Operational programme “ Development of the …...Page 3 of 106 Operational programme “ Development of the competitiveness of the Bulgarian economy” 2007-2013, Priority axis 4.2

This project is co-financed by the European fund for Regional Development through Operational programme “ Development of the competitiveness of the Bulgarian economy” 2007 - 2013

Export strategy for

sector

“MANUFACTURE OF

WOOD AND OF

PRODUCTS OF

WOOD, EXCEPT

FURNITURE”

Bulgarian Small and Medium

Enterprises Promotion Agency

2012

Operational programme “ Development of the

competitiveness of the Bulgarian economy” 2007-2013,

Priority axis 4.2. “Promoting the internationalisation of the

Bulgarian enterprises” Project № BG161РО003 – 4.2.01-

0001 “Promotion Of The Internationalization Of The

Bulgarian Enterprises”

Page 2 of 106

Operational programme “ Development

of the competitiveness of the Bulgarian

economy” 2007-2013, Priority axis 4.2.

“Promoting the internationalisation of the

Bulgarian enterprises” Project №

BG161РО003 – 4.2.01-0001 “Promotion

Of The Internationalization Of The


This document was developed under project № BG161РО003 – 4.2.01-0001

“PROMOTION OF THE INTERNATIONALIZATION OF THE BULGARIAN

ENTERPRISES”.

Beneficiary: Executive agency for promotion of small and medium enterprises

This document was developed with the financial support of Operational

programme “Development of the competitiveness of the Bulgarian economy” 2007-2013 co-

financed by the European fund for Regional Development. The overall responsibility of the

document’s content lies with the Executive agency for promotion of small and medium

enterprises and under no circumstances it can be accepted that this document reflects the

official statement of the European Union and the Contract authority.

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BG161РО003 – 4.2.01-0001 “Promotion



CONTENTS

INTRODUCTION .......................................................................................................................8

APPROACH TO DEVELOPING THE EXPORT STRATEGY FOR SMALL AND

MEDIUM ENTERPRASES IN SECTOR “MANUFACTURE OF WOOD AND OF

PRODUCTS OF WOOD, EXCEPT FURNITURE” .............................................................10

MAIN CONCLUSIONS OF THE ACTUAL SITUATION ANALYSIS .............................17

SWOT ANALYSIS OF SECTOR “MANUFACTURE OF WOOD AND OF WOOD

PRODUCTS, EXCEPT FURNITURE” ..................................................................................64

STRATEGIC OBJECTIVES FOR PROMOTING THE EXPORT BY SMALL AND

MEDIUM ENTERPRISES FROM SECTOR “MANUFACTURE OF WOOD AND OF

WOOD PRODUCT, EXCEPT FURNITURE” ......................................................................70

STRATEGY FOR PROMOTING THE SECTOR SMEs EXPORT ...................................73

SEGMENTATION AND SUCESSFUL POSITIONING OF THE IDENTIFIED EXPORT

MARKETS .................................................................................................................................77

ACTION PLAN FOR SECTOR “MANUFACTURING OF WOOD AND OF

PRODUCTS OF WOOD, EXCEPT FURNITURE” .............................................................84

MONITORING AND CONTROL SYSTEM .......................................................................102

BIBLIOGRAPHY AND STATISTICAL SOURCES ..........................................................106

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Bulgarian Enterprises” LIST OF TABLES:

Table 1 Regional distribution of companies and employed in sector “Manufacture of wood, of

products of wood, except furniture” in 2009 ...............................................................................19

Table 2 Base index, 2001=100, Dynamics of the export by sectors, 2001 – 2010 .....................31

Table 3Indicators of the condition of the export of the SMEs in the manufacturing industry ....33

Table 4 Index of the turnover of the international market for the period 2001 – 2010 (to the

month of December of the corresponding year, where the base is 2005) ...................................37

Table 5 Export of Bulgaria in sector “Manufacture of wood and of products of wood, except

furniture” (million EUR) .............................................................................................................37

Table 6 Indicators of the condition of the export of the SMEs in the frame of sector

“Manufacture of wood and of products of wood, except furniture” ...........................................38

Table 7 Structure of the export of wood and articles of wood; wood charcoal – Chapter 44

under CN 2010 for the period 2001 - 2010, Main commodity groups with relative share of over

1% (in thousands EURO) ............................................................................................................40

Table 8 Dynamics of the export of wood and articles of wood from Bulgaria in total under

chapter 44 and by CN commodity groups: 4403, 4407, 4415 for the period 2001 -2010 (2001

=100) ...........................................................................................................................................42

Table 9 Dynamics of the export of commodity group 4403 worldwide for the period 2002-2010

(%, 2002=100), Source: ITC, own calculations ..........................................................................44

Table 10 Dynamics of the export of commodity group 4407 worldwide for the period 2002-

2010 (%, 2001 = 100) ..................................................................................................................44


2010 (%, 2001 = 100) ..................................................................................................................45

Table 12 Leading export partners for the commodity groups in sector “Manufacture of wood

and of products of wood, except furniture” for the period 2000 - 2010 .....................................47

Table 13 Leading countries importers of the Bulgarian products of group 4403 “Rough wood

materials” in total for the period 2001 -2010 (in % of the total export of Bulgaria of the

products of group 4403) ..............................................................................................................50

Table 14 Leading countries importers of the Bulgarian products of group 4403 “Rough wood

materials” in total for 2010 (in % of the total export of Bulgaria of the products of group 4403)

.....................................................................................................................................................50

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Bulgarian Enterprises” Table 15 Leading countries importers of the Bulgarian products of group 4407 “Wood,

sawned…” in total for the period 2001 -2010 (in % of the total export of Bulgaria of the

products of group 4407) ..............................................................................................................51

Table 16 Leading countries importers of the Bulgarian products of group 4407, in total for

2010 (in % of the total export of Bulgaria of the products of group 4407) ................................51

Table 17 Leading countries importers of the Bulgarian products of group 4415 “Packing cases,

boxes, crates, drums and similar packing of wood” in total for the period 2001 -2010 (in % of

the total export of Bulgaria of the products of group 4415) ........................................................52


2010 (in % of the total export of Bulgaria of the products of group 4415) ................................52

Table 19 SWOT analysis .............................................................................................................64

Table 20 PESTEL analysis ..........................................................................................................67

Table 21 Action plan ...................................................................................................................84

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Bulgarian Enterprises” LIST OF GRAPHS:

Figure 1 Labour productivity, measured as value added in BGN per one employed in SMEs of

the manufacturing industry by sectors in 2010 ...........................................................................21

Figure 2 Turnover in BGN per one employed in SMEs of the manufacturing industry by sectors

in 2010 .........................................................................................................................................22

Figure 3 Distribution of the SMEs of sector “Manufacture of wood and of products of wood,

except furniture” by activity groups ............................................................................................24

Figure 4 Indices of industrial production, turnover at the external and the domestic market of

sector “Manufacture of wood and of products of wood, except furniture” for the period 2000 –

2010 (average annual value for 2005 = 100) ...............................................................................26

Figure 5 Prognosticated values for export growth /2010-2015/ (in mln. EUR) ..........................29

Figure 6 Distribution of the companies in sector “Manufacture of wood and of products of

wood, except furniture” by size according the number of employed in 2007.............................31

Figure 7 Export in BGN per one employed in SMEs out of the total 18 studied sectors of the

manufacturing industry ...............................................................................................................35

Figure 8 Index of the turnover of the international market for the period 2001 – 2010 (to the

month of December of the corresponding year, where the permanent base is 2005 = 100) .......36

Figure 9 Dynamics of the export of wood materials and of products of wood, except furniture

(million EUR) ..............................................................................................................................38

Figure 10 Development of the export of wood and articles of wood from Bulgaria in total under

chapter 44 and by CN commodity groups: 4403, 4407, 4415 for the period 2001 -2010 (in

thousand EUR) ............................................................................................................................42

Figure 11 Export markets of the studied companies (in %) ........................................................53

Figure 12 Percent ratio of the export by number of export markets ...........................................54

Figure 13 Development of the strategy for product positioning .................................................79

Figure 14 Basic corporate strategies ...........................................................................................83

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Bulgarian Enterprises” LIST OF ABBREVIATIONS:

ЕU European Union

BSMEPA Bulgaria Small and Medium Enterprises Promotion Agency

SME Small and Medium Enterprises

CM Council of Ministers

MEET Ministry of Economy, Energy and Tourism

NCEA National Classification of Economic Activities

NIS National Institute of Statistics

OP Operational Programme

ITC International trade centre

BCWFI Branch Chamber of Woodworking and Furniture Industry

MFA Ministry of Foreign Affairs

CIS Commonwealth of Independent States

CN Combined Nomenclature

UAE United Arab Emirates

VAT Value Added Tax

SAPARD Special Accession Programme for Agriculture & Rural Development

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Bulgarian Enterprises” INTRODUCTION

The export strategy for sector “Manufacture of wood and of products of wood, except

furniture” has been developed under Project No BG161РО003 – 4.2.01-0001 “Promotion of the

internationalization of the Bulgarian enterprises” under Priority Axis 4 “Strengthening the

international market positions of Bulgarian economy” under Operative programme

“Competitiveness of the Bulgarian economy”, in the frame of Contract BG-161PO003-4.2.01-

001-C00001 for direct financial contribution, being the Bulgarian Small and Medium

Enterprises Promotion Agency (BSMEPA) the institutional beneficiary thereon.

The objective of the export strategy for sector “Manufacture of wood and of products of

wood, except furniture” is to support the Bulgarian micro, small and medium-size enterprises

within the sector, in order to enhance their competitiveness, internationalization level and initial

entering or expansion of the market share of Bulgarian products, in particular of those with

higher value added.

The Bulgarian state, represented by BSMEPA, MEET and other government bodies, has

recognized the SME sector to be extremely sensible and at the same time as having decisive

importance in the economic field, deserving special attention. The diversity in the development

of the various industrial sectors, where the SME development has its place, as well as national

priorities, related to promoting the country’s export, require drafting of export strategies for

certain sectors, being the “Manufacture of wood and of products of wood, except furniture”

sector one of them. Focusing the support and giving of precise reference points for State

intervention through its institutions, as well as offering development options for the rest of the

participants in the process will strengthen in positive aspect the plan-based principle in State

activities and as a result will improve the sectors functioning. The successful realization of the

Expert strategy is expected to result in the improvement when entering international markets

and the active expansion and strengthening of the market positions of the Bulgarian small and

medium enterprises, manufacturing wood and of products of wood, except furniture.

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Bulgarian Enterprises” At the strategy development, general consideration has been made of the results and the

conclusions of the carried out studies of the existing strategic and legal acts. The “Methodology

of strategic planning”, drafted by the Administrative reform council at the Council of Ministers

of the Republic of Bulgaria has also been taken into account.

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APPROACH TO DEVELOPING THE EXPORT STRATEGY FOR

SMALL AND MEDIUM ENTERPRASES IN SECTOR “MANUFACTURE

OF WOOD AND OF PRODUCTS OF WOOD, EXCEPT FURNITURE”

The export strategy is a strategic document, setting short-term objectives and priorities

within the SMEs export development. It has been drafted on the basis of the strategic planning

approach, which adroit use has the following advantages:

Ensures good comprehension among the stakeholders for the trends and what could

bring the future;

Creates general vision and consensus among the stakeholders, coordinating the

various initiatives under the chosen objectives;

Identifies the projects and actions undertaken or planned;

Strengthens the partnership among the management bodies, the business and others

for solving complex problems.

When developing such a strategic document it is extremely important to precisely

formulate the “owner” of the strategy, i.e. the institution or institutions responsible for the

overall implementation of the strategic documents, as well as the concrete phases of the

strategic planning.

Most commonly the phases of elaboration of the strategic document are:

Assignment;

Preparation;

Development;

Coordination;

Adoption;

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Bulgarian Enterprises” Implementation;

Evaluation;

Update.

Each of these phases contains different activities, some of which, as assignment,

preparation, elaboration, coordination, adoption and update at a later stage, will be part of the

project, implemented by the contract, mentioned at the beginning. Consequently, the main

“owner” of the export strategy is the Bulgarian Small and Medium Enterprise Promotion

Agency. This formal logic does not contradict to the fact that as stakeholders in the different

phases are included significant number of institutions, businesses and even the country’s

population.

Strategic planning tools

The strategic planning process includes the following steps:

Identification of the stakeholders;

Analysis of the environment;

SWOT analysis;

PESTEL analysis;

Vision;

Definition of the targets;

Selection of alternative – development strategy;

Action plan;

Monitoring system.

Each of these steps has certain peculiarities, mainly:

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Identification of the stakeholders. A stakeholder is each person or group, that requires

attention, that can influence certain decision, may contribute with resources or may be affected

by given decision. The implication of the stakeholders at an earlier stage of the strategic

document development may lead to better expressed consensus on the targets and bigger

readiness to support the decision. The stakeholders to the Export strategy may include different

people and organizations: companies, government bodies, manufacturer associations, certain

businesses, the corresponding products consumers, non-governmental organizations and

experts.

Analysis of the environment. The analysis of the environment (the conclusions on

which is based the SWOT analysis) permits the definition of targets and priorities that are

going to synchronize the efforts and to be inline with the time and environment.

The analysis describes the present situation of the SMEs in the sector and the export

process, establishes the reasons that provoke problems in the development, and sets the future

development trends.

SWOT analysis. The SWOT analysis gives the opportunity to identify the main

internal factors, differentiated as “strengths and weaknesses” and the external factors –

“opportunities and threats”, helps formulating the strategic objectives, priorities and measures.

The use of SWOT protects from setting unreachable objectives and priorities for the export

development of the SMEs of sector “Manufacture of wood and of wood products except

furniture” within the Strategy period.

The use of SWOT analysis when developing the Export strategy has certain specifics, as

the “owner” of the strategy is the BSMEPA, but the analysis is focused on the export process of

the SMEs in this exact sector and not on the industry itself.

PESTEL analysis. There are number of factors and “variables” that have a direct or

indirect influence on the business environment in our country as well as on the whole

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Bulgarian Enterprises” manufacturing industry state. Tax rates, changes in law, trade barriers and administrative

requirements, political and social trends represent macro factors having perceivable effect on

the enterprise operation.

PESTEL analysis is focused on analyzing the factors and tendencies on macro level

influencing the development of Bulgarian manufacturing industry, SME and the “Medical,

precise and optical equipment and instruments” sector in particular.

The use of this analysis shall present key conclusions for the positioning and planning of

SME development in this sector. Vision: Defining the vision is extremely important for the

future development of the export of the Furniture manufacturing sector SMEs, as it

demonstrates the view of the institutions and the business towards the future. The vision seeks

answer of one basic question – How do the stakeholders and the main participants in the

process want the sector export to look at the end of the period, covered by the strategy?

Vision: Defining the vision is extremely important for the future development of the

export of the SMEs of sector “Manufacture of wood and of wood products except furniture”, as

it demonstrates the view of the institutions and the business towards the future. The vision

seeks answer of one basic question – How do the stakeholders and the main participants in the

process want the sector export to look at the end of the period, covered by the strategy?

Definition of the targets. The strategic planning is focused on the issues of critical

importance, the opportunities and the problems, faced by the SMEs export of sector

“Manufacture of wood and of wood products except furniture”. It helps to outline the really

important decisions from those decisions with temporary impact.

The definition of the targets by making hierarchical tree of goals is a working instrument,

giving the opportunity to work out in detail as the most common general objectives, as well as

the most specific ones.

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Bulgarian Enterprises” Reaching the level of the specific targets permits finding the answer of the questions

“who”, “what” and “when”, as to guarantee the achievement of the defined general goals.

Selection of alternative – development strategy. After the objectives definition, the

paths for their achievement are sought. Practice shows that this may be done through different

ways, representing different alternatives for development and achievement of the set objectives.

At this stage of the strategic planning the various alternatives are evaluated by different point of

views and criteria, and as a result one alternative is chosen, that is to become a development

strategy.

Action plan. The chosen strategy is to be supplied with certain activities and measures,

bound by deadlines, people in charge, executors and funding. The action plan and the measures

provided therein represent the transformation of this strategic instrument into our everyday

work and the realization of policy of supporting the “Manufacture of wood and of products of

wood, except furniture” sector SMEs export.

Monitoring system. The last stage of the strategic planning process is the monitoring and

evaluation of the progress of implementing the general and specific objectives, laid down in the

export strategy and in the action plan. Monitoring is important as it gives the possibility to

undertake corrective actions, if the progress is unsatisfactory or if the conditions are changed.

Reporting the progress in achieving the general objectives in front of the society and the

business is also important, as to grant them the possibility to evaluate the work of the

corresponding institutions and stakeholders for the strategy realization. We must note that very

often impacts may not be visible or obvious, that makes their measurability difficult. Moreover,

impact may often result in cumulative effect and it may additionally complicate the analysis.

This gives particular importance of the monitoring, which is closely related with all stages of

implementation of the Export strategy – preliminary (ex ante), current (parallel to realization)

or posterior (ex post) evaluation.

In order to monitor the export strategy implementation and to evaluate the results

achieved in terms of the set goals, it is necessary to use a set of indicators related to the

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Bulgarian Enterprises” implementation of the strategic document, that are to be determined preliminary or early

enough, as to use the data obtained thereof. In most of the cases these will be targets, which in

aggregate will correspond to the objectives of the strategic document.

The monitoring provides the feedback, helping to render account about the success or

failure of the planning document.

In order to perform the monitoring process is it necessary to define:

Monitoring indicators (what is to be monitored);

Periodicity of the monitoring and the evaluation (when are going to be prepared

the corresponding reports);

Responsibilities, related to the monitoring and evaluation implementation (who

and for what is going to be responsible), and competences on taking decision on changes

(update of the strategic document).

Information sources

When developing the export strategy the following basic information sources have been

used:

National Institute of Statistics;

Information, given by BSMEPA;

Information from the Ministry of Economy, Energy and Tourism;

Eurostat;

World Trade Centre;

Information, published in relation to the celebration of international forums and meetings;

Official electronic information sources;

Information, published by the Branch chamber of wood-working and furniture industry

Information by the Bulgarian Chamber of Commerce and the Bulgarian Chamber of

Commerce and Industry, as well as their regional divisions;

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Bulgarian Enterprises” Information from sociological survey, carried out within the period October 31st –

November 28th, 2011 together with the senior management of 23 SMEs, working in the

sector, as well as of the carried out discussions in focus groups.

Structure of the Export strategy for sector “Manufacture of wood and of products of

wood, except furniture”

At determining the structure of the Export strategy for sector “Manufacture of wood and

of products of wood, except furniture” has been considered the use of the strategic planning

approach, setting the general parameters of the strategic document. At the same time has been

conducted a survey of the structure of other institutional strategic documents, using for

evaluation the following criteria:

– Is there a possibility for comparatively easy acquaintance with the document through a

comprehensive and logic structuring of the various parts;

– Is the content represented in an attractive and easy to understand way, accessible for

non-professionals;

– Is it possible to grant the information thematically, i.e. is the material structured in a

way to allow in-depth introduction into the issues and analysis only if the reader is

willing to.

Some of the studied strategies met the so selected criteria, where there was a clear distinction

between tow separate parts, in particular:

1. Main document, where according to the described above logic of the strategic plan tools

contains definition of the various sections.

2. Annexes, containing the complete text of the prepared analysis, including the

introduced in the main material conclusions.

This approach was preferred also when structuring the Export strategy for sector

“Manufacture of wood and of products of wood, except furniture”.

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Bulgarian Enterprises” MAIN CONCLUSIONS OF THE ACTUAL SITUATION ANALYSIS

This part contains the conclusions of the various analysis, included in the “Analysis of

the environment”, being one of the main steps in the strategic planning technology. In addition

to this strategic document is given the complete text of the facts, as well as of the made

analysis, on the basis of which made conclusions have been formulated. The conclusions and

the analysis themselves are structured in 5 parts, as follows:

CONDITION AND DEVELOPMENT OF THE SECTOR IN

BULGARIA

EXPORT ORIENTATION OF THE SECTOR

PRODUCTS WITH EXPORT ADVANTAGES AND POTENTIAL

COMPETITIVENESS OF THE EXPORT OF GOODS TO

FOREIGN MARKETS

BARRIERS TO THE INTERNATIONALIZATION OF SMALL

AND MEDIUM SIZED ENTERPRISES AND MEASURES AND

PERSPECTIVES FOR EXPORT PROMOTION AND

DEVELOPMENT

CONDITION AND DEVELOPMENT OF THE SECTOR IN BULGARIA

Small and medium enterprises are the backbone of European economy, its priority and

long-term commitment, being also an important social factor for the development of common

economic space. The situation in Bulgaria is similar and requires long-term vision and

particular efforts supporting the non-financial sector and enterprises, ensuring employment to

more than two thirds of the population.

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Bulgarian Enterprises” Especially vulnerable of the abrupt changes in economic cycles, SMEs are following

the upsurges and falls of the global financial and economic path. Among the basic principles of

the European Community – principles Bulgaria has always underlined its aspiration to follow –

is the commitment to ensure stability and protection namely of such priorietary economic

structures, combining important economic and social roles. This priority of National and

European performers, lawmakers and consultative bodies require far-sighted strategic and

export interference in the last three years, as a result of the global and economic crisis.

The growth in the industrial production of the EU Member States marked sensible fall;

the mutual export, as well as export to third countries, has also suffered negative development.

And in Bulgaria, a country, still lagging behind the cohesion indicators and possibilities for

long-term industrial investment, theses trends were especially forced by the role of the

decreased industrial export in the period 2008 – 2010. A motor for the national GDP forming,

the export potential of over 99% of the companies in the non-financial sector, requires a

package of incentives for reaching the generally accepted principles of sustainable economic

development in the European economic space. Similar national and branch policies, through

concrete objectives and systematized measures are to be guided by the indicators for strong and

weak sides of our manufacturing industry, but at the same time, by the in-depth analysis of the

possibilities and upcoming trends on international markets, comparisons between present and

future competitors, usage and long-term application of recognized good practices.

What is peculiar for our manufacturing industry, in particular for sector “Manufacture

of wood and of products of wood, except furniture”, according the statistics of NIS and

Eurostat, is that it is lagging behind in the scientific and technology field and in the field of

modernization, leading to characteristically low share of the added value.

The indicated below findings represent a concentrated expression of the conclusions,

based on the detailed analysis and sociological surveys made with representatives of the SME

of sector “Manufacture of wood and of products of wood, except furniture” in the process of

drafting the present strategy. The objective is to emphasize the place of the SME in the sector

and their export possibilities.

The sector “Manufacture of wood and of products of wood, except furniture” has

clearly expressed possibility to strengthen its export positions, but at the same time it should

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Bulgarian Enterprises” not be ignored that the fight for conquering market shares depends on the personal

imitativeness of the Sales executives and managers, who usually are long-term experts in the

field they are working in, but are suffering serious financial difficulties to organize business

trips, participations in international meetings, fairs, symposia, etc.

The manufacture consists in manufacture of profiles for windows and doors, veneer

sheets and wood-based panels; assembled parquet floors; builders’ carpentry and joinery;

wooden containers; other products of wood; manufacture of articles of cork, straw and plaiting

materials, etc.

The sector for wood manufacturing comprises about 1.5% of the industrial manufacture

in the country and is creating also approximately 1.5% of the added value in the industry. The

participation of the sector in the external trade of the country is amounting to approximately

1.3% of the total export and less than 1% of the total import. The revival of the manufacture in

the sector will impact the export dynamics that grew in 2010 by 36.5%.

There is clearly expressed uneven distribution of enterprises and people employed by

regions. There are 950 companies operating in the sector, small, medium and large sized, where

around 40% of them are situated on the territory of the South-western and Southern Central

planning region. Lowest is the concentration of companies in the North-eastern region.

Table 1 Regional distribution of companies and employed in sector “Manufacture of wood,

of products of wood, except furniture” in 2009

Employed

in the

sector

(prs)

% of employed in

the

manufacturing

industry

% of

employed

in the

sector

Companies

in the

sector

(uts)

% of

companies

in the

sector

North-western region 2679 4,4% 16,0% 252 12,2%

Northern central region 2265 12,7% 13,5% 215 10,4%

North-eastern region 1482 2,6% 8,9% 182 8,8%

South-eastern region 2110 2,6% 12,6% 230 11,1%

Southern central region 4738 3,5% 28,3% 674 32,4%

South-western region 3442 2,2% 20,6% 520 25,1% Source Eurostat

The level of salaries in the sector is around the average for the country. The average

monthly remuneration is estimated at 480 BGN and ensures employment of approximately 16.7

thousand persons (3.5% of the employed in the manufacturing industry).

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Bulgarian Enterprises” Among the companies, operating in the field of wood industry could be distinguished

the following: State Hunting Area “Borovo” SF, “Tundja” SF, State Hunting Area “Alabak”

SF, State Hunting Area “Kotel” SF, factory “Mediket” PLC, and among those dealing with

woodworking – “Lessoplast” PLC, “Rodopi” PLC, “Kronoshpan BG” SPLC, “Woodworking

VT” PLC, “Technowood” SPLC.

The index of industrial production and that of the turnover in the sector in 2010 have

improved respectively by 12.6 and 7.1 points. At the same time there is change in the producer

prices in the sector (-5.6 percentage point relative to 2009).

At the end of 2010 the number of SME in the sector was 1962 SME, where the

reduction relative to 2009 is approximately 7%, following the general trend of decreasing the

number of enterprises, operating in the industry field and in particular in the manufacturing

industry in Bulgaria. In 2010 in terms of number of small and medium size enterprises in sector

“Manufacture of wood and of products of wood, except furniture” holds fifth place in the

manufacturing industry after sector “Manufacture of furniture”. The relative share of the SMEs

in the sector in comparison to those in the industry is 0,63%, and relative to those of the

manufacturing industry is approximately 6.5%.

The realized turnover by the SMEs in sector “Manufacturing of wood and of products of

wood, except furniture” turnover of approximately 473 million BGN ranks it on 11th place

among the observed 18 sectors of the manufacturing industry in the country, in terms of this

indicator. It represents 0,38% of the turnover realized in 2010 within the industrial sector of

Bulgaria and approximately 2,7% of the turnover of the manufacturing industry. The increase

rate of the turnover in the sector in 2010 in relation to 2009 of 10% significantly outruns the

average increase rate of the turnover in 2010 in relation to 2009 for the SMEs in the

manufacturing industry, accounting for 1, 78%.

The disadvantageous economic conditions have pushed the sector SMEs managers to

optimize their resources and to increase their effectiveness, and as a result the turnover reached

in 2010 exceeds by 41 million the values of 2009, independently of the essential work force

contraction.

As a result of the above fact, the labour productivity of the sector SMEs, measured as a

ratio of the created value added and the number of employed, has increased by approximately

8,5% in 2010 in relation to 2009, accounting for 8 173 BGN/employed. However, the sector is

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Bulgarian Enterprises” situated in one of the last places among the studied total of 18 sectors of the manufacturing

industry in terms of the indicator “value added per one employee”, as well as by the turnover,

realized per one employee.

Figure 1 Labour productivity, measured as value added in BGN per one employed in SMEs

of the manufacturing industry by sectors in 2010

(source: NIS, own calculations)

*Translation:

21 Manufacture of basic pharmaceutical products and pharmaceutical preparations

26 Manufacture of computer, electronic and optical products

20 Manufacture of chemical products

28 Manufacture of machinery and equipment n.e.c.

18 Printing and reproduction of recorded media

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Bulgarian Enterprises” 23 Manufacture of other non-metallic mineral products

27 Manufacture of electrical equipment

30 Manufacture of other transport equipment

22 Manufacture of rubber and plastic products

25 Manufacture of fabricated metal products, except machinery and equipment

10 Manufacture of food products

17 Manufacture of paper, paperboards and of paper and paperboard products

Figure 2 Turnover in BGN per one employed in SMEs of the manufacturing industry by

sectors in 2010


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Bulgarian Enterprises” *Translation:


26 Manufacture of computer, electronic and optical products

10 Manufacture of food products

21 Manufacture of basic pharmaceutical products and pharmaceutical preparations




23 Manufacture of other non-metallic mineral products

17 Manufacture of paper and paper products

11 Manufacture of beverages





16 Manufacture of wood and of products of wood and cork, except furniture; manufacture of

articles of straw and plaiting materials

31 Manufacture of furniture

14 Manufacture of wearing apparel

15 Manufacture of leather and related products

The total added value created in the sector in 2010 is accounting approximately to 109

million BGN and it ranks it immediately after sector “Manufacture of chemical products”. This

added value forms about 2,61% of the added value in the SMEs of the manufacturing industry

and 0,56% of the added value in the industry.

In 2010 in sector “Manufacture of wood and of products of wood, except furniture” is

witnessed growth trend of the total volume of added value in comparison to 2009, accounting

for 2%,. At the same time, there is a decrease trend of the added value in SMEs in the

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Bulgarian Enterprises” manufacturing industry of almost 1 %, that together with the decrease in employment, results in

the increase the value of the “labour productivity” indicator of up to 8,5% on annual basis

The contribution of the SMEs of sector “Manufacture of wood and of products of wood,

except furniture” in the field of employment, turnover and value added of the SMEs in the

manufacturing industry gives grounds to determine the sector as perspective and having export

potential.

The relatively low values of labour productivity are due to greater extent to the still

existing strong dependence on the traditionally high employment rate, which is an important

social factor in regions of concentration of sector SMEs, as well as to the low level of

processing of the raw material, i.e. there is lesser added value.

The dynamics of the manufactured production and the turnover of the companies,

manufacturing wood and products of wood, except furniture, measured in terms of the

productivity and turnover index show the existence of ongoing positive trends in the sector for

the period 2001 – 2010, but at the same time, there is strong dependence on the development of

other industrial sectors, at first place – the construction. The larger export orientation will

ensure to the sector a possibility of sustainable development and lower conjuncture dependence

on the domestic market.

Figure 3 shows the inter-sector distribution of the SMEs:

Figure 3 Distribution of the SMEs of sector “Manufacture of wood and of products of wood,

except furniture” by activity groups

(source: NSI, own calculations)

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Bulgarian Enterprises” *16.1 Sawmilling and planing of wood; impregnation of wood (39% - 769 companies)

16.2 Manufacture of products of wood, cork, straw and plaiting materials (61% - 1193

companies)

The vast majority of the sector SMEs (61%) are employed in group according to the

CEA - 2008, 16.2 “Manufacture of products of wood, cork, straw and plaiting materials”, that

includes manufacture of veneer sheets and wood-based panels; of assembled parquet floors; of

builders’ carpentry and joinery; of wooden containers; of other products of wood; of articles of

cork, straw and plaiting materials.

In group 16.1. “Sawmilling and planing of wood; impregnation of wood” are engaged a

total of 39% of the SME. It includes: sawing, planing and machining of wood; slicing, peeling

or chipping logs; manufacture of wooden railway sleepers; manufacture of unassembled

wooden flooring; manufacture of wood wool, wood flour, chips, particles; drying of wood;

impregnation or chemical treatment of wood with preservatives or other materials; manufacture

of split and sharpened piles and pallets.

Out of the two main groups in the sector, group 16.1. “Sawmilling and planing of wood;

impregnation of wood” marks an increase in the employed accounting for approximately 2,5%,

and group 16.2 “Manufacture of products of wood, cork, straw and plaiting materials” – a

decrease of 11% in 2010 relative to 2009.

More than 60% of the turnover in the sector is realized by group 16.2 “Manufacture of

products of wood, cork, straw and plaiting materials”. It marks turnover growth of 3,5% in

2010 in comparison to 2009, while the growth in group 16.1. “Sawmilling and planing of

wood; impregnation of wood” it is significantly higher – over 20%.

The labour productivity (added value per one employed) in both groups of sector

“Manufacture of wood and of products of wood, except furniture” marks growth in 2010

relative to 2009, whereas the growth is more significant in group 16.02 “Manufacture of

products of wood” – 10,5%. In the case of group 16.1. “Sawmilling and planing of wood;

impregnation of wood” there is an increase of 6,5%. In the case of the first group the main

reason for the significant increase of the created value added is the increase of this indicator in

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Bulgarian Enterprises” comparison to the previous year, and in the case of the second group – the reason is the

significant decrease in employment.

The analysis of the index of industrial production within the sector shows fast growth

rates for the period after 2001, peaking in 2006. The production and turnover growth rates for

the sector, especially those of the internal market, follow the general trends in the industry and

the manufacturing industry, but differ by its accelerated development within the period,

characteristic with the active construction period in Bulgaria and the huge amount of

investments in this sector. After 2007 all indices reflect the influence of the world economic

crisis, returning to levels of 2004. The turnover index on the world market follows more

gradual development and for the whole period the values are under the average for 2005. After

2009 this index shows ascending trend.

Figure 4 Indices of industrial production, turnover at the external and the domestic market

of sector “Manufacture of wood and of products of wood, except furniture” for the period

2000 – 2010 (average annual value for 2005 = 100)


*Index of industrial production/Index of turnover on the international market/Index

of turnover on the domestic market/Index of industrial production in the industry as a

whole/Index of industrial production in the manufacturing industry

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Bulgarian Enterprises” The unfavourable economic conditions have pushed the sector SMEs managers to

optimize their resources and to increase their effectiveness, and as a result the turnover reached

in 2010 exceeds by 41 million the values of 2009, independently of the essential work force

contraction.

The contribution of the SMEs of sector “Manufacture of wood and of products of wood,

except furniture” to the employment, turnover and value added of the SMEs in the

manufacturing industry gives grounds to suppose, that, if in a more favourable macroeconomic

environment it could show characteristics of a perspective, adaptive, fast-reacting sector with

significant export potential that could play a vital role in the future economic development of

the country.

In sector “Manufacture of wood and of products of wood, except furniture” in the frame

of a sociological survey have been studied a total of 23 enterprises in 18 different locations in

the country, including 5 villages. There are situated in 12 districts. The highest number of

companies is from the region of Pazardzhik (4) and Sofia-city (3); in six districts have been

studied per 2 business units and in the rest – per 1.

Situation analysis

Main factors, representing a barrier to the export of the SME of sector “Manufacture of

machinery, equipment and home appliances” are the following:

Deteriorated policy of crediting;

Insufficient financial resources;

Seriously limited and insufficient choice of funding sources;

Risk of insolvency due to the specificity of the SME structure;

Incapability for entering into the field of highly industrialized export.

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Bulgarian Enterprises” Analysis of the Bulgarian export of products, marking the highest values within the studied

period.

Among all studied products there are such, being absolute leaders by indicators both

concerning absolute value and growth for the period. There are products with relatively

constant levels of demand and such, having more specific demand.

In order to evaluate the possibilities of the present strategy to help them develop even

more, identical indicators for monitoring and evaluation of the set measures will be undertaken,

as there are different possible development scenario and the market situation at the moment is

unfavourable. From the time perspective the main task and objective of the present strategy will

be to introduce strategic planning into the sector. This is first and foremost related to

overcoming falls in export and achieving sustainable growth, as each harsh reduction in the

export value may result fatal for one small or medium-size Bulgarian enterprise.

An evaluation of the present strategy efficiency may give a more complete and deeper

analysis of the reached results about the export values. Without considering the absolute values,

it is important to find the trend development and to analyse the export development line. The

introduction of the strategy is expected to promote the export and to lead it to sustainable

growth, subjected to stable development rates. Another key instrument is to build systematic

monitoring and to perform analysis of different product segments.

Analysis of the Bulgarian export of products, marking the lowest values within the studied

period.

If in the case of the products having stable export positions, marking the highest export

values the objective is the achieve sustainable development, in the case of the products with

relatively lower export values the priority should be to push it out to higher export levels. It

could be realized through aggressive policy on behalf of the exporting country in relation to the

price level or preferential conditions. The export value is determining to a higher extent if a

trade policy is effective or not. In the case the aim is to break or enter into a foreign market by

all marketing tools. This may include discounts for larger orders, preferential prices for regular

and loyal clients, as well as other bonuses.

Occupying new niches by the SME in the sector, willing to establish their position into

the foreign market is related to finding ways to produce and export channels. One of the

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Bulgarian Enterprises” possibilities before the small and medium-size business is equipment hiring or licensing and

cluster creation, specialized in producing the good. The set strategic goals, measures and the

following of certain action plan to promote the economic activity production export may be

done mostly if performing regular market monitorings and publishing specialized bulletins, as

well as information from the NSI for the development of the sector and alternative market

studies, carried out by business or non-profit organizations. Otherwise, the established

indicators would have representative role and could easily be approved by various market

stakeholders.

The given 5 graph shows the prognosticated values for the development of various

market segments for the period 2010 – 2015.

Figure 5 Prognosticated values for export growth /2010-2015/ (in mln. EUR)

0.0 50.0 100.

0

150.

0

200.

0

250.

0

Други изделия от дървен

материал, корк, слама и

материали за сплитане

Разкрояване, рендосване и

импрегниране на дървен

материал

Опаковки от дървен материал

Сглобени паркетни плочи

Фурнир и дървени плочи

2015

2010

Source: Own calculations

*Translation:

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BG161РО003 – 4.2.01-0001 “Promotion


Bulgarian Enterprises” manufacture of veneer sheets and wood-based panels

assembled parquet floors

wood packaging

Sawmilling and planing of wood; impregnation of wood

other products of wood; of articles of cork, straw and plaiting materials

As it may be seen on the graph enclosed the products of “veneer sheets and wood-based

panels” undergo the most dynamic development and have the biggest export potential, second

come “other products of wood; of articles of cork, straw and plaiting materials”; on third place

are “assembles parquet floors”; fifth – not far of the opportunities for strong export

development are “wood packaging”.

In other words, the sector companies must have clear and precise vision regarding the

extent to which they could apply the strategic objectives of the present document and what

expenditure levels they need to realize export. Therefore it should be added that a number of

methods could be applied to optimize the financial structure of given company with view to

reducing costs and increasing the relative income share.

In the case of companies from this economic activity – “Manufacture of wood and of

products of wood, except furniture”, it is necessary to act in both directions or rather to reduce

the expenses for an activity, redirecting them to investment in developing the export activity.

This restructuring is related to costs for drafting prognosis, strategic plans, projects and mainly

vision for introducing the product into the foreign market.

EXPORT ORIENTATION OF THE SECTOR

As in the rest of the European countries, in Bulgaria the sector “Manufacture of wood

and of products of wood, except furniture” is sector of the small and medium-size enterprises –

more than 99% of all companies are small and medium-size enterprises, where approximately

78% are micro enterprises.

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Bulgarian Enterprises” Figure 6 Distribution of the companies in sector “Manufacture of wood and of products of

wood, except furniture” by size according the number of employed in 2007

Sources: NIS

According to Eurostat data the number of SMEs in the manufacturing industry of

Bulgaria amount to 32 177 in 2009. The number of SMEs out of the determined as priority 18

sectors for same year is 25 942, representing 81% of the manufacturing industry. Consequently,

as a conclusion of the analysis of the SMEs we could say that these 18 export-orientated sectors

could be accepted as representative for the SMEs from the whole manufacturing industry

sector.

Table 2 Base index, 2001=100, Dynamics of the export by sectors, 2001 – 2010

Sector number 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Manufacture of food products 100 140,5 126,9 163,0 186,1 201,4 222,7 369,3 373,2 458,4

Manufacture of beverages 100 96,5 94,1 93,5 108,3 116,3 144,7 139,6 104,7 120,2

Manufacture of textile and textile

products, except wearing apparel

100 120,3 145,0 171,0 173,3 206,2 236,2 217,1 164,8 180,7

Manufacture of wearing apparel,

incl. leather clothes, tanning and

dressing of leather

100 110,5 126,0 131,0 129,7 136,3 136,4 124,6 106,7 112,6

Manufacture of rubber and

plastics products

100 112,9 126,7 149,1 187,9 237,3 287,8 271,4 235,7 321,6

Manufacture of chemical and

pharmaceutical products

100 89,2 93,4 96,8 131,2 138,6 186,3 224,3 168,2 224,9

Manufacture of non-metallic and

mineral products

100 102,5 113,5 116,4 129,3 198,9 237,4 244,9 217,5 266,3

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Bulgarian Enterprises” Sector number 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Manufacture of machinery,

equipment and household

appliances

100 109,6 114,3 135,4 164,8 198,6 275,8 311,6 219,6 275,1

Manufacture of medical, precise

and optical apparatus and

instruments

100 167,0 224,5 220,2 300,0 443,5 524,9 576,9 573,2 700,2

Manufacture of office equipment

and computers

100 148,8 206,3 256,5 319,6 398,2 479,5 571,3 481,1 593,7

Manufacture of electric

machinery and apparatus

100 113,1 151,6 166,4 195,2 250,3 321,1 368,9 369,2 493,7

Manufacture of wood and

products of wood, except

furniture

100 114,5 127,7 149,8 148,7 161,9 198,1 142,5 135,1 186,8

Manufacture of pulp, paper and

paperboard

100 107,0 141,5 163,1 166,1 158,5 196,7 219,7 111,4 252,0

Manufacture of furniture 100 144,1 187,0 227,0 256,1 274,5 316,1 296,7 238,8 274,0

Publishing, printing and

reproduction

100 150,7 242,1 183,8 222,9 272,7 527,5 617,1 425,9 354,4

Manufacture of motor vehicles,

except cars

100 145,2 121,3 147,8 271,5 349,5 526,0 730,1 886,8 1

363,7

Manufacture of metal products,

except machinery and equipment

100 96,6 102,5 142,3 161,9 238,8 307,2 286,8 210,6 271,4

Manufacture of radio, television

and telecommunication

equipment

100 173,9 191,3 208,7 530,2 576,6 472,2 591,8 549,3 520,1

Total for the 18 sectors 100 111,5 123,4 138,4 158,5 183,7 215,8 235,0 198,9 245,1

Total export from BG 100 106,6 116,8 140,0 165,3 210,8 237,6 267,9 207,5 272,1

Source: International trade centre

The table 2 data analysis shows that out of the export-orientated sectors from the

manufacturing industry sector “Manufacture of wood and of products of wood, except

furniture” is registering the biggest growth (over 2 times) of the export in 2010 relative to 2009.

This demonstrates trade of recovering the export positions of the sector and is indicating the

existence of process of overcoming of the effects of the crisis.

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BG161РО003 – 4.2.01-0001 “Promotion


Bulgarian Enterprises” Table 3Indicators of the condition of the export of the SMEs in the manufacturing industry

Groups of companies Export share in

the total export of

SMEs in the

manufacturing

industry (%)

Change

in export

2010/2009

Export volume

per 1 employed

(BGN)

2009 2010 2009 2010

Manufacture of food products 4,32 3,00 92,43 13867 13428

Manufacture of beverages 0,34 0,16 61,35 9933 6325

Manufacture of textiles and textile

products, except wearing apparel

0,57 0,34 79,33 18701 16139

Manufacture of wearing apparel 6,18 4,36 93,83 16896 17649

Manufacture of leather, manufacture of

footwear and other related products

1,15 0,96 110,87 20217 23182

Manufacture of wood and of products of

wood and cork, except furniture;

manufacture of articles of straw and

plaiting materials

0,50 0,27 72,51 8030 6198

Manufacture of paper, paperboard and

products thereof

0,27 0,13 64,38 8282 6233

Printing and reproduction of recorded

media

0,16 0,10 85,97 4040 3449

Manufacture of chemicals and chemical

products

1,26 0,70 74,07 32860 25165

Manufacture of basic pharmaceutical

products and pharmaceutical

preparations

0,10 0,07 88,16 13785 11410

Manufacture of rubber and plastics

products

1,43 1,12 104,29 15586 17860

Manufacture of other non-metallic

mineral products

0,41 0,29 94,52 4928 5768

Manufacture of fabricated metal products,

except machinery and equipment

1,36 1,09 106,77 7667 9490

Manufacture of computer and

communication equipment, electronic and

optical products

1,05 0,52 66,50 43944 30410

Manufacture of radio, television and

telecommunication equipment and

apparatus

0,08 0,05 92,24 18173 14242

Manufacture of electrical equipment 1,00 0,74 98,08 23978 27133

Manufacture of machinery and

equipment, with general and special

purpose

0,96 0,81 112,23 13024 15408

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BG161РО003 – 4.2.01-0001 “Promotion


Bulgarian Enterprises” Manufacture of motor vehicles, except

cars

0,27 0,18 88,12 26492 25793

Manufacture of furniture 0,49 0,42 114,73 5187 6764

Source: NIS, own calculations

The analysis of the date from table 3 gives ground to make the following conclusion:

In contrast to sector “Manufacture of wood and of products of wood, except furniture”

as a whole, the export of SMEs therein is reducing its export in 2010 relative to 2009,

proving the necessity of a longer period for overcoming the effects of the crisis.

The SMEs of the sector are going down to 10th

place in 2009 and are holding hardly 13th

place (after “Manufacture of products other non-metallic mineral products) among the

studied sectors in terms of export share in the total export of the country in 2010.

There is an unfavourable trend of specialization of the sector SMEs in satisfying the

needs of the domestic markets. Although small in number, in the last years several large

companies from the sector have attracted significant foreign investments and have

created significant export capacity, thanks of their foreign partners.

The indicator “volume of the export per 1 employed” in 2010 going down by 23% in

relation to 2009.

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Bulgarian Enterprises” Figure 7 Export in BGN per one employed in SMEs out of the total 18 studied sectors of the

manufacturing industry

(Source: NIS, own calculations)

*26 Manufacture of computer, electronic and optical products




15 Manufacture of leather and related products


14 Manufacture of wearing apparel



10 Manufacture of food

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Bulgarian Enterprises” 21 Manufacture of pharmaceutical products and pharmaceutical preparations


31 Manufacture of furniture

11 Manufacture of beverages

17 Manufacture of paper and paper products

16 Manufacture of wood and of products of wood and cork, except furniture; manufacture of

articles of straw and plaiting materials

23 Manufacture of other non-metallic mineral products


Figure 8 Index of the turnover of the international market for the period 2001 – 2010 (to the

month of December of the corresponding year, where the permanent base is 2005 = 100)

Source: NIS

*Industry – general/Manufacturing industry/C 16 Manufacture of wood and of products of

wood, except furniture

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Bulgarian Enterprises” Table 4 Index of the turnover of the international market for the period 2001 – 2010 (to the

month of December of the corresponding year, where the base is 2005)

Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Industry -

general 64,2 55,0 73,5 69,3 91,5 112,2 120,6 139,3 97,0 110,3 176,9

Processin

g industry 60,4 53,7 73,0 68,5 91,9 110,1 119,8 140,0 98,3 113,8 180,0

Manufact

ure of

wood and

of

products

of wood,

except

furniture

73.5 38.7 62.3 75.6 86.4 99.5 86.4 94.1 74.2 77.1 90.7

Source: NIS

Sales incomes on the international market in the manufacture of wood and of products

of wood, except furniture have grown after 2001, following more slowly the general

development of the index of the industrial sector and the manufacturing industry. In 2010 the

values of the index for the sector almost reach their pre-crisis levels of 2005, while the indices

for the industrial sector and the manufacturing industry reach their highest values for the whole

period. This may be followed in the next tables and graphs.

Table 5 Export of Bulgaria in sector “Manufacture of wood and of products of wood,

except furniture” (million EUR)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Export of Bulgaria

5253,1 5714,2 6062,8 6668,2 7984,9 9466,4 12011,9 13511,9 15204,0 11699,2 15561,2

Total for the sector

233,3 278,1 294,9 334,4 346,4 364,7 388 293,7 257,2 228,3 308,3

Share of the sector of the total of Bulgaria

4,4 4,9 4,9 5,0 4,3 3,9 3,2 2,2 1,7 2,0 2,0

Base index (base 2000)

100.0 474,6 503,2 570,6 591,1 622,4 662,1 501,2 438,9 389,6 526,1

Chain index

100.0 119,2 106,0 113,4 103,6 105,3 106,4 75,7 87,6 88,8 135,0

Source: ITC and BNB

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BG161РО003 – 4.2.01-0001 “Promotion


Bulgarian Enterprises” Figure 9 Dynamics of the export of wood materials and of products of wood, except

furniture (million EUR)

Износ на дървен материал и изделия от него, без

мебели

0

100

200

300

400

500

2000г 2001г 2002г 2003г 2004г 2005г 2006г 2007г 2008г 2009г 2010г

мл

н.е

вр

о

Source: ITC

Based on the data from table 5 most significant is the export share of wood and of

products of wood, except furniture, of group “Manufacture of products of wood, cork, straw

and plaiting materials” – 60% of the export in the sector for 2009, marking increase to 72% in

2010. Notwithstanding the increase of the share in the export structure for group “Manufacture

of products of wood, cork, straw and plaiting materials ", the volume of the total export in the

sector is going down by approximately 30% in 2010, relative to 2009. In group “Sawmilling

and planing of wood; impregnation of wood” the decrease is by approximately 20% for 2010,

relative to 2009.

Table 6 Indicators of the condition of the export of the SMEs in the frame of sector

“Manufacture of wood and of products of wood, except furniture”

CEA Groups of companies Export

(thousand

s BGN)

Export

(thousan

ds BGN)

Export Structure of the

export %

Export

per one

employed

Export

per one

employed

2009 2010 2010/

2009

2009 2010 2009 2010

16 Manufacture of

wood and of

products of wood,

except furniture”

114357

82920

72.51

100,00 100,00 8030 16.0

16.1 Sawmilling and

planing of wood;

impregnation of

wood

29413 23367 79.44 40 28 5604 16.1

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Bulgarian Enterprises” 16.2 Manufacture of

products of wood,

cork, straw and

plaiting materials

84944 59553 70.11 60 72 9445 16.2

Source: NSI

Summary conclusions:

In 2010 the export, realized by the SMEs in sector “Manufacture of wood and of

products of wood, except furniture” falls down by almost half in relation 2009. It is

due to a great extent to the fact that large companies in the sector have taken

market niches, that, although few in number, have significant export capacity.

In 2010 the indicator “volume of the export per 1 employed” of the SMEs of sector

“Manufacture of wood and of products of wood, except furniture” has decreased

by 23% in relation to 2009.

Main export share of the SMEs of the sector hava the companies, manufacturing

products of wood, cork, straw and plaiting materials” –72%.

GOODS WITH EXPORT ADVANTAGES AND POTENTIAL

The world import of wood and articles of wood; wood charcoal is estimated on slightly

over 83 billion EUR for 2010, where the share of the Bulgarian export therein for 2010 is

accounting for 0,24%. For the whole period 2001 -2010 worldwide has been imported wood

and articles of wood to the amount of approximately 820 billion EUR. The Bulgarian export is

over 1, 498 billion EUR and constitutes around 0,18%.

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Table 7 Structure of the export of wood and articles of wood; wood charcoal – Chapter 44

under CN 2010 for the period 2001 - 2010, Main commodity groups with relative share of

over 1% (in thousands EURO)

Code Commodity group Thousand

EUR

Share in the

group %

'4410 Particle board and similar board (for example,

oriented strand board (OSB) and waferboard) of

wood or other ligneous materials, whether or not

agglomerated with resins or other organic binding

substances

459 116 31

'4407 Wood sawn or chipped lengthwise, sliced or

peeled, whether or not planed, sanded or end-

jointed, of a thickness exceeding 6 mm

280 528 19

'4411 Fibreboard of wood or other ligneous materials,

whether or not bonded with resins or other organic

substances

153 508 10

'4403 Wood in the rough, whether or not stripped of

bark or sapwood, or roughly squared

137 691 9

'4412 Plywood, veneered panels and similar laminated

wood

93 265 6

'4415 Packing cases, boxes, crates, drums and similar

packings, of wood; cable-drums of wood; pallets,

box pallets and other load boards, of wood; pallet

collars of wood

59 494 4

'4401 Fuel wood, in logs, in billets, in twigs, in faggots

or in similar forms; wood in chips or particles;

sawdust and wood waste and scrap, whether or not

agglomerated in logs, briquettes, pellets or similar

forms

57 361 4

'4409 Wood (including strips and friezes for parquet

flooring, not assembled) continuously shaped

(tongued, grooved, rebated, chamfered, V-jointed,

beaded, moulded, rounded or the like) along any

of its edges, ends or faces, whether or not planed,

sanded or end-jointed

55 968 4

'4402 Wood charcoal (including shell or nut charcoal),

whether or not agglomerated

52 976 4

'4408 Sheets for veneering (including those obtained by

slicing laminated wood), for plywood or for other

similar laminated wood and other wood, sawn

lengthwise, sliced or peeled, whether or not

planed, sanded, spliced or end-jointed, of a

thickness not exceeding 6 mm

35 617 2

'4418 Builders' joinery and carpentry of wood, including

cellular wood panels, assembled parquet panels,

25 508 2

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shingles and shakes

'4421 Other articles of wood 25 452 2

'4404 Hoopwood; split poles; piles, pickets and stakes of

wood, pointed but not sawn lengthwise; wooden

sticks, roughly trimmed but not turned, bent or

otherwise worked, suitable for the manufacture of

walking-sticks, umbrellas, tool handles or the like;

chipwood and the like

17 383 1

'4419 Tableware and kitchenware, of wood 13 300 1

(source: ITC, own calculations)

In the structure of the Bulgarian export for 2010 the biggest share – 31% have the

products under group 4410 “Particle board and similar board (for example, oriented strand

board and waferboard) of wood or other ligneous materials, whether or not agglomerated with

resins or other organic binding substances”, for which is characteristic that are manufactured in

the big companies of the branch. At second place with 19% follows group 4407 “Wood sawn

or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end-jointed, of a

thickness exceeding 6 mm” and group 4411 “Fibreboard of wood or other ligneous materials,

whether or not bonded with resins or other organic substances” with 10%. The three groups

together comprise 60% of the Bulgarian export of wood and articles of wood for the period

2001-2010.

In order to receive more clear vision of the export development of the sector SMEs and as

recommended by the experts, in our further analysis other three commodity groups, the SMEs

manufacture and export, will be observed. These are the following:

4403 Wood in the rough, whether or not stripped of bark or sapwood, or roughly

squared – 9% share of the total export in the sector for the studied period

4407 Wood sawn or chipped lengthwise, sliced or peeled, whether or not planed,

sanded or end-jointed, of a thickness exceeding 6 mm – 19 %.

4415 Packing cases, boxes, crates, drums and similar packing, of wood; cable-

drums of wood; pallets, box pallets and other load boards, of wood; pallet collars

of wood – 4%.

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Figure 10 Development of the export of wood and articles of wood from Bulgaria in total

under chapter 44 and by CN commodity groups: 4403, 4407, 4415 for the period 2001 -

2010 (in thousand EUR)

(Source: ITC, own calculations)

*Chapter 44 by CN “Wood and articles of wood; wood charcoal”/4403 Wood in the rough, whether or

not stripped of bark or sapwood, or roughly squared/ 4407 Wood sawn or chipped lengthwise, sliced or

peeled, whether or not planed, sanded or end-jointed, of a thickness exceeding 6 mm/ 4415 Packing

cases, boxes, crates, drums and similar packings, of wood; cable-drums of wood; pallets, box pallets

and other load boards, of wood; pallet collars of wood

For the period 2001 until 2010 as a whole the Bulgarian export of wood and articles of

wood follows ascending development, due to the export of wood particle boards, manufactured

and exported mainly by the big companies. The three commodity groups of the above graphics,

representing the main export products of the SMEs show uniform and almost parallel

development of the export with low rates and slightly ascending trend in the last year of the

period.

Table 8 Dynamics of the export of wood and articles of wood from Bulgaria in total under

chapter 44 and by CN commodity groups: 4403, 4407, 4415 for the period 2001 -2010

(2001 =100)

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Wood and articles

of wood; wood

charcoal –

Chapter 44

WORLD

100 100 94 105 111 118 122 108 87 108

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Wood and articles

of wood; wood

charcoal –

Chapter 44

Bulgaria

100 115 113 155 155 171 210 156 148 213

4403 Wood in the

rough, whether or

not stripped of

bark or sapwood,

or roughly

squared

100 65 110 157 178 247 279 170 121 264

4407 Wood sawn

or chipped

lengthwise, sliced

or peeled

100 105 97 98 87 89 77 57 54 83

4415 Packing

cases, boxes,

crates, drums and

similar packing, of

wood;

100 122 118 167 160 172 264 314 293 416

(Source: ITC, own calculations)

The development rates of the Bulgarian export of wood and articles of wood for the

period 2001 -2010 as a whole are outrunning the rates of development of world import. Same is

valid for the rest of the commodity groups with one exception – commodity group 4407 “Wood

sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end-jointed, of a

thickness exceeding 6 mm”, that is lagging behind the development rates of the world import,

as well as of the development of the export of the Bulgarian small and medium-sized

enterprises. Attracts the attention the fast development rate of commodity group 4415 “Packing

cases, boxes, crates, drums and similar packing, of wood; cable-drums of wood; pallets, box

pallets and other load boards, of wood; pallet collars of wood” – 4-fold increase of the export

turnover in 2010 in relation to 2001.

The total export volume for the period 2001 – 2010 of commodity group 4403 is

exceeding 77 billion EUR. The top five countries – exporters are forming in total 52% of the

world export in this group, with relative shares of the world export, as follows: Russia - 24%,

USA - 14%, Malaysia -5%, Myanmar - 5%, New Zealand - 4%. Bulgaria is ranked 50th

place

with a relative share of 0,17%.

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2010 (%, 2002=100), Source: ITC, own calculations

Year 2002 2003 2004 2005 2006 2007 2008 2009 2010

TOTAL

WORLD

100 87 95 110 116 133 118 88 120

Russia 100 91 108 132 149 173 136 75 80

USA 100 85 91 92 91 97 90 75 107

Malaysia 100 92 89 103 96 89 83 81 98

Myanmar 100 110 128 163 155 174 177 133 136

New

Zealand

100 83 66 66 76 86 91 113 191

Bulgaria 100 110 243 276 382 431 263 188 408

Position of Bulgaria in the world export

56 55 54 47 47 43 46 49 53

% of the export of Bulgaria relative to the export of the leading world exporter

- 0.31% 0.37% 0.70% 0.65% 0.79% 0.77% 0.60% 0.77% Source: ITC

The above table is representing data, showing the threefold higher growth of the

Bulgarian export of rough wood of commodity group 4403 relative the global export growth for

the period 2002 – 2010. None of the leading five countries exporters are even close to half of

the value of the index of the Bulgarian export for the last year of the period.

The total volume of the export of sawn wood material of commodity group 4008 for the

period 2001 – 2010 is exceeding 229 billion EUR. The top five countries – exporters are

forming in total 55% of the world export in this group, with relative shares of the world export,

as follows: Canada - 25%, Sweden - 10%, USA -7%, Russia - 7%, Finland - 6% Bulgaria is

ranked 54th

place with a relative share of 0,12%.


2010 (%, 2001 = 100)

Year 2002 2003 2004 2005 2006 2007 2008 2009 2010

TOTAL

WORLD

98 88 98 101 108 108 86 70 90

Canada 88 68 86 83 78 60 41 29 44

Sweden 108 107 106 110 129 137 113 104 121

USA 91 77 78 81 90 77 62 55 84

Russia 119 135 158 198 239 307 249 243 296

Finland 103 103 100 92 103 116 82 63 83

Bulgaria 105 102 98 87 89 77 57 54 83

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Year 2002 2003 2004 2005 2006 2007 2008 2009 2010


47 50 52 55 59 59 62 63 61


0.47 0.59 0.45 0.41 0.45 0.50 0.54 0.72 0.74

Source: ITC, own calculations

The data of table 10 are showing similar development rate of the Bulgarian export of

sawn wood material of commodity group 4407 with that of the world export for the period

2002 – 2010, demonstrating a slow down and decrease in the index values in the last years with

certain increase in 2010.

The total volume of the export of wood material of commodity group 4415 “Packing

cases, boxes, crates, drums and similar …” for the period 2001 – 2010 is approximately 18

billion EUR. The top five countries – exporters are forming in total 40 % of the world export in

this group, with relative shares of the world export, as follows: Poland - 12%, Germany - 9%,

Belgium - 7%, Canada - 6%, The Czech Republic - 6%. Bulgaria is ranked 54th

place with a

relative share of 0,12%.


2010 (%, 2001 = 100)

Year 2002 2003 2004 2005 2006 2007 2008 2009 2010

TOTAL

WORLD

100 96 100 101 110 126 127 96 117

Poland 103 129 156 147 167 212 201 143 192

Germany 100 93 98 116 131 144 152 121 144

Belgium 107 93 95 98 103 126 134 105 124

Canada 107 88 92 97 85 73 62 47 56

The Czech

Republic

96 98 128 113 136 176 182 134 155

Bulgaria 122 143 167 160 172 264 314 293 416


46 44 39 46 47 36 34 35 31


2.35 2.19 2.12 2.14 2.04 2.47 3.10 4.07 4.28


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The above table is representing data, showing the nearly four-fold higher growth of the

Bulgarian export of products of commodity group 4415, relative the global export growth for

the period 2001 – 2010.

The data for the percentage ration of the export of Bulgaria relative to the export of the

leading world export of export groups under CN 4403 “Rough wood material” and 4415

“Packing cases, boxes, crates, drums and similar packing” for the period 2001 – 2010, are

showing stable trend of stabilizing the reached positions and are demonstrating export

potential.

The sector is disposing of quality and recognized products, especially those of group 4415

“Packing cases, boxes, crates, drums and similar packing”, exporting to traditional markets,

mainly in Balkan countries, non-Balkan EU countries and to the Middle East.

Table 12 presents the leading trade partners in the export of Bulgaria under for the

commodity groups in sector “Manufacture of wood and of products of wood, except furniture”,

according to data of the ITC for a 10-year period.

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Bulgarian Enterprises” Table 12 Leading export partners for the commodity groups in sector “Manufacture of wood and of products of wood, except

furniture” for the period 2000 - 2010

2000 EUR'

mln

2001 EUR'

mln

2002 EUR'

mln

2003 EUR'

mln

2004 EUR'

mln

2005 EUR'

mln

Other products of wood,

cork, straw and plaiting

materials

143,6 193,6 188,0 211,5 203,3 216,6

1 Italy 109,1 Italy 149,9 Italy 142,8 Italy 152,9 Italy 137,1 Italy 147,5

2 Germany 6,5 Germany 8,6 France 13,6 France 15,2 Austria 14,1 Austria 17,5

3 France 3,8 France 8,0 Germany 6,7 Austria 10,5 France 10,5 Germany 11,7

4 UK 2,9 UK 4,0 Greece 3,3 Germany 5,5 Germany 7,6 France 10,6

5 The Netherlands 2,6 The

Netherlands

3,9 UK 3,2 UK 4,4 UK 7,5 UK 6,1

Sawmilling and planing

of wood; impregnation

of wood

52,2 47,8 47,2 48,8 56,1 57,4

1 Greece 17,2 Greece 22,7 Greece 19,3 Greece 21,8 Greece 29,0 Greece 25,3

2 Turkey 9,9 Italy 8,1 Italy 8,0 Macedonia 6,9 Italy 6,2 Turkey 10,0

3 Macedonia 6,7 Macedonia 5,2 Macedonia 7,6 Italy 6,7 Turkey 5,9 Italy 8,8

4 Italy 6,3 Turkey 3,4 Turkey 3,8 Turkey 3,9 Macedonia 5,5 Macedonia 4,3

5 F. Yugoslavia 4,7 F. Yugoslavia 1,1 France 1,6 France 1,7 France 2,0 France 2,2

Wood packing 3,0 3,1 3,9 4,3 5,0 4,9

1 Greece 2,1 Greece 2,1 Greece 2,2 Greece 2,5 Greece 3,2 Greece 3,0

2 Germany 0,2 Italy 0,2 Italy 0,5 Italy 0,5 Italy 0,6 Italy 0,6

3 Italy 0,2 France 0,1 France 0,2 Austria 0,2 Austria 0,2 Austria 0,3

4 France 0,1 Germany 0,1 Austria 0,2 France 0,2 Turkey 0,2 Turkey 0,2

5 Israel 0,1 Israel 0,1 Germany 0,2 Germany 0,2 France 0,2 France 0,2

Assembled parquet

floors

6,9 8,1 6,9 9,5 9,3 10,6

1 F. Yugoslavia 1,3 Russian

Federation

2,1 Italy 1,2 Greece 1,2 Greece 1,4 Italy 2,4

2 Greece 1,1 Italy 1,2 F. Yugoslavia 1,1 F. Yugoslavia 1,2 Italy 1,2 Greece 1,1

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Bulgarian Enterprises” 3 Bosnia and

Herzegovina

0,9 F. Yugoslavia 1,0 Germany 0,9 Italy 1,2 F. Yugoslavia 1,1 F. Yugoslavia 0,9

4 Russian

Federation

0,8 Germany 0,6 Greece 0,9 Albania 0,7 USA 0,7 USA 0,7

5 Macedonia 0,7 Greece 0,6 Macedonia 0,6 Croatia 0,5 Spain 0,6 Germany 0,6

Veneer sheets and wood-

based panels

27,7 25,5 48,9 60,3 72,7 75,1

1 Italy 7,8 Italy 9,4 Italy 10,1 Italy 12,4 Turkey 16,9 Turkey 18,7

2 Greece 5,5 Greece 5,1 Greece 6,6 Turkey 10,2 Italy 11,8 Italy 10,1

3 Germany 4,8 Germany 4,2 Turkey 5,8 Greece 6,1 Greece 7,3 Greece 8,1

4 Sudan 2,8 Sudan 2,1 Germany 3,7 Sudan 3,1 Macedonia 3,1 Azerbaidjan 4,4

5 Turkey 1,5 The Czech

Republic

0,8 UK 2,5 Germany 2,5 Azerbaidjan 3,0 Rumania 3,6

2006 EUR'

mln

2007 EUR'

mln

2008 EUR'

mln

2009 EUR'

mln

2010 EUR'

mln

Other products of wood,

cork, straw and plaiting

materials

226,5 197,1 183,4 59,7 211,5

1 Italy 151,6 Italy 140,0 Italy 124,4 Italy 39,4 Italy 137,3

2 Austria 20,4 France 12,1 France 10,8 Hungary 5,7 Hungary 24,6

3 UK 10,9 Hungary 10,3 The Czech

Republic

10,0 France 3,2 Rumania 9,7

4 France 10,8 Greece 5,9 Germany 6,6 Rumania 2,6 Germany 7,6

5 Hungary 8,6 Germany 5,8 Hungary 6,0 Germany 2,3 France 7,3

Sawmilling and planing

of wood; impregnation

of wood

65,5 58,0 42,4 30,9 69,5

1 Greece 28,2 Greece 29,2 Greece 26,8 Greece 24,4 Greece 24,4

2 Turkey 13,2 Turkey 12,0 Italy 4,9 Turkey 13,4 Turkey 20,1

3 Italy 10,2 Italy 8,1 Turkey 3,3 Macedonia 8,3 Italy 7,6

4 Macedonia 4,2 Macedonia 2,3 France 2,1 France 1,3 Macedonia 6,9

5 France 2,0 France 1,8 Macedonia 1,7 Italy 0,8 France 3,3

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Bulgarian Enterprises” Wood packing 5,3 7,4 8,7 0,6 11,8

1 Greece 3,0 Greece 4,2 Greece 5,0 Greece 1,8 Greece 4,6

2 Italy 0,7 Italy 1,0 Italy 1,0 Rumania 0,3 Italy 2,9

3 Turkey 0,3 Rumania 0,4 Rumania 0,7 Italy 0,3 Rumania 2,5

4 Austria 0,2 Hungary 0,3 Germany 0,4 Germany 0,1 Germany 0,4

5 Rumania 0,2 Turkey 0,3 Austria 0,2 Serbia 0,1 Austria 0,3

Assembled parquet

floors

12,0 14,4 9,5 2,9 9,9

1 Italy 1,9 Italy 3,7 Italy 1,3 Greece 0,4 Italy 1,4

2 Greece 1,8 France 1,7 France 1,3 Italy 0,3 UK 1,2

3 France 1,2 Greece 1,5 Greece 1,2 France 0,2 Greece 1,1

4 USA 0,8 Serbia 1,4 Germany 0,9 Germany 0,2 France 1,0

5 UK 0,7 Germany 1,1 Serbia 0,7 Switzerland 0,2 Germany 0,9

Veneer sheets and wood-

based panels

78,7 16,8 13,3 3,3 5,6

1 Turkey 18,2 Turkey 3,2 Greece 2,9 Greece 1,7 Greece 2,6

2 Greece 11,4 Greece 2,4 Rumania 2,3 Turkey 0,6 Serbia 0,9

3 Italy 11,3 Rumania 2,1 Turkey 1,3 Rumania 0,4 Turkey 0,7

4 Rumania 7,0 Italy 1,7 Germany 1,2 Germany 0,2 Italy 0,5

5 Macedonia 4,3 Poland 1,2 The Czech

Republic

1,1 Poland 0,1 Austria 0,2

Source: ITC

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Based on the data of table 12, the traditional markets for export of sector “Manufacture

of wood and of wood products, except furniture” are those of our neighbour countries Greece,

Turkey, Macedonia, Serbia, Rumania, and for the products of higher processing level these are

the markets of Italy, France, Austria.

Potential markets for the SME of the sector are those of Germany, The Czech Republic,

Hungary, Russian Federation, Israel, Azerbaijan, Sudan, Poland, UK, where in the last years

the registered export of Bulgarian products is with higher level of processing as wood packing,

veneer sheets, wood-based panels. The manufacture and export of these products is

concentrated mainly in large companies and requires the SMEs to make the necessary

investment for modernization of their production capacity and diversification of their

production in order to successfully enter into these market niches.

Analysis of the priority markets by the various commodity groups of the sector:

Table 13 Leading countries importers of the Bulgarian products of group 4403 “Rough

wood materials” in total for the period 2001 -2010 (in % of the total export of Bulgaria of

the products of group 4403)

Position Country partners %

TOTAL WORLD 100%

1 Greece 61%

2 Turkey 33%

3 Macedonia 3%

4 Italy 2%

5 USA 0.43% (source: ITC, own calculations)

Table 14 Leading countries importers of the Bulgarian products of group 4403 “Rough

wood materials” in total for 2010 (in % of the total export of Bulgaria of the products of

group 4403)

Position Country partners %

TOTAL WORLD 100%

1 Turkey 54%

2 Greece 34%

3 Macedonia 9%

4 Austria 2%

5 Italy 1% (source: ITC, own calculations)

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The given in the above tables data (table 13 and 14) are showing that in commodity group

4403 “Rough wood material” the factor, determining the success of the export activity is the

geographical proximity. The relatively low prices of the product relative to the price of the

transport service for the delivery, is transforming the distance in main factor for the more

successful realization into domestic markets.

Out of the top leading markets - Turkey, Greece, Macedonia, Austria, Italy, for the

products of commodity group 4403 “Rough wood material”, in 2010 the Bulgarian SMEs of

the sector have gained best positions in Greece, where Bulgaria is leading importer with almost

one third of the total import of this commodity group, market share and incomes of over 7.5

million EUR for 2010. Into the Macedonian market Bulgaria is also holding leading position

with 73% of the local market. Although in 9th

position, the export of products of group 4403 in

Turkey are ensuring incomes of nearly 12 million EUR in 2010. Main competitors to the sector

on the leading markets in this group are the CIS countries, the Balkan and African countries

and some of the EU countries.

Table 15 Leading countries importers of the Bulgarian products of group 4407 “Wood,

sawned…” in total for the period 2001 -2010 (in % of the total export of Bulgaria of the

products of group 4407)

Position Partner country %

TOTAL WORLD 100%

1 Greece 44%

2 Turkey 20%

3 Macedonia 16%

4 Italy 5%

5 Jordan 3%



2010 (in % of the total export of Bulgaria of the products of group 4407)


TOTAL WORLD 100%

1 Greece 42%

2 Turkey 18%

3 Macedonia 16%

4 Italy 11%

5 Jordan 2%


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The main market, where the products of the sector of group 4407 “Wood sawn or chipped

lengthwise, sliced or peeled” are realized are the neighbour to Bulgaria countries, namely

Greece, Turkey and Macedonia.

In this commodity group, as in the sector as a whole, is witnessed the strong dependence

on a small number of markets with similar characteristics, making the sector extremely

vulnerable from the unfavourable development of the economy conjuncture in this region.

Out of the five leading markets - Greece, Turkey, Macedonia, Italy, Jordan, for the

products of commodity group 4407 “Wood sawn or chipped lengthwise, sliced or peeled”, in

2010 the Bulgarian SMEs of the sector have gained best positions one more time in Greece,

Turkey and Macedonia. Main competitors in the sector of the leading markets in this group

are some of the Scandinavian countries, the CIS countries, USA and some EU countries.

Table 17 Leading countries importers of the Bulgarian products of group 4415 “Packing

cases, boxes, crates, drums and similar packing of wood” in total for the period 2001 -



TOTAL WORLD 100%

1 Greece 58%

2 Italy 14%

3 Rumania 8%

4 Germany 3%

5 Austria 3%




Място Страна партньор %

TOTAL WORLD 100%

1 Greece 39%

2 Italy 25%

3 Rumania 21%

4 Germany 3%

5 Austria 2%


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The main market, where the products of the sector of group 4415 “Packing cases, boxes,

crates, drums and similar packing, of wood” are exported, are: Greece, Italy, Rumania, with

main weight of the Greek market. This is putting the sector on test considering the

unfavourable economic process within three of the above indicated countries. Due to the high

level of processing, the products of this group have an advantage before the other two groups in

relation to the realization opportunities and the more distant markets in Europe and abroad.

Out of the five leading markets - Greece, Italy, Rumania, Germany and Austria, for the

products of commodity group 4415 “Packing cases, boxes, crates, drums and similar packing,

of wood”, in 2010 the Bulgarian SMEs of the sector have gained best positions again in Greece

– 1st 38.6% market share, Italy and Rumania. Main competitors in the sector of the leading

markets in this group are the Western European countries as Germany, Italy and Poland,

speaking of quality and competitiveness of the exported by the SMEs products of group 4415

“Packing cases, boxes, crates, drums and similar packing, of wood”.

The information of the carried out survey in sector “Manufacture of wood and of products

of wood, except furniture” gives the possibility to follow the main export destinations of the

companies and the approximate export share of their products and services..

Figure 11 Export markets of the studied companies (in %)

Source: Sociological survey

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*Africa and Middle East, 1.82

Asian countries, 3.64

Other European countries, 5.45

Other, 7.27

Balkan countries out of the EU, 27.27

EU countries, 54.54

On Figure 11 are shown the export markets of the studied companies. The main

destination is the EU – more than the half of the export. At the front positions as destinations

are Germany and Greece (most companies have indicated namely these two countries).

Second are ranked the Balkan countries, non-EU members – mainly Turkey, but also Serbia,

Macedonia, Kosovo. Almost 40% of the export destinations of the companies are the Balkan

countries (in and out of the EU). This represents a serious challenge for the sector companies,

as one of their main competitors on the international markets are namely the countries from our

regions. Among the European countries out of the EU most commonly is indicated Russia. The

rest of the export destinations have shares under 10%.

On Figure 12 are given the export shares of the studied companies of sector “Manufacture

of wood and of wood products, except furniture”.

Figure 12 Percent ratio of the export by number of export markets

Sociological survey

*number of markets /export percentage – up to 30%; 31-60%; 61-99%;100%

Observation: Four companies of the sector haven’t indicated their export shares

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The most are the markets where the export is up to 30%. Follow those, with export

shares between 31 and 60%. To seven export destination is exported by 100% of the companies

production. It may be also indicated that the number of markets with export share up to 30% is

almost equal to the number of market share of over 30%.

The main competitors on the world markets for the studied companies are the EU

countries. The competition is quite strong – at first place, with almost 30% of the opinions

come Germany and Rumania. Follow Italy, Greece and the Czech Republic. The other

competitors (Spain, Portugal, Austria, Slovenia, etc) are in the rear positions in the ranking.

Among the countries out of the EU main competitor to the Bulgarian companies is

Turkey. Follow China, Russia and Ukraine. It is noteworthy that the companies from the

branch are also competing with the USA, Canada and India, but these countries are given by

smaller number of respondents. If talking about the regional aspect and to Turkey we add also

Rumania and Greece, we may say that the companies from the branch have serious competition

in the frame of the Balkan peninsular. However (as said above) these are also one of the most

serious export destinations of the Bulgarian companies.

The export production of the SMEs of sector “Manufacture of wood and of products of

wood, except furniture” still has low level of processing and is impossible to ensure an added

value in the export incomes that is big enough, as the major part of the export production

represent raw material for further manufacture abroad.

Due to the low level of processing and respectively the low price of the production of the

sector, the transport expenses are resulting to be of great importance in order to determine the

export destination of the Bulgarian manufacture, that are mainly our neighbour countries -

Greece, Turkey, Macedonia, Serbia, Kosovo, Rumania, and for the products of group 4415 are

Italy and Germany.

The SMEs of the sector should streamline their efforts on the one hand towards keeping

the gained market positions on the traditional markets of the region and on the other to

diversify their production with products of higher processing level, in order to be able to count

on realization into foreign markets outside the region.

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COMPETITIVENESS OF THE EXPORT OF GOODS ON INTERNATIONAL

MARKETS

The low level of manufacturing of the exported products makes the export of the SME of

the sector dependant on the geographic proximity of the markets.

In all three commodity groups (4403, 3307 and 4415) the top five countries-importers of

Bulgarian wood products and materials are ensuring more than 50% of the export incomes.

This is a sign of strong dependence on small number of markets and clients.

The sector SMEs are leading importers on the markets of the neighbor Balkan countries.

Although with leading market positions in the surrounding countries, the low level of

manufacturing and the small volume of added value in the sector products cannot contribute

to significant incomes of the realized export.

In almost all commodity groups the main competitors are the CIS countries, the Balkan

countries, some African, Scandinavian and other European countries.

Main advantages of the EU competitors, indicated by the respondents, are related to:

favourable custom regulation; geographical situation (lower transport costs); imposed brand

of certain products on the markets; the financial resources these are disposing of, and least

but no last – the State support and the good business climate therein.

Unfavourable trend, leading to lower competitiveness is the low-developed research

activity.

The made findings and conclusions give ground to expect that within the next five years the

export of Bulgarian wood and of products of wood, will grow, although slowly.

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BARRIERS TO THE INTERNATIONALIZATION OF SMALL AND MEDIUM

ENTERPRISES AS WELL AS MEASURES AND PERSPECTIVES FOR

STIMULATION AND DEVELOPMENT OF EXPORT

Internalization is one of the ten main principles of Small Business Act (SBA) – the

main document of the European Committee regarding the policy to SMEs in EU developed in

2008 – and it includes all different groups of activities related to connections with foreign

markets that one company starts at accomplishing its economic activity. The global dynamics

regarding the political and macro-economic circumstances results in internalization and in our

days it includes not only goods and services for foreign countries but also a great number of

other activities – like investing in foreign country (direct foreign investments), formation of

partnerships with foreign companies, recruiting foreign experts as sub-contractors, participation

in international networks and others. There is tendency to continuous increase in the number of

SMEs operating on the international markets. This results in increase of their contribution to

the world economy and respectively – changes their significance as business partner. This

strategy is focused on improving the process of exportation of SMEs of the sector, so

internalization is considered as narrower term, including only export of goods.

The barriers to entering the market are factors, that make difficult or prevent the

entering of new companies into given industrial sector. The existence of barriers to the entering

into the market is always a factor, limiting the development of a competitive market.

The term “obstacle to trade” or “barrier” refers to “any trade practice, adopted or

supported by third country, in relation to which the international trade rules foresee a right to

undertake actions”.

Usual obstacles to trade may be:

Import-related national provisions (import licenses, inspections and examinations);

Obligations to assign a representative or to ensure warehouse premises in the State

of export;

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National control on prices and reimbursement of expenses.

The most serious barriers to the Bulgarian export of the small and medium size

enterprises in sector “Manufacture of wood and of products of wood, except

furniture”, based on the carried out sociological survey and discussion of the present

strategy in the focus groups, are related mainly with external factors:

barriers for entering into foreign markets;

need of upgrading the economic and administrative support of the State to

support the sector in formulating the tasks for the new programme period of

European funding;

high risk of the various foreign markets;

unfavourable business environment in Bulgaria;

technical and technological indicators – insufficiently high level of goods and

services;

the human factor – relatively less risky for the export.

The analysis of the effectiveness of the measures for promoting the export of the small

and medium-size enterprises and development perspectives is organized in a way to give

answer to the following questions:

1. What are the priority measures for supporting the production process of the small and

medium-size enterprises and of the export, in particular

2. Which are the measures, influencing the most the SMEs export

3. What is the efficiency of the services, provided by BSMEPA, on the export activity of

the SMEs

4. Which are the main sources of information for the export possibilities of the SMEs

In relation to the above indicated serious barriers are also the suggested as priority

measures for overcoming the obstacles to the export of the companies and the sector as a

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whole. Analogically, these are related mainly to the State support for the export of the

companies and of the sector 1) reducing the bureaucracy and 2) releasing the companies’

capital, so that these could invest in the production upgrade. Such measures are:

In this sense the respondents have indicated that ”the procedures for export should be

relived and the bureaucracy should be reduced”, “the State should allocate funds for supporting

the expenses needed for European and other international exhibitions”, “to be ensured relieved

funding for export”. As higher proprietary are offered also measure for improving the business

climate. It seems important the measure, proposed by one of the respondents: ”there are too

much procedures for VAT reimbursement – in this way the State keeps the free capital of the

companies and prevent investments”. This proposal concerns: 1) reducing the bureaucracy and

2) releasing the companies’ capital, these could invest in the production upgrade

More than 96% of the interviewed small and medium-size enterprises indicated that they

are producing finished product, designated to be exported, where in 64% of the cases the level

of manufacturing is high and in the rest of the cases it’s average or low. Approximately 35% of

the SMEs are exporting raw materials and 43% - semi-manufactured article, mainly with high

level of manufacture (The sum of the percents is over 100, as the respondents have indicated

more than one answer).

– support for the technological modernization of the production

– Encouraging the export of the companies;

– Improvement of the access to funding;

– Funding of innovation projects for the development of new products, technologies

and services.

– Training and improvement of the qualification of the employed in SMEs;

– Support for technological innovations.

Among the factors having positive impact on the export activity of the companies of

the sector, is the support for the participation in international fairs, exhibitions and business

forums. At second place are the factors “establishment of contacts with foreign institutions”;

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BG161РО003 – 4.2.01-0001 “Promotion



“funding of programmes for the development of innovation activities” and “communication

with trade representatives”.

Regarding the BSMEPA activity, positively are evaluated: 1) “organization of

information campaigns”; 2) “information for offers and inquiries by foreign companies”; 3)

“Information about international and regional markets”, “organization of participation in

international exhibitions and fairs”, “information about international tenders”.

Additional information the survey companies mainly need is logistics, mechanisms of

international trade payments, information about the markets in Asia (Jordan, Iran, Iraq); clearer

information for law procedures, information about contractors, etc.

Most of the priority measures for overcoming the barriers to the export are expected to be

undertaken by the State. At the same time the companies clearly understand the need of

technological upgrade of the production and the lack of own resources, indicating mainly the

support for the technological modernization as measure with highest priority, as well as

measures, related to ensuring financial support by the State under different forms.

The companies are usually gathering the necessary information about the export

individually – through own surveys and through the internet. It is interesting that they don’t

count much neither on the branch organizations, nor on their colleagues in the country. In third

place (after own survey and internet) they indicated colleagues from abroad. Probably, it is

related with the competition among the companies in the branch.

The corruption risk profile in this sector is determined by the nature of the markets for

which such production is exported, the existing export situation as well as the sustainability and

economic results of the enterprises which invest its end production in such products.

The expert evaluations trace the following profile of potential corruption risk:

The relatively conservative nature of this market does not presuppose the putting of

systematic effort in innovation development

Pressure by the administrative structures and the existing influence networks, also

within the relationships between the companies themselves.

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Relative limitation of the number of potential participants as a result of the economic

crisis. The build through the years stable partnerships are determining the common

market chances of the new and less potential exporters.

Lack of competent personnel for performing the activity.

Lack of internal rules and procedures for guaranteeing the interests of the

exporters/foreign importers.

Lack of regulatory mechanisms and institutions, fixed as competences and

responsibilities in the field of the regulatory environment

Dynamic change of the requirements of the foreign users.

Unstable and/or extremely sensible to the market oscillations regulatory environment,

as well as lack of comparability between the external and internal production quality

standards.

Limitation of the profit and increase of the sense of instability in time of crisis.

As tools for assessment of the corruption risk and for planning export strategies could be

used three already recognised international surveys of the international anti-corruption

organisation Transparency International: Corruption perceptions index (CPI), Global corruption

barometer (GCB), Bribe payers index (BPI). These give relative information regarding the level

of expansion of the corruption worldwide and the extent to which the national institutions and

sectors are affected.

A) Markets in European Union Member States: Greece, Italy, Rumania, Germany,

UK, France

According to the CPI, the index value for the countries is: UK – 8,2 points, Germany – 8,

France – 7, Italy – 3,9, Rumania – 3,6, Greece – 3,4.

According to GCB the most seriously affected institutions and sectors of corruption are:

Greece – political parties and media; Rumania – political parties and parliament; Italy – judicial

system, customs, agricultural services and medical services.

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BG161РО003 – 4.2.01-0001 “Promotion



Less affected instutions and sector of corruption are: Greece – fiscal services, media and

judicial systems; Rumania – fiscal services. The highest level of integrity of the work of the

institutions and business could be expected in the UK, Germany and France. In Germany, in

fact, there is lack of corruption pressure on the business by Customs, fiscal services and

Judiciary; the highest percentage of bribe payment is at nationals and companies, having access

to registry services (1,9%).

Most significant pressure for bribe payment (expressed as percentage of nationals asked

to pay a bribe in the last year) exists in the following sectors: Rumania – police (16,2%),

judicial system (13,0%) and registry services (10,8%), agricultural services (6,4%), customs

(5,7%); Greece – customs (16,9%), agricultural services (4,9%) and registry offices (4,4%).;

Italy – judicial system (28,8%), customs (13,9%), agricultural services (12,9%) and medical

services (10%)l France – agricultural services (8,1%), customs (5,4%) and medical services

(5,1%).

B) Markets outside the European Union Member States: Turkey, Macedonia,

Serbia, Albania, Kosovo

According to CPI the above mentioned countries rank as follows: Turkey – 4,2, Kosovo

– 2,9, Albania – 3,1, Macedonia – 3,9, Serbia – 3,3.

According to GCB the most seriously affected institutions and sectors by the corruption

are: Macedonia – customs; Serbia – political parties, followed by public administration,

Judiciary.

Less affected institutions and sectors by the corruption are: Macedonia – fiscal services;

Serbia – registry services.

Most significant pressure for bribe payment (expressed as percentage of nationals asked

to pay a bribe in the last year) exists in the following sectors: Turkey – customs (32,4%),

agricultural services (32,2%), fiscal services (34,5%), registry services (31,2 %), police (28,9

%), Judiciary (26,2 %); USA – customs (18,3%), agricultural services (12,5%), %), registry

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BG161РО003 – 4.2.01-0001 “Promotion



services (9%), Judiciary (8,4%), fiscal services (5,6%), police (5,7%); Macedonia – customs

(25%); Judiciary (20,6%); Serbia – police (14,5%), Judiciary (13%) and customs (12,4%);

Kosovo – customs (11,2%), registry services (7,2%) and Judiciary (9,5%).

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Operational programme “Development of the competitiveness of

the Bulgarian economy” 2007-2013, Priority axis 4.2.

“Promoting the internationalisation of the Bulgarian enterprises”

Project № BG161РО003 – 4.2.01-0001 “Promotion Of the

Internationalization of the Bulgarian Enterprises”

SWOT ANALYSIS OF SECTOR “MANUFACTURE OF WOOD AND OF WOOD PRODUCTS,

EXCEPT FURNITURE”

Table 19 SWOT analysis

STRENGTHS OPPORTUNITIES

Traditions in furniture manufacturing and export

Qualified workforce

Sufficient quantities, relatively cheap local raw materials

and energy

Competitive labour cost

Low cost of end products

Good technology equipment in large part of the sector

enterprises

Export orientation of the sector

Strong professional organization

Contacts through the professional organization with

international professional associations (UEA/European

association of the furniture-manufacturers and national

associations)

The sector is defined as export-orientated by BSMEPA

Financial and expert support provided by BSMEPA

Project funding under structural funds

Public incentives for the formation of clusters, incl. export

clusters

Improvement of the country’s image

Increase in demand on target markets –Balkan region, EU,

Middle East

Withdrawal of Western investors from the Far East region

and increased interest in the Eastern Europe region

Increased interest on behalf of investors from the Far East to

the Eastern Europe region

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Flexibility – ability to produce small series, quick response

to market needs, prompt delivery

WEAKNESSES THREATS

Strong dependence on small number of clients (markets)

Production, often not compliant with the target markets

requirements regarding quality and design

Local raw materials often don’t meet the high requirements

of target markets

Few professionals with trade export experience

Insufficient information about foreign markets

Difficulty in providing working capital, debt

Small number of enterprises, certified according to

international standards

Low labour productivity

Limited experience in organizing and participation in

international exhibitions

Deepening of the global economic crisis and consumption

contraction

Decrease in investment activity in worldwide

Difficult crediting

Increased competitive pressure

Higher barriers to entry the target markets

Increased prices of raw materials and energy

Increased labour cost

Lack of reliable information for management decision

making

Decrease in the number of Bulgarian trade representations

abroad

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PESTEL ANALYSIS

The PESTEL analysis of factors and tendencies on macro level, having impact on Bulgarian

manufacturing industry development, SME and in particular of the sector of “Manufacture of wood

and of wood products, except furniture”.

The PESTEL analysis is abbreviation of the first letters of the English words and it includes

several groups of factors that are to be analyzed: political, economic, social, technological,

environmental factors, legal.

The Republic of Bulgaria as a member state of the European Union having full rights,

employ all instruments of political stability and namely democracy, implemented political

pluralism, implemented election system, working Bulgarian institutions harmonized with the

European legislation. In our country there is guaranteed political stability on national level which

is guarantee for realization of investments and development of projects, for financing and

organizing export activities. Bulgaria leads active international policy and thus helps the

development of the market positions for its export. This factor is of extreme significance for the

functioning and main precondition for export increase.

In relation to the economic indicators on macro-level, the country depends on the world and

European trends due to the openness of the economy and its engagement with the operating

markets, international exchanges, international credit evaluations and rating evaluations, etc. that is

why the economic processes in the country should be followed in the context of the economic and

financial processes within the European Union and the Eurozone. Most of all, however, it should

be unambiguously underlined that the current adopted policy of macroeconomic stability and fiscal

and financial discipline creates relatively predictable macroeconomic environment for the market

participants. The following table shows the PESTEL analysis.

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Table 20 PESTEL analysis

Political factors Economic factors

Bulgaria is a parliamentary republic and member

state of the EU enjoying full rights

Income policy is based on taxes, fees and others as

the main division is of state and municipal.

As a member state of the EU, Bulgaria is part of the

structure for international trade and operating agent on

the common European market

There are different operating laws and established

commissions for protection of the consumers

The political stability is main priority for the

governing majority

Safety and competitiveness stimulation are starting

points in promoting trade activity

Despite the world financial instability, Bulgaria

manages to maintain levels of stable development and

positive economic growth.

The interest percentage is determined by the central

bank (BNB) and has a tendency to reduction as of 01.11.2011,

it is 0.22%

The country promotes employment as through

attraction of foreign investments, it creates new employment

positions and re-qualification programs for unemployed

people.

Income taxing is done by ‘flat’ stake amounting to

10%.

The Bulgarian currency is in condition of currency

matching to euro at the rate of 1.95583 BGN per 1 euro.

The adopted by the government financial policy

manages to retain inflation within its normal values.

Consumers’ trust is put to serious test because the

system of regulation and management of quality needs higher

effectiveness.

Social factors Technological factors

The cultural-demographic detachment of Bulgaria

suggests a lot of everyday life and cultural differences

between the wide ranges of ethnic groups. However, the

integration of these ethnic groups is successful.

Relative ageing of the population and negative

population growth (-0.6% for 2010). Positive population

The research activity in Bulgaria has rich tradition and

experience

The industry functions and is organized by

technological operations which determine the necessity of

their knowing and research.

Bulgaria is among the world leaders in terms of its

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growth was registered during the period from 1960 to 1990

then it becomes negative and reaches its lowest levels in

1990 and 2001 almost reaching -2.0%.

Statistics like this clearly re-create the influence of the

political factors over the social and demographic structure

of community.

At national level it is observed an expressed labour

mobility and a certain part of the specialists find

professional realization abroad and in particular – within

the EU. This shows how the mechanisms of the community

work and how the labour market creates demand and

supply outside the borders of a country.

The living standard in Bulgaria is a social category

subject to a thorough examination and multi-factorial

analysis. The level of net income is relatively low, unlike

that of ownership of real estate.

Entrepreneurship in Bulgaria is the reason for the

implementation of many projects, including the absorption

of funds from European fund paths.

The issue of education in Bulgaria is a topic of utmost

priority. The state provides free elementary, primary and

secondary education; higher education also being

financially supported for the most part

research-workers who gave to the world numerous

discoveries, inventions and innovative technologies. Few of

them reach community due to the fact they do not find

investors in the country.

The exchange of technology with the rest of the world

has marked its beginning since the early years of the last

century. With the construction of the modern state, these

technologies play a significant role in the construction of each

unit.

The life cycle of the products, as well as their going

out of use, becomes shorter and shorter with the opening of

markets and the invasion of newer and more energy-efficient

products.

Both in political and in purely technical aspect, the

global energy saving policy is also applied in Bulgaria. It

includes the construction of alternative energy sources that

should reduce the levels of harmful emissions and generate

lower levels of cost for the end user

Regarding the information technologies and the

Internet, the country is among the European leaders in the

field of their introduction, use and development.

Environmental factors Legal environment factors

Bulgaria is among the countries with the most widely

developed and included eco-tourism in Europe.

It is being worked on strategies for wastewater

treatment and construction of incinerators for waste

incineration.

Planned urbanization and cultivation of gardens,

Bulgaria is a statutory Republic and the fundamental

law is the Constitution.

Bulgaria’s judicial system is a direct expression of the

judiciary branch and it is divided into different levels and

instances for the purpose of being more accessible to people.

Of all the rights, the one of private property is the

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parks and ponds.

starting point for most of the changes after the transition to a

market economy.

Bulgaria is a country with established legal system

that allows its citizens position and protection and that

guarantee them the full functioning of democracy.

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STRATEGIC OBJECTIVES FOR PROMOTING THE EXPORT BY SMALL

AND MEDIUM ENTERPRISES FROM SECTOR “MANUFACTURE OF

WOOD AND OF WOOD PRODUCT, EXCEPT FURNITURE”

The carried out studies and analysis of the current situation of sector “Manufacture of wood

and of products of wood, except furniture” show that the sector has the potential to maintain its

importance for the national economy and to improve its positions on the international market.

The vision for the future of the sector, this strategies aims at, is:

Increase of the production share of the Bulgarian sector “Manufacture of wood

and of wood products, except furniture” on the international market

The increase in export activity of the SMEs from the sector will play a stimulating role for

the overall development of this important for the Bulgarian economy industrial sector.

For the vision realization it is necessary the efforts to be orientated towards the following

strategic and specific objectives:

Strategic objective 1 – Increasing the export potential of the Bulgarian SMEs of sector

“Manufacture of wood and of wood products”

One of the most serious challenges, the manufacturers from sector “Manufacture of wood

and of products of wood” are facing at home is the considerable growth of international

competition as a result of the liberalization of the world trade in the last years. The situation

created by the new world economy order proves that to be competitive in the international market

is not depending only on the advantages coming from cheap workforce. The competitiveness

depends on vast circle of factors, leading to good quality production at reasonable prices and

companies having high level of flexibility. On the other side the international markets situation,

although dynamic, shows the return of many Western European assignors, working until recently

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in the Far East, towards the production on the Balkans and in particular towards our country.

Obviously this trend will be kept due to the necessity of prompt, precise and reliable supplies, as

well as of the small series production. The EU policy for keeping such production in Europe is also

favouring the sector development in Bulgaria, which promises good growth chances in the

following years. For the successful realization of Strategic objective 1, the implementation of two

specific objectives is established:

Specific objective 1 – Increasing the number of the SMEs of sector “Manufacture of

wood and of products of wood”, exporting goods to the world market

Specific objective 2 – Promoting the competitiveness of the SMEs of sector

“Manufacture of wood and of products of wood”, exporting goods to the world market

The implementation of Specific objective 1 and Specific objective 2 will lead to the

successful realization of Strategic objective 1.

Strategic objective 2 – Increasing the market share of the products of the Bulgarian

SMEs of sector “Manufacture of wood and of products of wood” on the world market

To expand the presence of Bulgarian enterprises of sector “Manufacture of wood and of

products of wood” on the world market there is need of tenacious and purposeful actions. The

approach to keeping existent markets and to entering into new ones is different. While sub-supplier

companies are traditionally working for leading companies mainly from the European Union,

attracting investments and to conquer new markets is related to a number of difficulties. To

overcome these difficulties there is need of State-supported joint actions of the Bulgarian

manufacturers.

This strategic objective will be realized by achieving the following specific objectives:

Specific objective 1 – Increasing the market share of the products of the Bulgarian

SMEs of sector “Manufacture of wood and of products of wood” on the existing markets

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Specific objective 2 – Entering of the Bulgarian SMEs of sector “Manufacture of wood

and of products of wood” into new markets

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STRATEGY FOR PROMOTING THE SECTOR SMEs EXPORT

In order to achieve the set objectives different alternatives for development are possible.

Here, two main scenarios were evaluated, in particular:

1. Keeping the present structure of the public institutions, supporting the business,

especially the existing relationship between them and the export orientated SMEs

from sector ¨Manufacture of wood and of products of wood, except furniture”.

2. Change in the structure and transfer of functions for supporting the SMEs towards

units and forms, related to funding projects with EU funds and the State budget

according to the model of the Operational programmes or the Programme for

development of the rural regions.

The criteria to evaluate these scenarios are:

1. Possibility for the selected scenario to be realized within the frame of a 5-year

period.

2. Possibility to solve the issues related the supporting export orientated SMEs in other

EU countries.

3. Evaluation of the efficiency of the activities, related to supporting the business,

implemented by created to this exact end structures or by existing programmes,

granting support under the project principle.

The carried out analysis shows that:

The transition from the now existing system to a new one, on a project principle, will

require a period larger than 5 years. At the same time, now existing rules for the period up

to 2013 it is practically impossible, as the priorities and the main activities in the

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operational programmes are clearly defined. For the next programme period 2014-2020

such an approach, if possible, is to be laid down in the negotiation process, but in fact

several years will be necessary its actual initiation, in the same way the OP in all EU

countries started for the period 2007-2013;

The selected in Bulgaria scheme through BSMEPA is preferred from the major part of EU

countries, where the success level is different in different countries, but there is no trend of

changes in the near future;

The reported difficulties in the business projects realization within operational programmes,

as for example “Competitiveness” show that the efficiency of promoting export orientated

SMEs, notwithstanding the critics at the moment due to lack of funds and good focusing, is

the relatively much better level than the results reached by the business through project

orientated measures.

Considering the above conclusions, the first alternative was chosen, namely – drafting of

Export strategy for the SMEs from sector “Manufacture of wood and of products of wood, except

furniture”.

In terms of the strategic perspective, the chosen alternative will require both general measures

for the whole system to support the SME, as for example increase of the institutions capacity,

introduction of clear and measurable indicators and criteria for evaluation of their work efficiency

and support to the business, etc. as well as specific changes, related in particular to the

“Manufacture of wood and of products of wood, except furniture”, as for example export

orientated work approach. As far as this was not an object of analysis and study of the present

strategy document, it would be probably a part of the elaboration of the institutional strategy of the

corresponding public administrations.

The present Export strategy for the SMEs from sector “Manufacture of wood and of products

of wood, except furniture” provides for the following principle steps, related to improving the

support of export orientated SME:

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Creation of the base for adequate and professional management of the processes of

supporting the export orientated SMEs through determining their possible scope – number

and characteristics of the export orientated SME, usage of the information from the drafted

profile, as well as of information from the business regarding the precise formulation of the

business needs of support, and of the created to this end institutions, as well as through

other forms, as for example the project principle, creation of a model for successful

communication with business to be supported.

Elaboration of the necessary programmes, policies and measure for support the SMEs to

export into foreign markets, through measures, designed to markets where to keep or

expand the existing positions, joint work with units, disposing of direct possibilities to

support export (for example foreign trade representatives and MEET), as well as measures,

having routine nature (for example), participation in fairs, missions, visits, etc.;

Measures, designed to certain deficits in export orientated SMEs, barriers for their

development in the field of export, as for example: support for the technology

modernisation of the SME in relation to improving their export positions, support for

creating export companies to help SMEs export; creation of State guarantees for export

insurance for SMEs, to complement and develop the now existing forms, advertising

campaigns for improving the image of the Bulgarian business, etc

Measures, designed to increasing the capacity of the SMEs, mainly through different

educational programmes.

Considering the deadlines of the Export strategy for the SMEs from sector “Manufacture of

wood and of products of wood, except furniture” the foreseen steps are realistic and would lead to

real results in supporting the export.

Important precondition for the realization of the set strategy is also the presence of political

will to ensure the necessary resources for its implementation.

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Due to the short-term 5-year horizon of the Strategy in the Action plan, the measures are

precisely formulated and divided into micro (enterprises), meso (branch organizations) and macro

(public institutions) level.

The foreseen funds are exemplary and tailored according to the actual possibility to

increase the BSMEPA budget. The prognosis for funds coming from Operational programmes

through the next programme period is too conditional, as there are no definitely adopted rules by

the EU. At the same time it is extremely important that BSMEPA and MEET to defend just

requirements for increasing the funds for development of the SMEs that are the backbone of each

economy.

Important precondition for the realization of the set strategy is also the presence of political

will to ensure the necessary resources for its implementation.

When drafting the present strategy the leading good European practices and the experience

of partners, organizations and institutions, having direct of indirect relations to the development of

the small and medium business, were observed.

Enclosed is a detail plan for the above described strategic development of the sector.

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SEGMENTATION AND SUCESSFUL POSITIONING OF THE IDENTIFIED

EXPORT MARKETS

In the frame of the present export strategy are presented detail analysis of the sector, of the

development of the export of the various product groups; the markets are identified – the export

destinations for the SMEs from the sector within and outside the EU; information is given about

the main competitors on these markets and about the products with export potential, as well as

other key for the export activity of the SMEs information. The complex of analysis is serving as

foundation, the basis on which at micro-level each sector SMEs should perform segmentation of

the corresponding market and to determine adequate specific measures for the positioning of its

productions.

It is of key importance for the process of entering into new markets and to the ends of

achieving sustainability of the conquered market positions the determination of specific set of

promotional measures for the successful positioning of the products of the SMEs on the already

identified marketя, on the basis of the carried out surveys, analysis and evaluations.

The potential markets, identified as targeted ones for the sector, should be segmented, i.e.

to be divided into separate, the most homogenous possible groups of consumers that are defined as

market segments. The market segmentation would help export-orientated SMEs to develop and

offer such products, meeting to the greatest extent the specifics of the corresponding segments and

to provide targeted impact with appropriate marketing tools. Thus the available market potential of

the individual enterprise would be utilized in the best way.

Markets could be classified by a number of characteristics. Most frequently in the practice

are met the following classifications:

By geographical sign – local, community, national, regional, continental,

global;

By political and economic principle;

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By commodity group of by concrete articles;

By the need the corresponding article of commodity group is satisfying;

By way of life – for examples luxury goods market, non-brand goods, etc.

One of the possible versions of the segmentation procedure is:

General definition of the market;

Consideration of the external restrictions (if such);

Selection of several indicators;

Determination of those of them, for which is possible to gather information

and surveys are carried out.

Selection of appropriate segment (target market)

By means of the market segmentation the corresponding SMEs from the priority

sector, object of the present export strategy, could define the perspective market

segments and to carry out the corresponding type of marketing, depending on

segmentation:

Non-differentiated marketing – aims at big, vast market by means of

marketing plan; it is related to the first stages of development of given

market through mass approach, where the consumers are alike.

Non-differentiated marketing – for the various market segments, different

marketing mix is applied;

Concentrated market – the concentration on the separate niche or segment

is determined by limited resources of the company or the impossibility to

satisfy different market segments.

The target market is a segment on which the product corresponds to the greatest

extent. The market window is a segment, the manufacturers are ignoring.

The market segmentation is one highly professional marketing activity, including

the normal combination of high risk level with likely high incomes, as a result of the full

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coverage of the market. Not last, the risk is related to the long-term period, according to

which in practice is proved either the appropriateness of the taken decision for market

segmentation or the made mistake by choosing the approach of differentiated marketing.

Before coming to the positioning of a product or a brand, it is necessary to

perform market segmentation and to select the appropriate market segment. The

positioning strategy could be developed according to the following algorithm:

Figure 13 Development of the strategy for product positioning

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Positioning strategies

The development of the appropriate product positioning strategy means the companies to make

such an offer that is to take a dominating place in the consumers mind. To this end, the individual

SME of the sector is to perform the following steps:

1. Environment survey. It is done through studying and aims at gathering information for

the various segments.

2. Quality survey. It aims at measuring all important for the consumers’ product and market

characteristics.

3. Quality survey. It is based on the results of the quality survey and aims at measuring the

consumer adjustment towards the brand and its competitors.

4. Analysis. This stage is critical and depends on the manager’s experience. All marketing

and statistical analysis are applied.

2. Segmentation

3. Positioning. The company strategy is determined regarding the segmentation and

positioning, considering quality, quantity and accessibility of resources Segmentation is related to

the market and the positioning to the product and its placement in the segment. The product

positioning has two determinants – the ideal vision of the consumers and the perceived product

position.

Depending on which of the determinants the companies efforts will be focussed, two positioning

strategies can be distinguished:

1. Positioning, focusing on consumers. The main efforts of the company when choosing this

strategy are directed at creating maximum compliance between the actually perceived offer and the

ideal vision for the concrete product on the corresponding market segment. The aim is to shorten

the distance between them. Two strategies are possible thereto:

1.1. Strategy of juxta-positioning: The strategy consists in adapting the offered product to the

ideal vision thereof.

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1.2. Strategy of pre-positioning. The strategy consists of adapting the relations of the consumers

to the position of the offered products.

The perceived positions of the already positioned in the consumers mind product is perceived by

the company as granted and efforts are made to change the ideal vision towards the existing

product.

2. Positioning, focusing on the competitor. The main marketing actions, directed to the creation

of such product position in the consumer mind, ensuring advantages in relation to the perceived

product positions of the consumers. This type of orientation could be done in two ways:

2.1. Strategy for profiling. It may be appropriate for the concrete export-orientated SMEs of the

sector, when it is possible to differentiate the competitor products. The strategy consists in the

searching of possibilities for isolated by the competitors positioning in the product space. The main

objective is to create relatively heterogeneous product-market combination in the frame of one

product space.

2.2. Strategy for imitating. The strategy is appropriate when there are homogeneous products,

which the consumers perceive as mutually replaceable and the most rational way for positioning is

to imitate the positions of the competitors. The advantages of the strategy are related with

expenditure saving, because the results of the competitors are used without any effort.

Ways of positioning

1. Positioning on the basis of the product characteristic

This approach is vastly widespread in the practice. It is based on the logical and objectively acting

relation between the client’s need and the product that is to satisfy certain specific necessity.

Therefore, on the basis of an expert study of the necessities and characteristics of their carriers –

the market clients, the marketing tools is orientated towards creation and strengthening of the

product advantages by means of given parameter that is by rule cleverly set in the advertising

message. It is in the basis of the specific competitive advantage in relation to the rest of the similar

products, offered by the competitors. The product positioning could be based on the ration between

certain parameters – for example quality and price.

2. Positioning on the basis of the product usage or application

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In the process of positioning of a product in the consumer mind the attention may be focused as a

priority towards the way, the situation or simply the time of product usage. This approach too often

is supporting the other approaches aiming at the further expansion of the market.

3. Positioning on the basis of the characteristic of the product consumer

The usage of the relation between product and consumer as marketing approach for product

positioning is grounded and efficient for the objectives of entering and conquering good

differentiated market segments.

4. Positioning on the basis of the product order

Each product is part of a given product order and is satisfying specific necessity. Practice shows

that in number of cases the association, formed by the marketing efforts in the consumer mind in

relation of the product belonging to a certain product order, plays an important role for its

positioning.

5. Positioning in relation to the competitors

The usage of more or less open mentioning of the product advantages in comparative plan with the

competitors´ similar products is quite widespread marketing strategy for product positioning. This

approach is hiding essential risks in the condition of good regulated market economy and is to be

carefully applied by the SMEs. Here is paid attention to the market positions of given company as

precondition for the success of the positioning in comparison to the competition.

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Figure 14 Basic corporate strategies

BASIC CORPORATE STRATEGIES

DIFERENTIATION

EXPENDITURE

LEADERSHIP

FOCUSING

Approaches for

positioning through low

price

Approaches for

positioning by

benefit/problem/applicatio

n/usage/type of consumer

Approaches for

positioning by product

category; by product

characteristic;

competitive positioning;

by country of origin; by

relative price;

distribution positioning

through celebrities;

symbiosis

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ACTION PLAN FOR SECTOR “MANUFACTURING OF WOOD AND OF PRODUCTS OF WOOD,

EXCEPT FURNITURE”

Table 21 Action plan

OBJECTIVES AND

MEASURES

IMPLEMENT

ATION

DEADLINE

RESPONSIBLE

INSTITUTIONS

NECESSARY

FINANCIAL

RESOURCES

FUNDING

SOURCES

EXPECTED

OUTCOME

IMPLEMENTA

TION

INDICATORS

I. STRATEGIC OBJECTIVE 1

Increasing the export potential of the Bulgarian SMEs of sector “Manufacturing of wood and of products of wood”

1.1. Specific objective 1

Increasing the number of the SMEs of sector “Manufacturing of wood and of products of wood”, exporting goods to the world market

1.1.1. Drafting and update

of national strategy for the

sector development

2014 MEET 40 000 Operational

programme

Competitiveness

Developed and

adopted at national

level Strategy and

Action plan,

according to the

time schedule

National strategy

for the sector

development and

Action plan

thereto, that is

being

implemented.

Provided financial

resources for the

plan

implementation by

years;

Achievement of

the set objectives

Micro level: Granting

information, participation

in discussions and focus

groups

Companies

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OBJECTIVES AND

MEASURES

IMPLEMENT

ATION

DEADLINE

RESPONSIBLE

INSTITUTIONS

NECESSARY

FINANCIAL

RESOURCES

FUNDING

SOURCES

EXPECTED

OUTCOME

IMPLEMENTA

TION

INDICATORS

Micro level: Collaboration

at collecting and processing

information, participation

in discussion and focus

groups

Branch

organization

Meso level: Coordination

and organization of the

process of the overall

strategy development

BSMEPA

1.1.2. Elaboration of profile

of export-orientated

companies from the sector

2013 BSMEPA in

collaboration

with

(BBCWF)

5000 BGN

Budget of the

BSMEPA

Drafted criteria for

export-orientated

SME

Published criteria

Micro level: Participation

in the discussion of the

proposed draft of profile of

export-orientated

company.

Granting of information

Companies

Meso level: Participation

in the discussion of the

proposed draft of profile of

export-orientated company

Professional

organizations

Macro level: Organization

and coordination of the

process of creation of

BSMEPA

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OBJECTIVES AND

MEASURES

IMPLEMENT

ATION

DEADLINE

RESPONSIBLE

INSTITUTIONS

NECESSARY

FINANCIAL

RESOURCES

FUNDING

SOURCES

EXPECTED

OUTCOME

IMPLEMENTA

TION

INDICATORS

profile of export-orientated

company

1.1.3. Collection of

information (creation of

database) for export-

orientated companies of the

sector, including data

about:

- exporting companies

- those, having export

potential

2013 BSMEPA in

collaboration

with

(BBCWF)

10 000 BGN Part of the

general budget

funding of

BSMEPA

The database is

functioning

An accessible

database has been

created, where the

presence of given

company in the

database for the

export-orientated

companies is

included as a

criteria in the

evaluation for the

granting of funds

to support the

export and the

competitiveness


information for the

database

Companies

Meso level: Support in

collecting and processing

the information

Professional

organizations

Macro level: Organization


preparation and update of

the database

BSMEPA

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OBJECTIVES AND

MEASURES

IMPLEMENT

ATION

DEADLINE

RESPONSIBLE

INSTITUTIONS

NECESSARY

FINANCIAL

RESOURCES

FUNDING

SOURCES

EXPECTED

OUTCOME

IMPLEMENTA

TION

INDICATORS

1.1.4. Informing of foreign

traders and potential

investors for the existence

of the database mentioned

in p. 1.1.3 and granting

them access thereto

2014 BSMEPA in

collaboration

with Branch

Chamber

(BBCWF)

2 000 BGN Part of the

general budget

funding of

BSMEPA

Informed foreign

partners

500 e-mails sent,

information

published on the

UEA and BBCWF

sites

Micro level: dissemination

of information on

companies/partners level

Companies

Meso level: Collaboration

for the information

dissemination

Professional

organizations

Macro level: Information

dissemination on State level

BSMEPA/MEET

1.1.5. Informing the sector

SMEs on the possibilities of

support for their export-

orientation

Continuous BSMEPA 50 000 BGN

annually

Operational

programs

The BSMEPA

webpage is

transformed into

main source of

specialized export

information for the

sector SMEs.

Number of entries

in specialized

BSMEPA site

rubrics and

received feedback

Micro level: Participation

in information events

Companies

Meso level: Collaboration

for the information

dissemination and the

Professional

organizations

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OBJECTIVES AND

MEASURES

IMPLEMENT

ATION

DEADLINE

RESPONSIBLE

INSTITUTIONS

NECESSARY

FINANCIAL

RESOURCES

FUNDING

SOURCES

EXPECTED

OUTCOME

IMPLEMENTA

TION

INDICATORS

organization of information

events

Macro level: General

coordination and

organization of the process

of informing the SMEs

BSMEPA

1.2. Specific objective 2

Promoting the competitiveness of the SMEs of sector “Manufacture of wood and of products of wood”, exporting goods to the world

market

1.2.1. Update of the

development strategy for

sector “Manufacture of

wood and of products of

wood”

On annual

basis

BSMEPA,

Branch Chamber

(BBCWF)

15 000 BGN Operational

programmes,

Own capital of

the Branch

Chamber

(BBCWF)

An updated sector

strategy leads to

the promotion of

the competitiveness

of the sector SME

The measures on

the development

strategy update are

being

implemented

Micro level: Granting the

necessary information,

including participation in

opinion polls and focus

groups

Companies

Meso level:

Granting the necessary

information, including

participation in opinion

polls and focus groups

Professional

organizations

Macro level: Organization BSMEPA

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OBJECTIVES AND

MEASURES

IMPLEMENT

ATION

DEADLINE

RESPONSIBLE

INSTITUTIONS

NECESSARY

FINANCIAL

RESOURCES

FUNDING

SOURCES

EXPECTED

OUTCOME

IMPLEMENTA

TION

INDICATORS


process of development and

officialization of the

strategy and the action

plan, as well as their

implementation process

1.2.2. Support for the

creation/development of

export orientated

consortium in the sector

2013-2014 Branch Chamber

(BBCWF),

BSMEPA

100 000 BGN

annually

Funds of the

BSMEPA and

operational

programmes

The export unit is

supporting the

export activity of

the sector SMEs

Export unit

created

Micro level: Willingness

for participation in export

orientated consortium

Companies

Meso level: Participation in

the creation and

development of export


Promoting the

participation of SMEs in

such consortiums,

especially through ensuring

expert assistance when

applying for grants

Professional

organizations

Macro level: Assisting the

creation/further



BSMEPA,

MEET

Page 90 of 106






OBJECTIVES AND

MEASURES

IMPLEMENT

ATION

DEADLINE

RESPONSIBLE

INSTITUTIONS

NECESSARY

FINANCIAL

RESOURCES

FUNDING

SOURCES

EXPECTED

OUTCOME

IMPLEMENTA

TION

INDICATORS

Promoting the

participation of SMEs in

such consortiums

1.2.3. Drafting a

programme for increasing

the number of SMEs,

certified under

internationally recognized

standards (including

introduction of the so

called Chain of Custody

(CoC) certification

2014 BSMEPA,

MEET

According to

the announced

grant schemes

OP

Competitiveness

The Bulgarian

SMEs meet the EU

standards for

quality, working

conditions and

environmental

performance.

Number of SME,

having introduced

EU standards

Micro level: Development

of proposals for funding

activities on introducing

quality management

systems and other


standards

Companies

Meso level: Encouraging

the SMEs participation in

projects under the

operative programmes for

the next programme period

to the ends of introduction

of systems for quality

management and other

Branch

organizations

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OBJECTIVES AND

MEASURES

IMPLEMENT

ATION

DEADLINE

RESPONSIBLE

INSTITUTIONS

NECESSARY

FINANCIAL

RESOURCES

FUNDING

SOURCES

EXPECTED

OUTCOME

IMPLEMENTA

TION

INDICATORS


standards

Macro level: Development

of programme for

increasing the number of

companies, having

introduced systems for

quality management and

other internationally

recognized standards.

Management of the overall

grant funding process and

monitoring of the results

MEET

1.2.4. Transformation of

the export and import

potential of the SMEs into

leading criteria when

evaluating projects under

OP “Competitiveness”

If possible

BSMEPA

Created evaluation

criteria with bigger

relative weight of

export

5 additional points

for export-

orientated

companies

Micro / Meso level: Active

participation in the

development of the

proposals for increasing

the weight of the evaluation

for the companies’ export

orientation within the total

score for receiving a grant.

Companies,

Professional

organizations

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OBJECTIVES AND

MEASURES

IMPLEMENT

ATION

DEADLINE

RESPONSIBLE

INSTITUTIONS

NECESSARY

FINANCIAL

RESOURCES

FUNDING

SOURCES

EXPECTED

OUTCOME

IMPLEMENTA

TION

INDICATORS

Macro level: Drafting of

proposals for increasing

the weight of the evaluation

for the companies export

orientation within the total

score for receiving a grant.

BSMEPA

1.2.4. Ensuring State

guarantees for the SMEs

export insurance (Macro

level)

2014 BAEI 30 000 Budget of the

institution,

Operational

programmes in

the next

programming

period

Increasing the

number of SMEs

and the volume of

the export of the

sector, thanks to

the improved

mechanisms for

export insurance

Number of

ensured export

deals of the SMEs

Macro level: Creation of

mechanisms for granting

state guarantees for export

insurance in the frame of

OP for the following

programme period

Granting state guarantees

for export insurance in the

frame of OP for the

following programme

period

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OBJECTIVES AND

MEASURES

IMPLEMENT

ATION

DEADLINE

RESPONSIBLE

INSTITUTIONS

NECESSARY

FINANCIAL

RESOURCES

FUNDING

SOURCES

EXPECTED

OUTCOME

IMPLEMENTATIO

N INDICATORS

1. STRATEGIC OBJECTIVE 2

Increasing the market share of the products of the Bulgarian SMEs of sector “Manufacture of wood and of products of wood” on the

world market

2.1 Specific objective 1

Increasing the market share of the products of the Bulgarian SMEs of t sector “Manufacture of wood and of products of wood” on

existing markets

2.1.1. Support for the

participation of the

sector SMEs in

international and

national exhibitions and

fairs

FURNIWOOD

CHINA (Beijing,

China) –

international

exhibitions for

furniture

accessories, wood

materials and

articles, celebrated

every two years;

FURNIMA

(Thessalonica,

Greece) –

Continuous MEET,

BSMEPA

2 000 000 Budget of

BSMEPA, OP

Competitiveness

Drafted annual

programme for the

exhibition and fairs,

important to the

sector manufacturers

Number of SMEs,

having taken part

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International

exhibition for

machinery, raw

material, tools,

accessories and

equipment for

furniture

manufacture,

celebrated every

two years;

ARREDO

(Bolzano, Italy) –

exhibition for

furniture,

celebrated every

two years;

SOUTHPACK

(Charlot, USA) –

exhibition of the

leading suppliers of

packing machinery,

products for

material processing

and services,

packing materials,

packaging and

outsourcing

services.

Micro level:

participation in

Companies

Page 95 of 106






international and

national exhibitions and

fairs

Meso level: Assistance

for the organization of

the Bulgarian

participation

Professional

organizations

Macro level:

organization of the

Bulgarian participation

and follow-up of the

outcomes

BSMEPA/MEET

2.1.2. Creation of

mechanism to support

the visit and

participation of foreign

trade partners in

specialized exhibitions

in Bulgaria

2013-2014 BSMEPA and

the professional

organizations

50 000 BGN Budget of

BSMEPA and

BBCWF or of

Companies,

wanting to take

advantage of

this measure

Signed export

contracts due to the

participation of

foreign trade

partners.

Yearly increase in

the number of signed

export contracts with

invited foreign trade

partners.


information to foreign

partners

Companies

Meso level: Assistance

in ensuring funds for

such events

Professional

organizations

Macro level: Assistance

in ensuring funds for

such events

BSMEPA

2.1.3. Creation of 2013 BSMEPA, 20 000 BGN Budgets of Elaborated and At least 1 specialized

Page 96 of 106






programme for more

active interaction with

the Bulgarian trade

representations abroad

for receiving current

market information

MEET and MFA BSMEPA and

MFA

functioning

interaction

programme

information message

per month is given to

the Branch Chamber

for dissemination

among export-

oriented sector SME

Macro level:

Development of draft

programme for more

active interaction with

the Bulgarian trade

representations abroad

for receiving current

market information

Officializing and

application of the

programme

BSMEPA

2.1.4. Elaboration and

realization of

programme for

qualification of export

specialists from the

sector SMEs.

2014-2020 BSMEPA and

Higher education

institutions

50 000 BGN

annually

Budget of

BSMEPA and

operative

programmes

Over 1000 export

specialists from the

SMEs trained within

the programme

period.

Number of trained

export specialists.


information about the

needs of training

Participation in

trainings

Companies

Meso level:

Development of

Professional

organizations

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training programmes

Encouraging the SMEs

to take part in trainings

Celebration of the

trainings

Macro level:

Organization and

coordination of the

process of development

and implementation of

programmes for

increasing the

qualification of export

specialist in the SMEs

BSMEPA

2.2 Specific objective 2

Entering of the Bulgarian SMEs of sector “Manufacture of wood and of products of wood” into new markets

2.2.1. Preparation and

celebration of

advertising campaigns,

representing the

potential and the

advantages of the sector

SMEs as trade partners

abroad

Continuous

BSMEPA 100 000 BGN

annually

Budget of

BSMEPA,

operative

programmes

and BBCWF

The sector

companies are

known as potential

partners on new

markets

At the min. 5

presentations

annually in different

countries – target

markets, 1

informative internet

portal, 5 paid

publications in

foreign press

annually


information for the

Bulgarian products and

services

Companies

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Meso level: Granting

information for

products and

manufacturers;

assistance in the

creation of specific

advertising campaigns

Professional

organizations

Macro level:

Coordination of the

process, as well as by

including commercial

attaches to the

Bulgarian diplomatic

missions abroad

BSMEPA

2.2.2. Development of

programme for training

specialist of the sector

SMEs and of the

branch organization to

take part in specialized

domestic and foreign

exhibitions

2014 BSMEPA and

Higher education

institutions

20 000 BGN

annually

Budget of

BSMEPA

Working

programme for

training specialists

of sector SMEs and

branch organization

to participate in

specialized domestic

and foreign

exhibitions

100 specialist from

the sector SMEs per

year have undergo a

training on

participation in

specialized domestic

and foreign

exhibitions

Micro/meso level:

Granting information

about the needs of

training

Participation in the

trainings

Companies

Professional

organizations

Macro level: BSMEPA

Page 99 of 106






Organization and

coordination of the

process of creation and

implementation of the

programme for training

of specialist

2.2.3. Elaboration of

criteria for selection of

markets and for


analysis

Periodically BSMEPA and

Branch

organization

(BBCWF)

5 000 BGN

annually

Budget of

BSMEPA and

Branch

organization

(BBCWF)

Relieved selection

of target markets in

new regions –

Persian gulf, CIS

countries

Elaboration of 1

handbook, updated

once per year

Micro level:

Participation in

discussions and focus

groups for the criteria

development

Companies

Meso level:

Participation in

discussions and focus

groups for the criteria

development

Professional

organizations

Macro level:

Coordination and

organization of the

process on developing

the criteria

BSMEPA

2.2.4. Issuing periodic

brochures and reports,

containing information

about international

Periodically Branch Chamber

(BBCWF)

50 000 BGN

annually

Budget of

BSMEPA

and

Branch

Increased level of

information of the

sector SMEs

managers regarding

Monthly brochure

with information

about international

markets and two

Page 100 of 106






markets Chamber

(BBCWF)

export opportunities semi-annual reports

with more in-depth

analysis are provided

to the export-

orientated sector

SMEs


information

Companies

Meso level: Support in

collecting and

processing the

information

Professional

organizations

Macro level:

Coordination of the

information processing

process, the creation of

the final product and its

dissemination

BSMEPA

2.2.5. Organization of

seminars for

acquaintance with the

specific requirements of

the corresponding

markets EU, Russia,

CIS, USA, Arab region,

etc.

Periodically BSMEPA

and

Branch Chamber

(BBCWF)

20 000

BGN/annually

Budget of

BSMEPA

and

Branch

Chamber

(BBCWF)

Better knowledge of

the specific

requirements of the

corresponding

markets by the

sector SMEs

managers

Micro level: Active

participation at such

events

Companies

Meso level: Support in Professional

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the information

organization and

preparation

organizations

Macro level: Seminars

organization and

realization

BSMEPA

2.2.6. Purchase and

granting of information

for the identified target

markets by BSMEPA

Continuous BSMEPA Own funds,

operational

programmes

Available and

adequately

processing

information for the

identified target

markets

Easy and

unconditional access

to information for the

identified target

markets

Micro level: Submitting

data for the database

Companies

Meso level: Submitting

data and analysis

Professional

organizations

Macro level: Creation

of database with

potential partners and

information about

external markets

Coordination of the

overall database

maintenance process

and its timely update

BSMEPA

2.2.7. Provision of

budget funds for

creation of networks for

supporting the small

and medium business

Continuous MF, MEET 1 000 000

BGN annually

State budget,

OPC

Horizontal and

vertical cooperation

in networks for

collaboration and

support of SME

Number of created

formal and informal

networks and

structures; number of

SME taking part

Page 102 of 106






MONITORING AND CONTROL SYSTEM

For each strategic document it is of great importance: first - to be elaborated according to

predetermined goals, deadlines and resources; second - to show stability over the time and to

enforce the activities and effects built into it. To this end, it is advisable to monitor

(monitoring) and evaluate the implementation of the document and to identify appropriate

actions – to remedy and improve the activities set out therein.

Monitoring can be defined as: (a) an integral part of an ongoing project management

(which is considered to be the realisation of an Export strategy for sector “Production of

transport vehicles, excluding cars”, aiming to achieve any change – in this case, improving the

export activity of SMEs in the sector); (b) an instrument facilitating the control over the

management and the process of decision making; (c) a description of events and conditions

within a specified period of time; (d) systematic collection of reliable, up-to-date and relevant

information on the progress, changes and consequences of all programming action taken. These

essential features of the monitoring itself define it as one of the most important components of

the management of strategic documents, programs, projects, etc.

Assessment, in turn, is a systematic review of specific management activities to provide

information about the full range of short and long term effects on consumers. Programme

evaluation may include assessment of workload, operating procedures, or personnel, but its

main purpose remains the effect and impact of programme’s implementation (strategic

document).

Monitoring should therefore establish the status and monitor the progress in

implementing various components and subcomponents and thus - the Strategy as a whole.

Monitoring should also identify arising problems, the factors determining these problems and

suggest possible measures and solutions to these problems. The information obtained is

expected to be timely made available to the responsible authority (primarily MEET and

Page 103 of 106






BSMEPA). The meaning of this is to enable those authorities and other relevant government

agencies, at their discretion, to take timely "corrective actions" to facilitate achieving the

strategy objectives.

It should be noted that while monitoring focuses on monitoring the: (a) actions taken

and resources expended, (b) results achieved, (c) process progress over the time, (d)

achievement of the effects, the assessment aims at identifying the extent to which the general

and specific objectives of the document are achieved, and also includes a systematic review of

specific management operations to provide information about the full range of short and long

term effects.

The main points that should be observed in connection with the implementation of this

strategy are:

- Adhering to the pre-set schedule of activities;

- Volume, rate and extend to which resources have been used;

- Results achieved;

- Achievement of objectives and strategic document impact.

When to monitor? - The goal of the current monitoring is to record the effects and the

deviations from the planned figures early enough so as to allow their correction before the

consequences of these effects become so serious that they can not be overcome. What should

not be forgotten is the need for monitoring to be performed frequently enough in order the

deviations from the set plan to be adjusted.

Based on this methodology, the monitoring and assessment, necessary for the fulfilment

of this Strategy, suggest the following succession of activities:

1. Selection of criteria and indicators for monitoring and assessment;

2. Monitoring the implementation;

3. Comparing results with the target state;

4. Proposing and taking corrective actions.

According to the adopted goals and measures set forth in the strategy, we propose the

following main indicators for monitoring and assessment:

Published criteria the SME and their production for initiating export are to comply

with;

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Created accessible database for export orientated companies, where the presence of

given company into the database is included as a criteria when making an assessment

for granting funds to promote the export and the competitiveness;

Number of entrances into specialized rubrics of the BSMEPA website and received

feedbacks;

Availability of update strategy for development of sector “Manufacture of wood and

of products of wood, except furniture” and implementation of the measures, included

therein;

Number of SME, having introduced systems for quality management, working

conditions and environment management (ISO 9001, ISO 14001 and others);

Number of patented articles by SMEs from the sector;

Number of companies exporters, using the guarantees for export insurance;

Number of participation by sector SMEs in international and national fairs and

exhibitions;

Created at least 3 clusters;

Increase in any following year of the signed export contracts with the invited foreign

trade partners;

Number of trained specialists in the sector;

At least 5 presentations per year in different countries – target markets, 1 information

internet portal, 5 paid publications in foreign media per year;

100 specialist from the sector SMEs yearly have undergo a training on participation in

specialized exhibitions in the country and abroad;

Drafted 1 guide for promoting the export of the SMEs, reflecting the possibilities for

export and the condition of the market conjuncture, updated once per year;

At least 2 seminars per year should be organized for presenting the specific

requirements for the defined key markets in and outside EU;

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Progress surveillance and monitoring shall be carried out by BSMEPA, which is the

“owner” of the Strategy, and it shall appoint an official, from its administration, which shall be

responsible for collecting information in order to facilitate the monitoring of the

implementation of measures and who shall report on an annual basis to the Executive Director

of the Agency.

The annual reports shall serve as interim evaluations of the fulfilment of the Strategy.

At the end of year 2020 it shall be prepared a final report covering the entire period of the

Strategy.

These reports are public. The results shall be disclosed to the public

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BIBLIOGRAPHY AND STATISTICAL SOURCES

1) Member States competitiveness performance and policies – EK, document SEC

(2010)1272, accompanying strategy “Integrated industrial policy for the globalization era.

Competitiveness and sustainability at front page”.

2) National programmes for reforms (2011 – 2015) of the Republic of Bulgaria (In

implementation of strategy Europe 2020) – CM of the RB, Sofia, 13th

April 2011.

3) Research, innovation and competitiveness package, proposal for a Regulation of the

European Parliament and the Council, establishing a Programme for the Competitiveness of

Enterprises and small and medium-sized enterprises (2014-2020), Brussels, 30.11.2011,

COM (2011) 834 final

4) Methodology for strategic planning in RB – Council for administrative reform at the CM of

the RB, Sofia, April 2010

5) Bases of Economics – Gillespie, Andrew, 2 iss., Oxford University Press 2011

6) Industrial policy: strengthening the competitiveness – EC, Brussels, 14.10.2011; COM

(2011) 642 final

7) Classification of the economic activities (CEA 2008) – NIS, Sofia 2008

8) Innovations. BG – Foundation “Applied studies and communication”, Sofia

9) Small Business Act for Europe (Think for small) – EK, Brussels, 25.6.2008; COM (2008)

394 final

10) Analysis of the condition and factors for development of the SME (The Bulgarian SME in

conditions of crisis) – NOEMA, BSMEPA, Sofia 2011

11) For the development of the present strategy the following statistical data and documents,

that are publicly available, have been consulted:

a. NIS

b. Eurostat

c. MEET

d. WTO (UN)

e. International trade centre, Geneva

f. Data and publications of the BCC, BTIC, BCCMB

g. Information from the sociological survey carried out in the period 31 October –

28 November 2011 with the management personnel of micro, small and

medium-size enterprises of the analyzed sector

h. Other official information electronic sources

Documents

Operational programme “ Development of the …...Page 3 of 106 Operational programme “ Development of the competitiveness of the Bulgarian economy” 2007-2013, Priority axis 4.2