Export Strategy MANUFACTURE OF MACHINERY, EQUIPMENT...
Transcript of Export Strategy MANUFACTURE OF MACHINERY, EQUIPMENT...
This project is co-financed by the European fund for Regional Development through Operational programme “ Development of the competitiveness of the Bulgarian economy” 2007 - 2013
Export Strategy
For Sector
„MANUFACTURE OF
MACHINERY,
EQUIPMENT AND
HOME APPLIANCES”
Bulgarian Small and Medium Enterprises
Promotion Agency
2012
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
2
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
This document was developed under project № BG161РО003 – 4.2.01-0001
“PROMOTION OF THE INTERNATIONALIZATION OF THE BULGARIAN
ENTERPRISES”.
Beneficiary: Executive agency for promotion of small and medium
enterprises
This document was developed with the financial support of Operational
programme “Development of the competitiveness of the Bulgarian economy”
2007-2013 co-financed by the European fund for Regional Development. The
overall responsibility of the document’s content lies with the Executive agency
for promotion of small and medium enterprises and under no circumstances it
can be accepted that this document reflects the official statement of the European
Union and the Contract authority.
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
CONTENTS:
INTRODUCTION .......................................................................................................................8
APPROACH FOR COMPOSING THE EXPORT STRATEGY OF THE SMALL AND
MEDIUM ENTERPRISES IN THE SECTOR „MANUFACTURE OF MACHINERY,
EQUIPMENT AND HOME APPLIANCES” ..........................................................................9
MAIN CONCLUSIONS OF THE ACTUAL SITUATION ANALYSIS .............................16
MACROECONOMIC CHARACTERISTICS OF THE PRIORITY BULGARIAN
EXPORT MARKETS. BILATERAL TRADE RELATIONS ..............................................68
SWOT AND PESTEL ANALYSIS – SECTOR “MANUFACTURE OF MACHINERY,
EQUIPMENT AND HOME APPLIANCES” ........................................................................88
OBJECTIVES AND STRATEGY TO PROMOTE THE EXPORT OF THE SECTOR
SMALL AND MEDIUM SIZE ENTERPRISES ....................................................................93
STRATEGY FOR PROMOTING THE SECTOR SMEs EXPORT ...................................96
ACTION PLAN – SECTOR “MANUFACTURE OF MACHINERY, EQUIPMENT AND
HOME APPLIANCES” ..........................................................................................................100
MONITORING AND CONTROL SYSTEM .......................................................................111
SOURCES ................................................................................................................................115
4
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
List of Tables:
Table 1 Regional distribution of companies and employed in sector “Manufacture of
machinery, equipment and home appliances” in 2009 ................................................................18
Table 2 Dynamics of the export by sectors, 2001 – 2010 ....................................................24
Table 3 Base index, 2001=100 ..............................................................................................26
Table 4 Indices for the condition of the export of the SMEs in the manufacturing industry
.....................................................................................................................................................28
Table 5 Indicator for the export of the SMEs in sector “Manufacture of machinery,
equipment and domestic appliances” ..........................................................................................30
Table 6 Export of Bulgaria in sector “Manufacture of machinery, equipment and home
appliances” (million EUR) ..........................................................................................................33
Table 7 Ranking of exporters of hydraulic pumps, hydraulic and pneumatic engines
worldwide for the period 2001 – 2011 (million EUR) ................................................................36
Table 8 Dynamics of the export (base index, base 2001) of hydraulic pumps, hydraulic and
pneumatic engines worldwide for the period 2001 – 2011 (million EUR) .................................36
Table 9 Leading partners in export (million EUR) ...............................................................38
Table 10 Ranking of exporters of furnaces and furnace burners worldwide for the period
2001-2011 (million EUR) ...........................................................................................................39
Table 11 Dynamics of the export (base index, base 2001) of furnaces and furnace burners
worldwide for the period 2001-2011 (million EUR) ..................................................................39
Table 12 Leading partners in export (million EUR) .............................................................40
Table 13 Ranking of exporters of office equipment, except computers worldwide for the
period 2001-2011 (million EUR) ................................................................................................40
Table 14 Dynamics of the export (base index, base 2001) of office equipment, except
computers worldwide for the period 2001-2011 (million EUR) .................................................41
Table 15 Leading partners in export (million EUR) .............................................................42
Table 16 Ranking of exporters of extracting and construction machinery worldwide for the
period 2001-2011 (million EUR) ................................................................................................43
Table 17 Dynamics of the export (base index, base 2001) of extracting and construction
machinery worldwide for the period 2001 – 2011 ......................................................................44
Table 18 Leading partners in export (million EUR) .............................................................45
5
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 19 Ranking of exporters of turbines and engines, except aircraft, vehicle and cycle
engines worldwide for the period 2001 – 2011 (million EUR) ...................................................46
Table 20 Dynamics of the export (base index, base 2001) of turbines and engines, except
aircraft, vehicle and cycle engines worldwide for the period 2001 – 2011.................................46
Table 21 Leading partners in export (million EUR) .............................................................48
Table 22 Export of Bulgaria in goods group Industrial cooling and ventilation equipment
for the period 2000 – 2010 (million EUR) ..................................................................................50
Table 23 Export of Bulgaria in the group of goods “Machinery and equipment for foods,
beverages and tobacco processing” for the period 2000 – 2010 (million EUR) .........................52
Table 24 Leading partners in export by groups of goods in sector “Manufacture of
machinery, equipment and home appliances with general and special purpose” for the period
2000 - 2010 ..................................................................................................................................60
Table 25 Main economic indicators for Romania and bilateral trade relations with Bulgaria
.....................................................................................................................................................70
Table 26 Economic indicators for Greece and bilateral trade relations with Bulgaria .........72
Table 27 Main economic indicators for the Czech Republic and bilateral trade relations
with Bulgaria ...............................................................................................................................74
Table 28 Trade turnover between Bulgaria and Slovakia (million USD) .............................76
Table 29 Main economic indicators for Hungary and bilateral trade relations with Bulgaria
.....................................................................................................................................................79
Table 30 Main economic indicators for Serbia and bilateral trade relations with Bulgaria ..80
Table 31 Main economic indicators for Macedonia and bilateral trade relations with
Bulgaria .......................................................................................................................................81
Table 32 Main economic indicators for Russia and bilateral trade relations with Bulgaria .83
Table 33 Trade turnover between Bulgaria and Ukraine (million USD) ..............................84
Table 34 Trade turnover between Bulgaria and Kazakhstan (thousand USD) .....................86
Table 35 SWOT and LOED Analyses .................................................................................88
Table 36 PESTEL-analysis ...................................................................................................91
Table 37 Action Plan for Implementation of the Export Strategy of the Sector .................100
6
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
List of Graphs:
Graph 1 Prognosticated values for export growth /2010-2015./ (in million EUR) ...............22
Graph 2 Export of Bulgaria in sector “Manufacture of machinery, equipment and home
appliances” ..................................................................................................................................34
Graph 3 Export of non-domestic cooling and ventilation equipment ...................................49
Graph 4 Value of the Bulgarian export – motor trucks, electrical trucks and other trucks
/2001 – 2010 / (in thousand EUR) ..............................................................................................53
Graph 5 Value of Bulgarian export – air conditioning machines /2001 – 2010/ ( in thousand
EUR) ............................................................................................................................................54
Graph 6 Value of the Bulgarian export – washing machines /2001 – 2010 / (thousand EUR)
.....................................................................................................................................................55
Graph 7 Value of the Bulgarian export – laundries and other laundry-type washing
machinery /2001 – 2010 / (in thousand EUR) .............................................................................56
Graph 8 Value of the Bulgarian export – sewing machines /2001 – 2010/ (in thousand
EUR) ............................................................................................................................................57
Graph 9 Value of the Bulgarian export – central heating boilers /2001 – 2010 / (in thousand
EUR) ............................................................................................................................................57
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
List of Abbreviations:
GDP Gross Domestic Product
BBCMB Bulgarian Branch Chamber – Machine Building
SOC State-owned company
SPLC Sole Public Limited Company (Joint Stock Company with single member)
EU European Union
EU-27 27 European Union Member States
BSMEPA Bulgarian Small and Medium-size Enterprises Promotion Agency
CEA Classification of Economic Activities
SME Small and Medium-size Enterprises
CM Council of Ministers
NACE Classification of Economic Activities in the European Community
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
INTRODUCTION
The export strategy for economic activity “Manufacture of machinery, equipment and
home appliances” is developed under Project No BG161PO003 – 4.2.01-0001 “Promoting the
internationalisation of the Bulgarian enterprises” under Operational programme “Development
of the competitiveness of the Bulgarian economy”, in implementation of Contract
BG161PO003 – 4.2.01-0001 for direct grant allocation, on which the Bulgarian small and
medium enterprises promotion agency (BSMEPA) is the institutional beneficiary.
The aim of the Export strategy for economic activity “Manufacture of machinery,
equipment and home appliances” is to support the Bulgarian micro, small and medium sector
enterprises to promote their competitiveness, their internationalization level and introduction
and expansion of market positions of the Bulgarian products, and in particular of those, having
higher added value.
The Bulgarian state, represented by BSMEPA, MEET and other government bodies, has
recognized the SME sector to be extremely sensible and at the same time as having decisive
importance in the economic field, deserving special attention. The diversity in the development
of the various industrial sectors, where the SME development has its place, as well as national
priorities, related to promoting the country’s export, require drafting of export strategies for
certain sectors, being the “Manufacture of machinery, equipment and home appliances” sector
one of them. Focusing the support and giving of precise reference points for State intervention
through its institutions, as well as offering development options for the rest of the participants
in the process will strengthen in positive aspect the plan-based principle in State activities and
as a result will improve the sectors functioning. The successful realization of the Expert
strategy is expected to result in the improvement when entering international markets and the
active expansion and strengthening of the market positions of the Bulgarian small and medium
enterprises, manufacturing machinery, equipment and home appliances.
At developing the present Export strategy has been considered the “Methodology for
strategic planning”, drafted by the Council for administrative reform at the Council of
Ministers/CM/ of the Republic Bulgaria.
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
APPROACH FOR COMPOSING THE EXPORT STRATEGY OF THE
SMALL AND MEDIUM ENTERPRISES IN THE SECTOR
„MANUFACTURE OF MACHINERY, EQUIPMENT AND HOME
APPLIANCES”
The export strategy is a strategic document, setting short-term objectives and priorities
within the small and medium sized enterprises (SMEs) export development in Bulgaria. It has
been drafted on the basis of the strategic planning approach, which adroit use has the following
advantages:
Ensures good comprehension among the stakeholders for the trends and what could
bring the future;
Creates general vision and consensus among the stakeholders, coordinating the
various initiatives under the chosen objectives;
Identifies the projects and actions undertaken or planned;
Strengthens the partnership among the management bodies, the business and others
for solving complex problems.
When developing such a strategic document it is extremely important to precisely
formulate the “owner” of the strategy, i.e. the institution or institutions responsible for the
overall implementation of the strategic documents, as well as for the concrete phases of
strategic planning.
Most commonly the phases of elaboration of the strategic document are:
Assignment
Preparation
Development
Coordination
Adoption
Implementation
Evaluation
Update
10
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Each of these phases contains certain activities, some of which, as assignment,
preparation, elaboration, coordination, adoption and update at a later stage, will be part of the
project, implemented by the contract, mentioned at the beginning. Consequently, the main
“owner” of the export strategy is the Bulgarian Small and Medium Enterprise Promotion
Agency. This formal logic does not contradict to the fact that as stakeholders in the different
phases are included significant number of institutions, businesses and even the country’s
population.
Strategic planning tools
The strategic planning process includes the following steps:
Identification of the stakeholders
Analysis of the environment
SWOT analysis
PESTEL analysis
Vision
Definition of the targets
Selection of alternative – development strategy
Action plan
Monitoring system
Each of these steps has certain peculiarities, mainly:
Identification of the stakeholders. A stakeholder is each person or group, that
requires attention, that can influence certain decision, may contribute with resources or
may be affected by given decision. The implication of the stakeholders at an earlier stage
of the strategic document development may lead to better expressed consensus on the
targets and bigger readiness to support the decision. The stakeholders to the Export
strategy may include different people and organizations: companies, government bodies,
manufacturer associations, certain businesses, the corresponding products consumers, non-
governmental organizations and experts.
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Analysis of the environment. The analysis of the environment (the conclusions on
which is based the SWOT analysis) permits the definition of targets and priorities that are
going to synchronize the efforts and to be in line with the time and environment.
The analysis describes the present situation of the SMEs in the sector and the
export process, establishes the reasons that provoke problems in the development, and sets
the future development trends.
SWOT analysis. The SWOT analysis gives the opportunity to identify the main
internal factors, differentiated as “strengths and weaknesses” and the external factors –
“opportunities and threats”, helps formulating the strategic objectives, priorities and
measures. The use of SWOT protects from setting unreachable objectives and priorities for
the export development of the SMEs of sector “Manufacture of machinery, equipment and
home appliances” within the Strategy period.
The use of SWOT analysis when developing the Export strategy has certain
specifics, as the “owner” of the strategy is the BSMEPA, but the analysis is focused on the
export process of the SMEs in this exact sector and not on the industry itself.
PESTEL analysis. There are number of factors and “variables” that have a direct
or indirect influence on the business environment in our country as well as on the whole
manufacturing industry state. Tax rates, amendments in law, trade barriers and
administrative requirements, political and social trends represent macro factors having
perceivable effect on the enterprise operation.
PESTEL analysis is focused on analyzing the factors and tendencies on macro level
influencing the development of Bulgarian manufacturing industry, SME and the
“¨Manufacture of machinery, equipment and home appliances” sector in particular.
The use of this analysis shall present key conclusions for the positioning and
planning of SME development in this sector.
Vision: Defining the vision is extremely important for the future development of
the export of SMEs in “Manufacture of machinery, equipment and home appliances”, as it
demonstrates the view of the institutions and the business towards the future. The vision
12
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
seeks answer of one basic question – How do the stakeholders and the main participants in
the process want the sector export to look at the end of the period, covered by the strategy?
Definition of targets. The strategic planning is focused on the issues of critical
importance, the opportunities and the problems, faced by the SMEs export of sector
“Manufacture of machinery, equipment and home appliances”. It helps to outline the really
important decisions from those decisions with temporary impact.
The definition of the targets by making hierarchical tree of goals is a working
instrument, giving the opportunity to work out in detail as the most common general
objectives, as well as the most specific ones.
Reaching the level of the specific targets permits finding the answer of the questions
“who”, “what” and “when”, as to guarantee the achievement of the defined general goals.
Selection of alternative – development strategy. After the objectives definition,
the paths for their achievement are sought. Practice shows that this may be done through
different ways, representing different alternatives for development and achievement of the
set objectives. At this stage of the strategic planning the various alternatives are evaluated
by different point of views and criteria, and as a result one alternative is chosen, that is to
become a development strategy.
Action plan. The chosen strategy is to be supplied with certain activities and
measures, bound by deadlines, people in charge, executors and funding. The action plan
and the measures provided therein represent the transformation of this strategic instrument
into our everyday work and the realization of policy of supporting the SMEs from sector
“Manufacture of machinery, equipment and home appliances”.
Monitoring system. The last stage of the strategic planning process is the
monitoring and evaluation of the progress of implementing the general and specific
objectives, laid down in the export strategy and in the action plan. Monitoring is important
as it gives the possibility to undertake corrective actions, if the progress is unsatisfactory or
if the conditions are changed. Reporting the progress in achieving the general objectives in
front of the society and the business is also important, as to grant them the possibility to
evaluate the work of the corresponding institutions and stakeholders for the strategy
13
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
realization. We must note that very often impacts may not be visible or obvious, that
makes their measurability difficult. Moreover, impact may often result in cumulative effect
and it may additionally complicate the analysis. This gives particular importance of the
monitoring, which is closely related with all stages of implementation of the Export
strategy – preliminary (ex ante), current (parallel to realization) or posterior (ex post)
evaluation.
In order to monitor the export strategy implementation and to evaluate the results
achieved in terms of the set goals, it is necessary to use a set of indicators related to the
implementation of the strategic document, that are to be determined preliminary or early
enough, as to use the data obtained thereof. In most of the cases these will be targets,
which in aggregate will correspond to the objectives of the strategic document.
The monitoring provides the feedback, helping to render account about the success
or failure of the planning document.
In order to perform the monitoring process it is necessary to define:
Monitoring indicators (what is to be monitored)
Periodicity of the monitoring and the evaluation (when are going to be prepared
the corresponding reports)
Responsibilities, related to the monitoring and evaluation implementation (who
and for what is going to be responsible), and competences on taking decision on
changes (update of the strategic document).
Information sources
When developing the export strategy the following basic information sources have
been used:
National Institute of Statistics;
Information, given by BSMEPA;
Information from the Ministry of Economy, Energy and Tourism;
14
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Eurostat;
World Trade Centre;
Information, published in relation to the celebration of international forums and
meetings;
Official electronic information sources;
Information, published by the Branch chamber of wood-working and furniture industry
Information by the Bulgarian Chamber of Commerce and the Bulgarian Chamber of
Commerce and Industry, as well as their regional divisions;
Information from sociological survey, carried out within the period October 31st –
November 28th, 2011 together with the senior management of 13 SMEs, working in
the sector;
Focus group carried out with the participation of sector SMEs representatives, branch
organizations and sector experts.
Structure of the Export strategy for sector “Manufacture of machinery, equipment and
home appliances”
At determining the structure of the Export strategy for sector “Manufacture of
machinery, equipment and home appliances” has been considered the use of the strategic
planning approach, setting the general parameters of the strategic document. At the same time
has been conducted a survey of the structure of other institutional strategic documents, using
for evaluation the following criteria:
– Is there a possibility for comparably easy acquaintance with the document through a
comprehensive and logic structuring of the various parts;
– Is the content represented in an attractive and easy to understand way, accessible for
non-professionals;
15
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
– Is it possible to grant the information thematically, i.e. is the material structured in a
way to allow in-depth introduction into the issues and analysis only if the reader is
willing to.
Some of the studied strategies met the so selected criteria, where there was a clear distinction
between two separate parts, in particular:
1. Main document, where according to the described above logic of the strategic plan tools
contains definition of the various sections.
2. Annexes, containing the complete text of the prepared analysis, including the
introduced in the main material conclusions.
This approach was preferred also when structuring the Export strategy for sector
“Manufacture of machinery, equipment and home appliances”.
16
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
MAIN CONCLUSIONS OF THE ACTUAL SITUATION ANALYSIS
This part contains the conclusions of the various analysis, included in the “Analysis of
the environment”, being one of the main steps in the strategic planning technology. In addition
to this strategic document is given the complete text of the facts, as well as of the made
analysis, on the basis of which made conclusions have been formulated. The conclusions and
the analysis themselves are structured in 5 parts, as follows:
CONDITION AND DEVELOPMENT OF THE SECTOR IN
BULGARIA
EXPORT ORIENTATION OF THE SECTOR
PRODUCTS WITH EXPORT ADVANTAGES AND
POTENTIAL
COMPETITIVENESS OF THE EXPORT OF GOODS TO
FOREIGN MARKETS
BARRIERS TO THE INTERNATIONALIZATION OF SMALL
AND MEDIUM SIZED ENTERPRISES AND MEASURES AND
PERSPECTIVES FOR EXPORT PROMOTION AND
DEVELOPMENT
17
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
CONDITION AND DEVELOPMENT OF THE SECTOR IN BULGARIA
Small and medium enterprises are the backbone of European economy, its priority and
long-term commitment, being also an important social factor for the development of
common economic space. The situation in Bulgaria is similar and requires long-term
vision and particular efforts supporting the non-financial sector and enterprises,
ensuring employment to more than two thirds of the population.
Especially vulnerable of the abrupt changes in economic cycles, SMEs are following
the upsurges and falls of the global financial and economic path. Among the basic
principles of the European Community – principles Bulgaria has always underlined its
aspiration to follow – is the commitment to ensure stability and protection namely of
such priority economic structures, combining important economic and social roles. This
priority of National and European performers, lawmakers and consultative bodies
require far-sighted strategic and export interference in the last three years, as a result of
the global and economic crisis.
The indicated below findings represent a concentrated expression of the conclusions,
based on the detailed analysis and sociological surveys made with representatives of the
SME of sector “Manufacture of fabricated metal products, except machinery and
equipment” in the process of drafting the present strategy. The objective is to emphasize
the place of the SME in the sector and their export possibilities.
The sector for manufacture of machinery, equipment and home appliances covers
slightly over 3.0% of the industrial production in the country and creates around 3.5%
of the added value in the industry. The participation of the sector in external trade is
about 6.9% of the total export in the country and 10.7% of the total import of the
country.
The manufacture consists in the production of turbines and engines, hydraulic pumps,
compressors, fittings, bearings, gears, furnaces and burners, lifting and handling
equipment, office equipment, tools, cooling and ventilation equipment, agricultural
18
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
equipment, metalworking machinery, equipment for metallurgy and moulding and other
industrial machinery, home appliances.
Sector “Manufacture of machinery, equipment and home appliances” is part of the
Machinery building industry. The companies in the sector are members of the Branch
chamber “Machine building”.
There is clearly expressed uneven distribution of enterprises and people employed by
regions. There are 950 companies operating in the sector, small, medium and large
sized, where around 40% of them are situated on the territory of the South-western and
Southern Central planning region. Lowest is the concentration of companies in the
North-eastern region.
Among the companies, dealing with the manufacture of machinery and equipment,
show up “Vidima Ideal Standard” PLC, “Remotex Radnevo” SPLC, “M+C Hydraulic”
PLC, “SKF Bearings Bulgaria” SPLC, “Atomenergoremont” SOC, “Sparky Eltos”
PLC, “Palfinger Productiontechnic Bulgaria” SLTD, “Kaproni” PLC, “Hraninvest –
Hranmashcomplekt” PLC, “Mashstroi” PLC.
Table 1 Regional distribution of companies and employed in sector “Manufacture of machinery,
equipment and home appliances” in 2009
Employed
in the
sector
(persons)
% of employed in
the
manufacturing
industry
% of
employed
in the
sector
Companies
in the
sector
(units)
% of
companie
s in the
sector
North-western region 5082 8,4% 16,5% 81 8,8%
Northern central region 7281 8,6% 23,6% 150 16,2%
North-eastern region 1358 2,3% 4,4% 80 8,7%
South-eastern region 6430 7,9% 20,9% 126 13,6%
Southern central region 6081 4,5% 19,7% 242 26,2%
South-western region 4591 2,9% 14,9% 245 26,5%
Source Eurostat
The salary level in the sector is around the average for the country. The average
monthly remuneration is estimated at 590 BGN and ensures employment of approximately 30
thousand persons (5.9% of the employed in the manufacturing industry).
19
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
The index of industrial production and that of the turnover in the sector in 2010 have
improved respectively by 6.9 and 5.9 points. At the same time there is change in the producer
prices in the sector.
At national level in the country is operating “Bulgarian branch chamber – Machine
building” with 260 member companies, active in the field of:
Manufacture of metalworking machinery;
Manufacture of woodworking machinery;
Manufacture of hydraulic machinery;
Manufacture of tools;
Manufacture of lifting/handling equipment;
Manufacture of machinery and equipment, used in the food industry;
Manufacture of agricultural machinery.
According to this branch organization data about 70% of the total production in the field of
machinery building is created namely by the members of this association. Many of the
Bulgarian producers, especially from the SME sector are working on the principles of
subcontracting – i.e. these are accepting orders to implement from external for the country
assignors. The problem is that, as one of the characteristics of the manufacture of machinery
and equipment, this process of subcontracting continues to grow and is extremely noticeable,
being a precondition for development of this companies also in the future.
This economic activity is extremely energy consuming, expensive, material consuming and
consumes a number of incoming resources. Less than one third (31%) of the created economic
values is added value and the other 69% are due to input resources and materials.
One specific field of the economic activity “Manufacture of machinery, equipment and
home appliances”, that is developing especially dynamically, is the activity area of
Bulgarian small and medium size enterprises, based in cities as Stara Zagora, Plovdiv,
Pazardzhik, etc., which companies are producing machinery and equipment for the
foods, tobacco and wine industry.
In 2010 the turnover of the SME in sector “Manufacture of machinery and equipment”
accounts to 883 555 thousand BGN and the labour productivity, expressed as realized
added value for 1 employed is 55,44 thousand BGN.
20
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Within the period 2009 – 2011 as a result of the economic crisis the sector has slow
down its development, a trend continuing also at the moment. The crisis on the
European market in 2009, accompanied with extreme reduction of the internal
consumption are the main factors for the sharp lowering of the production and sales of
goods of the Bulgarian companies.
Situation analysis
Main factors, representing a barrier to the export of the SME of sector “Manufacture of
machinery, equipment and home appliances” are the following:
Deteriorated policy of crediting;
Insufficient financial resources;
Seriously limited and insufficient choice of funding sources;
Risk of insolvency due to the specificity of the SME structure;
Incapability for entering into the field of highly industrialized export.
Analysis of the Bulgarian export of products, marking the highest values within the studied
period.
Among all studied products there are such, being absolute leaders by indicators both
concerning absolute value and growth for the period. There are products with relatively
constant levels of demand and such, having more specific demand.
In order to evaluate the possibilities of the present strategy to help them develop even
more, identical indicators for monitoring and evaluation of the set measures will be undertaken,
as there are different possible development scenario and the market situation at the moment is
unfavourable. From the time perspective the main task and objective of the present strategy will
be to introduce strategic planning into the sector. This is first and foremost related to
overcoming falls in export and achieving sustainable growth, as each harsh reduction in the
export value may result fatal for one small or medium-size Bulgarian enterprise.
An evaluation of the present strategy efficiency may give a more complete and deeper
analysis of the reached results about the export values. Without considering the absolute values,
it is important to find the trend development and to analyse the export development line. The
introduction of the strategy is expected to promote the export and to lead it to sustainable
growth, subjected to stable development rates. Another key instrument is to build systematic
monitoring and to perform analysis of different product segments.
21
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Analysis of the Bulgarian export of products, marking the lowest values within the studied
period.
If in the case of the products having stable export positions, marking the highest export
values the objective is the achieve sustainable development, in the case of the products with
relatively lower export values the priority should be to push it out to higher export levels. It
could be realized through aggressive policy on behalf of the exporting country in relation to the
price level or preferential conditions. The export value is determining to a higher extent if a
trade policy is effective or not. In the case the aim is to break or enter into a foreign market by
all marketing tools. This may include discounts for larger orders, preferential prices for regular
and loyal clients, as well as other bonuses.
Occupying new niches by the SME in the sector, willing to establish their position into
the foreign market is related to finding ways to produce and export channels. One of the
possibilities before the small and medium-size business is equipment hiring or licensing and
cluster creation, specialized in producing the good. The set strategic goals, measures and the
following of certain action plan to promote the economic activity production export may be
done mostly if performing regular market monitoring and publishing specialized bulletins, as
well as information from the NSI for the development of the sector and alternative market
studies, carried out by business or non-profit organizations.
An evaluation of the present strategy efficiency may give a more complete and deeper
analysis of the reached results about the export values. Without considering the absolute values,
it is important to find the trend development and to analyse the export development line. The
introduction of the strategy is expected to promote the export and to lead it to sustainable
growth, subjected to stable development rates.
What is noticed in the export of goods in sector “Manufacture of machinery, equipment
and home appliances” is that the introduction of strategic planning will lead to levelling the
values and achieving stable growth, without admitting serious amplitudes in the export values.
Another key instrument is to build systematic monitoring and to perform analysis of different
product segments.
The given graph shows the prognosticated values for the development of various market
segments for the period 2010 – 2015.
As it may be seen on the graph enclosed the manufacture of office equipment, except
computers, is undergoing the most dynamic development and has the widest export potential,
22
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
second comes the manufacture of furnaces and burners, third – turbines and engines, except
aircraft, vehicle and cycle engines; fourth – hydraulic pumps, hydraulic and pneumatic engines;
fifth – construction and extracting machinery.
Graph 1 Prognosticated values for export growth /2010-2015./ (in million EUR)
0 100 200 300 400 500 600 700
Други машини с общо
предназначение
Други обработващи машини
Машини за каучук или пластмаса
Машини за хартия, картон и изделия
от хартия и картон
Машини за добива и строителството
Машини за селското и горското
стопанство
Офис техника, без компютърната
Подемно-транспортни машини
Промишлено хладилно и
вентилационно оборудване
Хидравлични помпи, хидравлични и
пневматични двигатели
2 015
2 010
Source: Own calculations
Hydraulic pumps, hydraulic and
pneumatic engines
Industrial cooling and ventilation
equipment
Hoists
Machinery for paper, pasteboard
and articles from paper and pasteboard
Machinery for mining and construction
Machinery for agriculture and forestry
Office equipment without computers
Machinery for rubber and plastic
Other processing machinery
Other machinery with general purpose
23
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
In other words, the sector companies must have clear and precise vision regarding the
extent to which they could apply the strategic objectives of the present document and what
expenditure levels they need to realize export. Therefore it should be added that a number of
methods could be applied to optimize the financial structure of given company with view to
reducing costs and increasing the relative income share.
In the case of companies from this economic activity – Manufacture of machinery,
equipment and home appliances, it is necessary to act in both directions or rather to reduce the
expenses for an activity, redirecting them to investment in developing the export activity. This
restructuring is related to costs for drafting prognosis, strategic plans, projects and mainly
vision for introducing the product into the foreign market.
EXPORT ORIENTATION OF THE SECTOR
Due to lack of information for the total export by sectors from the NSI, the dynamics of
the total export of goods by sectors is made on the basis of the information available in the
International trade centre (ITC). Due to the fact that in the ITC is used the Combined
nomenclature (2010) for goods classification, all four-groups positions were analyzed and
compared to the appropriate class of CEA-2008, allowing to compare with data, given by the
NSI. Notwithstanding this “division” there might be some discrepancies between the value of
the export turnover for the corresponding sector according to ITC data with the official NSI
data (due to discrepancy in some of the six-groups codes), but such discrepancy should be
insignificant from the perspective of the analysis goals.
24
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 2 Dynamics of the export by sectors, 2001 – 2010
Sector
number Export (million BGN) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
1 Manufacture of food products 644,3 904,9 817,6 1 050,2 1 199,3 1 297,4 1 434,8 2 379,6 2 404,2 2 953,4
Share of the sector in the country export (%) 5,78 7,61 6,28 6,73 6,5 5,52 5,41 7,96 10,39 9,73
2 Manufacture of beverages 150,2 144,9 141,3 140,4 162,8 174,7 217,4 209,7 157,3 180,5
Share of the sector in the country export (%) 1,35 1,22 1,09 0,9 0,88 0,74 0,82 0,7 0,68 0,59
3 Manufacture of textile and textile products,
except wearing apparel 340,1 409,2 493,3 581,6 589,5 701,3 803,2 738,5 560,3 614,5
Share of the sector in the country export (%) 3,05 3,44 3,79 3,73 3,2 2,98 3,03 2,47 2,42 2,02
4 Manufacture of wearing apparel, incl. leather
clothes, tanning and dressing of leather 2 435,7 2 691,7 3 068,6 3 190,8 3 160,0 3 320,4 3 321,8 3 035,0 2 598,6 2 741,3
Share of the sector in the country export (%) 21,83 22,64 23,56 20,44 17,14 14,12 12,53 10,15 11,23 9,03
5 Manufacture of rubber and plastics products 244,3 275,7 309,6 364,2 458,9 579,5 702,9 662,8 575,7 785,5
Share of the sector in the country export (%) 2,19 2,32 2,38 2,33 2,49 2,46 2,65 2,22 2,49 2,59
6 Manufacture of chemical and pharmaceutical
products 953,5 850,8 890,1 923,1 1 250,7 1 322,0 1 775,9 2 138,9 1 603,4 2 144,4
Share of the sector in the country export (%) 8,55 7,16 6,83 5,91 6,78 5,62 6,7 7,16 6,93 7,06
7 Manufacture of non-metallic and mineral
products 258,7 265,1 293,7 301,2 334,5 514,7 614,2 633,7 562,7 688,9
Share of the sector in the country export (%) 2,32 2,23 2,25 1,93 1,81 2,19 2,32 2,12 2,43 2,27
8 Manufacture of machinery, equipment and
household appliances 700,2 767,6 800,2 948,1 1 154,0 1 390,4 1 931,5 2 182,0 1 538,0 1 926,0
Share of the sector in the country export (%) 6,28 6,46 6,14 6,07 6,26 5,91 7,29 7,3 6,65 6,35
9 Manufacture of medical, precise and optical
apparatus and instruments 68,5 114,3 153,7 150,8 205,4 303,8 359,5 395,1 392,5 479,5
Share of the sector in the country export (%) 0,61 0,96 1,18 0,97 1,11 1,29 1,36 1,32 1,7 1,58
10 Manufacture of office equipment and
computers 47,5 70,6 98,0 121,8 151,7 189,0 227,6 271,2 228,4 281,8
25
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Sector
number Export (million BGN) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Share of the sector in the country export (%) 0,43 0,59 0,75 0,78 0,82 0,8 0,86 0,91 0,99 0,93
11 Manufacture of electric machinery and
apparatus 359,5 406,5 545,0 598,3 701,6 899,5 1 154,2 1 325,8 1 327,2 1 774,5
Share of the sector in the country export (%) 3,22 3,42 4,18 3,83 3,81 3,83 4,35 4,44 5,73 5,85
12 Manufacture of wood and products of wood,
except furniture 192,3 220,1 245,5 288,1 286,0 311,2 380,9 274,0 259,8 359,1
Share of the sector in the country export (%) 1,72 1,85 1,88 1,84 1,55 1,32 1,44 0,92 1,12 1,18
13 Manufacture of pulp, paper and paperboard 120,6 129,0 170,6 196,7 200,4 191,2 237,2 265,0 134,3 303,9
Share of the sector in the country export (%) 1,08 1,09 1,31 1,26 1,09 0,81 0,89 0,89 0,58 1
14 Manufacture of furniture 86,5 124,7 161,8 196,4 221,6 237,5 273,5 256,7 206,6 237,1
Share of the sector in the country export (%) 0,78 1,05 1,24 1,26 1,2 1,01 1,03 0,86 0,89 0,78
15 Publishing, printing and reproduction 4,2 6,3 10,1 7,7 9,3 11,4 22,0 25,8 17,8 14,8
Share of the sector in the country export (%) 0,04 0,05 0,08 0,05 0,05 0,05 0,08 0,09 0,08 0,05
16 Manufacture of motor vehicles, except cars 28,6 41,5 34,7 42,3 77,7 100,0 150,5 208,9 253,7 390,1
Share of the sector in the country export (%) 0,26 0,35 0,27 0,27 0,42 0,43 0,57 0,7 1,1 1,29
17 Manufacture of metal products, except
machinery and equipment 525,9 508,2 539,2 748,5 851,7 1 256,1 1 615,7 1 508,3 1 107,3 1 427,1
Share of the sector in the country export (%) 4,71 4,28 4,14 4,79 4,62 5,34 6,1 5,05 4,78 4,7
18 Manufacture of radio, television and
telecommunication equipment 89,2 155,2 170,7 186,2 473,2 514,5 421,4 528,1 490,2 464,1
Share of the sector in the country export (%) 0,8 1,31 1,31 1,19 2,57 2,19 1,59 1,77 2,12 1,53
Total for the 18 sectors 7 249,8 8 086,5 8 943,7 10 036,3 11 488,1 13 314,6 15 644,2 17 039,0 14 418,0 17 766,7
Share of the 18 sectors in the country export(%) 64,99 68,03 68,66 64,28 62,31 56,63 59,03 57,01 62,3 58,53
Total export from BG 11 155,6 11 886,8 13 026,8 15 613,7 18 436,1 23 511,7 26 503,7 29 889,7 23 143,1 30 353,3
Source: International trade centre
26
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 3 Base index, 2001=100
Sector
number
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
1 100 140,5 126,9 163,0 186,1 201,4 222,7 369,3 373,2 458,4
2 100 96,5 94,1 93,5 108,3 116,3 144,7 139,6 104,7 120,2
3 100 120,3 145,0 171,0 173,3 206,2 236,2 217,1 164,8 180,7
4 100 110,5 126,0 131,0 129,7 136,3 136,4 124,6 106,7 112,6
5 100 112,9 126,7 149,1 187,9 237,3 287,8 271,4 235,7 321,6
6 100 89,2 93,4 96,8 131,2 138,6 186,3 224,3 168,2 224,9
7 100 102,5 113,5 116,4 129,3 198,9 237,4 244,9 217,5 266,3
8 100 109,6 114,3 135,4 164,8 198,6 275,8 311,6 219,6 275,1
9 100 167,0 224,5 220,2 300,0 443,5 524,9 576,9 573,2 700,2
10 100 148,8 206,3 256,5 319,6 398,2 479,5 571,3 481,1 593,7
11 100 113,1 151,6 166,4 195,2 250,3 321,1 368,9 369,2 493,7
12 100 114,5 127,7 149,8 148,7 161,9 198,1 142,5 135,1 186,8
13 100 107,0 141,5 163,1 166,1 158,5 196,7 219,7 111,4 252,0
14 100 144,1 187,0 227,0 256,1 274,5 316,1 296,7 238,8 274,0
15 100 150,7 242,1 183,8 222,9 272,7 527,5 617,1 425,9 354,4
16 100 145,2 121,3 147,8 271,5 349,5 526,0 730,1 886,8 1 363,7
17 100 96,6 102,5 142,3 161,9 238,8 307,2 286,8 210,6 271,4
18 100 173,9 191,3 208,7 530,2 576,6 472,2 591,8 549,3 520,1
Total for
the 18
sectors
100 111,5 123,4 138,4 158,5 183,7 215,8 235,0 198,9 245,1
Total
export from
BG
100 106,6 116,8 140,0 165,3 210,8 237,6 267,9 207,5 272,1
Source: International trade centre
The analysis of given data shows the following:
In 2010 the export of the analyzed sectors as a share of the total export of Bulgaria is
at one of the lowest levels of the ten-year period in question.
The volume of the realized export in 2010 is the biggest for sector „Manufacture of
food products”, ranking it at first place by share of the total export of Bulgaria.
Out of the 18 studied sectors, 10 have increased the share of their export in relation to
the total export of Bulgaria for 2010 and respectively in the case of eight of the sectors
a decrease has been registered.
27
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Sectors „Manufacture of motor vehicles, except cars” and „Manufacture of medical,
precise and optical apparatus and instruments” are improving at the strongest their
positioning for the period 2001 – 2010 by share in the total country export among the
rest of the analyzed sectors, while sector “Manufacture of beverages” is losing the
highest number of places in the ranking.
Out of the studied sectors 13 there is an increase in the export volume having faster
rate than the average for the 18 sectors. As the total country export grows faster than
the export of the 18 sectors, in the case of ten sectors the realized export is increasing
faster than the average for the country.
The highest growth in the export volume in value expression has been registered by
sector “Manufacture of motor vehicles, except cars”- over 13 times relative to 2001.
The highest growth in 2010 relative to 2009 has been registered by sector
“Manufacture of pulp, paper, paperboards and products” – over 2 times.
By share of the export in the total country export, sector “Manufacture of machinery
and equipment lines fourth, immediately after sectors for manufacture of foods
products, apparel and chemical and pharmaceutical products.
28
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 4 Indices for the condition of the export of the SMEs in the manufacturing industry
Groups of companies Export share in the
total export of SMEs
in the
manufacturing
industry (%)
Change in
export
2010/2009
Export volume per
1 employed (BGN)
2009 2010 2009 2010
Manufacture of food products 4,32 3,00 92,43 13867 13428
Manufacture of beverages 0,34 0,16 61,35 9933 6325
Manufacture of textiles and textile products,
except wearing apparel
0,57 0,34 79,33 18701 16139
Manufacture of wearing apparel 6,18 4,36 93,83 16896 17649
Manufacture of leather, manufacture of
footwear and other related products
1,15 0,96 110,87 20217 23182
Manufacture of wood and of products of
wood and cork, except furniture;
manufacture of articles of straw and plaiting
materials
0,50 0,27 72,51 8030 6198
Manufacture of paper, paperboard and
products thereof
0,27 0,13 64,38 8282 6233
Printing and reproduction of recorded
media
0,16 0,10 85,97 4040 3449
Manufacture of chemicals and chemical
products
1,26 0,70 74,07 32860 25165
Manufacture of basic pharmaceutical
products and pharmaceutical preparations
0,10 0,07 88,16 13785 11410
Manufacture of rubber and plastics
products
1,43 1,12 104,29 15586 17860
Manufacture of other non-metallic mineral
products
0,41 0,29 94,52 4928 5768
Manufacture of fabricated metal products,
except machinery and equipment
1,36 1,09 106,77 7667 9490
Manufacture of computer and
communication equipment, electronic and
optical products
1,05 0,52 66,50 43944 30410
Manufacture of radio, television and
telecommunication equipment and
apparatus
0,08 0,05 92,24 18173 14242
Manufacture of electrical equipment 1,00 0,74 98,08 23978 27133
Manufacture of machinery and equipment
n.e.c.
0,96 0,81 112,23 13024 15408
Manufacture of motor vehicles, except cars 0,27 0,18 88,12 26492 25793
Manufacture of furniture 0,49 0,42 114,73 5187 6764
Source: NSI
The analysis of the date from the table 4 gives ground to make the following conclusion:
29
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
The SMEs of sector “Manufacture of machinery, equipment and home appliances”
take 4th
place among the studied 18 sectors of the manufacture industry by share of the
export in by share of the export within the total country export in 2010;
In terms of the indicator “volume of the export per 1 employed” sector “Manufacture
of machinery, equipment and home appliances” marks an improvement. From 11th
place among the analyzed sectors in 2009, in 2010 in terms of this indicator the sector
moves to 10th
place and the export volume per 1 employed marks growth of 18% in
2010 in relation to 2009. At first place in this rating for both years is the sector
“Manufacture of computer and communication equipment, electronic and optical
products”,
The inter-sector division of the SMEs is given in the table below.
30
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 5 Indicator for the export of the SMEs in sector “Manufacture of machinery, equipment and domestic appliances”
2009 2010 2009 2010 2009 2010 2009 2010
(CODE) Economic activity Companies Companies Employed Employed Export Export Export by 1
employed
Export by 1
employed
Number
Number
Number
Number
Thousands
BGN
Thousands
BGN
Thousands BGN Thousands
BGN
28.1 Manufacture of
general-purpose
machinery
92 94 2428 2465 33581 77051 13,83 31,26
28.11 Manufacture of
engines and turbines,
except aircraft,
vehicle and cycle
engines
12 12 188 125 5069 5683 26,96 45,46
28.12 Manufacture of
hydraulic pumps,
hydraulic and
pneumatic engines
25 28 837 1093 17566 58273 20,99 53,31
28.13 Manufacture of taps
and valves
20 18 386 429 3075 2907 7,97 6,78
28.14 Manufacture of
fittings
22 22 633 469 5954 .. 9,41
28.15 Manufacture of
bearings, gears,
gearing and driving
elements
13 14 384 349 1917 .. 4,99
28.2 Manufacture of
other general
purpose machinery
351 343 6326 6387 83919 104247 13,27 16,32
28.21 Manufacture of
furnaces and furnace
burners
14 12 .. 183 .. ..
31
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
2009 2010 2009 2010 2009 2010 2009 2010
28.22 Manufacture of
lifting and handling
equipment
112 114 2810 2371 28077 13540 9,99 5,71
28.23 Manufacture of
office equipment,
except computer
9 13 376 634 18887 20603 50,23 32,50
28.24 Manufacture of
portable tools with
drive-in motor
6 6 .. .. .. ..
28.25 Manufacture of non-
domestic cooling and
ventilation
equipment
81 76 1414 1552 9188 53503 6,50 34,47
28.29 Manufacture of other
general purpose
machinery n.e.c
129 122 1437 1475 25209 14660 17,54 9,94
28.3 Manufacture of
agricultural and
forestry machinery
61 63 1116 1034 4772 5102 4,28 4,93
28.4 Manufacture of
machine tools
86 75 1993 1381 33828 8837 16,97 6,40
28.41 Manufacture of
metalworking
machine tools
49 42 1340 1009 21828 7605 16,29 7,54
28.49 Manufacture of other
machine tools
37 33 653 372 12000 1232 18,38 3,31
28.9 Manufacture of
other special
purpose machinery
330 320 4935 4669 62682 50312 12,70 10,78
32
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
2009 2010 2009 2010 2009 2010 2009 2010
28.91 Manufacture of
machinery for
metallurgy
7 13 .. 289 .. ..
28.92 Manufacture of
machinery for
mining, quarrying
and construction
29 23 736 592 13959 16391 18,97 27,69
28.93 Manufacture of
machinery for food,
beverage and tobacco
processing
97 102 1673 1783 27197 18551 16,26 10,40
28.94 Manufacture of
machinery for textile,
apparel and leather
production
10 8 137 105 .. ..
28.95 Manufacture of
machinery for paper
and paperboard
production
7 8 69 60 429 - 6,22
28.96 Manufacture of
machinery for
working rubber or
plastics
18 17 399 280 955 .. 2,39
28.99 Manufacture of other
special purpose
machinery n.e.c
162 149 1702 1560 16926 13153 9,94 8,43
28
28
Manufacture of
general and special
purpose machinery
and equipment
920 895 16798 15936 218782 245549 13,02 15,41
Source: NSI
33
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
In 2010 the number of SMEs in the sector and the number of employed decrease, but
the volume of the export and the value of the indicator “realized export by 1 employed”
increase. Notwithstanding the increased export volume, its share in the realized turnover by
SMEs in 2010 is decreasing to 28% relative to 31% for 2010.
The export in the sector is realized mainly by large companies, not object of this
strategy. The export realized by the SMEs in 2009 and 2010 with a share in the total
export of sector “Manufacture of machinery, equipment and home appliances” is
respectively 9,9% and 8,6%.
A specific field of the economic activity Manufacture of machinery, equipment and
home appliances, developing quite dynamically, is the field of operation of the
Bulgarian small and medium-size enterprises, situated in towns as Stara Zagora,
Plovdiv, Pazardzhik, etc., manufacturing machinery for food, beverage, tobacco and
wine processing. For example, recently for the production process become popular
the packaging machinery in the field the spices micro-packaging.
Machinery for wrapping vanilla, sugar, baking soda, etc. have extremely high level of
profitability, the parts are interchangeable, these can be found on the Bulgarian
industrial market, maintenance is fast and cheap and the built-in electronics in modern
machinery, manufactured by a Bulgarian manufacturer may be easily diagnosed and
easily repaired.
Table 6 Export of Bulgaria in sector “Manufacture of machinery, equipment and home
appliances” (million EUR)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Export of Bulgaria
5253,1 5714,2 6062,8 6668,2 7984,9 9466,4 12011,9 13511,9 15204,0 11699,2 15561,2
Total for the sector
370,5 450,9 524,2 543,5 659 806,2 1051,8 1312 1468,9 1132,6 1469,8
Share of the total export of Bulgaria
7,1 7,9 8,6 8,2 8,3 8,5 8,8 9,7 9,7 9,7 9,4
Base index (base 2000)
100.0 769,5 894,5 927,5 1124,6 1375,8 1794,9 2238,9 2506,7 1932,8 2508,2
Chain index
100.0 121,7 116,3 103,7 121,3 122,3 130,5 124,7 112,0 77,1 129,8
Source: BNB and ITC
34
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Until 2008 the value of the export is constantly increasing. Among the peak pre-
crisis years – 2007 and 2008 the export in this group is decreasing in 2009, but
manages to reach the pre-crisis levels in 2010, that is observed also in the next
figure.
Graph 2 Export of Bulgaria in sector “Manufacture of machinery, equipment and home
appliances”
Source: NSI
GOODS WITH EXPORT ADVANTAGES AND POTENTIAL
The sector “Manufacture of machinery, equipment and home appliances” is as a whole
export orientated and is present in the country export with a share of approximately 10%.
Regarding the manufactured goods the companies from sector “Manufacture of machinery
and equipment” have preserved their traditions and are supporting a wide assortment of the
manufactured goods:
drilling machinery;
metalworking machinery;
Export of machinery, equipment and home appliances
Eu
ro (
mil
lion
)
35
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
lathes with or without digital control;
oil country lathes;
assemblies, details, parts, wheels, mechanisms;
band saw machines;
After the relatively slow and painful forming of the companies in the sector during the
transition from public to private companies, began the creation of a constellation of
companies, forming the chain of supplies, distribution, advertising, as well as other subjects
were formed, performing specialized services for these companies.
At the beginning of the first decade of the new XXIst century in the country entered
many contemporary and modern companies, that settled in cities like Sevlievo (“Vidima”;
equipment for sanitary premises), Plovdiv (“Liebherr”; domestic refrigerators), Sopot (“SKF”,
bearings manufacturing), Gabrovo (“Zeratizit”, hard material matters) and others. This gave
relatively new impulse of the economic activity in the country, as competitive products started
to be manufactured. After the country joined the EU, in various towns in the country like
Yambol, Haskovo, Kazanluk and others many innovative companies entered with already
acquired market shares, which objective to restore or outsource their production has been
prompted mostly by the economic logic for lowering the production and operating costs.
The sector covers a wide range of products but their main exporters are the large
companies. The sector SMEs are mainly subcontractors and are manufacturing elements and
spare parts. Based on the data of NSI the SMEs from the sector are exporting the following
machinery and equipment, with the following share of the total export of SMEs in the sector
in 2010:
hydraulic pumps, hydraulic and pneumatic engines – 23,7%;
industrial cooling and ventilation equipment – 21,8%;
office equipment, except computers – 8,4%;
extracting and construction machinery – 6,7%;
machinery and equipment for food, beverages and tobacco processing – 6,7%;
36
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
turbines and engines, except aircraft, vehicle and cycle engines – 2,3%.
The export of these goods by the SMEs in the sector in 2010 amounts to 173 004
thousand BGN and represents 6% of the total export in the sector.
Hydraulic pumps, hydraulic and pneumatic engines
The main exporters, dynamics of the export and country positioning for this group of
goods according to data of the ITC are given in the tables below.
Table 7 Ranking of exporters of hydraulic pumps, hydraulic and pneumatic engines
worldwide for the period 2001 – 2011 (million EUR)
EXPORT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total world 26 084 26 870 26 386 29 275 32 799 39 864 45 183 48 110 40 858 49 252
China 1 232 1 613 1 970 2 362 3 029 4 548 5 878 6 644 5 415 7 395 8 538
Germany 3 811 4 108 4 036 4 629 5 266 6 310 6 915 7 420 6 267 7 356 8 161
USA 3 989 3 633 3 237 3 274 3 752 4 343 4 583 4 787 4 676 5 872 6 746
Italy 3 385 3 435 3 548 3 877 4 121 5 011 5 769 6 320 5 164 5 125 5 592
Japan 1 886 1 882 1 790 2 097 2 191 2 384 2 489 2 571 2 115 3 382 3 822
Bulgaria 60 69 70 74 77 96 142 147 101 120 125
Share of Bulgaria in world export (%)
0,2 0,3 0,3 0,3 0,2 0,2 0,3 0,3 0,2 0,2
Share of Bulgaria in the export of the leading exporter (%)
4,9 4,3 3,6 3,1 2,5 2,1 2,4 2,2 1,9 1,6 1,5
Source: ITC
Table 8 Dynamics of the export (base index, base 2001) of hydraulic pumps, hydraulic
and pneumatic engines worldwide for the period 2001 – 2011 (million EUR)
EXPORT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total world 100 103 101 112 126 153 173 184 157 189
Germany 100 131 160 192 246 369 477 539 440 600 693
Japan 100 108 106 121 138 166 181 195 164 193 214
USA 100 91 81 82 94 109 115 120 117 147 169
China 100 101 105 115 122 148 170 187 153 151 165
France 100 100 95 111 116 126 132 136 112 179 203
Bulgaria 100 114 117 122 128 159 235 244 167 198 208
Source: ITC T
In comparison to the leading 5 exporters of this group of goods the export of Bulgaria
is increasing with faster rates mostly for the period after 2003, where the higher peak is in
37
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
2007. Only Germany is surpassing it, which export increases more than 5 times. The
Bulgarian export is increasing more than twice in relation to the base 2001.
The following table represents the main markets for Bulgarian goods of
position hydraulic pumps, hydraulic and pneumatic engines for the period 2000 – 2010. The
main market of the Bulgarian goods is Germany, followed by Italy and the Russian
federation.
38
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 9 Leading partners in export (million EUR)
2000 2001 2002 2003 2004 2005
Hydraulic pumps,
hydraulic and
pneumatic engines
59,1 60,5 68,5 69,5 73,4 78,1
1 Germany 34,6 Germany 32,9 Germany 36,5 Germany 39,3 Germany 38,6 Germany 37,0
2 Italy 8,6 Italy 9,9 Italy 12,0 Italy 12,0 Italy 13,5 Italy 14,0
3 France 2,7 Mexico 3,7 Russian
Federation
4,7 Russian
Federation
6,0 Russian Federation 7,3 Russian
Federation
10,2
4 Greece 2,3 Russian
Federation
2,6 Greece 2,5 Greece 2,7 Greece 3,0 Greece 3,6
5 Russian
Federation
1,5 Greece 2,5 Mexico 2,1 Ukraine 1,2 Spain 1,2 Ukraine 2,5
2006 2007 2008 2009 2010
Hydraulic pumps,
hydraulic and
pneumatic engines
95,7 141,2 146,4 36,4 120,2
1 Germany 31,2 Russian
Federation
34,7 Russian
Federation
35,4 Germany 10,4 Germany 30,7
2 Russian
Federation
19,9 Germany 31,4 Germany 32,8 Italy 5,6 Russian Federation 19,2
3 Italy 13,9 Italy 22,7 Italy 21,1 France 5,5 Italy 18,3
4 France 10,4 France 18,1 France 19,2 Russian
Federation
4,7 France 15,2
5 Greece 4,0 Greece 5,8 UK 6,1 UK 2,2 Denmark 6,4
Source: ITC
39
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Furnaces and furnace burners
The main exporters, dynamics of the export and country positioning for this group of
goods according to data of the ITC are given in the tables.
Table 10 Ranking of exporters of furnaces and furnace burners worldwide for the period 2001-
2011 (million EUR)
EXPORT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total world 89 242 92 113 91 539 101 818 110 160 124 151 127 749 129 176 111 814 136 255
China 7 321 8 982 10 345 13 040 16 916 20 934 22 025 23 485 22 112 29 622 33 057
Germany 10 082 10 897 10 716 12 414 13 491 15 235 15 191 16 044 13 895 14 999 16 011
Italy 10 741 10 861 10 944 11 830 11 257 12 483 13 167 12 366 10 216 10 729 10 783
USA 10 259 9 026 7 730 8 145 9 056 9 898 8 985 9 160 8 303 9 709 10 460
Japan 5 315 5 170 5 159 5 592 5 522 5 676 5 823 5 744 4 486 6 039 6 630
Bulgaria 38 58 71 88 106 136 177 236 217 223 235
Share of Bulgaria in world export (%)
0,0 0,1 0,1 0,1 0,1 0,1 0,1 0,2 0,2 0,2
Share of Bulgaria in the export of the leading exporter (%)
0,5 0,6 0,7 0,7 0,6 0,7 0,8 1,0 1,0 0,8 0,7
Source: ITC
Table 11 Dynamics of the export (base index, base 2001) of furnaces and furnace burners
worldwide for the period 2001-2011 (million EUR)
EXPORT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total world 100 103 103 114 123 139 143 145 125 153
China 100 123 141 178 231 286 301 321 302 405 452
Germany 100 108 106 123 134 151 151 159 138 149 159
Italy 100 101 102 110 105 116 123 115 95 100 100
USA 100 88 75 79 88 96 88 89 81 95 102
Japan 100 97 97 105 104 107 110 108 84 114 125
Bulgaria 100 152 188 230 277 358 464 619 569 585 616
Source: ITC
The growth rate of the export of Bulgarian goods surpasses that of the leading five
world exporters and is an indication for the export orientation of the Bulgarian manufacturers of
this good. This is a market niche to be studied by the sector SMEs, to look for cooperation with
Bulgarian large companies, exporters or cooperation with international ones.
According to the table for the main markets for export of Bulgarian manufacture of
furnaces and furnace burners as traditional exporter come to be Germany, followed by France
and Italy.
40
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 12 Leading partners in export (million EUR)
2000 2001 2002 2003 2004 2005
Furnaces and
burners
10,5 28,0 45,6 58,8 73,0 82,4
1 Germany 2,2 Germany 9,1 Germany 10,3 Austria 14,6 Germany 20,8 Germany 26,4
2 Russian
Federation
1,3 France 3,2 Austria 7,6 Germany 14,0 Austria 13,1 France 9,7
3 France 1,1 Russian
Federation
1,4 France 5,4 France 6,1 France 6,5 Austria 5,5
4 Serbia 0,9 Bulgaria 1,3 Bulgaria 2,9 Bulgaria 3,2 Bulgaria 3,9 Italy 3,8
5 Italy 0,6 UK 1,2 Hungary 2,7 Poland 2,2 Italy 3,0 The
Netherlands
3,5
Leading partners in export (million EUR)
2006 2007 2008 2009 2010
Furnaces and
burners
103,6 127,0 174,0 59,7 170,7
1 Germany 31,1 Germany 36,1 Germany 53,3 Germany 20,3 Germany 57,5
2 France 11,1 France 14,0 Italy 22,0 France 5,9 France 16,2
3 Italy 6,3 Italy 10,1 France 15,1 Italy 5,8 Russian
Federation
12,8
4 UK 5,7 The
Netherlands
7,5 Russian
Federation
9,8 Russian
Federation
3,6 Romania 9,6
5 The
Netherlands
4,8 Romania 7,4 The
Netherlands
7,7 The
Netherlands
2,7 Italy 8,8
Source: ITC
Office equipment, except computers
The main exporters, dynamics of the export and country positioning for this group of
goods according to data of the ITC are given in the tables.
Table 13 Ranking of exporters of office equipment, except computers worldwide for the
period 2001-2011 (million EUR)
Export 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total
world
465 420 466 342 442 039 494 801 564 304 640 593 398 542 371 664 314 349 388 743
China 33 784 45 776 52 806 68 539 92 281 115 324 66 537 65 460 58 447 71 987 70 390
USA 67 137 55 139 47 995 49 162 51 919 57 039 46 338 42 269 37 072 44 220 45 569
Hong
Kong
32 762 36 784 38 716 44 444 53 344 56 617 39 547 36 050 31 505 39 782
Germany 34 365 35 854 32 766 40 600 45 744 49 649 32 445 30 722 25 030 30 801 32 804
Japan 45 867 43 734 44 361 48 529 47 385 47 734 31 724 29 956 22 509 29 147 28 423
Bulgaria 38 64 85 93 117 178 214 224 204 237 278
Share of Bulgaria in world export (%)
0,0 0,0 0,0 0,0 0,0 0,0 0,1 0,1 0,1 0,1
Share of Bulgaria in the export of the leading exporter (%)
0,1 0,1 0,2 0,1 0,1 0,2 0,3 0,3 0,3 0,3 0,4
Source: ITC
41
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 14 Dynamics of the export (base index, base 2001) of office equipment, except
computers worldwide for the period 2001-2011 (million EUR)
Export 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total world 100 100 95 106 121 138 86 80 68 84
China 100 135 156 203 273 341 197 194 173 213 208
USA 100 82 71 73 77 85 69 63 55 66 68
Hong Kong 100 112 118 136 163 173 121 110 96 121 0
Germany 100 104 95 118 133 144 94 89 73 90 95
Japan 100 95 97 106 103 104 69 65 49 64 62
Bulgaria 100 168 223 245 310 470 564 592 539 625 733
Source: ITC
The export of office equipment, except computers for Bulgaria is developing in a dynamic way
as the growth rates are considerably surpassing that of the leading exporters. According to the
table for the main markets for export of these goods, as traditional Bulgarian markets are
positioned that of Belgium, German, Italy and USA and as perspective are that of Sweden,
Romania and Russia.
42
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 15 Leading partners in export (million EUR)
2000 2001 2002 2003 2004 2005
Office equipment,
except computers
26,8 33,7 56,5 65,6 84,4 106.1
1 Germany 4,0 France 5,6 UK 13,1 UK 12,9 Serbia 14,5 Belgium 23.0
2 Italy 3,3 Germany 3,8 Germany 4,7 Germany 6,7 Germany 11,9 UK 13.8
3 The Netherlands 3,3 UK 3,8 Italy 4,7 Romania 6,4 UK 10,5 Germany 11.7
4 Romania 3,1 Italy 3,8 Romania 4,6 Italy 5,0 Romania 5,7 Italy 6.7
5 UK 2,5 Sweden 3,3 The
Netherlands
3,6 France 4,5 Italy 5,2 USA 6.7
2006 2007 2008 2009 2010
Office equipment,
except computers
163,6 191,3 197,1 57,1 200,4
1 Belgium 56,7 Belgium 83,4 Belgium 85,0 Belgium 23,9 Belgium 84,8
2 UK 17,0 Germany 16,9 Germany 21,8 Germany 7,8 Germany 24,3
3 Germany 16,9 USA 13,0 USA 8,8 USA 2,8 Italy 12,2
4 USA 11,5 Sweden 9,7 Sweden 8,0 Russian
Federation
2,5 USA 9,2
5 Italy 9,6 Romania 9,3 Romania 8,0 Italy 2,4 Russian
Federation
6,9
Source: ITC
43
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Extracting and construction machinery
The main exporters, dynamics of the export and country positioning for this group of goods according to data of the ITC are given in
the tables.
Table 16 Ranking of exporters of extracting and construction machinery worldwide for the period 2001-2011 (million EUR)
Export 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total
world
541 034 562 931 542 970 585 419 641 957 711 592 777 461 768 307 533 351 705 983
Germany 101 398 108 918 108 159 111 463 122 810 132 136 145 827 143 077 102 519 131 813 149 388
Japan 79 555 87 932 81 955 84 552 89 924 103 287 108 482 110 655 63 497 99 317 96 953
USA 53 557 53 766 47 735 49 538 60 066 67 941 75 052 77 362 51 808 69 491 81 331
Korea 16 497 17 508 18 824 23 883 26 893 30 330 32 216 29 766 22 996 33 967 42 555
Canada 52 224 49 897 41 465 43 146 45 336 44 996 41 259 31 284 22 351 33 527 34 937
Bulgaria 64 70 67 75 99 114 159 197 180 284 422
Share of Bulgaria in world export (%)
0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0
Share of Bulgaria in the export of the leading exporter (%)
0,1 0,1 0,1 0,1 0,1 0,1 0,1 0,1 0,2 0,2 0,3
Source: ITC
44
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 17 Dynamics of the export (base index, base 2001) of extracting and construction
machinery worldwide for the period 2001 – 2011
EXPORT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total world 100 104 100 108 119 132 144 142 99 130
Germany 100 107 107 110 121 130 144 141 101 130 147
Japan 100 111 103 106 113 130 136 139 80 125 122
USA 100 100 89 92 112 127 140 144 97 130 152
Korea 100 106 114 145 163 184 195 180 139 206 258
Canada 100 96 79 83 87 86 79 60 43 64 67
Bulgaria 100 110 105 117 155 178 248 308 281 443 659
Source: ITC
The Bulgarian export of extracting and construction machinery marks trend of
continuous growth, except during the crisis in 2008, where the growth rates are considerably
surpassing that of the leading exporters. Bulgaria is increasing the export volume on this
position more than 6 times, however, for the correct positioning of our export can be judged by
the increase in the share of Bulgaria in the export of the leading exporter.
According to the data for the main markets for export of Bulgarian extraction and
construction machinery, as traditional and perspective markets are that of Germany, Austria,
France, Belgium, Slovenia. Potential markets for the Bulgarian goods are that of Syria, Ghana,
Denmark and Macedonia.
45
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 18 Leading partners in export (million EUR)
2000 2001 2002 2003 2004 2005
Extracting and
construction
machinery
15,4 21,6 28,1 27,7 30,2 57,9
1 Austria 2,8 Germany 6,0 Germany 7,2 Slovenia 6,0 Austria 6,5 France 9,2
2 Jordan 2,2 Austria 3,9 Austria 4,8 Germany 4,3 Slovenia 4,9 Germany 8,7
3 Ghana 0,8 Italy 2,9 Italy 2,7 Austria 3,5 France 3,1 Austria 7,9
4 Germany 0,8 Ghana 1,6 Slovenia 2,4 Denmark 2,4 Germany 2,1 Slovenia 6,4
5 Syria 0,8 Denmark 0,9 Macedonia 1,7 Romania 1,6 Denmark 1,3 Belgium 3,9
2006 2007 2008 2009 2010
Extracting and
construction
machinery
68,1 101,5 135,1 125,9 209,2
1 France 16,0 France 19,7 Romania 25,3 Romania 23,8 Germany 54,2
2 Austria 10,4 Austria 16,2 France 18,7 Germany 21,6 Romania 18,9
3 Slovenia 8,0 Slovenia 10,8 Austria 14,7 France 19,7 The Netherlands 15,7
4 Germany 7,0 Germany 8,2 Slovenia 13,0 Austria 16,2 Macedonia 14,2
5 Belgium 6,1 Belgium 7,7 Germany 11,8 Germany 8,2 Austria 10,7
Source: ITC
46
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Turbines and engines, except aircraft, vehicle and cycle engines
The main exporters, dynamics of the export and country positioning for this group of
goods according to data of the ITC are given in the tables.
Table 19 Ranking of exporters of turbines and engines, except aircraft, vehicle and cycle engines
worldwide for the period 2001 – 2011 (million EUR)
EXPORT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total
world
206 536 216 890 211 492 230 127 255 057 278 805 297 048 294 856 234 676 318 082
Germany 30 438 33 447 34 680 39 627 43 899 48 381 51 403 51 280 39 482 51 998 59 641
Japan 25 493 26 244 25 269 27 158 29 102 29 421 29 741 29 279 25 869 38 278 39 903
USA 41 357 39 629 32 070 31 906 33 357 35 536 34 361 30 960 25 524 35 894 39 521
China 2 331 2 900 3 077 4 905 7 238 9 852 12 636 14 978 13 268 19 543 23 268
France 15 454 16 073 15 792 16 015 15 885 17 308 18 175 17 618 14 314 17 093 18 196
Bulgaria 50 55 62 87 118 140 180 201 117 204 327
Share of Bulgaria in world export (%)
0,0 0,0 0,0 0,0 0,0 0,1 0,1 0,1 0,0 0,1
Share of Bulgaria in the export of the leading exporter (%)
0,2 0,2 0,2 0,2 0,3 0,3 0,3 0,4 0,3 0,4 0,5
Source: ITC
Table 20 Dynamics of the export (base index, base 2001) of turbines and engines, except aircraft,
vehicle and cycle engines worldwide for the period 2001 – 2011
EXPORT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total world 100 105 102 111 123 135 144 143 114 154
Germany 100 110 114 130 144 159 169 168 130 171 196
Japan 100 103 99 107 114 115 117 115 101 150 157
USA 100 96 78 77 81 86 83 75 62 87 96
China 100 124 132 210 311 423 542 643 569 838 998
France 100 104 102 104 103 112 118 114 93 111 118
Bulgaria 100 109 124 172 234 280 358 401 234 406 652
Source: ITC
The export of Bulgarian turbines and engines, except aircraft, vehicle and cycle engines is
dynamic and in 2011 the realized growth is over six times the value of the export in relation to
2001.
47
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
The dynamics of the Bulgarian export follows that of the world one, but with much bigger
rates, where in terms of export rate relative to the largest world exporters it is surpassed only by
China.
According to the table for the main markets for export of Bulgarian goods of this position,
as traditional and perspective markets are that of Austria, Germany, Italy, France, Russian
Federation, where the most potential is that of Turkey.
48
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 21 Leading partners in export (million EUR)
2000 2001 2002 2003 2004 2005
Turbines and
engines, except
aircraft, vehicle
and cycle
engines
1 Italy 8,0 Italy 9,8 Italy 11,1 Italy 12,1 Austria 14,3 Austria 22,5
2 Germany 5,0 Germany 7,3 Germany 6,7 Germany 9,3 Italy 14,2 Germany 18,2
3 France 4,6 Bulgaria 5,0 Austria 5,9 Austria 6,5 Germany 11,1 Italy 17,1
4 Austria 4,4 Austria 4,5 France 4,7 France 6,0 France 8,5 France 13,5
5 Turkey 3,5 France 3,9 Turkey 2,6 Russian
Federation
3,5 Russian
Federation
6,2 Russian
Federation
8,1
2006 2007 2008 2009 2010
Turbines and
engines, except
aircraft, vehicle
and cycle
engines
146,7 186,4 201,0 41,4 204,6
1 Austria 28,5 Austria 38,7 Austria 35,7 Austria 5,7 Germany 34,1
2 Italy 18,6 Russian
Federation
21,5 France 28,8 Germany 5,7 Austria 24,4
3 Germany 17,8 France 21,3 Russian
Federation
25,1 France 5,0 France 22,6
4 France 16,2 Italy 21,0 Germany 20,9 Italy 4,6 Russian
Federation
20,2
5 Russian
Federation
14,3 Germany 20,7 Italy 20,6 Russian
Federation
4,2 Italy 17,8
Source: ITC
49
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Industrial cooling and ventilation equipment
In 2010 in the sector SME the export of Industrial cooling and ventilation equipment is
increasing five-fold relative to 2009 and is reaching a share of 21,8% of the total export of
SME in the sector (relative to 4,2% in 2009).
On the next graph is showed the increase in the export of this good by the SMEs and its
increase in its share in the export of Industrial cooling and ventilation equipment of the sector
as a whole.
Graph 3 demonstrates the share of the export of Industrial cooling and ventilation
equipment of the SMEs out of the total export of the sector on this position (million EUR)
Graph 3 Export of non-domestic cooling and ventilation equipment
Износ на промишлено хладилно и вентилационно
оборудване
0
20
40
60
80
100
2009 2010
мл
н.е
вр
о
МСП
общо С28
Source: NSI
According to data for the markets of the Bulgarian export of position “Industrial
cooling and ventilation equipment”, as traditional and perspective markets are that of
Austria, Germany, Russian Federation, Greece, The Netherlands, and as potentials are
that of Kazakhstan, Egypt, Belarus, Jordan.
Export of industrial cooling and ventilation equipment
Eu
ro (
mil
lion
)
SME
Total C28
50
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 22 Export of Bulgaria in goods group Industrial cooling and ventilation equipment for the period 2000 – 2010 (million EUR)
2000 2001 2002 2003 2004 2005
Total 2,4 Total 2,4 Total 3,3 Total 4,5 Total 7,5 Total 18,4
Germany 0,9 Ukraine 0,5 Germany 0,8 Germany 1,9 Germany 3,4 Germany 11,7
Greece 0,4 South Africa 0,4 Russian Federation 0,5 Romania 0,6 The Netherlands 0,8 The Netherlands 1,9
Romania 0,3 Romania 0,3 Romania 0,5 Macedonia 0,4 Russian Federation 0,5 Belarus 1,2
Macedonia 0,2 Germany 0,2 Jordan 0,5 Belarus 0,2 Albania 0,4 Austria 0,8
Ukraine 0,1 Serbia 0,2 Macedonia 0,2 Russian Federation 0,2 Austria 0,4 Ukraine 0,5
2006 2007 2008 2009 2010
Total 16,6 Total 50,1 Total 53,4 Total 60,0 Total 54,7
Germany 10,5 Germany 17,4 Germany 20,9 Austria 27,3 Austria 23,0
Austria 2,0 Austria 9,2 Austria 16,1 Germany 15,7 Germany 16,5
The
Netherlands
1,5 Kazakhstan 7,7 Greece 3,5 Egypt 7,2 Serbia 1,8
Belarus 0,5 UK 3,1 Romania 2,7 Greece 2,0 Romania 1,8
Romania 0,5 Greece 3,0 The Netherlands 1,7 The Netherlands 1,2 Greece 1,7
Source: ITC
51
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Machinery and equipment for food, beverages and tobacco processing
The export of the SMEs of Machinery and equipment for food, beverages and tobacco
processing increases in 2010 to 8,4 million EUR (having 7,1 million EUR in 2009) and takes a
share of 6,7% of the export of the SMEs in sector “Manufacture of machinery, equipment and
home appliances”. The relative share of the export of Machinery and equipment for food,
beverages and tobacco processing of the SMEs in the total export of the sector on this position
decreases to 29% in 2009 and to 24% in 2010.
The data for the markets of the Bulgarian export regarding position Machinery and
equipment for food, beverages and tobacco processing, as traditional and perspective markets
are that of Germany, Romania, Russian Federation, Greece, Switzerland, where potential are
that of Kazakhstan, Belarus, Moldova, USA.
52
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 23 Export of Bulgaria in the group of goods “Machinery and equipment for foods, beverages and tobacco processing” for the period 2000 –
2010 (million EUR)
2000 2001 2002 2003 2004 2005
Total 10,8 Total 11,6 Total 15,2 Total 9,9 Total 12,5 Total 16,5
Russian Federation 2,0 Germany 1,7 Germany 2,6 Romania 1,7 Romania 1,6 USA 2,4
Switzerland 1,1 Switzerland 1,5 Switzerland 1,5 Switzerland 1,1 Switzerland 1,0 Switzerland 2,4
Azerbaijan 0,9 Russian
Federation
1,4 Russian
Federation
1,0 Moldova 0,7 Macedonia 1,0 Romania 2,2
Macedonia 0,9 Azerbaijan 1,4 Ukraine 0,8 Macedonia 0,7 Germany 0,9 Ukraine 0,8
Germany 0,8 Greece 0,7 Macedonia 0,8 Russian
Federation
0,6 Russian
Federation
0,7 Russian
Federation
0,7
2006 2007 2008 2009 2010
Total 13,0 Total 45,4 Total 47,1 Total 23,6 Total 36,0
Romania 2,5 Greece 11,3 Belarus 10,6 Russian
Federation
3,5 Russian
Federation
5,9
Ukraine 1,3 Russian
Federation
6,0 Russian
Federation
6,5 Macedonia 1,9 Romania 3,3
Russian Federation 1,2 Romania 5,9 Kazakhstan 3,1 Azerbaijan 1,9 Moldova 2,7
Belarus 1,1 Kazakhstan 3,7 Romania 2,8 Romania 1,8 Belarus 2,6
Switzerland 1,0 Belarus 3,0 Ukraine 2,7 Germany 1,5 Hungary 2,6
Source: ITC
This project is co-financed by the European fund for Regional Development through Operational programme “ Development of the competitiveness of the Bulgarian economy” 2007 - 2013
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Graph 4 Value of the Bulgarian export – motor trucks, electrical trucks and other trucks /2001 –
2010 / (in thousand EUR)
Source: NSI
Former market positions of Bulgarian mastodon “Balkancar” of about 60,000 and more
handling and lifting trucks exported on the Russian market can never be recovered by the
SMEs from sector. And it is found out, as a result of in-depth research, that namely the
Bulgarian market niche is occupied by Chinese manufacturers, and the Russian market
constantly needs such "absorption". Especially here, the Bulgarian SMEs could hardly
overcome the powerful Chinese State companies, which are supported in a number of ways by
the Chinese country, on the one hand, and by the preferential duties the Russian state had
created for former Bulgarian enterprises in this sector. Therefore, one of the strategic objectives
is to restore the so-called “Bon-ton” in diplomacy between Bulgaria and Russia and to set new
market coordinates of the economic relations.
The given graph shows that each year the value of the export of the export of air
conditioning machines for the entire period from 2001 to 2010 is continuously growing, to
reach from nearly half a million euro to almost 30 million euro for the last two reported years.
54
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Graph 5 Value of Bulgarian export – air conditioning machines /2001 – 2010/ ( in thousand
EUR)
Source: NSI
Somewhat more slowly, but gradually upwards moves the export of washing
machines. On the attached graph can be seen that if ten years ago exports amounted to just over
7 EUR (million), then in the year of accession to EU-27 the value of exports increased almost
three times and a half, and for the period 2001 - 2010 the value of the export categorically has
tripled. This is one of the most dynamically developing fields of Bulgarian exports in this
sector and with great potential for development.
55
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Graph 6 Value of the Bulgarian export – washing machines /2001 – 2010 / (thousand EUR)
Source: NSI
Analogous to the situation of the washing machines export is the situation of the
exporters of laundries and other household laundry equipment, the value of which is also
constantly growing since the beginning of the decade. For comparison, the lowest value has
been recorded in 2002 - 181,000 EUR; to the year of joining the EU-27 this value increased 16
and a half times, and by 2010 this figure has grown to almost 26 times to almost 4.8 million
EUR. As in the case of the other export lines in the sector the country's accession to the EU-27
has a relatively “ground-breaking” role for the market participants, but exports in this direction
is quickly recovering its positions and continues to conquer new market spaces. Dynamics
since the accession of the country is slightly delayed because for the period 2007 - 2010 the
export in this area has grown by only one and a half, but in average for the decade - the values
are very high, where the “turbulent” years, as evidenced by the following
graph, were before 2007.
56
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Graph 7 Value of the Bulgarian export – laundries and other laundry-type washing machinery
/2001 – 2010 / (in thousand EUR)
Source: NSI
In contrast to the previous chart is the illustration of the value of exports of sewing
machines in Bulgaria. At the beginning of the decade the value of exports varies between
650,000 and 850,000 euros, where the first breakthrough of the “psychological” barrier of 1
million EUR is in 2004. In the years immediately before the accession of the country the value
of exports falls below 1 million EUR, but then slowly regains its position as the new record
level of 1.5 million EUR is reached in 2009.
In the last reported year - 2010, the export value is below 2004, where the fluctuations
in the export of sewing machines are at extremely short intervals of time - from one to two
years at the maximum, which creates some uncertainty among the market participants.
However, we must not forget, that the market for wearing apparel in the country has
also developed very rapidly and much of the Bulgarian SMEs especially here focused on
servicing the Bulgarian counterparts.
57
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Graph 8 Value of the Bulgarian export – sewing machines /2001 – 2010/ (in thousand EUR)
Source: NSI
Regarding the value of the Bulgarian exports of boilers for central heating, it is found
that from the beginning of the decade to the country's accession to the EU-27 the value of
exports has been constantly decreasing. Only in 2007 and 2008 is passed the 1 million EUR
again, then again in 2009 and 2010 these values fall dramatically.
Graph 9 Value of the Bulgarian export – central heating boilers /2001 – 2010 / (in thousand
EUR)
Source: NSI
58
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
At this stage the export is at the levels of 2004 and, in fact, many of the Bulgarian
manufacturers of boilers and similar appliances are seriously troubled, where the prospects of
recovery from this economic crisis are referred to after two or three years.
The analysis of the most exported products that have successful marketing realisation
onto foreign markets shows two relatively recognizable trends: either deterioration of the
production, respectively, export positions, or clear cycle recurrence of “influx” and “reflux” in
different areas, where the cycle recurrence is about one or two consecutive years, due primarily
to the execution of certain larger or smaller orders. It is this uncertainty and lack of rhythm that
causes serious problems in forecasting and organizing of the activities of the SMEs from the
sector. Inability to clearly define the short and medium term objectives at company level
through the instruments of forecasting and planning, is creating unpredictable consequences for
the sector and the export, as traditional business relationships are destroyed, distorting the
regularity of payments on the line companies - companies (or known also as “business-to-
business”) and on the line companies-workers.
In addition to machinery and equipment should be mentioned that according to EU
statistical nomenclature the household appliances are included in group 29.7р and can be
perfectly traded on international markets. This group includes a wide manufacturing range
of various products such as:
Domestic electric appliances – like refrigerators, freezers, washing machines;
Domestic electro-thermic appliances
Non-electric domestic cooking equipment;
The main users of these products are primarily households. Therefore, innovations
that are implemented in the production of these products are focused mainly on efficiency in
households and their impact on the environment. Here, for example, are taken into
account factors such as electricity consumption, water consumption, change in habits, and even
change in lifestyle. Because of the direct and almost daily contact of the people with this type
of equipment, it is necessary to make more and more improvements in design, ergonomics,
materials and other products characteristics.
On EU-27 level there about 5,200 companies, engaged in manufacturing of home
appliances, with annual turnover in 2006 only from the sale of these products accounted for
52.7 billion EUR, and generated value added value for 12.7 billion EUR. This value
corresponds to 6.6% of the total added value, created by all companies, engaged in the field.
59
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Of course, the nomenclature of the home appliances does not exhaust the full list of
potential solutions available for export, as the Bulgarian manufacturers of machinery and
equipment have also something to offer abroad at competitive prices.
COMPETITIVENESS OF THE EXPORT OF GOODS ON INTERNATIONAL
MARKETS
This chapter goes through the main export markets of our country for each group of
goods, identified as having export advantages and potential.
The next tables shows the leading trade partners of Bulgaria by groups of goods in
sector “Manufacture of machinery, equipment and home appliances” for a 10 year period.
60
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 24 Leading partners in export by groups of goods in sector “Manufacture of machinery, equipment and home appliances with general and
special purpose” for the period 2000 - 2010
2000 EUR
(million)
2001 EUR
(million)
2002 EUR
(million)
2003 EUR
(million)
2004 EUR
(million)
2005 EUR
(million)
Furnaces and furnace burners
1 Germany 2,2 Germany 9,1 Germany 10,3 Austria 14,6 Germany 20,8 Germany 26,4
2 Russian
Federation
1,3 France 3,2 Austria 7,6 Germany 14,0 Austria 13,1 France 9,7
3 France 1,1 Russian
Federation
1,4 France 5,4 France 6,1 France 6,5 Austria 5,5
4 Serbia 0,9 Bulgaria 1,3 Bulgaria 2,9 Bulgaria 3,2 Bulgaria 3,9 Italy 3,8
5 Italy 0,6 UK 1,2 Hungary 2,7 Poland 2,2 Italy 3,0 The
Netherlands
3,5
Office equipment,
except computers
26,8 33,7 56,5 65,6 84,4 106,1
1 Germany 4,0 France 5,6 UK 13,1 UK 12,9 Serbia 14,5 Belgium 23,0
2 Italy 3,3 Germany 3,8 Germany 4,7 Germany 6,7 Germany 11,9 UK 13,8
3 The
Netherlands
3,3 UK 3,8 Italy 4,7 Romania 6,4 UK 10,5 Germany 11,7
4 Romania 3,1 Italy 3,8 Romania 4,6 Italy 5,0 Romania 5,7 Italy 6,7
5 UK 2,5 Sweden 3,3 The Netherlands 3,6 France 4,5 Italy 5,2 USA 6,7
Extracting and construction
machinery
15,4 21,6 28,1 27,7 30,2 57,9
1 Austria 2,8 Germany 6,0 Germany 7,2 Slovenia 6,0 Austria 6,5 France 9,2
2 Jordan 2,2 Austria 3,9 Austria 4,8 Germany 4,3 Slovenia 4,9 Germany 8,7
3 Ghana 0,8 Italy 2,9 Italy 2,7 Austria 3,5 France 3,1 Austria 7,9
4 Germany 0,8 Ghana 1,6 Slovenia 2,4 Denmark 2,4 Germany 2,1 Slovenia 6,4
5 Syria 0,8 Denmark 0,9 Macedonia 1,7 Romania 1,6 Denmark 1,3 Belgium 3,9
Turbines and engines, except aircraft, vehicle and cycle engines
1 Italy 8,0 Italy 9,8 Italy 11,1 Italy 12,1 Austria 14,3 Austria 22,5
2 Germany 5,0 Germany 7,3 Germany 6,7 Germany 9,3 Italy 14,2 France 18,2
3 France 4,6 Bulgaria 5,0 Austria 5,9 Austria 6,5 Germany 11,1 Italy 17,1
4 Austria 4,4 Austria 4,5 France 4,7 France 6,0 France 8,5 France 13,5
61
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
5 Turkey 3,5 France 3,9 Turkey 2,6 Russian Federation 3,5 Russian
Federation
6,2 Russian
Federation
8,1
Hydraulic pumps, hydraulic and
pneumatic engines
59,1 60,5 68,5 69,5 73,4 78,1
1 Germany 34,6 Germany 32,9 Germany 36,5 Germany 39,3 German
y
38,6 Germany 37,0
2 Italy 8,6 Italy 9,9 Italy 12,0 Italy 12,0 Italy 13,5 Italy 14,0
3 France 2,7 Mexico 3,7 Russian
Federation
4,7 Russian
Federation
6,0 Russian
Federation
7,3 Russian
Federation
10,2
4 Greece 2,3 Russian
Federation
2,6 Greece 2,5 Greece 2,7 Greece 3,0 Greece 3,6
5 Russian
Federation
1,5 Greece 2,5 Mexico 2,1 Ukraine 1,2 Spain 1,2 Ukraine 2,5
2006 EUR
(million)
2007 EUR
(million)
2008 EUR
(million)
2009 EUR
(million)
2010 EUR
(million)
Furnaces and furnace burners 103,6 127,0 174,0 59,7 170,7
1 Germany 31,1 Germany 36,1 Germany 53,3 Germany 20,3 Germany 57,5
2 France 11,1 France 14,0 Italy 22,0 France 5,9 France 16,2
3 Italy 6,3 Italy 10,1 France 15,1 Italy 5,8 Russian
Federation
12,8
4 UK 5,7 The Netherlands 7,5 Russian
Federation
9,8 Russian
Federation
3,6 Romania 9,6
5 The
Netherlands
4,8 Romania 7,4 The
Netherlands
7,7 The
Netherlands
2,7 Italy 8,8
Office equipment, except
computers
163,6 191,3 197,1 57,1 200,4
1 Belgium 56,7 Belgium 83,4 Belgium 85,0 Belgium 23,9 Belgium 84,8
2 UK 17,0 Germany 16,9 Germany 21,8 Germany 7,8 Germany 24,3
3 Germany 16,9 USA 13,0 USA 8,8 USA 2,8 Italy 12,2
4 USA 11,5 Sweden 9,7 Sweden 8,0 Russian
Federation
2,5 USA 9,2
5 Italy 9,6 Romania 9,3 Romania 8,0 Italy 2,4 Russian
Federation
6,9
Extracting and
construction machinery
68,1 101,5 135,1 125,9 209,2
62
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
1 France 16,0 France 19,7 Romania 25,3 Romania 23,8 Germany 54,2
2 Austria 10,4 Austria 16,2 France 18,7 Germany 21,6 Romania 18,9
3 Slovenia 8,0 Slovenia 10,8 Austria 14,7 France 19,7 The
Netherlands
15,7
4 Germany 7,0 Germany 8,2 Slovenia 13,0 Austria 16,2 Macedonia 14,2
5 Belgium 6,1 Belgium 7,7 Germany 11,8 8,2 Austria 10,7
Turbines and engines,
except aircraft, vehicle and
cycle engines
146,7 186,4 2
01,0
41,4 204,6
1 Austria 28,5 Austria 38,7 Austria 35,7 Austria 5,7 Germany 34,1
2 Italy 18,6 Russian
Federation
21,5 France 28,8 Germany 5,7 Austria 24,4
3 Germany 17,8 France 21,3 Russian
Federation
25,1 France 5,0 France 22,6
4 France 16,2 Italy 21,0 Germany 20,9 Italy 4,6 Russian
Federation
20,2
5 Russian
Federation
14,3 Germany 20,7 Italy 20,6 Russian
Federation
4,2 Italy 17,8
Hydrauli
c pumps,
hydrauli
c and
pneumat
ic
engines
95,7
141,2 146,4 36,4 120,2
1 Germany 31,2 Russian
Federation
34,7 Russian
Federation
35,4 Germa
ny
10,4 Germany 30,7
2 Russian
Federation
19,9 Germany 31,4 Germany 32,8 Italy 5,6 Russian
Federation
19,2
3 Italy 13,9 Italy 22,7 Italy 21,1 France 5,5 Italy 18,3
4 France 10,4 France 18,1 France 19,2 Russian
Federation
4,7 France 15,2
5 Greece 4,0 Greece 5,8 UK 6,1 UK 2,2 Denmark 6,4
Source: ITC
63
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Bulgaria could encourage the export by SMEs into the following five markets,
where a relative growth is noticed in the EU: Romania, the Czech Republic,
Slovakia, Greece and Hungary;
The identified key markets outside the EU are: Russia, Serbia, Ukraine, Kazakhstan,
Macedonia;
The priorities regarding machinery and equipment should be directed to the
restoration of existing and working until the near past markets, where the Bulgarian
production is accepted with readiness and willingness and the traditionally good
relationship still exist;
Regarding home appliances it should be looked even for the “new old” target
markets, including in the countries in the Middle East and also to some more solvent
African countries like Egypt, Tunisia, Algeria, Morocco, where Bulgaria has been
traditionally accepted as reliable and trustful trade partner;
Main rivals in the EU countries are that of Western Europe. In first place is
Germany, followed by Italy, France, Spain, the Czech Republic, Sweden;
Among the countries out of the EU main rival to Bulgarian companies is China,
followed by Turkey, USA and Russia;
Main advantages of the EU rivals, indicated by the respondents of the carried out
sociology survey, are related to:
high quality of the competitive products (way forwards in the rating);
low product cost (indisputably related to the high technical and technology
level);
good technologies;
traditions in the export of these countries;
imposed on the markets brand of certain products;
financial capacity;
large investments in marketing and advertising.
64
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
BARRIERS TO THE INTERNATIONALIZATION OF SMALL AND MEDIUM
ENTERPRISES AS WELL AS MEASURES AND PERSPECTIVES FOR
STIMULATION AND DEVELOPMENT OF EXPORT
The most serious barriers to the Bulgarian export according to the carried out
sociological survey are the unfavourable business environment in Bulgaria, high
production cost of goods and the lack of support by the Bulgarian state for the
export, i.e. the most serious barriers to the export are the barriers of the
“surrounding environment”;
The companies from the sector are clearly understanding the need of modernization
of the production process to be competitive, including into the international markets,
as well as the lack of own financial resources. This is reaffirmed by the fact that
among the priority measures the highest priority is given to the support for
technology modernisation of the production process, corresponding to the most
serious barrier to the export – high production cost of goods and services;
Most of the measures to overcome the barriers to the export are expected to be
undertaken by the state. Most often is indicated the need of creating normal business
climate in Bulgaria. Moreover there is an accent for such business environment,
adequate to the existing at the moment serious crisis;
Companies are counting to the highest extent on their own to ensure the necessary
information for the export and to a much lesser extent to the administrative
structures of BSMEPA and the branch organizations.
65
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
ANTICORRPUTION COMPONENTS OF THE EXPORT STRATEGIES
The experts’ assessments outline the following potential corruption risk profile:
Lack of information and of attempts to bridge this information gap by seeking
intermediaries capable of recommending a potential partner, as well as falling into
the frames of already existing dependencies. The lack of information for the
existing dependencies for ensuring and guaranteeing the claims, as well as for the
more general defence of the exporters’ rights;
Insufficient technical capacity and resource availability, including the lack of
investments in innovations, as an objective factor for the increase of the risk of
attempts to bribe foreign public officials.
High level of corruption risk in some of the markets of the Arab countries, e.g.
Africa and the Middle East countries, due to incomplete and unclear legal
framework, volatile regulatory environment, incomplete or partial definition of the
scope of competence of the various agencies and institutions, lack of mechanisms
for control and penalization of unfair competition practices;
In internally national context – lack of knowledge about the legislation in force,
high level of mistrust in public authorities, lack of information and coordination in
the requirements of the administrative units, responsible for the export activity.
As tools for assessment of the corruption risk and for planning export strategies could
be used three already recognised international surveys of the international anti-corruption
organisation Transparency International: Corruption perceptions index (CPI), Global
corruption barometer (GCB), Bribe payers index (BPI). These give relative information
regarding the level of expansion of the corruption worldwide and the extent to which the
national institutions and sectors are affected.
66
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
A) MARKETS IN EUROPEAN UNION MEMBER STATES: GREECE, ROMANIA,
THE CZECH REPUBLIC, SLOVAKIA, HUNGARY
According to CPI the efficiency of the anti-corruption policy in these countries is below
the average values for the EU (6,27). The given above countries may be divided in two groups:
the first includes Greece (index 3,4) and Romania (3,6), where in the last 3 years shows an
increase of the indicators for anti-corruption efficiency. The other group of countries show
more stable progress in fighting the corruption in the last years and as a whole is offering more
appropriate business conditions.
According to GCB the most seriously affected institutions and sectors by the corruption
are: in Romania – political parties and the parliament; Greece – political parties and media; the
Czech Republic – political parties, parliament and public administration; Hungary – business.
Less affected institutions and sectors by the corruption are: in Greece – fiscal services,
police and judicial system; the Czech Republic – judicial system, fiscal services and customs;
Hungary – public administration, judicial system.
Most significant pressure for bribe payment (expressed as percentage of nationals asked
to pay a bribe in the last year) exists in the following sectors: in Greece – customs (16,9%),
agricultural services (4,9%) and registry offices (4,4%); the Czech Republic – registry services
(8,7%), agricultural services (8,6%), Romania – police (16,2%), judicial system (13,0%) and
registry services (10,8%).
B) MARKETS OUTSIDE THE EUROPEAN UNION MEMBER STATES: RUSSIA,
SERBIA, UKRAINE, KAZAKHSTAN, MACEDONIA
This group of countries is creating less favourable environment for business realization
due to two main deficits: lower efficiency of the public institutions work and more serious
corruption pressure on the business.
67
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
According to CPI most serious problems related to anti-corruption encounter in first
place Ukraine (2,3), followed by Russia (2,4) and Kazakhstan (2,7). In comparable
international aspect the Balkan states Serbia (3,3) and Macedonia (3,9) are showing relatively
more favourable to the international business conditions.
According to GCB the most seriously affected institutions and sectors by the corruption
are: in Ukraine and Russia – judicial system, public administration and the parliament (the risk
of administrative corruption is leading relative to the risk of politically favoured corruption);
Macedonia – judicial system, political system; Serbia – political parties, public administration,
parliament, judicial system and police.
Less affected institutions and sectors by the corruption are: Macedonia – fiscal services,
media.
Most significant pressure for bribe payment (expressed as percentage of nationals asked
to pay a bribe in the last year) exists in the following sectors: Russia – police (27,7%),
agricultural services (20,2%), judicial system (17,7%), customs (10,9) and registry offices
(8,6%); Ukraine – police (29%), customs (23,4% paid a bribe and another 20,8% do not
answer), agricultural services and forest management services (24%), registry services (22,1%
and another 12,1% do not answer), judicial system (16,9%) and fiscal services (10,4%);
Macedonia – customs (25%), judicial system (20,6%); Serbia – police (14,5%), judicial system
(13%) and customs (12,4%).
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
MACROECONOMIC CHARACTERISTICS OF THE PRIORITY BULGARIAN
EXPORT MARKETS. BILATERAL TRADE RELATIONS
In order to get clearer vision of the overall condition and peculiarities of the defined as
main Bulgarian export markets for the production of the analyzed by us sector, we are offering
a general view of the leading five countries of this rating, that are part of the European Union,
as well as of the leading five outside its borders.
For sector “Manufacture of machinery, equipment and home appliances” the most
important markets, as we have already found out are: Romania, Greece, the Czech Republic,
Slovakia and Hungary. Outside EU these are Russia, Serbia, Macedonia, Kazakhstan and
Ukraine.
Actual data and characteristics for big part of the developed markets could be found
also on the National export web portal, supported by BSMEPA.
Romania. The contractual legal basis between the two countries in the field of the trade
and economic relations has been established and continues to develop. Among the signed
agreements and contracts are the following:
Protocols for liberalisation of trade for industrial and agricultural products in the frame
of the Accession agreement of Bulgaria to the CEFTA, effective since 1999; Agreement on
cooperation and mutual assistance in customary matters since 1999; Agreement on bilateral
recognition of diplomas and academic degrees; programmes for cooperation in the field of
science and education; multiple agreement on border cooperation.
A new stage in the development of the bilateral economic relations begins after signing
the protocols for liberalisation of trade for industrial and agricultural products in the frame of
the Accession agreement of Bulgaria to the CEFTA (in force of 01.01.1999), being Romania
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
party to it. The removal of the barriers to bilateral trade is reflecting positively on the trade and
has positive effect on the trade and economic relations in bilateral and regional plan.
The accession of Bulgaria and Romania to the European Union in 2007 put the
development of the bilateral relations in the trade and economic field into new environment,
transforming it into intercommunity ones. Romania is an important economic partner of
Bulgaria. The markets of both countries have similar characteristics, keeping some
peculiarities, relatively foreseeable economic environment, decreased in the last year internal
consumption due to the economic crisis.
For the last 4 years the trade turnover between Bulgaria and Romania has been marked
by significant growth, where only in 2009 is marked a slight fall in the export of Bulgaria and
higher in the import. In 2010 the trade turnover between the two countries is growing and is
about 2,5 billion EUR. Both the import and the export have marked increase of one third in the
volume for 2010 relative to the previous year.
The joint European projects, both countries taking part in, the building of Danube
bridge 2, the cross-border projects, the European funds for infrastructure modernisation, the
agriculture, AGRI and other give ground to consider that the trade and economic relationship
will deepen and develop even more in short and long term.
In the next years is expected the internal consumption to grow and both economies to be
more and more export orientated that is possible to be ensured by means of mutual support and
bilateral flexible trade policy both of State institutions and the various subjects and companies
in both countries.
Independently of the economic crisis many Bulgarian companies have marked interest
to be present and develop activity on the Romanian market, not lacking respectively Romanian
companies, orientated towards the Bulgarian market.
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 25 Main economic indicators for Romania and bilateral trade relations with Bulgaria
GDP (per capita, 2010) $ 11,600
Growth of GDP (%, 2010) -1,3%
Inflation (%, 2010) 6%
Export volume (2010) $ 51,91 billion
Position as world exporter (2010) 51
Main trade partners in export
(2009)
Germany 18,8%, Italy - 15,4%, France 8,2%,
Turkey 5%, Hungary 4,3% (2009)
Main export positions (2009) machinery and equipment, textile and shoes,
metal and metal products, minerals and fuels,
chemicals, agricultural products
Main trade partners in export
(2009)
Germany 17,3%, Italy - 11,7%, Hungary
8,5%, France 6.1%, China 4,9%, Austria 4,8%
(2009)
Main import positions (2009) machinery and equipment, metal and metal
products, minerals and fuels, chemicals,
agricultural products
Export volume of Bulgaria
(million EUR, 2010)
1.441.244
Share of the export (%) in the total export
of Bulgaria, in EURO (2010)
9,25 %
Main positions of the export of Bulgaria
in 2010
iron rods or non-alloy steel, petroleum oils
and oils obtained from bituminous minerals,
rape seed, sugar cane sugar, sunflower seeds,
wheat and rye, tractors, meat and offal;
pharmaceuticals; corn
Import volume of Bulgaria,
(million EUR, 2010)
1.336.488
Share of the import (%) in the total import
of Bulgaria, in EURO (2010)
6,97 %
Main positions of the import of Bulgaria
in 2010
petroleum oils and oils obtained from
bituminous minerals, petroleum gas and other
gaseous hydrocarbons; copper waste and
debris; waste and debris of cast-iron, iron and
steel; meet and offal; pneumatic rubber tires,
new; oil-cakes; pharmaceuticals, passenger
cars and other motor vehicles; sugar cane
sugar.
Source data: ITC and MEET
For 2009 the amount of the Romanian investments in Bulgaria is 152.5 EUR (million)
and it sets them on 26th
place among the countries investors here. Again for same year but
according to data of the Ministry of foreign affairs of Romania, a total of 36 companies and
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
representatives with Romanian participation have been registered in Bulgaria, out of which 9
are constituted with 100% Romanian capital.
In Romania, according to data of the Romanian Ministry of trade, as small and medium-
sized enterprises and the business environment have been registered 1014 companies with
Bulgarian participation, with capital 18 529,7 EUR (million), ranking Bulgaria at 41th place
among the investors in the country. The Bulgarian investment in Romania, according to BNB
until the end of 2009 are 41,2 EUR (million), where the Bulgarian investment flow there for
2009 is 4,1 EUR (million) and for the first 6 months of 2010 is 1,6 EUR (million) with 40,2
EUR (million) total flow, i.e. falling of Bulgarian investment abroad for the same period.
Greece. The trade and economic relations between Bulgaria and Greece are developed
on the basis of bilateral agreements and that with the EU, directly related to the Republic of
Greece as EU member state. Greece is traditionally entering in the first five of our trade
partners from the EU and takes the leading place among the SEE countries. BTCC is
maintaining constant business contacts with the commerce chambers of the Republic of Greece,
the Greek unions and associations. A number of agreements for cooperation have been signed
between the BTCC and the Commerce chambers of Athens, Seres, Drama, Thessalonica,
Kavala, the Greek Association for Promoting the Export, the Federation of the Greek
Industrials, the Small-size Business Trade Chamber. Regional chambers of the Republic of
Bulgaria on their turn are concluding cooperation agreements for the realization of joint
projects, organization of business visits and meetings.
Legal framework:
Agreement for five-year programme for cooperation in the field of development
/2002-2006/, signed on 28th
August 2002;
Treaty for cooperation in the field of tourism /14th
May 1999/;
Agreement for avoiding double taxation with additional protocol /15th
February
1999, protocol on 18th
June 2000, in force since 1st January 2002/;
Agreement for cooperation and mutual assistance between the custom
administration /19th
January 1999, in force since 2d March 2000/;
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Agreement for the construction of new road border bridge between both countries in
the region of the Kulata-Promahon border crossing point /2d July 1997, in force
since 1st March 1998/
Agreement for seasonal employment of workforce, with Annexes 1 and 2 /15th
December 1995, in force since 21st July 1997/;
Agreement for the inauguration of three new cross border points and road
connections between both countries /22d December 1995, in force since 19th
November 1996/;
Agreement for the use of the waters of the river Mesta /22d December 1995, in
force since 19th
November 1996/;
Agreement for promotion and mutual protection of investments /12d March 1993, in
force since 29th
April 1995/.
Table 26 Economic indicators for Greece and bilateral trade relations with Bulgaria
GDP (per capita, 2010) $ 29 600
Growth of GDP (%, 2010) -4,5%
Inflation (%, 2010) 4,5%
Export volume (billion USD, 2010) $ 21,14 billion
Position as world exporter (2010) 67
Main trade partners in export
(2009) Germany 11,1%, Italy - 11%, Cyprus 7,3%, Bulgaria
6,7%, USA 4,9%, UK 4,4%, Turkey 4,2% (2009)
Main export positions (2009) food and beverages, manufactured products, petroleum
products, chemicals, textile
Main trade partners in import
(2009) Germany 13,7%, Italy - 12,7%, China 7,1%, France
6,1%, The Netherlands 6%, South Korea 5,7%, Belgium
4,3%, Spain 4,1% (2009)
Main import positions (2009) machinery, transport equipment, fuels, chemicals
Export volume of Bulgaria to Greece
(million EUR, 2010)
1 236,711
Share of the export to Greece (%) in the total
export of Bulgaria, in EURO (2010)
7,9 %
Main positions of the export of Bulgaria to
Greece in 2010
textile products and materials, base metals and electricity
Import volume of Bulgaria to Greece (million
EUR, 2010)
1 141,925
Share of the import from Greece (%) in the
total export of Bulgaria, in USD (2010)
5,9%
Main positions of the import of Bulgaria
from Greece in 2010
textile products and materials, mineral and chemical
products, machinery and equipment and base metal
Data source: ITC and MEET
73
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
For the period 1996-2010 investments from Greece amount to 3.53 billion EUR,
representing around 9% of the total amount of the investments for the period (39,5 billion
EUR), and the country ranks 3rd place of total of 182 countries. In 2010 have been attracted
112,5 EUR (million) from Greece, amounting to approximately 1.3% of the total sum (3212
million EUR).
According to preliminary data of BNB for 2010 we are reporting PFI at the amount of
1.36 billion EUR (two-fold decrease relative to 2009). In 2008 the foreign investment are 3.28
billion EUR.
In Bulgaria are registered 4139 companies with from 5 to 100% Greek participation
until the end of 2007. In term of this indicator Greece ranks third after Turkey with 6290
companies and Russia with 4920 companies and before UK with 3902, Macedonia - 2724,
Syria - 2606, Germany - 2330, Italy - 2161 and China - 1842. Greece is the biggest foreign
investor in Albania and Macedonia and the third in Romania.
Promoting the investment activity in the Balkan regions is a priority of the economic
policy of Greece.
The Czech Republic is an industrially developed country with intensive agriculture.
Highly developed are the automotive and chemical industries, energy industry, machine
building, electronics, metallurgy and steel production industry, coal mining, glass, textile,
paper, leather and food industries.
In the last years the Czech economy marks continuous GDP growth, where in 2007 has
been reached the highest growth of 6,5%. In terms of volume of GDP per capita the Czech
Republic has reached in the first semester of 2008 82% of the average level for the EU. Main
economic problem for the Czech Republic in long-term is the public funds deficit. In 2008 the
Czech reached for the first time a rate in terms of this indicator, meeting the Maastricht criteria
– 1,5%. Considering the GFEC impact, in the first half-year of 2009 the GDP rate fall by 5,5%
in comparison to same period of 2008. As a whole, in 2009 the GDP drop reached minus 4,1%,
in comparison to previous year. The average annual inflation in 2009 was 1% (in 2007 it was
2,8% and in 2008 reaches 6,3%). The general unemployment rate at the end of 2009 reaches
6,7%. In 2009 the average nominal salary has increased by 5,2% (and is approximately 1010
EUR) and the actual with 4,8% relative to previous year.
The high influx of direct foreign investment, one of the largest for the region, helps
strengthening the country economic power. The total amount of direct foreign investment for
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
the period 1993 – 2004 is 45.5 billion USD. Only in 2005 direct foreign investment reach 8.8
billion EUR, where largest is the share of investments in telecommunication, real estate and
manufacturing industry.
The trade turnover between the two countries marks continuous growth rate.
Notwithstanding the export of the Bulgarian production to the Czech Republic in the first 10
month s of 2008 has increased by 60.5% relative to same period of 2007, there is stable trend
for negative trade balance for Bulgaria.
Table 27 Main economic indicators for the Czech Republic and bilateral trade relations
with Bulgaria
GDP (per capita, USD, 2010) $ 25,6 thousand
Growth of GDP (%, 2010) 2,3%
Inflation (%, 2010) 1,5%
Export volume (billion USD, 2010) $ 116,5 billion
Position as world exporter (2010) 33
Main trade partners in export (2010)
Germany 31,7%, Slovakia 8,7%, Poland
6,2%, France 5,5%, UK 4,9%, Austria
4,7%, Italy 4,5% (2010)
Main export positions (2010) machinery and transport equipment, raw
materials and fuels, chemicals
Main trade partners in import
(2010)
Germany 25,6%, China 11,9%, Poland
6,5%, Russia 5,4%, Slovakia 5,2%
(2010)
Main import positions (2010) machinery and transport equipment, raw
materials and fuels, chemicals
Export volume of Bulgaria
(million EUR, 2010)
146,32
Share of the export (%)in the total export of
Bulgaria, in EURO (2010)
0,94 %
Main positions in the export of Bulgaria in 2010 copper waste and debris; chairs and
seats; copper rods and profiles; radiators
with non-electric heating; generators and
hot air distributors; sound recorder
devices or devices for analogue records;
aluminium rods and profiles; bread,
paste, cons or biscuit products; wires,
cables; other tubes and hollow profiles
from iron or steel; iron sheets, copper
sheets and bands, with gauge exceeding
0,15 mm.
Import volume of Bulgaria (million EUR, 2010) 363,81
Share of the import (%)in the total export of
Bulgaria, in BGN (2010)
1,9%
Main positions of the import of Bulgaria passenger cars and other motor vehicles
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
in 2010 for passenger transport; pharmaceuticals;
wool; spare parts for rail or tram
vehicles; TV receivers; printing
machinery and devices, electrical
apparatus for wire telephony and
telegraphy; automatic data processing
machines and units thereof; magnetic or
optical readers; machines for
transcribing data onto data media in
coded form and machines for processing
such data Data source: ITC and MEET
In average for the period 2000 – 2010 is observed the following:
– Diversification of the import: agricultural 13% and industrial 39%;
– Diversification of the export: agricultural 12% and industrial 15%;
– In Bulgaria a total of 1689 companies are importing, out of which 141 realize 75%
of the import;
– From Bulgaria a total of 423 companies are exporting, out of which 49 are
realizing 75% of the export;
– The number of Bulgarian companies with Czech participation from 5 to 100% is
293.
The direct Czech investment in Bulgaria for the period 2000 – 2010 amounts to 942.3
million EUR.
Slovakia is member of over 50 international political and economic organizations.
Since 01.05.2004 Slovakia is full member of the EU. In 1999 in Bratislava has been established
a Regional centre of the UN Development Programme (UNDP) for the Central European
countries.
The predominating part of the external trade of Slovakia is with EU countries. Leading
external trade partners of the country are Germany, Austria, the Czech Republic, Russia, China,
Korea, France, Poland, Italy, etc.
Leading main goods in the export list
– motor cars;
– LCD televisions;
– machinery and equipment;
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
– flat-rolled products of iron and steel;
– cables and wires;
– paper and paper products.
Leading main goods in the import list
– parts and accessories for the automotive industry;
– petroleum and mineral oils;
– natural gas;
– chemicals;
– pharmaceuticals;
– plastic products.
Table 28 Trade turnover between Bulgaria and Slovakia (million USD)
Year Export Import Balance Trade turnover
2000 6,1 44,6 -38,5 50,7
2001 9,9 42,3 -32,4 52,2
2002 18,7 47,8 -29,1 66,5
2003 15,9 63,1 -47,2 79,0
2004 30,4 85,2 -54,8 115,6
2005 33,2 92,5 -59,3 125,7
2006 58,3 118,7 -60,4 178,0
2007 115,2 224,9 -109,7 340,1
2008 106,02 221,4 -115,38 327,42
2009 94,71 193,20 -98,49 287,91
2010 104,62 208,3 -103,68 312,92 Datasource: ITC and MEET
The data for the trade turnover between the two countries in 2010 show the following
trends. The turnover has increased by 8,68% relative to 2009; the import from Slovakia has
increased by 7,8%, the Bulgarian export has increased by 10,46%. However, the balance in the
turnover is negative that is due to the increase of import, considering its lower level in the crisis
2009.
In the last years is noticed a serious drop in the Bulgarian export of iron and steel
products and chemical raw materials, that in 2008 consisted around 45% of the overall export.
At the present the data show fall in the export of iron and still of around 4 times, that is related
both to the closing of the metallurgical plant “Kremikovtsi” PLC, main export of metals for
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Slovakia, and to the significantly decreased demand of similar production in the country as a
result of the crisis.
However during the reported period most drastic seems to be the drop of over 15 times
in the export of raw materials for the chemical industry, zinc and aluminium at the most, due on
one side to the significant decrease in the orders in the chemical production of Slovakia, as a
result of the crisis, but also as a result of the non-competitive prices of our producers.
The group of electro-technical equipment, cables and insulations in 2009 comes at first
place in our export for Slovakia, being well position also the food products, mainly rice,
sunflower oil, sugar products, cacao and spices, for example the rice supplies have grown
approximately twice, the oil with over 25 times, etc.
Serious drop with over 60% marks the export of traditionally strongly represented in the
import list products in our country from Slovakia, namely the passenger cars of Volkswagen,
Kia Motors and Peugeot-Citroen, due to the decreased demand of this group of goods as a
result of the crisis.
The entering of new articles in the Slovak export of our country is noticed, namely of
industrial oils, plastic goods, etc., showing the increased competitiveness of the Slovak in
comparison to the Bulgarian manufacturers in these sectors, as well as in relation to the similar
to them import goods. According to data of MEET and BNB in 2009 the Slovak investments
amount to 13 EUR (million). In 2009 was started the realization of new investment project in
hi-tech manufacture in the city of Lovech (blood banks plant). In 2010 the amount of the
Slovak investments has fallen by 9,4 EUR (million).
Leading main goods in the export of Bulgaria for Slovakia:
– Electronic equipment, cables, insulations;
– Food products and spices;
– Steel and flat-rolled iron;
– Plastic products.
Leading main goods in the export of Slovakia for Bulgaria:
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
– TV sets and other household appliances;
– Electronic equipment and cables;
– Plastic products;
– Office and other types of paper.
Hungary. The trade turnover between Bulgaria and Hungary in 2007 grow to 808,1
EUR (million) in the context of significant negative balance of 525,4 EUR (million). In the
Bulgarian export biggest is the share of the flat-rolled iron profiles – 13%, then come the shoes
– 7,5%, aluminium and other metal waste – 5,00%, food products – 3,5%, etc. In import first
come the motor cars and other vehicles – 22,68%, electrical appliances – 8,7%,
pharmaceuticals – 7,12%, Radio and other types of receivers – 5,41%, etc.
According to data of MEET, the amount of Hungarian investments in Bulgaria for the
period 1996-2008 /first trimester/ amount to 986.16 EUR (million), ranking Hungary on 9th
place in the rank list of the foreign investors. In 2003 is realized the biggest Hungarian
investment here by the Hungarian bank OTP, that purchased Bank DSK for 311 EUR (million).
In 2006 the Hungarian bank MKB bought the majority share of the actions of Unionbank for
244,3 EUR (million). In 2007 the Hungarian investments are accounting for 236,8 EUR
(million). There is precondition for the entering of new Hungarian investments not only in the
bank sector, but also in other fields of the Bulgarian economy. According to data of the
BULSTAD register, at the end of 2006 the total number of companies from Hungary, invested
here, is 88.
In 2008 between the Ministry of economy, energy and tourism of the Republic of
Bulgaria and the Ministry for national development and economy of the Republic of Hungary
was signed an Agreement for cooperation in the field of small and medium-size enterprises. In
compliance with the Agreement for cooperation Hungary was a “country-partner” of the
Autumn International Plovdiv Fair in 2009.
Between the government of the Republic of Bulgaria and the government of the
Republic of Hungary was signed a Treaty for mutual promotion and protection of investment,
that was ratified by law, adopted by the 37th
National assembly on 2d of March 1995 – SG No
24 of 1999, in force since 7th
September 1995. Issued by the Ministry of finance, it was
published in SG No 98 of 7th
November 1995.
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 29 Main economic indicators for Hungary and bilateral trade relations with
Bulgaria
GDP (per capita, USD, 2010) $ 18,800 thousand
Growth of GDP (%, 2010) 1,2%
Inflation (%, 2010) 4,9%
Export volume (USD, 2010) $ 93,74 billion
Position as world exporter (2010) 36
Main trade partners in export (2010 ) Germany 25,5%, Italy 5,5%, UK 5,4%,
Romania 5,3%, Slovakia 5,1%, France
4,9%, Austria 4,7% (2010)
Main export positions (2009) machinery and equipment 61,1%, other
products 28,7%, food products 6,5%,
raw materials 2%, fuel and electricity
1,6% (2009)
Main trade partners in import
(2010)
Germany 26,1%, Russia 7,7%, China
6,8%, Austria 5,9%, The Netherlands
4,4%, Poland 4,3%, Italy 4,2% (2010)
Main import positions (2010) machinery and equipment 50%, fuel and
electricity 11%, food products, raw
materials
Volume of the export of Bulgaria
(million EUR, 2010)
198,06
Share of the export (%) in the total export of
Bulgaria, in EUR (2010)
1,27 %
Main positions in the export of Bulgaria
in 2010
Footwear, food products, machinery,
aluminium, textile, organic chemistry,
batteries, petroleum oils and oils of
bituminous minerals
Volume of the import in Bulgaria
(million EUR, 2010)
597,98
Share of the import (%) in the total export of
Bulgaria, in EUR (2010)
3,12%
Main positions in the import of Bulgaria in 2010 TV and radio sets and parts thereof,
motor vehicles, pharmaceuticals,
electrical equipment, meat products,
appliances, etc. Datasource: ITC and MEET
Perspective fields for development of trade and economic relations:
In 2003 is realized one of the biggest Hungarian investments in Bulgaria. On 20th
May
2003 the governors of the Bank consolidation company (BCC) and the Hungarian bank OTP
80
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
signed in Sofia a contract for the sale of 100% of Bank DSK. The paid price by the buyer is
311 million euro.
In 2006 the Hungarian bank MKB purchases the majority share of the action of the
Bulgarian Unionbank.
Other Hungarian investors are “Videoton Holding PT” (majority share in “DZU” PLC,
Stara Zagora from the electrical and electronic sector), “Dunapak PT” (majority share in
“Rodina” and “Rodinvest” from the pulp and paper industry), “Hun-Ex” (hospitality). Separate
smaller investments are realized in the field of trade, consultancy, real estate, etc. There is a
positive trend of establishing cooperation between Hungarian and Bulgarian companies.
On 1st of April 2003 the Bulgarian “Lines Holding”, producer of natural juices and milk
with the BBB brand, bought the canned factory “Storko” PLC, Pleven. The holding has signed
a contract with the Hungarian company “Globus” for close cooperation, providing for acquiring
51% ownership for about 701 250 USD.
Serbia. In the export of Bulgaria for 2010, Serbia holds 8th
place, with a share of 3.5%,
regarding the import holds 21st place, with share of 1%. Given data determine the importance
of the Republic of Serbia as external trade partner of the Republic of Bulgaria.
Table 30 Main economic indicators for Serbia and bilateral trade relations with Bulgaria
GDP (per capita, 2010) $ 10 661
Growth of GDP (%, 2010) 1 %
Inflation (%, 2010) 10,3%
Export volume (2010) $ 9,794 billion
Position as world exporter (2010) 82
Main trade partners in export
(2009)
Bosnia and Herzegovina 12,2%, Germany -
10,4%, Montenegro 10%, Italy 9,8%
Main export positions (2009) metals, electric machinery and equipment, copper,
plastics, wheat crops
Main trade partners in import
(2009)
Russia 12,3%, Germany 12,2%, Italy 9,7%, China
7,1%, Hungary 4%
Main import positions (2009) mineral oils, machinery and equipment, electric
machinery and equipment, plastics, vehicles,
paper
Export volume of Bulgaria
(thousands EUR, 2010)
583,195
Share of the export (%) in the total export of 3,8 %
81
Operational programme “ Development of the
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Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Bulgaria, in EUR (2010)
Main positions of the export of Bulgaria
in 2010
copper, pharmaceuticals, machinery and
equipment, glass, metals, steel, electric machinery
and equipment, essential oils
Volume of the import in Bulgaria
(thousands EUR, 2010
207,498
Share of the import (%) in the total import of
Bulgaria, in EUR (2010)
1,1 %
Main positions of the import of Bulgaria
in 2010
Iron, steel, ores, plastic products, copper, animal
and vegetable oils, wheat crops, paper, etc.
Source: ITC and MEET
In the export list of the Bulgarian goods are prevailing mainly raw materials, materials
and goods with low level of processing. Leading positions are hold by the electricity (with
share 37%), refined copper and non-processed copper alloys, articles and products of the
chemical, pharmaceutical and glass industry, video recorders and video reproducers, etc.
At the moment, trade relations between the Republic of Bulgaria and the Republic of
Serbia are regulated by the Temporary agreement for trade and trade-related issues between the
EU and the Republic of Serbia signed on 29.04.2008 in Luxembourg. It is expected these to be
ruled by the Stabilization and Association Agreement, ratified on 19.01.2011 by the EU
Member States.
Macedonia. According to preliminary data of the Macedonian State Institution for
Statistics within the period January – April 2011 Bulgaria holds 5th
place as trade partner of
Macedonia. The common bilateral trade turnover amounts to 231 USD (million). The
Macedonian export for Bulgaria is 98 USD (million) and the import from Bulgaria is 133 USD
(million). The trade balance is positive for Bulgaria and amounts to 35 USD (million).
Table 31 Main economic indicators for Macedonia and bilateral trade relations with
Bulgaria
GDP (per capita, 2010) $ 9 728
Growth of GDP (%, 2010) 0,7%
Inflation (%, 2010) 1,6%
Export volume (2010) $ 3,332 billions
Position as world exporter (2010) 117
Main trade partners in export ( 2010) Germany 20,2%, Italy 7,1%, Bulgaria 7,1%,
Greece 6,4%
Main export positions (2010) food, beverages, tobacco products, iron and
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
steel
Main trade partners in import (2010) Germany 11,5%, Russia 11,1%, Greece
8,3%, Bulgaria 8,2%, UK 7%, Turkey
5,1%, Italy 5,1%
Main import positions (2010) machinery and equipment, vehicles,
chemicals, fuels, food products
Volume of the export of Bulgaria
(thousands EUR, 2010)
329,744
Share of the export (%) in the total
export of Bulgaria, in EUR (2010)
2,1 %
Main positions in the export of Bulgaria
in 2010
Electricity, petroleum oils and oils of
bituminous minerals, waste and debris of cast
iron, iron or steel, sunflower oil, iron or plain
steel, passenger cars and other vehicles
Volume of the import of Bulgaria
(thousand EUR 2010 )
252,890
Share of the import (%) in the total
import of Bulgaria, in EUR (2010)
1,3%
Main import position of Bulgaria in 2010 lead, copper and zinc ores, hot-rolled products
of iron or plain steel, raw or non-processed
tobaccos, copper waste, hot-rolled iron pipes Datasource; ITC and MEET
The external trade relations between two states are assisted by the bases, created upon the
signed on 15.12.2008 in Skopje new Agreement for economic cooperation between the
governments of Bulgaria and Macedonia, a mixed Bulgarian-Macedonian intergovernmental
Committee for economic cooperation. Other contracts, promoting the trade turnover between
two states are:
Agreement for cooperation between Bulgaria and Macedonia in the field of
standardization, metrology, accreditation and evaluation of the compliance – signed
in Skopje, 15.05.2000;
Agreement between the government of the Republic of Bulgaria and the Republic of
Macedonia for cooperation and mutual assistance in customary matters – in force
since 15 July 2000, etc.
83
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Russia is traditional and one of the most important external-economic partners of
Bulgaria. After Bulgaria joined the EU the relations between the two countries received new,
even higher dynamic. This is confirmed by the registered growth in 2007 relative to 2006 of the
Bulgarian export for Russia - 96%, of the Russian investments in Bulgaria – 73,8%, of the
tourist flow from Russia – 14%, as well as of the signed agreement on the energy projects.
In 2009 the Russian federation realizes 8,7% of the external trade turnover of Bulgaria,
including 2,5% of the export and 13,1% of the import. In average for 2000 – 2008 it is
observed that from Bulgaria to Russia are exporting a total of 640 companies, 41 of which
constitute 75% of the export and in Bulgaria from Russia are importing 844 companies, out of
which 2 constitute 75% of the import (due to the energy resources). Bulgaria holds about 1% of
the external trade turnover of Russia.
Table 32 Main economic indicators for Russia and bilateral trade relations with Bulgaria
GDP (per capita, 2010) $ 15,900
Growth of GDP (%, 2010) 4 %
Inflation (%, 2010) 6,7%
Export volume (billion USD, 2010) $ 376,7 billion
Position as world exporter (2010) 13
Main trade partners in export
(2009)
The Netherlands 12,2%, Italy 9%,
Germany 6,9% ,Turkey 5,9%, Ukraine
5%, China 4,5%, Poland 4,3%
Main export positions (2009) petroleum and petroleum products,
natural gas, wooden material and
wooden articles, metals, chemicals,
machinery and spare parts
Main trade partners in import
(2009)
China 12,9%, Germany 12,6%, Japan
6,9%, Ukraine 6%, USA 5,1%, Italy
4,1%
Main import positions (2009) vehicles, machinery and equipment,
plastics, cast iron, steel and metal semi-
manufactured articles, consumer goods,
food
Export volume of Bulgaria to Russia (million
USD, 2009)
415,8
Share of the export for Russia (%) in the total
export of Bulgaria, in USD (2009)
2,5 %
Main positions in the export of Bulgaria for
Russia in 2009
pharmaceuticals, wine, aircrafts, fittings,
spare parts, refrigerators, freezers,
84
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
cables, beverages, cosmetics
Import volume of Bulgaria to Russia (USD -
billions, 2009)
3,03
Share of the import (%) from Russia in the total
import of Bulgaria, in USD (2009)
13,2 %
Main positions in the import of Bulgaria from
Russia in 2009
naphtha, natural gas, stone carbons,
refined copper and alloys, paper, calcium
phosphates, motor carriages, machinery
and equipment, spare parts Datasource; ITC and MEET
The Bulgarian export for Russia is diversified to a high extent, the share of
pharmaceuticals, fitting articles, car and trucks parts, cooling equipment, batteries, aircrafts,
fittings, cosmetics constitutes around the half of the Bulgarian export. The increase in supply
volumes of these and other positions will allow reducing the large negative balance in the
bilateral trade turnover, as a result of the import of energy and fuels.
Ukraine is one of the main trade partners of Bulgaria. In 2010 it holds 10th position in
the total trade turnover and generates 1.28% of the export and 4,16% of the import of Bulgaria.
The Bulgarian community (diasporas) in Ukraine counts for approximately 225 000 persons
(according to Ukraine data), being an additional precondition for expanding the cooperation in
the economic field between both countries.
Table 33 Trade turnover between Bulgaria and Ukraine (million USD)
Year Export Import Balance Trade turnover
2006 103,1 710,9 -607,8 814,0
2007 226,4 2137,5 -1911,1 2364,1
2008 261,8 2754,0 -2492,2 3015,8
2009 139,7 1111,4 - 971,7 1249,1
2010 264,5 1059,3 -794,8 1323,8 Data source; ITC and MEET
Within the period 2003 – 2008 there is a clear trend of increasing the mutual trade,
including the Bulgarian export. In 2009, as a result of the global economic crisis the general
trade turnover decreases harshly (-58.6%), as well as the Bulgarian export by 48.5% and the
Ukraine import by 59.9%. In 2010 there is growth in the trade turnover by 5.3% - 1323.8 USD
(million), due mainly to growth in the export by 96.4%, reaching 264.5 USD (million), where
85
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
at the same time there is a drop in the import of -4.5%, reaching 1059.3 USD (million). The
negative balance has also decreased to 794.8 USD (million).
In the first six months of 2011 the trade turnover has increased by 40.1%, where the
export has increased by 49.3% and import – by 38.8%.
Leading products in the Bulgarian export in 2010:
– Petroleum oils and oils of bituminous materials;
– Pharmaceuticals;
– Organic surface-active agents (different from soaps);
– Plastic transportation and packaging articles;
– Iron and plain steel rods;
– Unifilar plastic coating
Leading products in the Bulgarian import in 2010:
– Stone carbons;
– Crude petroleum oils;
– Petroleum oils and oils of bituminous materials.
– Iron and plain steel rods;
– Hot-rolled iron products.
In the export nomenclature in 2010 there are 4 groups of goods that have formed over
60%, including petroleum oils 52.1%, pharmaceuticals 8.1%, organic surface-active agents
2.8%, plastic transportation and packaging articles 2.6%, iron and plain steel rods 2.6%. The
rest of the article groups have relative share of under 2.1%.
In the first six months of 2011 this trend is kept – 53.7% of the Bulgarian export for
Ukraine is of the 4 groups of goods: petroleum oils 32.9%, pharmaceuticals 9.6%, iron and
plain steel rods 7.8%, turbojet engines 3.4%. There is harsh decrease in the export (by
1053.6%) of iron and plain steel rods.
We have the potential to offer to the Ukrainian market equipment for the food industry
and food products, electronic products, lifting and handling machinery, optical appliances and
devices, metalworking machinery, electrical engines and generators, men’s and women’s
wearing apparel, ceramic pavement and enamel coverings, ceramics equipment, etc.
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Our import from Ukraine consists mainly of stone carbons, petroleum raw materials,
semi-manufacture iron articles.
Kazakhstan. The bilateral trade turnover between Bulgaria and Kazakhstan in the last
years is largely dependent on the volumes of the import of Kazakh petroleum and is also
influenced by the global financial economic crisis.
In 2010 the bilateral trade turnover has dropped in relation to 2009 over 3 times, but the
Bulgarian export has increased for the same period with 16.7%.
In the first semester of 2011 our country has imported significant quantities of Kazakh
petroleum that resulted in the creation of significant negative balance.
Table 34 Trade turnover between Bulgaria and Kazakhstan (thousand USD)
Year Export Import Balance Trade turnover
2006 23 554 300 807 - 277 253 324 361
2007 62 569 3 935 58 634 66 504
2008 30 443 2 913 27 529 33 356
2009 24 289 105 169 - 80 880 129 458
2010 27 611 9 658 17 953 37 269 Datasource; ITC and MEET
Leading products in the export of Bulgaria for Kazakhstan in 2010:
– Pharmaceuticals;
– Horse, asses, mule or hinnies meat, fresh, chilled or frozen.
– Medical, surgical, dental or vets instruments and devices;
– Apparatus – switches, fuses, voltage limiters,
– Cranes, container-processing (surrounding) tucks and crane trucks.
Leading products in the export of Bulgaria for Kazakhstan in 2010:
– Petroleum gas and other gaseous hydrocarbons;
– Mineral and chemical nitric fertilizers;
– Mineral and chemical fertilizers, containing nitrogen, phosphorus and
potassium; other type of fertilizers;
– Constructions and parts thereof – bridges and bridge elements, towers, piles,
stands, columns;
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
– Constructions and parts thereof – water-gates, scaffoldings, roofs, doors and
windows.
Our country has the potential to increase the export to Kazakhstan in a number of goods
and services: technology lines for fruits and vegetables processing; pre-cast units, liquid pumps,
electric batteries; trucks – lifting equipment; machinery and apparatus; calculators and
accounting machinery; lamps, construction and tourist services; pharmaceuticals, hair styling
preparations; mouth preparations; furniture; wood products; ready-made sauces; fruit juices;
frozen vegetables mixes; canned food, etc.
88
Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
SWOT AND PESTEL ANALYSIS – SECTOR “MANUFACTURE OF
MACHINERY, EQUIPMENT AND HOME APPLIANCES”
The SWOT analysis is an instrument by which it is possible to identify the strengths,
weaknesses, opportunities and threats with regard to a certain policy or activity. This is an
acronym from the first letters of the respective words in English /Strengths, Weaknesses,
Opportunities, Threats/.
The LOED analysis is an instrument by which we can identify in what way the positive
effect of the analyzed policy can be increased and in what way the negative effects can be
countered. The word is an acronym from letters of the words in English – upgrading,
overcoming, employment, defence.
Table 35 SWOT and LOED Analyses
S.W.O.T L.O.E.D
Strengths:
1. Bulgaria is member of EU-27 and the
SMEs from the sector may use the rights
and privileges for the manufacture and
trade of machinery, equipment and home
appliances
2. The SMEs have access to specialized EU
funds for implementation of programmes
for enhancing their competitiveness
3. The SMEs from the sector have already
created infrastructure facility for
performing specific manufacture activities.
4. The sector SMEs are operating in the
condition of expanding market, having
better price/quality ratio
5. The Bulgarian SME of the sector have
traditional and sustainable market positions
6. Bulgaria has lower criminality rate in
relation to other EU members.
7. The Bulgarian legislation is constantly
Loading:
1. Popularization of the image of the SMEs
from the sector.
2. Taking advantage to a greater extent of
European funds by the sector SMEs.
3. Creation of better administrative
mechanism for serving the sector SMEs.
4. Introduction of rules and regulations for
faster integration of the sector SMEs for
entering international markets.
5. Incorporation of foreign partners for
popularization of the Bulgarian production
abroad
6. Restoration of the positions of the trade
attaches at the Bulgarian diplomatic
services and their engagement in
defending the sector SMEs interests.
7. Creation of coordinated policies for the
support of certain standards in terms of
production quality
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
being updated and the European directives
and legal regulations are being introduced.
8. Bulgaria can make use of the already
elaborated EU guidelines,
recommendations and directives, regarding
this category persons
9. The country geographic situation is
favourable for export realization
8. Creation of specialized clusters of SMEs
from the sector, that are to make and
maintain analytical and information
database and to perform information
provision.
Weaknesses:
1. Shortage of operating capital for the
Bulgarian SMEs from the sector
2. Shortage of financial resources for
modernization of the managerial processes
at company and cluster level
3. Shortage of investment capital for
investment and R&D.
4. Many of the sector companies are
deindustrialized or having lower
technology level.
5. Problems related to the age, educational
and other structure of the personnel
6. Shortage of new cadres, dominating
foreign languages and new skills and
competences.
7. Lack of unified complete system for who
is operating on the Bulgarian market and
what are the authentic production facilities
of the SMEs
8. Low level of market reaction due to lack of
fresh capital resources and long production
cycle.
9. External orders are usually having many
specialized requirements and short
execution deadlines, slowing down the
market reaction.
10. Lack of statistical report about the
commitment of the sector with other
sectors and consumer demand
11. In many cases the SME are “fighting”
for clients
12. Lack of adequate on-site surveys for
the sector SMEs integration in clusters
13. Resistance for cooperation of the SME
managers with the State authorities.
14. Low competitiveness of the
manufactured production due to the
Overcoming:
1. Structuring of programmes at state,
regional and municipal level for improving
the administrative attendance of the sector
SMEs
2. Lobby for legislative amendments to
promote innovations and the introduction
of new technologies and solutions in the
sector companies.
3. To create special centres for working with
foreign clients to the ends of promoting
the export of the sector companies.
4. The unified information portal for the
sector SMEs needs is to be regularly
updated, similar to such portals in
Germany, UK, and USA.
5. Making of information brochures/leaflets/,
etc. in different languages, as to facilitate
the access to information of foreign users
regarding the opportunities and potential
of the SMEs from the sector.
6. Start of representative national
sociological surveys in interval of about 5
years regarding the active sector SMEs.
7. Start of drafting annual report on the state
of the sector and the impact of the
implemented export-related encouraging
measures and policies
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
laborious, material consuming and energy
consuming production.
15. Predominating export of articles with
low value added.
16. Lack of experience of the SMEs in the
elaboration of export marketing strategies.
17. Lack of financial support for the
SMEs actions in defence of the intellectual
and industrial property.
Opportunities:
1. To introduce EU “good manufacturing
practices” in relation to the policies for
administrative attendance of sector SMEs
2. Usage of national and international
benchmark criteria for comparability of the
sector results.
3. Initiation of clusters for overall
performance on international markets
4. To undertake active actions for
introduction of precise criteria for
accounting the manufacture production,
the marketing and sales channels,
production cost, etc.
Employment:
1. To carry out policy for successful
negotiation of partnership with foreign
market participants (fairs, expo-centres,
call-centres, e-mails)
2. To carry out active policy for inclusion of
the SMEs in the formulation of the
encouraging measures for the sector
companies.
3. To carry out regular campaigns in relation
to the export potential and achievements of
the Bulgarian sector.
4. To carry out active communication policy
for popularization of the activity and
potential for export of the sector.
Threats:
1. Lack of adequate target axis for ensuring
financial funds and projects for upgrade of
the sector SMEs.
2. Outsourcing activities prevent the
development of own leading brands and
serve external interests
3. Division of the sector SMEs into various
“fighting” business units
4. Amortization of the inventory and aging of
the work force in the SMEs from the sector
Defence:
1. Celebration of popularizing campaigns for
the government policy in the field of
manufacture of Bulgarian machinery,
equipment and home appliances.
2. Creation of specialized funds for support
of R&D units in technology leaders in the
sector.
3. Creation of working system for
accountancy and follow-up of the
movement and economic activity of the
sector SMEs.
4. Creation of balanced initiatives for
information exchange among the
manufacturers from the sector and the
foreign partners.
The following table gives the PESTEL-analysis.
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
Table 36 PESTEL-analysis
Political factors Economic Factors
Bulgaria is a parliamentary republic
and a full-fledged member of the EU
The revenue policy is based on taxes,
charges and others and the main
division is: state and municipal
As a member of the EU, Bulgaria is
part of the structure of international
trade and an active agent of the
common European market
For the protection of consumers are in
effect various laws and are established
various committees
Political stability in the country is a
main priority of the ruling majority
Safety and competition promotion are
starting points in the encouragement
of the commercial activity
Despite the global financial instability,
Bulgaria manages to maintain levels
of sustainable development and a
positive economic growth
The interest rate is determined by the
Central bank (BNB) and has a
tendency to reduce; as of 01.11.2011 it
was 0.22%.
The state promotes employment and,
by attracting foreign investments, it
creates new jobs and unemployed
cadres prequalification programs
The income taxation is done with
"flat" rate amounting to 10%.
The Bulgarian currency is in a state of
currency board with the euro in
quotation of 1.95583 BGN per 1 euro
The financial policy implemented by
the state manages to keep the inflation
in the range of its normal values
The trust of the consumers is facing a
serious test, as the regulation and
quality management system needs a
higher effectiveness.
Social factors Technological factors
The cultural and demographic
detachment of Bulgaria involves a
variety of daily and cultural
differences between the broad
representation of ethnicities.
Nevertheless, the integration of these
ethnicities is successful
Relatively aging of the population and
a negative growth (-0.6% for 2010). A
positive growth was reported in the
period between 1960 and 1990 which
then became negative and reached its
lowest levels in 1990 and 2001 almost
reaching -2.0%. Statistics like this one
clearly reproduce the influence of the
political factors on the social and
demographic structure of society
At national level it is observed an
expressed labour mobility and a
Scientific research in Bulgaria has a
rich tradition and experience.
Industry operates and is organized by
technological activities, which
determines the need for knowing and
examining them.
Bulgaria is among the world leaders
with regard to its researchers, who
have given the world numerous
discoveries, inventions and innovative
technologies. Few of them reach the
community due to the fact that they
cannot find investors in the country.
The exchange of technology with the
rest of the world has marked its
beginning since the early years of the
last century. With the construction of
the modern state, these technologies
play a significant role in the
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Operational programme “ Development of the
competitiveness of the Bulgarian economy” 2007-2013,
Priority axis 4.2. “Promoting the internationalisation of the
Bulgarian enterprises” Project № BG161РО003 – 4.2.01-
0001 “Promotion Of The Internationalization Of The
Bulgarian Enterprises”
certain part of the specialists find
professional realization abroad and in
particular – within the EU. This shows
how the mechanisms of the
community work and how the labour
market creates demand and supply
outside the borders of a country.
The living standard in Bulgaria is a
social category subject to a thorough
examination and multifactor analysis.
The level of net income is relatively
low, unlike that of ownership of real
estate.
Entrepreneurship in Bulgaria is the
reason for the implementation of many
projects, including the absorption of
funds from European fund paths
The issue of education in Bulgaria is a
topic of utmost priority. The state
provides free elementary, primary and
secondary education; higher education
also being financially supported for
the most part.
construction of each unit.
The life cycle of the products, as well
as their going out of use, becomes
shorter and shorter with the opening of
markets and the invasion of newer and
more energy-efficient products.
Both in political and in purely
technical aspect, the global energy
saving policy is also applied in
Bulgaria. It includes the construction
of alternative energy sources that
should reduce the levels of harmful
emissions and generate lower levels of
cost for the end user.
Regarding to the information
technologies and the Internet, the
country is among the European leaders
in the field of their introduction, use
and development.
Environmental factors Legal environment factors
It is being worked on strategies for
wastewater treatment and construction
of incinerators for waste incineration.
Planned urbanization and cultivation
of gardens, parks and ponds.
Bulgaria is a statutory Republic and
the fundamental law is the
Constitution.
Bulgaria’s judicial system is a direct
expression of the judiciary branch and
it is divided into different levels and
instances for the purpose of being
more accessible to people.
Of all the rights, the one of private
property is the starting point for most
of the changes after the transition to a
market economy.
Bulgaria is a country with established
legal system that allows its citizens
position and protection.
93
OBJECTIVES AND STRATEGY TO PROMOTE THE EXPORT OF THE
SECTOR SMALL AND MEDIUM SIZE ENTERPRISES
Economic activity „Manufacture of machinery, equipment and home appliances” is
one of the strong segments of the Bulgarian economy under the condition that is taken into
account the available infrastructure of Bulgarian companies and their production workshops,
inherited from the past. Regarding their innovation however, this is an activity, lagging behind
in terms of many indicator from the leading European manufacturers. For example, in Germany
this is the sector, second in terms of innovation in the German economy.
The listed concrete objectives are indicative and are formulated on the basis of carried
out in-depth surveys of the economic conjuncture and interests for export-orientation of the
SMEs, engaged in this economic activity.
Concrete objectives at macro level:
1. To strictly follow the present budget cycle, the elaborated European programmes for
promoting the competitiveness of the small and medium-size enterprises in the country.
2. In the following EU programme cycle 2014-2020 to be laid down measure for easier
application for the so called “European” funds for SMEs, operating actively in this
economic activity.
3. In the following next years should be updated and modernize the introduced rules and
standards, related to the sector, as well as to created specialized structure for promotion
and introduction of the contemporary standards by the Bulgarian SMEs from the sector.
4. To organize unified system for promotion of the Bulgarian production on external
markets through common advertising campaigns, participation in international
exhibitions and promotion of the establishment of closer relations between the
Bulgarian universities and the R&D units in the sector SMEs.
94
Concrete objectives at mezzo level:
1. Short-term – within two to three years to be created a system for submission and
processing of the companies’ feedback to unified analytical centre, in charge of
promoting the export by the Bulgarian manufacturers from the sector.
2. „Mapping” of the market participants on the good will principle and their inclusion in
programmes for information exchange and market researches.
3. Creation of platform for regular organization of the market participants from the branch
(conferences, round tables, forums and alike).
Concrete measures at micro level:
1. Stopping the processes of release of the sector work force.
2. Encourage the companies to organize their own information, according to the EU
programmes for financial support and co-financing, as well as to promote the possibility
for applying under the project axis of the various programmes.
3. Keep the level of the salaries in the sector for the crisis period in order to keep the
present personnel in the sector SMEs structures.
4. Introduce organizational changes in the job descriptions and duties of the available
human resources with view to improving the labour effectiveness and the
transformation to forms of flexible employment, instead of “cutting off” the social
privileges and working places.
The specific objectives of the plan implementation are divided into three main specific
objectives.
Specific objective-1
To build and proceed to the successful functioning of information and normative base
for the promotion of export of SMEs from the sector “Manufacture of machinery, equipment
and home appliances”. This specific objective is divided into the following sub-objectives:
1. Drafting and updating of sector development strategy.
2. Updating the strategy for promotion of the export of SMEs from the sector.
3. Creating a profile of an export-oriented enterprise.
95
4. Creating an adequate database for SMEs to help the management decision making
for the sector.
Specific objective-2
To increase the qualification of the employed in the SMEs from sector “Manufacture of
machinery, equipment and home appliances”, focusing on the trade personnel and the units,
engaged in foreign trade at micro level.
1. Creation and implementation of programmes for improvement of the qualification of
export specialists in SMEs.
2. Creation and implementation of training program for participation in international
exhibitions.
Specific objective-3
To support the activities of the enterprises and their access to foreign markets and
partners.
1. Financial support for enterprise certification for quality management, environmental
management, and introduction of a modern system for safe and healthy working
conditions.
2. Increase of the weight of the evaluation for the export orientation of the enterprises in
the overall assessment for receiving of financial support.
3. Support for the creation/further development of organizations/clusters for promotion of
the export by SMEs.
4. Transmission of the services for organization of the Bulgarian participation in fairs,
exhibitions and other advertising events to the respective branch organizations, under
established clear rules for equality in the selection of the participants.
5. Creation of a mechanism for financial support for the participation of foreign partners in
local fairs and exhibitions.
96
STRATEGY FOR PROMOTING THE SECTOR SMEs EXPORT
In order to achieve the set objectives different alternatives for development are possible.
Here, two main scenarios were evaluated, in particular:
1. Keeping the present structure of the public institutions, supporting the business,
especially the existing relationship between them and the export orientated SMEs
from sector ¨Manufacture of machinery, equipment and home appliances”.
2. Change in the structure and transfer of functions for supporting the SMEs
towards units and forms, related to funding projects with EU funds and the State
budget according to the model of the Operational programmes or the Programme
for development of the rural regions.
The criteria to evaluate these scenarios are:
1. Possibility for the selected scenario to be realized within the frame of a 5-year
period.
2. Possibility to solve the issues related the supporting export orientated SMEs in
other EU countries.
3. Evaluation of the efficiency of the activities, related to supporting the business,
implemented by created to this exact end structures or by existing programmes,
granting support under the project principle.
The carried out analysis shows that:
The transition from the now existing system to a new one, on a project principle, will
require a period larger than 5 years. At the same time, now existing rules for the period
up to 2013 it is practically impossible, as the priorities and the main activities in the
operational programmes are clearly defined. For the next programme period 2014-2020
such an approach, if possible, is to be laid down in the negotiation process, but in fact
97
several years will be necessary its actual initiation, in the same way the OP in all EU
countries started for the period 2007-2013;
The selected in Bulgaria scheme through BSMEPA is preferred from the major part of
EU countries, where the success level is different in different countries, but there is no
trend of changes in the near future;
The reported difficulties in the business projects realization within operational
programmes, as for example “Competitiveness” show that the efficiency of promoting
export orientated SMEs, notwithstanding the critics at the moment due to lack of funds
and good focusing, is the relatively much better level than the results reached by the
business through project orientated measures.
Considering the above conclusions, the first alternative was chosen, namely –
drafting of Export strategy for the SMEs from sector “Manufacture of machinery,
equipment and home appliances” to be based on the understanding that al measures to be
undertaken will fall in the frame of the now existing structures within their actual
capacities.
In terms of the strategic perspective, the chosen alternative will require both general
measures for the whole system to support the SME, as for example increase of the
institutions capacity, introduction of clear and measurable indicators and criteria for
evaluation of their work efficiency and support to the business, etc. as well as specific
changes, related in particular to the “Manufacture of machinery, equipment and home
appliances”, as for example export orientated work approach. As far as this was not an object
of analysis and study of the present strategy document, it would be probably a part of the
elaboration of the institutional strategy of the corresponding public administrations.
The present Export strategy for the SMEs from sector “Manufacture of machinery,
equipment and home appliances” provides for the following principle steps, related to
improving the support of export orientated SME:
Creation of the base for adequate and professional management of the processes of
supporting the export orientated SMEs through determining their possible scope –
number and characteristics of the export orientated SME, usage of the information
98
from the drafted profile, as well as of information from the business regarding the
precise formulation of the business needs of support, and of the created to this end
institutions, as well as through other forms, as for example the project principle,
creation of a model for successful communication with business to be supported.
Elaboration of the necessary programmes, policies and measure for support the
SMEs to export into foreign markets, through measures, designed to markets where to
keep or expand the existing positions, joint work with units, disposing of direct
possibilities to support export (for example foreign trade representatives and MEET),
as well as measures, having routine nature (for example), participation in fairs,
missions, visits, etc.;
Measures, designed to certain deficits in export orientated SMEs, barriers for their
development in the field of export, as for example: support for the technology
modernisation of the SME in relation to improving their export positions, support for
creating export companies to help SMEs export; creation of State guarantees for
export insurance for SMEs, to complement and develop the now existing forms,
advertising campaigns for improving the image of the Bulgarian business, etc
Measures, designed to increasing the capacity of the SMEs, mainly through different
educational programmes.
Considering the deadlines of the Export strategy for the SMEs from sector “Manufacture
of machinery, equipment and home appliances” the foreseen steps are realistic and would lead
to real results in supporting the export.
Important precondition for the realization of the set strategy is also the presence of
political will to ensure the necessary resources for its implementation.
Due to the short-term 5-year horizon of the Strategy in the Action plan, the measures are
precisely formulated and divided into micro (enterprises), mezzo (branch organizations) and
macro (public institutions) level.
The foreseen funds are exemplary and tailored according to the actual possibility to
increase the BSMEPA budget. The prognosis for funds coming from Operational programmes
99
through the next programme period is too conditional, as there are no definitely adopted rules
by the EU. At the same time it is extremely important that BSMEPA and MEET to defend just
requirements for increasing the funds for development of the SMEs that are the backbone of
each economy.
Important precondition for the realization of the set strategy is also the presence of
political will to ensure the necessary resources for its implementation.
When drafting the present strategy the leading good European practices and the
experience of partners, organizations and institutions, having direct of indirect relations to the
development of the small and medium business, were observed.
Enclosed is a detail plan for the above described strategic development of the sector.
ACTION PLAN – SECTOR “MANUFACTURE OF MACHINERY, EQUIPMENT AND HOME APPLIANCES”
Table 37 Action Plan for Implementation of the Export Strategy of the Sector
Objectives and Measures Implementatio
n deadline
Responsible
institutions
Necessary
financial
resources
Sources of funding Expected results Performance indicators
Specific objective 1 :
Creation and successful functioning of the information and normative base for the promotion of the export of SMEs from the sector
1.1. Preparation and updating
of a sector development
strategy
2014 MEET 40 000 Operational
Programme
“Competitiveness”
Developed and adopted at the
national level Strategy and
Action Plan, in accordance
with the determined schedule
Adopted by the CM
National Sector
Development Strategy and
Action Plan to it, which is
implemented;
Provided funds for the
implementation of the plan
by years;
The set objectives are
achieved
1.1.1. Provision of the necessary
information, including
participation in sociological
research and focus groups
2013 Companies/
NSI/Branch
organizations
Created database, supporting
the development of the
strategy and the Action Plan
Developed analysis of the
sector and draft of the
Action Plan
1.1.2. Organization and
coordination of the development
and formalization process of the
strategy and the action plan, as
well as the process of their
2014 MEET Developed Strategy draft and
Action Plan, in accordance
with the determined schedule
Adopted by the CM
National Sector
Development Strategy and
Action Plan to it, which is
implemented;
101
Objectives and Measures Implementatio
n deadline
Responsible
institutions
Necessary
financial
resources
Sources of funding Expected results Performance indicators
implementation Provided funds for the
implementation of the plan
by years; The set objectives
are achieved
1.2. Updating the strategy
for promotion of the export
of SMEs from the sector
2014 BSMEPA 20 000 Operational
Programme
“Competitiveness”
Updated strategy for
promotion of the export of
SMEs from the sector and
updated Action Plan to it,
adopted at national level
Action Plan that is
implemented in
accordance with the
schedule set in the
Strategy
Available funds for the
implementation
Achievement of the
strategy objectives
1.2.1. Provision of the necessary
information, including
participation in sociological
research and focus groups
2014 Companies,
NSI, Branch
organizations
Updated database for SMEs Updated analysis of the
sector development
1.2.2. Organization and
coordination of the updating
process of the strategy and the
action plan, as well as the
process of their implementation
2014 BSMEPA Action Plan that is
implemented in accordance
with the schedule set in the
Strategy. Achievement of
the strategy objectives.
1.3. Creating a profile of an
export-oriented enterprise
2013 BSMEPA/ME
ET
10 000 Operational
Programme
“Competitiveness”
Drawn up criteria for export
orientation of SMEs
Presence of the drawn up
criteria on the page of
BSMEPA
1.3.1. Participation in the
discussion of the proposed draft
of a profile of an export-oriented
enterprise
2013 Companies Discussed and supplemented
criteria for export orientation
of SMEs
Developed version of
criteria
102
Objectives and Measures Implementatio
n deadline
Responsible
institutions
Necessary
financial
resources
Sources of funding Expected results Performance indicators
1.3.3. Organization and
coordination of the process of
creation of a profile of an export-
oriented enterprise
2013 BSMEPA/
MEET
Prepared final version of
criteria for export orientation
of SMEs
Developed and formalized
criteria
1.4. Creating an adequate
database for SMEs assisting
management decision
making for the sector
2014 MEET, NSI 10 000 the budget of NSI Available and appropriately
processed information for the
development of the sector
and SMEs within it
Easy and unconditional
access to the information
for the development of the
sector and SMEs within it
1.4.1. Creation of an information
database system for foreign
markets, potential foreign
partners, international fairs,
exhibitions and other advertising
events,
2014 BSMEPA/
MEET
30 000 OPC Created and operating
information system
Number of enterprises
using the information
system
1.4.2. Provision of data for the
information system
2014 Companies Created database for the
information system
Database serving the export
activity of the companies
1.4.3. Provision of data and
analyses for the information
system
2014 Branch
organizations
Created database for the
information system
Database serving the export
activity of the companies.
1.4.4. Coordination and
organization of the process of
creation of an information
database system for foreign
markets, potential foreign
partners, international fairs,
exhibitions and other advertising
events
2014 BSMEPA/
MEET
Created and operating
information system
Number of enterprises
using the information
system
1.4.5. Maintenance of the
information database system for
Permanent BSMEPA/
MEET/Compa
10 000 per
year
The budget of the
departments
Permanently operating and
updated information system
Number of enterprises
satisfied with the quality of
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Objectives and Measures Implementatio
n deadline
Responsible
institutions
Necessary
financial
resources
Sources of funding Expected results Performance indicators
foreign markets, potential foreign
partners, international fairs,
exhibitions and other advertising
events
nies/Branch
organizations
the information available
1.4.6. Coordination of the
process of maintenance of the
information database system for
foreign markets, potential foreign
partners, international fairs,
exhibitions and other advertising
events
Permanent BSMEPA/ME
ET
Permanently operating and
updated information system
Number of enterprises
satisfied with the quality of
the information available
1.4.7. Improving the awareness
of SMEs on the available funding
opportunities by national and
foreign financial sources
(excluding trade credits)
Permanent BSMEPA 5 000 per
year
The budget of the
department
Increase of the number of
enterprises applying for
financial support
Number of enterprises
applying for financial
support
1.4.8. Participation in organized
events for the popularization and
dissemination of information
about the available funding
opportunities by national and
foreign financial sources
Permanent companies
Number of developed and
applied projects for funding
of companies
Number of participants in
the events
1.4.9. Participation in and
dissemination of information
about organized events for the
popularization and dissemination
of information about the
available funding opportunities
by national and foreign financial
sources
Permanent Branch
organizations
Number of developed and
applied projects for funding
of companies
Number of participants in
the events
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Objectives and Measures Implementatio
n deadline
Responsible
institutions
Necessary
financial
resources
Sources of funding Expected results Performance indicators
1.4.10. Organization and
coordination of the process of
information of SMEs on the
available funding opportunities
by national and foreign financial
sources (excluding trade credits)
Permanent BSMEPA Increase of the number of
enterprises applying for
financial support
Number of enterprises
applying for financial
support
1.4.11. Realization of
information activities for
popularization of the possibilities
for direct participation of the
SMEs in EU funding schemes,
different from Operational
programmes
Permanent Branch
organizations/
MEET/BSME
PA/sector
companies
Own funds, State
budget
1.4.12. Purchase and granting of
information about the identified
target markets by BSMEPA
Permanent BSMEPA Own funds,
Operational
programmes
Available and adequately
processed information about
the identified target markets
Easy and unconditional
access to information about
the identified target markets
Specific objective 2:
Increasing the qualification of the employees of SMEs within the sector, with focus on the trade cadres and the units engaged in foreign trade at the company level
2.1. Creation and
implementation of programs
for improvement of the
qualification of export
specialists in SMEs
2014 - 2020 BSMEPA,
Institutions of
Higher
Education,
Branch
organizations
50 000 per
year
Budget of
BSMEPA and
Operational
Programmes
Trained over 1000 export
specialists from SMEs for the
program period
Number of trained export
specialists.
2.1.1.Provision of information on
the needs for training and
participation in the trainings
2014 - 2020 Companies,
Branch
organizations
Number of companies that
have provided information
and participants for the
trainings
Number of companies that
have sent their specialists
for training
2.1.2. Creation of training Branch At least one created detailed Number of trained experts
105
Objectives and Measures Implementatio
n deadline
Responsible
institutions
Necessary
financial
resources
Sources of funding Expected results Performance indicators
programs and conduction of the
trainings
organizations,
Institutions of
Higher
Education
program for training of
foreign trade specialists from
companies
per year
2.1.3. Organization and
coordination of the process of
creation and implementation of
programs for the increase of the
qualification of export specialists
in SMEs
2014-2020 Institutions of
Higher
Education,
MEJS,
BSMEPA
Trained over 1000 export
specialists from SMEs for the
program period.
Number of trained export
specialists.
2.2. Creation and
implementation of a training
program for participation in
international fairs
2017 BSMEPA 20 000 per
year
Budget of
BSMEPA
Trained experts from a
minimum of 400 SMEs.
Number of companies that
have sent their specialists
for training.
2.2.1. Provision of information
on the needs for training and
participation in the trainings
2017 Companies Number of companies that
have provided information
and participants for the
trainings
Number of companies that
have sent their specialists
for training
2.2.2 Participation in the
establishment of training
programs and assistance in the
conduction of the trainings
2017 Branch
organizations
At least one created detailed
program for training
Number of trained experts
per year
2.2.3. Organization and
coordination of the process of
creation and implementation of
programs
2017 Institutions of
Higher
Education,
MEJS,
BSMEPA
Trained over 400 export
specialists from SMEs.
Number of companies that
have sent their specialists
for training
106
Objectives and Measures Implementatio
n deadline
Responsible
institutions
Necessary
financial
resources
Sources of funding Expected results Performance indicators
Specific objective-3 Support the activities of the enterprises and their access to foreign markets and partners.
3.1. Financial support for
enterprise certification of
quality management,
environmental management,
and introduction of a
modern system for safe and
healthy working conditions
permanent MEET 500 000 OPC Increased number of the
enterprises that have received
certificates
Number of enterprises that
have received certificates
3.1.1. Development of proposals
for funding activities on the
establishment of quality
management systems and putting
the systems into operation
permanent Companies Increased number of funding
proposals
Number of proposals
received
3.1.2. Assisting the assessment of
the proposals
According to
the schedule of
MEET
Intermediate
unit or other
structure in
the EU funds
management
system
Increased number of the
approved proposals for
funding
Number of proposals
approved
3.1.3. Management of the overall
process of financial support and
monitoring of the results
According to
the schedule of
MEET
MEET Increased number of the
enterprises that have received
certificates
Number of enterprises that
have received certificates
3.2. Increase of the influence
of the assessment for the
export orientation of the
enterprises in the overall
assessment for receiving of
2014 MEET/
CM
OP for business support is
oriented towards support to
SMEs, which have export
potential.
In the criteria for
assessment of the project
proposals is expressly
specified the export
potential.
107
Objectives and Measures Implementatio
n deadline
Responsible
institutions
Necessary
financial
resources
Sources of funding Expected results Performance indicators
financial support.
3.2.1. Active participation in the
development of the proposals for
increasing the influence of the
assessment of the export
orientation of enterprises in the
overall assessment of receiving
financial support
2014 Companies,
Branch
organizations
Accepted proposals for
change/ newly developed
program documents and rules
for their implementation
Published draft documents
3.2.2. Development of the
proposals for increasing the
influence of the assessment for
export orientation of enterprises
in the overall assessment of
receiving financial support.
2014 MEET OP for business support are
oriented towards support to
SMEs, which have export
potential..
In the criteria for
assessment of the project
proposals is expressly
specified the export
potential.
3.3. Support for the creation/
further development of
organizations/clusters for
promotion of the export
from SMEs
2017 BSMEPA, the
branch
organizations
100 000 per
year
The Operational
Programmes
Established export
organizations/ clusters to
support the export of the
enterprises.
At least 2 established
export clusters
3.3.1. Participation in export
clusters in the sector
Companies Extended opportunities for
export of the companies
Number of companies
participating in clusters
3.3.2. Participation in the
establishment and development
of export clusters.
Encouraging the participation of
SMEs in export clusters
Branch
organizations
Increased number of clusters
that support the activity of
the sector
Increased number of the
enterprises participating in
clusters
3.3.3. Assistance to the
establishment/further
development of organizations/
BSMEPA,
branch
organizations
Established export
organizations/ clusters to
support the export of the
At least 2 established
export clusters.
108
Objectives and Measures Implementatio
n deadline
Responsible
institutions
Necessary
financial
resources
Sources of funding Expected results Performance indicators
clusters for support to the export
from SMEs
enterprises.
3.5. Creation of a mechanism
for co-financing of trade
missions
2014 - 2020 BSMEPA, the
branch
organizations
30 000 per
year
The budget of
BSMEPA; Funds
from the branch
organizations
Concluded export contracts
thanks to the participation of
foreign trading partners.
Increase in each subsequent
year of the export contracts
concluded with invited
foreign trading partners.
3.5.1.Provision of information
about potential partners and
concluded contracts
Companies Concluded export contracts
thanks to the participation of
foreign trading partners.
Increase in each subsequent
year of the export contracts
concluded with invited
foreign trading partners.
3.5.2. Development of a project
for mechanism and support for
its implementation
Branch
organizations
Concluded export contracts
thanks to the participation of
foreign trading partners.
Increase in each subsequent
year of the export contracts
concluded with invited
foreign trading partners.
3.5.3. Coordination of the
process and support for its
implementation
BSMEPA Concluded export contracts
thanks to the participation of
foreign trading partners.
Increase in each subsequent
year of the export contracts
concluded with invited
foreign trading partners.
3.5.4. Development of a program
for work with the Bulgarian trade
representatives abroad in favour
of SMEs from the sector
2014 - 2020 BSMEPA/
MEET/
CM
Decision adopted at the CM
level and created and
operating program for work
of the trade representatives
Increase of the concluded
contracts for export of
products from the sector,
produced by SMEs, as a
result of the program
implementation
3.5.5. Improvement of the
mechanism of ensuring working
insurance of the export of SME
2014 BAEI 30 000 The budget of the
department, OP for
the next program
period
Increase of the number of
SMEs and the export volume
thanks to the state guarantees
Number of insured export
agreements of SME
The objectives to be implemented in the “Action plan” are divided in three panels –
short-term objective /2013/, mid-term objectives /2014/ and long-term objectives /2014-2020/,
coinciding with the following budget planning period of the EU.
Short-term objectives /2013/:
1. Update of the introduced technology norms, standards and requirements.
2. Creation of “road map” for approximation of the interests of the SMEs in the sector.
3. Introduction of organizational changes for mastering the processes of workforce release
and shortage of working positions.
4. Relieve of the regimes of operating of the bank warranties and bank crediting for the
sector
5. Correction of the market behaviour, considering the higher prices of the energy
distributors, including the price of the natural gas.
Mid-term objectives /2014/:
1. Creation and update of the decision-making system for promoting the Bulgarian
production abroad.
2. Creation of alliance for trade representation in the potentially most attractive markets
for the segment companies.
3. Creation of analytical reviews on regular basis for the sector development in the EU-27
as a whole and of other current and potential markets out of the EU, like the CIS
countries, the countries from the Arabian world, others.
4. Creation of economic clusters on the basis of certain market, trade, production or other
sign.
5. Creation of foreign language brochures for the cluster companies development.
6. Reorganization of individual information bases and assembly of the documents for
applying under EU projects from the next budget cycle.
7. Increase of the level of computerization, automation and use of IT.
8. Development of plan for attracting investors.
9. Drafting a plan for improving the operating investors attendance
10. Drafting a strategy for improving the investment marketing
110
11. Ensuring crediting for patenting the innovations abroad
Long-term measures/2014-2020/:
1. Encouraging the improvement of the level of industrialization in the sector
through encouraging the technology innovation sin the sector SMEs and
communication policy
2. Encouraging the investment in human resources
3. Introduction of relieved financial conditions for the introduction of high-tech
solutions and trainings
4. Creation and branding of industrial cluster trademarks;
5. Segmentation and definition of target export markets, according to the prognosis
for world economic development at 2020.
The action plan is to be applied gradually and in good faith, synchronously between the
public institutions, stakeholders and manufacturers of the economic activity.
The control of the plan implementation may be coordinated at branch level or at the
level of state authority in case of majority consent of the market participants. Financial support
for the companies’ certification for quality management, environment management and
introduction of contemporary system for safety and health at work.
111
MONITORING AND CONTROL SYSTEM
For each strategic document it is of great importance: first - to be elaborated according to
predetermined goals, deadlines and resources; second - to show stability over the time and to
enforce the activities and effects built into it. To this end, it is advisable to monitor
(monitoring) and evaluate the implementation of the document and to identify appropriate
actions – to remedy and improve the activities set out therein.
Monitoring can be defined as: (a) an integral part of an on-going project management
(which is considered to be the realisation of an Export strategy for sector “Manufacture of
machinery, equipment and home appliances”, aiming to achieve any change – in this case,
improving the export activity of SMEs in the sector); (b) an instrument facilitating the control
over the management and the process of decision making; (c) a description of events and
conditions within a specified period of time; (d) systematic collection of reliable, up-to-date
and relevant information on the progress, changes and consequences of all programming action
taken. These essential features of the monitoring itself define it as one of the most important
components of the management of strategic documents, programs, projects, etc.
Assessment, in turn, is a systematic review of specific management activities to provide
information about the full range of short and long term effects on consumers. Programme
evaluation may include assessment of workload, operating procedures, or personnel, but its
main purpose remains the effect and impact of programme’s implementation (strategic
document).
Monitoring should therefore establish the status and monitor the progress in
implementing various components and subcomponents and thus - the Strategy as a whole.
Monitoring should also identify arising problems, the factors determining these problems and
suggest possible measures and solutions to these problems. The information obtained is
expected to be timely made available to the responsible authority (primarily MEET and
BSMEPA). The meaning of this is to enable those authorities and other relevant government
agencies, at their discretion, to take timely "corrective actions" to facilitate achieving the
strategy objectives.
112
It should be noted that while monitoring focuses on monitoring the: (a) actions taken
and resources expended, (b) results achieved, (c) process progress over the time, (d)
achievement of the effects, the assessment aims at identifying the extent to which the general
and specific objectives of the document are achieved, and also includes a systematic review of
specific management operations to provide information about the full range of short and long
term effects.
The main points that should be observed in connection with the implementation of this
strategy are:
- Adhering to the pre-set schedule of activities;
- Volume, rate and extend to which resources have been used;
- Results achieved;
- Achievement of objectives and strategic document impact.
When to monitor? - The goal of the current monitoring is to record the effects and the
deviations from the planned figures early enough so as to allow their correction before the
consequences of these effects become so serious that they can not be overcome. What should
not be forgotten is the need for monitoring to be performed frequently enough in order the
deviations from the set plan to be adjusted.
Based on this methodology, the monitoring and assessment, necessary for the fulfilment
of this Strategy, suggest the following succession of activities:
1. Selection of criteria and indicators for monitoring and assessment;
2. Monitoring the implementation;
3. Comparing results with the target state;
4. Proposing and taking corrective actions.
According to the adopted goals and measures set forth in the strategy, we propose the
following main indicators for monitoring and assessment:
Published criteria the SME and their production for initiating export are to
comply with;
Created accessible database for export orientated companies, where the
presence of given company into the database is included as a criteria when
113
making an assessment for granting funds to promote the export and the
competitiveness;
Number of entrances into specialized rubrics of the BSMEPA website and
received feedbacks;
Availability of update strategy for development of sector “Manufacture of
machinery, equipment and home appliances” and implementation of the
measures, included therein;
Created export unit in BSMEPA to support the sector SMEs in their export
activity;
Granting 5 additional points for export orientated enterprises when assessing
projects under OP “Competitiveness”;
Number of SME, having introduced systems for quality management, working
conditions and environment management (ISO 9001, ISO 14001 and others);
Number of patented articles by SMEs from the sector;
Number of companies exporters, using the guarantees for export insurance;
Number of participation by sector SMEs in international and national fairs and
exhibitions;
Created at least 3 clusters;
Increase in any following year of the signed export contracts with the invited
foreign trade partners;
Number of trained specialists in the sector;
At least 5 presentations per year in different countries – target markets, 1
information internet portal, 5 paid publications in foreign media per year;
100 specialist from the sector SMEs yearly have undergo a training on
participation in specialized exhibitions in the country and abroad;
Drafted 1 guide for promoting the export of the SMEs, reflecting the
possibilities for export and the condition of the market conjuncture, updated
once per year;
114
Monthly brochure with information on international markets and two semi-
annual reports, containing in-depth market analysis, are to be presented to the
sector export orientated SMEs;
At least 2 seminars per year should be organized for presenting the specific
requirements for the defined key markets in and outside EU;
1 internet database with contact details of at least 200 potential partners from
all over the world, information about prices on international markets, trade
barriers, trends, etc.
Progress surveillance and monitoring shall be carried out by BSMEPA, which is the
“owner” of the Strategy, and it shall appoint an official, from its administration, which shall be
responsible for collecting information in order to facilitate the monitoring of the
implementation of measures and who shall report on an annual basis to the Executive Director
of the Agency.
The annual reports shall serve as interim evaluations of the fulfilment of the Strategy.
At the end of year 2020 it shall be prepared a final report covering the entire period of the
Strategy.
These reports are public. The results shall be disclosed to the public
115
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