The Pazardzhik-based battery manufacturer "Elhim-Iskra" will halt operations and begin laying off staff, affecting nearly 200 employees, according to APIS data, Bulgarian media "Capital" reported. In an announcement to the Bulgarian Stock Exchange, the company attributed the decision to a challenging financial and economic environment, influenced by several factors.

The board of directors made the decision on Wednesday, March 4. It came as a surprise, as there had been no prior indications that such a step was imminent. While the company’s revenue has been declining over the past year and it remains unprofitable, its latest reports had projected sales through mid-2026. Following the closure announcement, "Elhim-Iskra" shares dropped approximately 13%, falling to 29 euro cents each, reflecting a market capitalization near 7.3 million euros. Shares of the majority owner, Stara Planina Hold, also fell slightly, by less than 1%, below the day’s decline of the SOFIX index.

The plant is set to stop operations on March 23, with staff contracts to be terminated 20 days later under the Labor Code provisions for work stoppages exceeding 15 days. Although the company mentions a strategy for future restructuring, no details have been shared, and there is no indication that production will resume in the near term.

"Elhim-Iskra" cited several reasons for its difficulties. The company has lost market share in Italy and Germany due to declining industrial output there, and faces stiff competition from Turkish, Chinese, and Indian manufacturers, who benefit from lower labor and energy costs. High electricity prices in Bulgaria and across Europe, coupled with the absence of effective state support mechanisms, are also a major concern. Additionally, the annual increase in the minimum wage and a shortage of qualified personnel have forced rising labor costs without corresponding productivity gains.

This situation is part of a wider trend in Bulgaria, where rising labor expenses and competition are forcing factories to close. Sectors with labor-intensive production and thin margins, including sewing and automotive cable manufacturing, have been particularly affected. Japanese company SE Bordnetze announced closures of its cable factories in Mezdra and Karnobat, while German firm Leoni’s Pleven plant has ceased operations. More recently, MD Elektronik, a data cable manufacturer in Vratsa, has confirmed it will shut down by mid-year, collectively impacting thousands of workers.

Financially, "Elhim-Iskra" reported a 7% revenue decline last year, ending 2025 with 15.4 million euros in revenue and a reduced loss of 0.5 million euros. Initial forecasts for the first quarter of 2026 anticipated revenue of around 4.2 million euros, with 3.6% growth projected for the first half compared to 2025. Preliminary data indicate revenues for January and February 2026 reached 2.5 million euros, with a gross loss of 153,000 euros reported for January alone.