“Business Point“ is the latest in the series of Money.bg that presents successful models of work of the companies with a large contribution to the Bulgarian economy. The first place the team visited was Trakia Economic Zone.
Engineer Plamen Panchev is the founder of TEZ and Chairman of “Sienit Holding” AD. In 2013, he united under this brand the 6 industrial zones around Plovdiv. In the same year Mr. Panchev also created the Trakia Economic Zone Cluster. To date, TEZ is the largest industrial zone not only in Bulgaria but also in Southeastern Europe.
In 2018, due to the successful development of TEZ, Plovdiv made the top three in the category “Attracting direct foreign investment” (FDІ strategy) of Тор 10 Ѕmаll Еurореаn сіtіеѕ оf thе Futurе 2018/2019 by the prestigious British edition “Financial Times”. The Plovdiv region occupies the fourth place in the same category in the ranking of the global media.
Mr. Panchev how did the past year go for one of the most successful economic projects in our country – Trakia Economic Zone?
It was definitely a successful year. It was definitely very busy, as interest in Bulgaria is growing steadily, which has led to many meetings with investors, to many realized investments and others are in the process of being realized. We as well have many others that we will start and others that will be finished in 2019.
Would you like to highlight some of the significant 2018 investments?
The construction of the “odelo Farba” factory for automotive parts, in particular Mercedes’s headlamps, has begun. This is indeed a significant manufacturer for the region, as it has given a substantial boost to the Kuklen industrial-commercial zone, part of the TEZ. Together with Spinner’s new plant for production of machinery with digital-program management, which is also being launched in the industrial area, these are the two new high-tech productions.
We all know that this type of engineering manages to get young people with good education to stay in Bulgaria and realize their professional potential.
Would you describe the year in numbers – how much was invested into the economy?
Last year’s investments exceeded 150 million euros. As far as new job openings are concerned, it is our aim that higher technology companies offer jobs that require highly qualified staff. This is one of our serious priorities – to connect business with vocational education.
What can we expect from 2019? What will be the new production bases that will be opened in the next few months?
We have started building a very large new logistics and service center for “Moto Pfohe”. There are also a number of Bulgarian companies that are preparing investments in the area. Last year some of them bought terrains or began designing, and some already got their building permits. These are companies manufacturing automobile parts.
A large number of investors already present in the area are now expanding their production. Some buy only new machines and equipment, but many build new production facilities. One such good example is the German company Mecalit, which managed to attract a new partner and start a new high-tech production. The French company Latecoere, which is specialized in making parts for the aerospace industry, is also expanding its base which was opened last year.
There has also been a significant development for the platform “Trakia Tech” that aims for digital transformation of the traditional industries in TEZ. The idea of the platform is to develop and establish Plovdiv as a center for high-tech investments.
In recent years, the automotive industry has been one of the fastest growing in the country, which is also strongly represented in TEZ. Do you expect the sector to continue to grow at a rapid pace or has it already reached the top of its capabilities?
There is definitely room for development as the environment that it has created across the region allows for the attraction of many partners of the companies already established here. It is useful for those companies to have their subcontractors here and work together in TEZ. We have a lot of such examples at the moment, e.g. the expressed interest by manufacturers of parts for BMW. We are negotiating in this direction and hoping to finalize it this year.
Yet there are signs of some difficulties in the sector. In 2018, the Belgian brand “Malmar”, component supplier for “Volvo” and “Renault”, announced that it was withdrawing from Bulgaria because of lack of personnel. Can we expect new withdrawals from our market due to insufficient work force?
I would not like to say that there is no such problem, but more important is what we are actually doing to deal with it. We saw the first symptoms about 5 years ago and ever since the municipalities in which we work have shown a very adequate attitude to vocational education problems. These are efforts made by the TEZ team, the municipalities, the business and the education institutions which already give results. Many more of those efforts have to be shown as good examples. Because we must first convince ourselves that it is possible for young people to find realization in Bulgaria, by receiving good vocational education. And I am saying this because I’m in contact with such young people.
The process of creating mentors is also slow and it cannot happen without the help of the business. The good thing is that companies have long understood that they should be involved in this process. There is still a lot to do.
But I could give as a good example what we have achieved in the cluster with our training center for professionals. This is a topic so important to investors that it is equal to infrastructure, for example.
Can you give examples of companies that already support education?
KCM 2000 has been successfully working with the vocational school in Asenovgrad in order to train staff to work for them or be directed to other companies in the industry. Good words can also be said about the Liebherr training center.
It is important to say that we have created the first Educational and Industrial Board in Bulgaria together with the Ministry of Education, Plovdiv Municipality and Industry Watch. The idea is to orient the children professionally by attending real production sites. More than 170 children have been able to go through phase one of the education process so far and each year the interest in this form of education is growing.
This form was aimed at 7-8th grade children. In addition, we partner with the German Institute for Applied Physics “Fraunhofer”. Our partnership dates back five years, and we can safely say that we already have our first success stories. This is a complete project for a circular economy. We already have a project that allows the production of a new building material, which is the fruit of our cooperation. We are optimistic that in the next few years we will find a way to produce this material in Bulgaria and to apply it in Europe.