Bulgarian Economy Minister Traicho Traikov presented Stefan Leberbauer, a senior executive of Amer Sports, with the Class A investor certificate at a special ceremony, Photo © BTA
. bg ski news : Finnish Investment to Make Bulgaria World`s Top Ski Producer - 07 March 2011 - 16:12
The company that owns Atomic has bought the assets of its Bulgarian contractor and plans to boost production
INDUSTRY. Bulgaria will be making between 15% and 20% of the total annual production of ski in the world thanks to the investment in a local factory by Finnish company Amer Sports.
On Monday, world ski producer, Finnish company Amer Sports, received a "Class A" investor status from the Bulgarian government for its project to expand the ski factory in Bulgarian mountain resort Chepelare.
Bulgarian Economy Minister Traicho Traikov presented Stefan Leberbauer, a senior executive of Amer Sports, with the Class A investor certificate at a special ceremony, Photo © BTA
Leberbauer has pointed out that thanks to the Finnish investment Bulgaria is to become the largest ski producer in the world.
In his words, by the end of 2011, Amer Sports will have invested BGN 40 M in the ski plant in Chepelare, which already employs 640 people.
Amer Sports plans to invest BGN 7.8 M in the expansion of the "Pamporovo Ski" factory, which it bought in 2008 for EUR 5 M (BGN 10 M).
The Finnish company Amer Sports a market share of about 30% on the global ski market.
In 2009, the factory in Chepelare produced over 500 000 items, and its ski are delivered directly to the stores of Atomic and Solomon around the world.
"It is great to be number one in some kind of industry, especially when it comes to ski equipment because this is the kind of sport practiced by wealthy and intelligent people," Economy Minister Traikov commented upon presenting the Class A investor certificate to Amer Sports Bulgaria.
Sofia News Agency
March 7, 2011, Monday
Finnish skis from Chepelare
The company that owns Atomic has bought the assets of its Bulgarian contractor and plans to boost production
Finnish manufacturer of skiing and sports equipment Amer Sports, which owns the Atomic and Salomon brands, has acquired the assets of Bulgarian manufacturer Pamporovo Ski for five million euro - land, buildings, and equipment - and plans to invest a further 10 million in upgrading production so that the factory will pour out about one million pairs of skis annually. Amer Sports wants its new Bulgarian production facility to account for half of the entire Atomic production and thus become one of the largest global producers of skis.
Chepelare is a small mountainous town in south-central Bulgaria with a population of about 9000, its main industry being tourism and lumbering. In 1975, the town was chosen as the new location of the Sportprom factory, which moved from Sofia, dropping the Pirin brand and launching the Pamporovo one, with an annual output of about 20 000 pairs of skis. In December 1981, Bulgaria bought a licence to make Atomic skis. The licence lapsed in 1990, at which point the brand name was changed to Orion.
Then, in 1995, the state-owned company Pamporovo Ski was privatised. Five years later, Atomic returned with a partnership deal, outsourcing its entire ski boots production to Chepelare and closing its facility in Koflach, Austria. Only three per cent of the production stays in Bulgaria; the rest is sold abroad. In 2007, Pamporovo Ski had a turnover of 16.7 million leva and a profit of two million leva.
Chepelare, not China
Negotiations on the deal started 18 months ago, after the snowless winter of 2006, when ski equipment sales worldwide dropped 30 to 40 per cent, prompting leading ski manufacturers to sound off mergers and cost optimisation.
Michael Schineis, president of Amer Sports Winter Sports Equipment, tells of the long months of arduous talks before the board authorised the investment in the Bulgarian factory: "The acquisition is vital for all the parties involved. Chepelare will become Amer Sports' main production facility and will be one of the largest in the world."
The decision is bad news for the plants in France and Romania, where the Salomon brand is currently produced.
"The factory in France was small and has sunk to under the production minimum, whereas in Romania we could not acquire 100 per cent of the factory," Schineis said. "This means the production of both factories will be shipped to Bulgaria, whereas the production line for ski boots will be shipped to Romania." Amer Sports is thus left with just two ski factories, in Bulgaria and in Austria.
Amer Sports claims to hold 20 to 30 per cent of world ski production. The bulk of ski factories are in Central and Eastern Europe, Ukraine and China. According to Amer Sports' research, Bulgaria was more attractive than China, where the Fischer and Blizzard brands are currently made. Production in Asia has become more expensive because of the costs of shipping first raw materials there and then the finished goods back, because more than 60 per cent of the market for skis is in Europe.
Another important factor was that for the past 20 years Atomic has been buying skis made in Chepelare.
"Besides, people in Chepelare are emotionally attached to the ski manufacturing process and are residents of a developing ski resort. It is the same in Austria with the factory in Flachau," Schineis said. Flachau is the birthplace of Austrian four-time alpine skiing World Cup winner Hermann Meier.
Upgrades
Amer Sports has not disclosed exact figures about the planned production, as this would depend on contracts signed at industry fairs in January. New models have to be on the market by September at the latest, making the summer months the most intensive ones. The initial target is for the Chepelare factory to make 500 000 pairs of skis in 2009 and raise this to 600 000 pairs in 2010. Chepelare would make half of all Atomic skis, so to achieve the same quality of manufacturing as in Austria, the production facility will shut down for two months, during which it would be gutted and refurbished with modern equipment and technology.
The deal offers the factory a new beginning, but old contracts will not be forgotten either. Ties with Japan remain important and in 2009 the factory will make 100 000 pairs of skis under the Kazama brand.
Amer Sports has renewed all contracts for the 370-strong workforce, which makes it the largest employer in the town. Manufacturing is mainly by hand and around the clock, in three shifts, but with salaries ranging between 600 and 1000 leva, people rarely quit.
In 2008, the factory has produced 300 000 pairs of skis, 110 000 pairs of ski boots and 15 000 snowboards, which puts the company among the 10 largest producers in the world, according to Pamporovo Ski chief executive Krustyo Vangelov.
by Eleonora Tarandova
Kapital weekly, issue 45
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