No complaints

Q: What is PCO’s position in the Bumar Group?
A: Bumar owns 80 percent of PCO, which over the past years has considerably boosted its revenues – from a net PLN 27 million in 2000 to about PLN 115 million in 2007. This year we plan to net PLN 150- 180 million. I believe we are the most dynamic unit in the Bumar Group, whose overall earnings came to over PLN 2 billion. Compared to this our turnover isn’t exactly overwhelming, but this needs to be looked at from a different angle. Our products carry considerable added value like know-how costs, while the main factor in, say, steel construction are material costs.
PCO is an engineering firm with vast technological potential. In the 1980s we brought out the first fire-control systems for PT-54 tanks in this part of Europe. In 1995 we signed a contract for more than 200 such systems for the PT-91 model.
We have a very good design and research section which allows us to develop our own solutions. On some products we work together with other organizations, among others the Military University of Technology. Our staff also attend international conferences – sometimes, as the sole Polish delegates, as was recently the case in Washington.
Q: You mentioned PCO’s R&D work…
A: A quarter of our crew work in engineering. Our design section uses state-of-the-art software to work out integrated and optical circuits. Our labs run tests on prototypes and serially-manufactured products. We have a thin-layer lab which makes coatings for optical glass. These coatings resemble a sandwich made of different materials which influence the glass, changing its transparency, light reflection, polarization, etc. In our so-called testing station we check night vision products for endurance, acceleration, damage and temperature resistance, etc. Most of the tests, however, are on the light amplifiers which are the heart and core of all such devices. Some of them – for instance rangefinding gear or the universal self-shielding systems on OBRA-3 vehicles – use laser power and are tested in a special laser lab, which in fact consists of a rather long, darkened tunnel. We also have an angling lab and are starting up a lab for testing thermovision cameras. For the past 18 months we have been working on two types of thermovision camera – cooled for vehicles and a non-cooled manual version.
Q: How do you cover the path from blueprint to industry?
A: We can’t afford misguided ideas. Our marketing sections gather data on what our clients want. I myself am a marketer, especially in talks with Defence Ministry officials. We created a precedent when our commercial head went to Afghanistan for two weeks to gather information about how our gear was performing there.
We keep tabs on what other countries’ armies use and try to track down all the novelties shown at trade fairs and exhibitions. PCO staff are almost always present at such events to see what the competition is up to.
Q: And how do you measure up?
A: We can’t complain. What we do have trouble with are some of the deals we’re offered. We may have the means to make something, but if we’re asked to manufacture, say, only 10 items, the whole project becomes unprofitable. Also, the size of a contract largely decided about the technology that will be used. For example with a batch of several-score-thousand night goggles some parts can be made of synthetics, but with smaller contracts aluminium is often cheaper.
Our army’s demands are too high. U.S. troops in Iraq had throwaway night goggles which they discarded after use. If they had them, the Poles would mend them and use them again.
We are also tendering to supply our MU-3 NVDs to Thailand. The equipment we offer here featured black and white vision, a step up from the green display. Nine firms started out in this tender and now it’s only us and ITT.
Q: How much of your turnover comes from exports?
A: We used to sell vehicle periscopes to India, our devices can be found in equipment exported to Malaysia, we also sell two-plane platform rangefinders to Hungary and the Czech Republic.
However, the brunt of our earnings comes from the home market. Our chief customer here are the armed forces, the Internal Security Agency (ABW), the Central Anti-Corruption Office (CBA) and the Border Guard. As of late the army has been showing a rising interest in optoelectronic gear, mainly because of the foreign missions.
Q: You offer NVDs and thermovision equipment, firearm scopes, periscopes, fire control and warning systems, and laser rangefinders. Which of the products sell best?
A: Right now it’s MU-3 night goggles.
At the 15th International Defense Industry Salon in Kielce your MU-3 monocle brought you an Innovation of the Year 2007 award, a European Medal, and a Special Distinction from the Polish Interior Minister. What is so innovative about it?
A: The MU-3 is very popular with our troops. It consists of a number of elements and can be used as a monocle and binocular, it can also be fitted with different lenses and a scope. Another novelty is the “white phosphorus” used to achieve the black-and-white imaging.
Q: Will you bring out a simplified civilian version of the MU-3?
A: We’re one of the few firms in our field in Poland who produce absolutely nothing for the civilian market. We sometimes talk about growing a “civilian leg”, but our experiences in this respect aren’t too positive.
We know how to make civilian products, but not in the technology we’re using now as we must account for each and every light amplifier we use on military gear. This alone, however, would not be an insurmountable problem – we could use weaker and much cheaper amplifiers: the ones in the MU-3s cost PLN 70,000 and the monocles PLN 20,000 each. The real difficulty here is distribution. Neither we nor Bumar have a sales network guaranteeing mass distribution. Another important factor is production scale.
Q: Quite soon you’ll be moving into new offices…
A: We’re leaving our present, 45,000 sqm headquarters which we didn’t even use in full. The new, self-designed object covers 15,000 sqm and there we will be able to manufacture all our products. Until now we had to outsource our rangefinder assemblies to an Israeli firm for lack of adequate production conditions.
Q Your future plans?
A: The most recent draft of our strategic plan provides for raising turnover by means of a modified marketing plan, technical upgrades and enlarging our product range. We plan to continue as the sole producer of our most advanced equipment, but the simpler devices can be outsourced to partners. We’re also planning to change our employment structure and put the main stress on engineering – which is why we’ll employ practically every electronics, IT and precision mechanical engineering graduate.
We hope to gain the funds needed for upgrading our technical pool and developing new products from the stock market, on which PCO intends to make a debut quite soon. We’ve also applied for an extra PLN 25 million under the Innovative Economy Operational Programme to introduce aspheric technology, to which we will contribute PLN 9 million of our own funds, and have submitted a project worth PLN 3 million to the Operational Programme Human Resources.