At least 800 million levs will be invested in Bulgaria's industry over the coming years. This emerges from Capital's ranking of the 15 largest manufacturing projects launched in 2018. The amount, which is comparable with the 2017 figure - 830 million levs (1 euro is 1.95583 levs), tends to refute rumours of a slump in investment, but there is no surge either. There would, however, be an increase if Lukoil Neftochim's project is added: the Burgas-based refinery recently received a 550 million levs loan from its owner as a part of the financing for a pending large-scale investment. The figure also omits the investment of some $170 million made by Canada's Dundee Precious Metals in its new mining project near Krumovgrad, as the ranking focuses on manufacturing industry only.
Without pretending to be exhaustive, the list reveals some interesting conclusions. Incredibly, two-thirds of the projects for construction of new, or expansion of existing, enterprises are in Northern Bulgaria. Due to much-improved infrastructure, investment over the past few years has been directed mainly to the southern part of the country and especially around Plovdiv. Bulgaria's second-largest city remains in companies' investment plans but the map of new factories now includes locations like Pleven, Lovech and even laggard Vratsa, which have attracted automotive component manufacturers. In fact, the automotive industry is the key driver of manufacturing growth.
Northern Bulgaria is also home to the largest announced investment - Amylum's in Razgrad. The focus on Northern Bulgaria has its explanation: there is not much competition for the workforce there and wages are still low. It could even be a problem for companies to find enough workers in a region that has been largely depopulated.
The big investor of 2018 appears to be Germany, responsible for six of the 15 projects - all of them in the automotive industry. Fortunately, four of the investments are planned by Bulgarian companies. Bulgaria remains a popular destination for Turkish investors too, which account for three of the new projects.
1. More wiring in PlevenSector: Automotive wiring Company: Leoni Bulgaria
Germany's Leoni Group will build a plant for automotive wiring systems in Pleven. The total investment is about 32 million euro with half intended for construction and the rest for machinery and equipment. The plant is expected to become fully operational in 2020 and employ 2,000 people. The group's local subsidiary, Leoni Bulgaria, has been certified as a first-class investor, which gives it the right to certain incentives such as refunding of social security expenses. Construction on the new plant is connected to orders placed by a large client of the group. Leoni chose Pleven after two years of scouting various locations in the region. Pleven already has another foreign-owned plant for wiring harnesses.
2. The lights of PlovdivSector: Automotive electric equipment Company: odelo Farba Bulgaria
Turkey's odelo Farba Lighting Group will invest 37 million euro in an automotive lighting plant near Plovdiv, which has to open in late 2020. The enterprise will produce lighting for German automotive manufacturers, including Mercedes, with products to be delivered to various locations depending on customers' needs. The project is being carried out by the local entity odelo Farba Bulgaria and is expected to create 400 jobs. The company has purchased a much larger plot than currently needed and, if the investment turns out a success, after 2021 it intends to build an electronics plant and a supplier park.
3. Second chance for LovechSector: Automotive components Company: VOSS Automotive Bulgaria
Germany's VOSS Automotive will start producing automotive components near Lovech. The company will rent the buildings of now defunct Litex Motors. The investment in equipment will amount to 15 million euro. The plant will manufacture SCR line assemblies for Euro 6 diesel engines. It will start production in the middle of 2019 and reach full capacity by the end of 2020. The products will be exported directly to automotive manufacturers in Europe. The company plans to hire 1,000 people.
4. Double speedSector: Vehicle climate control systems Company: Behr-Hella Thermocontrol (BHTC)
German vehicle climate control system manufacturer Behr-Hella Thermocontrol (BHTC) will expand its plant in Bozhurishte industrial zone near Sofia, which was opened in 2015. The project includes construction of 6,500 sq. m. of production and logistic space, including technical zones, offices and laboratories, etc. The investment will reach 17 million euro, including equipment, and will nearly double the company's production capacity. The new plant is expected to start operating this year. The company will add 250 workers to the current 490 employees.
5. Austrian parts from TenevoSector: Machine parts Company: Palfinger Produktionstechnik Bulgaria
Palfinger Produktionstechnik Bulgaria, which is owned by Austria's machine building group Palfinger, will expand its production of hydrocylinders in the village of Tenevo (Yambol region) with a 14 million euro investment. The company intends to build two more production facilities and install additional equipment, which will raise the production capacity more than 50%. The project is planned to be completed by the end of 2020. There is no information yet about the number of new jobs to be created. Austria's Palfinger also has a plant in the town of Cherven Bryag.
6. Further expansionSector: Furniture production Company: Parallel
Bulgarian furniture producer Parallel will further expand its factory in Sevlievo with a 14 million euro investment. The project includes construction of new production buildings and a second fully automated warehouse, as well as installation of high-tech machines and equipment that will allow the implementation of waste-free technology. Construction is expected to conclude in May 2020. The expansion of production will create 200 jobs and double the volume of output.
7. Vratsa breakthroughSector: Automotive systems Company: MD Elektronik
Germany's MD Elektronik will invest 11.5 million euro in a new plant in Vratsa to manufacture data cables, coaxial sub-assemblies, sensors and other electronic equipment. The investment includes construction and equipment of the facility. The municipal authorities have already cleared the sale of an 8.3-hectare plot of land to MD Elektronik. The first phase of the project will open 300 jobs but if the labor market permits, a further expansion to 1,000 employees is envisaged. This will be the fourth production facility of the German group, which has plants in the Czech Republic, China and Mexico.
8. Wire from ShumenSector: Copper wire Company: Sark Bulgaria
Turkey's Sarkuysan will invest 11 million euro in a new plant for copper wire in Shumen. The company registered a local entity, Sark Bulgaria, back in 2016 but it did not announce its plans officially. More information emerged after the company was certified by the government's InvestBulgaria Agency last year. The plant will manufacture mainly wire for the automotive industry, as well as special conductors for the aviation and defense industry. The plant is expected to open within five years and provide 40 jobs.
9. Simultaneous productionSector: Steel equipment Company: Biomashinostroene
Biomashinostroene, Bulgaria's leading manufacturer of steel equipment for the food-processing, pharmaceutical and chemical industries, will invest 10 million euro in production expansion in Plovdiv. Last year the company received a 4.5 million loan from the European Bank for Reconstruction and Development for its project, which is part of a six-year investment program. The rest of the amount will come from the company's own resources. The investment will enable simultaneous work on several orders of large, complex equipment. Sales are expected to increase 50% by 2022.
10. Twice more locksSector: Automotive components Company: WITTE Automotive Bulgaria
German automotive locking system manufacturer WITTE Automotive will expand its plant in Ruse by investing more than 10 million euro. Over a three-year period locally-registered WITTE Automotive Bulgaria will build and equip a new production facility adjacent to the existing plant and hire an additional 450 people. The group has been operating in Bulgaria since 2010: first in rented premises and since 2014, in its own building. The current investment will be its last in Ruse, as the project will reach the group's limit of employees per location. The production capacity will double to 12 million units a month.
11. Own factorySector: Furniture production Company: Valiyan
Bulgarian furniture producer Valiyan will invest more than 5.5 million euro in its own production and commercial building. The company, which designs and produces interiors for hotels, restaurants, residential and office buildings, is currently renting premises in Sofia. The new factory will be in Lyulin residential district, where the company has already purchased a 1.9-hectare plot of land with existing buildings. The rest of the amount will be invested in refurbishment and reconstruction of the premises, as well as in an additional building, so that the total built-up area will reach 9,500 sq. m. The project is expected to be completed by the end of 2020 and create 45 new jobs.
12. Leather seat coversSector: Automotive interior products Company: Bader
German automotive leather interior product manufacturer BADER will build a plant in Ruse, relying on local traditions in the sewing industry. The company does not yet have a locally-registered entity and has not officially tabled its plans but it says in an interview for economy.bg that it will rent a building and invest 5 to 10 million euro in equipment. The company intends to launch production in the late summer of 2019 and employ 700 people.
13. Glass businessSector: Multiple-walled insulating units of glass Company: Capital Glass
Bulgaria's Capital Glass will build a plant for production of multiple-walled insulating units of glass in the town of Pliska. The planned investment amounts to 6.5 million euro and is expected to create 100 new jobs. Shareholders in the company are two individuals - Svetoslav Stamenov (67%) and manager Petko Petkov (33%). Petkov himself has a similar business in Shumen, where he is the sole proprietor. According to the investment proposal, which was filed in the middle of last year, the new enterprise will be spread over an area of 3.3 ha. The company intends to renovate existing warehouses and an administrative building and construct a new facility for the production line.
14. From corn to alcoholSector: Starch and ethanol Company: Amylum Bulgaria
U.S. Archer Daniels Midland Company (ADM) will invest 124 million euro in expanding production at its Amylum Bulgaria plant in Razgrad. The project includes increasing capacity for corn processing and expanding the sweetener production line, which is expected to be completed this year, as well as installing an ethanol production line in 2020. The new capacities will allow the company to process some of its by-products. The project will create more than 50 new jobs, which will raise the total number of employees to 350. That is the largest investment in the world to date by the U.S. group.
15. More exportsSector: Particle boards Company: Kastamonu Bulgaria
New jobs: 1,200
Turkey's Kastamonu Entegre will expand production and build warehouse facilities at its particle board plant in the village of Gorno Sahrane, Pavel Banya municipality. The company will invest some 100 million euro over a three-year period and create about 1,200 new jobs. The Turkish company operates through its locally-registered entity Kastamonu Bulgaria. The project is expected to increase production capacity and generate an additional 50 million euro in exports a year