Bulgaria's Troubled VMZ Sopot Plant

Bulgaria's Troubled VMZ Sopot Plant

In February 2010, VMZ Sopot, the largest Bulgarian military plant, which is still state owned and in deep financial troubled fired workers who protested against delays of salaries.

The VMZ Sopot plant employs 3 700 workers. It is located in the town of Sopot in central Bulgaria, which is the birthplace of Bulgarian writer and poet Ivan Vazov. The plant was founded in 1936, and during the communist period was developed into a large-scale military industrial unit.

VMZ Sopot has been in a troubled financial condition in the last few years. In 2007, Bulgaria's Privatization Agency started to sell of the plant's assets in order to cover part of its debts; some of its assets were also sold at the beginning of 2009.

Over the years, several governments failed to decide on a strategy to privatize VMZ Sopot, and the Privatization Agency is said to be expecting a solution from the GERB government and the new Parliament dominated by them.

In May, Bulgarian authorities started investigating former managers of VMZ Sopot over suspected abuses that may have contributed to the dire financial situation of the plant. All information pertaining to the investigation is classified. The names of the former directors and senior managers of the military factory who are under investigation for abuses have not been revealed. VMZ Sopot, the largest military complex in Bulgaria, which is still state-owned, currently has total debts amounting to about BGN 100 M.

In April, the head of Bulgarian Privatization Agency Nikolov announced that in 2010 the Bulgarian state planned to initiate the privatization of VMZ Sopot. In his words, the struggling arms giant will take a while to be privatized because the respective strategy for the it had to be approved by the Parliament first.