May 19 - Bulgaria's becoming a hub for car parts makers and attracting much-needed foreign investment. Joanna Partridge reports on the convenient location and cheap labour that's luring companies to the former Communist country.
When you think of car part manufacturers, Bulgaria doesn't automatically spring to mind. But the country is moving up a gear and has attracted foreign investment from the likes of the Filipino firm IMI, which runs this electronics-focussed car parts factory. Investors have benefitted from Bulgaria's history of electronics and computer engineering, dating back to Communist times. Eric de Candido is IMI's Bulgaria Managing Director. SOUNDBITE: Eric de Candido, IMI's Bulgaria Managing Director, saying (English): "In the past Bulgaria suffered from corruption image and this might have been one of the factors why the investors did not come to Bulgaria before. I think this image has changed, there are more and more actors in Bulgaria and a company like ours has shown that making business in Bulgaria doesn't represent major risks." IMI's just one of the foreign firms that's invested in the country on the southeastern edge of Europe, which offers cheap labour costs. Dozens of others, from Germany, to Japan and South Africa are driving an auto component manufacturing boom. Bulgarian industry officials say exports in the sector overall have doubled to around 1 billion euros in the past five years, making up almost 5% of the country's exports. That's expected to grow, as firms expand operations or new companies enter the market. It's hoped this could lift the fortunes of the EU's poorest member, which was hit by a property crash in 2009. The Deputy Director of its Foreign Investment Agency says Bulgaria offers good incentives. SOUNDBITE: Kostadin Djatev, Deputy Executive Director of Foreign Investment Agency, saying (English): "The overall tax burden for companies in Bulgaria is one of the lowest in European Union. And on top of that we have the investment promotion act, so companies that get certified with us, they can get even further benefits, like for example the social security reimbursement." A shift in car production from western to eastern Europe has boosted the economies of formerly Communist countries from Slovakia to Romania. Unlike others, Bulgaria doesn't have a long history of car production, so it's failed to attract major car makers, beyond China's Great Wall Motor Co. Analysts say that kind of large investment could still be years away, due to problems such as red tape and poor infrastructure.