Eng. Panchev, the successful business model of Trakia Eocnomic Zone tells for the appeal attracting foremost international players, in addition for the expansion of manufacturing facilities. What are the admissible chances to attract prospective investors for the course of the Bulgarian delegation at the EU Council?
This is a promising opportunity to boost the good practice and example set by Trakia Economic Zone (TEZ) for the recent years in attracting investors. For the six-month course of the Bulgarian delegation at the EU Council our country is sure to be visited by a large number of politicians, media, business and non-governmental reps. Turnouts on such a high scale are here to come but rarely. We should bent every effort toward getting the most of the fact that Bulgaria will come in the spotlight which will be reflected more often in the business periodicals.
Plovdiv will be involved in several events, one of which TCI European Conference on March 20 – 22, 2018. Established back in 1998, TCI is a leading global network of organizations alongside practitioners joining their efforts toward the enhancement of clusters and the cluster competitiveness.
We set our hope on high that due to that unfamiliar to our country, however highly successful partnership pattern – the cluster, we will come to get to the prospective investors’ knowledge the development chances they can enjoy in Bulgaria, along with the chances for presumable partnerships here – which has increasingly proven to be our perspective. It is increasingly the case with the Bulgarian manufacturers to match their partners from abroad. We have recently enjoyed numerous proven cases to attest to a successful partnership along this line. Newcomer companies in Bulgaria would sort out their fit of their vendors and partners, which make it a safe bet for them to place their investments here. As it happens, they identify their excellent partnering fit in their proper Bulgarian partner. Indeed, a substantial number of Bulgarian companies have recourse to us, i.e. Trakia Economic Zone with the request to put them through to investors, employers, vendors, or to open markets where they could place their products or get their services boosted.
Trakia Economic Zone has been backed up by the cooperation of Sienit Holding Jsc. and KCM 2000 Jsc., along with Bulgarian and Israeli as well as Bulgarian and Italian companies, plus 9 municipalities in Plovdiv district. It has proven exemplar in the PPP model what substantiates the fact that the joined effort of business and municipalities makes for success. Besides, Trakia Economic Zone stands on a shared ground with the largest business and science community in Europe – the German institute of Fraunhofer, the latter being the most substantial scientific research association for applied researches in Europe.
Investments in TEZ resulted with the economics in Plovdiv and its region increasing by leaps and bounds. What results have been achieved for the course of 2017?
To begin with, Bulgaria will enjoy the manufacturing business of aircraft works, speaking of which, this will be based in TEZ.
The French Latécoère, which is a foremost supplier in the aircraft industry, started the construction of its facility on Sept 27, 2017, in Maritza Industrial Zone. In terms of figures, their investment features 37 000 m2, phase 1: a building having 5000 m2 GFA (4000 m2 dedicated to manufacturing, plus 1000 m2 apportioned to the administration), with the opening of 200 new jobs.
One of the major lighting system manufacturers worldwide – the German tech giant Osram started its facility in October in Plovdiv over the total area of 16 000 m2, inclusively of a manufacturing area and storages. The investment comes up to EUR 25 mill.with 500 employees already at work there, where their general number should attain 900 by the mid of 2018.
INTRAMA, an established manufacturer of high-tech thermal moulding machines, automatics feeding devices, sliced product devices membranes and barrier packages, rolled-up self-adhesive labels, started a top-notch manufacturing development in July 2017 for the cost of BGN 20 mill, having 7192 m2 GFA, and opening 100 fresh jobs.
MAN Truck & Bus Center started a new service station, having a 2000 m2 warehouse, over 6 000 m2 total area.
VP Brands International leased 4 000 m2 logistics stock house in Maritza Industrial Zone. Investor of the stock house – the Bulgarian and Israeli Sensor.
The Dutch TNT Express acquired by the US overnight delivery service provider FedEx, leased 1200 m2 shipping base in Maritza Industrial Zone.
The Belgian Malmar leased a part of a building in Plovdiv zone to accommodate a new research center in the mechanical engineering industry, the investment amounting to half a million Euro.
The Belgian-held Marbul started a new apparel manufacturing warehouse over 3300 m2 GFA in Rakovski Industrial Zone.
The English William Hughes commssioned a new production line at the cost of BGN 1.7 mill, thus opening 10 fresh jobs.
The projects referred make a small part of the investments in TEZ. There are further projects where we can state no figures, however, we know for sure these have been expansions of their already established manufacturing facilities. For the most part of the companies which made their choice for us have increasingly placed investments in equipment, recruitment of further personnel, mastering new productions as well as products.
We cannot produce the complete array of facts and data, admissibly however, what we do know cannot be lightly esteemed.
What do you feature for the 2018 advancement of TEZ?
Generally, the greatest interest is held by EU companies. At the very opening of 2018, we had promising meetings with a German investor in the automotive parts manufacturing industry. Further, we had negotiations with a Turkish company – another manufacturer of automotive parts. In addition, we had a Turkish investor in the machine industry with digital programmable control. Best of all, these are high-tech manufacturing businesses which will entail skilled personnel.
To that, the Bulgarian investors to start their investments this year makes a big number. Currently,a certain part of them get licensed as a ‘grade A’ investor. More precisely:
- TVT (Bulgaria) – logistics services/packages, over 20 000 m2 area – 4500 m2 footprint;
- Elco Mess (Bulgaria) – sausage manufacturing facility, over 15 000 m2, 4000 m2 footprint.
- “ENKO Plastics (Bulgaria) – plastics shipping packages, extension of their existing manufacturing facility, 30 000 m2 plot area
- Teolino Plast (Bulgaria) – logistics base, having 25 000 plot area, 4000 m2 warehouse
- Sting (Bulgaria) – drugs distributor, 8 000 m2 plot area –3800 m2 stock house
- Humanita (Germany) – textile sorting and recycling factory, 120 jobs
- Kaufland (Germany) – expansion of the central logistics stock house, 160 000 m2 plot area, 30 000 m2 logistics facility
- William Hughes (England) – one further expansion 1000m2м “Mecalitt (Germany) – one further expansion at the cost of EUR1.5 mill in a stock of buildings with a 30% increase of the manufacturing area and doubling the administrative area
- VEM (Germany) – joint venture of Mecalitt with a new German investors, a new factory on the ground of Mecalitt, with an investment of over EUR1 mill in matrix manufacturing facility, syringe shapes for all kinds of plastics details, prospectively, in dies, with 150 new jobs
- Willi Elbe Automotive Bulgaria, an affiliate of the German Willi Elbe Gelenkwellen – a new finished product stock house over 1500 m2 at the cost of BGN 2 mill., 10 new machines at the cost of EUR 4 mill, 50 new jobs
- Biomashinostroene (Bulgaria) – construction over 32 000 m2 of 2 logistics platforms, plus 2 manufacturing facilities over a total area of 6000 m2.
Last year you announced that you were going to expand Trakia Economic Zone toward Haskovo and Burgass. Are there prospective chances to develop the PPP with the local regulators with the view to establish industrial zones and their pertaining infrastructure?
There are definitely such chances. Currently, the Investment Act goes through a revision, hopefully, it will allow for a better opportunity to regulate the said relations. I would extend my appreciation to the Ministry of Economics for their assistance and support to the Bulgarian business.
How are the negotiations going with the Asian companies, here also with the industrial zones in China and South Korea which TEZ has placed a Memorandum of Cooperation with?
Hopefully, 2018 will be the landmark in the relations with China. Bulgaria will be the host of the summit under the „16+1“ initiative – the seventh meeting of the state and governmental leaders of the Central and Eastern European countries and China. In May, we are expecting the visit to be paid by the PRC Minister of Agriculture. As you know, the “16+1” Logistics Center and E-commerce Booth has been already running in TEZ to boost the commerce with agricultural and other products in China and the Central and East European countries. The initiative has come to be the result of the shared effort of the Bulgarian Ministry of
Agriculture, Food and Forestry, the Association for the Promotion of Agricultural Cooperation between China and the CEE Countries, and TEZ.
On present form, we are coming through the logistics hub project which we are going to present to our Chinese partners from Shenzhen, Ningbo, and Qingdao for co-funding. Hopefully, 2018 will be a landmark featuring the execution of an agreement for the effectuation of the logistics hub on the Chinese part.
The shortage of skilled personnel poses a major problem for the factories. What initiatives does TEZ undertake to the point?
The Association of Trakia Economic Zone Cluster has commenced at the cost of BGN 1 754 167.51 the equipment of a vocational training center accommodating 10 rooms for theoretical studies, plus 1 for training courses which are to supply the demand for fundamental knowledge and competency in various area across the manufacturing industries plus working skills, exploitation and design of mechatronic systems of average and high level automation.
The funds for the development of the center come under the European project ‘Targeted Development of Cluster Information Assets’ under Contract no. BG16RFOP002-2.009-0045-C01, where the beneficiary is Trakia Economic Zone Cluster. The funding comes under operational program ‘Innovation and Competitiveness’ 2014 – 2020, priority axis 2 ‘Entrepreneurship and Capacity for Growth of SME’, under the ‘Development of Clusters in Bulgaria’ procedure.
The procedure is implemented by the EU financial support via the European Regional Development Fund. The grant amounts to BGN 1 243 790.56, 30% of the total amount – BGN 510 376.95 comes as the co-funding provided by Trakia Economic Zone Cluster.
The vocational training center is based in Rakovski Industrial Area, which makes a part of TEZ; by the close of 2018, it will be furnished with 211 computers and a modern software. Within the framework of the ‘Targeted Development of Cluster Information Assets’ project, an e-platform is established for the delivery and taking innovative e-courses to meet the industry demands. A shared infrastructure and know-how for joint cluster activities is being developed – equipment for training rooms, vocational training center for practice to supply training services in various functional areas both to the employees of the companies within the cluster, and bespoke on demand of external clients.
Has the point of residential development for factory workers already come on the front burner under the project of Trakia Economic Zone Cluster?
It is even so. This initiative comes in line with the idea of advancing the opportunity to bring in employees from without. Speaking of which, this is a comprehensive process – the housing, plus the educational and vocational training of staff fit within a joint project. The dwellings follow in an nice way up the project of the vocational training center.
Generally, the greatest interest in TEZ is held by EU companies. At the very opening of 2018, we had promising meetings with a German investor in the automotive parts manufacturing industry. Further, we had negotiations with a Turkish company – another manufacturer of automotive parts. In addition, we had a Turkish investor in the machine industry with digital programmable control. Best of all, these are high-tech manufacturing businesses which will entail skilled personnel.