German luxury packaging producer Rissmann has chosen a little-known village in Bulgaria, Novo Leski, as a location for its fourth factory globally. Attracted by the availability of workforce in the region, in the middle of 2022 the company set up a local entity, Rissmann Bulgaria, in partnership with its long-time partner here, BK Production. The total investment will reach 5.7 million levs (about 2.85 million euro) and the number of the 130 or so employees will double. The purchased land area allows for further expansion of the facility.
Rissmann is based in Nuremberg and has two more plants outside Germany: in Hungary and China. The group has a turnover of around 52 million euro and 1,200 employees.
The company discovered Bulgaria in early 2017 while it was looking for a partner abroad to expand production on a tolling basis. The co-owner of BK Production, Konstanting Dimitrov, sent them an offer and samples and a month later they struck an agreement. The local partner rented a building in another village nearby and after the premises were audited by Rissmann's big-brand customers, production started.
Six years later, the need for further expansion of the business encouraged the German company to take the next step and invest in its own factory. "As the existing building did not offer enough space for growth, we decided to build a new plant," Joerg Weber, head of global production at Rissmann, told the Capital Weekly.
The German company found a suitable plot a few kilometers away, in Novo Leski, near the city of Gotse Delchev in southwestern Bulgaria where it purchased 1.6 ha of land. The planned investment includes the construction of two buildings, the first one of which is now ready and houses production operations, warehouse facilities and administration. Once the second building is completed, production will be moved into it.
The local business
Rissmann's business in Bulgaria is managed by three separate companies. Rissmann Bulgaria, which is a joint venture between Rissmann (75%) and BK Production (25%), is responsible for the export of the products. The property and machines are held by Rissmann Bulgarian Holding (100% owned by Rissmann) and production is performed by BK Production.
"Our products require a lot of manual work - about 90% of the process. Therefore we had to find a location where we would be able to pay good wages but also have enough space for expansion. We also wanted to keep our existing employees," said Weber.
A total of 127 people are currently employed in the production process through BK Production. When the new building is ready, the company expects to double that number. "That is just the beginning. We hope to be able to switch to two shifts, which means reaching some 400 employees. It all depends on how the market will develop but given the current conditions, that goal is realistic," Weber added.
At present Rissmann Bulgaria produces some 300,000 items of luxury packaging a month. The amount is planned to double first and then increase five-fold in the next three to five years. The company also intends to add operations that are currently done in Nuremberg and have the entire production localized once the new facility in Novo Leski is completed and equipped.