To turn the crisis into an opportunity: Odelo Bulgaria is building a second plant in the Trakia Economic Zone
Ugur Ozai, Plant Manager of “Odelo Bulgaria”:
Odelo Bulgaria is building a second plant in the Trakia Economic Zone / TEZ /. Doesn’t the pandemic stop the company’s investment plans?
Yes, we are building a second plant within the features of TEZ. The reason is that our business is expanding and we divide the two types of production – the serial for car lights, which are used in new cars and the second unit for spare parts – lights, which are sold to other dealers. The production of spare parts will be located in the new plant. It is currently a mix, everything is done in the existing production base. Its capacity is 10 production lines, but we are already using almost all capacities, so expansion is needed. Our plant is located on 24 000 square meters, and the new one will be 12 000 square meters. It will be a production hall, a warehouse and a small logistics center for them. The investment is about 10 million euros, of which 4 million euros are invested in machinery. We hope everything will be ready by October or November this year. We have reason to believe that this will happen, firstly because in TEZ things happen quickly, and apart from that “Odelo Bulgaria” is certified as a class A investor and we use shortened deadlines for issuing documents.
The pandemic did not change our investment plans. The car business is certainly undergoing unpleasant changes due to the coronavirus situation. However, orders have not fallen dramatically, which means that we are not in a serious crisis and need to take steps to reorganize or reduce production. The pre-coronavirus intentions remain the same and we are expanding our business. Moreover, projects that have so far been worked on by other companies are now coming to our plant. There are several big players in the market for car lights, one of them is “Odelo” and there is competition between us who will take the new projects of the car manufacturers. Well, we did it! Very soon new world brands come to us, and Daimler with Mercedes remain as customers. In two months, for example, we will start serial production for Dacia.
Are you saying that the lockdown situation has not affected your contractors in Europe in any way and orders have not been reduced?
During Germany’s first lockdown, Daimler closed its plant for about two months. Fortunately, we in Bulgaria managed to readjust the production so as not to close. Autumn was even easier, then Daimler did not close at all. I would say that the pandemic reflects on our travel issues. We are at the stage of active expansion and very often we need colleagues from abroad or to send our own to gain experience. The need for constant PCR tests has led to some fatigue among colleagues who travel frequently. Before the pandemic we were a very open company, we were constantly visited by colleagues from other factories of the mother company, people from the companies that are our customers, as we are subject to audit by them, etc. This regime was much more operational than the current one of meetings, conversations and negotiations online. In our budget for 2020, we had not planned the considerable costs of disinfection, protective masks and other health measures imposed by the coronavirus. But now we have experience.
How many people work in “Odelo Bulgaria” and how many will you hire for the new plant?
Currently, we have 215 employees, including the administration. The plan is to have 330 employees by the end of this calendar year. I.e., more than 100 people have to join our company in the production department. We do not expect prepared staff to come, for the simple reason that there is no other factory with similar activity in our country. All new hires will be trained on site. Our requirements are not high at all – we are looking for positive and motivated people who want to develop in the automotive sector. According to data from the automotive cluster, about 65,000 people in Bulgaria are employed in this sector. There are over 250 companies and if a person gets into one of them, he or she can develop in many others, not only in Bulgaria but also abroad. Our work is not physically difficult and both sexes are equally successful. I even have the impression that on the assembly lines where the products are assembled, women are much more patient and precise. „
It should be easy to find people for the new production, given that unemployment has risen. Till now, staff shortages were one of the biggest problems for employers.
Yes, because of the pandemic, unemployment jumped and an awkward truth emerged – that the market was flooded with low-skilled labor. We often discuss this problem with our HR specialists. We, as a manufacturing company, do not have any requirements for people, but we want them to have at least work habits. The education system does not deal with this. Businesses are trying to build this type of people through dual training. However, this process is very slow and along with the coronavirus completely stopped due to difficulties in face-to-face training, internships and others. On the other hand – yes, many people lost their jobs during the pandemic, but these are mainly employees of the restaurant business and hotels. Not that these people are not suitable for us, but they themselves do not have the attitude to come and work in production. The situation is strange! Unfortunately, work in production is perceived as something temporary and not very prestigious. And a machine operator with us can grow a lot in his career. If he or she is persistent enough and completes an engineering specialty, he can reach the position of Production manager. There is a rule in our company – we always look for the missing positions at high levels among our people, among the team. Only if we can not find are we look for a person outside. There is something else that explains the situation on the labor market. For example, the casinos have been closed for months and it is unknown when they will work again. And a person who had worked there and took a few thousand levs, does not want to come to the assembly line for much less money. The same applies to high-paying positions in the restaurant and hotel industry.
People work for money and remuneration is the main motive for starting a job. How do you motivate your employees in this context? Did you have to cut wages or cut social benefits because of the pandemic?
On the contrary, this year we have raised wages in production again. Many companies have entered the industrial zones of Plovdiv, and the staff is not enough. This, of course, makes wages go up smoothly. We all follow this trend. And we haven’t even thought about cutting social benefits. Currently, our employees use free company transport, food, additional health insurance and twice a year receive gift vouchers from the employer.
Did Odelo Bulgaria apply for state support because of the pandemic? Do you have any remarks on government measures?
We did not participate and I will say why. At the beginning of the Covid crisis, we were about to apply for the 60:40 measure. One of the conditions was to prove a turnover a year ago. And then, in 2019, we were still building our plant. Such cases were not affected by the law in any way and so investors who are new in Bulgaria were missed. And if we had closed, we would not have been able to take advantage of this measure. However, we took advantage of two of the incentive measures of the Investment Agency – for the construction of infrastructure leading to the plant and the measure for reimbursement of insurance by an employer. These measures work and have not been reduced due to the Covid crisis, which is good. Thus, the Government sent a signal to investors that it is ready to help.
What is the future of the automotive industry globally? The work of 65,000 people in Bulgaria depends on this, as you said.
Everyone is trying to keep working as before the pandemic. Factories like our, however, are one unit of a whole chain, the car comes at the end. But, in general, there is no huge and significant reduction in volumes in the automotive sector. There are other processes going on – the consolidation of producers, the green wave in production and others. However, Bulgaria is doing well on this map. Because of the many companies we already have experience. I would even say that the country is now ready to accept a large car manufacturer as infrastructure. Economic areas are well developed and structured. And when you’re looking for a place to invest your money, you see if the other investors around you are doing well. There’s no factory in the field, is there? Bulgaria is in the EU, which brings only pros, there is financial security. These are just some of the things that make me believe in the good future of the automotive sector here.