Szczecinbiznes.pl: Megaron is getting ready for its initial public offering at the Stock Exchange. When will it take place?

Piotr Sikora: We are now waiting for the decision of the Polish Financial Supervision Authority in this respect. The Authority has already received our responses to all queries, so we expect the decision to be issued soon. However, considering the schedule of the authority’s meetings, I don’t thing the decision will be given in 2010 – the first half of January is more likely. If the decision is factually announced early in January, then the subscription for shares will start in the second part of the month and it is possible that we will go public at the end of the month or early in February. This is our schedule, all procedures are practically completed.

How will the initial public offering take place? What are its premises?

Our entry to the stock exchange will be divided into two stages. During the first stage approx. 200 thousand of shares, i.e. 4 – 5 percent of the entire stock, will be issued - we expect to receive about PLN 4 – 5 million for that. The second, major part of the issue will take place a year later and will cover up to 20 percent of shares, which is our target limit of external investor shareholding. The division into two issues results from the company’s current dynamic growth. It is not yet visible in the financial results, but most probably, the improvement will be translated into financial outcome next year and it will allow us to obtain higher prices for our shares. Hence, we will go public now and then we intend to sell our shares at best prices.

What is Megaron’s shareholding structure?

I own the majority of shares. There are three other individual shareholders possessing respectively: 23, 10 and approx. 2 – 3 percent of shares.

What is your company’s standing in the market for construction and finishing materials?

It depends on the criteria applied – if we take a narrow view, i.e. if we exclusively consider finishing coat and filling plaster producers, I believe our position is quite high in the ranking, even though there are no credible surveys in this respect and customer opinions often contain errors. However, we have some information from our recipients about our sales volumes and the sales volumes reached by our competitors and on those grounds I assess our domestic market share at the level of 10 – 20 percent. We have approximately 100 distributors and over 2 thousand retail outlets. Polish companies such as: Atlas, Cadas from Gdańsk and Transpol constitute our main competitors, as foreign products do not have a significant share of the market.

Does the Western Pomeranian region constitute an important market for your products?

Yes, of course, even though the highest sales are recorded in Wielkopolska, Małopolska and in Silesia. Our province seems to be somewhere in the middle of the sales ranking. Generally, the sales volumes depend on the economic development of the region.

How does the situation in the construction industry affect the business of your company?

The construction industry seems to be stagnant at the moment. It is not a serious downturn, but a lull in the market which is sure to pass soon. The slowdown has not affected us greatly, and even if we experience it, the effect is delayed. This is so because, first of all, the investments initiated in the past are being finished now. Secondly, our business is primarily linked with the retail market, i.e. individual clients and small companies that are not so susceptible to market fluctuations. Thirdly, we are continually winning our competitors’ customers – hence the stable increase of our sales. Last year we achieved the turnover of PLN 26 million, which was 20 percent more than in the previous year. This year we reached the quantity of 2009 turnover as early as in October.

What were the beginnings of your company?

I established the firm at the beginning of 1990-ies in Szczecin. In 1993 the company received a capital injection form a private person form aboard which allowed us to extend the business activity, especially the sales, nationwide. Another critical milestone was reached after 2000, at the time were banks willingly offered loans – then we built our first production building.

You have been advertising new products in the media lately.

This year we completed a new production building and a new manufacturing line for water-based products. Until then we only produced dry products that had to be mixed with water at construction sites. Now we offer a ready-to-use product sold in a bucket – Śmig that is manufactured on the new line. The construction was co-financed from two EU programs that furnished us with approx. PLN 6 M in total, i.e. respectively 50 and 60 percent of the required funding. The produciton was launched midyear.  The new facility is very productive and we intend to use it for many years without any extensions.  Next year we intend to introduce another new modern product made on that line.

What, in your opinion, is the formula for success in business?

We are doing our best to manufacture high quality products. We are constantly watching the market and we make efforts to meet the needs of our customers by introducing brand new products. Customer service can also be counted among our assets – the company’s sales network is well-developed, our salespersons are eager to please the customers and take good care of them.

PŁ, MAB