Discordia was established in 1992 in Varna with two trucks. Thirty years later the company has a fleet of 1,200 trucks transporting cargo throughout the Balkans and all of Europe. Its revenues for 2021 reached 259.3 million levs, up 50% year-on-year. That growth rate is not surprising for a company that expands its business by 35% on average each year. Discordia also has impressive ambitions for the future. It aims to rank among the top 10 transport and logistics companies in Europe by the end of the decade. To achive this, its revenues have to increase 8 times and reach 1 billion euro (2 billion levs).
Among the goals is developing its logistics capacities at the same pace as its transport activity. Discordia also looks to buy European logistics companies. The other main task for the company is to change the reputation of the entire sector and to make it attractive.
Two trucks and grandpa's house
The business started in 1992 with 100% credit for the purchase of two trucks from the Madara plant in Shumen, and two trailers. Key support comes from founder Hristo Hristov's grandfather, who secures the loan with his village house and vineyard. The next important step was taken in 1994 when logistics was added to the transportation business.
In 1999-2000, Discordia was included in a program for strategic restructuring and financial consulting assistance under the European Union's pre-accession financial instrument PHARE. In 2000-2001, three main changes occurred. First, Hristov realized that a management information system, ERP must be found, and in 2006, after using two cheaper local solutions, the company chose an expensive, well-functioning system.
"The second thing was that we started budgeting and planning for the first time," says Hristov. The third important change was the relocation of the office to Sofia.
"There's the main truck road connecting Europe to the Middle East. Also, in Sofia we could count on attracting young talents and ambitious young people," says the manager. The next important event was Bulgaria's entry into the European Union in 2007.
"Our market grew 300 times in one night and then I found out that we could radically change the scales of our goals and ambitions," Hristov recalls. So the company began to look for a model for rapid and sustainable growth with constantly improving profitability.
A few years later, in 2012, the company launched a program for attracting key managers to its shareholding structure. "We started with two or three. Currently, there are already 50 shareholders who are managers in the company", says Hristov, adding that his expectations are for at least 100 at the end of this decade.
In 2012, Discordia also made a deal with Volvo for 40 trucks. The leasing model was innovative - a hybrid between finance and operating leases. The haulier makes an initial payment, then pays a monthly lease fee, and can return the trucks to the lessor after three years and get new ones without making an initial investment.
As of 2012, there were 70 Discordia trucks. Currently, the fleet consists of 1,200 truck and the number will reach 1,300 by the end of the year if the manufacturers produce them on schedule. In other words, the company has grown more than 15 times in 10 years. The average annual growth rate is 35%, Hristov calculates.
Currently, the company works with Volvo, Scania and DAF for trucks, and with Schmitz, Kogel and Krone for trailers. "We are also in close communication with other manufacturers," adds Hristov. Among the main policies is the outsourcing of activities. The maintenance of the trucks has been entrusted to the manufacturers since 2012, and the fuels are outsourced to Shell.
The road to Europe
Previously, the company was more strongly focused on transport in the region. Currently, the Balkan fleets are almost equal to the European ones and the focus is on greater growth of the European network (Italy - England, Spain - England, France - Germany, the Scandinavian countries).
"At the time, we had a very small fleet in Europe. Now the growth rate is 2-3 times higher compared to the Balkan fleet," Hristov estimates.
The company looks at Europe also in logistics activities. As a share of revenue, transportation in Discordia accounts for 75% of the business, and logistics activity for the remaining 25%. The goal is for logistics to catch up with transportation, which is already growing by the same rate.
"However, I don't know if it will be able to compensate for this lag alone and here we would think about acquiring logistics companies in Europe and especially in the large logistics markets," says Hristov.
The company has already made an offer to a German company that was not accepted and is now looking at new opportunities. "The German market is the largest and we make most of our sales there. For 2021, we have sold in 59 countries, over 30 are in Europe, but Germany is number one", Hristov explains.
The pandemic did not prevent Discordia from achieving its typical growth rate. What's more, already in the second half of 2020, after the implementation of a process improvement project, it reported 26% better efficiency compared to the second half of 2019. In 2021, the company's revenue grew by 50%, well above the average annual growth rate of the past 10 years. Hristov attributed the higher rate of increase chiefly to the low comparison base in 2020 and postponement of investment.
In 2022, the company reported a jump in revenue of more than 50%, but the real growth of the business was 35%, with higher fuel price and other increased costs accounting for the remaining more than 15%.
€1 billion target
The company plans its growth to continue till the end of the decade. According to Hristov, this goal is quite realistic and Discordia is prepared.
"This means that revenues through organic growth will exceed 1 billion euro," says Hristov. "At the same time, the goal is for the operating profit to be at least 100 million euro at the end of the decade," he adds.
These revenues do not include the turnover that would result from a possible acquisition of more than one logistics company in the most developed and largest markets in Europe. ***They (who are 'they'? нещо не ми се връзва с предното изречение) can be in all directions - groupage transport, multimodal, sea, air, rail, to achieve the desired balance between the two main activities of Discordia.
To cross the threshold of 1 billion euro by 2030 the company will invest in both staff and facilities.
The planned investments by the end of this decade amount to 750 million euro, of which 200 million euro worth of own funds. The remainder will consist of borrowed capital.
The number of employees in the company will rise to 10,000 from 2,000 now, of whom 1,600 are drivers.The goal is clear - Discordia aims to become one of the 10 largest and most successful transport and logistics companies in Europe, says Hristov. "Now we are somewhere at the foothills. We are going on a hike, but we are well-trained," he believes.