What are the major steps in the history of Vidima?
Vidima is unique in that the business has managed to retain its reputation for craftsmanship and quality throughout its history. That's true from Vidima's founding in 1934 as a small private company manufacturing brass products to today, when an American-company owns 99% of the business. From 1934 to 1950, the company built up a prosperous business by acquiring smaller competitors and manufacturing high quality brass goods. When the state nationalized the business in 1950, 600 people worked for the company. As a state-run monopoly, Vidima supplied nearly 95% of faucets and other brassware to the local market. Once the government opened the country to foreign investment in 1991, we started looking for a partner with sufficient capital to expand what employees knew was a good business. We found that partner in American Standard, one of the world's largest plumbing products manufacturers. At the time, American Standard was starting to expand its fittings business and was seeking strategic partners. In April 1992, the companies entered into a manufacturing joint venture with American Standard owning a slight majority - 51% to the state's 49%.
I think the most significant milestone in our history occurred in 1995 when American Standard licensed Vidima to produce fittings under its Ideal Standard brand. That was a vote of confidence in our ability. Throughout Europe, the Ideal Standard brand is synonymous with quality, style and innovative design. By licensing Vidima, American Standard was saying we had the talent and skills to produce to their high standards.
In 1997, American Standard began construction of a plant in Sevlievo to manufacture ceramic bathroom products like sinks and toilets. Today, the plant is one of the company's largest in Europe. That same year, our fittings plant, also in Sevlievo, expanded its production capacity. And in May 2001, the company opened another plant in Sevlievo to manufacture door hardware. We've come a long way in nine years.
What were the objectives and the motives for Ideal Standard to come to Bulgaria?
Keep in mind that Ideal Standard is a division of U.S.-based American Standard. So as part of American Standard's growth strategy, Ideal Standard was seeking both a new market opportunity and a strategic low cost sourcing opportunity. Ideal Standard manufactures products in five countries and sells products in more than 10 countries throughout Western Europe. When the Berlin Wall came down in the late 80s, the company saw a new market opportunity in Eastern Europe. Perhaps even more important, countries in Eastern Europe represent a good product sourcing opportunity. What I mean by that is with the East's lower manufacturing cost structure, Ideal Standard could build product here and ship it to markets in the West. Bulgaria obviously meets the company's criteria. Additionally, we have a government that has encouraged foreign investment.
Do you think they were also interested in the brand awareness of Vidima in the region to penetrate new markets?
I think Ideal Standard was more interested in the reputation behind the Vidima brand. As I've said previously, Ideal Standard is known for quality, style and innovative design, and the company carefully manages its brands. By licensing Vidima to manufacture products under its brand name, Ideal Standard acknowledged that we have hard working, skilled people in whom they can rely. And they realized that a Bulgarian management team could work with them in developing new fitting production areas. |
When you mention investments in the new plants, what amounts are we talking about?
American Standard's investment totals in the millions of dollars. By investing additional capital in the business, American Standard grew its shares in Vidima from 51% to 99%.
What is your market share on the domestic market, and what are your main export markets?
Domestically, we have about 90% share for the fittings or faucets market segment, and about 40% share in the vitreous china or ceramic plumbing products segment. We export to Germany, France, Italy, the UK, Greece, Benelux, Mexico and countries in Eastern Europe.
Is there a strategy towards Eastern Europe markets?
Yes. Ideal Standard seeks new market opportunities and the emerging markets in Eastern Europe are of particular interest. Vidima has supplied products to countries like Russia, Ukraine, Hungary and Poland in the past. Although our market presence is relatively small, there's a good development opportunity for the business with Ideal Standard's support.
What is the distribution strategy of your products?
While I can't get into specifics, we are developing our distribution base in Eastern Europe. It is going quite well. Our focus is both on commercial activity and production.
How many people have you hired, and what is your present turnover?
In 1992 when we started the joint venture with Ideal Standard, we employed 1,050 people. Today, Vidima employs 1,950 and Ideal Standard employs another 1,300 people for a total of about 3,200. As for turnover, we don't disclose sales for individual locations but I can tell you that Ideal Standard accounted for half of American Standard's $1.8 billion plumbing products sales.
How do you perceive your social responsibility?
We believe we do have a social responsibility in Bulgaria. For example, we work closely with the American University in Bulgaria to provide learning opportunities for our employees and the Sevlievo community where our plants are located. It's all part of being a good corporate citizen.
There are very few American companies at your level in Bulgaria. Do you think that investors should have an interest in Bulgaria, to come and invest here?
Yes. There are many good reasons to invest here. Our people are educated and hard working. Our government supports foreign investment and we are strategically situated to serve as a bridge both to Eastern and Western Europe markets. Once our economy stabilizes, I think Bulgaria will be more attractive to foreign investors, particularly U.S. investors. And that's important. We need large investors here, because they bring about change - in our thinking and in the way we do business. It's good for our country.
What will be your final message to our readers?
Come to Bulgaria. When you do, you'll find hard working, talented people, a stable political environment and a cooperative government. Bulgaria is a great place to be.
Note: World Investment News Ltd cannot be held responsible for the content of unedited transcriptions. |
