EXPORT STRATEGY Manufacture of rubber and plastic products

REPUBLIC OF BULGARIA

Bulgarian Small and Medium

Enterprises Promotion Agency

PROJECT BG161РО003 – 4.2.01-0001, “PROMOTION OF THE

INTERNATIONALIZATION OF THE BULGARIAN ENTERPRISES”

Проект № BG161РО003 – 4.2.01-0001, „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” 2007 – 2013

Този проект е получил финансиране от Европейския фонд за регионално

развитие чрез Оперативна програма „Развитие на конкурентоспособността

на българската икономика” 2007 – 2013

EXPORT STRATEGY

Manufacture of rubber and plastic

products

June 2012

2

LIST OF ABBREVIATIONS

EU European Union

BSMEPA Bulgarian Small and Medium Enterprises Promotion Agency

MEET Ministry of Economy, Energy and Tourism

MRDPW Ministry of Regional Development and Public Works

SME Small and Medium enterprises

ITC International Trade Centre

NCEA National Classifier of Economic Activities

NSI National Statistical Institute

OP Operational Programme

OTEA Office of Trade and Economic Affairs

3

TABLE OF CONTENTS

INTRODUCTION .................................................................................................................... 4

1. APPROACH FOR DEVELOPING THE EXPORT STRATEGY FOR SECTOR

“MANUFACTURE OF RUBBER AND PLASTIC PRODUCTS” ..................................... 5

2. MAIN CONCLUSIONS FROM THE ANALYSIS OF THE CURRENT STATE .. 11

3. SWOT AND LOED ANALYSES OF THE EXPORT PROCESS OF SMEs IN

SECTOR “MANUFACTURE OF PLASTIC AND RUBBER PRODUCTS” ................. 30

4. OBJECTIVES................................................................................................................. 33

5. STRATEGY FOR PROMOTION OF EXPORT OF SMES IN THE SECTOR ..... 34

6. ACTION PLAN .............................................................................................................. 36

7. SYSTEM FOR MONITORING AND CONTROL ..................................................... 49

4

INTRODUCTION

The export strategy of sector “Manufacture of rubber and plastic products” is developed under

Project № BG161РО003 – 4.2.01-0001 “Promoting the internationalisation of the Bulgarian

enterprises”, Priority Axis 4 “Strengthening the international market positions of Bulgarian

economy” of Operational Programme "Development of the Competitiveness of the Bulgarian

Economy", pursuant to contract BG-161PO003-4.2.01-001-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 “Manufacture of rubber and plastic 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, The Ministry of Economy, Energy and

Tourism (MEET) 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 “Manufacture of rubber and plastic 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 rubber and

plastic products.

At the export strategy development, the "Methodology for Strategic Planning" is taken into

account prepared by the Council for Administrative Reform at the Council of Ministers of the

Republic of Bulgaria.

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1. APPROACH FOR DEVELOPING THE EXPORT STRATEGY

FOR SECTOR “MANUFACTURE OF RUBBER AND PLASTIC

PRODUCTS”

The Export Strategy is a strategic document defining the medium-term goals and priorities of

the export development of SMEs in sector “Manufacture of rubber and plastic products”. It is

developed on the basis of the strategic planning approach, the skillful implementation of

which has the following advantages:

Creates an understanding among stakeholders on the trends and prospects for the future of

sector “Manufacture of rubber and plastic products”.

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 sector “Manufacture of rubber and plastic products.

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

Updating

Each of these stages contains specific activities, some of which, such as assignment,

preparation, development, coordination, approval and, at a later period, updating, 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 “Manufacture of rubber and plastic

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 “Manufacture of rubber and plastic products” to be able

6

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.

Technology of strategic planning

The process of strategic planning encompasses the following steps:

Identification of the stakeholders

Analysis of the environment

SWOT analysis

Vision

Goal setting

Selection of an alternative – a development strategy

Action plan

Monitoring system

Each of these steps is characterized by some specifics, namely:

Identification of the stakeholders. A stakeholder is any person or group that requires

attention, can influence a decision, can contribute by resources or be affected by a certain

decision. Involving stakeholders at an early stage of the strategic document development

concerning the SMEs in sector “Manufacture of rubber and plastic products” can lead to a

strongly expressed consensus on goals and a greater willingness to support decisions.

Stakeholders of the Export Strategy for sector “Manufacture of rubber and plastic products”

may involve various persons and organizations, such as companies, state institutions,

producers’ associations, businesses, consumers of the products, NGOs and experts.

The specifics of developing business supporting strategies is that prepared documents shall

not favour some and/or discriminate other businesses. This is the reason why there was a

pursuit for equality when involving business organizations and different branch associations,

as well as a search for an opportunity that the majority of businesses could benefit from the

analysis made.

Analysis of the environment. The analysis of the environment (the conclusions of which

serve as a basis for the SWOT analysis) allows the formulation of goals and priorities which

shall align the efforts and shall not be dissociated from time and environment.

Analyses are focused on:

Current state of affairs of sector “Manufacture of rubber and plastic products” in

Bulgaria, trends, dynamics and growth;

Characteristics of export oriented SMEs, incl. regional distribution;

State of the exports of goods and services;

Analysis of goods and services with export advantages or export potential produced by

sector “Manufacture of rubber and plastic products”;

Estimation of productions with the highest value added growth potential in the export

of goods and services in which Bulgaria has a global market share;

Size of the international market;

Competitiveness of exports of goods and services, for existing and for potential

foreign markets;

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Share of products with origin from Bulgaria;

Share of the Bulgarian exports of analyzed product groups in total imports on the

global market;

Leading importers in the sector;

Value and volume of imports on certain foreign markets for a specified product group;

Main suppliers on a certain market;

Identification of barriers to internationalization of enterprises in sector “Manufacture

of rubber and plastic products” and measures for their overcoming.

Based on these analyses, the current problems and achievements of the sector shall be clearly

defined, and some forecasts, opportunities and prospects for development shall also be

motivated, such as:

Achieving a significant growth of Bulgarian goods in total, and particularly of those

with higher value added;

Identification and prioritization of target markets by commodity groups;

A forecast of exports and imports of goods and of trade balance in the next five and

more years.

Analyses are based on existing analytical and program documents, available statistical

information and information from conducted surveys – interviews and focus groups.

The analysis of the environment describes the current situation of SMEs in “Manufacture of

rubber and plastic products” and the export process, establishes the reasons that cause

developmental problems, and sets the guidelines for future development.

SWOT analysis. SWOT analysis allows the identification of the main internal factors defined

as “strengths and weaknesses” and the main external factors, defined as “opportunities and

threats”, and it also assists the formulation of strategic goals, priorities and measures. Using

SWOT analysis prevents the setting of unattainable goals and priorities for export

development of SMEs in “Manufacture of rubber and plastic products” over the period of the

Strategy.

Using SWOT analysis in the development of the Export Strategy has some specifics, as

though BSMEPA is the strategy “owner”, the analysis is focused on the export process of

SMEs in the sector “Manufacture of rubber and plastic products” and not the institution itself.

LOED analysis. LOED analysis is an instrument used to show how to build on strengths, to

overcome weaknesses, to seize opportunities and to protect against the threats identified by

the SWOT analysis.

Goal setting. Strategic planning focuses on critical issues, opportunities and problems faced

by the export of SMEs in “Manufacture of rubber and plastic products”. It helps to distinguish

really important decisions from decisions with temporary effects.

Goal setting, by establishing a hierarchical tree of goals, is a working tool that allows

detailing of the most common general goals to specific ones.

Defining of the general strategic goal is particularly important for the future development of

exports of SMEs in “Manufacture of rubber and plastic products” as it reflects the view of

institutions and business for the future. The general strategic goal seeks to answer a single

basic question: How should the export of SMEs in the sector look like in the long-term period

according to the main institutions and stakeholders?

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Reaching the level of specific goals makes it possible to answer the questions about “who”,

“what” and “when”, so as to guarantee attaining of the goals set higher in the hierarchy.

Selection of an alternative – a development strategy. Once objectives are defined, ways are

sought how to achieve them. Experience shows that this can be done in different ways, which

represent different alternatives for development and achievement of the objectives. At this

stage of strategic planning, different alternatives are evaluated from different perspectives and

criteria, and as a result, an alternative is selected which then becomes a development strategy.

Action plan. The selected strategy shall be supported by certain actions and measures, which

are linked to terms, supervisors, performers and financial resources. The Action plan and the

related measures therein transform this strategic instrument into daily work and

implementation of the policy for supporting the export of SMEs in “Manufacture of rubber

and plastic products”.

Monitoring system. The last step of the strategic planning process is monitoring and

evaluation of the progress in implementing the general and specific goals set in the export

strategy and in the Action plan. Monitoring is important as it allows taking corrective actions,

provided that progress is unsatisfactory or conditions change. It is also important that the

progress in achieving general objectives is reported to the public and the business, so that they

can estimate the work of relevant institutions and stakeholders in the implementation of the

strategy. It should be noted that often the effects may not be visible or apparent, which

hampers their measurability. Moreover, the impact is often a cumulative effect, and this may

complicate further the analysis. This gives particular weight to monitoring, which is closely

related to all stages of implementation of the Export Strategy - preliminary (ex ante), current

(parallel with implementation) and subsequent (ex post) evaluation.

In order to exercise monitoring of the implementation of the export strategy and to evaluate

performance against the defined targets, it is necessary to use a set of indicators which should

be determined in advance or early enough regarding the implementation of the strategic

document, so as to use data received on them. In most cases, these will be targeted values

which in aggregate will correspond to the goals of the strategic document.

Monitoring provides the feedback that helps to assess the success or failure of the planning

document.

To perform the monitoring process, it is necessary to determine:

Monitoring indicators (what will be observed);

Frequency of monitoring and evaluation (when the relevant reports will be

prepared);

Responsibilities for monitoring and evaluation (who does what) and

competences for decision-making to change (updating of the strategic

document).

INFORMATION SOURCES

The following main information sources have been used in developing the export strategy:

- National Statistical Institute

- Information provided by BSMEPA

- Information from the MEET

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- Eurostat

- International Trade Centre

- Official electronic information sources

- Information published by professional organizations in the sector

- Information from the Bulgarian Industrial Association, the Bulgarian Chamber of

Commerce and Industry and its regional divisions

- Information from a survey carried out in the period 31 October to 28 November 2011

with senior management of 1 micro, 8 small and 15 medium-sized enterprises (total of

24), working in the sector, and the focus group discussion.

Maximum objectivity of the conclusions has been pursued when processing the information.

In most of the cases, the analyzed information applies to the sector as a whole, i.e. the

information covers both SMEs and large enterprises, based on the assumption that if a

Bulgarian company has been successful on certain markets, the same could be expected for

another company as well, incl. from the group of SMEs. These specifics are explicitly

emphasized during the analysis.

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STRUCTURE OF THE EXPORT STRATEGY FOR SECTOR “MANUFACTURE OF

RUBBER AND PLASTIC PRODUCTS”

The structure of the Export Strategy for sector “Manufacture of rubber and plastic 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

non-specialists as well;

- providing information thematically, i.e. structuring the material in a way that allows

in-depth 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 “Manufacture of

rubber and plastic 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.

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2. MAIN CONCLUSIONS FROM THE ANALYSIS OF THE

CURRENT STATE

This part contains the conclusions of different analyses, included in “Analysis of the

environment”, one of the main steps in the technology of strategic planning. In application to

this strategic document, the complete text of data and analyses is presented, on which basis

the respective conclusions are drawn. 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 FOREIGN

MARKETS

EXPORT PRIORITY PRODUCT GROUPS AND MAIN MARKETS

BARRIERS TO THE INTERNATIONALIZATION OF SMALL AND

MEDIUM ENTERPRISES AND MEASURES FOR THEIR OVERCOMING

Conclusions are clearly structured according to the scope of the analysis, as first are presented

those valid for the whole sector, including the companies, meeting the requirements,

according to the classification for large enterprises, and second come the conclusions

regarding small and medium-sized enterprises in the sector.

STATE AND DEVELOPMENT OF THE SECTOR IN BULGARIA

General information for the sector "Manufacture of rubber and plastic products.”

The dynamics of production and turnover of the enterprises in the sector, measured by

the production and turnover indices, shows as a whole presence of positive trends in

the sector in the period 2000-2010. At the same time a significant deviation of the

index of production of the sector from the level of the production in the manufacturing

industry is observed in two directions: lower values in the case of decrease and higher

values when there is a positive change of the indicators. The slower turnover index

growth rate compared to the average for the manufacturing industry shows certain

difficulties in terms of the realization of the production of the sector on the domestic

market.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Index of Industrial Production

Manufacturing

industry

75.1 71.7 79.3 92.8 106.5 118.2 131.0 132.6 114.4 96.0 103.3

Manufacture of

rubber and

plastic products

57.7 50.2 54.7 85.7 105.3 80.1 122.6 134.0 124.2 105.8 114.3

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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Turnover index on the domestic market

Manufacturing

industry

69.8 67.1 78.8 80.9 103.0 117.6 134.7 149.6 134.5 127.2 153.6

Manufacture of

rubber and

plastic products

59.9 49.6 56.3 81.9 100.7 90.4 129.6 149.0 147.9 126.1 142.4

Note: as of December of the given year, on a continuous basis - 2005 - Source: NSI

The regional structure of companies in the sector is characterized by an uneven

distribution of enterprises and employed by regions. The concentration of companies

and employed is largest in the South Central region lowest in the North-Western

region.

Regional distribution of enterprises from the sector "Manufacture of rubber and plastic

products"

Source: Database 'Amadeus' MEET, 2011

SMEs in the sector "Manufacture of rubber and plastic products"

In 2010 out of all SMEs in the manufacturing industry 6.35% operate in the sector

"Manufacture of rubber and plastic products".

The percentage reduction in the number of SMEs in the sector in 2010 compared to

2009 (over 7%) is higher than the average decrease in number of companies in

manufacturing industry (4.6%).The registered downward trend in the number of SMEs

is valid for all subsectors except for "Production of plates, sheets, tubes and profiles of

plastics", which showed a growth of 9.6%.

For 2010 the share of the employed in SMEs in the sector in all employed in SMEs in

the manufacturing industry is 5.2%. However, for the sector “Manufacture of rubber

and plastic products” the negative trend of decreasing employment in SMEs in 2010

compared to 2009 is shown in higher degree and with a faster rate of decline (-9%)

compared to employment in SMEs in the manufacturing industry (-6.8%).

In 2010, the SME sector provides 7.4% of the turnover and 6.4% of the value added of

SMEs in the manufacturing industry. The registered growth of 9.2% of the turnover

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compared to 2009 is higher than the average for the manufacturing industry (1.8%),

while in terms of value added of SMEs in the sector a decrease of 6% is observed

(compared to less than 1% decline on average for the manufacturing industry).

The higher turnover rate than that of the value added shows that this type of

production does not contain in itself highly innovative components.

The industry is lagging behind in terms of innovation and high technology that is

further confirmed by the fact that in 2010 labor productivity in the SMEs in the sector

(13 948 BGN), although higher than the productivity of SMEs in the manufacturing

industry (11,421 BGN ) lags far behind the most high-performance sector -

Manufacturing of pharmaceutical products (29 418 BGN), where components such as

research and innovation are most significant.

In inner-sector aspect subsector "Manufacture of plastics products" creates the major

share of employment, turnover and value added in the sector - respectively 87.1%,

86% and 84.5%. Within this subsector highest proportion has the manufacture of

plastics, followed by the manufacture of builders' ware of plastics, n.e.s.. In subsector

"Manufacture of rubber" a major contributor to employment, turnover and value added

is the manufacture of other rubber products - 12.3%, 13.6% and 15%.

The sector has a well-prepared workforce that knows and is able to apply traditional

good practices in manufacturing. This assessment stems from the relatively not very

high priority of the measures for improving the qualification of the personnel referred

to in the conducted survey.

The findings of the conducted survey and the analysis of the financial state of SMEs

with export potential indicate that the surveyed companies continue to experience

difficulties in their activities and have still not overcome the negatives of the global

financial and economic crisis, which results in deterioration of their financial

performance after 2008, especially in terms of equity and profit.

EXPORT ORIENTATION OF THE SECTOR

General information for the sector "Manufacture of rubber and plastic products”

The volume of exports for 2010 ranks sector "Manufacture of rubber and plastic

products" in seventh place among the sectors analyzed with a share in the total export

of 2.6%.

Sector's share in the total exports has remained relatively constant over the period

2001-2010. In a dynamic plan, the reported increase of 0.4% in 2010 compared to

2001 shows that the production of rubber and plastic products has a potential for an

increase in its export activity.

The growth rate of the sector export during the analyzed 10 year period (322%)

exceeds the total growth rate of the export of Bulgaria (272%) and the difference

increases especially towards the end of the period.

Within the sector the increase in the export of rubber is more significant (by 7.62%)

compared to the export of plastic products (by 3.26%). The main reason is the decline

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in the export of products used in construction, which was strongly influenced by the

economic crisis.


In both years of the analyzed period the share of SMEs in the export of sector

"Manufacture of rubber and plastic products" is high - 66.7% for 2009 and 49.5% in

2010.

The registered decrease in the share of exports of SMEs in the overall increase in

exports of the sector from 36% in 2010 compared to 2009 due to large enterprises,

gives grounds to believe that small and medium enterprises in the sector are more

seriously affected by the global financial and economic crisis and need purposeful

state support.

SMEs in the sector “Manufacture of rubber and plastic products” rank third in export

volume in 2010 and fifth in terms of exports per one employed and per annual growth

of exports in 2010 compared to 2009 among the sectors analyzed for which export

strategies are developed1, which is indicative for their export orientation.

The presence of export-oriented SMEs in the sector is also confirmed by the results of

the carried out survey according to which 75% of interviewed SMEs realize export

with half of them exporting over 50% of the manufactured production.

Enterprises, included in the sample, export directly without using commercial

enterprises, or establishing joint business with other businesses, etc.

PRODUCTS WITH EXPORT ADVANTAGES AND POTENTIAL


Product groups that are manufactured and exported from sector "Manufacture of rubber and

plastic products" are extremely numerous. Therefore the choice of product groups with export

advantages and potential has been made on the basis of two criteria, namely: highest relative

share in exports of the given product group, combined with an increase in the observed

period. These criteria were applied for the sector as a whole, as no official statistical

information for SMEs is available. Implementation of the selected criteria in data from the

International Trade Centre gave grounds to determine the following 10 product groups that

have export advantages and potential:

Uncured rubber mixtures (without rubber with additives)

Hoses of unhardened vulcanized rubber

Pneumatic rubber tires, new

1 In the frame of Project № BG161РО003 – 4.2.01-0001 “Promotion of the internationalization of the Bulgarian

enterprises” have been developed the export strategies for another 17 sectors of the manufacturing industry,

which are considered to have export potential. The state, development and export orientation of sector

“Manufacture of rubber and plastic products” is compared (where appropriate) to data of the rest of the sectors in

order to outline their position and export possibilities.

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Hygienic or pharmaceutical articles of vulcanized rubber

Articles of vulcanized rubber other than hardened rubber, n.e.s.

Monofilament with largest cross-sectional dimension> 1 mm

Other plates, sheets, strip, foil from plastic

Bathtubs, showers and sinks, bidets and other plastic products

Packages, caps, lids and other devices for closures from plastic

Builders' ware of plastics, n.e.s.

The selection of product groups is confirming the conclusions of the Ministry of Economy

Energy and Tourism, Department „Economic Policy" in framing the country's export profile2.

The product groups: plastics monofilament products, plastic hygienic articles, plastic products

and devices, builders’ ware, uncured rubber mixtures, hoses of vulcanized rubber, pneumatic

rubber tires, are identified as the main ones, exported by sector "Manufacture of rubber and

plastic products.” The other two selected product groups also meet the criteria for export

goods with export advantages and are therefore included in the analysis.

The main findings of the analysis of the major exporters, the dynamics of exports, positioning

of our country in terms of the value of exports for selected product groups in the sector are

summarized in the following table:

Commodity groups Place in

world

exports

by 2001.

Place in

world

exports

by 2010

Share in

world

exports

by 2010

Share of

exports

of the

world's

leading

exporter

for 2010

by 2001

Share of

exports

of the

world's

leading

exporter

for 2010

by 2011

Growth

of

exports in

2010

compared

to 2001.

Uncured rubber mixtures

(without rubber with

additives)

47 36 0,14% 4,01% 0,73% 1692%

Hoses of unhardened

vulcanized rubber

59 41 0,65% 0,30% 4,30% 1891%

Pneumatic rubber tires,

new 69 69 0,01% 0,23% 0,08% 257%

Hygienic or

pharmaceutical articles of

vulcanized rubber

44 38 0,12% 0,47% 1,12% 431%

Articles of vulcanized

rubber other than

hardened rubber, n.e.s.

69 57 0,20% 0,19% 1,26% 1053%

Monofilament with

largest cross-sectional

dimension> 1 mm

44 14 1,16% 0,18% 3,01% 2935%

Other plates, sheets, strip,

foil from plastic 57 53 0,13% 0,53% 0,77% 573%

2 http://www.mi.government.bg/bg/themes/sektor-proizvodstvo-na-hranitelni-produkti-c10-510-

276.html

16

Commodity groups Place in

world

exports

by 2001.

Place in

world

exports

by 2010

Share in

world

exports

by 2010

Share of

exports

of the

world's

leading

exporter

for 2010

by 2001

Share of

exports

of the

world's

leading

exporter

for 2010

by 2011

Growth

of

exports in

2010

compared

to 2001.

Bathtubs, showers and

sinks, bidets and other

from plastic

43 21 1,16% 0,70% 5,35% 1327%

Packaging, caps, lids and

other devices for closures

from plastic

63 53 0,21% 1,04% 1,75% 490%

Builders' ware of plastics,

n.e.s. 66 50 0,12% 0,09% 0,68% 1562%

Source: International Trade Centre and own calculations

The data show that Bulgaria is holding the best position among world exporters, in the field of

product groups "Monofilament with largest cross-sectional dimension> 1 mm" and " Bathtubs,

showers and sinks, bidets and other from plastic " - the 14th

and 21st place respectively in

2010. These two product groups have the highest share in the export of the leading exporter in

2010 (respectively 3.01% and 5.35%).

The smallest share in world exports and lowest ranking among the world's exporters has

product group „Pneumatic rubber tires” (69th

place and 0.08% share in the export of the

world's leading exporter), probably due to the significant number of global competitors.

In all products, chosen for the analysis, an outrunning growth rate in the Bulgarian exports is

observed, that exceeds substantially the increase in the value of the world exports of the

relevant products, indicating strong demand for products produced in Bulgaria in the period

2000-2010.


The abovementioned data for the analyzed product groups apply in general for all enterprises

in the sector, not only for SMEs. The lack of sufficient statistical information makes it

impossible to identify SMEs in the export of the analyzed product groups.

The results of the conducted survey show that the main products exported by Bulgarian SMEs

in 2010 are PVC profiles, PVC and aluminum windows, baby bottles, containers (for biscuits

and sweets, for cosmetic products, salads, etc.), plastic details, pumps for liquid soap, flexible

connections for water and gas, decorative capsules, laminated tubes, medical disposable

products, insulation panels of EPS, pipes, garbage bags with ties, injection molded products,

which corresponds to the estimated profiles of small and medium enterprises.

According to all interviewed senior representatives of the SMEs in the sector, the available

manufacturing capacity is significant, which in combination with the unified willingness of

the management teams to realize the export of products, manufactured by their enterprises,

outlines a highly favorable picture for the development of the export of the sector.

Assessment of the interviewed companies is that the export of final products with more

specific properties prevails (in the proposed classification - raw materials and semi

manufactured products and final product), with high degree of processing and value added

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respectively. One can make the assumption that this is the niche in which SMEs would have

more serious success in exports.

The above conclusion is confirmed by the fact that in the opinion of the respondents as critical

(most important) factors for the success of exports of SMEs the high level of technology,

training of personnel and logistical support to exports from the state are indicated.

COMPETITIVENESS OF THE EXPORT OF GOODS AND SERVICES ON FOREIGN

MARKETS


The main markets of the analyzed ten product groups are in the EU, namely:

- Uncured rubber mixtures

- The main markets are Austria, Belgium and Finland.

- The product with the largest export to the leading market - Austria is " Uncured

rubber mixtures in the form of plates, sheets or strip (excl. Rubber mixed with

carbon black or silica, and mixtures of natural rubber, balata, gutta-percha,

guayule, chicle and similar natural gums).

- Our main competitors on the Austrian market are companies from Germany,

France, The Netherlands and Belgium

- Significant decline in the value of the Austrian trade balance in 2010 makes this a

promising market for Bulgaria, especially since in 2010 our country occupies 6%

share of the Austrian market.

- Hoses of unhardened vulcanized rubber

- The main markets are Spain, Germany, Poland, Estonia and the UK.

- The main product in this product group with the largest export to the leading

market - Spain is "pipes and hoses of vulcanized rubber (excl. hardened rubber),

reinforced or otherwise combined only with metal, with accessories."

- Our main competitors in the leading market are companies from Germany,

France, Poland, Italy and Czech Republic.

- The trade balance of the Spanish market is negative as in 2010 the imports of the

country increased and reached values close to those before the financial and

economic crisis. In this sense, the Spanish market remains an important export

destination for Bulgaria, especially in combination with an increasing share of

Bulgarian imports in the country.

- Pneumatic rubber tires, new

- The main importers of Bulgarian production are Germany and France.

- The main product in this product group with the largest exports to Germany is

"pneumatic tires, of rubber of a kind used on motor vehicles (including station

wagons and racing cars)," which though has a very low share in this market.

18

- Our main competitors in the market are companies from France, Czech Republic,

Slovakia, Poland and Spain.

- A positive factor for the Bulgarian export to Germany is the registered increase in

the value of total imports, which combined with the increase in the share of

Bulgarian import in the country predetermines the gain of better position among

importers of the analysed product group in the Federal Republic.

- Hygienic or pharmaceutical articles of vulcanized rubber

- The main market for this product group is the UK.

- The main product with the largest export to the leading market, the UK, is

"hygienic or pharmaceutical articles, incl. pacifiers, of vulcanized rubber

(excluding hardened rubber) with or without fittings of hard rubber, not included

elsewhere (except contraceptives, clothing and accessories, incl. gloves, for all

purposes)," while the volume of the import is relatively small compared to the

total import of UK.

- Our main competitors in the leading market are companies from China, USA,

Germany, Thailand and India.

- A gradual increase in the value of import and the negative trade balance of UK

provide opportunities for an increase of Bulgarian export to the UK.

- Articles of vulcanized rubber other than hardened rubber

- The main markets are Germany, Poland and Italy.

- The main products in this product group with the largest export to the leading

market - Germany are "articles of vulcanized rubber not included elsewhere

(except hardened rubber and those of cellular rubber) ", but imports of this

product is very small compared to the total import of Germany.

- Our main competitors in the leading market are Italy, Czech Republic, France,

Poland and Turkey.

- The trade balance of Germany for the analyzed product group is positive with a

growth trend. However, import of the Federal Republic is increasing and in 2010

its value exceeds the pre-crisis level. This factor, combined with the growing

share of Bulgarian import, reinforce the importance of the German market as an

important export destination for our country.

- Monofilament with largest cross-sectional dimension> 1 mm

- The major markets are Romania, Ukraine and Moldova.


market - Romania is "Plastic Monofilament, whose largest cross-sectional

dimension exceeds 1 mm (monofilaments), rods, sticks and profile shapes, even

surface- processed but not otherwise processed by polymers of vinyl chloride."

- Our main competitors in the market are leading companies from Germany,

Turkey, Poland and France.

- As a whole, the Romanian market is dependent on the imported monofilament

fibers with the largest cross-sectional dimension> 1 mm. The total imports of

Romania decreased over the past two years, but Bulgaria's position (among the

main five suppliers of the market) determines the importance of the Romanian

market for Bulgarian exports of the analyzed commodity group.

19

- Other plates, sheets, strip, foil from plastic

- The main markets are Italy, Poland, Germany, France and Romania.

- The main product in this product group with the largest exports to the leading

market - Italy, is "plates, sheets, foil and strip, of plastics (poly (methyl

methacrylate)), not reinforced, laminated, supported or otherwise combined with

other materials, without further treatment or only surface-worked or cut to shape.”


Belgium, Britain, France and the Netherlands.

- Significant volumes of imports and exports of other plates, sheets, strip, foil, of

plastic of the Italian market during the period show that it is highly competitive

and open. This, combined with the registered increase in imports over the past

year, are factors that are positive for the Bulgarian export of the product group to

Italy. However, one must take into account the fact that Poland is also a

perspective destination for export of our products - the volume of Bulgarian

exports increased in 2010 compared to 2009 and is similar to that of our leading

export market.

- Baths, showers and sinks, bidets and other from plastic

- The main markets are Germany and Italy.


market - Germany is “plastic seats and covers for toilet seats.”

- Our main competitors in the leading market are companies from China,

Switzerland, Italy, the Netherlands and Denmark.

- Although German exports of baths, showers and sinks, bidets and other of plastic

is higher than imports, Bulgaria has over 5% share of the total imports in

Germany and this share increased in 2010 compared to 2009. This, combined with

the fact that imports in the Federal Republic return to pre-crisis levels, is a

positive factor for Bulgarian exports and makes this a promising market in the

future.

- Packaging, caps, lids and other devices for closures from plastic

- The main markets are Germany, Romania, The Netherlands and Greece.

- The product with the largest exports in this product group in Germany is "Sacks

and bags, including cones, of polymers of ethylene", while the most likely reason

is the vast market and high consumer demand in this country.

- Our main competitors in the leading market are companies from the Netherlands,

Switzerland, France, Poland and China.

- German exports of packaging, caps, lids and other devices for closures, from

plastics is higher than the imports which, however, are significant. This market is

important and promising for the Bulgarian export due to the increase in the value

of both the total imports of Germany, and the share of Bulgarian imports in the

Federal Republic observed.

- Builders' ware of plastics, n.e.s.

- The main market for Bulgarian export of this product group is Romania.

20

- The product with the largest exports in this product group in Romania is "plastic

doors, windows and their frames and thresholds for doors." Despite the decline in

construction, the export of this product increases.


Hungary, Italy and Poland.

- Romania is dependent on the import of “Builders' ware of plastics for

construction”. However, over the past two years a decrease is registered in the

value of imports made by our northern neighbor. Since Romania is a key market

for the Bulgarian export of this product group, Bulgaria must make an effort to

preserve the registered increase in the share of Bulgarian imports in the total

Romanian imports in the future as well.

The data for our main markets show that exports of the analyzed product groups is

concentrated in several markets - Germany, Italy, Poland and the UK, with which we

have established contacts, and traditional relations, and in Romania, Greece and

Macedonia, where the “geographical proximity” factor is added. Given that the

negative effects from the global economic crisis have not been overcome yet,

measures to promote exports should be focused on expanding our presence in the main

priority markets.

Although for fewer product groups, the volume of exports in value terms to non-EU

countries is similar to that to EU countries, for example: “Monofilament with largest

cross-sectional dimension> 1 mm” - Ukraine and Moldova, “Other plates, sheets,

strip, foil from plastic” – Turkey, “Builders' ware of plastics, n.e.s.” - Serbia.

Estimates of development by 2015 are prepared for each of the analyzed product

groups. Simulations of the trend lay on establishing the analytical form of the function

through which regularities in the development of exports of each product group in

2001 - 2010 are expressed, and estimating the values of the parameters of the function

used. In modeling exports, linear or logarithmic regression is used depending on the

regularities manifested in the output period. Regressions are calculated by using the

values for each year, not just in the first and last year of the period. The obtained

results are presented on the following figure.

21

Forecast for the development of exports by product groups by 2015

0

20000

40000

60000

80000

100000

120000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015


Articles of vulcanized rubber

Uncured rubber mixtures

Pneumatic rubber tires, new

Hygienic articles of vulcanized rubber

Packages from plastic

Other plates, foil from plastic

Monofilament with largest cr.sect.dim.> 1 mmBathtubs, showers from plastic

Builders' ware of plastics, nes

Source: International Trade Centre and own calculations

22


The data from the conducted survey of SMEs confirms the obtained results for the

priority export destinations - the main markets for the companies surveyed are in EU

countries. Next come the rest of the European countries and the Balkan countries.

The main advantages of the competitors of the surveyed SMEs are mainly associated

with the following two aspects:

First, better production and technical base and the related thereto lower cost of

production, lower prices and higher quality;

Second, a more favorable regulatory environment, strong state support and better

business climate.

Therefore, the advantages of the competitors are related to exactly those factors that

surveyed firms assess as critical for exports. The implementation of measures, aimed at

the reduction of the differences between the Bulgarian SMEs and their competitors both in

terms of improving their technical and technological level, as well as in the field of

strengthening state support for exports, is necessary.

The competitiveness of the Bulgarian rubber and plastic products is determined by the

fact that the majority of enterprises in the industry, according to respondents, have

clear and well grounded export strategies, have launched new product on the market

after 2007, have international certificates and own brand.

Unfavorable factor leading to lower competitiveness are the underdeveloped R&D

activities. Where R&D is carried out, innovations are aimed at expansion of existing

enterprise, followed by diversification of the production of the existing enterprise by

adding new additional products.

The expectations of two-thirds of the interviewed companies for the next period are,

that the export will increase, albeit with a slower rate. Companies planning to start

export declare that this will happen in 2012 or the following year.

The findings and conclusions give grounds to expect that over the next five years the

export of Bulgarian products of rubber and plastic produced by SMEs will increase

and at the end of the five year period it is expected that the export of Bulgarian SMEs

in the sector will amount to more than 400 million BGN.

23

EXPORT PRIORITY PRODUCT GROUPS AND MAIN MARKETS

The carried out analysis of the product groups in the sector gives grounds to determine the

leading priority export product groups and specific markets. The selection is made based on

criteria: share in the export of the sector, growing exports in the period 2001-2010, share on

the global market and concentration of SMEs in the subsector.

The main markets in 2010, main suppliers and their market share is given for each of the

selected commodity groups. The data used are taken from the International Trade Centre.

Products from the group "Manufacture of products from rubber”

Uncured rubber mixtures (without rubber with additives)

Austria

Finland

Romania

• Germany (63.5%)

• France (7%)

• Netherlands (6,5%)

• Bulgaria (6.0%)

• Belgium (5%)

• Sweden (41.2%)

• Germany (10.7%)

• Italy (10.6%)

• Belgium (8%)

• Bulgaria (7.2%)

• Germany (62.9%)

• Czech Republic (11.7%)

• Poland (7%)

• France (4%)

• Italy (2.8%)

• ......

• Bulgaria (0.3%)

24


Spain

Germany

Poland

• Germany (19%)

• France (14.4%)

• Poland (8.3%)

• Italy (7.9%)


• ...

• Bulgaria (4.2%)

• Hungary (12.8%)

• Italy (12.6%)


• Poland (11%)

• Romania (7%)

• .....

• Bulgaria (1.1%)

• Germany (33.2%)

• Italy (18.3%)


• Turkey (5.7%)

• China (5.5%)

• ...

• Bulgaria (1.3%)

Products from the group "Manufacture of products from plastics"

Monofilament with largest cross-sectional dimension> 1 mm

Romania

Ukraine

Moldova

• Germany (42.5%)

• Turkey (17.6%)

• Poland (15%)

• France (5%)

• Bulgaria (4.8%)

• Poland (31%)

• Germany (24%)• China (22.6%)

• Turkey (5.4%)

• Russia (5%)

• Bulgaria (3.7%)

• China (26.7%)

• Bulgaria (24.3%)

• Turkey (14.5%)

• Poland (11.4%)

• Germany (8.8%)

25

Bathtubs, showers and sinks, bidets and other plastic products

Germany

Italy

UK

• China (17.8%)

• Switzerland (10%)

• Italy (9.7%)

• Netherlands (9%)

• Denmark (7.7%)

• ...

• Bulgaria (5.5%)

• Germany (48%)

• China (12.8%)• Poland (8.6%)

• Egypt (6.3%)

• Bulgaria (4.1%)

• China (37.4%)

• Germany (14.3%)

• Netherlands (9%)

• France (7%)

• South Africa (3.4%)

• ...

• Bulgaria (1.3%)

The companies that have proved to be leading importers into the above mentioned main

markets for Bulgaria for rubber and plastics products, are international companies, ranking

among the largest producers and exporters of the analyzed products.

In conclusion, the main markets for the product groups produced by the sector "Manufacture

of rubber and plastic products" are in the European Union. Among them the most important

markets are Germany, Italy, Spain, Britain, Poland, with which traditional trade relations

exist. In countries such as Romania and Greece an additional favourable factor is the

geographical proximity.

The strengthening of the market positions of SMEs, producing rubber and plastics products,

on traditional markets, the entering into new markets and the improvement of the image of

Bulgarian goods require purposeful support and assistance from the responsible institutions

(MEET together with the BSMEPA).

Possible measures for promoting exports to traditional markets and entering new markets

may include:

Preparation of situation reports for the relevant markets and research on the

consumption of specific products;

Ensuring access of SMEs in the sector to actual and useful information (market

analysis, distribution channels, customs and tariff regimes, etc.) towards promotion

and support of exports;

Providing support to participate in business delegations and business forums with

international participation in order to create contacts and attract partners and

customers;

Supporting the participation of foreign visitors (producers and users) at the

Bulgarian trade fairs and exhibitions;

26

Development of models for entering new markets for SMEs in the sector,

according to the specifics of the products, such as subcontracts, cooperation with

producers of raw materials abroad, engineering contracts, distribution through the

local (for the corresponding country) distribution network and more.

Creation and distribution of information and advertising materials, catalogues and

analyses to promote and advertise the products of sector "Manufacture of rubber

and plastic products" abroad.

Support for the participation of Bulgarian manufacturers in leading for the industry

international exhibitions and fairs.

BARRIERS TO THE INTERNATIONALIZATION OF SMALL AND MEDIUM

ENTERPRISES AND MEASURES FOR THEIR OVERCOMING

The barriers to internationalization of SMEs and the measures, the companies prefer for

overcoming them and for promoting exports are identified and analyzed through the

conducted sociological survey.

For the specific enterprise

Barriers (obstacles) Very

serious

obstacle

Serious

obstacle

Not a

serious

obstacle

Not an

obstacle

High production costs of goods and services 29,2% 33,3% 20,8% 16,7%

High export realization expenditures 4,2% 25,0% 45,8% 25,0%

Not high enough quality of the goods and services 8,3% 33,3% 16,7% 41,7%

Lack of qualified staff to ensure quality over a

longer period 4,2% 37,5% 37,5% 20,8%

Lack of experience in the foreign trade activity 8,3% 37,5% 29,2% 25,0%

Language barriers 8,3% 29,2% 25,0% 37,5%

Unfavorable business environment in Bulgaria 37,5% 29,2% 16,7% 16,7%

High risk on the various foreign markets 12,5% 54,2% 16,7% 16,7%

Customs and non-customs restrictions imposed by

other countries 12,5% 25,0% 33,3% 29,2%

Lack of support by the Bulgarian state for the export 41,7% 37,5% 8,3% 12,5%

Source: Sociological survey conducted with representatives of the SME sector, 2011

The most significant barriers to the export of SMEs in the opinion of the interviewed

CEOs are related to: 1) lack of support by the Bulgarian state for the export, 2)

unfavorable business environment in Bulgaria, 3) increased risk on the various foreign

markets. As for the sector in general the responses do not differ significantly. It may

be noted, however, that 86% of respondents underline the absence of state support as

the most serious obstacle to the export of the sector.

Almost all factors internal for the SMEs (skilled and experienced staff, quality of the

products, etc.). are not reported as a barrier to the export, which indicates that the

27

managers of the interviewed enterprises give high evaluation of the performance and

capacity of their companies.

The main conclusion regarding the barriers to exports of SMEs from the sector is that

the most important obstacles are linked to external factors, especially the lack of

support from the state and the unfavorable business environment in Bulgaria, rather

than to the technological level and human resources available in SMEs.

In relation to the above mentioned barriers are the measures managers of the companies

propose as priority ones for overcoming the difficulties to export of the enterprises and the

sector as a whole.

2007 – 2013 2014 – 2020

Priority Very high

priority (need

to set aside

funds in a very

large size)

High priority

(need to set

aside funds in

a large

amount)

Very high

priority (need

to set aside

funds in a very

large size)

High priority

(need to set

aside funds in

a large

amount)

1. Encouragement of the export of the

firms

12 7 15 6

2. Support for the technological

modernization of the manufacture

17 7 18 6

3. Support for meeting of the

standards / requirements of the EU

8 12 8 10

4. Financing of the innovative

projects for the development of

new products, technologies,

services

8 12 8 12

5. Training and improving the

qualification of the employees in

SMEs

11 6 12 6

6. Attracting foreign direct investment 8 6 8 7

7. Business cooperation and

participation in clusters

5 13 1 6

8. Consultancy and information

services

2 3 2 4

9. Improvement of the access to

finance

11 5 14 3

Source: Sociological survey conducted with representatives of the SME sector, 2011

The importance of almost all priority measures to support SMEs in the sector increases in

the next programming period 2014 - 2020. This means that it will be necessary to allocate

more resources to implement these measures for the development of SMEs in the sector.

Companies in the sector clearly realize the necessity of modernization of the production

process, so as to be competitive on international markets as well, and the lack of own

financial resources. This is confirmed by the fact that the support for technological

modernization of production is indicated unanimously (100% of respondents) as the

measure of highest priority.

Most of the measures for overcoming the barriers to the exports of SMEs are expected to

be undertaken by the state. This includes funding of innovative projects, support for

covering the EU standards, and better access to financial resources. Best summarized the

28

expectations of the branch are for the state to develop purposeful and relevant policies to

encourage and support the export of SMEs.

As to the sources by which companies obtain the necessary information on exports, the

following conclusions can be drawn:

- Extremely large proportion (96%) of the companies obtain the necessary information

through own surveys;

- Next, as permanent sources of information are used the Internet (54%) and

information from colleagues from the sector abroad (33%);

- Other sources of information– BSMEPA, branch associations, colleagues from the

branch in Bulgaria, are used at a very low degree.

The obtained assessments of the effectiveness of the services provided by the BSMEPA

indicate that: a) half of the experts believe that none of these services will affect the export

activity of the enterprises, b) relatively high (such as services with high and medium

impact ) are evaluated: the organization of information campaigns - 37.5%; organization of

business forums in the country and abroad and organization of the participation in

international fairs - 33.4%, and information about international tenders - 33.3%. This

means that the Agency should further increase its activity and strengthen its relations with

SMEs in order to promote its activity in the future and so that small and medium

enterprises in Bulgaria could really feel "cared for" from the public structures.

Based on the abovementioned the following measures for overcoming the barriers to the

export of SMEs in the sector "Manufacture of rubber and plastic products" may be proposed:

Updating the export strategy for sector "Manufacture of rubber and plastic products";

Creation of a profile (catalogue) of export-oriented SMEs in sector "Manufacture of rubber

and plastic products," starting with SMEs in sub-sector "Manufacture of builders' ware of

plastics, n.e.s.";

Using the prepared profile of export-oriented SMEs in sector "Manufacture of rubber and

plastic products" as an information base for the development of support mechanisms

through various forms and under various programs, including EU funds;

Establishment of a common branch association for sector "Manufacture of rubber and

plastic products", covering the majority of SMEs in the sector;

Providing information to SMEs in sector "Manufacture of rubber and plastic products" for

the opportunities to strengthen the export potential - eg. priority markets, providing

information on particular foreign markets, offers, sector analysis, business compasses,

starting with enterprises in sub-sector "Manufacture of builders' ware of plastics, n.e.s.";

Development and implementation of annual program for the participation of companies

from sector "Manufacture of rubber and plastic products" in major fairs, exhibitions and

other international forums, including in countries whose markets are promising (eg,

Turkey, Russia, China and others.)

Implementation of promotional measures in the priority markets in EU countries -

Germany, Italy, Spain, Poland, Britain and others, starting with the products of enterprises

in sub-sector "Manufacture of builders' ware of plastics, n.e.s.";

29

Implementation of promotional measures in the priority markets in countries with

geographic proximity - Romania, Greece, Serbia, Macedonia, starting with the products of

enterprises in sub-sector "Manufacture of builders' ware of plastics, n.e.s."

Conducting advertising campaign to raise the recognition of Bulgarian products to existing

and new markets, starting with the products of SMEs in sub-sector "Manufacture of

builders' ware of plastics, n.e.s.";

Establishing and practical implementation of funding mechanism involving foreign trade

partners in Bulgarian exhibitions;

Development of procedures for work of the Bulgarian trade representation offices which

are in support of export-oriented SMEs in sector "Manufacture of rubber and plastic

products;

Conducting "Days of Bulgaria" in our embassies in countries and promotion of Bulgarian

producers from sector "Manufacture of rubber and plastic products";

Change in the rules of financing under the EU funds in a way that export potential of

enterprises becomes a leading criterion;

Establishment and development of export clusters and / or other specialized structures in

the sector, starting with enterprises in sub-sector " Builders' ware of plastics, n.e.s."

Establishment and implementation of a program to increase the number of enterprises with

international certification and quality management system in sector "Manufacture of

rubber and plastic products";

Establishment and implementation of a program for improvement of the qualification of

export specialists in SMEs in sector "Manufacture of rubber and plastic products";

Establishment and implementation of a training program for participation in international

exhibitions.

30

3. SWOT AND LOED ANALYSES OF THE EXPORT PROCESS

OF SMEs IN SECTOR “MANUFACTURE OF PLASTIC AND

RUBBER PRODUCTS”

SWOT ANALYSIS

SWOT analysis is based on the idea of separating the object of strategic analysis from the

environment in which it operates. The object of strategic analysis is viewed in its "strengths”

and “weaknesses”. The environment in which the object of the strategic analysis functions is

differentiated into "opportunities” and “threats”.

Strengths. The strengths are resources, skills or some other advantage, which SMEs in the

sector possess from the viewpoint of exports. The strength is a distinctive competence that

gives a comparative advantage.

Weaknesses. The weaknesses are constraints or lack of resources, skills and abilities that

seriously hinder the development of exports of SMEs in the sector.

Opportunities. The opportunities are the most favourable elements of the external

environment. These are favourable external factors, of which SMEs in the sector could benefit

in their exports.

Threats. The threats are the worst segments of the external environment. They put the biggest

barriers to the present or future (desired) state of affairs.

Strengths

o Faster growth rate of Bulgarian exports

compared to world trends

o Existing traditions in production

o Qualified personnel

o Geographic proximity to raw materials and

finished products

o High share of investment among sectors in

manufacturing

o Technology equipment meeting the EU

standards

o Availability of a large number of SMEs and

employed persons in SMEs, providing a

basis for export

o Good positions in terms of turnover and

value added among the export-oriented

sectors recognized as such by the state

o Good position of the sector in terms of

SMEs export share among export-oriented

sectors recognized as such by the state

Opportunities

o The sector is among the priority

industries selected by the state as having

export potential

o Access to financial support from EU

funds

o Public incentives for the formation and

development of clusters

o Provided funding in BSMEPA for export

promotion and participation in exhibitions

o Availability of capacity and management

will to develop export of SMEs

o Available production capacity for

production of new products

o Improvement of business climate in

industry and manufacturing industry

o Investment promotion incentives

31

Weaknesses

o Low labor productivity among the export-

oriented sectors recognized as such by the

state

o Lack of reliable information for taking

adequate management decisions

o Trends of decrease in the number of SMEs

in the sector and persons employed there

o Deteriorating financial performance and

reduced profits for many SMEs

o Lack of or low-skilled middle management

in export-oriented enterprises

o Small number of enterprises certified to

international standards

o Poorly developed forms of cooperation

with foreign partners in export

o Bulgarian products are not recognizable on

international markets

o Lack of branch association in the sector

„Manufacture of rubber and plastic

products";

o Lack of clusters

Threats

o Shrinking of consumption world-wide

o Strengthening of barriers to export to

non-EU countries

o Higher price levels of main raw materials

o Limited supply of important raw

materials for the production process, such

as natural rubber

o Rising prices of energy

32

LOED ANALYSIS

LOED analysis is an instrument that helps identifying how to strengthen the positive effect of

the examined process and to neutralize the negative effects. The word is an acronym from the

letters of words in English - lever, overcome, exploit, and defend. LOED analysis shows how

strengths can be levered, weaknesses – overcome, and how to exploit the opportunities and

defend against the threats identified by the SWOT analysis.

Build on strengths

o Promotion of the geographical location and

image of the country

o Additional improvement of qualification of

specialists in SMEs

o Improving the production base and

introducing new technologies

o Creating international partnerships

o Policy to promote export-oriented firms

o Creating of a profile of export-oriented

SMEs in the sector

o Developing mechanisms to support export

of SMEs through various forms and under

various programs, including EU funds

Use of opportunities

o Initiating and funding of activities to

promote exports of SMEs

o Establishment and development of export

clusters in the sector

o Encouraging the participation of foreign

partners in Bulgarian trade exhibitions

o Change the rules of financing under the

EU funds in a way that export potential of

enterprises becomes a leading criterion

Overcoming weaknesses

o Creation of branch association in the

sector

o Development and successful operation of

informational and regulatory framework

to support the export of rubber and plastic

products from SMEs

o Providing information to SMEs to

enhance their export potential, e.g.

prioritization of markets, providing

information on selected foreign markets,

offers, industry analysis, business

compasses

o Creation and implementation of a program

to increase the number of enterprises with

international certificates in sector

“Manufacture of rubber and plastic

products”

o Conduct advertising campaigns to raise

the recognition of Bulgarian products

o Development of working procedures for

the Bulgarian foreign trade representations

in favor of SMEs in the sector

Protection from threats

o Improvement of products’ quality

o Searching for opportunities to export to a

greater number of markets and increase

the market share of the country

33

4. OBJECTIVES

STRATEGIC OBJECTIVE

THE INCREASE OF THE EXPORTS OF RUBBER AND PLASTIC

PRODUCTS MANUFACTURED BY SMES TO PRESERVE THE

LEADING ROLE OF THE SECTOR IN THE MANUFACTURING

INDUSTRY

OBJECTIVES

1. Increase the number of SMEs with export potential and the number and volume

of exported products

2. Improve the market positions and increase the export share of SMEs in

“Manufacture of rubber and plastic products” on key and priority markets

To achieve the determined objectives, different measures shall be identified to support the

export of SMEs in “Manufacture of rubber and plastic products” and to focus on problem

issues identified by the analysis. Selected measures should be clearly linked with the potential

mechanisms by which public institutions can influence the processes. Under these conditions,

three areas were identified where state institutions through commitment and other

stakeholders – through promotion and incentives, could perform actions to achieve the

objectives. For each of these areas, clear and measurable specific objectives are defined as

follows:

Specific objective 1: Establishment and successful functioning of information and

regulatory base to promote the export of rubber and plastic products of SMEs until

2018.

Specific objective 2: Create conditions and support in order to facilitate the export

activities of the SMEs.

Specific objective 3: Improve the qualification of personnel in SMEs in the sector so as

to improve work efficiency of units dealing with export issues at company level.

34

5. STRATEGY FOR PROMOTION OF EXPORT OF SMEs IN THE

SECTOR

There are different alternatives of development for attaining the objectives and in this case

two main scenarios were estimated, namely:

1. Maintain the present structure of state institutions supporting business, including the

existing relationships between them and with export-oriented SMEs in sector

“Manufacture of rubber and plastic products”.

2. Change the structure and transfer the functions of SME support to units and structures

dealing with financing of projects under EU funds and by the state budget, similar to

the model of Operational Programs or the Program for Rural Development.

These scenarios were assessed by the following criteria:

1. Possibility for implementation of the selected scenario within a 5-year period;

2. Practices of supporting export-oriented SMEs in other EU member-states;

3. Estimation of the efficiency of business supporting activities performed by established

specialized structures or by existing programs supporting SMEs on a project basis.

The analysis made pointed out that:

The transition from the presently existing system to a new one on a project basis will

take more than 5 years. Moreover, according to the existing rules for the period till

2013, this is actually impossible, since all priorities and activities of operational

programs are clearly defined. Such an approach, if possible, for the next

programming period 2014-2020, should be put to negotiations, but in practice it will

take again several years for its actual launch, like the start of OP in all EU countries

for 2007-2013.

The selected in Bulgaria scheme through BSMEPA is preferred by the major part of

the EU member-states and, although with varying success in different countries,

there is no tendency observed for changes in the near future.

Reported difficulties in the business projects implementation under operational

programs, such as OP “Competitiveness”, indicate that the efficiency of supporting

export-oriented SMEs, regardless of being subject to critics due to lack of funds and

proper focusing, is at relatively much higher level than the results achieved by

business under project designed measures.

Given the above conclusions, the first alternative gained preference, i.e. the development of

Export Strategy for SMEs in sector “Manufacture of rubber and plastic products” shall be

based on the understanding that all measures will be undertaken in the framework of presently

existing structures and within their present capacities.

In strategic perspective, the selected alternative will demand both common measures for the

whole SME supporting system, for example, improving the capacity of institutions,

implementation of clear and measurable indicators and criteria for assessing the efficiency of

their work and support rendered to business, etc., as well as specific changes related to sector

“Manufacture of rubber and plastic products” in particular, like, for example, sector-oriented

approach of work. As far as this is not a subject of analysis and research of the present

strategic document, it will probably become a part of developing a strategy or a program for

improving the capacity of relevant state administrations.

35

This Export Strategy for SMEs in sector “Manufacture of rubber and plastic products”

envisages several main steps directed at improving the support to export-oriented SMEs,

namely:

1. Creating the basis for an adequate and professional management processes of

supporting the export-oriented SMEs by identifying their possible scope - the number

and characteristics of the export-oriented SMEs, using information from the conducted

profile and business information for precise formulation of the business needs for

support from both institutions created for this purpose and through other forms, such

as for example on a project basis, creating a model for successful communication with

businesses that can be supported.

2. Development of the necessary programs, policies and measures to support SME export

on foreign markets, through measures targeted at markets with prospects to preserve

or expand the existing positions, joint work with units having direct abilities to assist

exports (for example, foreign trade representatives and the MEET), as well as routine

measures, such as (for instance) participation in fairs, trade missions, business visits,

etc.

3. Measures directed at overcoming certain deficits of export-oriented SMEs, presenting

barriers to their export development, for example, such as: support the technological

modernization of SMEs in order to improve their export positions; assist the

establishment of sector profiled export companies; organize advertising campaigns to

raise the image of the Bulgarian business, etc.

4. Measures directed at raising the capacity of SMEs, mainly by different training

programs.

Considering the terms of the Export Strategy for SMEs in sector “Manufacture of rubber and

plastic products”, the envisaged steps are realistic and could contribute to achieving real

results in export supporting.

The political will to provide the funds necessary for implementing the strategy is also an

important prerequisite for its successful accomplishment.

36

6. ACTION PLAN

Due to the mid-term 5-year horizon of the Strategy, measures in the Action Plan are

concretely formulated.

Envisaged financial resources are indicative, but they are consistent with the realistic

opportunities to increase the budget of BSMEPA. Estimated resources from Operational

Programs in the next programming period are rather contingent, as the allocation rules are not

yet finally adopted by the EU. At the same time, it is crucial that BSMEPA and MEET defend

fair requests for funds especially for this leading export sector of the country and for the

development of SMEs, which are the backbone of any economy.

In compliance with the selected model, for all envisaged measures specific actions are defined

to be implemented at micro (SME), meso (branch associations) and macro (state) level.

On the basis of analysis of exports of different product groups, important and priority

markets for the sector are identified. However, as mentioned above, data is not available on

the participation of SMEs on those markets. Therefore, in order to suggest indicative

promotional measures on the identified markets, it is assumed that in periods of crisis efforts

should be directed both at preserving the existing market positions and entering new markets

as well but rather at. The fact that Bulgarian exports are already made on the existing markets,

allows assuming that this will be an advantage for SMEs which orient to these same markets.

37

ACTION PLAN

Measures Deadline Responsible

institution

Financial

resources Source of financing Expected results Performance indicators

1. Specific objective:

Establishment and successful functioning of information and regulatory base to promote the export of rubber and plastic products of

SMEs until 2018

1.1. Updating the

export strategy for

sector "Manufacture

of rubber and plastic

products"

04.2013 MEET 40 000 BGN

for the whole

period

OP Competitiveness Updated Export Strategy

and Action Plan to be

implemented

Drafted documents are of

good quality

Documents are prepared

and approved within

schedules

Strategy implementation led

to achievement of stated

objectives

Micro-level and meso-level:

- Providing information, incl. participation in sociological surveys

- Participation in discussions for the identification of barriers, SWOT analysis, targets and measures, etc.

Macro-level:

- Overall coordination of the export strategy development process, its update and implementation

1.2. Creation of a

profile (Catalog) of

export-oriented SMEs

in sector

"Manufacture of

rubber and plastic

products” starting

with SMEs in sub-

sector "Manufacture

12.2013 BSMEPA/MEET 10 000 BGN

for the whole

period

OP Competitiveness Data base of export-

oriented SMEs

Availability on the national

export portal of the

elaborated criteria and a

list of companies which are

export-oriented

38


institution

Financial


of builders' ware of

plastics, n.e.s."

Micro-level:

- Providing information

Meso-level:

- Encourage and assist companies to provide information on their export activities

- Assisting the BSMEPA to elaborate criteria for export-oriented SMEs

Macro-level:

- Elaboration of criteria for export-oriented SMEs

- Design, maintain and update a database and profile of export-oriented SMEs in the sector

1.3. Using the

prepared profile of

export-oriented SMEs

in sector

"Manufacture of

rubber and plastic

products" as an

information base for

the development of

support mechanisms

through various

forms and under

various programs,

including EU funds

Permanent BSMEPA/ MEET OP Competitiveness SMEs included in the list

will be the main

beneficiaries of the

assistance for the sector

both under programs

directly oriented towards

export, and of activities

related to competitiveness

The inclusion of a company

in the list of SMEs with

export potential becoming

an evaluation criteria for

the company when applying

for financial support for

export and competitiveness

Meso and Macro level:

- Elaborate mechanisms to assist export-oriented SMEs in the sector

39


institution

Financial


- Encourage and assist SMEs to participate in the elaborated mechanisms

2. Specific objective:

Create conditions and support in order to facilitate the export activities of the SMEs

2.1. Establishment of

a common branch

association for sector

"Manufacture of

rubber and plastic

products", covering

the majority of SMEs

in the sector

12.2013 Enterprises from

the sector

Activity will be transferred

to business structures for

which they are designed

Established common

branch association

Percentage of SMEs,

members of the branch

association

Micro-level:

- Initiating and establishing of a branch association of the sector

Meso-level:

- Attract the major part of SMEs in the sector to participate in the activities of the branch association

2.2. Providing

information to SMEs in

sector "Manufacture of

rubber and plastic

products" for the

opportunities to

strengthen the export

potential – eg. priority

markets, providing

information on

particular foreign

markets, offers, sector

analysis, business

Permanen

t

BSMEPA 300 000 BGN

yearly

Operational programmes National export portal

becomes a main source of

specialized export

information for SMEs from

the sector

Number of entries in the

specialized rubrics of the

national export portal and

the received feedback

40


institution

Financial


compasses, starting

with enterprises in sub-

sector "Builders' ware

of plastics, n.e.s."

Micro-level:

- Actively seeking information to enhance the export potential

Meso-level:

- Encouraging and assisting companies to use the export portal for opportunities to strengthen the export potential. Connection with the Branch

association website (future).

Macro-Level:

- Creating and continuously updating the information in the export portal

- Promotion of the available options to increase the export potential of SMEs.

2.3. Development and

implementation of

annual program for

the participation of

companies from

sector "Manufacture


products" in major

fairs, exhibitions and

other international

forums, including in

countries whose

markets are

promising (eg,

Turkey, Russia,

China, and others).

Permanent BSMEPA 300 000 BGN

yearly

Budget of the agency,

financial support from

companies

Strengthening the position

of the Bulgarian rubber and

plastic products at trade

fairs, exhibitions and other

international forums

Number and value of

contracts concluded as a

result of the participation in

the corresponding

international forums (fairs,

exhibitions, etc.)

41


institution

Financial


Micro-level:

- Participation in exhibitions - for example, PLASTEX (Brno), RUBBER (Turkey), Technical Fair (St. Petersburg) and others.

- Participation in delegations of national and regional level

- Financial support for printing of materials for promotion of Bulgarian rubber and plastic products in the countries of interest

- Production of samples for distribution with product information in the relevant language.

Meso-level:

- Branch association (future) to take a leading role in organizing the participation in relevant forums, incl. through outsourcing of activities by the

BSMEPA to it

- Branch association (future) to develop rules to ensure equal treatment of companies in the sector, regardless of their participation in it

- Create a profile of companies in specialized trade organization site (future)

- Establishing relationships with related branch associations

Macro-Level:

- Organization in cooperation with the trade representatives of annual business visits and trade delegations

- Distribution of information about the annual national and specialized exhibitions, fairs and exhibitions

- Development of specialized sites of the trade representation offices by countries with information on the production of the sector and SMEs in it

- Organization of the participation in specialized exhibitions

- Organization of conferences with representatives of the media, specialists, distributors, so as to increase the recognition of Bulgarian exports of rubber

and plastic products

- Organization of the printing of promotional materials

2.4. Implementati

on of promotional

measures in the

priority markets in

EU countries -

Germany, Italy,

Spain, Poland,

Britain and others,

starting with the

products of the

09.2014 MEET, BSMEPA

and Ministry of

Foreign Affairs

1 000 000

BGN yearly

OP Competitiveness Strengthening the position

of Bulgarian rubber and

plastic products in the

selected markets.

Number of organized

participation in specialized

exhibitions.

Number of events, at which

product samples are

distributed - for example at

exhibitions or promotional

campaigns in the

commercial network

42


institution

Financial


enterprises in sub-

sector

"Manufacture of

builders' ware of

plastics, n.e.s."

Number of conferences

held.

Micro- / Meso-level:

- Participation in exhibitions with international participation - for example, CEVISAMA (Valencia), PLAST (Milan), HANNOVER MESSE (Hannover) and others.

- Participation in delegations of national and international level

- Participation in organized bilateral visits to business firms in the sector

- Providing information to create a profile of the companies in specialized sites of the trade representation offices

- Promotion and advertising of individual firms in catalogs and electronic publications

Macro-Level:

- Organization in cooperation with the trade representatives of annual business visits and trade delegations in those countries

- Dissemination of information about the annual national and specialized exhibitions, fairs and exhibitions

- Development of specialized sites of the trade representation offices in countries with information on the production of thesector and SMEs in it

- Issuing of special catalogs and electronic publications for distribution in their respective countries

2.5. Implementati

on of promotional

measures in priority

markets in countries

with geographic

proximity -

Romania, Greece,

Serbia, Macedonia,

starting with the

products of

enterprises in sub-

sector

"Manufacture of

builders' ware of

plastics, n.e.s."

09.2014 MEET, BSMEPA

and Ministry of

Foreign Affairs

1 000 000

BGN yearly

Budget of MEET, financial

support from the companies

Strengthening the position

of Bulgarian rubber and

plastic products in the

selected markets

Number of organized

participation in specialized

exhibitions.

Number of events, at which

product samples are

distributed - for example at

exhibitions or promotional

campaigns in commercial

network.

Number of conferences

held.

43


institution

Financial


Micro-/ Meso-level:

- Participation in national and regional fairs

- Participation in information portals of sector and regional basis

- Establishing relationships with related branch associations

Macro-Level:

- Organization of bilateral trade fairs and exhibitions;

- Organizing annual bilateral business visits;

- Development of information portals of sector and regional basis;

- Distribution by sales representatives of specialized catalogs;

- Use of means of regional cooperation to promote exports of SMEs

2.6. Conducting

advertising campaign

to raise the

recognition of

Bulgarian products to

existing and new

markets, starting with

the products of SMEs

in sub-sector

"Manufacture of

builders' ware of

plastics, n.e.s."

Permanent BSMEPA 1 000 000

BGN per

year

BSMEPA budget and

operational programs and

branch associations

Carried out advertising

campaigns for specific

products

Increased exports of

products due to advertising

campaigns

Meso-level:

- Design and carry out an advertising campaign together with BSMEPA

Macro-level:

- Design and carry out an advertising campaign together with branch associations (future)

2.7. Establishing and

practical

implementation of

12.2017 BSMEPA and

branch

associations

20 000 BGN

annually

Budgets of branch

associations, or companies

willing to benefit from this

Contracts for export signed

based on the participation

of foreign trade partners

Annual increase of the

signed export contracts

with invited foreign trade

44


institution

Financial


funding mechanism

involving foreign

trade partners in

Bulgarian exhibitions

measure partners

Micro-level:

- Providing information on foreign partners

Meso-level:

- Study of foreign experience in financing the participation of foreign partners in Bulgarian exhibitions

- Support the implementation of the developed mechanism, incl. by providing funds

Macro-level:

- Study of foreign experience in financing the participation of foreign partners in Bulgarian exhibitions

- Develop a mechanism to finance the participation of foreign trade partners in Bulgarian exhibitions

- Support implementation of the developed mechanism, incl. by providing funds

2.8. Development of

procedures for work

of the Bulgarian

trade representation

offices which are in

support of export-

oriented SMEs in

sector "Manufacture


products

12.2013 BSMEPA and

MEET

20 000 BGN MEET budget Working procedures Prepared procedure for

work of Bulgarian foreign

trade representation offices

in favor of SMEs in the

sector

Macro-Level:

- Study the needs of SMEs in the sector for information and services to be provided by the Bulgarian trade representation offices

- Development of procedures for work of Bulgarian trade representation offices in favor of SMEs in the sector

2.9. Conducting

"Days of Bulgaria"

in our embassies in

yearly BSMEPA, MEET,

ОТЕА

OP Competitiveness Developed program for the

"Days of Bulgaria" by

Number of inquiries from

foreign companies

45


institution

Financial


countries and

promotion of

Bulgarian

producers from

sector

"Manufacture of

rubber and plastic

products"

country Number of attracted new

customers

Micro-level:

- Participation in ongoing events

Macro-Level:

- Develop and effectively implementation of a program for conducting thematic "Days of Bulgaria" by country

2.10. Change in the

rules of financing

under the EU funds in

a way that export

potential of

enterprises becomes

a leading criterion

12.2013 BSMEPA, MEET,

MRDPW

OP for business support are

oriented to SMEs which

have export potential

In the assesment criteria of

the project proposals it is

specifically referred to the

export potential of the

companies

Macro-level:

- Development of criteria for increasing the weight of SME export orientation in the total evaluation of project proposals for financial support

2.11. Establishment

and development of

export clusters and /

or other specialized

structures in the

sector, starting with

enterprises in sub-

sector " Builders'

ware of plastics,

12.2017 BSMEPA and

branch

associations

100 000 BGN

per year

BSMEPA budget and OP Established export clusters

to increase the number of

exporting SMEs.

Number of established

export clusters in the

sector.

46


institution

Financial


n.e.s."

Micro-level:

- Participate in export-oriented clusters in the sector

Meso-/Macro-level:

- Participate in the establishment and development of export clusters

- Encourage SMEs to participate in export clusters

2.12. Establishment

and implementation

of a program to

increase the number

of enterprises with

international

certification and

quality management

system in sector

"Manufacture of

rubber and plastic

products"

2014-2020 BSMEPA 150 000 BGN

per year

OP in the next program

period

Increased export due to

received certificates

Number of SMEs which

have obtained international

certificates

Export of the enterprises,

which have obtained

international certificates

Micro-level:

- Participation in projects under OP for the next programming period with the aim to obtain international certificates

Meso-level:

- Encourage SMEs to participate in projects under Operational Programs for the next programming period with the aim to implement quality management systems

and other internationally approved standards

Macro-level:

- Create and implement a program to increase the number of enterprises with implemented quality management systems and internationally approved certificates

- General management of the process of financial assistance and monitoring of results

47


institution

Financial


3. Specific objective :

Improve the qualification of personnel in SMEs in the sector so as to improve work efficiency of units dealing with export issues at

company level

3.1. Establishment

and implementation

of a program for

improvement of the

qualification of

export specialists in

SMEs in sector

"Manufacture of

rubber and plastic

products"

2014-2020 BSMEPA and

higher schools

100 000 BGN

per year

BSMEPA budget and

Operational Programs

Trained export specialists

of at least 80% of SMEs

within the programming

period

Number of trained export

specialists

Micro-level:

- Providing information for the training needs

- Participation in the training

Meso-level:

- Providing comments on the study of training needs and on the developed training program

- Encourage SMEs to participate in trainings for export specialists provided by BSMEPA

Macro-level:

- Assessing the needs of training export specialists in SMEs

- Developing a program for improving the qualification of export specialists of SMEs

- Training of export specialists of SMEs in the sector

3.2. Establishment

and implementation

of a training program

for participation in

international

12.2017 BSMEPA and

universities

40 000 BGN

per year

BSMEPA budget Trained experts of at least

80% of SMEs in the sector

Number of trained export

specialists for participation

in international exhibitions

48


institution

Financial


exhibitions.

Micro-level:

- Participation in a training program for qualification to participate in international exhibitions

Meso-level:

- Providing comments and opinions on training needs assessment and on the developed training program

- Encourage SMEs to participate in trainings provided by BSMEPA

Macro-level:

- Assessment of training needs for participation in international exhibitions

- Development of a training program for participation in international exhibitions

- Training of experts from SMEs in the sector to participate in international exhibitions

49

7. SYSTEM FOR MONITORING AND CONTROL

For each strategic document it is of great importance, first, to be implemented in accordance with

predetermined goals, deadlines and resources; second, to be sustainable over time and to develop the

activities and effects determined in it. For this purpose, it is advisable to monitor (fulfill monitoring)

and assess the implementation of the document and to identify appropriate actions - for correction

and improvement of its inherent activities.

Monitoring can be defined as: (a) an integral part of the ongoing project management (attributed also

to the implementation of the Export Strategy for sector “Manufacture of rubber and plastic products”,

aimed at achieving a certain change - in this case, improving the export performance of SMEs in the

sector); (b) an instrument assisting the control on management and the process of decision making;

(c) a description of events and conditions within a specified period of time; (d) systematic collection

of reliable, timely and relevant information on the progress, changes and consequences of undertaken

program actions. These essential features of monitoring make it one of the most important

components of the management of strategic documents, programs, projects, etc.

Assessment in its turn is a systematic review of specific management activities aiming to provide

information about the full range of short and long-term effects on the target groups. Program

evaluation may include assessment of the workload, operating procedures, or personnel, but its main

purpose remains the effect and impact of implementing the program (strategic document).

Monitoring should therefore establish the status and follow the progress in implementing the various

components and subcomponents, and the Strategy as a whole. Monitoring should also identify

emerging problems and factors that determine them, and suggest possible measures and solutions to

these problems. The information obtained is expected to be promptly available to the responsible

authority (primarily BSMEPA and MEET). The meaning of this is to enable these authorities and

other competent public institutions, if they consider it necessary - to take timely "corrective actions"

to support achieving the objectives of the Strategy.

It should be underlined that if monitoring focuses on the observation of: (a) actions taken and

resources expended, (b) results achieved, (c) carrying out the process in time, (d) the effects received,

assessment is aimed at determining the extent to which the general and specific objectives of the

document are achieved and also includes a systematic review of specific management operations to

provide information about the full range of short and long-term effects.

The main points that should be observed in connection with the implementation of this Strategy are:

- Compliance with the schedule of activities;

- Volume, speed and degree of resource use;

- Achieved results;

- Achievement of objectives and impact of the strategic document.

When to monitor? - The aim of ongoing monitoring is to record the effects and deviations from

planned levels early enough, so as to allow their correction before their consequences become too

serious to be overcome. What should not be forgotten is the need for monitoring to be performed

frequently enough to allow adjustment of deviations from the plan followed.

50

Based on this methodology, monitoring and assessment of the implementation of this Strategy

involves the following sequence of actions:

1. Selection of criteria and indicators for monitoring and assessment;

2. Monitoring of performance;

3. Comparison of achievements and targets;

4. Proposal and taking of corrective actions.

In compliance with the adopted objectives and measures in the Strategy, the following key indicators

for monitoring and assessment are proposed:

Availability on the national export portal of the elaborated criteria and a list of companies which

are export-oriented;

The inclusion of a company in the list of SMEs with export potential becoming an evaluation

criteria for the company when applying for financial support for export and competitiveness;

Established common branch association;

Percentage of SMEs, members of the branch association of the sector “Manufacturing of rubber

and plastic products”;

Number of entries in the specialized rubrics of the national export portal and the received

feedback;

Number and value of contracts concluded as a result of the participation in the corresponding

international forums (fairs, exhibitions, etc.);

Number of organized participations in the specialized exhibitions;

Number of events at which product samples are distributed - for example at exhibitions or

promotional campaigns in commercial network;

Number of conferences held;

Increased exports of products due to advertising campaigns;

Annual increase of the signed export contracts with invited foreign trade partners ;

Prepared procedure for work of Bulgarian foreign trade representation offices in favor of SMEs in

the sector;

Number of inquiries from foreign companies during the "Days of Bulgaria";

Number of attracted new customers during the "Days of Bulgaria". In the assesment criteria of the

project proposals it is specifically referred to the export potential of the companies;

Number of established export clusters in the sector;

Number of SMEs which have obtained international certificates;

Export of the enterprises, which have obtained international sertificates;

51

Number of trained export specialists;

Number of trained export specialists for participation in international exhibitions.

Surveillance and monitoring of progress will be carried out by BSMEPA, which is the "owner" of the

Strategy. To this end, the Agency will assign particular responsibilities to an official in its

administration to collect information necessary for monitoring the implementation of the measures,

who will make annual reports to the Executive Director of the Agency.

Annual reports will serve as interim assessment of the Strategy. At the end of the period, a final

report will be prepared for the whole period of the Strategy and a new document will be developed

for the next five-year period.

Reports will be public and the results will be disclosed to the public.