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11 Slovak companies make Top 100 CE list

11 Slovak firms have made it into the 1996 list of the top 100 Central European companies, published by the international auditing firm Deloitte & Touche. Their standing brings both good news and bad news about the country's economy.
The good news is that Slovakia, whose market size is half of Hungary's, squeezed in the same number of firms as its southern neighbor.
The bad news, however, is that while Slovakia's presence on the list has increased from nine corporations in 1995, mostly due to Volkswagen's improved performance and VSŽ, which had two of its companies make the list, a majority of the listed Slovak firms recorded stagnant or declining performance figures for 1996 compared to the year before.

11 Slovak firms have made it into the 1996 list of the top 100 Central European companies, published by the international auditing firm Deloitte & Touche. Their standing brings both good news and bad news about the country's economy.

The good news is that Slovakia, whose market size is half of Hungary's, squeezed in the same number of firms as its southern neighbor.

The bad news, however, is that while Slovakia's presence on the list has increased from nine corporations in 1995, mostly due to Volkswagen's improved performance and VSŽ, which had two of its companies make the list, a majority of the listed Slovak firms recorded stagnant or declining performance figures for 1996 compared to the year before.

Just as in 1995, the list continues to be dominated by the Visegrád four countries, led convincingly by Poland with 41 and the Czech Republic with 24 corporations represented. Romania contributed 7 companies, Slovenia 4 and Yugoslavia 2 firms to round off the list.

While explaining Polish dominance unambiguously by pointing to the size of the country's economy, Dennis Albertsen of Deloitte & Touche in Bratislava couldn't account for the fact that both Hungary and Slovakia feature 11 companies in the 1996 list. His colleague, Martin Chyla, looked for reasons in each country's approach to structuring its economy.

"It depends on the legal and tax environment in each country," Chyla said. "Another reason may be the relation between the government and companies, whether the government encourages big companies in its country or whether the legal environment gives smaller companies better benefits. It can be said that yes, we in Slovakia do support big companies."

Certain trends are clear from the basic list, in which companies are ranked according to revenue. "I think it's the most realistic picture we can get in this region," Albertsen explained. "It's very difficult sometimes to get trustworthy numbers on assets. [Especially] when the company is state-owned, the numbers might not be actual, but rather official numbers." One glaring trend to be found in revenue-based growth rates is that most listed Slovak firms recorded stagnant or even negative growth figures in 1996 compared to the year before (please see Chart No.2), the only two companies recording significant growth being Slovenské telekomunikácie (22 percent) and Volkswagen Slovakia (No. 55 in 1996, while not ranked the year before).

If VSŽ had stayed intact, it would have ranked fifth in the region overall. However, other Slovak economic flagships on the list seem to have water pouring into their lower decks as well, recording growth figures ranging from a meager 2.6 percent to -8.1 percent.

The 1996 list also shows to a certain extent that, unlike other countries in the region, the Visegrád countries have the infrastructure necessary to support the industrial giants. "In essence, [the Top 100 Companies list] confirms what we already know of Central Europe, that the countries with the strongest economies, like Poland, the Czech Republic, Hungary and Slovakia, all have the infrastructure to support the largest companies," said Tom Flanagan, CEO of Deloitte & Touche.

Chyla explained that the Top 100 list was an indication of the sectoral changes occurring in the four countries' economies. He said that trading companies made a big jump within the list, increasing their share from 6 percent in 1995 to 25 percent in 1996, while two construction companies made it into the list for the first time, reflecting the continuing infrastructure and commercial development in the region.

"The region's businesses seem to have realized that if they want to sell abroad, it's not so easy to enter the market and sell, but they understand the need to ask for advice from a big trading company," Chyla said. "Certain countries have been pretty stable in the Top 100 list, while others have had their ups and downs," Albertsen added, referring to Bulgaria, whose nine companies on the 1995 list disappeared completely from the 1996 list. "Therefore, countries like Poland, the Czech Republic, Slovakia and to certain extent Hungary, are the ones we consider to have the best infrastructure and a very controlled, if not very good, privatization process. The other countries in the region are a bit further behind."

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