Article by: Economy.bg
The coronavirus crisis has not closed any of the 180 companies in Trakia Economic Zone (TEZ). This was shared with Economy.bg by Plamen Panchev, founder of TEZ. Some of them have reduced production volumes, but are gradually beginning to return to pre-pandemic levels. Most of the companies put their employees on paid and unpaid leave in April and May so that they would not have to cut them.
There are also companies that continue to implement their investment projects in the crisis. Willi Elbe Automotive Bulgaria has completed a new production building for the production of auto parts in March, where another 60 jobs are expected to be created. The new investment of the company is for BGN which already employs 145 people, is for BGN 5 million.
VEM Europe (a joint venture between the Chinese concern VEM and the German group Mecalit) put into operation in January 2020 a plant for the production of dies and punches. The investment in the new plant is BGN 10 million and 25 people already work there.
The German-type company Spinner Bulgaria has invested BGN 10 million in a new plant for the production of metalworking machines, where according to the plan 100 jobs should be created. The plant will start production in early July 2020 with an initial employment of 20 people.
TEZ is also working on six new investment projects – for four plants and for two projects in the field of logistics and fuels. Investments in them amount more than 50 million euros, and they are expected to create 1,000 new jobs this year. The investments are in the Kuklen, Maritsa and Rakovski zones, part of TEZ. The entrepreneurs are from Bulgaria and abroad.
Expansion of its production areas in 2020 is also planned by “Odelo Bulgaria”, which last year opened its first factory in TEZ for headlights for Mercedes.
In total, TEZ employs over 180 companies, half of which are foreign. Over 24 billion euros have been invested in 24 years, and more than 35,000 jobs have been created. TEZ unites 6 industrial zones in the region of Plovdiv – “Maritsa”, “Rakovski”, “Kuklen”, Industrial Park “Plovdiv”, High-Tech Park “Plovdiv” and Agrocenter “Kaloyanovo”. The area is over 10,700,000 square meters, and 1/3 of it is already occupied.
How did the coronavirus crisis affect the companies in TEZ, were there suspended or frozen projects, laid off employees, are new investments planned, how can Bulgaria take advantage of Europe’s desire to reduce supply chains, how will the crisis change the industry – We commented on these and other issues with Plamen Panchev, founder of “Trakia Economic Zone” /TEZ/ and chairman of “Cluster Trakia Economic Zone” /CTEZ /.
Mr. Panchev, how did the coronavirus crisis affect the companies in TEZ?
The good news is that the coronavirus has so far failed to “close” any of the 180 companies in the Trakia Economic Zone. Some of them have reduced production volumes, but are gradually regaining pre-pandemic levels. Most of the companies put their employees on paid and unpaid leave in April and May so that they would not have to cut them.
What type of production companies were most affected?
Almost all subsidiaries of foreign companies, as well as Bulgarian. The media constantly commented on the impact of the pandemic on the automotive sector. But the good thing is that, as Krasen Krastev, manager of the German company Mecalit Bulgaria at TEZ, described it, “if the parent company in Western Europe is the locomotive in a train, then the subsidiary in Bulgaria is the last car. When the locomotive stops, the last wagon gradually slows down, and if the locomotive starts, the last wagon may not stop at all”. This is exactly what happened to us. The factories here did not stop production and are now moving again. Yes, there was a decline in the volume of deliveries and production. There was a decline in the production of Bulgarian companies that export abroad, such as the famous chokeberry juices using the original technology of Prof. Hristo Krachanov, which could not be supplied to markets in Japan, South Korea, China, Slovakia, Great Britain, Greece, Croatia, Spain.
There were also companies that completely kept their production volumes. Some will work even with increased capacity until the end of the year on the preliminary requests of their customers.
Rakovski zone, part of TEZ
Were there any canceled or frozen projects? What do companies share?
Some companies said they were negotiating with potential customers from different countries just before the pandemic – February and March, but they are currently stopped.
Are there any who are realizing their investment projects even in the crisis?
There are some and I will give specific examples. The German Willi Elbe Gelenkwellen through the Bulgarian representative office “Willi Elbe Automotive Bulgaria” / for the production of steering systems, components for steering systems and cardan shafts / in March 2020 completed the construction of a new production building with an area of 3,000 square meters, the investment is about 5 million leva. The commissioning of the building is forthcoming. Willi Elbe Gelenkwellen currently employs a total of 145 people. When the new building is put into operation, another 60 jobs are expected to be created.
VEM Europe (a joint venture between the Chinese concern VEM / Virtual Electronics Manufacturing / and the German group Mecalit) built and put into operation in January 2020 a plant for the production of dies and punches – production with high added value. The investment in the new plant is BGN 10 million and already employs 25 people, fully specialized staff.
The German-type concept SPINNER has built a new plant for metalworking machines with digital program control. Owners of Spinner Bulgaria with a 50% share are Avcı CNC Makine Pazarlama AŞ (Turkey) and Spinner Werkzeugmaschinenfabrik (Germany). The company received from the Bulgarian Investment Agency a certificate “Investor” Class A “at the end of January 2019 for an investment of BGN 10 million and the appointment of 100 new employees. The plant has ACT 16 from May 29, 2020. Due to the coronavirus, production will begin in early July 2020 with an initial employment of 20 people.
How has the crisis affected employment in companies? Do you have data on fired employees or salary reductions?
I personally do not have such information.
Are there companies that continue to hire new employees? And what sectors are they from?
Yes, there are such companies. For example, the team of the German-Turkish holding company Odelo Bulgaria, which has been producing Mercedes headlights in our country since last year, had to rent premises in the city of Plovdiv to conduct interviews with job applicants, as access to the TEZ base for outsiders was banned during quarantine.
Industrial park Plovdiv, part of TEZ
Has production resumption already begun? When do you expect a 100% recovery in production volumes?
Some of the companies have already boasted that they have fully restored the volumes before the pandemic. Others expect this to happen in the next month or two.
How much has been invested in TIZ so far? How many jobs have been created and in what production?
More than 180 companies operate in the area, half of which are foreign. TEZ unites 6 industrial zones in the region of Plovdiv – “Maritsa”, “Rakovski”, “Kuklen”, Industrial Park “Plovdiv”, High-Tech Park “Plovdiv” and Agrocenter “Kaloyanovo”. Its area is over 10,700,000 square meters, and 1/3 of it is already occupied. In 24 years / since the start of the first Maritsa zone / over 2 billion euros of investments have been made in it, over 35,000 jobs have been created.
Industrial park Plovdiv, part of TEZ
Are you working on new projects? How many new jobs will be created through them?
Preliminary expectations for investments in 2020 at TEZ are over 50 million euros, which will create 1,000 new jobs. However, it should be borne in mind that the situation related to the cessation of travel between countries may have a negative impact on the end result.
We are talking about six new investment projects – four plants and two projects in the field of logistics and fuels. These investments are in the Kuklen, Maritsa and Rakovski areas, part of TEZ. The entrepreneurs are from Bulgaria and abroad. The high-tech investments are in factories for equipment and furniture for pharmacies and warehouses, for textiles – for the production of a synthetic non-combustible niche for aircraft seats, for the processing of agricultural products, for the production of food products. We are also working on a project in logistics. Bulgarian company continues to invest in fuels.
“Odelo Bulgaria”, which opened its first plant in TEZ last year, this year begins to expand its production areas. Currently, Turkish companies are showing great interest in TEZ. We are negotiating with investors in the Mechatronics sector.
How can Bulgaria take advantage of Europe’s desire to reduce supply chains?
The companies want to shorten the supply routes and this is the great chance of our country. There is a growing tendency for European companies, which have several plants in different parts of the world, to step into Eastern Europe now instead of making another one in Asia. Today, the value of an investment in Asia is not so profitable purely financially.
What do we offer them in the “Trakia Economic Zone”? An infrastructure location, facilitated administrative service. A significant role in this process is played by “Respect Consult” (legal advisers of TEZ), which provide comprehensive services in the field of relocation of business and labor – consultations on visas, residence, living arrangements (purchase, sale or rental of real estate) and others.
How do you think the coronavirus crisis will change the industry?
Our team is convinced that after this pandemic we will turn TЕZ into a leading project of Bulgaria for the Green Deal and the presentation of the country as a high-tech investment destination. It was during the months of coronavirus quarantine that we developed models for achieving a carbon-neutral zone by 2050. The measures set out in the TEC Energy Development Strategy Paper are in line with the EU’s vision for decarbonisation and the transition to green energy. We focus on investments in renewable energy, production of electric vehicles, low-carbon transport system with the city of Plovdiv, expansion of renewable energy capacity, energy efficiency, attracting production related to the low-carbon industry. At the forefront is the training of young people – pupils, students and workers in carbon-intensive industries, to be more easily employed in low-carbon industries.
Maritsa zone, part of TEZ
How can the university-business relationship be further improved?
The role of the “Trakia Economic Zone” is also strong in the implementation of the business-education relationship. Our team makes literally visible to the companies the Centers of Excellence and Competence Centers built at the universities – associations of leading specialists, researchers and institutions working in the field of applied sciences and innovations. We attract companies to cooperate with these Centers for the creation and implementation of joint products.
Last year we opened a Center for Vocational Training TRAKIA in “Trakia Economic Zone”. It is the first of its kind in the country, situated and serving the business in the industrial zone. The capacity is over 1200 trained per year. The courses are intensive, one-week, with a break from production. For the first time in the country, multinational companies such as SMC, Schneider Electric, Milara International and ABB are coming together to solve the problem of staff qualification for the industry in a very effective way. The center is unique for Bulgaria – here is the latest technology in training, in practice the classes are with industrial equipment, which is used in real production. Lecturers from the University of Food Technology – Plovdiv / UFT /, which recently became an associate member of the “Cluster Trakia Economic Zone”, have developed programs tailored to the requirements of the business, which are applied in the training center. Lecturers and doctoral students from UFT are the lecturers at the Center, who prepare workers from various factories in TEZ, as well as students. For the first time in Bulgaria, the symbiosis discussed in recent years between education and business was actually realized.
For the first time in the country, the only initiative of its kind was held – Digital Academy “Haycad”, a member of the Cluster, promotes Bulgarian technical universities with free online seminars for prospective students.