In times when businesses speak about the damages inflicted by the global financial crisis, one sector of the Bulgarian economy experiences quite the reverse. The processing plants in the food industry have hardly felt the crisis or at least this is true of the larger of them. This has emerged from a survey of the food-processing industry in terms of financial results and human resources carried out by two consultancies Noema and Job Tiger.
It is true that during the crisis people do not stop consuming food. However, certain restrictions are expected but the results of the survey show surprising results. Most of the companies in the food-processing sector have improved their financial results and have declared profits for 2009. Over 300 companies with an annual turnover above 50,000 euro have been covered by the survey – that amounts to one fifth of all such companies in the sector. Among them are companies producing bread and bread-related produce, meat, dairy products as well as sauces and ready-made goods. Here is what Davil Kulev, executive director of Noema says:
“The most common conclusion we could draw is that the food-processing industry has not been so severely affected by the crisis, if it has been affected at all. The reduction of food production has been insignificant. The companies have laid off in total about 4% of their workforce and their have still declared profits. It can be observed that the crisis has affected mostly small companies and businesses. If a company exceeds the 500,000 to 1 mln euro annual turnover limit, it can be said that its future development becomes much easier and it experiences the crisis in a minimal way. Smaller-sized businesses also have difficulties paying their credits. In contrast, large-scale companies take advantage of the crisis to improve their production capacities through investment. Many of them even open operations abroad.”
About 75% of the companies in the food-processing sector have said they have good market positions. Half of them have expanded their market niches in 2009. About 20% of them have done that abroad, in foreign markets. 26% of the small-sized companies have registered financial losses while this is the case with only 15% of the large-scale ones. About 40% of the companies say they have enough financial means to operate properly.
Among the things companies point out as weak are the often unsuccessful marketing and the poor introduction of information technologies. The largest companies have already introduces high-quality standards for quality such as ISO 9001, ISO 14001 and ISO 22000. As a very serious problem, companies point out the inter-company indebtedness. This is indeed a problem for the entire economy of the country. Delayed payments slow down production. Over 30% of surveyed companies say they have unpaid obligations to their suppliers.
There is a serious difference between small and large-scale companies in terms of obligations to banks. On average, 1 in 10 companies have unpaid bank credits. What other obstacles are there in this sector of the economy? More from Davil Kulev:
“Among the basic problems companies mention is the grey sector. 70% of the survey companies point out that as their major problem. Second come food imports from abroad which are very competitive in terms of quality. Third comes tax indebtedness. Less important are now problems such as the lack of qualified workforce,” says Davil Kulev in conclusion.
In 2009, the crisis forced companies to impose much stricter control of the work of their employees. Every third company has resorted to restructuring of its workforce. However, the large food-processing companies did not stop paying bonuses to their employees even during the crisis.”
English version: Delian Zahariev
