combined international capabilities of its London office and sister company Dragon Rouge in Paris, Dragon aims to create a strong, well-established team in Warsaw.

Dragon co-founder, and the director responsible for the new Polish development, Ian Farnfield believes the acquisition will provide “an important strategic development” for clients.

“The opportunities in the marketplace are tremendous in Eastern Europe. Driving through Warsaw it is clear that it is now a truly multinational centre,” says Farnfield. He expects the business to “grow substantially and become the most influential of its type in Eastern Europe”.

“We are not just buying for the sake of buying,” maintains Farnfield. “It has let us find good people in Poland and gives Dragon a flying start in the Polish market.”

While there are “markets where you can transfer knowledge from the UK”, Farnfield admits that “a high level of local knowledge and expertise” is also required.

“It will enable us to provide valuable help to them in a market that is very exciting, but very challenging. Doing business in many Eastern European countries has become very difficult for our clients. Against this background, Poland has become increasingly important as a stable base from which to expand,” he says.

But industry commentator Jeremy Myerson believes acquisitions can turn out to be “a cumbersome way” of gaining business in new markets.

“It is not a brilliant way to go about it. Several British architectural companies have been clever by forging strategic alliances, which is the way forward. You need local know-how,” he says.

Siebert Head is another group spreading into Eastern Europe, with clients in Bulgaria, Hungary, Russia, Romania and Poland, where it too has a base. Sales and marketing director Satkar Gidda estimates that 45 per cent of the group’s income is generated overseas, and 20 per cent comes from the Warsaw office.

He says it was opened because “we followed our clients. Several of our multinational clients set up manufacturing bases there. We started working with clients in Warsaw and the workload consequently increased in the area.”

Since launching in April 1998, the Polish base has grown, and its client base has diversified. “We obtain business from local manufacturers which realise the need to compete with foreign companies locally as well as exporting their own products,” explains Gidda.

Siebert Head’s principal clients are in the food and drink industries. But Gidda believes other sectors, as well as rival design groups, will soon explore the many opportunities in the region.

“In my opinion, it is not at fever pitch yet, as it’s still a developing market. Brand impact design is still in its infancy, like the UK was 20 years ago. But it will get there faster than in the UK because there is already a momentum.”

Coley Porter Bell managing director Amanda Connolly echoes Gidda’s optimism about Eastern Europe. But she refuses to commit herself as to whether the company will ever have a permanent office in the region.

“We are doing work in Vienna and Budapest at the moment. A base in Eastern Europe is a possibility in the future, but we are able to develop business from here at the moment,” she says.

The consultancy’s involvement in Poland began in 1997 with the launch of a new tea brand for Van Den Bergh foods. The project was undertaken in alliance with ad agency JWT, which “provided local knowledge that helped tremendously”, says Connolly.

“We developed a brand called Saga specifically for the domestic market. We had to create something with emotional values, while trying to understand the language of the market,” she explains.

Mike Jankowski, co-owner of Polish interior refurbishment company Aquaform, says there has been “a movement in all Eastern countries, from what they were eight years ago to what they will be in the future”.

Jankowski cites petrol stations as a prime example of Poland’s evolution in recent years.

“In Poland they are now the most modern in Europe. Instead of aping the evolution of petrol stations in Western Europe, they have installed concepts developed in the West which have not yet been implemented,” he says.

But he feels privately-owned institutions are maintaining their local identities, while commercial organisations adopt Western designs. “Eastern Europe is visually speeding towards a Western European feel with respect to corporate identity, but private places like restaurants and bars still retain their regional identities.”

With Poland aiming to join the European Union by the end of 2002, economic councillor for the Polish Embassy in London, Bogdan Zagrobelny, welcomes foreign investment in the country, which totalled $32bn (£20bn) in 1998.

“The Polish economy is in quite good shape,” he says. “Our gross domestic product in 1998 grew by 4.8 per cent – the highest in the region and one of the highest in Europe.”

But Zagrobelny is realistic about the country’s need to continue its expansion. “Our scope and links with central European countries and the location of Poland make it an attractive place for investment, but there is still much work to be done to keep pace with the rest of the EU.”

The Polish government’s open attitude towards foreign investment is certain to sustain its flourishing economy and is a signal of its willingness to embrace new projects.

As a result, designers look set to have more and more opportunities to explore in Poland and the rest of Eastern Europe.

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