Economic Yearbook of the Stara Zagora Region, 2010

Net Sales Revenues – BGN 123 mln.
Profit – BGN 3 mln.

Approximately 200 companies are active in the sub-sectors Manufacture of Textile and Textile Products and Apparel Manufacture, most of which are small sized enterprises. Their total NSR amount to BGN 123 mln., which is approximately the same amount as for the previous year. The companies of these two sub-sectors are most affected by the world economic crisis due to the shrinking of the Bulgarian market, but most of all because of cancellation of orders from foreign partners.
At the beginning of 2009, the leader in the sub-sector during previous years, Embul Investment AD, laid off a great number of its staff and reduced significantly its output volume. The company was established with Turkish capital and produces synthetic fibres (acrylic yarn). The factory exports its products mostly to the USA. In 2008, the company’s export deals with partners from EU member states were worth BGN 36 mln. However, the market for the products of Embul Investment AD shrank significantly at the end of 2008 and the situation remained unchanged in 2009.
A decrease in NSR was also reported by Kazanlak Bulgaria – K AD (production and trade in sewing and embroidery threads, weaved cotton and synthetic yarns and fibres) and Katex AD (worsted-type wool fibre textiles), which were among the leading European companies in the sub-sector in the previous years with mostly export orientation. The annual financial statements of textile manufacturers report minimum profits, except for the apparel manufacturer Transconfection OOD.
The unfavourable world economic environment was further aggravated by the abolition of the textile quotas for the World Trade Organisation member states, which also had a negative effect on Bulgarian manufacturers. Some companies redirected their capital to other economic sectors like agriculture and electric power production by renewable energy sources. A typical example is Runo – Kazanlak AD, a company which changed entirely its economic activity and is now engaged in water power plant exploitation, as well as Katex AD, which in 2009 continued to invest in facility renovation, energy saving technologies and utilization of solar installations. Besides, the company had to lay off some of its workers. At the end of 2009, Katex AD had 500 employees as compared to 650 in the previous year. In 2009, the company continued to sell its products on foreign markets, but had to decrease significantly the output volumes. As of the end of September 2009, Katex AD has NSR of BGN 6.5 mln, as compared to BGN 10.1 mln. for the same period of the previous year.
Along with the highly unfavourable economic factors on the world markets, Bulgarian companies have to deal with the challenges of the Bulgarian economy as well. These are mostly related to complying with EU ecological and energy norms and standards, as well as to the recommended tendency of increasing work salaries. The production costs, too, increase significantly as a result of the higher prices of natural gas, petroleum fuels and electric power. Some of the companies have problems with delayed payments from partner companies. In the context of lack of sufficiently flexible crediting by the banks, many companies had to look for better liquidity of their products, which limited the number of their potential clients.   
Many of the smaller companies active in the two sub-sectors managed¸ with a lot of effort, to keep their local market positions despite the increasing competition by analogous products offered by manufacturers from India, China and Korea (where labour costs are much lower), as well as by companies from Bulgaria’s neighbour countries Turkey and Greece.
Companies relying almost entirely on the Bulgarian market and having earned good reputations among their customers, as well as companies manufacturing apparel upon orders from partner companies from EU countries, achieved good results during the previous year.