Bulgaria - Industry



Before 1989, heavy industry dominated the Bulgarian economy. Metallurgy was largely dependent on iron ore imports, while locally mined copper, zinc, and lead ores were smelted in Bulgaria. The chemical industry produced fuels, plastics, rubbers, soda ash, and fertilizers. Engineering was well developed, especially in the production of electrical equipment, electric and motor trucks, heavy machinery, machine tools, electronics, and shipbuilding. Since the transition to a market economy, with a few exceptions that have attracted major foreign investment or serve sizeable international demand, the remaining heavy industry companies have struggled under management-employee privatization schemes. By 1999 industry contributed 29 percent to the GDP and employed 31 percent of the workforce. More recent labor force estimations were not available, but the percentage of GDP the sector contributed by 2000 remained the same.

Computer and software industries grew spectacularly in the 1980s, but, since then, many hi-tech players have been severely hit. DZU, a modern data storage equipment manufacturer in 1989, later leased out its production facilities to dubious firms that made Bulgaria the world's second largest producer of pirated compact discs (CDs). A government crackdown then all but ruined DZU, whose chances of survival currently lie with Hungary's Videoton, which acquired it for a nominal price. At best, it will function as a cheap assembly plant, but other companies will not even be this lucky. Bulgaria lost more than 50,000 computer programmers and engineers to developed countries over the 1990s, and this drain on a skilled workforce showed no sign of slowing down.

Textiles, the oldest industry in Bulgaria, together with apparel, leather goods, and footwear manufacturers, use largely domestic raw materials. The manufacture of building materials—cement, bricks, and glass—is well established. Pharmaceuticals and beauty products, food processing, including wine and other beverages, and tobacco processing, were once major revenue sources and show prospects for future growth.

Industries whose market prospects show promise in the 21st century include the manufacture of electrical equipment; telecommunications equipment and services; computers, software, and information technology; medical equipment; automotive parts and service equipment; agricultural equipment; building materials; chemicals; and, to some extent, metallurgy. All these enterprises, however, require massive restructuring and investment for their revitalization.

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