Bulgaria’s plastics industry has been making the most of the growing demand for supplies from major western markets.
The sector has been particularly buoyant over the past five years, with Bulgaria’s comparatively low costs and occasional regulatory light touch making its plastics companies competitive with competitors in western Europe.
In particular, the country has seen the order volume for components for the automotive industry expand significantly. Also, there have been substantial investments in its plastic packaging segment, driven by growth in demand for polymer-based products worldwide.
“Companies strive to export to foreign markets as the Bulgarian market is relatively small, and due to low production costs in Bulgaria, large western companies are relocating here,” the president of Bulgaria’s Branch Association Polymers industry group (https://bap.bg/en/), Tsvetanka Todorova told Plastics News Europe.
Equipment in Bulgaria’s plastics sector is also regularly upgraded with the support of European Union (EU) economic development programmes, increasing its competitiveness, she said. This includes increasing capacity for making plastics from biodegradable materials, which are gaining in popularity, said Todorova.
Data from EU statistical agency Eurostat shows that in 2018, Bulgaria exported a record for the country’s plastics sector of 420,000 tonnes, nearly 75% of which was sold to other EU member states. By comparison, in 2014 Bulgaria’s plastics sector exported around 307,000 tonnes, split between 201,000 tonnes to the rest of the EU and 106,000 tonnes to third countries – indicating robust growth.
That said, these general statistics do not mean all plastics companies in Bulgaria are having an easy time. Speaking to manufacturers in Bulgaria, it is clear that many of the 160 plastics producing companies in the country are facing challenges of various kinds. Biljana Pop-Petrovska, managing director of Bulgarian manufacturer Carboplast noted that some companies are carrying significant debt that in some cases is “a very high and risky level”.
She added that buyers are pressuring Bulgarian manufacturers on cost: “Every client wants quality material at a low cost which results in cost reduction and unfair competition”, said Pop-Petrovska, whose company is a subsidiary of Italy’s TVP Compound.
Carboplast’s production mainly focuses on the widely produced synthetic plastic polymer polyvinyl chloride (PVC), often used in construction, cables, tubes and packaging. And this is a tough segment: “The market is very competitive, and perhaps it is developing, but volumes are not increasing dramatically”, she added.
Very similar is the experience of PVC hose producer Plexistab, whose executive director Bilyana Kutseva said that this segment’s profitability is particularly vulnerable to price shifts in ingredients: “Control is not always in our hands. We depend on the macro framework of the entire sector and the policies of certain companies”, she stressed.
On the plus side, with its strong export performance, Bulgaria’s plastics sector is well-connected with the comprehensive web of plastics suppliers and customers that spans Europe. The diversity of this market means that Bulgaria’s plastics sector has a sustainable position within Europe.
The owner of Bulgarian thermoplastics manufacturer Pro Grup Bulgaria, Dimitar Grigorov, said his company had solidified its market position since being launched in 2011 in Bulgaria’s second city Plovdiv, serving clients in Germany and Switzerland and outsourcing to manufacturers based in Bulgaria. In the past two years, Pro Group has produced prototypes, selling standard, engineered and high-performance plastics in granules, tiles or panels to car makers in Germany and Hungary for making tail lights, visually attractive colour trims and films for interior automobile linings.
Grigorov added that his company has started receiving inquiries from American companies for possible new export sales.
Plexistab, likewise based in Plovdiv, has also been diversifying its market. Producing PVC reinforced hoses for suction and pumping water, handling heavy duty water discharge, and delivering liquid fertilisers and chemicals, the company mainly targets the agricultural sector.
However, it has also been supplying to other client segments, such as pools, cable protection, air ventilation, and drinks makers, including wine. “More than 86% of our production is export-oriented. We export mainly to Europe, but we also have regular customers from countries in Asia, Africa and Australia,” Bilyana Kutseva noted.
From neighbouring Greece and Romania to the Netherlands, England, Belgium, France, Italy and Ukraine, Plexistab has realised the need to target its clients carefully. One issue it keeps an eye on is extremes in temperature – it makes sure its products can deal with freezing winters in Russia and the burning hot summers of Kuwait, creating hoses for liquids or solids that are resistant to temperatures ranging from -20˚C to +60˚C.