Most dy­namic

Top 100 See - - Contents - By Nevena Krasteva

A ma­jor­ity state-owned com­pany, which is un­der­go­ing re­or­gan­i­sa­tion fol­low­ing the launch of in­sol­vency pro­ceed­ings sur­pris­ingly topped the rank­ing of the most dy­namic com­pa­nies among the en­trants in the SEE TOP 100 chart. Af­ter end­ing six years in a row in the red, Ro­ma­nian chem­i­cals pro­ducer Oltchim posted a four­fold in­crease in rev­enue to 697 mil­lion euro in 2015 thanks to debt write-offs, which how­ever are sub­ject to a Euro­pean Commission in­ves­ti­ga­tion.

The com­pany's im­pres­sive 382% in­crease in rev­enue com­pares to a rise by just 63% in the rev­enues of the pre­vi­ous year's win­ner, the Ro­ma­nian unit of French re­tailer Auchan. And while Oltchim's per­for­mance could be seen as dis­tor­ing the over­all pic­ture, con­clu­sions that the race among the most dy­namic com­pa­nies is pick­ing up are fur­ther sup­ported by the fact that the top five po­si­tions went to com­pa­nies that posted sharper rises in rev­enues than Auchan's per­for­mance a year ear­lier. The thresh­old for en­try into the rank­ing too has risen.

How­ever, whole­salers and re­tail­ers ex­panded their dom­i­nance of the rank­ing, push­ing in 17 en­trants ver­sus 11 a year ear­lier. This is hardly sur­pris­ing, given that ris­ing con­sump­tion is one of the main driv­ers of the re­gion's ac­cel­er­at­ing eco­nomic growth. Even less sur­pris­ing is the fact that more than half of all whole­salers and re­tail­ers in this rank­ing op­er­ate in Ro­ma­nia – the re­gion's big­gest mar­ket and top eco­nomic per­former, which posted a 3.7% GDP growth last year mainly on the back of house­hold con­sump­tion.

Ro­ma­nia's eco­nomic strength is also ev­i­denced by the fact that the coun­try had 31 rep­re­sen­ta­tives in the rank­ing, up from 28 a year ear­lier and way ahead of the run­ner up Ser­bia with six and Croa­tia with four en­trants.

Ser­bia's elec­tric­ity dis­trib­u­tor EPS Distribu­cija, a fully-owned unit of the coun­try's state-owned power util­ity EPS, ranked se­cond thanks to a 182% in­crease in rev­enues. An­other EPS unit, elec­tric­ity sup­plier EPS Sn­ab­de­vanje, too made it into the rank­ing. Ear­lier in 2016, EPS Sn­ab­de­vanje merged into EPS as part of the lat­ter's re­struc­tur­ing process aimed at im­prov­ing the ef­fi­ciency and prof­itabil­ity of its op­er­a­tions. Key state en­ter­prises in Ser­bia's en­ergy and trans­port sec­tors have been un­der­go­ing much needed op­er­a­tional and struc­tural shake-ups un­der a re­form plan agreed with the In­ter­na­tional Mon­e­tary Fund (IMF).

Elec­tric­ity re­mains well-rep­re­sented in the rank­ing with six en­trants, as many as a year ear­lier. Apart from the two Ser­bian com­pa­nies, the rank­ing saw the en­try of Slove­nia's GEN-I, Ro­ma­nia's Tin­mar – Ind, Bulgaria's public power sup­plier NEK and Ro­ma­nia's Trans­e­lec­trica.

Ro­ma­nian state-owned rail­way in­fra­struc­ture op­er­a­tor CFR, took the third place, stag­ing an im­pres­sive turn­around af­ter five years of fi­nan­cial losses. CFR, which en­joyed 150% growth of rev­enues in 2015, plans to in­vest some 550 mil­lion euro in its in­fra­struc­ture in 2016, af­ter sign­ing with the Euro­pean Commission four fi­nanc­ing agree­ments for mod­erni­sa­tion projects worth 689 mil­lion euro in to­tal. The bulk of the funding, 677 mil­lion euro, will go for a project for the mod­erni­sa­tion of the rail­way line be­tween Brasov and Sighisoara, aim­ing to pro­mote sus­tain­able mo­bil­ity along the Rhine-Danube cor­ri­dor, in­crease the speed of trains and re­duce travel time for pas­sen­gers and freight.

An­other in­dus­try to re­tain its grip on the rank­ing is au­to­mo­bile and car parts man­u­fac­tur­ing with five en­trants. The in­dus­try has been grow­ing steadily over the past years as global com­pa­nies recog­nised the re­gion's po­ten­tial, re­flect­ing a com­bi­na­tion of low pro­duc­tion costs, skilled work­force and strate­gic lo­ca­tion giv­ing ac­cess to strate­gic mar­kets. Man­u­fac­tur­ers of food, drinks and to­bacco prod­ucts too are well rep­re­sented in the rank­ing as four com­pa­nies made the cut. Un­sur­pris­ingly, they are all Ro­ma­nian. The best per­former among them – Coca-Cola HBC Ro­ma­nia – re­ported an 11% rise in sales vol­umes in 2015 with good per­for­mances across all cat­e­gories, fol­low­ing a de­cline in the prior year.

The other three are units of in­ter­na­tional cig­a­rette mak­ers - Ja­pan To­bacco In­ter­na­tional (JTI), Bri­tish Amer­i­can To­bacco Trad­ing and Philip Mor­ris Trad­ing. The to­bacco in­dus­try is the se­cond big­gest con­trib­u­tor to Ro­ma­nia's bud­get, gen­er­at­ing 3 bil­lion euro, or 2% of the coun­try's GDP and 12.5% of all bud­get rev­enues in 2015, ac­cord­ing to in­dus­try of­fi­cials. The in­dus­try also gen­er­ates 4,000 di­rect jobs and 45,000 in­di­rect jobs in Ro­ma­nia.

At the be­gin­ning of 2016, the three com­pa­nies called for an ex­ten­sion of the dead­line by which they have to im­ple­ment a new EU di­rec­tive on the pack­ag­ing and pro­duc­tion of to­bacco prod­ucts, as JTI Ro­ma­nia warned that it may halt pro­duc­tion at its Bucharest fac­tory.

One sec­tor, whose pres­ence has shrunk dras­ti­cally in the SEE Most Dy­namic rank­ing is oil and gas. Only two petroleum and nat­u­ral gas com­pa­nies made it into the chart, as com­pared to 14 a year ear­lier – in yet an­other strong ev­i­dence of the trou­bles that the in­dus­try is ex­pe­ri­enc­ing.

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