 Fruits of private initiative |
Now, working hard to become a modern country with market-oriented economy the Bulgarians are on their way to gain the nickname "Valley" for their country again. But this time it is more likely to be a "Silicon Valley of Europe" than just a "Rose Valley". In the Socialist bloc Bulgaria was specialized in high technology with the Bulgarian IT specialists considered among the smartest and most inventive ones all over the world. It was John Atanasov, an American immigrant of Bulgarian origin who invented the computer. It is the Bulgarian professionals that are most commonly accused of producing the most dangerous computer viruses. It is Bulgaria where George Soros chose to invest US$4 mil in a Hi-Tech joint venture that would count on the skills of young Bulgarian IT specialists.
Although the spirit of private entrepreneurship had been depressed for many years, it is young ambitious businessmen from private sector that in recent years have proven that Bulgaria can quickly turn into an rapidly growing market-oriented economy. Counting on their experience from working abroad or just starting from a scratch, many private businessmen already enter new markets, which till very recently was unthinkable.
« Our main customers are Germany, France, Holland, Belgium, Ireland, Greece, Cyprus, Malta and etc. Just very recently we established a company in California and it will as to take care of the market. I believe that we will be able to sell in the USA", says Vassil Vassilev , CEO of Vassilevi Bros. Group , owner of a refrigerator and compressor producing plant. In 1989, when the communism collapsed, he and his father reactivated their family company established some 100 years before by his great grand father.
Under communism Bulgarian customers and people who tried to arrange new contracts used to be treated like boring intruders. Now they enjoy a quite different treatment due to the vital change in the business mentality. "My company is successful because it gives a feeling of security to the client. We do not take any money in advance and provide maintenance, guarantee and after guarantee maintenance which gives you the opportunity to do it all at one and the same spot. You can do a clean and fair business in Bulgaria but you need to look for the right people, you need to look for the private companies. In terms of mentality the Bulgarians and the Americans are very close. Both peoples are earning their money through hard labor", says Mr. Krassimir Uzunov , President of Interservice Uzunov , a large wholesale company with a branch in California.
Mr. Mitev and Mr. Lukanov , Presidents of the big cosmetics company Astera AG , give some important advantages of Bulgaria and Bulgarian companies for potential investors: "For investors who would like to enter the markets in CIS and Eastern Europe, Bulgaria would present the advantages of having traditional markets in all these countries and the advantage of the Bulgarian products that are very well known there. Their company operates two plants, both with huge capacity - "if our two plants work on three shifts for a period of three weeks they will satisfy the demands of the domestic market for a period of one year. Our production capacities are equal to those of SmithKlein Beecham for whole Europe", says Mr. Mitev.
Private companies proved not only to rely on the company’s or people’s background but also on employees’ up-to-date education and training. «We sponsor young people to study in the most prestigious universities in the world. Some of them already work in our corporation at a management level ». Moreover considering that Multigroup has contacts everywhere in the world, « We hope that the trade agreements signed by the Bulgarian government relating to trade with world economic institutions and the standardization of customs and export regimes is an important factor for the good involvement of Bulgarian business in world trade. All this makes us want to look for active contacts with foreign partners since this will make us even more competitive in the new globalized economic environment», says Mr. Iliya Pavlov , President of Multigroup , an industrial and financial holding.
A lot of small but very dynamic private companies build with the right marketing-oriented-mentality teach the Bulgarian people how to use and to make advertising in a society that badly needs it. One of those companies: M.A.R.C. Advertising.
Some of the success stories in Bulgarian business are based on big former state-owned companies. In these cases companies’ potential is combined with innovative private management. Nikolai Yanakiev , Chairman of the Board of Directors of the construction company Glavbolgarstroy , explains: "Generally, our markets are former Soviet Union republics. Our strategy is to enter the building markets of the Near and Middle East and Africa. The fact that we are a fully privatized company and the confidence of the banks in our company also contribute to our competitiveness". |
In other cases the potential of any recently privatized company is improved through new investments into up-to-date technologies. The construction company Siconco is an example of this. "We have an up-to-date technology, we use an up-to-date equipment bought from Germany for the production of window frames. Our window frames and full-scaled windows are of a highest standard . I was in the States recently, and I’ve looked to some showrooms of window manufactures - there is no comparison at all - ours are much better. Moreover in price terms our products are much more interesting than the German ones", Dantcho Lazarov , Chairman of the Board of the Siconco , says.
At the same time Bulgaria falls significantly behind other CEE countries in attracting foreign direct investments. Currently Germany and Belgium are the leaders among foreign investors. But most of the pioneers of the FDI in Bulgaria did make a success story - both for them and for the region where they had invested. It is a small Bulgarian town named Sevlievo that experienced the "The American dream". Some five years ago a US company - American Standard - bought Vidima Ideal, a company producing pipeline taps and valves. American Standard started modernizing the plant by heavy investments into up-to-date technology. Now there is no unemployment in Sevlievo, the workers enjoy competitive salaries and modern working conditions, the infrastructure of the town was renovated.
"All the French companies produce about 42 000 tons of tobacco and about 50 000 tons of cigarettes annually, while in Bulgaria, which is a small country, the maximum amount of tobacco production is130 000 tons annually and 80-82 000 tons of cigarettes. We sell tobacco everywhere in the world. Bulgarian tobacco is in the recipes of the all world wide famous brands of cigarettes – Marlboro, Rothmans, the brands of R.J.R. and B.A.T. ", explains Boyko Kishkov , Chairman of the Managing Board of Bulgartabac .
"It is very important for foreign investors to understand that the crisis in Russia is not impacting Bulgaria as significantly as before. For example, 90% of our wine production now goes to England and Holland where you get paid in cash and that can never happen in Russia. Indeed, it is a problem for the tobacco sector, but still Bulgartabac (a huge tobacco company offered for privatization) is one of the most profitable companies in Bulgaria. So the contraction of the Russian market that is expected will not impact Bulgaria and our clients that much" says Marin Marinov, Deputy Minister of Industry and member of Supervision board of Hebrosbank.
Indeed, due to the rapid expansion on new markets lead by private companies, Bulgaria is not expected to be badly hit by the Russian crisis. There were times when Russia and other communist countries imported more than 90% of the Bulgarian production. Now more than 50% of Bulgarian exports go to the European Union countries. Furthermore, the crisis in Russia would urge many people to buy mainly cheaper goods ; and indeed Bulgarian products are cheap. The stable financial system, which anchored onto the currency board, and additional underdeveloped capital markets make Bulgaria a safe haven even in the time of expected world crises. And what is more, in a situation of plunging capital markets all over the world, the price of the Bulgarian companies offered for privatization would inevitably fall, i.e. potential investors would pay less for their shares.
Other companies, well represented on European markets, are looking for new partners. Anna Glavinova , Executive Director of Polimeri , a recently privatized and huge producer of ethylene dichloride, caustic soda, polyvinylchloride, hydrochloric acid etc. explains: «Unfortunately Polimeri is not yet well known to the American market because almost all of our production is exported to Europe but we have an enormous interest in having relations with potential partners in the USA. As an advantage of our company I can mention the strategic geographical position of the plant, the good inside and outside infrastructure, the qualified staff and the good quality of the chemical products that we produce, i.e. their purity, as well as their wide application in many kinds of industries, such as the chemical, textile, pharmaceutical, soap production, cellulose, polish production, leather production, foods, metal production, etc». |
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