YOUR MOVE

Bulgaria: Precision Engineering Sector

2006 InvestBulgaria Agency WHYBulgaria? 1. 75% exports and robust technological innovation capability

2. Industry domains: electronics, automotive parts, military equipment, telecommunication equipment, consumer electronics, plastics, medical equipment

3. Quality management systems applied – ISO 9001:2000, ISO/TS 16949:2002, ISO 14000

4. Highly-qualified and experienced work force currently of around 10,000 people with technical support capability

5. Competitive labor productivity; competitive labor cost

LATESTdeals

Vendor Investor Target Size (EUR m) Palfinger Produktionstechnik Palfinger (Austria) Construction and equipment of a new production building for sheet-metal working, 10.2 (Cherven Brjag) manufacturing of welded components for the assembly plants, production of crane booms Consilium Components Bulgaria Consilium and Swefund Construction of a plant for automotive and marine components n.d. International (Sweden) Ericsson (Sweden) BTC 40% mobile network equipment supply n.d. Local companies conclude a total of 50-60 commercial deals for armoury and other defense technologies for each two weeks Currently, 26 manufacturers of military products operate in Bulgaria Annual export of special production in 2004: EUR 230 mln; average for 1980’s: EUR 800 mln (Source: Ministry of Foreign Affairs) 50% of Northrop Grumman’s (UK) radar systems are manufactured in Bulgaria Special purpose deals feature Samel 90 (), special purpose production for: Products: Northrop Grumman Sperry Marine, UK Mobile Police Station For Surveillance And Guarding BAE Systems North America, USA R-33M VHF simplex manpack radio Thales, HF/VHF radiojammers Device For Information Protection “Infoprotector”

1 PRECISION ENGINEERING Fact Sheet Electronics Small and medium-sized export-oriented Micro- and small-sized innovative enterprises with service functions: innovative enterprises: Established with Bulgarian, German, Servicing or completing activities to the group of the small and medium-sized export-oriented innovative enterprises; , Dutch and French capital; Investments in this group of enterprises are approximately 10% of the first group; EUR 100 mln investment for the last 2 Generate very high annual earnings: an average of $4,432 per employee, with considerably higher contribution per person to years; the formation of GDP than the average for the country; 100 % of production realized on Western Activities and product range: European, US and Canadian markets; Finishing and accompanying “back-end” services: Substantial innovation activity: electronics for special purposes; annually, more than 130 original electronics for cars; projects of integral schemes and 24 industrial electronics and automation; patents registered abroad (in France, electronics for entertainment purposes and for household appliances; Belgium, USA, etc.); telecommunications, etc. Over 40% of the personnel of design of ASICs, hybrid structures and modules, integral sensors (for own production of integral structures and for partners those companies consists of young from EU and USA); specialists; Basic processing “front-end” activities - production of microelectronic elements: Close interaction with the Bulgarian silicon structures with integral schemes or with integral sensors; educational institutions for developing thin-layer and thick-layer hybrid integral structures and schemes; the talent pool. micromodules, microsystems and silicon micromechanics; framing of integral structures; measurement and diagnostics of integral structures and schemes, of micromodules and microsystems; surface assembly of elements on structures, including “plain” chips; programming of integral structures and schemes; electrical and thermal training and life-tests, and tests for electromagnetic compatibility. Autoparts and mechanical engineering Structure of industrial engineering output, 2004 (EUR mln) Exports of precision engineering, 2003 (EUR mln) Customers of Bulgarian autoparts manufacturers Total: EUR 3.8 bn Total: EUR 904 mln Electronic modules and sensors Valeo and Delphi Auto parts and Optical and Electronic sensors Electricfil vehicles precision Marine equipment eqipment 203 43 Electrical and 49 Hybrid integrated circuits Sauer-Danfoss optical equipment Autoparts 536 40 PCBs Mannesmann Mechanical appliance Industrial control of conveyors Siemens 424 Machinery Plastic parts Rover 872 Electrical Basic metals and fabricated equipment and Hydraulic tooth pumps Magneti Marelli metal products and tools sound systems 2158 348 Cable terminal lugs Tyco Electronics Link bolts, Hoses Ford Source: National Statistics Institute Source: National Statistics Institute Brackets Trelleborg Automotive - Coventry Case studies Melexis (Belguim) Daisy Technology (Bulgaria) Subsidiary of Melexis N.V., Belgium since 2001 Designing, manufacturing and implementation of systems with fiscal R&D – development of Intellectual Property, Household Applications and IR Sensors; tests memory since 1996 of sensor ICs Leader in production of electronic cash registers and taximeters, electronic 166 employees scales, gas- and petrol stations equipment Net sales of Melexis Bulgaria grew from € 2.7 to € 13.5 million for 4 years Daisy Multimedia : design of digital video and digital sound products for companies like Sagem and Texas Instruments Export to Europe, , Asia and the Near East AREXIM Ltd (Bulgaria) AMI Semiconductor (USA) Manufacturing of plastic products and components for the highly demanding fields of Expansion of US AMI Semiconductor through its Belgium HQ via a new electronics, healthcare and food industry, est. 1991 design center in since July 2004 Products and services: Injection Moulding Workshop (plastic parts for electrical Integrated Mixed-Signal products and Structured Digital products engineering, components for refrigerators); Instrumental Equipment and Mould Workshop developing and supporting (designing and production of moulds and instrumental equipment) 20 analogue, digital, physical and SW engineers in the laboratory Quality management system approved by Lloyd’s Register Quality Assurance in Analog/Mixed Signal experience available on the engineering market while conformity with the following standards for quality management systems: ISO 9001:2000; very difficult in the other countries EN ISO 9001:2000; BS EN ISO 9001:2000 Clients: Schneider Electric Bulgaria, Liebherr-Hausgeraete, STS Holding Group, FESTO Bulgaria, Vidima Ideal (a subsidiary of American Standard, Kraft Jacobs Suchard and Hunter Douglas Europe – B.V., Holland

2 CERTIFICATION ANDaccreditation Quality management certification regulations applied in the sector: quality management system ISO 9001:2000 (acquired by a total of 1,681 Bulgarian companies); technical standards for suppliers to the automotive industry ISO/TS 16949:2002; environmental management systems ISO 14000.

Accreditation body Executive Agency “Bulgarian Accreditation Service” (BAS) is the only national body for accreditation of: www.nab-bas.bg testing laboratories and calibration laboratories; product certification bodies, management systems certification bodies, personnel certification bodies; inspection bodies; verifiers Certifying organizations АFAQ ASCERT International www.afaq.org American Systems Registrar (ASR) www.asrworldwide.com BVQI www.bvqi.com

DQS GmbH www.dqshellas.gr

Germanischer Lloyd Certification GmbH www.glc.de

Lloyd’s Register Quality Assurance www.lrqa.com

Moody International Ltd www.moody.bg SGS www.sgs.com TUV NORD CERT GmbH & Co.KG n.a. TUV Rheinland Bulgarien GmbH www.tuv-rheinland.bg United Registrar of Systems Ltd. www.urs-bg.com COMPETITION AND partners 5.1. Medical equipment Net sales Number of Company Activity Year (EUR ‘000) employees 1 Momina Krepost () Medical devices for single use 3,016 205 2004 2 Etropal () Medical devices for single use 2,695 246 2004 3 Berchtold Bulgaria (Sofia) Manufacture of medical electronics, lathed and cut parts for surgical lamps and 1,768 44 2004 tables and autonomous gas installations 4 Art Colenta Bulgaria (Sofia) Medical equipment 1,327 36 2004 5 Medical Equipment (Sofia) Medical, pharmaceutical, dental and physiotherapeutic equipment, hospital 905 298 2004 furniture 6 Centillion (Sofia) Medical equipment 844 31 2004

7 Optela - Optic Technologies () Industrial CO2 lasers systems and laser optics 508 107 2004 8 Gama Proekt JSC () Manufactures surgery and reanimation equipment, dental equipment, 358 186 2003 instruments 9 Intergalenika (Plovdiv) Medical devices (Concentrates for hemodialysis) 179 14 2003 10 Optica Laser (Sofia) Manufacture of laser systems for surgery, dentistry and physiotherapy 137 11 2002

3 5.2. Electronics and electrical engineering Net sales Number of Company Activity Year (EUR ‘000) employees 1 Ericsson Telecommunications Telecom equipment 27,255 35 2003 2 Liebherr - Hausgerate Maritsa (Radinovo) Production of refrigerators and freezers 25,911 300 2002 3 Elkabel (Bourgas) Production of power cables 21,927 371 2004 4 Datecs (Sofia) Design and production of hardware and cash registers 20,068 216 2004 5 EPIQ Electronic Assembly () Electronic assembly, module assembly, development and manufacture of plastic 14,130 991 2001 injection moulds & factory automation equipment 6 Melexis (Sofia) Development, production, testing and sale of integral schemes and systems 13,415 166 2004 7 Electron Progress (Sofia) Electronic equipment and instruments, radiolocation stations, military and 12,644 120 2004 telecom equipment 8 FESTO Production (Sofia) Production of proximity sensors and accessories, plugs and pre-assembled 12,082 205 2004 cables 9 Svetlina () Production of electric automobile lamps, electrical lamps for general lighting, 11,502 250 2004 halogen lamps, fluorescent lamps, quartz wares 10 Elprom - EMS (Sofia) Manufacture of small electric engines, brakes 6,215 580 2004 11 Samel 90 (Samokov) R&D and production of electronic military equipment, radar systems 8,560 400 2004 12 ABB Avangard () Manufacturing of electrical machinery and apparatus: high voltage switches, el. 8,300 300 2003 plants and generators 13 DZU () Disk Storage Devices 6,319 950 2004 14 Daisy Technology (Sofia) Design, manufacturing and implementation of systems with fiscal memory 3,903 82 2004 15 Teletek Electronics (Sofia) Accessories – dialers, power supplies, RC modules manufacturing 3,784 64 2004 16 Multiprocessor Systems (Sofia) Residential Electronic Single Phase Energy Meters, 3-Phase Energy Meters 3,614 91 2004 17 Opticoelectron Group (Panaguriste) Optic-mechanical and optic-electronic devices and systems for special military 3,297 n.a. 2004 purposes and civil use 18 Deltacom Electronics (Sofia) Broadband communications industry R&D and manufacturing 2,997 96 2004 19 SET (Steiner Elektronik Technologie Design, engineering, production of electronic products 1,960 300 2001 GmbH) (Rousse) 20 Arkomat () Electrical cables for automobiles 1,710 684 2001 21 Hybrid Integral Schemes (Sofia) Manufacture of hybrid IC’s, resistor networks, high-voltage resistors, PCB as- 1,182 121 2004 semblies, electro-luminous lamps 22 AMI Semiconductors (Sofia) Design center for mixed-signal integrated circuits for automotive, industrial and n.a. 20 2005 consumer applications 5.3. Mechanical engineering Net sales Number of Company Activity Year (EUR ‘000) employees 1 Sparky-Eltos (Lovetch) Production of electric tools, drilling machines, angle-grinding machines, circular 21,852 1,305 2004 saws, milling machines, eccentric grinding machines, engines for electric tools 2 Palfinger Productionstechnik Bulgaria Production of hydraulic lifting, loading and handling systems – cranes, forklifts, 18,617 270 2004 (Tcherven bryag) hook loaders 3 SKF Bearings-Bulgaria (Sofia) Production of bearings 6,922 1,097 2004 4 VAMO Manufacturing of engines, engine components, spare parts and technological 5,063 143 2004 equipment 5 Balkan () Production of transmission and bridges for battery-powered trucks; hydro- 4,470 410 2004 dynamic transmissions 6 Madara (Shoumen) Production of trucks, front and rear driving axles for trucks, buses, trolley buses 4,340 530 2004 and road building machines, gears and shafts, steel castings and forgings 7 Drouzhba () Production of pistons for internal-combustion engines 4,020 402 2004 8 Lifton Development and production of hydraulic breakers, hydraulic power packs & 3,705 121 2004 other hydraulic power-tools 9 Alucom () Manufacturing of truck and automobile wheel rims, radiators, aluminium castings 1,500 200 2003 10 Kuhn Technologies () Tool & dies making, structural parts for car body and car seats and their assembly 138 100 2004 5.4. Plastic and rubber parts Net sales Number of Company Activity Year (EUR ‘000) employees 1 Assenova krepost (Assenovgrad) Production of PP and PE packaging 22,331 1,223 2004 2 Kapitan Dyado Nikola (Gabrovo) Production of PVC, PE and PP water and sewer systems pipes and fittings 15,359 460 2004 3 Kauchuk (Pazardjik) Production of conveyor belts, rubber-textile hoses, technical rubber goods 11,878 843 2004 4 ITD (Saedinenie) Production of moulds, performs, plastic bottles, vials and caps 7,484 138 2004 5 Kula Ring (Kula) Production of rubber articles - belt conveyors, gaskets, profiles, pads, etc 2,873 205 2003 6 Arexim (Smoljan) Production of plastic parts 2,773 96 2003 7 Bunay (Panagiurishte) Details of plastics, bakelite and rubber with injection, press moulding, extrusion, 2,436 236 2003 back pressure injection

4 WORTH

Novo Selo knowing Boinitza Koinardja Slivo Sitovo Pole Kula Glavinitza Krushari Ruse Gramada 1 Dulovo Makresh Lom Valchedrum General 6.1. Educated workforce Ivanovo Vyatovo Toshevo Kozlodui Brusartzi Guliantzi region Yakimovo Borovo Ruzhentzi Medkovez Tzar Kaloyan Samuil Hairedin Tzenovo Dolna Dve Nikola Dobrich Byala Nikopol Razgrad Venetz Boichinovtzi Kozlevo Chuprene Montana Slatina Mitropolia Mogili Levski Byala Borovan Kneja Novi Bulchi Dol Loznitza Hitrino Chiprovtzi Dolnu Pleven Polski Pazar Krivodol Cherven Popovo Dabnik Trambesh Georgi Berkovitza Bryag Strajitza Aksakovo Vratza Vetrino Damianovo Letnitza Gorna Varna Varshetz Oryahovitza Veliki 3 Roman Lovech Veliko Preslav Tarnovo Lyaskovetz 1 Yablanitza Avren Sevlievo 1 Zlataritza Botevgrad Varbitza Dragoman Pravetz Sofia region Gabrovo Kotel Ruen Byala Slivnitza Etropole 1 Apriltzi Trun Bojurishte Gorna Chelopech Antonovo The city of Tvarditza Aitos Malina Zlatitza Kazanluk Mirkovo Pirdopo Sliven Sofia Maglij Pavel Chavdar Koprivshtitza 5 Bnya Straldja Kovachevtzi 1 Hisarya Nova Trekliano Zagora Radomir Stara Zagora Kaloyanovo Bratya Samokov Kostenetz Bobov Sapareva Daskalovi Tundja Lesichevo Sredetz Dol Banya Dolna Saedinenie Bania Dupnitza Opan Maritza Belovo Pazardjik Rila Plovdiv Perushtitza Malko Nevestino 2 Dimitrovgrad Tarnovo Tzarevo Rakitovo Parvomai Bratzigovo 2 Mineralni Belitza Rodopi bani Vocational technical colleges in Bulgaria Simitly Batak Devin Laki Lyubimetz Stambolovo Chernoochene (4-5 years of education) Garmen Goze Borino Banite Kurdjali Madjarovo Delchev Satovcha Strumyane ( mechanical engineering, electrical engineering, electronics) Madan Djebel Hadjidimovo Ivailovgrad Technical universities Kirkovo

University / College Location Majors (sector related) Technical University Sofia Sofia Automatics; Electronic Engineering and Technology; Electrical Engineering; Power Engineering and www.tu-sofia.bg Power Machines; Mechanical Engineering; Machine Technology; Semiconductor and Microelectronic Elements Design and Technology; Transport Machinery and Technologies, etc. University of Mining and Geology Sofia Automation, information and controlling equipment; Electric energy and electricity supply www.mgu.bg University of Architecture, Civil Engineering and Geodesy Sofia Structural Engineering, Hydraulic Engineering, Transportation Engineering www.uacg.bg Plovdiv branch of Sofia Technical University Plovdiv Electronics and Medical Instruments Engineering, Electronic Control Devices, Digital Handling of Infor- www.tu-plovdiv.bg mation, Power Electronics, Optoelectronics and Laser Engineering, Optical and Mobile Communications, Automation, Information and Control Systems, Electrical Engineering, etc. Varna Technical University Varna Electronic Engineering and Microelectronics, Radio Engineering, Communication Engineering, Electri- www.tu-varna.acad.bg cal engineering and electrical technologies, Automation of manufacturing - Digital Signal Processing, Technology of machine engineering and metal cutting machines Gabrovo Technical University Gabrovo Automation, information and control systems, Communication equipment and technologies, Electronics, www.tugab.bg Equipment and technologies for environment protection, Hydraulic and pneumatic engineering, Industrial engineering, Mechanical and precision engineering, mechanical engineering equipment and technolo- gies, etc. South-West University Blagoevgrad Machine Building and Textile Technologies and Technologies, Electronics and Communication Technolo- www.swu.bg gies and Technologies Rousse University Rousse Machine Tools & Manufacturing, Technical Mechanics, Electrical Power Supply and Equipment, Elec- www.ru.acad.bg tronic technique and technologies, Automation of production Bourgas Free University Bourgas Communication Engineering and Computer Networks, Computer Systems and Technologies, Electric Power www.bfu.bg Supply and Distribution, Industrial Management, Technology and Management of Transport 6.2. Sector-related exhibitions and conferences Exhibition Name Location Dates Frequency For more info ELTECH (International Exhibition of Electronics Plovdiv September Annually www.fair.bg and Electrical Engineering) International Technical Fair Plovdiv September Annually www.fair.bg INFOTECH Plovdiv September Annually www.fair.bg (International Exhibition of Information Technologies) 7. Useful contacts Organization Phone Web site Bulgarian Branch Association of Electronic Industry and Informatics (+359 2) 9718330 n.a. Bulgarian National Chamber Of Electrical Engineering (BNCEE) (+359 2) 963 35 32 www.bcee-bg.org Bulgarian Branch Chamber for Machine Building (+359 2) 988 40 44 www.bbcmb.org 8. Useful sites Organization Web site Bulgarian Academy of Science www.bas.bg Academician Emil Djakov Institute of Electronics www.ie-bas.dir.bg

5