Russian Economic Crisis Has Negative Effect on Bulgarian Industry - DW

Business » INDUSTRY | January 29, 2015, Thursday // 15:12
Bulgaria: Russian Economic Crisis Has Negative Effect on Bulgarian Industry - DW File photo

The worst economic crisis in Russia in a decade coupled with the devaluation of the rouble have affected Bulgarian companies in a negative way, as sales decrease and orders are being suspended.

Bulgarian company M & S Hydraulic, which makes machine parts, mainly power steering components for tractors, lost half of its sales in the region, Deutsche Welle reports.

Vladimir Spasov, managing director of the company, explains that 1/5 of the company's output is destined to the Russian market.

According to Spasov, a year ago the company's products were more competitive on the market, having a lower price than Russian manufactures.

However the Bulgarian products are no longer competitive as they are sold at a price that is double that of the Russian manufactures.

The company's products are priced in euros and business went into free fall due to the devaluation of the rouble.

As a result, the machines now operate only at half capacity and the sales are also running into trouble.

Spasov explains that most of the companies are requesting postponements as there is a strict order from the Russian government to find alternatives for all components used on their machines.

The production is in full swing in another part of the factory, that manufacturing products for the Western market.

Production in this department is enjoying a stable growth, which is partly compensating for the losses suffered on the Russian market.

The RCL company, which operates at Sofia's container terminal, used to load 120 containers every day, most of which were destined to Russia.

Last year only 30 containers were put on trains in the entire year, while at present no single container has been sent to Russia.

Valentin Raikov, managing director of the company, explains that containers are neither sent to Russia nor coming from there.

The consignments are so small that they are being transported by trucks rather than rail.

It has been eight months since the crane moved a single container, and the company keeps itself busy with domestic consignments.

We need your support so can keep delivering news and information about Bulgaria! Thank you!

Industry » Be a reporter: Write and send your article
Tags: Bulgaria, Russia, economy, industry, devaluation, rouble, crisis
Bulgaria news (Sofia News Agency - is unique with being a real time news provider in English that informs its readers about the latest Bulgarian news. The editorial staff also publishes a daily online newspaper "Sofia Morning News." (Sofia News Agency - and Sofia Morning News publish the latest economic, political and cultural news that take place in Bulgaria. Foreign media analysis on Bulgaria and World News in Brief are also part of the web site and the online newspaper. News Bulgaria