Minister Bogdanov: The future effective development of state-owned enterprises will go through restructuring

Minister Bogdanov: The future effective development of state-owned enterprises will go through restructuring

Attracting foreign investment, opening new markets, providing personnel for business are among the main priorities to continue the economic development of the country

‘A top priority for us is the future of the state-owned enterprises under the umbrella of the State Consolidation Company (SCC) and the more than 5,550 people working in them. We are looking at options to restructure them so that we don’t risk people losing their jobs.’ This was said by the Minister of Economy and Industry Bogdan Bogdanov at a press conference, in which together with Deputy Ministers Ivaylo Shotev and Nikolay Pavlov presented the key priorities of the Ministry.

In Bogdanov’s words, the future development of state-owned enterprises should be focused in four main areas — clean technologies and circular economy, defence aerospace, food and biotechnology, critical minerals, metals and raw materials. ‘These are key guidelines that will ensure the effective management of companies on a market basis,’ the economic minister stressed. In his words, the restructuring also aims to significantly reduce the number of board members in state-owned enterprises. At present, their composition varies around 70 people, and according to Bogdanov, a team of 20 to 30 people is needed to achieve an effective management structure.

The Minister of Economic Affairs recalled that in the first working days of this year, a significant resource of BGN 45 million was restored to the SCC for the unrealized government complex. ‘We currently have a resource of over BGN 90 million , which will be used to repay part of the company’s debt to the Bulgarian Development Bank,’ he announced. This will lift all the foreclosures and liens that have been made over time on a significant number of the state-owned enterprises of the SCC. According to Bogdanov, these companies are currently pledged as collateral for this loan. It should be recalled that the Minister of Economy and Industry announced at his inauguration that he would work to restructure SCC’s debt to the BDB so that Bulgarian taxpayers would not pay the interest on the loan, which so far amounts to BGN 22 million.

Bogdanov also focused on the development of the International Fair Plovdiv AD, where the Ministry of Economy and Industry continues its efforts in the direction of returning state ownership. ‘We expect to recover 29% of Plovdiv Fair’s capital by the end of March,’ Bogdanov stressed. He added that the economic ministry is already ready with the preparation of a strategy for its development so that the state can enter into its active role as a shareholder.

During the press conference the minister outlined five pillars of Bulgaria’s economic development in the new year. Among them are the attraction of foreign investments, the opening of new markets, the continuation of the work on our country’s membership in Schengen and the euro area, as well as its accession to the OECD.

Bogdanov reported a record growth of nearly BGN 7 billion of foreign investment in Bulgaria in the first ten months of last year and announced that work is underway to maintain this trend in 2024. The Minister recalled the already announced investment in the automotive sector for EUR 1 billion, planned to be implemented in Stara Zagora, Plovdiv and Burgas and announced a new intention, which is currently being worked on. The investment is worth over EUR 600 million and is to be announced at the end of March. He stressed that there is interest for investments in the sectors of manufacturing industry, automotive industry, logistics, construction of IT hubs.

The Minister recalled that last year the opening of two new industrial zones was launched — in Dobroslavtsi and in Stara Zagora. ‘Their aim is to attract companies with high added value industries in strategic regions that are about to change their economic landscape,’ Bogdanov said.

He said that the Ministry of Economy and Industry is currently working on several instruments that will directly assist businesses, shorten the investment process and help fight corruption. The minister also warned that there are a number of challenges to investment in terms of personnel. That is why efforts are being made to ease the regime for third-country nationals to work in Bulgaria.

Bogdanov explained that the focus for this year is to open the opportunity for investments from third countries and to diversify Bulgaria’s economic relations. In 2024, our country is looking for new markets outside the EU, focusing on new markets such as Saudi Arabia, the UAE, Egypt, Vietnam, the Republic of Korea and Japan.

Among the highlights for the economic development of the country, the minister pointed to the prospect of our country’s accession to Schengen and the euro area. He explained that this would increase the confidence in our country and lead to an increase in foreign investment. Our country’s membership in the OECD remains among the key priorities.