Odd as it may sound, the seemingly endless economic malaise enveloping Europe has not dimmed the appetite for investment in Bulgaria, a development that the country’s investment agency hopes to capitalise on with a series of events promoting Bulgaria outside its borders.
“What we see lately, especially in 2012, it is interesting that we’ve had a higher number of inquiries, especially in manufacturing, than we had last year,” the executive director of InvestBulgaria agency, Borislav Stefanov, told The Sofia Globe.
“Usually it is European companies, thinking probably of cutting their manufacturing costs,” he said.
Lower cost may be what sets Bulgaria aside from other potential investment destinations, but it was only relevant because the country could deliver quality at least equal to other, more cost-intensive, locations, Stefanov said. “I hope that as a result of our marketing campaign, we will get new inquiries from Asia and America.”
InvestBulgaria is in the middle of one promotional campaign already and is putting the finishing touches on a second one, due to start later this year.
The initial campaign, in the works since 2010, when Stefanov took the job and the agency was handed a budget of 18 million leva over three years to put Bulgaria on the investment map, was launched with an event in London in December 2011.
In all, InvestBulgaria’s plans are to hold nine events focused around different industries, meant to bring together Bulgarian businesses and prospective investors from outside the country.
“London was about IT and outsourcing, then we had one event in Munich in March, which was focused on electronics and electrical engineering, and one event in Dubai at the beginning of May, which targeted mostly food and agriculture and medical tourism,” Stefanov said.
There will be three more such business conferences in Europe, tentatively scheduled for the period between September and December, one in Tokyo, and the remaining two in China and the US.
“Each of these will focus on one or two industries – the purpose of this is that when we’re bringing companies from Bulgaria, we try to invite people from a specific industry, both in the audience and among the panellists, so that they have common topics to talk about,” Stefanov said.
The industries for some of the events have already been picked: in Brussels it will be about transport and logistics, in Paris – food and agribusiness, same as Russia, where Bulgarian produce still has a vestigial high reputation earned during the Comecon era.
“The question is what do we do in China, the US and Japan, because these are countries that have a very high potential in very different sectors. The industries will depend on the location we choose in each case – for example, in the US, if you go to the West Coast, chances are that we will focus on IT, outsourcing, the more high-tech industries, and if we choose somewhere in the Midwest, it might be more related to manufacturing and agriculture.”
“For China, US and Japan, we are working with the respective embassies here, with our own trade officers in those countries. We are planning on having those events in September-December and I hope that we will have finalised dates and sectors for each of them soon,” Stefanov said.
As soon as this series concludes, a further 12 events are in the plans for the first half of 2012. Following a public tender, the agency has picked a consortium that included Financial Times to organise 12 events, grouped in series of four – one for Europe, one for Asia, and one for America. InvestBulgaria was in the final stages of clearing administrative hurdles before signing the contract, according to Stefanov.
This series will be structured around one large event on each continent, followed up by three smaller-scale ones in each region, either round-tables or business breakfast type, that will focus on promoting Bulgaria’s investment appeal in broader terms.
“The idea there is to use Financial Times, in this case, to attract prominent companies. The point is more to raise awareness about Bulgaria – but we are still discussing the details,” Stefanov said. “Our idea is to group the events together in the space of a week or two, so that all of us fly to, say, China, we have our main event there, then another one in Korea, a third in Japan, and so on.”
In addition to all the events around the globe, InvestBulgaria plans to launch a media campaign targeting print, business TV and online media, to advertise Bulgaria as an investment destination. Other countries in the region have done so in the past, and while a media campaign was unlikely to bring in concrete investments, it was a good way to raise general awareness, Stefanov said.
“Bulgaria is not the size of Germany, it’s not France, it’s not even Poland or the Czech Republic, places that investors know about. Bulgaria is quite unfamiliar the further you are from here and this is why some general advertisement as an investment destination could be useful just in the sense of increasing awareness of the country.
“After that, it is our goal as an investment agency to follow up and identify specific companies, but it is a two-way process – the more awareness businessmen have about Bulgaria, the higher the chance that some of them will be interested in researching investment opportunities here.”
Although a public procurement tender was yet to be officially announced – Stefanov said he hoped to once again attract a large global business media on the scale of Financial Times or The Economist – he said he was hopeful that proceedings would move swiftly and a winner picked by the end of summer.
But promotion abroad is not the only focus of the agency, which has been arguing for improved legislation to give Bulgaria an edge over other destinations. As it stands, Bulgarian Government’s investment incentives are no longer the most appropriate ones for a changed economic reality. Stopping short calling the law outdate, Stefanov said that in its current form it was “misaligned with market reality in the last couple of years.”
Purchase of land and infrastructure access were important factors for investors during the economic boom of the previous decade, but both are much easier to acquire during the current downturn. Instead Bulgaria should follow the lead of other countries in the region and offer tangible financial incentives for opening new jobs and not just high-end ones, but blue-collar jobs as well, Stefanov said.
“At this moment I am very positive that we will have some amendments, with Parliament giving the Economy Ministry a deadline to submit its draft version of the by the end of this month. From what I see, I think it will go through on time,” he said.