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Veliko Tarnovo Furniture Cluster Bulgaria

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Page 1: Bulgaria - Furniture cluster · 12 Mielec, Poland 13 Danyang, China 14 Bischweier, Germany 15 Zvolen, Slovakia 16 Egorievsk, Russia 17 Sebes, Romania 18 Bjelovar, Croatia 29 Brasov,

Veliko Tarnovo Furniture

Cluster Bulgaria

Page 2: Bulgaria - Furniture cluster · 12 Mielec, Poland 13 Danyang, China 14 Bischweier, Germany 15 Zvolen, Slovakia 16 Egorievsk, Russia 17 Sebes, Romania 18 Bjelovar, Croatia 29 Brasov,

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Production Sites with Furniture Clusters

1 SZCZECINEK FURNITURE CLUSTER- TVILUM- STOL-TAP- GRZEŚKOWIAK- BHK- GREEN ANGEL- WOOD TECHNOLOGY INSTITUTE - POZNAŃ- ABO

2 SMORGON FURNITURE CLUSTER

3 LAPOVO FURNITURE CLUSTER

4 SZOMBATHELY FURNITURE CLUSTER

5 OXFORD FURNITURE CLUSTER

6 ELEKTROGORSK FURNITURE CLUSTER

7 VELIKO TARNOVO FURNITURE CLUSTER

8 SEBES FURNITURE CLUSTER

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USA

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Support for businesses• We would like to share our location and extend our premises in order to provide

our partners with a built area to install furniture production facilities.

• The required infrastructure is already in place: Our location is equipped with high voltage power supply, gas supply, adequate water supply and waste water treatment facilities. Separate meters will be provided for the furniture factory.

• Property tax and local fees are administrated by Kronospan.

• Close proximity between the two manufacturing sites results in near zero transportation costs.

• Just in time delivery of raw and melamine-faced particleboard will result in no stock – which eliminates the burden on cash flow.

• Kronospan will keep the agreed minimum stock levels.

• We would provide you with access to our extensive product portfolio.

• You could benefit from technical support in material processing on-site. Our engineers are experienced in both furniture production technology and equipment – whether that’s mechanical, electrical, automation software or robotics.

• Kronospan will support you with administrative issues, including registration of a legal entity, the local register and banks.

• We could also provide support with accounting, tax and payroll regulations as well as reconciliation of local accounting with internal reporting.

• We will assist you with your recruitment process with our HR specialists and database.

• You could receive support from the on-site Kronospan design and marketing department.

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USA CHINA

Kronospan Worldwide

Ports and Own Ships:

Production Sites: Furniture Clusters:

Ponterosso, Italy24

Sandebeck, Germany4

Spremberg, Germany25

Szczecinek, Poland5

Szombathely, Hungary26

Poznan, Poland6

Lapovo, Serbia27

Lampertswalde, Germany7

Strzelce Opolskie, Poland28

Sanem, Luxembourg8

Jihlava, Czech Republic9

Pustków, Poland10

Burgas, Bulgaria11

Mielec, Poland12

Danyang, China13

Bischweier, Germany14

Zvolen, Slovakia15

Egorievsk, Russia16

Sebes, Romania17

Bjelovar, Croatia18

Brasov, Romania29

Kastamonu, Turkey30

Smorgon, Belarus31

Burgos, Spain32

Salas de los Infantes, Spain33

Elektrogorsk, Russia34

Ufa, Russia35

Mogilev, Belarus36

Auxerre, France37

Le Creusot, France38

Ryomgaard, Denmark39

Clarion, USA40

Grodno, Belarus41

Jaslo, Poland42

Novovolynsk, Ukraine19

Oxford, USA21

Lungötz, Austria1

Riga, Latvia22

Salzburg, Austria2

Veliko Tarnovo, Bulgaria23

Chirk, United Kingdom3

Mohacs, Hungary20

Chemical Plants:Chirk, United Kingdom1 Sebes, Romania8

Burgos, Spain2 Mogilev, Belarus9

Aarhus, Denmark3 Egorievsk, Russia10

Lampertswalde, Germany4 Ufa, Russia11

Szczecinek, Poland5 Kastamonu, Turkey12

Ostrava, Czech Republic6 Oxford, USA13

Strazske, Slovakia7

Gandia, Spain1

Aarhus, Denmark2

Szczecin, Poland3

Distribution Centers:Mouscron, Belgium1

Penza, Russia8

Tárnok, Hungary2

Ulyanovsk, Russia9

Sofia, Bulgaria3

Moscow, Russia10

Samara, Russia4

Yekaterinburg, Russia11

Kiev, Ukraine6

Rostov-on-Don, Russia13

Goole, United Kingdom15

Dnepropetrovsk, Ukraine7

Krasnodar, Russia14

Chatham, United Kingdom16

Istanbul, Turkey17

Nicosia, Cyprus18

Kazan, Russia19

Tbilisi, Georgia20

Baku, Azerbaijan21

Shanghai, China22

Kaunas, Lithuania23

Torun, Poland24

Vtachikon, Slovakia25

Constanta, Romania4

Enns, Austria5

m/v Spanaco Loyalty

m/v Spanaco Reliability

m/v Spanaco Simplicity

m/v Spanaco Fidelity

m/v Spanaco Progress

5 Saint Petersburg, Russia

12 Novosibirsk, Russia

Szczecinek, Poland5

Sebes, Romania17

Veliko Tarnovo, Bulgaria23

Szombathely, Hungary26

Lapovo, Serbia27

Smorgon, Belarus31

Elektrogorsk, Russia34

Oxford, USA21

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Over 120 years of manufacturing experience Our core activity is the manufacture of wood-based panel products (particleboard, MDF and OSB) and related value added products. Vertical integration enables Kronospan to lead the way in both cost and innovation. We have invested in developing a vertically integrated supply chain that allows us to constantly improve upon and perfect every aspect of our products.

Focus on the European Market Kronospan has more than 40 production facilities and is the world leader in the manufacture of wood–based panels. For the last 20 years our major projects have been undertaken in Eastern Europe and Russia.

Wealth creation in the medium and long termBeing privately owned means that we take a long term view rather than focusing on short term achievements.

Decentralized organizationKronospan is made up of several manufacturing groups. This allows decision making by local management. As a result we can be close to our customers, our suppliers of goods and services and our people. This provides a strong platform for growth. The structure also allows us to ring fence political and economic risks where appropriate. With this we get more commitment, more ideas which allow individuals and the company to grow.

Customer serviceWe aim to be the most service-oriented supplier in our sector. Our extensive market coverage and wide product range give us a significant competitive advantage. At Kronospan, we are close to our customers and our locations are a maximum of 400 km or 8 hours by truck from our customers which is a key advantage resulting in reduced transport costs, hence Kronospan can offer the best package.

Advanced technologyWe have pioneered many of our industry’s key advances and will continue to lead product development and innovation in the future. Our production asset quality is also first class. We are here to lead, not to follow; using for example state-of-the-art filter technology.

Cost leadership Although our structure is decentralised we benchmark our production sites and with the support of our technical shared service centre ensure that they remain efficient low cost producers.

Local financingFinancing is obtained at a local level and we look for long term banking relationships. Our aim is to keep foreign exchange risks under control and therefore require finance as much as possible locally.

Central supportWe use shared services where it is important and only centralise when and where it makes sense.

Environmental responsibilityOur aim is to manufacture with the least environmental impact and the maximum raw material yield – no waste.

KronospanExcellence in Transforming Wood

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Inspiration and innovation

Kronospan is the global leader in the production of wood-based boards and panels. Our products are used everywhere: from floors and furniture to frame constructions. With over 100 years of market presence, we have accumulated a wealth of experience in many markets, continuously innovating and investing ever since the inception of our firm. All of this continues to translate into Kronospan's new products, systems and advanced technologies.

Kronospan's global product range, which is divided into Kronodesign, Kronobuild and Krono Original, offers unlimited design opportunities to make high-quality furniture, interiors or buildings.

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Key facts

Bulgaria is located in Southeastern Europe. It benefits from excellent water, road and rail transport connections to Western Europe and Turkey.

European routes E 70 and E 85 – which provide easy access throughout Western Europe, Turkey and the Near East – meet in central Bulgaria.

Official Name Republic of Bulgaria

Form of State Democratic Republic

Area 110 994 km²

Population 7.05 million

Official Language Bulgarian

Main Religion Orthodox Christianity

Capital City Sofia: 1.37 million people

Currency Bulgarian Lev (BGN)

GDP (2018) € 55.2 billion

GDP pc (2018) € 7 851

E 70

E 85

AccessibilityGeostrategic location

Igoumenitsa840 km

London1982 km

Dublin2703 km

Amsterdam1383 km

Hamburg2147 km

Copenhagen1680km

Oslo2885 km Stockholm

2953 km

Helsinki2924 km

Tallinn2837 km

Berlin1857 km

Warsaw1853 km

Minsk1565 km

Vilnius1646 km

Klaipėda1954 km

Moscow1954 km

Riga2530 km

Kiev1102 km

Chisinau641 km

Prague1508 km

Vienna1226 km

Graz1189km

Bratislava1184km

Brussels1672 km

Budapest991 km

Stuttgart1786 km

Zurich1906 km

Milan1645 km

Munich1551 km

Salzburg1431 km

Ljubljana1143 km

Zagreb1005 km

Sarajevo291 km

Tirana767 km

Skopje469 km Alexandroupoli

346 km

Sofia221 km

VELIKO TARNOVO

Bucharest183 km

Istanbul473 km

Athens1022 km

Belgrade110 km

Frankfurt1947 km

Paris1766 km

Madrid2586 km

Marseille2144 km

Lisbon3142 km

Rome1891 km

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Veliko Tarnovo FurnitureCluster

Varna, Ruse, BucharestNational road

Sofia

Railway

Economic zonein Veliko Tarnovo

Sofia

Varna

Plovdiv

VELIKO TARNOVO

Ruse

Ravno Pole

Burgas

Pleven

Bulgaria

Romania

Serbia

Macedonia

GreeceTurkey

Haskovo

Stara Zagora

We are located in the Veliko Tarnovo industrial zone - a convenient position in the centre of Bulgaria - providing great access to all key roads. It’s this strategic location, complemented by Kronospan’s innovative business proposition, that would give any furniture producer the competitive edge. Kronospan owns 297 215 m2 (30 ha) of land in Veliko Tarnovo with well-developped technical infrastructure. Additionally Kronospan plans to provide more than 86 420 m2 (8.6 ha) area to build warehouses and manufacturing facilities to meet the needs of the potential partners - furniture producers.

E 70

E 75 Utilities to sitegassupply

electricitysupply

watersupply

more than 86.000 m2

potential areawhere the production facility could be built according to the needs of the potential partner – furniture producer

The location is easily accessible because of internal railway connection to the train station in Veliko Tarnovo. Veliko Tarnovo is positioned on the major railway line Stara Zagora - Ruse and is 15 km away from the biggest railway station in northern Bulgaria (Gorna Oryahovitsa).

Railway connection

The Municipality of Veliko Tarnovo operating 22 kindergartens, 13 primary schools, 4 secondary schools, 4 vocational school, 6 public vocational schools in the field - tourism, economy, light industry, electronics, construction, 1 private professionals High School, 2 special (auxiliary ) schools, 3 University with more than 10.000 students in over 70 specialties. Additionally 30 km away from Veliko Tarnovo there is Technical university with 17 specialities.

Human resources

Easy access221 km 223 kmto Sofia to Varna

5 kmto the Highway

10 kmto Gorna Oryahovitsa

215 kmto Burgas

473 kmto Istanbul

183 km

400 km

to Bucharest

to Constanza

We offer at your disposal

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Political and business stability Bulgaria is strategically located and offers a combination of political and macroeconomic stability and incentives for doing business

● Stable parliamentary democracy; EU, NATO and WTO member

● Bulgaria’s currency is fixed to the Euro under a currency board arrangement, pegging the Bulgarian lev to the euro at the level of 1.96

● EU funding – more than €8 bn in EU funds over the next years

● Bulgaria has one of the lowest government debts in the European Union (23.1 % of GDP)

Development

Facts and figures In recent years, the Bulgarian economy experienced growth due to strong foreign investments and continuous improvement of its business environment. In fact, since 1996, Bulgaria has attracted more than €43 billion of inward foreign direct investment.

€ 79 billionInward FDI in Bulgaria 1996-2017

Bulgaria is one of the best EU countries to invest in. Stable macroeconomic indicators are showing that Bulgaria has consistent growth and improving credit rating of the country . One of the lowest corporate taxes (10%) in EU, financial stability with currency board, strategic location and direct access to key market regions, are some of the advantages, which investment in Bulgaria provides to investors.

Strategic locationLocated at the heart of the Balkans, Bulgaria is a strategic logistics hub. Ease of transportation of cargo is provided by:

● Five Pan-European corridors (IV, VII, VII, XI, X), which pass through the country

● Transport program TRACECA, which connects Europe with Caucasian and Central Asian region

● Four major airports: Sofia, Plovdiv, Bourgas and Varna

● Two main seaports: Varna and Bourgas

● Numerous ports at the Danube River

Potential marketDue to its location Bulgaria provides direct access to the following key markets:

● European Union - zero tariff market with population of 500 million

● CIS – still not well penetrated market with a high potential

● Turkey - zero tariff market of near 80 million population

● Middle East – a market with high purchasing power

● North African market

Human resourcesBulgaria has one of the most competitive costs of labor in Central and Eastern Europe and average monthly salary in Bulgaria is € 620 (2018).

Work force is well educated, highly skilled and multilingual

● 60 % of the total population is in working age (appr. 4.2 million)

● 60 000 students annually graduate from 51 universities

● 98% of the high school students study a foreign language (usually English) and 73% study a second language (mainly German, French, Spanish, Russian)

● 94% of the schools have Internet access

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Potential after investment of Kronospan in Bulgaria

450 employees

Veliko Tarnovo capacity:

700 000 m3 of PB

25 000 000 m2 of Melamine Faced Boards

360 000 m3 of MDF

Burgas capacity:

180 000 m3 of OSB

Kronospan in Bulgaria

Kronospan has been presented in the Bulgarian market for many years. This was originally through trading and distribution but during the last 22 years we have been manufacturing at our modern production facilities in Burgas and Veliko Tarnovo.Today Kronospan is the leading wood-based panel producer in Bulgaria. We offer an excellent product, decor range and the very highest levels of customer service. We are able to produce E-LE (CARB II) certificated products. We ensure that all employees and suppliers adhere to ethical business practices. We acquire goods, commodities and materials from domestic suppliers.

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Business environmentLow cost of doing business

● Favourable tax regime in Europe. Corporate income tax is 10% flat rate. Personal income tax is 10%, flat rate. Industries in high-unemployment areas are granted 0% tax rate.

● 2-year VAT exemption for imports of equipment for investment projects over €5 million, creating at least 50 jobs

● 0% withholding tax on dividends and liquidation quotas for EU tax residents (5% for non EU tax residents)

● Low cost of office rents and utilities. Bulgarian cost of electricity for industrial users is 70% of the European average

● Competitive labour cost (approx. 30% of EU average)

● Currency stability is supported by the currency board

● Technical university preparing qualified personnel for cluster on site

● Strategic location - located at the heart of the Balkans

● Direct access to key markets: EU, CIS, Turkey, Middle East, North Africa

State supportThe Bulgarian legislation introduces a system of promotion measures for initial investments in tangible and intangible fixed assets and creating new employment linked thereto, according to the legislation of EU.

(1) Data source: National Statistic Institute(2) Avarage for the region of Veliko Tarnovo

One of the most competitive costs in EuropeGas Water0.33 €/kWh 1.17 €/1m3

Electricity0.09 €/kWh

Cost of Labor(1)Salary (Min.) - 342 € Salary (Avg.)(2) - 700 €

Investments must be related to the following sectors:

● Manufacturing ● Research & Development ● Education ● Healthcare ● High-tech services ● Warehousing and logistics

The government incentives for:

● Class B Investment Projects

● Class A Investment Projects

● Priority Investment Projects

Financial support for investors

The Bulgarian government offers the following incentives for investors:

● Institutional support

● Financial grants of up to 50% for education and R&D projects and up to 10% for manufacturing projects

● Reimbursement of labor costs paid by the employer

Support is applicable for new projects and the ammount of the support depends on:

● the number of new staff employed by the project

● the size of the company / investor and value of the investment

INVE

STM

ENT

CRI

TERI

A IN

DU

STRY Priority Class A Class B

Manufacturing Industry €50 million

or 25 million

and 200 working places

Manufacturing Industry €5 million

or €2 million

and 150 working places

Manufacturing Industry €2.5 million

or €1 million

and 100 working places

GO

VERN

MEN

T IN

CEN

TIVE

S

Include all the incentives for Class A and B

Include all the Incentives for Class B Information services

Institutional Support

Consulting and individual administrative services. Investors will be able to authorize Agency officials to obtain any documents for implementation of the corresponding investment project.

Shortened administrative procedures: the central and local government authorities will provide administrative services shortened with one-third of the time period established by the law

Financial grants of up to 50% for education and R&D projects and up to 10% for manufacturing projects

Financial support for construction of technical infrastructure elements to the borders of the project site, needed for implementation of one or more investment projects.

Financial support of up to 25% for the vocational training for obtaining professional qualifications.

State tax exemption for changing the land status

Reimbursement of labor costs paid by the employer.

Acquisition of real estate private state or private municipal property without a tender and at a price lower than the market, but not lower than the tax assessment of the property

On the request of certified investor the corresponding authorities may transfer ownership rights or establish a limited ownership right over real estate (private state or private municipal property) without a tender.

Establishment of public-private partnerships with municipalities, universities, other organizations from the academic society and etc.

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Production and Cluster Area

MDF Production

MF Production

PB Production Cluster 8.6 ha

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The production hall for lease is adjacent to the newly develop production facility of Kronospan in Bulgaria

● The total built-up area is about 28 000 m2;

● The building is single-storey and two-storey made up of prefabricated reinforced concrete elements – columns, Virendeel frames, purlins, roof panels;

● Clear height in the hall is 6.55 m, and the columns are located in raster of 12.0 m and 18.0 m from each other;

● Natural daylight enters by skylight;

● Available water, gas and electricity supply;

● Railway connection;

Production hall for lease

Page 14: Bulgaria - Furniture cluster · 12 Mielec, Poland 13 Danyang, China 14 Bischweier, Germany 15 Zvolen, Slovakia 16 Egorievsk, Russia 17 Sebes, Romania 18 Bjelovar, Croatia 29 Brasov,

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