Mandam is a dynamically developing manufacturer of agricultural machinery, but the crisis in the industry and uncertainty about the geopolitical situation caused the company to suspend its investment plans. An impulse for further development would certainly be the launch of EU funds – primarily KPO.
- Mandam is a family company with exclusively Polish capital, employing 130 people.
- In recent years, the company has developed dynamically, increasing the production of machines and sales to the domestic and foreign markets. The crisis in the industry resulted in the suspension of investment plans related to, among others, with the construction of a large production hall and its equipment.
- -Companies like ours are silent victims of everything that is happening around us now and what we see in the media – notes Józef Seidel, member of the management board and marketing director of Mandam.
- The company’s plans include not only expansion, but also the creation of a research and development center, modernization of production processes and entry into Industry 4.0. The company wants to take advantage of all available support programs.
The conversation was created as part of the project “Investments in Poland through the eyes of business. Regression and hopes”, carried out jointly by ING Bank Śląski and the European Economic Congress (EEC). Premiere of the report prepared on the basis of interviews with managers of key Polish companies – during the EEC in Katowice (May 7-9, 2024).
Farmer: Is the labor market a barrier to increasing investment?
Józef Seidel, member of the management board and marketing director of Mandam: We actually noticed that at one time we had about 20-25 employees from Ukraine, but we also had employees from Moldova, we have an employee from Peru. When the war broke out, some Ukrainians left with a sense of obligation to their country and that they had to fight to defend their homeland.
However, I do not have the impression that the labor market will be unfavorable for the development of our company, because we feel that if we want to attract qualified staff to the company, we will succeed because we are able to provide them with appropriate working conditions.
On the other hand, we were never afraid to employ young people, whom we trained and offered various types of courses, financing forklift licenses and others. In addition, there is the specificity of the region – high population and access to specialists: welders, locksmiths, painters. There is also the issue of retraining miners. So there are a lot of people willing to work and we don’t see any problems with it.
![The Gliwice machine manufacturer is very much counting on the launch of subsidies to support investments in the company's development. For medium-sized enterprises, they are essential for further development, photo: Mandam](https://pliki.farmer.pl/i/18/52/49/185249_r0_940.jpg)
In your opinion, have Polish companies frozen their capital in safe assets due to the increased uncertainty caused by external crises and lack of regulatory stability, including frequent tax changes?
It is known that one invests to the extent possible and the calculations allow it. Currently, the situation has forced us to slow down on investments and as long as the market situation and crisis persist, we will refrain from making additional moves. And I’m not saying that everything has to return to the pre-crisis level, because that would be very difficult, but the situation must be stable and at some level. We will adjust our movements and investment activities to market conditions.
Did increased uncertainty encourage companies to increase employment (reversible decision, lower risk) than to invest (irreversible decision, higher risk)?
Increasing employment is a form of investment. Firstly, this increases the financial burden on the plant, and secondly, it would probably mean an increase in production and its efficiency. And in the period we are in, increasing production is not what we want. We are currently looking for solutions that increase customer reach, rather than burdening warehouses.
Have companies adopted a “wait-and-see” attitude – waiting for access to preferential EU financing (including from the KPO) or budget financing? What opportunities do you see for an increase in investments thanks to the unlocking of EU funds, in particular in infrastructure, networks, etc.?
This attitude is definitely visible. Currently, we are waiting for the KPO and deciding what the KPO will be used for. Because we know that if support programs appear, then, as I said at the beginning, a company like Mandam will want to take advantage of all the programs that will appear. Investing in enterprise development, infrastructure, computerization and research centers is absolutely worth it. And we should do this provided we receive this support.
Here, even in the case of the current unfavorable economic situation and lack of demand, and even if this large demand did not continue, investing with the support of EU or any other subsidies would certainly be used by us and we would return to the topics I discussed at the beginning, i.e. the construction of the hall. and the development of Industry 4.0, which we would like to refer to. There is also the issue of the research and development center.
These topics are currently suspended, but we are absolutely not giving up on them and we are waiting for better economic conditions or financing opportunities.
![Machine production at Mandam in Gliwice, photo: Mandam](https://pliki.farmer.pl/i/18/52/51/185251_r0_940.jpg)
Whether, and if so, what was or is the impact on investments resulting from changes in mood related to the course of the war in Ukraine (problems with the counter-offensive, sectoral tensions – grain, transport services) and the postponed perspective of participation in the reconstruction of this country?
The war in Ukraine had a very big impact on an industry like ours from the very beginning. Because as soon as it exploded, we immediately experienced problems with access to components: steel – the simplest, raw element, but over time there were problems with the supply of slightly more complex, advanced components, such as working elements of machines. It turned out that our suppliers – the companies that supplied us with these elements, had factories in Ukraine.
We didn’t always know about it and it wasn’t always important to us if they were of high quality and supervised by companies from Germany, Italy or Austria. When those factories stopped producing or slowed down production, we felt these issues very strongly.
There were incredible problems with supplies – we imported steel even from Spain, and there were also preliminary talks even with suppliers from Japan or Australia, just to have something to produce from. And this was the first stage, which stabilized somewhere in mid-2022, and in the second half of the year everything was, so to speak, rearranged and we adapted to the new conditions. And now we are experiencing confusion about grain and other products flowing from Ukraine to Poland.
So this influence is very large at the moment from one side or another. And here the question arises: when will it finally be regulated and sanctioned, because our client, who is primarily a Polish farmer, will be able to run his business and invest peacefully. However, I must say that in other countries the situation in agriculture is also similar. If this stabilizes, we hope that everything will return to normal.
Will a better perception of Poland in the world (image – political changes) additionally encourage foreign private investors?
I think so, because the people who are currently in power in Poland are better perceived, especially in the EU. The atmosphere of Polish politics seems to have improved a bit.
Will this translate into investments? I think so. Looking at the Silesian region, we can see how much is being built now and how many new plants are to be built soon. There are many production plants with foreign capital, as well as transshipment warehouses, etc. All of this is developing rapidly. I know that there are negotiations to sell further land for further investments. It is clear that despite everything, trust in Poland is high and development will continue. But provided that there are no other problems, such as an armed conflict in our territory or an unspecified EU country.
What can we expect in 2024-2025 (after the declines in the investment rate over the last decade): a rebound, stagnation, or perhaps a further reduction? Why? What role will the inflow of EU funds play here and when?
It seems to me that there will be no further declines, and it may sound dramatic, but we have reached the bottom – at least in our industry. And I guess now we’ll be “scratching our belly along the bottom” until we finally start “floating” and bouncing from it all.
The funds coming from the EU – if they are intended for our industry or the broadly understood industry – will be felt and will help us recover. However, today we do not yet know exactly what these funds will be used for and it is difficult to clearly determine that they will help us, although I expect that they will.
Nevertheless, I expect stagnation and then a slight upward movement and stabilization at some level, but I absolutely do not expect the level that was before the war or Covid, when we had the absolute peak. I do not expect such high levels of sales and such high investments from our side, but I think that it will stabilize at a reasonable level within about 2 years.
![Mandam at the Agrotech 2024 fair, photo: kh](https://pliki.farmer.pl/i/18/52/53/185253_r0_940.jpg)
Which sectors of the economy are most promising in the context of a possible rebound in investment in 2024-25?
Definitely a weapons industry. It’s a bit funny and a bit scary. I agree with the theory: “if you don’t want to have a war, prepare for a war” and I understand investments in armaments, and this is the main element promising investments. The atmosphere related to Ukraine and the conflict in the East has a huge impact on what is happening. And this is hardly surprising, because even 2 days ago a rocket entered Polish territory. So all this results from awareness of what is happening abroad and, on the other hand, awareness and fear that if Ukraine is now, why not Poland soon? I absolutely understand this and the arms industry will certainly have large financial outlays and will develop significantly.
And apart from the arms industry, I suspect that the IT and Industry 4.0 industries have good prospects, if the economic situation allows it.