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.