Frost & Sullivan: Government-Backed Incentives to Support Continued FDI Flows Into Electronics Manufacturing Market in Bulgaria

LONDON - Bulgaria offers immense growth potential for electronics manufacturing and related services. However, high inflation has been a cause of concern, especially amidst the economic slowdown, which affected Bulgaria in the second half of 2008. Nevertheless, contract manufacturers in Bulgaria can look forward to mixed prospects in 2009 with more market opportunities projected to emerge in 2010, thanks to incentives offered by the government promoting electronics manufacturing.

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New analysis from Frost & Sullivan (www.smt.frost.com), Bulgarian Electronics Manufacturing Market, finds that the market earned revenues of US$441.0 million in 2008 and is estimated to reach US$887.4 million in 2015.

“The global economic slowdown, which spread to emerging markets in Central and Eastern Europe (CEE) in late 2008 has had a considerable impact on Foreign Direct Investment (FDI) flowing into the electronics manufacturing segment in Bulgaria,” observes Frost & Sullivan Research Analyst Harish Natesan. “Nonetheless, with the government introducing aggressive policies to woo investors to Bulgaria, the country is set to attract appreciable FDI in electronics manufacturing in the coming years.”

The Bulgarian government has decided to lower investment thresholds and offer more incentives to electronics manufacturers investing in regions experiencing high unemployment. These economic reforms in the wake of the economic slowdown have been an attempt to lower the impact of this crisis on the Bulgarian economy. Hence, Bulgaria is set to emerge as one of the largest recipients of FDI in the CEE region in the coming years.

In 2008, rising inflation rates as well as the advent of the economic slowdown restrained the expansion of the electronics manufacturing market in the country. This trend is expected to persist in 2009 as well. Declining demand in key end-user segments has also been a key restraint for market growth.

“Curtailed investments due to the economic slowdown as well as mounting operating expenses will impact the prospects of the Bulgarian electronics manufacturing market in 2009,” cautions Harish. “In addition, declining demand from end users will be a major restraint on growth potential.”

Proximity to Romania and other emerging markets in Eastern Europe are positioning Bulgaria as a key electronics manufacturing hub for the future. As electronics manufacturers increasingly look to capitalise on markets with more limited competition, Bulgaria is emerging as an attractive destination for electronics manufacturing and services in Southeast Europe.

“Bulgaria offers the advantage of strategic proximity to Romania and a low competitive scenario,” remarks Harish. “Accordingly, it is increasingly being preferred by many electronics assemblers who are evaluating the Southeast European market.”

If you are interested in a virtual brochure, which provides a brief synopsis of the research and a table of contents, then send an e-mail to Joanna Lewandowska, Corporate Communications, at joanna.lewandowska@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country. Upon receipt of the above information, a brief brochure will be sent to you by e-mail.

Bulgarian Electronics Manufacturing Markets is part of the Surface Mount Technologies Growth Partnership Service programme, which also includes research in the following markets: Hungarian Electronics Manufacturing Markets, Polish Electronics Manufacturing Markets and Romanian Electronics Manufacturing Markets. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.

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Bulgarian Electronics Manufacturing Markets M390 Contact: Joanna Lewandowska Corporate Communications - Europe P: +48-22-390-41-46 E: joanna.lewandowska@frost.com

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Source: Frost & Sullivan

Joanna Lewandowska, Corporate Communications - Europe of Frost & Sullivan, +48-22-390-41-46, joanna.lewandowska at frost.com / Logo: https://www.newscom.com/cgi-bin/prnh/20081117/FSLOGO