Announcements of new large-scale investments in manufacturing projects have not been common in Bulgaria in recent years. Therefore the decision of France's Schneider Electric to choose the country for its new project is more than good news. Nearly 17 years after building its first switch factory near the village of Radinovo, close to the city of Plovdiv, and a year after the facility's last expansion, the company has begun construction of a second plant in the Trakia industrial zone. It will add new products to the portfolio of Schneider Electric Bulgaria and expand its markets.
The investment in the first stage of the project, which will be completed next year, amounts to 107 million levs. Plans for the next 10 years involve significant expansion, for which the company has already acquired a huge plot of land. According to CEO Martin Yordanov, the new plant makes Bulgaria a strategic location for the international group.
Even smarter factory
The new plant will spread on an area of 8,300 sq. m, with construction expected to be completed by the first quarter of 2025. The building's designer is IPS Bulgaria and construction is being carried out by Glavbolgarstroy. However, the entire plot is much larger - in February Schneider Electric bought just over 10.8 hectares for 8.5 million levs from Business Center 2, a company of Sienit Holding and Petar Kartev, which clearly speaks of its future plans.
In late 2019 the first plant was certified as smart factory, according to Schneider Electric's internal group standards. The goal now is for the new facility to reach the next level and become an advanced smart factory, as well as to receive a gold LEED certificate for the building itself. The construction of a geothermal heating and cooling system is also planned. About a year ago Schneider Electric's existing factory became the first production facility in Bulgaria with such an industrial installation and the company says the results are more than good.
The new plant will manufacture automatic switches and other low-voltage electrical products. According to Martin Ganchevski, manager of safety, environment and energy efficiency department and a key figure in the project execution, the next step will be to introduce new products, which will expand the portfolio and competences of the staff.
Beating the competition
Two years ago, Schneider Electric decided to increase its production capacity in Europe, with Hungary and Bulgaria identified as potential locations. Hungary had its advantages: with four working factories, a logistics center, two business service centers and 2000 employees, the French group had very strong presence there; the government also offered financial aid.
At the end of 2022 the Bulgarian team turned to InvestBulgaria Agency and, in Ganchevski's words, received strong support from there. At that time the group was leaning towards Hungary. "We got involved more or less in the final stage of the discussion but I'm glad we're here today," said Bogdan Bogdanov, executive director of the government agency at the time, at the official start of the project.
Meanwhile the Bulgarian government worked out rules for the provision of state aid - something that had been a hindrance to attracting large investors for years. Schneider Electric will now be the first company to take advantage of the new rules: in December the cabinet approved the provision of direct state aid for the priority project. The amount was not announced but the maximum rate is 50% of eligible costs, with funds disbursed gradually upon achieving certain project goals. Apart from that, the cabinet provided 4.6 million levs to Maritsa municipality for the construction of infrastructure that would serve the future factory.
However, financial incentives are not the only reason why Bulgaria was selected for the new plant. "What gives us an advantage is energy security. Studies have shown that Hungary's electricity needs for the next five years will be twice its production capacity," Ganchevski explained.
Another key factor in choosing Bulgaria was the short project execution time. "That weighed a lot in favour of the decision," he added.
The big plan
Production in the new factory is expected to start in the third quarter of 2025 with 110 employees. The company has already started recruiting staff, as the process of mastering the new machines takes about 6 months.
The big plan for the entire land plot is to be occupied over the next 10 years, with the maximum buildable area to be up to 60,000 sq. m. "The group needs new production facilities and increased capacity," said Ganchevski and added that the economic slowdown in Europe had not affected the company's order book.
Schneider Electric group reported 13% organic growth and 36 billion euro revenue in 2023. The latest published data for the Bulgarian subsidiary shows a 19% increase in sales to 303 million levs in 2022.
Announcements of new large-scale investments in manufacturing projects have not been common in Bulgaria in recent years. Therefore the decision of France's Schneider Electric to choose the country for its new project is more than good news. Nearly 17 years after building its first switch factory near the village of Radinovo, close to the city of Plovdiv, and a year after the facility's last expansion, the company has begun construction of a second plant in the Trakia industrial zone. It will add new products to the portfolio of Schneider Electric Bulgaria and expand its markets.
The investment in the first stage of the project, which will be completed next year, amounts to 107 million levs. Plans for the next 10 years involve significant expansion, for which the company has already acquired a huge plot of land. According to CEO Martin Yordanov, the new plant makes Bulgaria a strategic location for the international group.
