At. Vasilev: Bulgarian and Foreign Investors Have Always Been Interested in Darvoobrabotvane

At. Vasilev: Bulgarian and Foreign Investors Have Always Been Interested in Darvoobrabotvane talked to Atanas Vasilev, chairman of Darvoobrabotvane's Management Board, about the company's development, business partners and listing on the stock exchange.

Mr. Vasilev, can you tell us more about Darvoobrabotvane BT today?

Darvoobrabotvane is a company with 45 years of history. In the past years we have been introducing new technologies and equipment in our continuous efforts to launch new products, to boost quality and to use wood more efficiently.

We are currently supplying companies in the Far and Middle East, in Northern and Western Europe. We have the most up-to-date production technologies, which enables us to to offer a competitive product.

We have invested in the latest drying machines in order to ensure the high quality of our products.

Darvoobrabotvane is one of the main suppliers to IKEA. Our cooperation with IKEA started back in 2002. We started as a supplier of solid wood panels and gradually began manufacturing luxury chairs and other products for the Swedish company.

At the moment we are working in partnership with Ikea Supply AG Switzerland on a project which is to be completed in three stages between 2007 and 2010. The total amount of the investment will reach 4.8 mln leva. The first stage will consume 2.15 mln leva, the second – 1.15 mln leva and the third – 1.5 mln leva. Ikea will provide 3.6 mln leva and the remaining 1.2 mln leva will be provided by the Bulgarian company and a bank loan.

The first stage includes the manufacturing if 230,000 items worth 5.7 mln leva. Production in stage two will be raised by 60% and in stage three by another 30% to reach 535,000 items worth over 12 mln leva.

Last years you announced plans for another stock exchange listing. When can we expect the IPO?

As you know we canceled the first IPO we announced, but we haven't abandoned the plans completely. We are watching the market closely and when we see the situation as favorable we will get listed.

The latest news around Darvoobrabotvane is that we signed a five-year contract for financing from Bulbank. This agreement will provide the necessary funds for out development in the mid-term perspective.

Do you think the cancellation of the IPO was a good decision?

The decision was taken as a result of the market situation at the beginning of the year. It was inevitable that the international financial crisis would hurt BSE as well and we didn't want our company to be underestimated.

What can we expect from Darvoobrabotvane BT in the future?

We are planning to expand our cooperation with IKEA and to modernize our production.

We will construct a new installation that would cost us 500,000 leva. We are also planning to enter the business of energetics and renewable energy sources.

We are also considering buying our own forest fields so as not to be dependent on wood supplies. Improvement of the infrastructure around our plant is also on our priority list.

You already mentioned IKEA as an important business partner. To which countries do you export your production?

52% of our production is for IKEA but this is isn't our only client. We have more than 300 clients in Bulgaria and abroad. Apart from the Balkans we are also working with companies in the Far and the Middle East, and in North and Western Bulgaria.

What results can investors expect?

Only within the agreement with IKEA production will reach an annual of 12 mln leva by 2010. We are planning to increase both our production and financial results.

Which companies are the main competition for you?

Our main rivals are Vratza-based Dub, as well as furniture manufacturers Mebelsystem Pazardjik, Yavor Petrich, Yavor Varna and Fazerles. Our advantage is that we have a long term contract with a global leader in the sector, which includes financing from the partner.

Are foreign or local investors interested in acquiring stakes in Darvoobrabotvane?

There is a constant interest from both Bulgarian and foreign investors. We will certainly tell the media if we take step in this direction.

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