ACTUALIZATION of EXPORT STRATEGY Manufacture of Non-metal and Mineral Products

Transcription

1 REPUBLIC OF BULGARIA Bulgarian Small and Medium Enterprises Promotion Agency PROJECT BG161РО , PROMOTION OF THE INTERNATIONALIZATION OF THE BULGARIAN ENTERPRISES Проект BG161РО , НАСЪРЧАВАНЕ НА ИНТЕРНАЦИОНАЛИЗАЦИЯТА НА БЪЛГАРСКИТЕ ПРЕДПРИЯТИЯ This project is financed by the European fund for regional development through an Operational programme Development of the competitiveness of the Bulgarian economy Този проект е получил финансиране от Европейския фонд за регионално развитие чрез Оперативна програма Развитие на конкурентоспособността на българската икономика ACTUALIZATION of EXPORT STRATEGY Non-metal and Mineral Products February 2014 This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and

2 LIST OF ABBREVIATIONS EU European Union BSMEPA Bulgarian Small and Medium Enterprises Promotion Agency MEE Ministry of Economy and Energy MRD Ministry of Regional Development SMEs Small and Medium Enterprises ITC International Trade Centre NCEA National Classification of Economic Activities NSI National Statistical Institute OP OTEA Office of Trade and Economic Affairs This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 2

3 TABLE OF CONTENTS INTRODUCTION APPROACH FOR DEVELOPMENT OF THE EXPORT STRATEGY MAIN CONCLUSIONS FROM THE ANALYSIS OF THE CURRENTSITUATION SWOT AND LOED ANALYSIS OF THE PROCESS OF EXPORT OF SMES IN THE NON-METAL AND MINERAL PRODUCTS SECTOR OBJECTIVES STRATEGY FOR PROMOTING THE EXPORT OF SMES IN THE SECTOR This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 3

4 INTRODUCTION The export strategy of sector Non-metal and Mineral Products is developed under Project BG161РО Promoting the internationalization of the Bulgarian enterprises, Priority Axis 4 Strengthening the international market positions of Bulgarian economy of "Development of the Competitiveness of the Bulgarian Economy", pursuant to contract BG-161PO C00001 for providing direct grants under which the Bulgarian Small and Medium Enterprises Promotion Agency (BSMEPA) is an institutional beneficiary. The goal of the Export Strategy for sector Non-metal and Mineral Products is to provide support to the Bulgarian micro, small and medium-sized enterprises in the sector to enhance their competitiveness, degree of internationalization and entering or expanding the market positions of the Bulgarian products and particularly of these with higher value added. The Bulgarian state, represented by BSMEPA, MEE and other state institutions has identified the SME sector as particularly sensitive and at the same time as having crucial importance for economic life, deserving special attention. The diversity in the development of different economic sectors and the place of SMEs therein, as well as the national priorities related to the promotion of national exports, require the development of export strategies for particular sectors, one of them being the sector of Non-metal and Mineral Products. Focusing of the support and defining of precise benchmarks for state intervening through its institutions, on the one hand, and providing options for development to other participants in the process, on the other, will strengthen in a positive way the planning aspect of state activities and will at the end improve the performance of the sector. The successful implementation of the Export Strategy is expected to result in improvement of the process of going international and of the active expanding and strengthening of market positions of Bulgarian SMEs producing non-metal and mineral products. In developing the Export Strategy, the "Methodology for Strategic Planning" is taken into account prepared by the Council for Administrative Reform to the Council of Ministers of the Republic of Bulgaria. This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 4

5 1. APPROACH FOR DEVELOPMENT OF THE EXPORT STRATEGY The Export Strategy is a strategic document defining the medium-term goals and priorities of the export development of SMEs in sector Non-metal and Mineral Products. It is developed on the basis of the strategic planning approach, the skilful implementation of which has the following advantages: Creates an understanding among stakeholders on the trends and prospects for the future. Establishes a common vision and consensus among stakeholders, by coordinating different initiatives in the selected targets. Identifies already undertaken or planned projects and actions. Strengthens partnership between government, business and other parties to solve complex problems. In developing such a strategic document, it is of crucial importance to formulate properly the "owner" of the strategy, i.e. the institution or institutions who will be responsible for the overall implementation of the strategic document as well as for the different stages of strategic planning. In general, the development of strategic documents includes the following stages: Assignment; Preparation; Development; Coordination; Approval; Implementation; Evaluation and Updating. Each of these stages contains specific activities that are part of the project implementation under the contract mentioned above. Therefore, the principal owner of the export strategy is the Bulgarian Small and Medium Enterprises Promotion Agency (BSMEPA). For this reason, the goals, measures and actions set in the strategic document must first help BSMEPA improve the planning and implementation of activities related to the support of exports of SMEs in sector Non-metal and Mineral Products. This formal logic does not contradict to the fact that a significant number of institutions, businesses and even the population are involved as stakeholders and they might be influenced by means of different mechanisms, for example, the state institutions through the forms of coordination of strategic documents of such rank, and the branch associations and businesses by providing incentives to increase their export potential. It is of extreme importance for SMEs in the sector of Non-metal and Mineral Products to be able to see a clear and predictable export supporting state policy, which, though in the medium run, will allow them to decide whether to benefit or not from the created opportunities. The process of strategic planning with the following steps is used in the elaboration of this strategy: Identification of the stakeholders Analysis of the environment This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 5

6 SWOT analysis Vision Goal setting Selection of an alternative a development strategy INFORMATION SOURCES The following main information sources have been used when preparing the Export Strategy: - National Statistical Institute; - Information submitted by BSMEPA; - Information from MEE; - Eurostat; - International Trade Center; - Information published in relation to holding international forums and meetings; - Official electronic information sources; - Information published by branch associations in the sector; - Information from the Bulgarian Industrial Association and the Bulgarian Chamber of Commerce and Industry, as well as from their regional sections; - Information from a company survey carried out from October 31 to November 28, 2011 with the senior management of 2 micro, 12 small and 6 medium enterprises (a total of 20), operating in the sector, from 12 administrative-territorial districts in the country; and from a focus group. Information is processed with the willingness for maximum objectivity of the conclusions. In many cases the information is analysed for the sector in total, i.e. information that includes not only SMEs but also the large ones, based on the assumption that where a Bulgarian enterprise has achieved success it could be expected that this will be possible for another one as well which is from the group of SMEs. This specificity is explicitly emphasized in the analyses. This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 6

7 STRUCTURE OF THE EXPORT STRATEGY FOR SECTOR MANUFACTURE OF NON-METAL AND MINERAL PRODUCTS The structure of the Export Strategy for sector Non-metal and Mineral Products is based on the strategic planning approach which sets the general parameters of the strategic document. At the same time, a study was made of the structure of other institutional strategic documents, and they were estimated with regard to the following criteria: - providing opportunity for relatively easy access to the document through understandable and logical structuring of different parts; - presenting the content in an attractive and easy-to-understand manner accessible to nonspecialists as well; - providing information thematically, i.e. structuring the material in a way that allows indepth penetration of problems and analyses only if desired by the reader. The above mentioned criteria were met by several of the studied strategies and they contained two clearly distinguished separate parts, namely: 1. A main document, in which according to the above described technology of strategic planning the separate chapters are defined. 2. Appendices that contain the complete text of the analysis, including conclusions, transferred to the main document. This approach was chosen in structuring the Export Strategy for sector Non-metal and Mineral Products. Following consultation with stakeholders, the initial approach was slightly altered, as findings and conclusions in the main document were supplemented with specific data and visualized with graphs and diagrams, thus relieving users who do not intend to go in depth of the analyses included in the Appendices. This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 7

8 2. MAIN CONCLUSIONS FROM THE ANALYSIS OF THE CURRENTSITUATION This part contains the conclusions of various analyses, included in Analysis of the environment. The conclusions and the analyses themselves are structured in 6 parts, namely: STATE AND DEVELOPMENT OF THE SECTOR IN BULGARIA EXPORT ORIENTATION OF THE SECTOR GOODS WITH EXPORT ADVANTAGES AND POTENTIAL COMPETITIVENESS OF THE EXPORT OF GOODS ON INTERNATIONAL MARKETS EXPORT PRIORITY PRODUCT GROUPS AND MAIN MARKETS BARRIERS TO THE INTERNATIONALIZATION OF SMALL AND MEDIUM ENTERPRISES AND MEASURES FOR THEIR OVERCOMING STATE AND DEVELOPMENT OF THE SECTOR IN BULGARIA Sector non-metal and mineral products, general The dynamics in the production and turnover of the enterprises from the sector measured by the index of production and turnover show a positive trend until 2008, a significant decline in 2009 with tentative increase in the period , followed by a new decline in the last analysed year, which indicates that the sector is affected significantly by the global financial and economic crisis. Table 1. Indices of industrial production and turnover on the domestic market * Index of industrial production Manufacturing industry nonmetal and mineral products Turnover index on the domestic market Manufacturing industry nonmetal and mineral products Notice: as of December of the year, 2005=100 *Data are preliminary Source: NSI This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 8

9 According to data of the International Trade Center, there is a constant upward trend in the export of the sector in the period ,except for the decline of 10% in 2009 compared to 2008 and the subsequent increase in volumes. These results are largely due to large enterprises in the sector. An uneven allocation of enterprises and employees by regions is observed in sector non-metal and mineral products. The highest concentration of companies and employees is in the South-Western region, and the lowest one in the North-Western region. Figure 1. Regional distribution of enterprises in sector non-metal and mineral products Source: Amadeus database, MEE, 2011 SMEs in sector non-metal and mineral products Of all SMEs in the manufacturing industry 4.5% operate in sector non-metal and mineral products in In 2010, 2011 and 2012 the total number of SMEs in the sector marks a decrease. The rate of decline in 2012 compared to 2011 was lower (-5%) than the rate in 2011 compared to 2010but significantly exceeds the average rate of decline in This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 9

10 manufacturing (-1.4%). Within the sector, the largest number and, respectively, share of SMEs is in " articles of concrete, plaster and cement" (38.7%). The sector is relatively well positioned also in terms of number of employees in SMEs in manufacturing, providing 4.1% of employment in However, it recorded the largest decrease (about 20%) in the level of employment in 2010 compared to 2009 in comparison with the other analysed sectors 1. In 2011 and 2012, the decline in employment was lower (-3.43% and -3.04%, respectively). Within the sector, employment in 2012 increased compared to 2011 only in the sub-sectors of " cement, lime and plaster, clay building materials and "Cutting, shaping and finishing of ornamental and building stone". The highest employment in the sector in 2012 is provided by sub-sector " articles of concrete, cement and plaster" (44%). In 2012, SMEs in the sector registered 5.8% of turnover and 6.38% of value added in manufacturing. The average growth rate of turnover in 2012 compared to 2011 for SMEs in manufacturing is 3.9%. In sector " non-metal and mineral products" turnover in 2012 increased by 15.5% compared to 2011, after registering a serious decline of 24.4% in The decline in value added in the sector is also significant (-24% in 2010 and -3.51% in 2011) and by this indicator it ranks among the three sectors with the worst drop in value added in this period. In 2012, however, the increase in value added of the sector is significant (30.7%), which ranks it first by this indicator among the 18 priority sectors. In terms of labour productivity of SMEs, sector " non-metal and mineral products" lags behind the leading sectors in manufacturing, as the sector falls in the group of the three sectors with negative change in 2011 compared to However, in 2012, the sector has the biggest increase by this indicator, by almost 35%. Within the sector, labour productivity in 2012 compared to 2011 increased in most of the sub-sectors. The lowest labour productivity is registered by SMEs producing other porcelain and ceramic products. The highest is labour productivity of SMEs in "Production of cement, lime and gypsum" and "Manufacture of other non-metallic minerals. The conducted survey shows the existence of difficulties in the activity of the companies which results in decreasing turnover of an increasing number of 1 In the framework of Project No. BG161РО Promoting the internationalization of the Bulgarian enterprises, export strategies are developed for other 17 sectors in Manufacturing considered to have export potential. The state, development and export orientation of sector Food Products is compared (where appropriate) to data for the rest of the sectors, so as to outline their positions and export potential. This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 10

11 enterprises. Most of the interviewed small and medium enterprises cannot cover their liabilities with owner s equity and this is the reason most of them to be forced to use mainly borrowed funds. This is related to a strong dependence of most of the companies on external sources of funding and increases the risk degree of enterprises for meeting their obligations. Two tendencies are observed in most of the analysed financial indicators within the period an initial positive change in 2008 and 2009, and a drop in 2010 as a consequence of the aggravated economic environment, with profit being the most negatively affected indicator. There is a continuing trend of more limited change in the price index of the sector which may be considered as a price advantage for the development of the export opportunities of the sector, but at the same time may worsen the financial situation of SMEs in the sector. The results of the survey related to the good workforce level assessment and the relatively not so high level of priority of measures for improving the qualification of personnel, give grounds to conclude that the sector has enough qualified workforce that has the necessary knowledge and skills to apply good practices in the production and to realize the export of the companies. This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 11

12 EXPORT ORIENTATION OF THE SECTOR Table 2. Export dynamics by sectors, and Q No Bulgarian export Q thous.bgn thous.bgn thous.bgn thous.bgn thous.bgn thous.bgn thous.bgn thous.bgn thous.bgn thous.bgn thous.bgn thous.bgn thous.bgn food 1 products beverages textiles and textile 3 articles, except apparel wearing apparel, 4 including leather, leather 5 rubber and plastics chemicals and pharmaceuticals Production of nonmetallic products and minerals machinery, 8 equipment and household appliances This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 12

13 No Bulgarian export Q medical, precision 9 and optical apparatus and instruments office machinery and 10 computers and computers 11 electrical machinery and apparatus wood 12 and cork, except furniture pulp, 13 paper and paperboard and articles 14 furniture Publishing, printing, 15 reproduction motor vehicles other than cars Fabricated metal products, except 17 machinery and equipment radio, television and 18 communication equipment Total, 18 sectors BG exports This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 13

14 No Bulgarian export Q Structure (Share of the sector in the national exports, %) food 1 products beverages textiles and textile 3 articles, except apparel wearing apparel, 4 including leather, leather 5 rubber and plastics chemicals and pharmaceuticals Production of nonmetallic products and minerals machinery, 8 equipment and household appliances medical, precision 9 and optical apparatus and instruments office machinery and 10 computers and computers This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 14

15 No Bulgarian export Q electrical machinery and apparatus wood 12 and cork, except furniture pulp, 13 paper and paperboard and articles 14 furniture Publishing, printing, 15 reproduction motor vehicles other than cars Fabricated metal products, except 17 machinery and equipment radio, television and 18 communication equipment Total, 18 sectors BG exports Base index %, 2001=100 food 1 products beverages This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 15

16 No Bulgarian export Q textiles and textile 3 articles, except apparel wearing apparel, 4 including leather, leather 5 rubber and plastics chemicals and pharmaceuticals Production of nonmetallic products and minerals machinery, 8 equipment and household appliances medical, precision 9 and optical apparatus and instruments office machinery and 10 computers and computers 11 electrical machinery and apparatus wood 12 and cork, except furniture This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 16

17 No Bulgarian export Q pulp, 13 paper and paperboard and articles 14 furniture Publishing, printing, 15 reproduction motor vehicles other than cars Fabricated metal products, except 17 machinery and equipment radio, television and 18 communication equipment Total, 18 sectors BG exports Sector non-metal and mineral products, general Source: ITC and own calculations The volume of the realized export in 2012 by sector " non-metal and mineral products" is 2.36% of the total export of Bulgaria (ITC data). In value terms, the export volume in 2012 compared to 2001 is growing at rates similar to those of total exports of the country 330% for the sector and 364% for Bulgaria. After the decrease in 2008 the turnover index on the international market of sector " non-metal and mineral products" marks a stable upward trend. This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 17

18 Table 3. Turnover index on the international market * Industry total Manufacturing industry nonmetal and mineral products Note: December of the year, 2005=100; *Preliminary data Source: NSI SMEs in sector non-metal and mineral products Regarding the relative share of SMEs export in 2012, the sector ranks 8th, and its better positions in the ranking by the turnover and value added indices of SMEs make for the worse estimation of export dynamics of SMEs in the sector in comparison with the annual changes in export value in the other analysed sectors. In view of exports in the sector, all sub-sectors for which information is available show increase in 2012 compared to 2011, as the highest rate is registered by cement, lime and plaster 256%. SMEs register a relatively low share in total exports of the sector, accounting for slightly over one-fifth of the export sector. After a decrease of 4.1 percentage points in 2010 compared to 2009, in 2011 the share of exports by SMEs increased by 7 p.p. compared to 2010 and accounts for 20% of the total registered exports of sector " non-metallic and mineral products." In 2012, as a result of the increase in exports of SMEs by 20%, the share of their export of total exports of the sector increased to 21%. In terms of the indicator export volume per 1 employed the sector ranks 14th among the analysed sectors which indicates a low degree of export orientation. Data from the survey show that the studied SMEs export a very small part of the manufactured goods, and some of them have no exports at all in some of the analysed years ( ). Direct export by the enterprises is dominating throughout the period. This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 18

19 PRODUCTS EXPORT BENEFITS AND POTENTIAL Total of the Manufacturing of non-metallic and mineral products sector The choice of product groups with export advantages and potential is realized on the basis of two criteria: the highest share in the exports of this commodity group, combined with an increase in the observed period. These criteria are applied to the sector as a whole, as official statistics on SMEs are not available. Implementation of selected criteria in data from the International Trade Center has warranted determining the following commodity groups that have export potential and advantages. Products from ceramics: Kitchen and washbasins, for them, bathtubs, bidets and similar sanitary fixtures made of ceramic materials Glazed ceramic tiles, cubes and similar articles (excl. double tiles) related articles of mosaics Unglazed tiles, cubes and similar articles of pottery and stoneware Refractory bricks, blocks, tiles and similar refractory ceramic constructional goods Roofing tiles, chimney cowls, smoke and other building materials, ceramics; Glass products: Glassware for tables, kitchen, toilets, offices, etc. Plastic carboys, bottles and other containers, of glass Float glass and polished glass in sheets Safety glass, consisting of toughened (tempered) or laminated glass laminated (laminated glass) Glass mirrors The choice of commodity groups confirmed the findings of the Ministry of Economy and Energy, "Economic Policy" in framing the export profile of the sector. Commodity groups Articles of plaster or of compositions based on plaster, tile and paving or wall sinks, bathtubs, bidets, urinals and other Float glass and surface ground or polished glass, Carboys, bottles, flasks, jars and other glass kind used for table, indoor decoration are listed as the main exported from the sector This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 19

20 " non-metallic and mineral products." Ranking of product groups in the sector in terms of export in 2012 is shown in the graph below. Figure 2. Export of non-metal and mineral products from Bulgaria in 2012 (thous. EUR) Source: Data of the International Trade Center The main findings of the analysis of the place of the country in the world export, the dynamics of the export, the positioning of our country by the value of the export of the selected product groups in the sector are summarized in the following table: This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 20

21 Table 5. Export of Bulgaria compared to world exports and the export of the world s leading exporter by product groups Table 4. Bulgarian exports of glass products and products from ceramics in and Q (thous. EUR) Product Q Glass-ware for table, for kitchen, toilet and stationary, etc Wicker-covered demijohns, bottles and other similar containers made of glass Float glass or polished glass, in sheets Safety glass Glass mirrors Kitchen and other wash basins, stands thereof, baths, bidets and other sanitary fixtures of ceramic materials Glazed ceramic tiles Unglazed ceramic tiles Refractory bricks, blocks, tiles and similar refractory ceramic constructional goods Roofing tiles, chimney-pots, cowls, chimney liners and other ceramic constructional goods Source: International Trade Center Place in world exports Share in world exports Share in the export of the world s leading exporter for 2010 Q1 Q Increase of exports compared to Glass-ware for table, for kitchen, toilet and stationary, etc % 0.99% 0.83% 1.01% 1.26% 3.52% 2.92% 1.90% 2138% 1949% 2027% Wicker-covered demijohns, bottles % 1.41% 1.40% 1.23% 5.03% 7.90% 9.67% 10.68% 252% 332% 366% This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 21

22 Table 5. Export of Bulgaria compared to world exports and the export of the world s leading exporter by product groups and other similar containers made of glass Float glass or polished glass, in sheets Place in world exports Share in world exports Share in the export of the world s leading exporter for 2010 Q1 Q Increase of exports compared to % 0.97% 0.84% 0.87% 0.43% 7.15% 8.80% 7.40% 7505% 8309% 6904% Safety glass % 0.25% 0.44% 0.57% 0.02% 1.24% 1.49% 2.25% 47142% 68058% % Glass mirrors % 0.37% 0.36% 0.40% 0.70% 1.64% 1.47% 1.29% 1881% 2024% 2251% Kitchen and other wash basins, stands thereof, baths, bidets and other sanitary fixtures of ceramic materials % 2.13% 2.32% 2.61% 37.20% 9.10% 10.81% 10.68% 162% 199% 235% Glazed ceramic tiles % 0.62% 0.63% 0.45% 0.59% 1.82% 2.68% 2.18% 228% 342% 415% Unglazed ceramic tiles % 0.11% 0.13% 0.08% 0.48% 0.30% 0.24% 0.25% 1010% 943% 1311% Refractory bricks, blocks, tiles and similar refractory ceramic constructional goods Roofing tiles, chimney-pots, cowls, chimney liners and other ceramic constructional goods % 0.12% 0.05% 0.03% 0.26% 0.18% 0.33% 0.13% 286% 605% 296% % 0.02% 0.05% 0.04% 0.02% 0.09% 0.06% 0.16% 938% 700% 1613% Source: International Trade Center and own calculations This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 22

23 The data shows that in 2012 the best position among world exporters Bulgaria is in the products Kitchen and washbasins, for them, bathtubs, bidets and similar sanitary fixtures made of ceramic materials "- 13th place, "Plastic carboys, bottles and other containers of glass" - 18th place and "Glassware for table, kitchen, toilet, office, etc." - 19th place. The growth rates are much higher for exports of products from " glass" compared to " pottery. Better export positioning of glass products is obvious from the analysis of the studied indicators: The highest growth rate measured by the base index in the period is characteristic for exports of products made of glass - "Safety glass, consisting of toughened (tempered) or laminated glass laminated (laminated glass)" (116446%), "Float glass and polished glass, in sheets" (6904%) and "Mirror glass" (2251%). The most significant improvement of the position in world exports is observed in products Safety glass, consisting of toughened (tempered) or laminated glass laminated (laminated glass) "(by 44 positions)," Glassware for table, kitchen, toilet, office, etc. " (by 31 positions) and" Float glass and polished glass, in sheets "(by 28 positions). The highest share to the world leading exporter in 2012 was registered by the products "Kitchen and washbasins, for them, bathtubs, bidets and similar sanitary fixtures use of ceramic materials" (10.68%) and "Carboys, bottles and other containers of glass" (10.68%) and "Float glass and polished glass, in sheets" (7.4%). This is probably due to the large share of exports of big Bulgarian manufacturers "Ideal Standard" and "Roca Bulgaria" in the first group and "Shishejam" - in the second. In the period , the most significant decrease in Bulgarian exports as a share of export of the world leading exporter is registered by sub-sector Kitchen and washbasins, for them, bathtubs, bidets and similar sanitary fixtures use of ceramic materials" (over 26 p.p.), which is due to the strong and fast growth of Chinese exports. SMEs in the sector " non-metallic and mineral products" The above data analysed commodity groups apply generally to all companies in the sector, not only for SMEs. Lack of statistical information makes it possible to identify the share of exports of SMEs in the export of commodity groups analysed. Orientation given some data from a survey conducted among SME sector. The results obtained show that in the sample SMEs mainly exported final product (a proposed classification - raw materials, semi-finished and finished product) with highly processed and high value added respectively. One can make the assumption that this This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 23

24 is the niche in which SMEs would have a serious success in exports. According to 85% of the interviewed senior representatives of the companies production capacity for exports is high. However, in almost all companies (95%), management teams have common will to export the products. In other words, in terms of capacity and management attitudes of management of the company, there are no obstacles to the realization of a successful export. Better data about the capabilities and knowledge of employees for export. Managers interviewed indicated that most employees have high knowledge and skills for the realization of export sales to the foreign markets. Skills in these two indicators were not assessed as low by any of the leaders. Critical (most important) factors for the success of the export are the high level of technology, training of staff of small and medium enterprises and low labour costs, which are the main prerequisite for the creation of products with high added value. COMPETITIVENESS OF EXPORTS OF GOODS OF FOREIGN MARKETS Total sector " non-metallic and mineral products" Glass Glassware of a kind used for kitchens, toilets, offices etc. The main markets in the EU are Germany, UK, Greece, Italy, as in Italy and Greece there is an increase of the share of Bulgarian exports in total imports of the country in these products. Products with the largest export on the leading market Germany are drinking glasses, gathered mechanically (excl. glasses cut or otherwise decorated, or of glass ceramics, lead crystal or toughened glass and stemware) drinking glasses, gathered mechanically, cut or otherwise decorated (excl. glasses of glass ceramics, lead crystal or toughened glass and glassware). The main competitors of Bulgaria on the leading market are China, France and Poland. The main non-eu markets are Turkey and USA. The large volume of imports and the volume of imports from Bulgaria make the German market an important and promising destination for Bulgarian exports. This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 24

25 Carboys, bottles and other containers made of glass The most serious in volume in 2012 is the presence of Bulgaria on the markets of Greece, Italy and Romania. Moreover, high levels of imports are accompanied by good positions, as Bulgaria is the leading importer on the Greek and the Romanian market, and it ranks fourth in Italy. The main non-eu markets are Serbia and Macedonia, as the share of Bulgarian products on the Macedonian market increased by nearly 5 p.p. The products with the largest export on the leading market Greece are Bottles of colourless glass, of a kind used for the commercial conveyance or packing of foodstuffs and beverages, of a nominal capacity of > 0,33 l but < 1 l and Carboys, flasks, jars, pots, phials and other containers, of glass, of a kind used for the commercial conveyance or packing of foodstuffs and beverages, of a nominal capacity of >= 0,25 l but < 2,5 l (excl. bottles), as both products account for more than 60% of total imports of the country. The main competitor of Bulgaria on the leading market is Italy, which ranks just behind Bulgaria, while the share of other importers is much lower. The negative trade deficit reveals the dependence of the Greek market on imported Carboys, bottles and other containers of glass. The fact that Bulgaria is leading importer on this market increases its importance for Bulgaria. Float glass and polished glass in sheets The main EU markets are Romania and Greece, i.e. the influence of geographical proximity is crucial. In 2012 Bulgaria is the major importer of this product group on the Romanian market. The main non-eu markets in 2012 Turkey, Serbia, Russia, Ukraine, and Macedonia. In Macedonia, Bulgaria ranks first by imports of this product group.. The main product in this product group with the largest export on the leading market Romania is Float glass and surface ground or polished on one or both sides of the sheets, but not otherwise thickness> 3.5 mm but <= 4.5 mm (apart. armoured glass, or coloured in the mass, with reflecting layer or plain surface). The main competitors of Bulgaria on the leading market are Hungary and Belgium, probably due to the geographical proximity as well. Good positions of Bulgaria on the Romanian market, the increasing share of Bulgarian imports and the presence of demand for imported float glass and polished glass in sheets This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 25

26 prove the importance of Romania as an export destination for Bulgarian products. However, it is necessary to consider the increase in the trade balance of the country. Safety glass, consisting of toughened (tempered) or laminated glass Glass mirrors The main EU market is Romania, i.e. the geographical proximity is an important factor one again. In 2011 and 2012, exports to Germany take leading positions too. The main non-eu markets are Turkey and Serbia. The main product in this product group with the largest export to the leading market in 2012, Romania, is Toughened tempered" safety glass (excl. glass of size and shape suitable for incorporation in motor vehicles, aircraft, spacecraft, vessels and other vehicles, and lenses for spectacles and goggles, etc., and for clocks and watches)": other. The main competitors of Bulgaria on the leading market are Poland, Germany, Hungary and Turkey, i.e. leading manufacturers and exporters in this commodity group. The negative trade balance of Romania along with the increasing share of Bulgarian exports in the Romanian imports of Safety glass, consisting of toughened (tempered) or laminated glass laminated (laminated glass) make this market an important priority for our country. The main EU markets in 2012 are Poland and Romania, as well as a Italy but with a smaller share. The main non-eu markets are Russia and Ukraine. The main product in this product group with the largest export on the leading market Russia is Toughened tempered" safety glass (excl. glass of size and shape suitable for incorporation in motor vehicles, aircraft, spacecraft, vessels and other vehicles, and lenses for spectacles and goggles, etc., and for clocks and watches)": other. The main competitors of Bulgaria on the leading market, besides the leading importer on this market, China, are also Republic of Korea, Poland, Germany and Japan, due to their relatively close to that of Bulgaria positioning in terms of share in the Russian imports of glass mirrors. The negative balance of trade for this commodity group reveals the dependence of the Russian market on imported glass mirrors. The increase in imports of these products since 2010 up to values higher than pre-crisis ones, and the fact that Bulgaria is leading importer in Russia, reinforce the importance of this market. This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 26

27 Ceramics Kitchen and washbasins, bathtubs, bidets and similar sanity fixtures made of ceramic materials The most serious presence of Bulgaria in terms of volume of exports in 2012 is on the market of France and this is accompanied by good ranking of Bulgarian imports among 10 major importers on the French market. Other main markets of Bulgarian exports are Italy, and Germany, where our country has different ranking among the leading importers on these markets.. Bulgaria has a good position on the market in Italy, where it ranks among the top five suppliers. The main non-eu market is Russia. The product with the largest export on the leading market France is ceramic sinks, kitchen sinks, washbasin pedestals, baths, bidets, flushing pans, flushing cisterns, urinals and similar sanitary fixtures use of porcelain (apart. Holders of soap, for mushrooms trays, holders tooth brush, towel racks, etc.). The main competitors of Bulgaria on the leading market are China, Portugal, Germany, Spain and Turkey. The French market relies on imported kitchen and washbasins, for them, bathtubs, bidets and similar sanitary fixtures use of ceramic materials. The growing trade deficit makes the French market a priority for Bulgarian producers. In this sense, it is important to put efforts to prevent further decline in the share of Bulgarian imports in total imports of France of this product group. Glazed ceramic tiles, cubes and similar articles (excl. double tiles) related articles for mosaics The main markets in the EU are Romania and the UK, as Bulgaria is the second major importer on the Romanian market. Bulgaria s positions are good in Germany and Greece as well, where our country ranks 13 th and 4 th respectively among main suppliers in The main non-eu markets are Serbia and Macedonia. The products with the highest export on leading market Romania are paving or facing, hearth or wall tiles, earthenware or fine pottery face> 90 cm ²; paving or facing, hearth or wall tiles face <= 90 cm ²; plates paving or facing, hearth or wall tiles, facing> 90 cm ² (. Major competitors of Bulgaria on the leading market are Spain, Turkey, Italy and Poland. Good positions of Bulgaria on the Romanian market, the increasing share of Bulgarian imports and the trade deficit prove the importance of Romania as an export destination for This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 27

28 Bulgarian Glazed ceramic tiles, cubes and similar articles (excl. double tiles) related articles for mosaics. Unglazed tiles, cubes and similar articles of pottery and stoneware, similar mosaics articles The main EU market in 2012 is Romania, i.e. the influence of geographical proximity is crucial The main non-eu markets are Serbia and Macedonia, as Bulgaria ranks among the top three importers on these markets. The main products in this product group with the largest export on the leading market Romania are unglazed ceramic flags and paving, hearth or wall tiles; unglazed ceramic mosaic cubes and the like, whether or not on a backing. The main competitors of Bulgaria on the leading market are leading world exporters of this commodity group such as Italy and Poland. The negative balance of trade for this commodity group reveals the dependence of the Romanian market on imported Unglazed tiles, cubes and similar articles of pottery and stoneware; similar articles mosaics. Refractory bricks, blocks, tiles and similar refractory ceramic constructional goods Key EU markets are Hungary and Austria. The main non-eu markets are Serbia and Macedonia, which shows the importance of the factor geographical proximity. The main products in this product group with the largest export on the leading market Hungary are refractory bricks, blocks, tiles and similar refractory ceramic constructional goods containing, by weight, > 50% alumina, silica or a mixture or compound of these products (excl. containing, by weight, >= 93% silica, > 7% but < 45% alum. No data available on The main competitors of Bulgaria on the leading market are China, Germany, and Austria due to traditional trade relations between these countries or geographical proximity. The decrease in imports of Hungary of Refractory bricks, blocks, tiles and similar refractory ceramic constructional goods and the shrinking share of Bulgarian imports in the country indicate that efforts are needed to strengthen the positions of Bulgarian exports on other export destinations. Roofing tiles, chimney cowls, smoke and other building materials, ceramics The main EU market in 2012 is Greece, i.e. Bulgaria s neighbouring country. This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 28

29 The main non-eu markets are Serbia and Russia. The main products in this product group with the largest export on the leading market Greece are ceramic chimney pots, cowls, chimney liners, architectural ornaments and other ceramic constructional goods (excl. of siliceous fossil meals or similar siliceous earths, refractory ceramic constructional components, pipes and other components. The main competitors of Bulgaria on the leading market in 2012 are the major importers on this market, Poland, Germany, Hungary and Turkey. The increase of the share of Bulgarian imports in Greece proves its importance as an export destination for this commodity group. However, the decline in the Greek imports in 2012 should be taken into consideration. Based on the analysis of the product groups, the following conclusions can be made: Total for sector Manufacturing of non-metallic and mineral products The main markets of the analysed products of sector " non-metallic and mineral products" are European countries - both in and outside the EU. Bulgaria s position among the major importers on the respective market depends on its size, therefore identical export volumes rank the country at different positions in different countries. Of most important priority for the development of the export potential of sector " non-metallic and mineral products" in most of the products are markets close to Bulgaria - Romania, Greece, Macedonia and Serbia, as the importance is also increasing of exports to non-eu countries - Russia and Turkey. Significant potential for export development have the markets of geographically close countries - Macedonia, Serbia, Albania, Montenegro, Ukraine, where conditions exist for growth of Bulgarian exports. The decrease in the market share of our country in some of the analysed countries is not due to a decrease in exports but rather to a stronger increase in the volume of exports of competitors, i.e. to the increased competitive pressure. For each of the commodity groups analysed the forecast development until 2015 modelling of the trend is to establish the analytical form of the function through which express the perceived regularities of development of exports of each product group for the period and estimating the values of the parameters of the function used. Modelling of exports was used linear or logarithmic regression depending on the perceived regularities in the source period. In calculating regressions were used meanings for each year and not just during the first and last year of the period. The results obtained are presented in the following figure. This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 29

30 Figure 3. Forecast for the development of export by product groups by 2015 Source: International Trade Center and own calculations This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and Medium Enterprises Promotion Agency bears full responsibility for the content of this document which shall not be regarded, by any 30

31 SMEs in sector Manufacturing of non-metallic and mineral products : The main advantages of EU competitors mentioned by participants in the survey are related to favourable customs regulations, geography (lower transportation costs) imposed on the market brand of certain products, financial resources, which have, and not Lastly - the support of the state and the best business climate in the country. These factors have priority according to the heads of the companies surveyed and to develop their export potential. As one of the main reasons for the poor competitiveness of Bulgarian products interviewed representatives of SMEs indicate Weak D, which has a limited scope - it is directed to the expansion of existing business or to diversify the production of the existing plant by adding new additional products. The majority (90%) of the surveyed enterprises in the sector have a clear and wellreasoned export strategy is relatively high (60%) is the percentage of alumni a new product on the market since 2007 in the same direction also affects the holding of international certificates and own brand. The findings and conclusions give reason to expect that in the next five years exports of products of the sector " non-metallic and mineral products", including and SMEs, has the potential to grow, albeit at a slower pace, it is estimated that in the end of the period to reach 100 million BGN. PRIORITY EXPORT COMMODITY GROUPS AND MAJOR MARKETS The analysis of commodity groups in the sector gives rise to set priorities leading export commodity groups and specific markets. The choice was made based on the following criteria: share of exports of the sector, growing exports in the period , the share of the world market and concentration of SMEs in sub-sector. Graphics interpret data Bulgarian exports in 2012 and the first quarter of 2013 (2013, Q1). The data used are taken from the International Trade Centre ( For each of the selected commodity groups are presented the main market in 2012 and 2013, Q1 in the EU and outside the EU, the main suppliers and their market share. This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 31

32 Glass-ware for table, for kitchen, toilet and stationary, etc Major EU market GERMANY Major non-eu market TURKEY 2013, Q1 Major EU market GERMANY Major non-eu market TURKEY This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 32

33 Float glass and polished glass, in sheets Major EU market ROMANIA 2012 Major non-eu market TURKEY 2013, Q1 Major EU market ROMANIA Major non-eu market TURKEY This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 33

34 Glazed ceramic tiles, cubes, pieces and similar articles (without double tiles); similar articles for mosaics Major EU market ROMANIA 2012 Major non-eu market MACEDONIA Major EU market ROMANIA 2013, Q1 Major non-eu market MACEDONIA This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 34

35 Toughened (tempered) safety glass or laminated safety glass Major EU market ROMANIA 2012 Major non-eu market TURKEY Major EU market ROMANIA 2013, Q1 Major non-eu market TURKEY This document has been developed with the financial support of Operational Program Bulgarian Economy, cofinanced by the European Union through the. Bulgarian Small and 35