Bulgaria: foreign-led glass renaissance in north-east

Glass production in north-east Bulgaria is undergoing a renaissance after 15 years of idleness. Two large producers, Greece“s Yioula Glassworks and Turkey“s Sisecam, will compete in the Targovishte …

Glass production in north-east Bulgaria is undergoing a renaissance after 15 years of idleness. Two large producers, Greece“s Yioula Glassworks and Turkey“s Sisecam, will compete in the Targovishte and Novi Pazar regions. In the latter location, Yioula Glassworks will invest BGL 36 million in the production of glassware at the upgraded Novo Staklo factory, the former socialist-era Kitka plant, by the summer of 2006. A Sisecam plant making household glass started operation in Targovishte in 2005 and flat glass output from a new development at the same site began at the end of February 2006. The Regulatory Commission for Competition has given the go-ahead for the sale of Ivaglass Manufacturers Limited, the Cyprus-based owner of Novo Staklo, to Yalos Holding (Overseas) Limited. The sole shareholder in Yalos is Yioula Glassworks, which owns the Druzhba company in Bulgaria, a producer of glass bottles and jars in Plovdiv and Sofia. The move means that the company will also start making household glassware. The result of these developments is that Sisecam, which is building several factories for various types of glass around Targovishte, and Yioula Glass, in Novi Pazar, will be the major manufacturers of household glass in Bulgaria. The companies have chosen these two locations because of the traditions in glass making, the high rate of unemployment and the relative proximity of sea ports. In the past, the region hosted a significant number of Bulgaria“s glass-making factories: Kitka in Novi Pazar, Belopal in Beloslav, and Diamant in Razgrad. According to information from the glass producers, the Bulgarian market for household glass is worth between USD 20 million and USD 30 million a year. Since most of the factories were closed down years ago, until 2005 the country“s entire demand was satisfied by imports from Turkey, France, the Czech Republic, Germany, and China. Currently, a Sisecam plant near Targovishte is the only producer of household glass in the country. The plant, in which USD 70 million has been invested and which has been working since mid-2005, employs around 600, with target sales of USD 50 million a year. Output is mainly for export and, according to the investors, over 90% of the 235 million glasses, vases, and plates (54,000 tonnes) produced annually are sold in the EU. On the start-up of the Bulgarian factory, Sisecam said that it hoped its household glass brand Pasabahce would improve its position on the European market to 15% from the current 12%. Annual brand sales are more than USD 300 million globally. The Novo Staklo plant will produce only glasses, which will be sold both locally and internationally. A new furnace costing BGL 36 million is currently being built at the plant; it is expected to enter service in six months. The net effect of the work of the two glass plants will be to turn Bulgaria into an exporter of glassware to the Balkans; the two companies are the main regional competitors in the field of household glassware. On 20 February 2006 the second Sisecam plant at Targovishte started operation; the new plant makes flat glass, and a factory for mirrors and furniture glass is expected to be completed at the site in the next few months. The value of the project will bring Sisecam“s investment up to USD 220 million, and Bulgaria will start exporting flat glass. In the past, flat glass was produced at Kristal in Pernik, and Diamant in Razgrad, but these plants no longer exist. For the immediate future the Sisecam flat-glass plant at Targovishte faces no competition in southeastern Europe. Saint-Gobain is currently building a USD 100 million plant in Calarasi, Romania to be launched later in 2006. The privatisation of Panchevo, Serbia“s largest glass manufacturer, has failed and there is no serious prospect that it will be operational any time soon. The closest plant to Targovishte producing the same type of glass is in Hungary.