D-r Harlfinger, how the business environment in Bulgaria has changed in the last 8 years since you’ve taken over the management of Kaolin?
Quarzwerke acquired Kaolin in 2013. Since then, there has not been a moment of regret for the decision to invest in Bulgaria: The country offers high quality industrial material deposits, strong support from local communities, good access to our major markets and – last but not least – well educated, ambitious and fast-learning employees.
Regarding the business climate in Bulgaria, there is a lot of light and some shadow. The overall business situation has developed positively during the last years; but we also see room for further improvement: The high volatility and unpredictability in energy pricing is challenging. Also, a more stringent implementation of the rule of law would support Bulgaria’s attractiveness for investors.
The recovery of the world economy also leads to increased demand for industrial materials - how does this specifically affect Quarzwerke, which operates 12 plants in Bulgaria, Serbia and Ukraine?
Particularly in the second quarter of 2020, we experienced significant declines in sales in our core industries of glass and ceramics. During this time, we reduced our production capacity very decisively and at short notice. We got off relatively lightly without having to reduce our headcount.
Already in the second half of 2020, the markets recovered for us and have been developing stably since then.
How Kaolin fits into the Quartzwerke Group, how Bulgaria contributes to the global business?
Kaolin is a very substantial part of the Quarzwerke Group. Before investing here, we have assessed a number of alternative investment opportunities, in Europe as well as overseas. We are convinced that Bulgaria is our destination: Primarily, Kaolin is a good cultural fit – a company, with a long and proud history, a stable performance, a long-term orientation and motivated and loyal staff. But also strategically, Kaolin is a perfect match: It is regionally complementary to our previous network of operations and offers an excellent access to key markets, South Eastern Europe, Turkey and the Eastern Mediterranean.
Therefore, Bulgaria is on the top of our list for further investment and I expect that the relevance of Kaolin within Quarzwerke Group will further grow.
What is the new project in Silistra that you have just started?
Indeed, we have a major investment in Bulgaria ahead of us. After years of detailed planning and preparation, the building of our new plant in Dulovo is about to start. By 2025, the most modern and most efficient processing plant for kaolin and silica sand in Europe, if not world-wide, will start its operations – in Bulgaria!
We intend to invest more than €80 mln. This is a huge step for Quarzwerke Group which makes me very proud: It is going to be the biggest single investment into a new processing plant in our history. It is a strong commitment to Bulgaria and the region of Dulovo. It is a promise to our customers that also in the future we will be a reliable partner for the supply of high quality industrial minerals.
We expect that the investment will create 250 new jobs in the region. Past experience has also shown that we are regarded an anchor investor, i.e. other investments follow – it is not by chance that Bulgaria has a strong glass and ceramics industry.
Such a massive investment will not bring a short-term payback for us, but it is an investment for the next Quarzwerke generation and the next generation in Dulovo. This is an important message: We have come to stay, as a long-term partner for Bulgaria and the region. I’m certain that our vision to invest in Dulovo is a right and far-sighted step!
How does a German manager feel in Bulgaria?
As an investor, but also personally, I have a great sympathy for Bulgaria and Bulgarians! I have worked here for eight years, my wife and kids have lived in Sofia for four years. Bulgaria has become a second home for us.
Working in a Bulgarian business environment is in some aspects different than working in a German environment: Order and punctuality are highly valued in Germany whereas in Bulgaria fostering and maintaining relationships is a key element to success. Understanding and managing these perspectives is a very exciting and colorful job.