Europe is losing to China and the US. "We have to protect our market. We have already lost many sectors"

In the era of the new trade war, our position seems to be lost. - Is Europe united in competition with the superpowers, or is it completely fragmented? Can an EU company count on any support from Brussels in the fight against competition from outside the Union, or will it stand up for a European company in expanding into the American market? - asks Tomasz Domogała, owner and chairman of the supervisory board of TDJ.

• - The EU economy has enormous potential - let's recognize it, protect our market and use our own potential for the good of EU residents - appeals Tomasz Domogała in an interview with WNP.PL.
• The owner of TDJ emphasizes that we must do everything to protect our internal market from growing competition, especially from Asia. - Many sectors have already been lost by Europe. Are we ready to lose more? - asks Tomasz Domogała.
• - I am glad that I am talking to WNP.PL, a portal that constantly monitors the Polish industry and understands it very well, because this is the time when we should start saying out loud that supporting local production is of fundamental importance - he sums up.
• The WNP.PL portal celebrates its 25th anniversary this year. The special anniversary project " 25 for 25 WNP.PL " is a series of conversations with 25 people who have co-shaped and co-shape the economic image of our country in a noteworthy way. The series finale is planned for the European Economic Congress (April 23-25, 2025).

WNP.PL is celebrating its 25th anniversary. A quarter of a century of the portal is not much compared to the history of TDJ, which dates back to the 1970s. The company was founded by Jacek Domogała, and Tomasz Domogała took over 15 years ago in 2010. These are two completely different worlds for business. Which of the gentlemen had it easier?

- Time flies very quickly and it's hard for me to believe that I've been managing TDJ for 15 years, and WNP.PL is a quarter of a century old!

To answer the question of who had it easier, I definitely think it was me. Looking at the last 250 years of Polish history, we are lucky to live in the best decades of the quarter-millennium - we should appreciate that.

However, it was your father's time that is seen as pioneering in Polish business. It was then that today's fortunes and big businesses were born…

- My father took his first steps in business in the late 1970s. A very strong entrepreneurial gene made him push towards business despite the entire system, which at that time persecuted every private initiative. At that time, the regulations allowed a private employer to employ a maximum of 10 employees. Increasing employment required special administrative approvals. So my father joined forces with his brothers, thanks to which they could build a larger enterprise together. Business was done despite the system.

Looking at today's free market and freedom of activity, our biggest challenge is facing strong competition and high volatility - we have no right to complain.

As entrepreneurs, we can freely breathe the air of free Poland, and our work is increasingly appreciated.

In the United States, there is a cult of entrepreneurship. This awareness is also slowly emerging in Poland. A businessman is no longer a huckster and a sly guy from the 90s, but a person who creates jobs, builds complex organizations, develops technologies, invests in the development of the skills of his own employees and serves customers in the country and abroad . With all this, he builds not only his own company, but also contributes to the growth of the prosperity of the entire country. Additionally, philanthropic activity is starting to be visible, entrepreneurs are getting involved in social projects, which makes me very happy.

So let's talk about today's challenges. You mentioned competition. What does competitiveness mean to you in the current, difficult geopolitical situation? The end of globalization is predicted, there is more and more protectionism around us, less and less free trade. Should business be protected by the state? Does it need non-regulatory support?

- This is an important issue today from the perspective of further rapid development not only of our country, but also of the whole of Europe. Systemic support and creation of business-friendly regulations are important for the development of the economy. However, it is worth noting that it has already started to appear.

As a company, we have already used various types of real support mechanisms many times, such as those offered by the Polish Development Fund, KUKE, BGK or R&D subsidies. A good example are PFR programs, such as the Foreign Expansion Fund, which helps Polish companies develop outside the country. PFR also supplies the financial market through investments in private equity or venture capital funds. This is necessary because it makes it easier for entrepreneurs to access capital.

We use these programs, of course you can want more, but let's appreciate that this support is there.

So our business environment isn't that bad?

- Please allow me to finish my statement (laughter – editor's note). You drew attention to the ongoing geopolitical changes, the twilight of globalization. In such an environment, without state support, it will be increasingly difficult for Polish companies to break through.

Look at how the US Presidential administration operates, conducting economic diplomacy and helping American companies win arms or nuclear contracts. China supports the export of its own producers and finances them in a way that is incomparable to ours. This is how global companies are created that represent the economic interests of a given country.

And here fundamental questions arise: is Europe united in this competition with the superpowers, or is it completely fragmented? Can an EU company count on any support from Brussels in the fight against competition from outside the Union? Will the European Union stand up for a European company in its expansion into the American market? And the most important question – do we really care that Chinese companies are conquering our domestic market and do not want to support our own companies there?

I am glad that we are receiving support at the national level, including of course EU funds, but today the game is global and powers such as the United States or the BRIC countries (Brazil, Russia, India, China - editor's note) are strengthening their position on the geopolitical map of the world.

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At the same time, a divided and often internally conflicted Europe is doing little to build the strength of European companies in the intercontinental arena and, worse still, is failing to protect its own market.

In the EU, we have a free trade agreement, but another step towards integration is needed, especially since the European Union has a huge internal market - 450 million inhabitants, 100 million more than the US, and GDP measured in purchasing power parity at almost $65,000 per person , the same as it is per capita in the US.

So what does the future hold for European industry, including Polish industry? What should we do to ensure that Europe does not end up on the sidelines of the global economy?

- This is the moment when we need to start talking very loudly about local content. Looking at the geopolitical situation, I believe that there is unfortunately no turning back from the aforementioned protectionism in Europe, although I would like it to be different.

Europe should be strong enough economically and technologically today that companies from our continent should win contracts all over the world without any support. Unfortunately, this is not the case - for the last 20-30 years, Europe has been systematically losing competitiveness to its rivals.

I am glad that I am talking to WNP.PL, a portal that constantly monitors the Polish industry and understands it very well, because this is the time when we should start saying loudly that supporting local production is of fundamental importance . We should locate as much of the supply chain as possible here.

But how to do it? The EU actually prohibits preferring suppliers based on country of origin…

We must do everything to protect our domestic market from growing competition, especially from Asia. Many sectors have already been lost to Europe. Are we prepared to lose more?

Europe has neither its Google nor its Microsoft, in the AI ​​race it was the first to apply the brakes. Similarly, we gave up the entire green energy segment almost without a fight. We have no photovoltaic manufacturers, we also import inverters from China, we tried to create a European battery champion and we see what happened to Northvolt.

And we are talking here about modern branches of the economy, because we had already consciously abandoned the traditional ones by locating production outside Europe.

Even when we talk about coal, our perspective is distorted by European policy. We want to eliminate coal completely from the energy mix , while its extraction in the world is growing every year, and the International Energy Agency is correcting upwards its forecasts of global demand for this raw material, which according to the latest data will reach over 9 billion tons in 2027. This is because it is an optimal stabilizer of the network in the energy mix, even one strongly based on renewable energy sources.

A good example of the absurd actions of the EU is the automotive sector. Europe was a powerhouse in traditional motoring, but we missed the revolution of electromobility, and then we introduced the most ambitious decarbonization goals, assuming the withdrawal of combustion engines, without building a local value chain for electromobility. As a result, European automotive production is going through a huge crisis, which is felt most painfully by Germany, while we are switching to American Tesla and Chinese BYD, MG, Jaecoo, Omode and others.

The closest example for Silesia is the recent tender for the purchase of electric buses by the city of Katowice. The city, in accordance with public procurement law, chose the cheapest offer and bought 30 Chinese buses for PLN 117 million. I understand that the offer was lower by about PLN 3 million, but this money will go to China, instead of going to Solaris located in Poland and the Polish Impact, which produces batteries for it. This money will not return to the state in the form of taxes (even employee taxes) paid by these companies.

Interestingly, this purchase was financed from KPO funds. Can we really afford to allocate funds from the National Reconstruction Plan to strengthen Chinese companies at the expense of our own? Are we really "rebuilding" our country by buying Chinese equipment? Don't Polish companies deserve support because they pay taxes here? Because first we impose high taxes, minimum wages, ESG and CO2 emission costs on European companies, and then, when European companies are a bit more expensive, because of the above regulatory and bureaucratic factors, we decide to give business to companies from outside Europe that are not burdened with these regulations. Where is the sense in this?

Unfortunately, this is not an isolated case. In 2024 alone, European cities such as Athens, Madrid, Budapest and Turin bought buses from Chinese suppliers.

You listed the sectors we have already lost. Where does Europe still have a chance to fight for its place?

- In my opinion, we should not give up, even in those areas where we have already lost our primacy - it is primarily a matter of creating competitive conditions for conducting production in Europe . When it comes to sectors in which we should be particularly determined to strengthen our presence and independence, it is of course defense . We are able to produce weapons in Europe based on our own technological thought and production capacity. In addition, wise investment of funds in the development of technology on our continent is in our strategic interest.

This is an area that, in my opinion, is a field for cooperation between state-owned companies and private capital, in order to increase the number of entities and increase competitiveness in this market sector as well. Of course, while maintaining appropriate regulations that, given the specificity of the arms sector, will ensure appropriate security.

Another huge market that we should fight for are technologies related to energy transformation . It is worth betting on local content here and not accepting that their origin does not matter.

The energy sector was, is and will be the most strategic branch of the economy of each country, which defines our independence. The competitiveness of our economy depends on it, because the price of energy is included in every product.

We started the conversation in the 1970s. At that time, Polish energy was based exclusively on coal. We had domestic resources, almost the entire supply chain was Polish. We were able to design and build a power plant and a mine. We also had a strong mining machinery industry, i.e. our own technology and production capacity. We were able to produce energy ourselves. The entire value chain was Polish. What's more, we were able to export it - from machinery through mining technology.

Today we know that the impact of coal on the environment is negative, but from an economic perspective it still gives us independence. We are taking part in the energy transformation, we know that the role of coal will be minimized, we are entering new sources of generation and – unfortunately – we have the entire supply chain outside the country. We buy photovoltaic components in China, windmills in Germany, nuclear from France or the States . Gas power plants do not give us energy independence. From this point of view, the inevitable zero-emission transformation will reduce the competitiveness of the Polish economy. Therefore, there is a huge space to fight for the participation of the Polish industry in this transformation.

But are we still able to enter this race when – as you yourself pointed out – the market is already dominated by others?

- We will probably never be able to compete with China in terms of costs. We are losing technologically, for example, to the Americans. Therefore, it is a very good question whether we have a chance to exist in the value chain of the energy transformation?

You are talking to an entrepreneur who has his feet firmly on the ground and has no illusions about our chances in this competition, but I believe that we should still find our niches in this chain. At the same time, we should fight for the interests of Europe . The EU economy has enormous potential - let's see it, protect our market and use our own potential for the good of EU residents. With such great opportunities, will we not find our niches?

What niches might these be?

- Energy storage technologies are a good example here. In the coming years, we will face huge, multi-billion investments. While we will buy a significant part of the cells for these storage facilities from Asia anyway, are we ready to give up the role of producer?

Here, there is considerable know-how and IP, control over BMS and EMS systems, which will soon be supported by AI for even better optimization, as well as the entire cybersecurity layer of these warehouses. Do we really care where it is manufactured? Because if it is not, and it should not be, then we must support European companies, including Polish ones, so that they can exist in this sector. We should take care of appropriate preferences for Polish producers, pay attention to local content, so that our companies are beneficiaries of this transformation.

In addition to energy storage, we – as a company – are joining the fight for the share of Polish industry in wind technology – we want to build a Polish windmill. We are aware that the competition here is strong, that entering this market is difficult, but we have a certain idea for a niche in this market, which we will try to fight for. Here, the state certainly has a role to play, to create a support system that will help local producers appear or strengthen on the market, thanks to the preference for local content.

Support will not solve the problem, innovations are needed, and Poland is not doing so well. Polish companies' spending on research and development has lagged far behind other countries for years…

- Polish industry has historically been relatively uninnovative. But fortunately this is changing and the expenditure of industrial companies on research and development has doubled over the last 10 years. I think this is simply another stage of natural development. After a period of conquering the market, building capital and production capacity, the time has come to compete with technology, which will naturally force us to invest in innovation and translate into further growth in expenditure on research and development.

We are talking about a mature business, but what is the condition of Polish innovators? TDJ, as part of its Venture arm, invests in young innovative businesses, so it has its own experience…

- This market is still very immature, unprofessionalized and there are still many failed investments and many business failures to come. This is part of the necessary learning process.

The startup market in Poland was built using the venture capital system of institutions such as NCBR or PFR. Without this public money, the market would not exist at all. However, this meant that we had to go through many painful experiences and failed investments in startups that did not understand business because they were dependent on public funds or investors.

In Poland, we have had the first wave of great enthusiasm, and now considerable disappointment. Now it is time to create healthy businesses. I am convinced that many competent and professional players will appear and we strongly support and encourage the best. I consider the fact that this market has been built in the last decade, despite mistakes, to be a plus.

We are talking about how to improve the business environment in Poland, increase the competitiveness of our economy, so we cannot avoid the currently so loud topic of deregulation. What requires urgent change and how to efficiently carry out this process?

- We have an overregulated market at both the European and Polish levels. This limits our entrepreneurship, speed and freedom of action, the ability to make decisions, and our appetite for risk.

A good answer to your question is the initiative initiated by Prime Minister Donald Tusk and continued under the leadership of Rafał Brzoska . I am very glad that we managed to unite in action so many groups of entrepreneurs and our strength lies in the fact that we speak with a strong, common voice.

We have delegated seven experts from labor law, public procurement to education to work on this project, so that they can contribute to the joint effort of deregulation. We hope that this will bear fruit. The move in which the government invited entrepreneurs to dialogue and asked what hurts us or how we can relieve our burden is certainly good, which is why we support it.

In addition to deregulation, there is another issue that is a thorn in the side of Polish entrepreneurs. It is the level of interest rates. I have the impression that the times of serious inflation are already behind us and it is worth following in the footsteps of the ECB (European Central Bank - editor's note) or Switzerland and starting a cycle of reductions.

In my opinion, monetary policy in Poland should take into account the development of domestic business more.

This is not the first deregulation initiative by governments of various political persuasions. Janusz Palikot tried with his commission, Jarosław Gowin also made an effort to reduce bureaucracy. Why should it succeed this time?

- You are talking to an entrepreneur, not a politician. I try to know business and I can tell you what is preventing us from acting. However, regulatory actions are the domain of politicians and they are the ones who should be asked if this time it will work and encouraged to do so.

We started the conversation from the beginnings of TDJ, which were strongly connected with industry, and the hardest one, namely the mining base. How has the Polish industry changed from the perspective of a company that today has a very diversified business, but still has an industrial DNA, and what does the future hold for it?

- I believe that we underestimate what we have left in the areas of mining and metallurgy. We still believe in the industry and believe that it should continue to develop in Poland and Europe.

We should not agree to the complete outsourcing of heavy industry - the fact that it will be conducted outside Europe will not reduce the global carbon footprint at all, it may be quite the opposite. That is why such initiatives as the new rolling mill in Siemianowice Śląskie built by Cognor Przemysław Sztuczkowski are strategically important for the Polish economy and require support.

This may sound unpopular today, but Polish mining is still building our energy independence and stabilizing the system. Of course, it is a very emission-intensive sector, which is associated with huge tax costs, but we cannot give up coal overnight. We also do not see the importance of mining for the defense industry. In this context, it is worth mentioning JSW and its strategic role as a key supplier of coke in Europe, necessary for steel production.

I am a passionate advocate of transformation, TDJ invests in renewable energy sources, energy storage, we are working on Polish wind turbine technology and we are ready to take the risk of developing such products. But at the same time, let's appreciate the industry that is still there and we should not be too quick to write it off.

I consider what is currently happening in Polish hard coal mines, where employment is being reduced through attractive voluntary redundancy programs, to be a mistake. In this way, the best will leave the mines, who will easily find work in a new place. In this way, we are weakening an important branch of the Polish economy. Considering the currently low unemployment rate, mining plants should have the comfort of decision to be able to keep the most valuable employees in their staff, and this program will not help with that.

But there is no turning back from transformation. The EU has no intention of abandoning its climate ambitions…

- I am for transformation, but let it be a well-thought-out transformation with appreciation for what was and still is to some extent. And let it be a planned transformation that will give people time to prepare for the change.

We certainly shouldn't cut off the branch we're still sitting on, at least not until a new branch has grown that we want to switch to. Otherwise, we're in for a painful fall. We should first start a nuclear power plant and then we can calmly implement a program of voluntary retirements from the entire conventional energy chain. Doing it in reverse is dangerous.

Coal will one day become history, but will the industrial, mining-related part of TDJ's business also end then?

- This sector is very close to us both in terms of business and emotions, because it is part of our history. However, all employees can be convinced that they are part of a group that can find its way in this transformation and is doing as much as possible to use the competences built over the years.

And can export markets outside the EU, where coal is still doing well, be an opportunity for Famur's technology-developing mining sector?

- The largest export market for Famur was Russia. After the war in Ukraine broke out, we lost this market and we see no chance of rebuilding it, even when this conflict ends. In other countries, we have a huge expansion of Chinese producers, who unfortunately have monopolized many foreign markets, now also the Russian one.

That is why at Famur we are building new competences that are a response to the challenges of transformation. When there is no longer a need for mining combines, we want to produce and service wind gears.

Finally, about social activities. Your philanthropic activities are focused on education. Why?

- It is the result of personal conviction and experience. I was lucky that from a young age my parents instilled in me a respect for work, entrepreneurship and responsibility - and above all a belief that education is the key to the future, which I was able to experience in several fantastic academic centers. It made me realize how much potential lies dormant in young people - if they are provided with the right conditions.

Today I know that investing in education is one of my most important tasks. It may sound like a cliché, but the future starts today – that is why we must invest wisely in the development of young people. Why education? Because it is the foundation of everything.

Strong societies and strong companies need people with open minds, well-developed competences and clearly defined values.

That is why our programs are aimed at both children and teachers, and in cooperation with parents and business partners we create a system that really supports the development of the young generation. As entrepreneurs, we have not only the opportunity, but also the obligation to engage in this process – through resources and practical knowledge.

I am glad that we can implement our projects together with other entrepreneurs. Thanks to this, together we will achieve a greater and more lasting effect.

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