Newcomers embrace capitalism

THE slumbering corporate bears of eastern Europe will awaken tomorrow to the Big Bang of European Union enlargement as 10 new States become members.

Post-communist countries have swiftly learned the ropes of capitalism and some of the region's companies are now thriving on a global scale.

They may still be small by multinational standards but a number have been able to weather the storm that blew in with the transition to market economies. Two - Slovenia and Latvia - have already become important global players.

With the London Stock Exchange eager to attract listings from the new member States, their names could become a lot more familiar soon. As trade barriers come down, some successful companies are also likely to prove tasty potential for predators.

One of those is Gorenje, Europe's eighth-largest maker of white goods, which is harbouring its own ambitions of growth with a plan to expand its exports to the UK. The company is Slovenia's largest manufacturer and the country's biggest net exporter.

It makes two million household appliances annually, of which 93% are exported. Gorenje controls 70% of the Slovenian market and has been branching out into Europe. The group had net sales revenues of e826m (£552m) last year.

The company was founded in 1950 when the production of small stoves began in the town of Gorenje. Its first export order came from Germany in 1961. Ten years later, its first subsidiary was set up in Munich. It is now doing business in more than 60 countries.

Franjo Bobinac, who became Gorenje's chairman in 2003, aims to put the company among the top five in Europe by 2006 with e1bn in sales in the next three to four years.

In Latvia, merchant marine and transportation group Latvian Shipping Company has the fifth-largest tanker fleet in the world and the largest in Northern Europe. The company began operations in 1991 after it took over 87 vessels from the Soviet commercial fleet that were registered in Latvian ports.

LSC employs 1,800 worldwide and had almost e250m in shipping turnover last year. Because the company's vessels are ageing, its strategic plan for 2003-10 provides for an investment of e294m in fleet renewal.