- In 2021, most companies in the industry resumed production.
- The leading 45 companies in the sector recorded revenue growth of 23.5%, reaching 10.9 billion levs.
- Auto suppliers are recovering, although some are still struggling.
After reporting its first overall revenue decline in years in 2020, one of the most dynamic sectors of the Bulgarian economy - machinery and equipment - returned to growth last year. In 2021, most companies in the industry resumed production, although some continued to struggle due to delayed global supply chains.
The average revenue growth of the leading 45 companies in the sector is more than healthy - 23.5%, reaching 10.9 billion, and revenues are higher than recorded in pre-pandemic 2019. And while almost everyone in the sector ranking had lower results in 2020 compared to 2019, last year only seven companies decreased their turnover, and by small percentages.
Some improvement can also be seen in the performance of manufacturers of auto parts, which have the most substantial presence in the ranking. There are more than 250 such companies in Bulgaria. After a poor 2020, when many of their customers' plants were closed for a certain period, they managed to shake off the slowdown and return to growth, although some of them are still struggling. This engineering segment is important because it alone employs more than 65,000 people.
The big three
Kostal Bulgaria Automotive, which is part of the German group Kostal, became the leader for the first time. The company has had a plant in Pazardzhik since 2017 and produces components for the steering systems of cars. Its revenue jumped sharply in 2020 due to the relocation of lines from the factory in the Czech Republic, as well as the transfer of production from the plant, located in Smolyan. These changes continued in 2021, and their effects are visible: turnover jumped by almost 50% to 813 million levs. At the same time, staff numbers decreased by more than 20% last year, a tendency that is still ongoing.
For the first time, Costal Bulgaria Automotive turned a profit - of 36 million levs. In second place is the previous year's leader - German refrigerator manufacturer Liebherr-Hausgerete Maritza. The company reported revenues topping half a billion levs in 2020. In 2021, its turnover increased by another 15% to 577 million levs. In 2021, the Plovdiv plant surpassed its record for manufactured appliances - 1 million refrigerators in November alone (for comparison - in 2000 they started with a capacity of 14,000). There are more than 2100 employees in the enterprise.
The parent company Liebherr has another company in Bulgaria - Liebherr Transportation Systems Maritsa. It produces air conditioning systems for trains. Last year, it reported revenues of 68 million levs and therefore does not enter into the sector ranking. In July, it started a third separate business - Liebherr Concrete Technologies opened its plant in the southern part of Plovdiv, in the Trakia Industrial Zone. The new factory produces assembly parts, and concrete truck barrels and assembles concrete trucks. The investment in the new plant is 17 million euros - 15 million for the plant and premises and 2 million for the transfer and the purchase of new equipment. The company now has more than 100 employees.
In third position is the former leader from 2018 and 2019 - Sensata Technologies Bulgaria. The company, which is owned by American Sensata Technologies, produces sensors mainly for the automotive industry in its plants in Botevgrad and Plovdiv. It also has a business center in Sofia. After reporting a decline in all three main indicators in 2020 - for turnover, profit and employees, in 2021 the trend was reversed. Revenues jumped by 19% to a record 573 million levs, and employees - by nearly 9% to over 3,600, a trend that continues this year.
... and the record holder in profitability
Fourth in the ranking is BTL Industries, part of the Czech company BTL, which produces medical equipment for physiotherapy, cardiology and aesthetics at its plant in Plovdiv. In recent years, the company has not stopped growing, and in 2021 it recorded the second-highest increase in turnover in the top 40 - with 99%, reaching 508 million levs. According to Georgi Petkov, executive director of the Bulgarian company, the reasons for the constant jump are increased equipment orders worldwide. The company plans to double its team to 1,000 people next year. BTL Industries is also a leader in terms of profitability in the sector - its profit in 2021 jumped by 163% to 165 million levs.
The manufacturers of automotive components have the largest number of representatives in the top 45 - 17. Over the past ten years, their investments and revenues have steadily increased, but in 2020 and 2021 their performance suffered. In the first year, the main reason was the pandemic, while last year, despite the recovery, production in the entire sector was undermined by disrupted supply chains. Thus, the results of individual companies are different. Although only four reported a small decrease in turnover in 2021 as well, nine of the 17 companies in the auto sector reduced their number of employees. At the same time, some have healthy models and businesses - for example, the German VITTE Automotive Bulgaria grew by 35% to 281 million levs.
One of the largest companies in this segment is Teklas - Bulgaria, which is a subsidiary of the Turkish Teklas and produces rubber, plastic and metal components for the automotive industry. The company has plants in Kardzhali, Krumovgrad, Momchilgrad and Vratsa, and was one of the few car suppliers that reported turnover growth in 2020 - by 2%. In 2021, it is 4%, reaching 481 million levs. The group has also increased its staff - by 10% to nearly 3,000 employees.
The wheels of fortune are spinning
Another segment that traditionally features in the sector ranking is bicycle manufacturing. Here, the three representatives rather swapped places in 2021. For the first time in years, the industry leader is changing - Plovdiv's Maxcom displaces Cross based in Montana. Maxcom increased its revenue by 80% to 399 million levs. Cross's turnover decreased by 9.7% to 367 million levs, after exceeding 400 million levs the previous year for the first time. Leader - 96, whose plant is located in the Plovdiv village of Rogosh, grew by 43% to 160 million levs. A huge part of the production - over 90% of the three companies - is for export, which in 2020 will reach 750 million levs, according to data from the Association of Bicycle Manufacturers in Bulgaria. Electric bicycles are the most popular in Europe, while traditional ones saw a decline in sales.
The decrease in the revenues of Cross is directly linked to the weaker export of e-bikes. At the same time, Maxcom reports strong growth due to its largest customer - the Austrian partner Pierer Group, for which it produces collections of its brands Husqvarna, GAS GAS and Raymon. Growing demand has led Maxcom to build a second bicycle manufacturing plant together with Pierer, which should be operational in 2023. Total investment will top 40 million euros.
In this year's sector ranking, there are also 15 companies with Bulgarian owners. The company reporting the highest growth in the ranking is also a Bulgarian company - Smolyan-based cable producer Gamacable. It reported a 124% jump in revenue, reaching 101 million levs.
One of Gamacable's big customers, Emka, which makes cables and wires at its plant in Sevlievo, also reported healthy growth of 50% to 139 million levs. In its annual report, the public company says the main reason for the jump is the reduced volume of production in Western Europe, which increased orders to Emka. Over 70% of production is for export.
The sector hopes for a stable 2022, but the companies are aware of the big challenges: inflation, the war in Ukraine, and possible recession ahead. Those working in the industry have lived through more than one crisis or two and are aware that each one also presents new opportunities.