South-East European Industrial Market 4/2022

THE INDUSTRIAL PRODUCTS & SERVICES MAGAZINE FOR THE SOUTH-EAST EUROPEAN COUNTRIES www.tllmedia.bg NOVEMBER ISSN 1312-0670 Visit the SEEIM web site: www.SEE-industry.com issue4/2022 www.cadpoints.com www.comet.bg Automotive electronics manufacturing in Bulgaria

south-east european INDUSTRIAL MARKET 2 South-East European Industrial Market is a bimonthly industrial products & services magazine for the South-East European countries - Bulgar ia, Croat ia, Greece, Northern Macedonia, Romania, Slovenia, Serbia, Montenegro, Turkey, Albania. It is distributed free of charge among the working specialists in the industrial sectors in the region, and the engineering, manufacturing and trade companies in South-Eastern Europe. Editorial Department Dilyana Yordanova - Lead Editor d.yordanova@tllmedia.bg % (+359 2) 818 3823 Lyuben Georgiev lubo@tllmedia.bg % (+359 2) 818 3808 Pepa Petrunova p.petrunova@tllmedia.bg % (+359 2) 818 3822 Advertising & Communications Marieta Krasteva % (+359 2) 888 956 150 Petya Naydenova % (+359 2) 818 3810 Gergana Nikolova % (+359 2) 888 595 928 Elena Dimitrova % (+359 2) 818 3815 Marketing & Distribution Dept. abonament@tllmedia.bg Mirena Russeva - Head of Department % (+359 2) 818 3812 Maria Apostolova - Technical Assistant % (+359 2) 818 3811 ISSN 1312-0670 TLL Media Ltd. © All rights reserved.The artwork, layout design, the articles and all the graphical and text materials used - images, photos, texts, etc., are copyrighted and protected by the law. Unauthorized and unpermitted use is illegal and a copyright infringement. The Publisher shall not be held liable for the contents of the advertisements, advertising layouts and banners, video advertising publications, advertorials and company articles. Copyrights of all mentioned trademarks, registrated trademarkes, etc. belong to their owners.  IN THIS ISSUE: www . SEE - i ndus t r y . com Publishing House 104, Acad. Ivan Geshov Blvd., entr. A, office 9, 1612 Sofia, Bulgaria % (+359 2) 818 3838, Fax: (+359 2) 818 3800 E-mail: reklama@tllmedia.bg ® 4 Reducing Size, Noise, and Field Failures of Transportation APUs - designers are finally able to extract disruptive system-level benefits of SiC technology. 10 Lyubomir Stanislavov, CEO and Member of the Board of Directors of Automotive Cluster Bulgaria: The automotive sector has established Bulgaria’s place on the European high-tech industrial map. 11 Automotive electronics manufacturing in Bulgaria. 17 Hannover Messe 2023 to show the way to a climate-neutral industry. 17 TIMTOS to welcome buyers from around the world in March 2023. 18 Renewable energy market in SEE. 22 Pulp and paper industry in Romania. 25 EBRD invests EUR 60 million in sustainability bond in Croatia. 25 Romanian small businesses receive EUR 50 million support. 26 Chemical production in Croatia. 28 TaipeiPLAS and ShoeTech Taipei 2022 attracted over 12 500 visitors. 28 Lamiera 2023 to take place at fieramilano Rho. 30 Knauf Group to invest over EUR 200 million in Romania. 31 MTU opens new MRO facility in Serbia.

south-east european INDUSTRIAL MARKET 3 PAID ARTICLE Endrich Bauelemente Vertriebs GmbH success on the International Plovdiv Technical Fair Zoltán Kiss, Export Director e-mail: z.kiss@endrich.com Written by Zoltan Kiss, Export manager and Head of R&D - Endrich Bauelemente Vertriebs GmbH In the previous issue of the magazine we have been talking about our participation on the 76. International Technical Fair in Plovdiv, where we were about to introduce our multiaward winning IoT Eco-System, the E-IoT platform, which actually supports our major offering to our partners described by or 2022 year slogan “We MAKE YOUR DEVICE SMART”. Smart features of devices support predictive maintenance, optimize energy consumption, and support remote monitoring. But not only that, we can call this ecosystem to support our everyday healthy life. As the Plovdiv fair was for us a special occasion, here we have introduced our new IoT device, the so called cityBox device, which is an air quality detection device, sending the characteristics of the air quality constantly to a Cloud database to provide local authorities with reliable data automatically with samoling and uploading data in every two minutes in 7/24 operation. Endrich GmbH - a leading electronics component distributor and design-in house - has developed an online sensor network infrastructure, where each hardware components belong to manufacturers represented by the company. A series of technical writing have been published in South East European Industrial Market to give the readers a closer look at to Endrich’s IoT platform and ecosystem, offering a possible cooperation between IoT developers and the leading component distributor on the field of “smart devices”. We intended to talk to the Bulgarian professionals in order to see whether we can integrate our IoT services into national Bulgarian technical products, requiring predictive maintenance, being part of smart network or meeting requirements of Industry 4.0.We did not only show the concept on our Booth at the Plovdiv Show, but also intended to exhibit a few of the finished product derivates out of the concept, amongst others the Smart City Box, designed for monitoring air quality of urban area. This latest product debuted in Plovdiv, this had been the first show where it was promoted to the audience. The E-IOT ecosystem is extremely popular in western Europe, the concept itself and the derived products have won by today several prizes, amongst others the 2022 German Innovation Award. We also felt necessary to weight it on the International Gold Medal and Diploma Competition of the Plovdiv International Technical Fair. About the device itself… It is a solar panel driven single board computer with integrated air quality measurement sensors, such are air particle sensor, carbon dioxide, nitrogen oxide, humidity and temperature sensors as well as the possibility to connect external wired and/or wireless sensors. The city box communicates to the Endrich Cloud via the Internet through 2G/ NarrowBand (NB-IoT or LTE-M) GSM channel. The international technical fair in Plovdiv, as the most famous exhibition of the South-Eastern European and especially the Balkan electronics market, gave us the opportunity to finally get into personal contact with the local market participants, after years of regularly publishing in the local technical media. Probably thanks to this, the E-IoT concept received a very positive reception here as well and won the gold medal of the fair, which we received at the official award ceremony in the “Plovdiv” hall of the local Congress Center in September. “The gold medal of the International Technical Fair is the highest market award in the Bulgarian industry and represents an indisputable prestige in the portfolio of the awardees,” said Prof. Dr. Ivan Sokolov, General Director of the Plovdiv International Fair, in his welcome speech. He highlighted the intellectual and applied scientific aspects of the 76th edition of the fair and emphasized that today’s innovations in the industry ensure tomorrow’s social well-being.” The Bulgarian and international visitors have been very much interested, we succeeded to make a few really interesting leads, and we were quite satisfied with the results. Winning the GOLD MEDAL has been a nice surprise to us, showing that the E-IOT concept has been weighted also in Plovdiv positively.

south-east european INDUSTRIAL MARKET 4 Reducing Size, Noise, and Field Failures of Transportation APUs Designers are finally able to extract disruptive system-level benefits of SiC technology to shrink the size, noise, and field failures of auxiliary power units (APUs) in transportation vehicles. Kevin Speer, Nitesh Satheesh, and Marc Rommerswinkel, Microchip Technology As vehicle electrification proliferates the consumer EV) segment, other forms of transportation are also chasing the global macrotrend, including railway, aircraft, delivery trucks, off-highway vehicles, and more. Common across all forms of electrified vehicles are two electrification systems: the traction power unit (TPU), which provides vehicle propulsion; and the auxiliary power unit (APU), which supplies power for all other on-board loads, from lighting and doors to air conditioning and power outlets. Unlike consumer EVs which put a premium on range-per-charge, other transportation use cases may have different priorities addressed through improvements in the APU. Cabin space comes at a premium in light rail, for example, as free space allows more paying passengers. Field reliability is paramount for mining vehicles, where downtime is measured in millions of dollars per day. And across all use cases, passenger comfort is critical in a market served by competitive OEMs targeting choosy buyers. The high switching losses of silicon IGBTs have blocked transportation APU improvements. By limiting switching frequency, IGBTs fix the minimum size of the APU’s largest physical components, the isolation transformer and heatsink. With SiC, one can drastically downsize the isolation transformer by switching at higher frequencies; and with switching losses reduced by 80% or more, heat sinks shrink in turn. In addition, APU switching frequencies can extend beyond the audible range, eliminating the high-pitched whine that is tiresome for passengers. Last, efficiency is essential because the APU is continuously operating, often under light load; the conduction losses of SiC MOSFETs are lower than competing IGBTs under light load conditions. SiC Up to the Task? The toughness of the SiC MOSFETs across wide-ranging conditions is essential for APUs that power both convenience and emergency loads. One must verify: 1) the stability of the MOSFET’s gate oxide, a known issue for SiC MOSFETs; 2) the lifetime of the gate oxide; 3) the stability of the MOSFET’s body diode; and 4) failure toughness measures such as avalanche ruggedness and short circuit survival. Gate oxide integrity Should the threshold voltage shift, device performance changes (e.g., increased on-resistance), leading to erratic system behavior and possible APU failure. Production-grade SiC MOSFETs Vth data should exhibit no meaningful change after 1000 h of stress at 175 C. One can predict gate oxide lifetime by accelerating samples to failure using elevated temperature and electric field. Activation energy is extracted for each failure mode, and an Arrhenius equation is used to extrapolate oxide lifetime (see Figure 1). A production-grade SiC MOSFET gate oxide can last well beyond 100 years at high stress, ensuring confidence in routine, reliable APU operation beyond the designed service lifetime. Body diode stability Unlike the IGBT, the SiC MOSFET can conduct reverse current using its intrinsic body diode. In some devices, this diode degrades over time, leading to an increased RDS,on and more heat than designed. Figure 2 shows body diode I-V curves and MOSFET ON-state drain–source resistance (RDSon) after many hours of constant forward current stress. Wide variation was seen across suppliers. One supplier had noticeable degradation; another became unusable. Selected devices should show no perceptible shift. Using a SiC MOSFET with stable body diode enhances reliability and cuts cost by eliminating the antiparallel diode. Field survival: Short circuit and Avalanche Transportation APUs are susceptible to a variety of fault conditions, demanding SiC MOSFETs designed to safely ride through these events and maintain consistent performance before and after faults. Short circuit withstand caFigure 1. Example of extrapolated oxide lifetime of production-grade SiC MOSFET from Microchip. Figure 2. Pre- and post-stress RDSon for commercially available SiC MOSFETs, revealing varying quality of the intrinsic body diode from three suppliers. pability measures the MOSFET’s ability to survive an instantaneous short of the dc link across its drain-source terminals. The MOS channels are enhanced, allowing a properly designed de-

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south-east european INDUSTRIAL MARKET 6 Figure 3. Short circuit withstand time for production-grade SiC MOSFETs. Figure 4. Graphical user interface for programmable AgileSwitch™ gate driver and turn-off waveforms using (left) conventional switching and (right) augmented switching. Figure 5. Demonstration of how augmented switching (right) can reduce peak voltage and peak current during short circuit event compared to conventional switching (left). Figure 6. Proposed phase-shifted full bridge implementation of the Microchip ASDAK+ in the DC-DC section of a transportation APU. vice to safely distribute peak currents across the MOSFET die area. Figure 3 shows short circuit withstand times (SCWTs) for production-grade SiC MOSFETs – the Microchip example is between 3 and 14 microseconds, with dependence on dc link voltage and applied VGS. This is sufficient for many commercially available gate drivers. An advanced driver, such as that described in the next section, adds intelligence to short circuit detection. Avalanche ruggedness is even more demanding: the load current is suddenly dumped into the MOSFET, forcing the drain-source voltage to rise to breakdown. Unlike short circuit, the MOS channels are not enhanced; avalanche current crowds the die edge, rapidly taking the device to its thermal limitations. Repetitive unclamped inductive switching (R-UIS) is used to evaluate a device’s avalanche ruggedness. Many suppliers maintain oxide strength but the ability to demonstrate up to four times the toughness alongside stability in RDSon and drain-source leakage reinforces the SiC MOSFETs’ ability to safely ride through the most demanding electric overstress conditions. Switch Faster with Low-inductance Packaging Combined with high edge rates, problematic inductances in a power system cause higher switching losses, excessive overshoot voltages, non-compliant EMI, and potentially, APU failure. The preventative measures designers must take to slow down the MOSFETs’ speed may leave them wondering what happened to SiC’s value proposition. Microchip’s low-inductance SP6LI package illustrates how these problems can be solved. The phase leg-configured format inserts less than 3 nanohenries of parasitic inductance to the power loop. Internally, layout optimizations have been made to ensure identical timing and current sharing. Thermal performance can be improved with the use of silicon nitride ceramics (aluminum nitride also offered), and baseplate options include copper and AlSiC. Externally, the power terminals allow a low-inductance connection to the dc link and optimal paralleling in two orientations. The SP6LI allows the designer to drive the SiC MOSFETs at higher speeds with maximum efficiency and reduced EMI, shrinking APUs while precluding EMI-related failures. Gate Drivers Keep APUs on Track APU performance and reliability can also be optimized using digital programmable gate drivers that enable overshoot voltage and switching losses to be fine-tuned on the fly. This allows APU designers to reduce APU cost and size with lower-voltage parts and smaller heat sinks – and eliminating hours with a soldering iron and bin of gate resistors. The impact of augmented switching may be seen in Figure 4. Unlike conventional turn-off (left), augmented turn-off begins with an on-stage voltage of 20 V, moves to a user-programmed intermediate level for a specified dwell time, and finally to the off-state of -5 V. The effects are modest due to the SP6LI’s extraordinarily low inductance; results are published elsewhere showing more pronounced influence. In addition, short circuit events are quickly arrested, reducing peak voltage and current by 60% and 10%, respectively (Figure 5). Total SiC System Solution Designers wishing to streamline from double-pulse evaluation through volume production will need accelerated development kits that unify all three pieces into the total SiC system solution for transportation APUs: rugged SiC power devices, low-inductance power package and intelligent gate driver. Figure 6 shows how Microchip’s solution may be dropped into an APU circuit. Summary The use of SiC MOSFETs in auxiliary power units for transportation vehicles offers disruptive benefits over silicon IGBTs with respect to the APU’s size, weight, efficiency, and noise. However, these benefits may only be realized with high field reliability using rugged SiC MOSFETs, low-inductance packaging, and a gate driver intelligent enough to take control of SiC’s agile performance. Designers can now solve the challenges of transportation APU design with total SiC system solutions that simultaneously enable a reduction in size, noise, and field failures of transportation APUs.

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south-east european INDUSTRIAL MARKET 8 Prototype services The prototyping is an important supporting phase of a larger development project and unexpected delays in proto assemblies may increase dramatically the overall project cost. Prototype manufacturing and working as a partner to design engineers is our core competence. We try to achieve a long-term partnership with our clients for to achieve good and open communication. In proto assemblies we emphasize speed and flexibility for to support product development projects. Contract manufacturing Our technical knowhow creates strong basis on manufacturing services in the field of electronics. Managing the logistics is in an especially important role in contract manufacturing. Our technical capabilities include machine placed SMT down to 0201 and BGA components, finepitch parts and leadless parts, as far as THT components. Our production capacity adapts to small and middle-sized series. Together with our customers we will find the most cost-effective manufacturing service package, where customers’ individual needs are taken into account.From the prototype to medium-sized series production, we meet your individual needs quickly and reliably. Whether for printed circuit board assembly or soldering processes, our facilities are equipped with adequate technology and guarantee high quality at a reasonable price. Due to our flexible manufacturing organization we are able to quickly react on product modifications in design and quantity with optimal results. Comet Electronics – Contract Manufacturing Services As a specialist in electronics Comet Electronics provides services from electronics design to contract manufacturing. Full range service portfolio covers product development, proto manufacturing, production series and product maintenance. We can act as your partner’s outsourced department of electronics. Electronics design services Comet Electronics offer development service from your idea to complete product, according to the customer’s needs. Our design department works in close cooperation with our manufacturing services and the products we design have optimized manufacturability. From performance specifications to mass production, from the first circuit design to prototype – our development department takes care of all aspects of electronic development. With expertise and a wide range of experience we accompany you until your product is ready for production. www.comet.bg www.comet.rs www.comet.srl.ro PAID ARTICLE

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south-east european INDUSTRIAL MARKET 10 What are the long-term takeaways after this year’s „Automotive & Mobility Forum: Southern and Eastern Europe“ conference in terms of key challenges and opportunities? Òhe development of the automotive industry has started to rely more and more on software. A large part of the IT companies in Bulgaria produce automotive software for renowned OEMs, and companies such as Daimler already have software subsidiaries in Bulgaria. Another main topic, which shouldn’t be a surprise to anyone, is the focus on electrification. All major OEMs have acknowledged that electric vehicles are the future and our conference also reflected this trend. The third major trend is autonomous vehicles, and this is perhaps the most unfamiliar topic so far, but one which is developing rapidly. The number of electronic components and devices in cars is growing every year. How far do you expect this trend to evolve? Today more than 50% of the profit of a traditional OEM is coming from the electronic and software components. The enormous evolution of microelectronics has led to a significant increase in infotainment, lighting and sensor applications that require a durable and reliable design. The industry is actively contributing to road safety through the development and evolution of technologies to limit accidents, for example through stability control systems and driver health status. While OEMs have been offering connectivity, telematic services and infotainment systems for many years, monetizing these services continues to be weak. But this is about to change. How would you assess the role of Bulgaria-based electronic component manufacturers for the regional and global automotive industry? With its rapid pace of development in recent years, the automotive sector has established our country’s place on the European high-tech industrial map. It is impressive that about 80-90% of the cars produced in Europe have parts and components of Bulgarian origin. The Bulgarian automotive industry is developing in relation to the labour force, as well. For the past decade, the number of employees in the sector has risen significantly – from about 7000 to more than 70 000. The companies implement various mechanisms to support the development of their employees’ professional competences. Òhe close co-operation between the business and educational institutions creates opportunities for a successful career start of the young specialists. The technical modernization is another integral part of the development of the sector in the context of Industry 4.0 and the majority of the automotive companies in Bulgaria are focused on their digital transformation. The Automotive Cluster is actively supporting its members in the process of implementation of intelligent technologies through various projects. This results in increased competitiveness of the companies and in the quality of the manufactured products. The automotive sector has established Bulgaria’s place on the European high-tech industrial map Arch. Lyubomir Stanislavov, CEO and Member of the Board of Directors of Automotive Cluster Bulgaria, for South-East European Industrial Market What is the current investment climate in Europe? Are your strategies for attracting investors to Bulgaria changing and how? The European investment climate is recovering from the challenges of the past years and the Bulgarian companies are transforming to meet the fast-changing industry. We are glad that more and more automotive companies developing innovative solutions recognize our country as a potential location to establish their manufacturing facilities or R&D centers. One of Automotive Cluster Bulgaria’s main objective is to support the development of the Bulgarian automotive sector so that it could be more competitive and sustainable. To that end, we will continue to actively work for attracting high-tech leaders that shape the mobility of the future. What is your forecast for the future of the automotive sector in our country in 10 years? What goals should be worked towards in order to turn Bulgaria into an international innovation center? For the upcoming decade, I believe that our country has the potential to become a hub for innovations in the field of electronics, software, electric mobility, etc. In 10 years’ time I hope Bulgaria will have more than one OEM production facilities for car assembly and another several ones for battery production. Some of the actions for the future success of the business includes support by the state, as well as investments in the education and the professional skills of the specialists.

south-east european INDUSTRIAL MARKET 11 The production of automotive components is one of the fastest growing sectors of the Bulgarian economy in recent years. According to the Bulgarian Investment Agency, 80% of all sensors and over 90% of airbag sensors in European cars are produced in Bulgaria. Other products manufactured in the country include brake, fuel and engine sensors, climate control sensors, exhaust gas sensors and transmission sensors. The Bulgarian production of automotive electronics is developing in line with the global trends towards electrification and digitalization, which are among the main drivers of the annual increase in the number of electronic components in cars. Bulgaria-based manufacturing plants produce different types of cables and electronic components for the operation of various systems and services in cars, such as engine ignition, fuel injection, audio and communication systems, exhaust control, heating/air conditioning, navigation, safety, etc. Strong automotive and electronic manufacturing development According to Automotive Cluster Bulgaria, over 100 manufacturers of components and automotive parts operate on the territory of the country, and a large number of foreign investors plan or have already built or operate a second or a third local factory. Represented in the product mix of companies engaged in manufacturing activity are bearings, cables, air conditioning systems, fuel, air and oil filters, batteries, gears, bushings, springs, automotive alternators, starters, pistons, piston rings and bolts, levers for blinkers and wipers, entire steering wheel assemblies, sealing systems, gas injection systems and modules, alarm systems, electrical wiring, airbag sensors, car seat upAutomotive electronics manufacturing in Bulgaria holstery, etc. The production is intended for leading brands in the automotive sector, such as Àudi, Mercedes-Benz, BMW, Mini Cooper, Porsche, Bentley, Lamborghini, Ford, Nissan, Seat, Alfa Romeo, Volkswagen, Volvo, Renault, Mitsubishi, Skoda, Fiat, Tesla, etc. Electronics manufacturing is a traditional sector of the Bulgarian industry which has been steadily developing over the years. In 2015 the electrical and electronic equipment segment dominated the automotive industry in Bulgaria and accounted for more than 70% of the market shares in terms of revenue. According to the marketing analytics agency IBISWorld, the market size, measured by revenue, of the electronic component manufacturing in Bulgaria is EUR 241,7 millon in 2022. The market size has grown 7,9% per year on average between 2017 and 2022. The average business in the sector now employs more workers than it did five years ago, the report also informs. There are 92 electronic component manufacturing businesses in the country as of 2022, an increase of 5,3% from 2021. The electronic component manufacturing industry in Bulgaria has low market share concentration and there are no companies with more than 5% market share, IBISWorld further states. There are a number of local and foreign large, middle-sized and small companies currently operating in the country. Arkomat is an international manufacturer of wire harnesses for many global automotive companies, including Volkswagen Electrical Systems, Fiat and Renault. The company’s first subsidiary in Bulgaria was opened in Kazanlak in 1999. A second production plant was announced in 2015, in Karlovo.

south-east european INDUSTRIAL MARKET 12 Behr-Hella Thermocontrol (BHTC) is a manufacturer of climate control and thermal management solutions for the automotive industry. It has been active on the Bulgarian market since 2013 and opened a production plant for control panels for vehicle air conditioning in May 2015. The company also established a development centre for innovations in Bulgaria. BRSP Autoelectronica is a joint company established in 1986 as the only producer of automotive electronic modules and microprocessor systems for the former Russian and East European markets. Today it manufactures electronic voltage regulators, dry ignition coils and ignition control modules for the automotive industry. It is orientated towards the production of competitive articles for the Bulgarian and foreign markets. Elektrokabel Bulgaria is a subsidiary of Nexans Autoelectric – the German producer of cabling systems and electromechanical components for leading automotive and system manufacturers worldwide. Nexans’ production range includes individual system parts, mounting parts and microswitch applications for vehicle interiors as well as entire vehicle wiring systems. It opened its first production plant on the Bulgarian market in 2015 at the Industrial and Logistics Park of Pleven. The facility occupies an area of 5000 sq m and is specialized in the production of electrical systems for BMW’s vehicles. Festo is a global producer of sensors and sensor solutions for a wide range of industries, including the automotive sector. Since 1997 Festo Bulgaria has been specializing in the manufacturing of sensors and sensor applications and operates two manufacturing facilities in the country – in Sofia and in Smolyan. Festo’s main products manufactured in Bulgaria include fluid and magnetic flow and pressure sensors, as well as connecting cables for sensors, electric drives and valves. IDT is a global provider of high-performance, energy-efficient analog and mixed-signal semiconductors and application-specific ICs. At the end of 2015 IDT completed the acquisition of ZMDI, which allowed the company to operate in the automotive and the industrial sector, adding highperformance programmable power devices and signal conditioning solutions to its portfolio. IDT’s design center in Bulgaria, IDT Bulgaria (former ZMD Eastern Europe), was established in 2008 for the design, marketing and sales of ASICs and ASSP. IDT Bulgaria operates two locations – in Varna and Sofia. IMI Bulgaria (Integrated Micro-Electronics Bulgaria) is a tier 2 and producer of electronic components and services for manufacturers of original electrical and electronic parts and devices for the automotive, industrial and consumer sectors. The production facilities are located in Botevgrad and the development team is in Sofia. Kemmler Electronic manufactures a wide range of customised cable assemblies mostly for the automotive industry, which accounts for about 80% of its production. An important milestone in the international history of the company was the establishment of the Bulgarian subsidiary in March 2013. The city chosen to become a site for the next production base was Rakovski, which was already operational in the summer of 2014. Kostal is an independent family enterprise established in 1912 in the German town of Ludenscheid. In 2016 Kostal Bulgaria Automotive was established in the city of Pazardzhik. The company manufactures and supplies components for more than 5 million cars worldwide. In 2019 it expanded its production in Bulgaria by the addition of 13 000 sq m of production area with manufacturing facilities. In September 2022 the company inaugurated two new assembly lines for the production of Porsche understeering parts. LEM develops and manufactures high quality solutions for measuring electrical parameters. Its core products – current and voltage transducers,

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south-east european INDUSTRIAL MARKET 14 are used in a broad range of applications. LEM has production plants in Beijing (China), Geneva (Switzerland), Sofia (Bulgaria) and Tokyo (Japan). The company’s Automotive division specializes in developing and manufacturing current transducers for battery management and motor drive applications in cars, buses and trucks. MD Elektronik In 2019 the German manufacturer of components for the automotive industry MD Elektronik started the construction of its first Bulgarian plant in Vratsa. The factory covers an area of 10 000 square meters and produces cable systems and electronic modules for numerous car manufacturers. In addition to Bulgaria, the company has factories in the Czech Republic, China and Mexico. Melexis designs, develops and delivers innovative microelectronic solutions for customers from the global automotive, industrial, consumer and medical markets. In Bulgaria, the company exists as Melexis Bulgaria and was established in 2000. Its scope of activities includes microelectronic component manufacturing, sensors, ICs for the automotive industry. Melexis Bulgaria ICs are used in the vehicles of companies like Mercedes-Benz, BMW, Audi, VW, Suzuki, Toyota, GM, and Ford. Nursan Otomotiv In 2002, in a joint collaboration between Nursan Electric Donanam and Koush Group, Nursan Otomotiv was founded, which currently operates in an enterprise located in the village of Lulakovo, municipality of Burgas, which occupies 7000 sq m. Nursan works with clients from Turkey, France, Italy. The company produces automobile cable systems and battery cables for cars, light-trucks and trucks.

south-east european INDUSTRIAL MARKET 15 SE Bordnetze is Bulgarian manufacturer and supplier of components for the automotive industry with headquarters in Karnobat. It has over 3000 employees. The company manufactures wiring harnesses for Volkswagen Group vehicles. In 2008 it founded its second plant in Bulgaria, located in the town of Mezdra. Currently SE Bordnetze operates a third location in the country, in Sliven, owned by its subcontractor Ates. Sensata Technologies Bulgaria is headquartered in Sofia. Its main activity is the production of high-temperature sensors for the automotive industry, mainly for exhaust gas treatment systems. The company is part of the American Sensata Technologies Holding group. It has production and business centres in 11 countries on 4 continents. Bulgaria is Sensata’s largest location in Europe. The company has two factories in the country for the production of car sensors – in Botevgrad and near Plovdiv, as well as a business centre and a test laboratory in Sofia. Tremol SMD was established in 2006 in the city of Veliko Tarnovo as a company in the field of outsourcing of high-tech assembly of electronic components SEM (Contract Electronic Manufacturer). Automotive, Industrial, Medical and Aviation electronics. It is part of Tremol Group Bulgaria and currently employs more than 240 people. The company produces electronic modules in its 7000 sq m production site, with a 1000 sq m administration and engineering site and an additional PTH manual assembly division in the town of Svishtov. Established in 2000 Visteon boasts a long-standing automotive heritage, starting as a division of Ford Motor Company and acquiring the electronics division of Johnson Controls in 2014. As one of the world’s largest automotive electronics suppliers, focused exclusively on cockpit electronics, Visteon creates, designs and manufactures high-tech electronics products and solutions for connected cars. It supplies almost all leading car manufacturers, including BMW, Daimler, Ford, General Motors, Nissan and Hyundai. Visteon Electronics Bulgaria is a technical centre with over 940 employees with experience in the development of software, hardware and mechanics. It is Visteon’s largest global technology centre, currently focusing on the design and development of platforms and custom solutions for millions of vehicles in future mass production. Wurth Elektronik iBE BG is a manufacturer of noise suppressing elements for the automotive industry. The production base is located in the village of Belozem, Plovdiv region. Wurth Elektronik iBE BG was established in 2002 as a subsidiary of the German company Wurth Elektronik iBE, part of the Wurth Elektronik group. The production base in Belozem is the largest of the six divisions of the Wurth Elektronik iBE group. The remaining five production sites are located in the Czech Republic, Mexico, China and Germany. Yazaki Bulgaria is 100% owned by Yazaki Corporation. The company’s activity in Bulgaria dates back to 2006 and is related to the production of automotive cable installations, with the main customers being the car manufacturers Renault, Ford and Daimler. Yazaki Bulgaria’s first plant in the country is in Yambol and its official opening took place in 2007. The plant has a production area of 15 500 sq m. With its three plants in Yambol, Sliven and Dimitrovgrad, Yazaki Bulgaria is one of the largest employers in Bulgaria, with over 5500 workers.

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south-east european INDUSTRIAL MARKET 17 Hannover Messe 2023’s lead theme ‘Industrial Transformation – Making the Difference’ will show the difference that exhibiting companies can make, which changes they can carry out and which innovations they can develop on the road to a climate-neutral industry. “This is a call to action for corporations, SMEs and startups as well as science, politics and society. They must work together to secure our industrial production, prosperity and future as well as to protect our environment – Hannover Messe shows the way to a climate-neutral industry”, said Dr. Jochen Koeckler, Chairman of the Managing Board, Deutsche Messe AG. The event, which will take place between 17 and 21 April 2023, will host more than 4000 exhibiting companies from all over the world, including global enterprises such as Autodesk, Bosch, Capgemini, Dassault Systemes, Microsoft, NOKIA, Salzgitter, ServiceNow, Schneider Electric, and Siemens as well as leading SMEs like Aerzener Maschinenfabrik, Beckhoff, Block Transformatoren, Boge, GP Joule, Festo, Formlabs, gbo Datacomp, GFOS, Harting, ifm, Kaeser, LAPP, Pepperl+Fuchs, Phoenix Contact, Rittal, SEW, Wago, WIBU, and Ziehl-Abegg. Well-known research institutes such as Fraunhofer and Karlsruhe Institute for Technology (KIT) will sketch industrial solutions for the future and more than 300 startups from various technology fields will show innovations with disruptive potential. Hannover Messe 2023 to show the way to a climate-neutral industry Hannover Messe 2023 features seven display sectors: Automation, Motion & Drives, Digital Ecosystems, Energy Solutions, Engineered Parts & Solutions, Future Hub, Compressed Air & Vacuum, and Global Business & Markets. Exhibitor show solutions in areas such as CO2-neutral production, Industrie 4.0, artificial intelligence, IT security, Logistics 4.0, circular economy, and hydrogen and fuel cells. Indonesia, the largest economic power in the ASEAN region, is Partner Country at Hannover Messe 2023. From 6 to 11 March 2023, three halls at the Taipei Nangang International Exhibition Center, Hall 1, Hall 2, and Taipei World Trade Center, Hall 1, will host the Taiwan International Machine Tool Show (TIMTOS), which is co-organized by TAITRA and TAMI. Statistics show that this year’s registration is back to its normal status from the previous year. The exhibition will feature intelligent machines, necessary components, and intelligent manufacturing solutions that will cover the entire metalworking production process. With the strong support from domestic and international manufacturers and the numerous inquiries from foreign investors and buyers since the border was opened on October 13, 2022, TIMTOS 2023 is expected to reclaim its position. Except for a few nations and regions that are still under entry restrictions, Taiwan lifted border controls on October 13, 2022, and resumed visafree entry. From now until 2023, it is expected that professional trade shows in Taiwan will have a great opportunity to welcome exhibitors and visitors from other countries. One of the largest professional exhibitions in Taiwan, TIMTOS, has planned to expand registration area by opening the foreign and national pavilions at Taipei World Trade Center, Hall 1. This will allow foreign buyTIMTOS to welcome buyers from around the world in March 2023 ers to pre-register for the exhibition. TIMTOS will also host a global partner and press conference at the end of November to welcome foreign visitors. With the theme of “Keep Rolling in Metalworking”, TIMTOS 2023 will showcase various solutions to make metalworking smarter, more sustainable, and more efficient; linking the global metalworking ecosystem from castings to whole machines, and from steel material to products. Additionally, echoing the trend of the tooling industry towards modularization and high-value transformation, TIMTOS 2023 also introduces three new exhibition zones: the Advanced Technology Processing Zone, the Theme Zone for Integrated Manufacturing, and the Future Manufacturing Experience Zone, providing buyers from around the world with the most advanced metal precision processing and smart manufacturing solutions. Photo: Deutsche Messe Photo: TAITRA

south-east european INDUSTRIAL MARKET 18 According to the International Renewable Energy Agency (IRENA) renewable energy already plays a significant role in SEE, in particular in the form of hydropower and bioenergy. Indeed, SEE boasts an installed hydropower capacity of more than 22 GW with the potential to significantly increase this capacity. Yet, while hydropower is vital in reducing the region’s dependence on fossil fuels, this key electricity source must be developed sustainably. Similarly, the region’s bioenergy use is vast, thanks to the large forested area. Traditional bioenergy constitutes a large portion of the total energy demand in all of SEE and plays a vital role as a direct source of heat for its residential buildings. A shift from polluting traditional bioenergy to modern bioenergy is necessary, however. The region is endowed with good wind resources, too, with the wind blowing at average speeds between 5,5 m/s and 6,7 m/s. Solar radiation is also relatively substantial, in particular in the southern part of SEE (Albania, Bulgaria and North Macedonia). The technical potential of utility-scale variable renewables in SEE reaches as high as 1680 PJ. Oil represents the largest share in total primary energy supply (TPES), with 28% of the total, followed by solid fossil fuels – mainly locally supRenewable energy market in SEE plied lignite – with 27%, natural gas (20%) and biomass (11%). Currently, the power sector of the region is heavily reliant on an ageing fleet of lignite power plants, which produced 43% of the 231 TWh generated in 2017. The ageing infrastructure of these facilities and their negative environmental impact reveal the need for the rapid phasing out of older plants and suspension or improvement of more recent ones. The region’s total final energy consumption (TFEC) was around 2720 PJ in 2017, states IRENA. The residential sector is the largest consumer, with a 32% share of TFEC. A large part of the energy consumed in the residential sector comes from biomass, which offers an economic solution for heating residential buildings. The use of biomass in the residential sector is, however, mostly in inefficient cooking and heating appliances, which are a major source of local air pollution and health problems. Improving access to clean solutions for cooking and heating is a priority under the Sustainable Energy for All Initiative of the United Nations. Yet, in SEE, there are still many households lacking access to clean solutions – over 30% in some cases. Slow progress in deploying modern bioenergy indicates both the presence of significant barriers, and that current policy measures are insufficient to stimulate deployment of renewable energybased solutions. Policies and investments Most renewable energy capacity is concentrated in the EU member states of SEE, while the rest of the region has been relatively slow to roll out such projects. The EU member states benefited from the early adoption of mediumterm, technology-specific targets for renewable energy and the introduction of dedicated supporting policies.

south-east european INDUSTRIAL MARKET 19 The most common policy support instruments in the EU are auctions and tariff mechanisms for utility-scale and residential plants. Nowadays, every government in SEE has adopted renewable energy targets, as a result of international agreements, including the Renewable Energy Directive (RED) and the Energy Community Treaty. Targets had a profound effect on the region’s renewable energy environment. RED and the related National Renewable Energy Action Plans (NREAPs) have been powerful catalysts for the deployment of renewable energy technologies and their integration into power sectors around the EU. SEE, like most regions in the world, still lacks a comprehensive legal framework supporting renewable in the heating, cooling and transport sectors. As the use of traditional biomass is widespread, the pace of adoption of modern renewables and energy efficiency measures should be accelerated to guarantee the decarbonisation of the heating sector. Dedicated policy interventions are needed to overcome a variety of economic barriers (e.g., access to finance for the procurement of modern appliances) and noneconomic barriers (e.g., low consumer confidence). An enabling environment, with appropriate policies, is conducive to attracting investments in the renewable energy sector. Between 2001 and 2018, SEE received USD 20,7 billion in renewable energy investment, excluding large-scale hydro. Regional investment has grown from nonexistent in 2001 to its 2012 peak of USD 3,7 billion. In 2018, the total renewable energy investment in SEE was USD 1,49 billion. Overall, renewable energy investment remains fragile in SEE. The changing pattern of investment can be attributed to the presence (or lack thereof) of dedicated supporting policies. Without stable policy and regulatory frameworks, regional investment in renewable energy will continue to be sporadic. Reducing the cost of capital and offering more harmonised approaches across national markets would also provide an additional boost in investment for a region with vast renewable energy resources to fully realise its potential, states IRENA. Renewable energy potential Historically, the region’s power generation profile has been significantly shaped by large hydropower plants, while heating needs have mainly been covered by the large biomass endowment. The overall estimated unexploited potential for renewable energy is still substantial, however. IRENA has undertaken an analysis on costcompetitive renewable energy in SEE, which carried out a systematic assessment of the region’s overall renewable electricity potential. The analysis found that SEE sits on rich and partially untapped renewable energy resources. Despite having an installed hydropower capacity of more than 22 GW, the region still has the largest remaining unexploited hydropower potential in Europe, as its river catchments have remained largely undeveloped. The technical potential of hydropower is estimated to be 522 PJ per year. While up to 140 large (above 10 MW of capacity) greenfield hydropower plants and more than 2700 small projects (each below 10 MW of capacity) are in the production pipeline, the sustainability of these projects has sometimes been questioned. In the last couple of years, opposition to the construction of small hydropower plants has been growing, mainly in Albania, Bosnia and Herzegovina, Croatia and Serbia. Local stakeholders and nongovernmental organisations (NGOs) have called for a set of principles for sustainable hydropower to be respected, with one of these principles being the prioritisation of investment in rehabilitating existing plants.

south-east european INDUSTRIAL MARKET 20 SEE NEWS Mercedes-Benz Romanian unit to invest 9-digit sum in electric drive factory Romania’s Star Assembly, a fully-owned subsidiary of Mercedes-Benz, announced it will invest a nine-figure sum to extend its production portfolio and include the assembly of electric drive units for new generation Mercedes-EQ electric vehicles starting 2025. The 30 000 m2 production facility will be housed on the current site of the Star Assembly factory, in the central Romanian city of Sebes. Construction will begin in the first quarter of 2023 after land preparations are completed. The investment aims to reinforce MercedesBenz’s electric mobility strategy and prepare Star Assembly for a fully electric future, after having been set on this trajectory since 2020, when the unit began producing 8-speed dual-clutch transmissions. The factory will be carbon neutral, with the energy supply being secured through renewable energy sources. Linden Energy books firm capacity in GreeceBulgaria link US-based energy development company Linden Energy recently finalised its commitment to use 10% of the capacity of the newly-commissioned Interconnector Greece-Bulgaria (IGB) pipeline under a 20-year contract. The move comes after the US company in August completed its agreed acquisition of 50% of privately-held Bulgarian natural gas supplier Overgas Inc. The deal, seen to be paving the way for the parties’ intended expansion in the Western Balkans, was agreed in July 2021. It was made possible after the board of Gazprom approved the disposal of the Russian gas supplier’s indirect and direct holding in Overgas for EUR 15,5 million euro (USD 15,4 million). „The IGB pipeline is key to the diversification of gas markets in Bulgaria and throughout the region. This pipeline will be integral to our objectives with Overgas, and we are excited to see it become utilised in connection with the Revithoussa terminal in Greece,“ Linden Energy founder and president Stephen Payne said. Photo: Star Assembly Photo: ICGB In 2016, the EU commissioned a study on hydropower for the Western Balkans. This was aimed at defining how to develop the region’s hydropower potential in a way that balances energy generation, flood protection and environmental concerns. The study concluded that the first, immediate priority for investment should be the rehabilitation and increased efficiency of existing hydropower plants, in combination with ecological restoration measures. This would safeguard the existing capacity and generation that hydropower currently contributes to the region’s energy mix. The study concluded that the development of Greenfield projects should be limited to hydropower plants, as the contribution of small plants to energy production is extremely limited, while their impact on the environment can be severe. Western Balkan waterways provide the region’s inhabitants with many services that are essential to their livelihoods. Hydropower must therefore be developed in compliance with the highest standards of ecological preservation. Some refurbishment and modernisation is already taking place, at, for example, the Iron Gate 2 hydropower plant in Serbia. Global horizontal irradiance, a key parameter in solar PV installation, is higher in the southern part of the region, where it reaches over 4,5 kWh/m2/day. Solar resources in the northern part are more modest, down to 3 kWh/m2/ day, but in line with or better than other European countries with large PV deployment, such as Germany. The utility-scale solar technical potential of the SEE region is estimated at around 245 PJ. The whole region is endowed with good wind resources, with wind blowing at average speeds of between 5,5 m/s and 7 m/s at 100 mheight. The mountainous and coastal landscape increases the variation in wind resource across the region, with higher average wind speeds in coastal areas and at high altitudes. The Eastern coast of the region (Republic of Moldova and Romania) enjoys the best wind resources, with average wind speeds of 6 m/s to 7 m/s. The Adriatic coast (Albania, Bosnia and Herzegovina, Croatia, Montenegro and Slovenia) enjoys similar average wind speeds, but this area is also regularly hit by winds that gust between 150 and 200 km/h. This adds additional stress on wind turbines. Wind energy is not harvested at its full potential, however, as in nearby countries with similar wind resources, with the exception of harvesting in the EU member states of the region. The technical potential of SEE’s wind energy currently is estimated at 1436 PJ, estimates IRENA. Notably, the presence of a good technical potential is a necessary but not sufficient condition for deployment. Other aspects to consider are the economic limits to supply, the market constraint and the presence of appropriate supply chains. Hydropower Hydropower is a very cost-competitive option for new power. Data from the IRENA Renewable Cost Database show that the weighted-average levelised cost of electricity (LCOE) from hydropower in SEE decreased by a third from the 2011 to 2014 period to the 2015 to 2018 period. During the latter three years, the weighted-average LCOE of hydropower in the region was USD 0,083/kWh. Solar PV and onshore wind Available data for projects in the IRENA Renewable Cost Database indicate that the capacity factor of utility-scale solar PV and onshore wind projects in SEE has been historically in line

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