Interview – InPost wants to buy B2B courier company

Fast-growing Polish mail and parcels company InPost plans to buy a B2B express courier companythis year to expand its business dramatically, CEO Rafal Brzoska told CEP-Research in an exclusive

The company, part of the stock exchange-listed Integer group, is already investing about €40million in a nationwide network of automated parcel machines to benefit from the booming Polishe-commerce market as part of a diversification strategy designed to generate 30% of revenues fromnon-mail activities.

“We are thinking about buying one of the express couriers on the Polish market,” Brzoskarevealed on the sidelines of the World Mail & Express Europe conference in Copenhagen. “We donot have time to grow organically in that field. That’s why we decided to buy one of thecompetitors. That will give us massive growth.”

InPost parent Integer will seek to raise about €20 million on the Warsaw stock exchange, whereit has been listed since 2007, for the investment. Brzoska said he hopes to announce a deal laterthis year, and that the acquisition would double the company’s revenues this year.

In 2009, the Integer group, based around InPost, had revenues of €35 million and profits of €2.8million. This year, excluding the acquisition, it expects revenue growth of about 40% and aims todouble profits following the launch of its B2C parcel service last autumn. The Polish B2C market isgrowing at about 25%, Brzoska said.

InPost’s growth is being driven by expansion of its automated parcel machines (‘Paczkomaty’)where consumers can collect and drop off their parcels. InPost has so far installed more than 300parcel terminals in Polish towns and cities and plans to have a nationwide network of 800 machines.The Polish-made terminals are mostly located at petrol stations, offering 24/7 access for customersto pick up their parcels. About €15 million of the total €40 million investment in the innovativetechnology has come from EU funding.

Acquisition of a B2B courier would create “huge synergies” for the parcel business, Brzoskaexplained. “We can put some of the express volumes into our system.” The company would installparcel machines in large office buildings, enabling companies to deposit their parcels there duringthe day ready for end-of-working day collection or to pick them up in the morning. InPost couldthus use the automated machines to offer later cut-off times and earlier deliveries than expressfirms relying on couriers, he pointed out.

Speaking earlier at the conference, Brzoska said the Polish mail market was not yet declining asfast as in western Europe but this would inevitably happen. The company had therefore decided twoyears ago to diversify from addressed and unaddressed mail deliveries into hybrid mail as well ase-commerce and B2C parcel deliveries. After six months, the B2C parcel service, which offers aguaranteed 48-hour delivery, in fact had a 97% next-day delivery rate, he said.

InPost is very actively using social media such as Facebook and YouTube to target youngerconsumers through interactive dialogue and to create a “social commerce” market. It has launched anonline shop on Facebook Poland to generate new volumes. “We have to show young people that the postis cool and trendy,” Brzoska declared.