ECONOMY

Outward-looking Greek firms show the way above mediocrity

A small number of listed Greek companies have managed, over the years, to escape the general mediocrity and reliance on the limited potential of the domestic market, and account for the bigger part of their sales and profits from their operations abroad. Greek multinationals are admittedly few and, with the possible exception of Coca-Cola Hellenic Bottling Company (CCHBC), one of the world’s top refreshment bottlers which operates on the model and structure of its giant US parent, cannot really claim the size usually implied by the term. Even firms such as Titan Cement, which has invested significant amounts abroad, including the United States, are overshadowed by foreign rivals. They nevertheless provide a pleasant surprise at a time when the majority of listed firms are facing serious capital problems, hundreds of entrepreneurial ventures have proved ill-conceived, and huge sums raised on the Athens Stock Exchange (ASE) have been wasted on acquiring other firms of doubtful potential. A comparison of parent company and consolidated nine-month results of a number of ASE-listed firms with strong activity abroad reveals that foreign sales outweigh domestic turnover by as much as six times. CCHBC, with group sales of 3.18 billion euros, would have realized only a meagre 506 million had it not expanded its activities to 28 countries, from Ireland to Russia and from Estonia to Nigeria. Similarly, Titan group sales would have been less than half its present 780 million euros had it not spread to the US, the Balkan neighborhood and Egypt. The firm’s nine-month results showed a 5 percent decline in sales, reflecting the strong export difficulties arising from the strengthening of the euro, given its significant sales in the US. Without its presence abroad, industrial refrigerators maker Frigoglass would be a small to medium-sized firm with sales around 40 million euros – a fraction of its present group turnover. Frigoglass has 24 plants, including in Belgium, France, Germany and Sweden, and exports to 16 countries. S&B Industrial Minerals’ group sales are double their national level. It recently announced the acquisition of Bentonit, which is listed on the Sofia stock exchange and is active in the mining, processing and trading of bentonite, zeolite and perlite. Snacks maker Chipita International’s foreign sales, mainly in the Balkans and Russia, match its domestic ones. It has production units in Poland, Romania, Bulgaria, Portugal and Egypt and recently acquired bakeries in St Petersburg, Russia. It has also signed a deal with Pepsico for joint ventures in Latin America. Pipe manufacturer Petzetakis, one of the first Greek «multinationals» due to the pioneering inventions of its founder, seems to be recovering from capital difficulties of recent years. Today, the group exports to Europe, America, Africa and Asia, divided into three operational divisions: Petzetakis Eurohose, Petzetakis Africa and Petzetakis Greece. Phone and IT retailer Germanos reported sales of 495.3 million euros and nine-month group pretax profit (after minorities) of 41.4 million euros. At present, the firm operates 580 outlets in six countries, 290 in Greece, 146 in Poland, 66 in Romania, 46 in Bulgaria, 20 in the Former Yugoslav Republic of Macedonia (FYROM) and 18 in Cyprus. Faux bijoux and fashion accessory retailer Folli-Follie has been a model success story: starting as a tiny firm, its nine-month sales grew 21 percent to 112 million euros, of which 44 million was pretax profits after minorities. It has production units in China, and Asia, particularly Japan, accounts for more than two-thirds of its sales. It also exports to Britain, France, Spain and Poland. Its listing on the ASE gave it access to cheap capital, which it put to good use and its share is now in the portfolios of many foreign institutional investors. ASE listing also gave a big boost to aluminium profile manufacturer ALCO, which in 2000 acquired 51 percent of Germany’s Hermann Gutmann Werke. Nine-month group sales were 91 million euros, of which only 17 million was accounted for by the domestic market. Significant investment in other Balkan countries and expansion in the Middle East have also changed the profile of sausage maker Nikas, which reported nine-month sales of 87.3 million euros. Greece’s biggest exporting group, in the metallurgy sector, Viohalco, with recent big investments in Bulgaria, is due to report soon.