Serge Schmidt, General Manager Bulgaria and Greece at Italcementi Group, has won the contest in the Business section of the 2014 Personality in the News, a poll conducted by Novinite.com.

Under the management of Mr. Schmidt, Devnya Cement has won the 2014 Investor of the Year award of InvestBulgaria Agency.

Novinite.com has asked Mr. Schmidt several questions relating to the operations of Devnya Cement and Italcementi Group, a First Class Investor in Bulgaria.

1. In your opinion, which sectors of Bulgaria’s economy are set to attract most foreign direct investment in 2015-2016?

According to the latest preliminary data for 2014, Foreign Direct Investment dropped by approximately 20% between January and November compared to the same period of 2013. The report declares a significant variation compared to the trend of the past years. Despite the not very optimistic numbers, I still think that the country is very attractive for foreign investors, including Italcementi Group. 

So far, a significant part of the FDI is concentrated in the manufacturing and services sectors. In my opinion, this trend will continue due to two reasons: first, there is a lot of potential for “green field” investments in many sectors of the economy and second, there are still many production facilities in Bulgaria that need to be modernized in order to be competitive on the European market. 

Another very promising area with a great potential is the IT sector which gives the chance to the country to become the “Silicon Valley” of Europe. For me, the most important advantage for any and all foreign investors in the country is neither the low corporate tax, nor the low labour cost, but the competent and skilful work force.

Currently, we are at the finish line of completing one of the biggest industrial investments in the country in the past quarter of a century - the new production line of our plant in Devnya, with a project cost that exceeds BGN 320 million. It was not by chance that Italcementi has identified Bulgaria as a strategic location for its large investment. We believe that the country has the potential to increase its domestic consumption and its geographical location provides excellent opportunities for export toward other Black Sea countries.

2. What will be the impact of the recent sharp fall in oil prices and the weakening of the euro on the operations of the group and Devnya Cement in particular?

In 2014, we have faced many challenges deriving from the fluctuating currency levels of the US dollar and the Russian rouble. 

A significant part of our raw materials for cement production are procured in US dollars and its appreciation is forcing us to extend the time span of our supplies which inevitably impacts our current cash flow. Moreover, part of our export activity is directed towards Russia and Black Sea countries.

The delicate political situation, in combination with the falling rouble, is limiting our export expansion opportunities. We are therefore trying to adapt and to seek other commercial options overseas.

3. Looking at Bulgaria’s commercial legislation, what would you like to see amended to enhance the development of the business of the group in the country?

Here, I would prefer to make a general comment rather than enter into the specifics of commercial legislation. 

From myexperience in the country it seems that, in many cases, the main issue is not so much about legislation or its amendments, but rather its enforcement. 

It is quite obvious that any serious investor would prefer to operate in a country that has a clear and stable legal system. I believe that Bulgaria has been making headway in this direction over the past few years.