EVFTA motivates Bulgarian firms

Vietnam’s high growth potential and huge consumption are attracting Bulgarian investors, Photo: Le Toan

For the first time, executives of 23 leading Bulgarian companies arrived to Vietnam last week to explore investment and business opportunities, in preparation for the expected ratification of the EU-Vietnam Free Trade Agreement (EVFTA).

These Bulgarian businesses operate in many sectors that will see tariff reductions, including animal feed, engine lubricants, lighting equipment, drinks, audio and visual equipment, and waste treatment technologies.

“The Vietnamese economy is becoming increasingly important in the world, as it has many FTAs. These firms want to take advantage of the EVFTA’s tariff cuts (see box) and Vietnam’s growing demand for consumption, especially for Bulgarian products,” said Bulgarian Minister of Economy Emil Karanikolov at the Vietnam-Bulgaria Business Forum held last week in Hanoi.

Irena Vladova, head of exports of Prestige-96 AD, said that her company is one of Bulgaria’s leading foodstuff producers, with famous cake and biscuit brands like Trayana, Mirage, Roden Krai, Hyper, Troy, Spoko, Naya, Muesli, Nasladki, Wellness, and Frunu, which account for 23 per cent of the total market value of the Bulgarian cake and biscuit market.

“The Vietnamese market is extremely attractive and we would be delighted to co-operate with Vietnamese partners to distribute our products here,” Vladova said.

Similarly, Kalina Halatcheva, CEO of Corte Diletto Ltd., said that the company wishes to co-operate with Vietnamese partners in producing high-quality ice cream and confectionery in Vietnam. “Ice cream consumption in Vietnam is very high and we want to establish a firm foothold here,” Halatcheva said.

In addition, Bonmix Ltd. is also looking for Vietnamese partners to trade and produce animal feed in the country. A number of Bulgarian investors also want to establish a commercial presence and open joint-venture companies in Vietnam.

Kyulev Consulting House is one of them and is seeking Vietnamese partners to establish a joint-venture company or a partnership to export its food additives and organic cosmetics to Vietnam.

In another case, Prista Oil Holding EAD is exploring opportunities to establish a joint venture to recycle discharged oil in Vietnam. This company also wants to export lubricants to the country.

Minister Karanikolov said that Bulgaria “fully supports the ratification of the EVFTA,” and is “pushing up the agreement to be signed.” It is expected that the deal will be signed early next year and come into force by mid-2019.

“It is very important to us, to Bulgarian businesses, because it will give us enormous opportunities and make it easier to do business in Vietnam,” Daniel Dobrev, counsellor and head of the Commercial Section under the Bulgarian Embassy to Vietnam, told VIR.

“The EVFTA is not only about tariff reductions, but also about the easing of trade barriers and deals with many topics, including investment. Bulgarian businesses are quite optimistic about the Vietnamese market, which has tremendous consumption power,” he said. “Businesses in Bulgaria expect tariff reductions from the EVFTA and other incentives under the deal to do business in Vietnam.”

The EVFTA will eliminate over 99 per cent of tariff lines. The EU will eliminate duties on thousands of items sourced from Vietnam. Meanwhile, Vietnam will liberalise 65 per cent of import duties on EU exports at the entry into force of the EVFTA, with the remainder of duties being gradually eliminated over a 10-year period.

As of August 20, Bulgaria had nine investment projects in Vietnam registered at $31 million.