Warwaw, Poland, June 2, 2006--Polish ceramic tiles maker Opoczno registered a subsidiary to handle sales in Russia, the company said in a statement late Wednesday, while also maintaining plans to make acquisitions in that country, according to Interfax.
"The management of Opoczno announces that on May 31 it received the certificate of registration of a subsidiary] located in Moscow, under the name of Opoczno)," the company wrote in the statement. "In the first phase of Opoczno's activities will conduct broad marketing and promotional activities and take action to intensify sales in Russia." While the move signals Russia's importance in Opoczno strategy, analysts are concerned about its potential impact on the loss-making company's bottom line.
"Opoczno has high restructuring costs, mostly reorganization of sales," Bom PK BP analyst Dorota Puchlew wrote in in BDM's morning comments Thursday.
"Setting up a separate company to handle sales in Russia will add to these costs Let us hope that the high hiring costs of the first quarter will not be repeated this quarter," Puchlew added.
Russia, together with other post-Soviet republics accounted for a half of Opoczno's foreign sales last year.
Opoczno declined to comment on the size of its investment in the new subsidiary or on its planned headcount.
While company strategy is based on acquisitions in Russia, a Greenfield investment is also a possibility, chief executive Miroslaw Godlewski said in March.
Opoczno is in talks with several potential acquisition targets, public- relations manager Elzbieta Kwiecinska told Interfax. In the first quarter, Opoczno posted a consolidated net loss of PLN 6.35 mln on PLN 96.32 mln revenues.
