Poland’s PKP Cargo to make acquisitions to boost market share

Poland’s state-run PKP Cargo , one of Europe’s biggest rail freight companies, may make an acquisition this year to boost its market share, its chief executive told Reuters.

The group, Poland’s biggest rail operator, is mostly looking for potential targets in southern Europe but does not rule out takeovers at home.

“The talks we are having today are not advanced enough for us to announce something soon. But it is possible that in the second half of the year or at the end of it we will succeed in finalising an acquisition,” Czeslaw Warsewicz said.

“We are looking mostly at the south European markets, but takeovers on the domestic market are possible too,” he added.

It is too early to predict the financial structure of a potential deal, Warsewicz said.

“Today the problem is not financing, the problem is finding an appropriate investment,” the CEO said, adding PKP Cargo had already walked away from several negotiations, due to unsatisfactory conditions.

“There is not such a big acquisition target on the horizon that we would have to consider a share issue,” Warsewicz said.

PKP Cargo, which competes mostly with Germany’s DB Cargo, also plans to launch this year a company or office in China, most likely in Beijing, as it wants to take advantage of China’s Belt and Road project, which is rebuilding the old Silk Road to connect with Asia, Europe and beyond.

PKP Cargo plans to expand the capacity of its terminal in Malaszewicze on Poland’s border with Belarus, which handles most of the cargo from China, as the number of trains from China increased to 2,200 last year from just 17 in 2011 and is expected to grow further.

“The numbers show that the turbulence on the geopolitical arena and difficult relations between China and the Unites States do not have a negative impact on the trade exchange between China and Europe,” Warsewicz said.

He would like PKP Cargo to have the biggest share possible of rail freight from China to Europe, despite the challenges posed by Europe’s trade deficit with Beijing, which means trains carrying goods from China to Europe often have to return empty.

“The trade exchange between China and the rest of the world is, and will be, there and we as a carrier want to take advantage of it,” the CEO said, adding that currently only 1% of all cargos from China to Poland was transported by rail.

Source : https://www.reuters.com/article/pkpcargo-poland-acquisitions/polands-pkp-cargo-could-make-a-takeover-this-year-ceo-idUSL8N2332Z6

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