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In Bulgaria, Arms Manufacturer Reports Record Profits Amid Ukraine War

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Photo: In Bulgaria, Arms Manufacturer Reports Record Profits Amid Ukraine War. Source: vmz.bg
Photo: In Bulgaria, Arms Manufacturer Reports Record Profits Amid Ukraine War. Source: vmz.bg

During the first half of 2023, the net income from the sales of the state-owned Vazov Machine-Building Plant (VMZ) in Sopot, which produces Soviet-era weaponry also used in the Ukraine conflict, has surged by nearly 80%, reaching 392 million Bulgarian levs (approximately 200 million euros). The reason behind this growth is the heightened demand for specialized products due to the conflict in Ukraine.

This update comes from 'Capital' magazine.

By mid-year, VMZ's trade turnover had already exceeded the figures for the entire year of 2021. However, direct comparisons with 2022's results are not feasible, 'Capital' adds, as the Ministry of Economy, which oversees the enterprise, has not released the annual financial report due by April 25. Nevertheless, considering these trends, it's plausible that VMZ's record turnovers seen in 2016-2017, surpassing 500 million levs (250 million euros) annually, could be surpassed.

According to unofficial information, a significant portion of VMZ's exports to Ukraine pass through 'Bulkomerc KS', owned by Kaloyan Stanislavov. As per the National Revenue Agency (NAA) data, this company was among Bulgaria's top ten companies for refunded VAT in 2022.

While officially the country does not supply weaponry and ammunition for the Ukraine conflict, job postings at the Military Academy hint at orders being in place.

VMZ, being one of the largest employers in the country, had 3973 employees by the end of 2022, almost 13% more than the previous year, according to the National Statistical Institute. This double-digit employment growth persisted into the second quarter of 2023, with the interim report for that period revealing the workforce reached 4024 individuals, signifying an 11% year-on-year increase.

The plant manufactures anti-tank projectiles, rocket shells, and other ammunition. In the first quarter of 2023, the company reported an astounding 830% surge in sales, partly attributed to a low base during the same period the previous year. Although this effect tapered off by the second quarter, the substantial business jump remains evident. In response to rising demand, the enterprise's management aims to enhance production capacities. Their projection is that by the end of 2023, contracts and orders worth another 400 million levs will be fulfilled.

Meanwhile, state-owned "Terem Holding" factories demonstrate mixed results – from a 202% leap in trade turnover for the trading enterprise "Khan Krum" in Targovishte, engaged in tank and truck repairs, to an almost 40% decline at the "Tsar Samuil" plant in Kostenets.


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