NCIZ is a working mechanism for attracting investment

• 13.10.2022
• Media For Us

Mrs. Antoaneta Bares, PhD, Executive Director of NCIZ, before BTA: NATIONAL COMPANY INDUSTRIAL ZONES IS A WORKING MECHANISM FOR ATTRACTING INVESTMENTS

- It became clear that more than BGN 200 million had been set in the National Recovery and Sustainability Plan for the development of the industrial zones in our country. What can and will these funds contribute to?

The perception that the existence of well-functioning Industrial Zones is a factor for stimulating industrial, climate and digital investment, for creating favourable conditions for economic activity and for opening new jobs in a given country or region, has become even more popular in recent years.
The main condition for the development of these zones and parks is the good infrastructure, which is our main concern and task. A real opportunity for the rapid development of the state industrial parks and zones is the investment of European funds in connecting and internal technical infrastructure, the construction of which can be financed under the Support Programme for the Development of Industrial Zones and Parks /the Programme/ and to improve their infrastructure connectivity in order to attract investments (AttractlnvestBG), which is a part of the National Recovery and Sustainability Plan.
We expect the Programme to contribute for achieving the objectives, set out in the Industrial Parks Act, in force as of 12 March 2021, namely to create opportunities to build new industrial parks and zones and complement with all the necessary infrastructure the existing ones, as well as to create favourable conditions for the implementation of new projects in industry, in order to support economic growth. In this way the financial resources, foreseen in the Recovery and Sustainability Plan, will be used to attract key investments and to develop the investment ecosystem in Bulgaria. At the same time, the administrative and financial measures under the Investment Promotion Act will continue to be applied to strategic/key investors. The terms and conditions of the Programme are currently under clarification, as it is expected to be launched in the beginning of 2023.

- Which is the fastest growing industrial zone at the moment? To what do you attribute it? Accordingly - which one has the least interest and why?

As a natural process, the zones located near major cities are developing the fastest due to better infrastructure and availability of skilled workforce - nowadays around the big cities we can see well-established industrial periphery. Of course, the parks and zones in Burgas and Varna are unique in their location, being situated on the Black Sea, the zone in Ruse is also preferred, as it has an outlet to the Danube river. We have more difficulties with the parks in the less economically developed regions of the country.

 I believe that most of the parks and zones have developed over the years - here I could outline the Sofia-Bozhurishte Industrial Park, where more than 37 investment projects have been implemented and in the process of implementation in the sectors of automotive industry, telecommunications, electronics and electrical engineering, warehousing and logistics, biotechnology, food industry. The investor companies are European: Bulgarian, German, Danish, Greek, Turkish, Swiss. The invested funds so far exceed EUR 312 million and the new jobs created are over 2000.

Burgas Industrial and Logistics Park is also developing excellently thanks to its strategic location next to the international road to Türkiye, in close proximity to the Port of Burgas and with a direct connection to the international airport and Trakia highway, which determines the high investment interest towards the park. The total investment is over 37 million euros and around 800 new jobs have been opened. Now the first investment projects in the so-called second phase of the park are already under development on additional 600 hectares of land.

Ruse Free Zone is another successful project of NCIZ. There are 29 warehouse and industrial buildings, a railway transfer station, a depot for light petroleum products, etc. A number of companies from various industries are operating in the Zone, such as a distribution centre for packaging and labelling of textile products, a workshop for the production of metal containers, a production plant for heavy industry machinery and others. It is also the best developed logistics and industrial centre in the region.

 The Zagore Industrial Zone has been also developing rapidly. At present, 90% of the properties there are sold, the infrastructure is completely built and eight companies are already implementing their investment projects. The zone is jointly owned by Stara Zagora Municipality and NCIZ. The newest investment project there is the construction of a health centre worth BGN 100 million, where medical procedures will be applied using entirely new high-tech solutions, in line with the latest trends and experience in modern medicine.

As for the Vidin Industrial Park, NCIZ is planning its further rehabilitation and development. There is a strong interest for new investments in the Park from local and foreign /mostly German/ companies, working in the automotive, industrial and construction sectors. The main difficulties for the development of the Park are the lack of manpower and the underdeveloped infrastructure. In this regard, and in order to develop the regional potential of Northern Bulgaria, the Programme for the Development of Industrial Zones and Parks could play a crucial role, by supporting the construction of both connecting and internal infrastructure. This will surely lead to the attraction and retention of significant investment and the construction of new production facilities, which in turn will help to accelerate the development of local economic activity and create the preconditions for reducing the pronounced disparities in the regional economic development.

- What is the overall interest by investors towards the Industrial Zones this year compared to last year? From which sectors and countries are they?

Foreign investment is the main source of capital for many regions in Bulgaria. Since the beginning of the year, there has been an increased interest from investors in the industrial parks and zones managed by NCIZ. A number of meetings have been held with representatives of companies - potential investors, who got acquainted with the opportunities, offered by NCIZ for starting a business in the industrial parks and zones, managed by the company. In response to enquiries from various companies, correspondence has been exchanged with over 40 commercial enterprises, interested in our sites, and currently 7 projects are in an advanced phase of negotiations.

So far this year, 4 final contracts have been signed, based on negotiations from the previous year, for investments totalling over BGN 77 million. The investment project of the largest scale is of a German retail chain, which plans to build a modern warehouse for finished and packaged goods together with administrative, technical and office premises on the territory of Industrial Park Sofia-Bozhurishte. The other investors are from the sectors of organic food production, production of organic certified and natural cosmetics, healthcare, etc. As a result of these 4 contracts alone, more than 160 job places will be opened.

- What kind of feedback do you get from foreign companies about our country as a place for doing business?

Indicative of the positive feedback we receive from foreign companies - investors in state-owned parks and zones - is the fact that many of these companies choose to work with us again. For example, five of the companies, that have already implemented projects within the Sofia-Bozhurishte Industrial Park, have chosen to locate their production and logistics activities, related to their other projects, again in this park.

On 19 September this year we organised a tour of the Park, attended by the diplomatic missions of Denmark, Spain, the Netherlands, Belgium, Switzerland, Greece, Turkey, Serbia, Romania, Austria, Bosnia and Herzegovina, etc. There is a long-term interest in Bulgaria as a competitive investment destination and the impressions from our talks were that our country undoubtedly has its advantages - strategic location, EU membership, favourable tax regime, fixed exchange rate, the country's expected acceptance in the Eurozone, etc. That is why the interest in Bulgaria as a competitive investment destination is long-standing. In the complex geopolitical environment at the moment there are new opportunities for Bulgaria to relocate production and investment and diversification of some industries affected by the disrupted supply chains, resulting from the coronavirus pandemic and the war in Ukraine.

- What are your priorities in industrial zone management?

Our priority is to continue our efforts to build modern smart industrial infrastructure in all our industrial parks and zones across the country, with a view to overcome territorial disparities in investment activity at a regional level. Here I would like to draw attention to the fact that, by their very nature, it is industrial parks that play a key role in attracting investments, which is an essential prerequisite for improving the business climate in our country. That’s why, the main goal of NCIZ is to create favourable conditions for investors and to establish the company as a leading partner in the implementation of industrial and logistics projects in Bulgaria. Achieving this goal is closely linked to the development of industrial parks and zones of a new type - environmentally friendly, digitalized and globally competitive. This will attract investment which, as we know, contributes to high GDP and to the creation of new job places.

More globally, our ambition is to create the conditions to close the cycle of existing industries by investing in new interconnected industries, thereby creating natural synergies. This would provide additional incentives to sustain investment interest in strategic investors. Last but not least, it is a priority of the NCIZ to manage industrial parks and zones in such a way as to realise Bulgaria's potential as an export destination for manufacturing and servicing targeted toward markets in Western Europe - the so called conception for “nearshoring”.

- Do you think that the Industrial Zones are an attractive place for the implementation of investment projects so far and what else can be done in this respect?

The successful development of the industrial parks and zones in different parts of the world has proved that this is an effective mechanism for attracting investment. Thanks to the active marketing of the NCIZ’s projects in the recent years, there is a well seen tendency for intensified interest towards the industrial zones in Bulgaria, as they are inherently favourable environment for the creation and development of industries and for generating business ideas. A given modern industrial zone should offer a range of business opportunities, but the strategic positioning, the level of professional training, availability of qualified workforce and economic incentives are also factors that facilitate investors' business intentions. Of course, there is always a potential for further development - in general, digitalization and development of innovative technology transfer infrastructure is the next step to improve and modernize the conditions for doing business in industrial parks. In this regard I believe that industrial parks and zones can become an attractive places for high value-added investments and be a prerequisite for dynamic smart growth.

Mrs. Antoaneta Bares, PhD, has many years of professional experience in the field of law and project management in various sectors of the economy. She has held key and senior positions in commercial companies from the IT sector and in government institutions. A lawyer and PhD in Economics from the Sofia University „St. Kliment Ohridski“.