Sisecam CEO Ahmet Kirman: Bulgaria Needs Different Incentives for Large-Scale Foreign Investment
Interview of Novinite.com (Sofia News Agency) with the senior management of Turkish glass-making giant Sisecam on the occasion of the opening of its new factory in Bulgaria's Targovishte.
On February 7, 2011, Sisecam Board Chair and Managing Director Ahmet Kirman inaugurated together with Bulgarian Prime Minister Boyko Borisov the "Sisecam" factory for automobile glass in the northeastern city of Targovishte. The brand-new investment is estimated at USD 25 M and will provide work for 130 people.
This is the fifth manufacturing facility of the Turkish glass giant in Bulgaria through its, after the factory for household glass, launched in 2005; for flat glass, launched in 2006; the mirror line and the line for appliance glass from 2007.
In 2008, "Sisecam" froze the project for automobile glass manufacturing over the shrinking of the European market. It has invested about USD 400 M in Targovishte so far, and employs 1 500 workers through its subsidiary Trakiya Glass Bulgaria. Its management has disclosed it considers doubling its investments but has asked the Bulgarian government for incentives.
Novinite.com (Sofia News Agency) talked to Sisecam Chair and Managing Director Ahmet Kirman, Exec. VP on flat glass Gulsum Azeri, Exec. VP on glassware Taner Uz.
You made it clear that you requested assistance by Prime Minister Borisov and the Bulgarian government regarding the further investments of Sisecam in Bulgaria. What exactly is it that you are requesting
Kirman: We mentioned in our statements and during previous meetings that we had with the Bulgarian Prime Minister and other members of the government that in order for us to realize a new investment of USD 400 M in Bulgaria, the authorities should make some amendments in the legislation regarding the investment incentives. Both the Prime Minister and the other ministers promised that they will take proper measures on this issue. We sincerely hope that they will make the necessary steps in this direction, and will thus help Bulgaria become the largest glass-producing complex of Europe because they will allow us to invest USD 400 M more in Bulgaria.
More specifically, what exactly are you going to be investing into?
Azeri: We know that we already have a flat glass factory in Bulgaria, which is very big. We are actually planning to build one more plant with the proportions, i.e. a second production line for flat glass. Of course, this production facility can be created either in Bulgaria, or in another European country.
In addition to this new facility for flat glass, we are also planning and considering a new facility in Bulgaria for the production of sustainable glass. At present, this kind of glass is not produced in Bulgaria. It is designed to save electricity and energy, and to have better heating isolation qualities. These are expensive products with high added value. What is more, we also plan to open a new facility for laminated glass. All of these types of glass are for the construction sector. For the facility that we just opened – for automobile glass – we plan a big expansion.
Uz: In addition to the existing production line for household glass, we plan to build a second one, which will allow you to produce about 200 million additional items such as glasses, cups, etc. The new investment in this production in Targovishte will be USD 61 M, and our capacity in household glass will reach 420 million items annually. The facility that we will construct in this field will include all production processes, and will allow us to produce absolutely all kinds of household glass.
If you do get the legislative incentives you are asking the Bulgarian government for, when do you expect these investments to be realized?
Kirman: We expect that most of them will be realized at the end of 2012, of course, if these legislation changes become a fact.
What is it specifically that you are asking the Bulgarian government for?
Kirman: When we talk about legislation amendments, we have in mind amendments like the ones anywhere in the world – tax cuts and tax breaks. We are talking about huge investments here so it makes sense to provide incentives based on their size.
You mentioned that you new facilities can be built in another country?
Azeri: No names. We just have alternative places where we can realize this investment. As company management, we prefer to realize it in Bulgaria but there is a neighboring country which is really good with incentives for big foreign investors.
Do you mean Romania?
Azeri: I will not mention any countries. We just hope that this can be settled because usually the investments that Bulgaria gets are for 15-30 million. We are talking about USD 400 M more on top of what we have already invested here. I think it is logical that such large investments should be viewed differently. We are not considering a different location in Bulgaria, only Targovishte, where we have plenty of space to expand.
Very close to Targovishte, in Razgrad, another city in Northeast Bulgaria, the Chinese state-owned company China Luoyang Float Glass Group plans to invest about EUR 80 M in a glass factory. How is that investment going to affect yours?
Kirman: How many years have we been waiting for this investment to come true?
For a few years but it is expected to happen soon.
Kirman: You should keep waiting.
Still, if it is realized, do you expect strong competition from them with respect to the EU market and even with respect to the human resources in the region?
Kirman: I don't believe that they will be able to compete with us.
Now that the crisis appears to be over, do you plan to raise the salaries for your workers in Targovishte?
Kirman: We are trying to provide payments to the best of our ability. Our remuneration policy in Bulgaria is the same as any other place where we have business operations. I want to point out that we did not reduce the salaries during the worst time of the crisis. This means only one thing – as long as these factories make money, the workers will make money as well.
Many foreign investors in Bulgaria are concerned about a potential shortage of labor – both skilled and unskilled. Do you have such difficulties in Targovishte? What share of your qualified workers and management did you bring from Turkey?
Kirman: Initially, when we started to invest in Bulgaria, we brought qualified laborers from Turkey but that was just at the beginning. At present, we have about 1 500 employees. Of those, only 50 are Turkish citizens. From here on we will continue the same way. We have almost no need to bring people from the outside. And we work the same way in Bulgaria as we do in our plants in Russia, Egypt, Bosnia and Herzegovina, Georgia.
*Questions from other media were also used
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