While many businesses lost ground on account of the Covid pandemic, in some sectors it has led to growth. The production of hygiene and sanitary products, for example, has flourished, and the new habits that the virus has created promise strong sales in the future. And the greater demand for disinfectants and personal hygiene products explains Septona Bulgaria's decision to expand its plant in Ruse.
The company, which produces cotton products for cosmetic needs such as makeup pads, ear sticks and wet wipes, as well as personal care products, will invest 40 million levs in new buildings and machinery. The first part of the project should be completed by next summer and the expansion will inevitably generate more hirings.
Two-stage development
The project includes the construction of a new production building with an area of 5000 sq.m., as well as a warehouse of about 1000 sq.m. Once planning permission is granted, the company anticipates it will take between six and eight months to complete and commission, meaning the new facilities should be up and running in the summer of 2025.
Septona's investment will be implemented in two stages. The first is worth around 26 million levs and includes construction activities and the purchase of a cotton production line. The second stage worth 14 million levs envisages the expansion of production with new machines for the company's other range of products, such as shower gels, soaps, and disinfectants, etc.
The company's General Director Konstantinos Akilidis told Capital more about the company's plans. "Along with the construction, we have also started the supply and installation project and the commissioning of the new cotton processing production line, which will be twice the size of our current one. The new warehouse space will also enable us to protect ourselves from sudden price hikes in the market for materials, as well as having our production in stock. Once this investment is completed, we will continue with the next step of increasing the production lines for final products with new machines and increasing automation."
With the expansion the firm aims to strengthen its presence on the market in Europe, where 75% of exports currently go, and there are already negotiated deals. In general, the company's products are sold in 75 countries around the world.
With the first stage, the company plans to increase the number of employees by 50 people, after which, depending on the state of the market, the expectation is to add about 100 more people in the next two years. There are currently 309 people employed.
"Finding labor here is like everywhere else at the moment. This is a common problem for all of Europe and the world, not only in Bulgaria. It applies to labor at all levels - technical staff, engineers, etc. In recent years we have had a targeted policy of retention and expansion of our staff, and we have managed to increase the number of employees by 30%. According to our plans, in the next two years we need to add about half of the existing staff," Akilidis says, but adds that he doesn't think they'll have a hard time finding additional manpower.
Along with the new production and warehouse base, Septona Bulgaria plans to build solar roof installations on both the existing buildings and the new ones. "We already have experience with similar installations, as one was done at our base in Greece. Here we have already collected offers and we need to choose the right moment for the implementation of the project. With the existing areas we will be able to have about 1.7 mW, and with the new building the capacity will be able to reach a little over 2.1 mW. Our plan is to implement this investment after the current one, but there is a possibility that the project will be started earlier," Akilidis comments. He pledges that 60 to 65% of the energy needs for the production of the firm in Ruse will be secured with the future RES installations.
Location, location, location
Septona Bulgaria is one of the main production centers of the Greek Septona, which is owned by the Evanguliou family. Septona set foot in Bulgaria in 2004. At that time, the company looked at several different locations for investment, such as Sandanski, Blagoevgrad, Sofia, Plovdiv, etc., but in the end they stopped at Ruse.
"As you know, the textile industry was very strong on the territory of South-West Bulgaria at that time and the opportunities for hiring labor were limited. The situation was similar in the larger cities and industrial zones in South Bulgaria. Then we were approached by the municipality of Ruse who assured us of their desire to develop their industrial park," Akilidis says. Later, the company bought its first properties in the city and registered the company itself in 2005.
Markets and pandemics
In general, the revenues of Septona Bulgaria have been growing over the years, reaching 74.7 million levs in 2023. "The pandemic was a good business opportunity. Not only for us, but for the entire disinfectant market. After the pandemic, we can say that it left a good habit for people to use disinfectants more often and maintain better hygiene compared to before this. The market accordingly increased significantly during the two years of Covid, after which it returned to some more normal, but also better than before, levels," Akilidis adds.
The company's profit over the last two years has dipped, and for 2023 it is at 566,000 levs. The reason is the high inflation in recent years, with the company's sales prices only partially compensating for the increase in the price of basic raw materials. The report found that in 2023, consumption increased as inflation eased, but increased labor costs remained a problem for businesses in the country.
Septona Bulgaria's goal this year is to restore profitability to levels seen before 2022. "For 2024, I can say that it is very good. We have new contracts and customers, as well as an increase in turnover, and EBITDA is there, where we set it out to be as per our goals. In short, this year will end as planned, which is a very good step for our next strategic plans," Akilidis says. He adds that the company has taken steps to ensure its production needs, having already contracted the necessary quantities of cotton for production in the new base. This will allow it to meet growing demand and attract new customers.
While many businesses lost ground on account of the Covid pandemic, in some sectors it has led to growth. The production of hygiene and sanitary products, for example, has flourished, and the new habits that the virus has created promise strong sales in the future. And the greater demand for disinfectants and personal hygiene products explains Septona Bulgaria's decision to expand its plant in Ruse.
The company, which produces cotton products for cosmetic needs such as makeup pads, ear sticks and wet wipes, as well as personal care products, will invest 40 million levs in new buildings and machinery. The first part of the project should be completed by next summer and the expansion will inevitably generate more hirings.
