Despite threatening to freeze plans to double investment as recently as May 2007, on March 27 Turkish glass giant Sise ve Cam Fabrikalari (Sisecam) broke ground of its new factory in Turgovishte. The plant is the first of four new production facilities that will be built in the vicinity of the north-eastern Bulgarian town with a population of about 40 000.

The four new factories will allow Sisecam to start exporting automobile glass to other countries in Eastern Europe. Construction of the other three plants near Turgovishte will begin by the end of 2008, Sisecam Holding vice president and Sisecam subsidiary Trakiya Glass Bulgaria executive director Gulzem Azeri said.

The new investment was officially announced during the visit by Turkish prime minister Tayyip Erdogan last week.

About $415 million is expected to be invested in the coming three years. Since 2004, Sisecam has poured $380 million into its Turgovishte projects, where it currently operates four plants for production of flat glass, glass for furniture industry, household glass and mirrors. Almost all of the production is for export, and in 2007 the turnover was $175 million, Bulgarian-language daily Dnevnik reported on March 30.

“The investment in Bulgaria is of utmost importance for us and it is connected to our strategy for expansion of our production that has high added value. Besides automobile industry glass, we will also manufacture products with high emission-holding properties, which, in turn, save energy,” Azeri said.

Increasing capacity will naturally mean increasing payroll. Sisecam now has 1500 workers in Bulgaria, with the number planned to reach 2000 by 2010. The managers said they are not worried about hiring new employees, as the company has its own training centre.

“The training is done in Bulgaria but for some of the staff, also in Turkey. We aim at training highly specialised stable professionals, and are certain that the company has a development strategy for the coming 10 to 20 years,” Azeri said.

Expanding production in Bulgaria is serving the main goal of Sisecam, namely to expand into Eastern European markets, even though the local factories will again have limited capacity.

“This investment is very important for us as the automobile industry is continuously growing,” Azeri said.

Sisecam’s Turkish plans cover 75 per cent of the demand for glass by the car industry in the country.

However, after announcing the success of its first investment in the then-new Turgovishte glass complex worth $220 million, in May 2007 Sisecam management was troubled by Bulgaria’s labour laws. The main problem was the contradiction between the Labour Code and Collective Labour Disputes Settlement Act, which allows unions to organise unregulated strike actions, a Sisecam media statement said. According to the company, these regulations neglected the collective labour contract arrangement, which has been in effect since May 1 2006 and regulated the relationship between the two parties, as The Sofia Echo reported at the time.

Sisecam spokesperson Bistra Dimitrova told The Sofia Echo that in the beginning of 2006, Trakiya Glass employees requested a salary increase and their financial packages (wages, night payments and social gains) were raised by 17 per cent, after which the collective labour contract they demanded was signed. It has a two-year term on condition that employees’ salaries would be re-calculated twice a year, according to official inflation in Bulgaria, but the workers were not allowed to demand new salary adjustments, Dimitrova said.

But in May 2007, employees signalled their intention to strike again, demanding that their wages were doubled. According to Spaska Duleva of Podkrepa Turgovishte Labour Confederation, Sisecam employees wanted to go on strike because their salaries were too low given the harmful conditions they worked in and also claimed the Bulgarian and the Turkish employees of the company were not treated equally.

After a lull that lasted close to six months, at the end of January Sisecam announced plans to start the construction of its fourth plant in Bulgaria.