Italian Companies to Invest Up to EUR 3 B in Bulgaria by 2020

Business | September 29, 2010, Wednesday // 22:16|  views

(L-R) Unicredit Bulbank CEO Hampartsumyan, Italian Ambassador Benazzo, and head of Confindustria Bulgaria Massimo Bartocci announced the upcoming meeting of Confindustria Balcani in Sofia. Photo by CB

Foreign direct investments by Italian companies in Bulgaria will amount to EUR 1-3 B in the next ten years, according to estimates of Confindustria Bulgaria, the Italian business association in Bulgaria.

This figure was revealed Wednesday by Massimo Bartocci, the head of Confindustria Bulgaria, at a special news conference, which announced that the General Assembly of Confindustria Balcani, the union of Italian business associations in the Balkan countries, will take place in Sofia on October 13, 2010.

Italy's Ambassador to Bulgaria Stefano Benazzo, the CEO of Unicredit Bulbank Bulgaria Levon Hampartsumyan, and the CEO of Generali Bulgaria Holding Boris Chuhran also took part in the press conference.

"The fact that we chose the Bulgarian capital Sofia for the meeting of Confindustria Balcani demonstrates Bulgaria's major role in the region, the dynamics of Italian companies working in the country, and its economic potential," Bartocci said.

Data of Confindustria Balcani shows that there are currently 800 Italian businesses that are active in Bulgaria. On this criteria, Bulgaria ranks second in the region after Romania, which boasts 4 000 Italian companies – a development seen much as a result of the fact that firms from Northern Italy started outsourcing some operations in Romania as early as the mid 1990s. Albania and Serbia come in next with about 300 active Italian businesses each.

Confindustria Bulgaria, which unites about 200 enterprises representing a total investment of EUR 2 B, with an annual turnover of EUR 1.3 B, and 20 000 Bulgarian employees, expects that by 2020 the number of Italian companies operating in the country will grow by 20-30% reaching at least 1000.

Its estimates of the expected Italian FDI in Bulgaria ranged within EUR 1-3 B depending on three major factors: the dynamics of the real estate market; the ability of Italian companies to participate in the energy (including renewable energy) market in Bulgaria; the global economic development and the expected influx investment into manufacturing for the local consumer markets based on the so called "multi-localization".

The Italcementi Group, which owns and runs the Bulgarian factory Devnya Cement, has already pledged an investment of EUR 250 M (expected to reach EUR 350 M) over the next 2 years into a new facility that is going to increase the plant's daily output of cement by 3000 tonnes. According to Italy's Ambassador in Sofia Stefano Benazzo, this is a clear indication that Italcementi expects better days for the Bulgarian construction and property markets.

The representatives of Confindustria Bulgaria and Confindustria Balcani emphasized the importance of the Balkans for the Italian businesses and the Italian economy pointing out by comparing Italy's trade with the Balkans to its trade with the so called BRIC countries (Brazil, Russia, India, China).

In 2009 Italy's trade with the Balkans amounted to EUR 17 B; Italy's total exports to the Balkan states was EUR 10.1 B, equaling its exports to China (EUR 6.6 B), India (EUR 2.7 B), and Brazil (EUR 2.7 B) combined, and far surpassing its exports to Russia (EUR 6.5 B).

"We believe that in Italy's case another "B" should be added to "BRIC" to stand for the Balkans," Bertocci said.

Italy's trade with Bulgaria amounted to EUR 2.3 B in 2009, down from the EUR 3 B per year before the economic crisis. It is Bulgaria's third largest trading partner after Germany and Greece; in 2009, Bulgaria's exports to Italy were EUR 1.3 B vs. imports of EUR 1 B, according to data of Confindustria Bulgaria.

"Thinking about the Balkans as an organic and integrated reality is one of the keys for the future development of the countries from the region, which presents a strategically important market on the European and global stage. Italian entrepreneurship wants to play a central role in this development," Bartocci declared.

He outlined Bulgaria's currency peggged to the euro, the stable banking system, the low taxes, the low budget deficit, good educator of the labor pool, central geographic location, and the fact that the government's austerity measures are backed by the citizens are major factors in making the country attractive to foreign and Italian investors.

"Bulgaria has gone a long way since the 1990s but it still has to go even further. Its success depends on three important factors: education, entrepreneurship, and persistence," the head of the Italian business association in Bulgaria said.

"In its role as a leading bank in the country, Unicredit Bulbank commits to being a partner of Confindustria Balcani in its quest to increase Italian investments in Bulgaria, thus supporting its economy and its citizens," vowed banker Levon Hampartsumyan.

Topics related with Italy's investments and trade in the Balkans will be the focus of the general assembly meeting of Confindustria Balcani in Sofia on October 13. The meeting will be attended by representatives of Italian business associations and companies active in Romania, Bulgaria, Albania, Serbia, Croatia, Montenegro, Macedonia, Bosnia and Herzegovina.

About 1000 Italian companies active in the Balkans are members of Confindustria Balcani, which founded in Tirana in April 2010 with the key role of Confindustria Bulgaria. For the first three years of its existence Confindustria Balcani will be managed by Confindustria Bulgaria (formerly the the Committee of the Italian Entrepreneurship in Bulgaria (CIIB)).

Italy's domestic business association Confindustria has over 150 000 member companies, which provide employment to over 5 million people with combined revenue of EUR 500 B.

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Tags: Confindustria Balcani, Italy, Committee of the Italian Entrepreneurship in Bulgaria, CEIB, Massimo Bartocci, Stefano Benazzo, Levon Hampartsumyan, UniCredit Bulbank, Devnya Cement, Italcementi, Confindustria, Confindustria Bulgaria, BRIC, China, Russia, India, Brazil, Italian Ambassador


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