Ideal Standard Bulgaria - Success Story Interview

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Bulgarian Success Stories > Success Story Interview: Ideal Standard Bulgaria

Dear Mrs. Tsaneva,

1. What are the reasons of your company to invest in Bulgaria?
Back in 1992, American Standard acquired a local successful manufacturer of faucets with long history in Bulgaria, opening up the door for further growth of the company’s operations in the country. The success of the initial investment in Bulgaria gave the confidence to American Standard to explore opportunities for growing the company’s presence by establishing a ceramic manufacturing facility in Bulgaria. Not long after that, in 1996, American Standard took the decision to invest in building its largest sanitary ware plant in Europe, delivering it as a green-field project. The plant was built in a record time of 11 months and proved to be one of the most successful operations of the company for many years. Today, Ideal Standard Bulgaria and Ideal Standard - Vidima are part of Ideal Standard International, a privately-owned company, operating independently in Europe, Middle East, Africa, and Asia Pacific.

2. What is your company’s experience on the Bulgarian market?
The Bulgarian market has been well-receptive to our products. Currently we are in a unique position to be able to offer our customers innovative, design-driven bathroom solutions, as well as individual bathroom products. Our product range covers all market segments from economy to upper basic and luxury, and we are pleased to experience a market leading position with our portfolio, considering our two main brands, Ideal Standard and Vidima. Today the Bulgarian consumer is looking for convenience and good value for money, and these are the features we are able to offer today.

3. Why did your company choose Sevlievo?
As I mentioned earlier, one of the defining reasons why American Standard invested in Bulgaria and particularly in Sevlievo, was the successful experience that the company had with its prior acquisition of the faucet plant located in Sevlievo. Sharing best practices and management experience was seen to be a valuable contribution for the successful establishment of the new operation. In addition to that, the company had the required support at local municipal and national levels for enlarging its business activities in the country. This has been an important prerequisite for the success of the company’s operations in Bulgaria.

4. What other factors make Bulgaria attractive to your company?
One very important factor is the skilled and competent workforce available in Bulgaria at that time. Considering the fact that there was no experience in ceramic manufacturing in this geographic area in Bulgaria, we have been able to find and train personnel able to adhere to the quality and efficiency standards that the company deploys worldwide. We found that people in Bulgaria are capable of acquiring new skills and are open to learning new practices.

5. Do you have expansion plans in Bulgaria?
Considering the current economic environment, any expansion opportunities require extensive analysis and well grounded reasoning for undertaking any such development. Despite that, though, today our Bulgarian operations are seen as a very valuable asset, and we continue to explore ways to stay ahead of competition. Some of the steps we take is evaluating our technological capabilities and ensuring up-to-date technology to manufacture and distribute our products, as well as keeping competitive positioning through our product range and in-house capabilities. Ideal Standard has one of its largest manufacturing and distribution hubs located in Bulgaria, and we believe that Bulgaria will continue to be an attractive environment for doing business.

6. How do you see the business sector of your company developing in Bulgaria?
Our business is very closely linked with the development of the construction market. This sector has been hit hard by the economic crises and construction development has nearly come to a halt in recent months. This year and next year we expect to see little activity in this area with some prospects for picking up later on. Most probably, double digit figures in terms of growth will not be seen again in comparison to the levels of growth enjoyed in the years prior to the crisis. Still, the Eastern European region is a developing region and growth rates will continue to outpace the growth rates in the developed economies.

7. What makes Bulgaria attractive for investors?
Some of the most important factors that make Bulgaria attractive to investors are the macroeconomic stability, good tax incentives introduced in recent years as well as relatively good level of education in the country. The labor market in terms of hiring and firing practices is also considered to be fairly efficient, although further efforts are required in terms of reliance on professional management. In terms of connectivity, Bulgaria is also well-developed, ranking high in internet users, mobile telephones and personal computers. I remember the answer of the same question Fred Pouses, president of American Standard, gave some years ago: ‘As a geographical location, Bulgaria is a good place for business, and the quality that Bulgarians achieve through their works is world class. You have people who want to work, want to develop and have positive attitude towards their work.’ Fortunately, that has not been changed.

8. What can be enhanced to attract more foreign investors in Bulgaria?
Bulgaria still needs to make strides in improving the quality of its institutions and its infrastructure, as well as technological readiness to meet the new challenges in terms of maintaining competitive positioning. The levels of productivity have been criticized widely and definitely require strong focus, as they are directly linked to the level of efficiency of the economy and the global competitiveness of the country. Another main area for improvement is the perceived corruption in the country and the level of efficiency of the legal system – two areas that definitely need to show improvement in close future to allow Bulgaria to be seen as providing a stable business climate.

9. Do you think the Bulgarian government provides enough support to companies and specifically to foreign companies?
Any government concerned with the development of its country should provide adequate support to investors both foreign and domestic. In general, governments in Bulgaria have been supportive to investors, but I believe that the level of effectiveness of that support could be further enhanced. The level of business sophistication and innovation could be identified as a potential area providing further opportunities for improvement, and any incentives that companies may get in this respect may enhance further development.

10. Finally, from your personal experience, what is your opinion about Bulgaria?

Bulgaria is a country that has its advantages and should look for ways to capitalize on them. It has lost some valuable time in the process of transformation to a well functioning market economy but should continue to make efforts in that direction.

Thank you for your time and consideration.

Elitsa Tsaneva, Executive Director, Ideal Standard (Bulgaria)