- Bulgarian grain trading company owned by Chinese giant Cofco leads the ranking
Grain, accelerated road construction and stepped-up factory operations determine the ranking of the most dynamically growing companies in "K 100" for 2019. Although they do not have a strong numerical advantage, the companies from the three sectors are most numerous in the otherwise colourful picture of this year's ranking among the big companies with growing revenues. A grain trader, Cofco International Bulgaria, is also a leader in terms of growth.
After the tumultuous 2018, the fastest-growing companies keep their acceleration in 2019 but the results are still a bit more moderate. Their revenues rose by an average of 55.9% last year, which is below the growth of 65.7% achieved in 2018, yet remains significantly above the increase reported for 2016 and 2017, 46% and 47% respectively. The comparison with Capital 100 general ranking reveals a similar trend of a slight slowdown.
In the comparison with Capital 100 general ranking reveals a similar slight slowdown. In the top 100, for example, the average increase in business is almost 9% in 2019 compared to 9.1% a year earlier. And in the broader sample of the 300 largest companies in the country, the revenues for the last financial year rose by an average of 8.1%, compared to an increase of 8.4% in 2018. The higher growth rates in the upper echelon compared to the average level for the top 300 are also reflected in their more tangible presence among the most dynamic 50. Thus, in 2019 their number in the group of 50 fastest-growing doubled compared to a year earlier, reaching 18. A notable detail is that this group includes five of the six representatives of the Machinery and Equipment sector.
On the other hand, the second 100 of the 300 largest companies in Bulgaria are losing positions in the group of 50 most dynamically growing, even though companies ranked ranking between 101st and 200th place post the highest average increase in revenue of 10%. Thus, there are 16 representatives of the second echelon among the fastest accelerating companies this year (compared to 28 in last year's edition of the ranking).
The number of companies finding their place among the 50 most dynamic companies is the same in the third hundred. Otherwise, the average result of the companies that occupy places from 201 to 300 in the big ranking Capital 100 is a minimal increase in turnover by only 0.9% in 2019. This underwhelming result stems from the fact that 40 of the companies from the third echelon actually shrank their business in 2019 (compared to 23 among top 100 and 19 in the second hundred).
More large companies found their way into the ranking. This is evident from the data on the total turnover of the top 50 rapidly developing companies. In 2019, it amounted to BGN 16 billion compared to BGN 11.4 billion a year earlier, when (relatively speaking) the smaller ones significantly dominated the ranking of the most dynamic companies.
However, entering the top 50 in terms of growth in this year's edition of the ranking is much easier, since the threshold was lowered significantly - for 2019 it is 21.55%. In comparison, the lower limit a year earlier was 29.6%, and in 2017 a company had to increase its revenues by at least 28.7% to rank among the fastest-growing entities.
The Fastest Among the Fastest
After the record-breaking number of 15 companies that reported a three-digit year-on-year rise in their 2018 revenues, such an impressive result was achieved by only six companies in 2019 - the same number as in 2017. In 2019, however, only one of those six achieved such a stellar rise from a zero base - the leader in the Most Dynamic ranking, Cofco International Bulgaria. The Bulgarian subsidiary of Chinese state-owned food giant Cofco, operating on the local market since April 2018, has become one of the largest grain traders in the country in less than two years. In 2019, its revenues jumped by 606% to almost BGN 400 million, which ranks it among the largest local companies. In addition, the Chinese parent company is buying grain from large Bulgarian traders through its Romanian branch.
In last year's ranking, it was also only the leader - Kostal Bulgaria Automotive, which posted a three-digit increase in turnover from a zero base. The automotive components manufacturer, part of Germany's Kostal group, which started operating in Pazardzhik in August 2017, achieved three-digit growth last year as well, as its revenues doubled after the rise of 329% reported for 2018. The reason for the ongoing boom was the transfer of part of the production from Kostal's Czech factory to Bulgaria, as well as the new projects the Bulgarian plant was awarded. The company has plans for continued growth, which could make it the largest local auto parts manufacturer.
The small group of companies with three-digit growth for two straight years includes The Center for Urban Mobility, the municipal company collecting the proceeds from paid parking services and the sale of tickets for public transport in Sofia. The rapid growth in its revenue in both 2018 and 2019, however, is largely due to a change in accounting policy and expansion of the range of revenues passing through the company.
There is another transport company owned by Sofia municipality among the 50 most dynamic - Stolichen Avtotransport, which last year took over the bus service on some public transport lines served until then by private carrier Karat S. Kostal Bulgaria Automotive and Urban Mobility Center are two of only four companies in this year's ranking of the most rapidly growing ones, in which the average annual increase in revenue from 2017 to 2019 is also measured in three-digit figures.
This group still includes glass container manufacturer BA Glass Bulgaria (former Druzhba Glassworks) and electricity trader Grand Energy Distribution. However, the explanations for their rapid growth are different. In the case of BA Glass Bulgaria the increase is entirely due to a significant rise in turnover in 2019, which in turn is explained by a change in accounting policy - since last year the Portuguese parent group has been invoicing all of its sales through the Bulgarian subsidiary. Thus, revenues grew by 368% to BGN 1.16 billion last year, which puts the company in the second position in the ranking of most dynamic and in 11th place in the national ranking of the largest businesses.
In the case of Grand Energy Distribution, rapid development is a process that started in 2018, when revenues increased by almost 112%. This is a result of a number of factors - winning the public tenders for Kozloduy NPP electricity, reselling the electricity produced by Toplofikatsia Sofia, participating in public procurement for electricity of state and municipal structures and companies.
The top three of the fastest growing corporate giants in the country is complemented by private arms dealer Sage Consultants. Unlike large arms manufacturers, which for the most part posted a decrease in turnover in 2019, the intermediary grew revenue by an enviable 165% to approximately BGN 182 million.
The group of companies that achieved three-digit business growth last year also includes TPP Varna, which at the end of 2017 was sold by its Czech owner CEZ to Sigda - a company, owned by the family of former Transport Minister Danail Papazov. Several months later, the honorary chairman of the Movement for Rights and Freedoms party, Ahmed Dogan, acquired a 70% stake in Sigda. After the change of ownership, the thermal power plant started receiving state contracts for cold reserve capacity, under which it receives money from the state-run Electricity System Operator (ESO). These funds form the main part of TPP Varna's sales revenue, and apart from that, revenues are also generated through an accounting operation related to the spin-off of the port serving the power plant into a new company.
Although their results are more modest, there is another group of companies that are growing steadily and sustainably and for the second year in a row, they find a place in the Most Dynamic ranking. Among them are bicycle manufacturers Cross and Leader-96, which continue to expand their business thanks to the strategic decision taken a few years ago to focus on electric models, demand for which is growing rapidly in Europe, while imports from China are being held back by customs duties. A third bicycle manufacturer - Maxcom, once again achieved a double-digit rate of revenue growth in 2019 but remained just below the threshold for joining the group of the 50 fastest-growing companies.
For the second year in a row one of the most dynamic companies is yet another representative of the Machinery and Equipment sector - the manufacturer of medical equipment BTL Industries, which doubled its acceleration rate last year thanks to the booming markets in Europe, North America and Asia and the introduction of new machines. In 2019, the company decided to build its own factory in Plovdiv.
Varna-based trader and processor of peeled seeds Magic Flame also improved its achievement from a year ago. It continues to invest in capacity expansion and expects growth for the current year as well. The top 50 of the most dynamic companies includes "Corn Trade, the export arm of agricultural firm Agria Group Holding. For the first time Valchedrum-based grain producer Zlatiya Agro and Varna-based Brevis, which produces and trades in sunflower and pumpkin seeds, wheat, barley and rapeseed, enter the rankings of top 300 and 50 fastest growing companies.
Apart from being beneficial for grain producers and traders, 2019 was yet another strong year for the construction business, in which the main growth driver was public procurement contracts, especially those relating to roads. A proof of this is the fact that for the second year the top 50 ranking of the most dynamic companies includes European Roads (former Plovdiv Roads), Motorways - Black Sea (the builder of the section of Hemus highway between Targovishte and Shumen) and state-owned Avtomagistrali. Two of the other three representatives of the group of fastest developing companies in the construction sector for 2019 are also active in the field of infrastructure works - Patinzheneringstroy - T, which also works on the section of Hemus highway between Targovishte and Shumen, and Glavbolgarstroy - Infrastructure Construction. The dynamic group of construction companies is complemented by Glavbolgarstroy itself, the individual revenues of which rose by 50% in 2019.
For the second year in a row, the group of 50 most dynamic companies includes Gabrovo-based clothing company Dzalli, the manufacturer of tobacco products Philip Morris Bulgaria, whose portfolio includes the smokeless product IQOS, as well as Paysafe Bulgaria, which in 2019 regained its leading position in the sectoral ranking of the largest local software companies. A strong year and a place among the fastest-growing companies were achieved by VM Ware Bulgaria, the local division of U.S.-headquartered VMware, as well as the local development unit of German business software group SAP - SAP Labs Bulgaria.
Some of the new names among the top 300 and the 50 most dynamic companies are the importer of BMW and MINI for the Bulgarian market Auto Bavaria, clothing chain LC Waikiki Retail BG and Sofia-headquartered natural gas trader Udinex, which, given its revenues of over BGN 295 million, ranks among the 100 largest companies in the country. At present, the Georgian-owned company is doing business entirely abroad, but this does not exclude the possibility of future operations on the Bulgarian market.
New production facilities are the reason for the growth of the Bulgarian unit of the German manufacturer of air conditioning systems for the automotive industry Behr-Hella Thermocontrol, which expanded its capacity in the industrial zone in Bozhurishte in 2019 due to a rise in the number of customer orders. The producer of crude and refined edible oils Oliva has a new plant in the village of Razdelna (near the port of Varna-West) valued at EUR 40 million, of which EUR 31 million was financed with a loan from the European Investment Bank under the so-called Juncker plan. The owner of Oliva - grain and oilseed trader Buildcom, is also among the 50 most dynamic companies for 2019. The holding company owned by Angel Georgiev reported a consolidated turnover of over BGN 1 billion for last year.
Lidl Bulgaria also passed past the BGN 1 billion revenue mark last year. The local unit of German retail chain reported a 23% increase in turnover to BGN 1.16 billion and gradually bridged the gap to sector leader Kaufland Bulgaria, which like Lidl is part of Germany's Schwarz Group.
The group of 50 most dynamically growing companies includes two more retail chains - Maxima Bulgaria (part of Lithuanian FMCG retailer Maxima Grupe), which operates the T- Market stores, and Bulgaria's Zora-MMS, which has been growing by about 20% for three years in a row, taking advantage of the problems at the former leader in the sales of household electric appliances Technomarket.