Bozhidar Lukarski: German companies with business in China look toward Bulgaria
 

German companies have a serious interest in the production of individual segments for cars in our country, says the Minister of Economy.

3 Bavarian companies were fluctuating between Romania and Bulgaria. Following our meeting, they chose to invest in Bulgaria

Mr. Lukarski, will you go soon to the Prime Minister Borisov for money?

No.

Is it because of his warning that if a minister wants more money, he should appear before him carrying his signed resignation?

Because our ministry has a strict financial discipline and our estimates are made in such a way that we do not need to ask for extra money.

You, as a coalition partner, are slightly protected.

Why? Everything applies for everything. We are strict in our accounts and we make savings.

Your travels are monitored by the media, by your political partners and opponents.

And so it should be.

You were in Bavaria. If we are to capitalize each visit, what was the effect of this one?

It was one of the most beneficial. This is also the opinion of our consul there who has seen many delegations come and go. He said that he didn't remember such a serious media coverage and such interest on the part of the Bavarians regarding what is happening in our country. The reason for my visit to Munich was the invitation of Mrs. Ilse Aigner, Minister of economy, media, energy and technology of Bavaria and former Minister of Agriculture of Germany. Me and Ms. Aigner talked that Bavarian business has obtained an impression of a stable environment in Bulgaria, which presupposes an increase of investment ideas. We discussed the arrival of a serious business delegation to Bulgaria in October.

We heard something about 40 companies.

37 if we have to be precise, and new ones are registering. We have specified the sectors they are interested in.

Which are they?

The IT sector, mechanical engineering and the automobile industry. Maybe we should introduce some Bulgarian term, we already call it automotive industry, as is the English term, which is not really car production, but the production of modules for cars, car parts, electrical equipment. Individual segments to be produced in Bulgaria.

We are always talking about segments, what about an entire car?

A few places in the world produce whole cars. We are specialists in electrical equipment, the Germans know that we have good technical universities, where the whole alumni are German and they want to use this. We had a serious business forum with the Chamber of Commerce of Bavaria, the hall proved small and they brought in more chairs.

This is a forum in which you presented investment opportunities, is that so?

Not only us – the Ministry of Economy and the Investment Agency, there were reports by Bavarian companies who have already invested in Bulgaria and praised our country as a positive example. They said what were the pros and why it was worth investing. They themselves said they would expand their presence. We thought that the interest of the Munich Airport to the concession of the Sofia airport has somewhat declined. On the contrary, there was a director of the airport and he said that they were firmly interested in the concession. They are expecting it and have a serious interest.

Is it true that there are companies that have been headed to Romania, but have strayed to Bulgaria?

This is an achievement of our delegation, we had talks with three Bavarian companies, which were fluctuating between Romania and Bulgaria. After the talks, they have no more  fluctuations with regard to Bulgaria.

And when they come here?

They have been here already. They have visited different parts of Bulgaria, they have been in the economic zone in Bozhurishte. One of the companies – ”Multivac”, which is a European leader in the production of packaging machinery, including packaging – starting with juice and finishing with cans – has identified 2 destinations. They didn't tell us which the Romanian one was, but ours is in Bozhurishte. During our conversation they said that most likely they will choose Bulgaria. They have a business plan for 2.5 million Euro for initial investment and will provide jobs for 80 people.

And the other two?

One is a company that already operates in Bulgaria, and has an idea of opening an office in Romania, but also in Bulgaria. It is in Sevlievo and develops components for “Vidima” and “Ideal Standard”. The third company, which was considering Romania, is “Baumüller”; it has production in the Czech Republic and Slovenia, works in the field of automation of production processes. More like logistics, which monitor processing lines and offer improvements but not only logistically, they also make machines to automate the process. They said they have observed Romania and Bulgaria, but after our meeting I think they have no hesitations. We had a meeting with the Union of manufacturers of machinery and equipment in Germany. They brought investors who are interested in the development of engineering in the country and the possibility of training personnel – mid-level and high personnel. We reached an agreement to sign a memorandum between the Bulgarian Investment Agency and two of their agencies for investments.

In the communication for this memorandum there was a sentence that it could benefit German companies that have production in Greece, but want to move to Bulgaria. Is there such a trend?

No. There were inquiries from German companies how will the Greek crisis affect the country and in particular Greek banks in Bulgaria. The answer they got, I think, satisfied them. But they told us something interesting – Ms Aigner and the State Secretary of Economics, and the Chairman of the Foundation of the family business throughout Germany, and it is that many German companies that are manufacturing in China, are looking towards Bulgaria.

Why?

The yuan became quite expensive for them. And Bulgaria has been volatile over the past 2 years when they have been doing their investments in China. It turns out that what they produce in China can be used only for the Far Eastern market, and their idea is for products to enter Europe. Naturally, there are no taxes and duties here, and transport is cheaper, their goods enter more easily in countries in Europe.

The more expensive price of the yuan, as well as wage increases in China, approach the cost of the product manufactured there to the one produced in Bulgaria. And everywhere they reported that the difference in quality is very obvious, the Bulgarian worker works with much better quality than the one in China.

And the German family business?

Their one worry is the situation in China, which makes them look to Bulgaria. By saying the German family business, these are 3000 companies that are in the middle segment of the German economy. They are worried by the future intention of the German government for the introduction of inheritance tax.

The intention is for it to be 30%, right?

Exactly. 30% for an inheritance of 500 thousand Euro and hence it will grow up gradually, it will be columnar. Therefore, they are looking to transfer the family business to other destinations, including Bulgaria.

During the forum they were very interested in IT technology and start up companies. They often asked what is the opportunity to use Bulgarian IT specialists and how is the start up business in Bulgaria developing.

How is it developing?

Very well, we have opened 28 companies last year. I explained to them that the situation with IT experts in the country is complex, there is a shortage of manpower. However, they are ready to offer better terms than, for example, Americans. Many of our IT specialists are working for the Silicon Valley. Bavarians are quite stubborn people and are ready to fight.

 
 
 
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