Veliko Tarnovo Furniture Cluster Bulgaria Production Sites with Furniture Clusters
1 SZCZECINEK FURNITURE CLUSTER 5 - TVILUM - STOL-TAP - GRZEŚKOWIAK - BHK - GREEN ANGEL - WOOD TECHNOLOGY INSTITUTE - POZNAŃ - ABO 2 SMORGON FURNITURE CLUSTER
USA
3 LAPOVO FURNITURE CLUSTER
4 SZOMBATHELY FURNITURE CLUSTER 6
5 OXFORD FURNITURE CLUSTER 2 1
6 ELEKTROGORSK FURNITURE CLUSTER
7 VELIKO TARNOVO FURNITURE CLUSTER 4 8
8 SEBES FURNITURE CLUSTER 3 7
2 3 Support for businesses
• We would like to share our location and extend our premises in order to provide our partners with a built area to install furniture production facilities. • The required infrastructure is already in place: Our location is equipped with high voltage power supply, gas supply, adequate water supply and waste water treatment facilities. Separate meters will be provided for the furniture factory. • Property tax and local fees are administrated by Kronospan. • Close proximity between the two manufacturing sites results in near zero transportation costs. • Just in time delivery of raw and melamine-faced particleboard will result in no stock – which eliminates the burden on cash flow. • Kronospan will keep the agreed minimum stock levels. • We would provide you with access to our extensive product portfolio. • You could benefit from technical support in material processing on-site. Our engineers are experienced in both furniture production technology and equipment – whether that’s mechanical, electrical, automation software or robotics. • Kronospan will support you with administrative issues, including registration of a legal entity, the local register and banks. • We could also provide support with accounting, tax and payroll regulations as well as reconciliation of local accounting with internal reporting. • We will assist you with your recruitment process with our HR specialists and database. • You could receive support from the on-site Kronospan design and marketing department.
4 5 Kronospan Worldwide Production Sites: Furniture Clusters: 1 Lungötz, Austria 15 Zvolen, Slovakia 29 Brasov, Romania 5 Szczecinek, Poland
2 Salzburg, Austria 16 Egorievsk, Russia 30 Kastamonu, Turkey 17 Sebes, Romania
3 Chirk, United Kingdom 17 Sebes, Romania 31 Smorgon, Belarus 21 Oxford, USA
4 Sandebeck, Germany 18 Bjelovar, Croatia 32 Burgos, Spain 23 Veliko Tarnovo, Bulgaria
5 Szczecinek, Poland 19 Novovolynsk, Ukraine 33 Salas de los Infantes, Spain 26 Szombathely, Hungary
6 Poznan, Poland 20 Mohacs, Hungary 34 Elektrogorsk, Russia 27 Lapovo, Serbia
7 Lampertswalde, Germany 21 Oxford, USA 35 Ufa, Russia 31 Smorgon, Belarus
8 Sanem, Luxembourg 22 Riga, Latvia 36 Mogilev, Belarus 34 Elektrogorsk, Russia 22
9 Jihlava, Czech Republic 23 Veliko Tarnovo, Bulgaria 37 Auxerre, France USA CHINA 10 Pustków, Poland 24 Ponterosso, Italy 38 Le Creusot, France
11 Burgas, Bulgaria 25 Spremberg, Germany 39 Ryomgaard, Denmark
12 Mielec, Poland 26 Szombathely, Hungary 40 Clarion, USA
13 Danyang, China 27 Lapovo, Serbia 41 Grodno, Belarus
14 Bischweier, Germany 28 Strzelce Opolskie, Poland 42 Jaslo, Poland Chemical Plants: 1 Chirk, United Kingdom 8 Sebes, Romania
2 Burgos, Spain 9 Mogilev, Belarus
3 Aarhus, Denmark 10 Egorievsk, Russia
4 Lampertswalde, Germany 11 Ufa, Russia 19 5 Szczecinek, Poland 12 Kastamonu, Turkey
6 Ostrava, Czech Republic 13 Oxford, USA
7 Strazske, Slovakia 23 Distribution Centers:
1 Mouscron, Belgium 14 Krasnodar, Russia 24
2 Tárnok, Hungary 15 Goole, United Kingdom
3 Sofia, Bulgaria 16 Chatham, United Kingdom
4 Samara, Russia 17 Istanbul, Turkey 25 5 Saint Petersburg, Russia 18 Nicosia, Cyprus
6 Kiev, Ukraine 19 Kazan, Russia
7 Dnepropetrovsk, Ukraine 20 Tbilisi, Georgia
8 Penza, Russia 21 Baku, Azerbaijan
9 Ulyanovsk, Russia 22 Shanghai, China 20 10 Moscow, Russia 23 Kaunas, Lithuania 17 21 11 Yekaterinburg, Russia 24 Torun, Poland
12 Novosibirsk, Russia 25 Vtachikon, Slovakia
13 Rostov-on-Don, Russia Ports and Own Ships: 18 1 Gandia, Spain m/v Spanaco Loyalty
2 Aarhus, Denmark m/v Spanaco Reliability
3 Szczecin, Poland m/v Spanaco Simplicity
4 Constanta, Romania m/v Spanaco Fidelity
5 Enns, Austria m/v Spanaco Progress
6 7 Kronospan Excellence in Transforming Wood
Over 120 years of manufacturing experience Our core activity is the manufacture of wood-based panel products (particleboard, MDF and OSB) and related value added products. Vertical integration enables Kronospan to lead the way in both cost and innovation. We have invested in developing a vertically integrated supply chain that allows us to constantly improve upon and perfect every aspect of our products. Focus on the European Market Kronospan has more than 40 production facilities and is the world leader in the manufacture of wood–based panels. For the last 20 years our major projects have been undertaken in Eastern Europe and Russia. Wealth creation in the medium and long term Being privately owned means that we take a long term view rather than focusing on short term achievements. Decentralized organization Kronospan is made up of several manufacturing groups. This allows decision making by local management. As a result we can be close to our customers, our suppliers of goods and services and our people. This provides a strong platform for growth. The structure also allows us to ring fence political and economic risks where appropriate. With this we get more commitment, more ideas which allow individuals and the company to grow. Customer service We aim to be the most service-oriented supplier in our sector. Our extensive market coverage and wide product range give us a significant competitive advantage. At Kronospan, we are close to our customers and our locations are a maximum of 400 km or 8 hours by truck from our customers which is a key advantage resulting in reduced transport costs, hence Kronospan can offer the best package. Advanced technology We have pioneered many of our industry’s key advances and will continue to lead product development and innovation in the future. Our production asset quality is also first class. We are here to lead, not to follow; using for example state-of-the-art filter technology. Cost leadership Although our structure is decentralised we benchmark our production sites and with the support of our technical shared service centre ensure that they remain efficient low cost producers. Local financing Financing is obtained at a local level and we look for long term banking relationships. Our aim is to keep foreign exchange risks under control and therefore require finance as much as possible locally. Central support We use shared services where it is important and only centralise when and where it makes sense. Environmental responsibility Our aim is to manufacture with the least environmental impact and the maximum raw material yield – no waste.
8 9 Inspiration and innovation
Kronospan is the global leader in the production of wood-based boards and panels. Our products are used everywhere: from floors and furniture to frame constructions. With over 100 years of market presence, we have accumulated a wealth of experience in many markets, continuously innovating and investing ever since the inception of our firm. All of this continues to translate into Kronospan's new products, systems and advanced technologies. Kronospan's global product range, which is divided into Kronodesign, Kronobuild and Krono Original, offers unlimited design opportunities to make high-quality furniture, interiors or buildings.
10 11 Accessibility Helsinki 2 24 Oslo Geostrategic location 2885 Stockholm 2 53 Tallinn Bulgaria is located in Southeastern Europe. 2837 It benefits from excellent water, road and rail transport connections to Western Europe and Turkey. Riga Moscow 253 1 54 European routes E 70 and E 85 – which provide Copenhagen Klaipėda easy access throughout Western Europe, Turkey 168 1 54 and the Near East – meet in central Bulgaria. Vilnius 1646
Minsk E 70 Dublin Hamburg 1565 27 3 2147 E 85 Amsterdam 1383 Berlin 1857 Warsaw London 1853 1 82 Brussels 1672 Frankfurt Prague Kiev 1 47 15 8 11 2 Vienna Stuttgart 1226 Bratislava Paris 1786 Munich Salzburg 1184 1431 1766 1551 Budapest Graz 1 118 Key facts Zurich Chisinau 1 6 641 Ljubljana Official Name Republic of Bulgaria 1143 Milan Zagreb Bucharest 1645 1 5 Belgrade 183 Form of State Democratic Republic 11
² VELIKO Area 110 994 km Marseille Sarajevo TARNOVO 2144 2 1 Sofia Population 7.05 million 221 Rome 18 1 Skopje Official Language Bulgarian Tirana Istanbul 46 Alexandroupoli Madrid 767 473 Main Religion Orthodox Christianity 2586 346 Igoumenitsa Capital City Sofia: 1.37 million people Lisbon 84 3142 Currency Bulgarian Lev (BGN) Athens 1 22 GDP (2018) € 55.2 billion
GDP pc (2018) € 7 851
12 13 Economic zone in Veliko Tarnovo
We are located in the Veliko Tarnovo industrial zone - a convenient position in the centre of Bulgaria - We offer at your disposal providing great access to all key roads. It’s this strategic location, complemented by Kronospan’s innovative business proposition, that would give any furniture producer the competitive edge. 2 Kronospan owns 297 215 m2 (30 ha) of land in Veliko Tarnovo with well-developped technical infrastructure. more than 86.000 m Additionally Kronospan plans to provide more than 86 420 m2 (8.6 ha) area to build warehouses and potential area manufacturing facilities to meet the needs of the potential partners - furniture producers. where the production facility could be built according to the needs of the potential partner – furniture producer
E 70 Romania E 75 Utilities to site gas electricity water Ruse supply supply supply
Pleven
Varna Railway connection Serbia The location is easily accessible because of internal railway connection to the train station in Veliko Tarnovo. IKO A NO O Veliko Tarnovo is positioned on the major railway line Stara Zagora - Ruse and is 15 km away from the biggest Bulgaria railway station in northern Bulgaria (Gorna Oryahovitsa).
Ravno Pole Sofia Burgas Stara Zagora Easy access 5 km 221 km 223 km 400 km Plovdiv to the Highway to Sofia to Varna to Constanza
Haskovo 10 km 215 km 183 km 473 km to Gorna Oryahovitsa to Burgas to Bucharest to Istanbul Macedonia Turkey Human resources Greece The Municipality of Veliko Tarnovo operating 22 kindergartens, 13 primary schools, 4 secondary schools, 4 vocational school, 6 public vocational schools in the field - tourism, economy, light industry, electronics, construction, 1 private professionals High School, 2 special (auxiliary ) schools, 3 University with more than 10.000 students in over 70 specialties. Additionally 30 km away from Veliko Tarnovo there is Technical university with 17 specialities. Sofia Varna, Ruse, Bucharest National road
eli o arno o Furniture Cluster
Railway
14 15 Development
Facts and figures Strategic location
In recent years, the Bulgarian economy experienced growth due to strong foreign investments Located at the heart of the Balkans, Bulgaria is a strategic logistics hub. and continuous improvement of its business environment. In fact, since 1996, Bulgaria has Ease of transportation of cargo is provided by: attracted more than €43 billion of inward foreign direct investment. ●● Five Pan-European corridors (IV, VII, VII, XI, X), which pass through the country € 79 billion ●● Transport program TRACECA, which connects Europe with Caucasian and Inward FDI in Bulgaria Central Asian region 1996-2017 ●● Four major airports: Sofia, Plovdiv, Bourgas and Varna Bulgaria is one of the best EU countries to invest in. Stable macroeconomic indicators are showing that Bulgaria has consistent growth and improving credit rating of the country . One of ●● Two main seaports: Varna and Bourgas the lowest corporate taxes (10%) in EU, financial stability with currency board, strategic location ●● Numerous ports at the Danube River and direct access to key market regions, are some of the advantages, which investment in Bulgaria provides to investors.
Political and business stability Potential market
Bulgaria is strategically located and offers a combination of political and macroeconomic Due to its location Bulgaria provides direct access to the following key markets: stability and incentives for doing business ●● European Union - zero tariff market with population of 500 million ●● Stable parliamentary democracy; EU, NATO and WTO member ●● CIS – still not well penetrated market with a high potential ●● Bulgaria’s currency is fixed to the Euro under a currency board arrangement, pegging ●● Turkey - zero tariff market of near 80 million population the Bulgarian lev to the euro at the level of 1.96 ●● Middle East – a market with high purchasing power ●● EU funding – more than €8 bn in EU funds over the next years ●● North African market ●● Bulgaria has one of the lowest government debts in the European Union (23.1 % of GDP)
Human resources
Bulgaria has one of the most competitive costs of labor in Central and Eastern Europe and average monthly salary in Bulgaria is € 620 (2018). Work force is well educated, highly skilled and multilingual ●● 60 % of the total population is in working age (appr. 4.2 million) ●● 60 000 students annually graduate from 51 universities ●● 98% of the high school students study a foreign language (usually English) and 73% study a second language (mainly German, French, Spanish, Russian) ●● 94% of the schools have Internet access
16 17 Potential Kronospan after investment in Bulgaria of Kronospan in Bulgaria Kronospan has been presented in the Bulgarian market for many years. This was originally through trading and distribution but during the last 22 years we have been manufacturing at our modern production facilities in Burgas and Veliko Tarnovo. Today Kronospan is the leading wood-based panel producer in Bulgaria. We offer an excellent product, decor range and the very highest levels of customer service. We are able to produce E-LE (CARB II) certificated 450 employees products. We ensure that all employees and suppliers adhere to ethical business practices. We acquire goods, commodities and materials from domestic suppliers. Veliko Tarnovo capacity:
3 700 000 m of PB
2 25 000 000 m of Melamine Faced Boards
3 360 000 m of MDF
Burgas capacity:
3 180 000 m of OSB
18 19 Business environment Financial support for investors Low cost of doing business The Bulgarian government offers the following incentives for investors: ●● Institutional support ●● Favourable tax regime in Europe. Corporate income tax is 10% flat rate. Personal income tax is 10%, flat rate. Industries in high-unemployment ●● Financial grants of up to 50% for education and R&D projects and up to 10% for areas are granted 0% tax rate. manufacturing projects ●● 2-year VAT exemption for imports of equipment for investment projects over €5 million, ●● Reimbursement of labor costs paid by the employer creating at least 50 jobs ●● 0% withholding tax on dividends and liquidation quotas for EU tax residents Support is applicable for new projects and the ammount of the support depends on: (5% for non EU tax residents) ●● the number of new staff employed by the project ●● Low cost of office rents and utilities. Bulgarian cost of electricity for industrial users is ●● the size of the company / investor and value of the investment 70% of the European average ●● Competitive labour cost (approx. 30% of EU average) Priority Class A Class B ●● Currency stability is supported by the currency board Manufacturing Industry Manufacturing Industry Manufacturing Industry €50 million €5 million €2.5 million ●● Technical university preparing qualified personnel for cluster on site or or or 25 million €2 million €1 million
●● Strategic location - located at the heart of the Balkans INVESTMENT and and and 200 working places 150 working places 100 working places ●● Direct access to key markets: EU, CIS, Turkey, Middle East, North Africa CRITERIA INDUSTRY Include all the incentives Include all the Incentives Information services for Class A and B for Class B One of the most competitive costs in Europe Consulting and individual Shortened administrative administrative services. Investors procedures: the central and local (1) will be able to authorize Agency government authorities will provide Electricity Gas Water Cost of Labor Institutional Support 0.09 €/kWh 0.33 €/kWh 1.17 €/1m3 Salary (Min.) - 342 € officials to obtain any documents for administrative services shortened implementation of the corresponding with one-third of the time period Salary (Avg.)(2) - 700 € investment project. established by the law Financial support for construction State support Financial grants of up to 50% for of technical infrastructure elements Financial support of up to 25% for education and R&D projects and up to the borders of the project site, the vocational training for obtaining The Bulgarian legislation introduces a system of promotion measures for initial investments to 10% for manufacturing projects needed for implementation of one professional qualifications. in tangible and intangible fixed assets and creating new employment linked thereto, or more investment projects. State tax exemption for changing Reimbursement of labor costs paid according to the legislation of EU. the land status by the employer. On the request of certified investor Acquisition of real estate private state Investments must be related The government incentives for: the corresponding authorities may GOVERNMENT INCENTIVES or private municipal property without to the following sectors: transfer ownership rights or establish a tender and at a price lower than ●● Class B Investment Projects a limited ownership right over real the market, but not lower than the ●● Manufacturing estate (private state or private ●● Class A Investment Projects tax assessment of the property ●● Research & Development municipal property) without a tender. ●● Priority Investment Projects Establishment of public-private ●● Education partnerships with municipalities, universities, other organizations from ●● Healthcare the academic society and etc. ●● High-tech services ●● Warehousing and logistics
(1) Data source: National Statistic Institute (2) Avarage for the region of Veliko Tarnovo
20 21 Production and Cluster Area
PB Production Cluster 8.6 ha
MF Production
MDF Production
22 23 Production hall for lease
The production hall for lease is adjacent to the newly develop production facility of Kronospan in Bulgaria ●● The total built-up area is about 28 000 m2; ●● The building is single-storey and two-storey made up of prefabricated reinforced concrete elements – columns, Virendeel frames, purlins, roof panels; ●● Clear height in the hall is 6.55 m, and the columns are located in raster of 12.0 m and 18.0 m from each other; ●● Natural daylight enters by skylight; ●● Available water, gas and electricity supply; ●● Railway connection;
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