site.btaUkrainian Companies Interested in Outsourcing Production to Bulgaria due to War in Ukraine 

Ukrainian companies are interested in outsourcing their production from Bulgaria due to the war in Ukraine, the newly elected chair of the Bulgarian-Ukrainian Chamber of Industry (BUCI), Lilia Ivanova, told BTA in an interview. She is former deputy economy minister and has extensive experience in the state administration. 

The Chamber will provide support to such companies, Ivanova said, recalling that in case they wish to relocate their activities to Bulgaria, the companies will have to register themselves as business entities or open an office in this country. Those companies wishing to get assistance under operational programmes must be registered as businesses under Bulgarian law. 

After the war ends, Bulgarian companies will be able to take part in the reconstruction process in Ukraine through the renewed European initiative for creating a Ukraine Solidarity Trust Fund, Ivanova said. She believes this fund will accumulate huge resources, adding that the funds are expected to be directed towards Ukraine’s economic recovery from the war, with infrastructure expected to be first. This will provide opportunities for Bulgarian construction companies and suppliers of materials. 

Over 20 companies from various sectors are members of BUCI. Among the fields they are involved in are hospital equipment production, hotels, agriculture, cosmetics, heavy industry, pharmaceuticals, retail trade and consultations, Ivanova explained. 

The main problems BUCI members have been facing since the war started stem from supply chain interruptions, inflation, the energy price increase and the COVID-19 crisis, Ivanova said. 

Two-way trade between Bulgaria and Ukraine stood at  1.471 billion US dollars in 2021, which is 56.8 per cent more than during the previous year, BUCI’s head recalled, quoting data of the Ministry of Economy and Industry. Trade with Ukraine stands at 1.2 per cent of GDP, but since it practically stopped after the war, the losses suffered by participants in this trade are 100 per cent, Ivanova said.

Most affected by the war will be companies that are unable to quickly adapt by finding alternative sources of supplies they had been importing from Ukraine and new markets for the products they had been exporting to that country, according to Ivanova. The main products which Bulgaria imports from Ukraine include ammonia, sunflower oil, saffron oil and cottonseed oil, iron, non-alloy steel. The main Bulgarian exports to Ukraine are medicines, fertilizers, cleaning agents and detergents, electronic equipment, petroleum oils and oils obtained from bituminous minerals.

Tourism is another sector impacted by the war. Some 250,000 Ukrainians have visited Bulgaria last year, ranking as the fifth largest source country of foreign visitors, Ivanova said. 

In the future, BUCI will focus on specific business cases and immediate assistance to companies that have approached the Chamber, Ivanova explained.