Bulgarian car parts boom brings hope to EU's poorest state

Wed May 7, 2014 2:00am EDT
 
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* Bulgaria exports doubled in five years

* Cheap labour, low taxes attract investors

* Bulgaria hopes to undercut European competitors

* Red tape, poor infra, lack of strategy hobble investment

By Matthias Williams and Tsvetelia Tsolova

RUSE, Bulgaria, May 7 (Reuters) - In its glory days, Ruse, a town along the Danube river trading route, was a thriving economic hub that was home to Bulgaria's first chamber of commerce and known as 'little Vienna' for its Austrian-style buildings.

A hundred years on and after decades economic decline under Communism, its location on the southeastern edge of Europe, near Turkey and bordering Romania, is helping attract investors such as Witte Automotive, a German car part maker that supplies majors including Ford.

Witte is one of dozens of foreign companies, from Japan to South Africa, driving an auto component manufacturing boom that could lift the fortunes of the European Union's poorest member. Bulgaria is hungry for new, sustainable foreign investment after a real estate bubble burst during the financial crisis in 2009.

"The industry is growing, and the interest is growing too," said Till Truckenmueller, the chairman of Automotive Cluster Bulgaria, an industry group, in an interview in Sofia. "There are decisions by the big players in the past several years to have new plants here."   Continued...