Eng. Plamen Panchev: The Industrial Zone saves 25% of the initial investment
CEO of “Trakia Economic Zone”, interview for “Capital Daily”
Sienit Holding and KCM 2000 develop the mega project “Trakia Economic Zone” by specially created cluster. He unites the zones in several municipalities around Plovdiv. On this topic we are talking with co– manager of the zone and president of the board of directors of “Sienit Holding”.
Is there a place in “Trakia Economic Zone” for small and medium business?
A big company can make her own investment wherever she wants because she has a good team for exploring and realizing the projects. The smaller companies which are also valid for foreign investors don’t have with these opportunities and it is better and more profitable for them to find a place for their business in an economic zone. In “Trakia Economic Zone” they found basic problem solved: legislation, land, joining the various operating companies, infrastructure, services which are offering here. Practice proves it- for example a middle company like “William Hughes” from England, who obviously found a good place to make business here. It started 10 years ago with 20 workers and 1000 square meters building in the industrial zone near to Rakovski. Now there are 100 workers, the investment exceed 15 million euros and the building stock is more than 5 000 square meters. For these investors the entry into the economic zone meant security, knowledge of the conditions and he expanded the production 3-4 times.
Do not miss the price as a factor for entering the business in TEZ. Is she profitable and can a middle company allow her?
If an investor has to make his investment “on a bare field” and he chooses to enter an economic zone, the second investment is about 25% lower than first. That says everything. Saving comes from the built infrastructure from the cleared usage or ownership rights that have already been made and it saves them, as well as from the cost of time that the business is highly valued.
What is the symbiosis between big and middle and small business in Trakia Economic Zone?
Let’s look for example “Liebherr”. The company was positioned in industrial zone “Maritsa”, part of TEZ. In order to serve Liebherr’s suppliers and subcontractors another 4-5 medium-sized companies came to the industrial zone. Something more- the connection between investors in “Trakia Economic Zone” and Plovdiv it’s not only economic. The companies are looking for trained staff and educational institutions to train these staff. Foreign investors very often “import” high technology and accordingly increase the requirements for workers knowledge and skills. The economic consequences of this are: more knowledge, more added value, higher pay and living standards. This is also a way to connect the diminished thread of “business education”.
What is the interest of the municipalities in participating in the “Trakia Economic Zone”?
For municipalities in which territory industrial zones are already in operation things are very clear- jobs, sustainable development, a good standard of living for the population. But let’s say the municipality Parvomay where they still don’t have created industrial zone, also supports the venture. She sees her interests in realizing the production produced on her territory. Namely in and through TEZ because here we started an area with agrarian direction which brings together the efforts and interest of six big Bulgarian farmers. The aim is to create several processing plants and a market for agricultural production.
Nine municipalities and two associations signed a Memorandum of Cooperation for the Development of TEZ- municipalities Plovdiv, Asenovgrad, Kaloyanovo, Kuklen, Maritsa, Parvomay, Rakovski, Rodopi, Stamboliyski, “Cluster Design and Construction and Cluster Information and Communication Technologies Plovdiv”.
What are the competitive advantages of Trakia Economic Zone?
The competition for attracting investors first stars at an international level. Our advantages are that Bulgaria has legislation supporting Bulgarian and foreign investors low operating costs and low taxes. This is appreciated by investors in Trakia Economic Zone which are already over 100 mostly from Europe. We are working and expecting in next 10 years to come at least 100 new investors in EU. We see a potential for attracting business from Scandinavian countries where we are still little known. But there is already a Scandinavian company “Viking” which produces lifeboats in industrial zone “Maritsa”. Now we are talking to enlarge their business.
Is the next investment China in the development of Trakia Economic Zone?
The location in Bulgaria and especially In Plovdiv, has become a factor in our relations with China. Here is a crossroads between Europe, Asia and Africa. There are 3 out of 10 Pan- European transport corridors- 4,8 and 10. Plovdiv is important railway center for Europe and Asia. Here is the front door for Europe on the ancient silk road, which is very important to the Chinese because it is part of their economic history. This road has brought prosperity to China over the centuries, now the big country again wants to revive this advantage. The first investor in TEZ is the Chinese leader in the production and marketing of agricultural products “Tianjin Farm Crop Group”. This is the first agrobusiness project, which China implements in a country from the EU. The company grows mainly wheat plants. Start from 2014 in TEZ after an unsuccessful try to start a business in other part of Bulgaria. During the Bulgarian- Chinese business forum “Plovdiv- Shundjun: Cooperation and investment 2014” “Sienit Holding”AD and Huawei Technologies Bulgaria signed a Memorandum of Cooperation for the technological renewal of the “Trakia Economic Zone”. In the development of TEZ are includes Hainan Longquan Century Project Investment and Development Co Ltd. With her subsidiary Bulgaria Real Estate Investment Co. For now the weakness in our relationship with the Chinese is that, they are waiting for you and we have no specific projects to offer them. But we are learning quickly.
What is the investment capacity in “Trakia Economic Zone”?
For 15 years the investment are over 1 billion euro. Our forecast for the next 10 years is to attract businesses for another 800 million euro. Interesting thing is the Chinese experts estimate of our investment capacity equals 3 billion euro. I believe that even the optimistic forecast is realizable because “Trakia Economic Zone” has support for the state and local authorities and this is important for foreign investors. Until now in the zone has revealed 12 000 work places. Through 2015 will be revealed another 1500- 3000 new working places only in the factory of company “Sensor Night Industrial”, which she manufactures automotive parts.
Are you able to service this investment capacity?
We have a good team but we are feeling that we need to attract more specialists to develop our design goals. It is good that in “Trakia Economic Zone” we have different partners- each with his own experience, capacity and potential. With our Israel partner Ithak Eden and his companies have been working for over 12 years together creating one of our industrial zones. They helped us to buy the land and consolidate them, help us to realize part of the infrastructure and buildings which they are using by investors. They brought here their world- wide- partner “Gazit Globe”.
We have also partner from Italy. On the Bulgarian side we are partnering with “KCM 2000” AD- a company with really great capital and opportunities. With these partners, we have jointly developed 1-2 projects in different industrial areas. For example in the industrial area around KCM- close to the village of Kuklen we have a joint project to build a lead- based battery plant that the company produces. I think the project is strong and the opportunity of him to be realize is huge.
Does the area need state support?
We work well with the state and local administration. We want the state to be closer to us. We are expecting from state to help us in having a improved and built the infrastructure for the normal movement of people and wares. We are hoping as soon as possible to realize the project for reconstruction and expansion of the most using entrance- exit artery of Plovdiv- “Goliamokonarsko shose”. As for the extension of the road section Plovdiv- Asenovgrad. Plovdiv has an unused labor reserve- the Roma. Yes, most of them are not educated. But that doesn’t mean they do not want to work. Here, in our “Trakia Economic Zone” an Englishman, “William Hughes” came to us and only Roma works for him. Some are doing a simple job, but some of them are also highly qualified specialists. But still we can’t wait to come 100 Englishmen like him and to learn out labor. This is about specific training for specific people not the common promises that “if we come to authority we will uncover work places and we will train the young”.
