site.btaParliament Puts Defence Suppliers on "No Privatization" List

Parliament Puts Defence Suppliers on "No Privatization" List

Sofia, July 20 (BTA) - The National Assembly on Wednesday supplemented the Privatization and Post-Privatization Control Act to include defence suppliers Kintex, VMZ Sopot and NITI on the list of state-owned companies not subject to privatization. Economy Minister Bozhidar Loukarski welcomed the change as a "correct move which will ensure not only social peace in these companies but also economic prosperity at the local and regional level", his ministry said in a press release.

The Economy Ministry had written in its reasoning for the bill that defence product exporter Kintex and ordnance manufacturer VMZ Sopot are of structural significance for the national defence industry and constitute an important element of the nation's security, economy and presence on strategic markets. The two companies are wholly state-owned and have performed remarkably well over the last two years, reinforcing their major social and economic role at the local and national level, the ministry said.

In 2015, Kintex secured 60 million leva worth of manufacturing orders to Bulgarian defence plants, up by 14 per cent compared with 2014. In 2016, orders made through the Sofia-based exporter are expected to double. The trend is likely to persist in 2017 and 2018.

Despite some unfortunate incidents at VMZ, in 2015 its plants in the central Bulgarian town of Sopot achieved results which had no precedent over the previous 20-25 years, the Economy Ministry further said in its press release. VMZ's profit in 2015 was nearly 30 million leva, compared with just 265,000 leva in 2014. Its sales in 2015 amounted to 130 million leva, increasing by over 60 per cent from 2014. The company paid off 30 million leva of its debts incurred over the years. At present, VMZ Sopot is operating at full capacity and is still recruiting new workers. Over the last half-year alone, it hired more than 800 new workers and thus expanded its staff to 3,445. In the meantime, pay rates increased. Available contracts will keep VMZ busy until the middle of 2018.