Tundzha textile factory used to be the largest industrial enterprise in the city of Yambol, in southastern Bulgaria. It stopped operating in 2008 after an unsuccessful management-and-employee buy-out transaction - one of the many unsuccesful tales of post-privatization.
Now, its premises will become home to new production.
The property has been purchased by local furniture manufacturer Videnov which plans to increase the company's capacity. VIdenov company, which was set up more than 30 years ago, is today the largest employer in the city with more than 1,400 staff - and growing. It is a testament to the new economy Bulgaria is building from scratch.
Videnov will invest some 20 million levs (10.2 million euro) in the project that will increase production capacity by 30% and open 200 new jobs, executive director Ivaylo Makaveev told Capital Weekly.
Growth in times of Covid
The furniture manufacturer operates in the lower price segment, which is obviously growing. The company's revenue has topped 100 million levs for three years running and the coronavirus-marked year 2020 saw it jump by 20%.
Videnov has 44 stores countrywide and sells online in Greece, Romania and North Macedonia. The surge in internet sales and the availability of own logistic network allowed the company to register a jump in revenue in the pandemic year. Spending on marketing and advertising has also helped - in Makaveev's words the amount is comparable with the budgets of established international brands.
"We had a 20% increase in sales in 2020, mainly on foreign markets," Makaveev said. For comparison, Videnov's revenue in 2019 exceeded 108 million levs.
Videnov is a family company established by Dancho Videnov shortly after the fall of Communism in 1989. Owner of the company now is his son, Grigor Videnov. Until recently the company was called Videnov Group but the name was changed in March 2021 to VG Global.
Property register data show that Videnov bought the property in September 2020 for a price of nearly 12.5 million levs. Seller was Tundzha, a joint-stock company with Nedka Yordanova and Krasimir Stefanov holding a little more than half of the shares. Shortly after the transaction Tundzha was liquidated.
"We chose Yambol, because that is our city," said Makaveev. The project covers an area of more than 15 ha, with buildings spreading on 5 ha. The premises are currently being restructured to house different production units. The construction works are carried out by Bulgarian company Glavbolgarstroy.
The investment will increase Videnov's logistic capacity too. Once production is moved to the new building, the current factory which is adjacent to the property will be used as a warehouse. The company plans to complete the reconstruction by the end of the year and is already hiring staff.
"The expansion of production is part of our long-term business strategy to gradually increase our market share in the country, as well as in Greece, Romania and North Macedonia," Makaveev explained. The project is financed with bank loans, the company said.
In recent years, Videnov has been growing commercially and logistically. In 2015 the company built a warehouse in the village of Stolnik, in Elin Pelin municipality east of Sofia; in 2016 it bought a warehouse in Ruse, in northern Bulgaria; and in 2019 it opened a showroom in Sofia with an area of 2,400 sq.m. A large project in Burgas is planned for this year, the company said but declined to elaborate.