Lighting products and systems manufacturers in Bulgaria

LightingTechnical ArticlesSouth-East European INDUSTRIAL Мarket - issue 1/2020 • 24.02.2020

Lighting components and systems production is a traditional industrial sector in Bulgaria which dates back to the 1940s. Over the years this manufacturing branch has developed into a key segment of the country´s contemporary economy. It has also experienced a gradual shift from conventional lighting technologies to solid-state lighting (SSL). This transition has been provoked by the change of the technological paradigm on a European and global scale welcoming LED lighting as a new standard for residential, office, commercial and industrial applications.

Throughout the past decade there have been such fundamental changes across many of the sub-sectors of the European electrical and electronic engineering industry and the "Lighting equipment and electric lamps" sub-sector has seen fast product innovation and technological progress acceleration. It has been affected the mass dissemination of the SSL-technology with LEDs becoming a driver for new product development and structural change of the sub-sector. LEDs provide a number of opportunities for improvements in the design of lighting and lead to an enormous increase in energy efficiency compared to traditional light sources.

The companies in this segment have always been leading the market for traditional light sources and command a strong position in the LED segment. Bulgarian manufacturers of lighting products and systems successfully keep up with that trend offering technologically advanced and high-quality products.


Market segmentation and trends

According to a study on the competitiveness of the electrical and electronic engineering industry, published by the European Commission, the traditional product programme in the field of lighting equipment and electric lamps in Europe comprises of the following products: discharge, incandescent, fluorescent, ultra-violet, infra-red lamps, fixtures and bulbs; ceiling lighting fixtures; chandeliers; table lamps; electric fireplace logs; flashlights; electric insect lamps; lanterns; spotlights; street lighting fixtures; lighting equipment for transportation equipment, non-electrical lighting equipment, etc.

The main light sources technologies in the segment s are: incandescent filament lamps, halogen lamps, gas discharge lamps are widely applied in the form of linear fluorescent lamps (LFL), high intensity discharge lamps (HID) and solid-state lighting (SSL), comprising of light-emitting diodes (LED), organic light-emitting diodes (OLED) and polymer light emitting diodes (PLED).

The manufacture of light sources consists of a limited number of stages. It is capital intensive and highly-automated. Beyond light sources, complementary components, such as luminaires, ballasts, controls and fittings, are necessary for illumination. The interfaces to light source manufacturers’ products are well-defined by mechanical, electrical, electronic, thermal and photometric specifications. In the area of light control and control systems Europe is on the leading edge of technology.

The survey "The European LED lighting market to 2024" by Research and Markets states that the lighting market in the region reached a value of USD 12,6 billion in 2018. Looking forward, the market is forecast to reach a value of USD 25,2 billion by 2024, exhibiting a CAGR of around 12% during 2019-2024. With the lighting industry transformation towards LED sources and solid-state lighting, Europe represents one of the most innovative lighting markets across the globe.

A key factor driving the demand of LED products in Europe has been the European Union´s policy measures banning the sale of inefficient lighting technologies. Other key factors driving the demand of LED products in Europe include infrastructure growth, upcoming smart building projects and decline in the average prices of LEDs.


Lighting manufacturing as a part of the EEI sector

Lighting manufacturing is a part of the Electrical and Electronics sector (Section "Electrical Engineering" – 27 Electrical Equipment – 27.4 Lamps and Lighting). According to the Bulgarian Investment Agency, the Electrical and Electronics sector in Bulgaria is characterized by the presence of experienced engineers, qualified workforce for assembling products at an affordable price, established traditions and a well-adapted infrastructure for production needs. Bulgaria has particularly strong traditions in the sector. In the 1970s and 1980s the country was among the leaders in the semiconductors and electronics industry in Eastern Europe. The electrical and electronics sector employed more than 130 000 people and accounted for more than 25% of Bulgaria´s total production at that time.

Today many Bulgarian companies operate successfully in the sector, offering competitive products all over the world. Bulgaria offers skilled and experienced workforce for the needs of electrical engineering, electronics and lighting manufacturing - from assembly personnel to highly qualified engineers. In the country there are 5 technical universities and a total of 10 academic institutions that provide education and training in various disciplines in the industry, as well as 130 vocational schools with classes including electrical, electronics and lighting equipment disciplines. There are also many centers for vocational education and a well developed dual learning system.

According to an overview of the "Electrical and Electronics" industry in Bulgaria and the European Union, published by the Bulgarian Association of Electrical Engineering and Electronics (BASSEL) in 2019, this industry is of key importance for the country´s economy.

It generates a significant portion of industrial output (over BGN 5,7 billion annually), provides employment for over 45 thousand workers and is leading in the export structure (accounting for 10,9% of total exports in 2018).

Eurostat data shows that a total of 866 companies operate in the sector, of which 350 are of significant economic importance. In recent years the energy funds made it possible for many companies in the field of electrical engineering, electronics and lighting manufacturing to renovate their production equipment. Many enterprises have built modern production buildings. In the sector there are a number of significant foreign investments.

Lamps and lighting are among the most important product lines in the sector, together with: electric motors, generators, transformers, industrial electronics, service electronics, wires and cables, cable car installations, electrical installation equipment, electricity distribution apparatus and equipment, accumulators and batteries, electronic components, etc.


History of the lighting manufacturing in Bulgaria

According to official historical reports, the oldest manufacturer of lighting bulbs in Bulgaria is the BELFA (Bulgarian Electric Lamp Factory) factory in Sliven. It was established in 1933. The factory started operating in 1934 with 20 workers and a couple of technicians. The first Bulgarian light bulb was lit in May 1934. The daily production of the facility ranged between 1800 and 2000 lamps. BELFA produced glass flasks, platter glass and plinths, while other materials and semi-finished products were imported.

The Bulgarian BELFA lamps had a lower price and a matching quality in comparison to foreign ones. In 1937 the factory manufactured a range of bulbs between 5 and 500 watts. Various models of lighting were produced both for homes and industrial sites, for trams, wagons and semaphores, for the installation of street posts in cities, etc.

The former lighting factory "Svetlina" is another old Bulgarian manufacturer worth mentioning. The company was established in 1949. Its main activity was related to the design, production and marketing of lighting fixtures and systems. The production programme was differentiated into the following main groups: street lights, park lighting, flood lights, industrial, fluorescent, transport lighting fixtures, etc. The street lights manufactured by "Svetlina" were exported abroad to the USSR, Russia, Germany and other countries.

The electrical and electronics sector in Bulgaria was relatively successfully restructured in the 1990s in terms of ownership, product range and markets. Electrotechnical factories were privatized, and many foreign enterprises bough important local manufacturing companies. To date, the sector has continued to see significant interest from foreign investors.


Current state of the Bulgarian lighting sector

According to Eurostat data, the ratio of the sub-sectors in the Electrical and Engineering industry in Bulgaria is 21% for electronics and 79% for electrical engineering. The production of the sector currently comprises of lamps and lighting products, wires and cables, electric motors, generators, transformers and electrical distribution apparatus, batteries, household appliances, etc. The exports of electrical equipment including lighting products and systems and have been on a steady upward trend since 2008, with the highest growth being in 2010 (29%). In 2017, exports of electrical equipment accounted for 7,2% of the country´s total exports. The total turnover of the country in section "C27 Electrical Engineering" is EUR 1,549 billion, latest reports state. The share of the branch in the manufacturing industry of Bulgaria (9,4%) is close to the average share in the EU and Germany.

According to BASSEL, the annual turnover in the industry for the product class "Lamps and lighting fixtures" is BGN 70 million. The shares of the product classes "С27 Electrical equipment", "С26 Electronics" and "С29.31 Electric car parts" in the total turnover of the branch "Electrical Engineering and Electronics" in Bulgaria are respectively 56,1%, 18,5% and 25,4%. The share of class "Lighting Equipment" in the total turnover of the branch "Electrical Engineering and Electronics" in the EU is 4,8% and in Bulgaria – 1,4%.

Lighting fixtures (including LED) and building installation elements are among the significant product niches in the country.

The turnover in class "Manufacture of lamps and lighting equipment" Bulgaria is 39 million euro, representing 1,4% of the total turnover in the industry. In the product class "Lamps and lighting fixtures" the sales revenue amount to BGN 70,3 million. The staff in the segment includes 884 people working in 26 enterprises.

As of 2019, in the product class "Lighting equipment" the sales revenue is 99,7 million BGN, the employed are 1690, and the number of enterprises is 34. The share of lighting equipment in the annual sales revenue of the branch was 1,7%.

Statistics on the share of product classes in the annual turnover of the industry show that lamps and luminaries account for 1,7%, optical equipment for 2,2%, electronics components for 3,3% and wires and cables for 5%. Lighting fixtures, incl. LEDs, are among the competitive products in the country. The electric lighting or signaling devices were among the leading products in the total export of the branch from Bulgaria in 2018, which was worth BGN 71,3 million.

According to NSI data for 2018, 4 422 187 ballasts for discharge lamps or tubes were sold, 140 954 electric night and table lamps were produced of which 129 713 were sold. The same year Bulgarian companies have manufactured a total of 514 893 chandeliers and other electric luminaires for attaching or fixing to a ceiling or wall. Of them 499 601 were sold.

BASSEL data, published in 2019, shows that the companies with foreign participation in the product class "Lighting equipment" have an annual income of BGN 10,7 million. The number of workers employed in such companies is 667. The trends in the development of foreign investment in the lighting industry can be identified by reviewing some larger investments in recent years.


Largest foreign investments in the field

The German company Osram, one of the largest lighting systems manufacturers in the world, invested EUR 25 million in a new production base for lighting electronic components near Plovdiv. The facility in the Trakia Economic Zone was opened in 2017. The German concern manufactures there LED arrays and modules, electronic ballasts, LED drivers, sensors and lighting control systems for the European market. Initially, the plant employed 500 people and the total number of employees reached 900 in 2019.

The Plovdiv plant is part of the company´s digitalization strategy and produces products for smart buildings and smart cities. The production includes LED arrays and modules, electronic ballasts, LED drivers, sensors and lighting management systems for smart buildings. Among the clients of the company are manufacturers of fittings, electrical engineers, lighting, architects and construction contractors.

In July 2018 US automotive lighting provider Varroc Lighting Systems acquired the Turkish company Sa-ba Automotive, which owns the automotive lighting plant near Dimitrovgrad. The new facility was inaugurated in January 2019. The plant manufactures headlights for Ford, Renault, Volkswagen and Aston Martin. The 3000-square-meter factory has created 350 jobs. The project is worth BGN 8 million. This location will enable the company to serve customers in close proximity to Bulgaria and could become a new production site for headlights and taillights. Initially, the facility is set to produce small lighting products, including centrally mounted stop lights, fog lights and indicator lights.

In October 2019 odelo Bulgaria opened its new production line for automotive lighting, again in the Trakia Economic Zone. The Kuklen plant is worth EUR 40 million, with a total of 400 jobs expected to be created by 2023. odelo Bulgaria company also opened a development center in Sofia in 2019. It is set to employ nearly 40 engineers to develop designs for the front and rear car lights. odelo is a leading automotive lights supplier supplying many global car manufacturers. The company has factories in Germany, Slovenia, Turkey and China.


Bulgarian companies as traditional participants in global lighting exhibitions

Bulgarian manufacturers of lighting products and systems traditionally participate as exhibitors and visitors at major international trade fairs in the field of lighting, electrical engineering, electronics and building equipment. Among the events of biggest interest for Bulgarian companies is Light+Building. In 2020 the popular global platform in Frankfurt am Main celebrates its 20th anniversary edition, showcasing latest products in the fields of lighting, electrical engineering, home and building automation.

As the official representative for Messe Frankfurt in Bulgaria, Inter Expo Center (IEC) reports increasing interest among Bulgarian companies in each successive edition of the forum. The organization assists local lighting manufacturers with detailed information about the event organization and deadlines, provides assistance with booth selection and further consultation on the companies´ participation in the platform.

According to IEC, the 2016 edition saw a sustained increase in Bulgarian visitors of nearly 20%. In 2018 14 Bulgarian representatives took part with their own stands. They demonstrated a broad portfolio of innovative products in the field of smart sockets and lighting, luminaries and LED technologies, lighting components, LEDs, electronic products, wiring harnesses, sensors, electrical panels and spotlights.

The event organizers also note that the number of Bulgarian exhibiting companies, which use Light + Building as a successful entry into the international market, has kept significantly increasing in recent years. This also proves that many Bulgarian companies are no longer focused only on the Balkan region but also on the European and global market.