Arkadiusz Mus has built a billion-dollar Press Glass business through international expansion. He is a critic of the Law and Justice Party’s policies, believing they take away the chance to live in an open country and build competitive companies in Poland.
FORBES: Are you breaking glass yet?
Arkadiusz Muś: Not yet, but it does not look particularly promising. The warehouses at the Ujazd glassworks are full and the situation is similar at other glass factories. Consequently, our main focus at the moment is on boosting sales. It is not easy, but we can see that there is a move in orders. The biggest concern is about winter and the end of the construction season. We have to enter it with emptied warehouses, otherwise we may have a problem.
After years of coping with many unfavorable situations, the Polish economy is weakening. In the second quarter, our GDP fell by 3.6 percent, which is the worst performance in the EU. Do we have a problem?
We have had one for a long time. For me, not only as an entrepreneur employing 5,200 people, but above all as a citizen, it is very disturbing that instead of focusing on Poland’s further development, those in power are focusing all their attention on the current political struggle. They are handling irrelevant problems or those artificially created by themselves.
The economic situation is deteriorating, we have many long-term challenges, which are for example related to demography or the energy transition. At this time PiS (the Law and Justice party) considers it most important to hold a referendum on “selling off state assets” or the border wall. To me, this is a distraction from the country’s real problems.
What is Press Glass’s way of dealing with the recession?
We stick to two principles: diversifying our global operations and offering high-quality products.
Does this approach work?
Despite several crises along the way, we are developing at a fast pace. More than a decade ago, we had 110 million USD in revenue and three factories in Poland. But at the same time, I knew that operating from Nowa Wies [a village in Poland, then headquarters of Press Glass near Czestochowa – editor’s note], we had a chance to create a large international organization, competing with concerns such as Saint-Gobain and Pilkington, present in the glass market for several hundred years…
Saint-Gobain has been in existence since 1665. The French founded it to break the dominance of the Republic of Venice in the glass business. Have you succeeded in defeating others?
We specialize in insulated glazed units. Today we are the largest in Europe in this segment, because we have set our sights on strong foreign expansion. It was very beneficial for Press Glass, like many other Polish companies, to join the European Union and the European Single Market.
Today we have half of our production capacity abroad. We have factories in the UK, USA, Croatia, and Lithuania. More than 90 percent of our products is exported, and the effects of our work can be admired on the facades of many office buildings in Warsaw, the City of London or New York’s Manhattan. If we were limited to the Polish market only, the problems would be much bigger.
How much bigger?
Sales in Poland has dropped by 40 percent, while in Western Europe they were down by about 10 percent. In the US, sales are doing best. In Poland, the big problem is not only the reluctance of those in power towards entrepreneurship, but also the lack of the funds from the EU National Recovery Plan [they are not transferred to Poland, among others, due to failure to meet milestones related to the rule of law – editor’s note]. In both Europe and the US, funding that supports the green transition helps the economy recover from the crisis. And in Poland, those in power prefer to squander resources on secondary issues, such as buying votes with seemingly toll-free highways. After all, taxes still have to pay for their maintenance.
According to the narrative of Law and Justice politicians, in the worst case scenario, we will manage without the EU funds from the National Recovery Fund.
This is a distortion of reality. Law and Justice politicians and their families employed in cushy jobs in state-owned companies will certainly manage, but at what cost to the country? Maybe the statistical Kowalski does not feel the cost of the lack of the these funds yet, but entrepreneurs already do, and it is a matter of time when these costs will hit the rest.
Why can’t those in power get along with the EU? After all, the whole economy will lose out.
Because they do not want to. They have calculated that it will pay off politically for them to follow this reasoning. They live in the belief that they need to outsmart the EU institutions. They do not understand that today most is achieved through cooperation and openness. This is what the European Union has built its success on. This is also what many Polish entrepreneurs and I have built their success on. Successful politics, just like business, depends on the ability to make compromises and build coalitions.
My 30 years in business have convinced me that it is impossible to run a company in such a way that only one party benefits. This year, I met with a prominent American entrepreneur, Charles Koch, who has been emphasizing for decades that it is important to think about mutual benefits for the success of a company or country. But for the politicians in the ruling party, the word “cooperation” does not exist. Such thinking prevailed in business in the early 1990s – buy low and sell high, preferably while still cheating the counterparty.
Where are those businessmen from the 1990s today?
Most of them have disappeared. The market has vetted them, as doing business this way is archaic and short-lived. In the 1990s, some entrepreneurs built businesses on close relationships with politicians. Now the politicians want to influence business more and more strongly through state-owned enterprises and building close relationships with selected private companies.
Last year you launched a new factory in Lithuania. This year you have started construction of plants in the UK, which are expected to be operational in 2024. In view of this situation, do you not see opportunities to invest in Poland?
On the contrary. We are prepared to build a new factory worth an estimated USD 185 million near Dabrowa Gornicza. We have everything: we have bought a plot of land, prepared a business plan, and are in agreement with suppliers of technology and machinery. I think Poland can be a fantastic place to develop business. But as an entrepreneur, I cannot disregard the risks, including political ones. This is why we are waiting to start this investment, watching what will happen next with the economic situation, the National Recovery Plan and Poland’s relations with the EU. Currently, there is too much uncertainty.
But not everyone is deterred by it. In June, the government announced Intel’s investment in silicon wafer production near Wrocław.
Well, that is right: “the government announced.” A big celebration is being made in Poland out of a normal business decision by an American company. Why doesn’t the government boast at what cost it managed to make such an investment? More than USD 1.4 billion will be paid by taxpayers, including other private entrepreneurs. The question is: Do we need to spend so much money on an investment that will still be profitable for the owners?
Maybe this will pay off in terms of creating innovative jobs?
Maybe if the quality of Polish economic institutions, the legal system and the judiciary were higher, there would be no need to offer so much? Moreover, intuition tells us that we have overpaid again. On top of that, all this money is being wasted related to punishments for activities of Turow power plant, the airport in small city of Radom, failures in construction of the power plant in Ostrołęka, or the cross-cutting of the Vistula Spit.
If you look at these who manage the investments run by Law and Justice politicians, it is no wonder. The government’s plenipotentiary for strategic foreign investments of state-owned companies is Jan Kanthak, a 31-year-old lawyer who was previously a spokesman at the Ministry of Justice and held several other political posts. Such a man is entrusted with looking over billion-dollar investments. As a citizen, I would like to know what kind of investments he has made previously. After all, he never even ran a newsstand and now this inexperienced man is supposed to decide on investments larger than those made by managers in my company, who have years of experience in running ventures on two continents.
The financing of these spectacular but unnecessary projects by politicians seems to have ceased to impress the average person.
Because these are abstract amounts of money even for me, let alone for most voters. Law and Justice politicians behave as if they have a USD 100 billion budget surplus and are some kind of Middle Eastern sheikhs extracting money from under the ground.
But somehow they find that money?
But they do not have it. Instead, they are putting current and future generations in debt. They have been very lucky as the last few years were characterized by an incredible global economic boom and low interest rates. Luck is an underrated factor. But it has come to an end.
Someone might say that nothing bad has happened so far. We have not experienced a serious crisis, wages are rising, there are no problems finding jobs….
Low unemployment is not thanks to the Law and Justice party, but to entrepreneurs and demographics. This is another real problem put off. The population is aging and there will be a shortage of hands to work. Not only in Poland, but also in many other European countries. Poland will continue to need immigrants, and those in power are organizing anti-immigrant campaigns.
You are one of the harshest critics of this government and Law and Justice policies among businessmen. Others do not follow your opinion. Maybe it is not so bad for them?
Some are passive for various reasons, which is not a very wise attitude. There have been several cases of politically motivated detentions of entrepreneurs, and some are afraid that the state apparatus will do something to them or make it difficult to do business. My impression is that the tax system is being complicated on purpose. Entrepreneurs are confused and fear that they will unknowingly make a mistake, for which they will later be punished. During the last eight years of Law and Justice’s rule, the state has been armed with a whole bunch of new tools that can be used against any entrepreneur.
But don’t they take advantage of it?
Then you can say that, after all, nothing has happened yet, entrepreneurs are not imprisoned. However, having these tools, they can always use them. This is enough to create an atmosphere of fear. As a rule, entrepreneurs must be able to take risks, but in business the uncertainty created by politicians is the worst. Added to this is the poor quality of the laws created. Laws are created and pushed through the parliament on the fly, without consultation, because a problem has just popped up and those in power want to show the electorate that they are already taking care of it. This is how ill-considered legal duds are created that make life difficult for everyone, such as the “Polish Deal” [the largest attempt to reform the tax system by Law and Justice – editor’s note].
However, Prime Minister Morawiecki says entrepreneurs are the salt of the earth and he cares deeply about them.
He appeals mainly to the smallest ones, counting on their votes. Nevertheless, we should all aspire for Polish companies to expand, fostering the growth of larger enterprises. Larger companies generate more added value, offer higher wages, drive job creation, invest more, and play a pivotal role in building prosperity.
The Law and Justice party does not care about fostering entrepreneurship and economic growth, as evidenced by their failure to implement necessary reforms. Consequently, Poland’s position in economic freedom and business conditions rankings has either stagnated or worsened. Seeing their situation improve, some people forget about the lost benefits, namely how many missed opportunities for reform there were during the past eight years. This is not about me, because my company – as you can see – is doing quite well. It is about taking away the opportunity from many people who are just starting out, companies that would like to grow, and workers entering the job market.
Why do they only care about small entrepreneurs?
Because they do not treat them as a force that can drive economic growth, but as a potential electorate that they want to pull to their side. In fact, for Law and Justice, the most important companies are state-owned companies. They promote such a nationalist model of the economy based on strong state-owned monopolies, which – having no competition – guarantee big profits for politicians. However, this is harmful for the country as it results in slower growth rates and higher prices.
Is this the reason Press Glass has set up its newest factory in Lithuania, although you have long considered Masuria in Poland?
No. There were many reasons, but two of them determined the location.
Firstly, Lithuania is a member of the Eurozone, so they use a global currency in which we operate with a large part of our customers. Secondly, our customers have increasing expectations for lower carbon footprint of the products we supply to them. Therefore, access to renewable energy sources was key. We invested in a photovoltaic farm to give surplus energy to the system in summer and get green energy from the wind in winter, when the solar panels are not as efficient. In Poland, connecting to the system in this way was impossible. That is why we have chosen Lithuania.
You are the largest Polish investor in the United States. Although everyone is very familiar with this market, Polish entrepreneurs rarely choose to invest there, except to buy real estate in Florida. Why?
I do not own real estate in the US. But you should be in the US if you have the ambition to build an international organization. The United States, like any country, has its pros and cons. On the one hand, it is a market of great opportunity because of its size. On the other hand, it is incredibly competitive. I must admit that a few things surprised me there as well. For example, the tax complexity or the importance of cultural diversity. We employ 500 people from more than a dozen nationalities in our two factories in Virginia and North Carolina. We have already invested USD 100 million in the US, and by the end of 2024, we intend to invest a total of almost USD 250 million. And I really encourage other entrepreneurs from Poland to try to conquer the American market.
What is driving business for you there?
Our product and the changing expectations of customers who are paying more and more attention to modern architecture, workplace quality, ecology and energy savings.
The situation in the US was quite specific. In New York – the largest market for commercial glass – its manufacturers had to deal with an extremely strong concrete and cement lobby for a long time. They were blocked. The effects are easy to see by walking around Manhattan and looking at how the older office buildings were built there. But at some point, the comfort of buildings with large windows and access to lots of natural light took over. We entered this market as the transformation in the design of modern workspaces accelerated.
At Press Glass, we specialize in double glazed units with a low heat transfer coefficient. This protects interiors from overheating in summer, while in winter, it insulates well against the cold. As a result, our glazing not only significantly increases comfort, but also reduces energy demand. The high sound insulation achieved by the asymmetry of the glazing and the use of laminated glass with sound reduction interlayers is added to this.
What does Press Glass want to be like in 5-10 years?
I am a long-term thinker, but in the company we do not make strategic plans for several years, with specific revenue or investment targets, which large corporations are so fond of. They may be nice in the beginning because you seemingly know what you have to do, but over time they start to weigh you down. You become attached to certain goals and this starts to limit you.
The idea is to fit into the trend of building “agile” organizations? Agile and easily adaptable to the changes going on around you.
I think this has paid off well in our case. There has not been a success story like Press Glass in the glass industry worldwide in recent decades. For me, the long-term development of the company was important. This is how I try to function in other areas as well. One of them is supporting NGOs and think-tanks.
Unlike the dominant trend among Polish entrepreneurs, giving money to various, obviously important charitable causes related to material aid, I primarily invest in ideas. You have to wait a long time for the effects, but I believe that economic and civic education, social change towards greater support for freedom, including economic freedom and the rule of law, will benefit Poland in the future. That is why I decided to create the Economic Freedom Foundation, and for many years I have supported the Civil Development Forum [FOR] founded by Leszek Balcerowicz.
Investing in ideas is not a common case in Poland. Please, explain how this works.
I will use the British example of Antony Fisher, the RAF fighter pilot who fought during the World War II and was also an entrepreneur.
In 1945, he was inspired by reading “The Road to Serfdom” by Friedrich Hayek, an Austrian economist teaching at the London School of Economics. During their meeting, the future Nobel laureate discouraged Fisher from pursuing a political career, convincing him to commit to the side of supporting the idea of freedom in society. With the money he earned in business, Fisher created the Institute of Economic Affairs, a think tank promoting free-market solutions.
Over the years, many politicians have been distant from the IEA’s recommendations. But one person who listened strongly to what they were talking about was Margaret Thatcher. When she took over in 1979 in a recession-ridden Britain to bring the country and the economy back to greatness again, she thanked Fisher, saying: “You created the climate of opinion which made our victory possible.” This shows how important it is for economic reforms to patiently foster certain ideas in the society and in the public debate.
Konfedereacja [Confederation] political party is most loudly boasting economic liberalism. How do you perceive their program?
As a whole, it is harmful. Some people take a very selective approach to their demands, picking up only what they like.
This is probably what supporters of most political parties do.
But the Confederation is such a disco polo-style “liberalism” [disco polo is a type of Polish urban folk dance-pop music – editor’s note]. Its leaders and members are unpredictable and change their views every now and then. You cannot tell when they are serious and when they are making fun of voters. What should worry any sane voter is their anti-EU stance. Although they are now trying to soften the message, they have many candidates who oppose Poland’s presence in the European Union or even its existence. Continuing to push Poland to the sidelines of the EU, which we are already seeing under the Law and Justice government, would be costly.
Moreover, Polexit would be a disaster – primarily because of the gigantic benefits lost from being in a huge free trade zone. I have five factories in the UK and I directly observe the country’s problems after leaving the European Union – there is a growing frustration in the people there. And we are talking about the UK, a country with a much stronger economy than Poland.
Are the upcoming elections important?
Crucial. It is not just a matter of choosing between one politician and another. It is a matter of choosing what Poland will be in the future and what development path we will follow. Will we be an open, tolerant country, focusing on economic freedom, the rule of law, entrepreneurship, industriousness, and good relations with EU partners? Or will we continue to close ourselves off, increase regulation and fear, strengthen politicized state-owned companies at the expense of the private sector, and quarrel with everyone in the EU? I am getting involved because I care about the former path.
Your name tops the list of this year’s contributions to Platforma Obywatelska [the Civic Platform] political party. Aren’t you afraid of posting political views?
If private donors to political parties were to be afraid of this, it would mean that democracy and freedom of speech are already very bad. This is something we should not allow to happen in Poland. Not only did I make a donation, but as a patriot, liberal, and European, I will vote for the Civic Coalition [coalition of the Civic Platrofm, liberal Nowoczesna, the Greens and center-left Polnad’s Initiative – editor’s note] this year to stop the damage being done to the economy, the rule of law and Poland’s position in the EU. I encourage others to do the same.
Arkadiusz Mus, entrepreneur, Chairman of the Board of Press Glass Holding, founder of the Economic Freedom Foundation
This text was originally published at Forbes 9/2023 issue. Arkadiusz Mus was interview by Piotr Karnaszewski and Filip Kowalik.