APPENDIX I. ANALYSIS OF THE CURRENT STATE

APPENDICES

APPENDIX I. ANALYSIS OF THE CURRENT STATE 1. STATE AND DEVELOPMENT OF SECTOR MANUFACTURE OF WEARING APPAREL, INCLUDING LEATHER APPAREL, TANNING OF LEATHER IN BULGARIA The analysis of the condition and development of sector Manufacture of wearing apparel, including leather apparel, tanning of leather is organized in a way to answer the following questions: 1. What is the place of SMEs in sector Manufacture of wearing apparel, including leather apparel, tanning of leather in industry total and in the manufacturing industry in Bulgaria? 2. What is the general condition of the sector and what trends occur in the period 2009-2010 in terms of turnover, employed, value added, etc. 3. What is the dynamics of the sector development compared to the development of the rest of the analyzed sectors 1, of industry total and of the manufacturing industry? 4. What is the place of the sub-sectors in sector Manufacture of wearing apparel, including leather apparel, tanning of leather? 5. What is the financial state of SMEs in the sector? Sector Manufacture of wearing apparel, including leather apparel, tanning of leather covers two divisions of sector С Manufacturing 2, namely: division 14 Manufacture of wearing apparel and division 15 Tanning and dressing of leather, manufacture of footwear and related leather products According to the NACE 2008, division 14 Manufacture of wearing apparel is divided into the following groups and classes: 14.1 Manufacture of wearing apparel, except fur apparel o 14.11 Manufacture of wearing apparel made of leather or composition leather ; o o o o 14.12 Manufacture of work wear ; 14.13 Manufacture of other outerwear, other than work wear ; 14.14 Manufacture of underwear ; 14.19 Manufacture of other wearing apparel and clothing accessories 14.2 Manufacture of articles of fur o 14.20 Manufacture of fur wearing apparel and fur articles 1 In the framework of Project No. BG161РО003 4.2.01-0001 Promoting the internationalization of the Bulgarian enterprises, export strategies are developed for other 17 sectors in Manufacturing considered to have export potential. The state, development and export orientation of sector Manufacture of wearing apparel, including leather apparel, tanning of leather is compared to data for the rest of the sectors, so as to outline their positions and export potential. 2 According to NACE 2008. 2

14.3 Manufacture of knitted and crocheted apparel o 14.31 Manufacture of socks and stockings ; o 14.39 Manufacture of classic (machine or hand knitted) pullovers, cardigans, jerseys, waistcoats and similar articles. Division 15 Tanning and dressing of leather, manufacture of footwear and related leather products is divided as follows: 15.1 Tanning and dressing of leather; manufacture of luggage, handbags, saddlery and harness; dressing and dyeing of fur o 15.11 Tanning and dressing of leather; dressing and dyeing of fur ; o 15.12 Manufacture of luggage, handbags, saddlery and harness 15.2 Manufacture of footwear o 15.20 Manufacture of footwear. For the purposes of the analysis, it should be underlined that in the text below the summarized data for the sector constitutes a sum of the summarized data for the divisions, compounding the sector. In analyzing the condition of particular economic sector, in order to estimate more precisely its importance for the economy of a given country, the following factors and their dynamics are of importance: Index of industrial production; Index of turnover: o on the domestic market; o on the international market. As it may be seen on the figures below, the development of sector Manufacture of wearing apparel, including leather apparel, tanning of leather in the period 2000-2010 is similar to the development of industry in Bulgaria during this period and in particular to the development of the manufacturing industry. The position of Bulgarian products on the international market of both the manufacture of wearing apparel, and tanning of leather and footwear manufacture is stable, recording progress until 2007. At the end of 2010 the levels of 2007, before the world economic crisis, are restored implying revival of consumption on foreign markets and increase in orders. This is not the situation on the domestic market, where the consumption is still quite contracted and the levels are almost half the levels in 2007. 3

Graph 1. Index of industrial production in the period 2000-2010 (as of December for the year, 2005=100) % % 160,0 140,0 120,0 100,0 80,0 60,0 40,0 20,0 0,0 Industry Manufacturing Manufacture of wearing apparel Tanning of leather; manufacture of footwear and other leather articles Years Source: NSI Graph 2. Index of turnover on the domestic market in the period 2000-2010 (as of December for the year, 2005=100) 200,0 180,0 160,0 140,0 120,0 100,0 80,0 60,0 40,0 20,0 0,0 Industry Manufacturing Manufacture of wearing apparel Tanning of leather; manufacture of footwear and other leather articles Years Source: NSI 4

Graph 3. Index of turnover on the international market in the period 2000-2010 (as of December for the year, 2005=100) 200,0 180,0 % 160,0 140,0 120,0 100,0 80,0 60,0 40,0 20,0 Industry Manufacturing Manufacture of wearing apparel Tanning of leather; manufacture of footwear and other leather articles 0,0 Years Source: NSI In the table below data are presented on the main parameters characterizing small and medium enterprises in the 18 sectors.. Table 1. Main data, characterising SMEs in the sector 5

Econom ic activity (CODE Groups non-financial companies Value added 1,2 (thousand Value added 1,2 (thousand CHANGE (in %) Labour productivit y (BGN/empl Companies (num) Turnover 1 (thousand BGN) BGN) Employed (num) Export (thousand BGN) Companies (num) Turnover 1 (thousand BGN) BGN) Employed (num) Export (thousand BGN) Companies Turnover 1 Value added 1,2 Employed Export oyed) 2009 2009 2009 2009 2010 2010 2010 2010 2010/////2009 Bulgaria, incl. Financial Total companies 3204800 22881600 3010400 30435000 133.01 Total Total 316565 179305454 32471996 2041918 313024 183194352 32367989 1932329 98.88 102.17 99.68 94.63 15903 16751 Total Manufacturing industry 32177 38575825 7595046 577450 30709 43088856 8053188 538435 95.44 111.70 106.03 93.24 13153 14957 SMEs Total 315804 123533857 20261960 1549591 312314 123169217 19462962 1458958 98.89 99.70 96.06 94.15 13076 13340 Labour productivit y (BGN/emp loyed) SMEs Manufacturing industry SMEs-18 SECTORS 31860 17444821 4235655 397161 30409 17754591 4196679 367468 95.45 101.78 99.08 92.52 10665 11421 10 Manufacture of food products 4783 4822896 783939 71217 987553 4736 5173275 850805 67976 912774 99.02 107.26 108.53 95.45 92.43 11008 12516 11 Manufacture of beverages 778 412614 76129 7804 77517 780 434331 88453 7519 47556 100.26 105.26 116.19 96.35 61.35 9755 11764 13 Manufacture of textile and textile products, except apparel 681 261386 56076 6965 130252 599 245997 68963 6402 103323 87.96 94.11 122.98 91.92 79.33 8051 10772 14 Manufacture of wearing apparel 4924 1359707 522960 83680 1413899 4477 1364456 497789 75171 1326690 90.92 100.35 95.19 89.83 93.83 6250 6622 535 15 Manufacture of leather and related products 212737 87126 13032 263470 494 219978 91709 12601 292115 92.34 103.40 105.26 96.69 110.87 6686 7278 16 17 18 Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials 2112 431909 107204 14242 114357 1962 473329 109346 13379 82920 92.90 109.59 102.00 93.94 72.51 7527 8173 Manufacture of paper, paperboard and paper products 553 406424 102205 7465 61824 517 372203 75571 6385 39800 93.49 91.58 73.94 85.53 64.38 13691 11836 Publishing, printing and reproduction 1171 439473 142697 8982 36288 1159 490227 150553 9044 31197 98.98 111.55 105.51 100.69 85.97 15887 16647 20 Manufacture of chemical products 558 727137 162850 8770 288182 577 871899 172799 8482 213452 103.41 119.91 106.11 96.72 74.07 18569 20372 Manufacture of basic 56 21 pharmaceutical products and pharmaceutical preparations 110491 43412 1630 22469 54 125524 51070 1736 19808 96.43 113.61 117.64 106.50 88.16 26633 29418 22 Manufacture of rubber and plastic products 2078 1195769 283769 20990 327153 1930 1305231 266457 19103 341186 92.88 109.15 93.90 91.01 104.29 13519 13948 23 25 Manufacture of other non-metallic mineral products 1591 1235756 320586 19101 94125 1467 934392 244241 15425 88967 92.21 75.61 76.19 80.75 94.52 16784 15834 Manufacture of fabricated metal products, except machinery and equipment 4415 1872617 491740 40457 310201 4061 1618573 438892 34900 331204 91.98 86.43 89.25 86.26 106.77 12155 12576 26 27 Manufacture of computer, electronic and optical products 389 321139 99235 5467 240243 363 452104 143744 5254 159772 93.32 140.78 144.85 96.10 66.50 18152 27359 Manufacture of electrical equipment 531 542648 139986 9590 229947 508 558704 127155 8312 225533 95.67 102.96 90.83 86.67 98.08 14597 15298 28 Manufacture of machinery and equipment with general and special purpose 920 703096 223155 16798 218782 895 883555 273932 15936 245549 97.28 125.67 122.75 94.87 112.23 13285 17190 30 Manufacture of other transport equipment, other than cars 84 168206 45942 2371 62813 74 138874 30201 2146 55352 88.10 82.56 65.74 90.51 88.12 19377 14073 31 Manufacture of furniture 2452 547237 167165 21407 111034 2279 563924 157716 18833 127390 92.94 103.05 94.35 87.98 114.73 7809 8374

Economic activity (CODE) Groups non-financial companies Companies (num) Value added 1,2 (thousand BGN) Value added 1,2 (thousand Turnover 1 (thousand BGN) Employed (num) Export (thousand BGN) Companies (num) Turnover 1 (thousand BGN) BGN) Employed (num) Export (thousand BGN) 2009 2009 2009 2009 2010 2010 2010 2010 Bulgaria, incl. Financial Total companies 3204800 22881600 3010400 30435000 Total Total 316565 179305454 32471996 2041918 313024 183194352 32367989 1932329 Total Manufacturing industry 32177 38575825 7595046 577450 30709 43088856 8053188 538435 SMEs Total 315804 123533857 20261960 1549591 312314 123169217 19462962 1458958 SMEs Manufacturing industry 31860 17444821 4235655 397161 30409 17754591 4196679 367468 STRUCTURE Share of the SMEs in 18 sectors in SMEs in the industry 10 Manufacture of food products 1.51 3.90 3.87 4.60 4.32 1.52 4.20 4.37 4.66 3.00 11 Manufacture of beverages 0.25 0.33 0.38 0.50 0.34 0.25 0.35 0.45 0.52 0.16 13 14 Manufacture of textile and textile products, except apparel 0.22 0.21 0.28 0.45 0.57 0.19 0.20 0.35 0.44 0.34 Manufacture of wearing apparel 1.56 1.10 2.58 5.40 6.18 1.43 1.11 2.56 5.15 4.36 15 16 17 18 20 21 Manufacture of leather and related products 0.17 0.17 0.43 0.84 1.15 0.16 0.18 0.47 0.86 0.96 Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials 0.67 0.35 0.53 0.92 0.50 0.63 0.38 0.56 0.92 0.27 Manufacture of paper, paperboard and paper products 0.18 0.33 0.50 0.48 0.27 0.17 0.30 0.39 0.44 0.13 Publishing, printing and reproduction 0.37 0.36 0.70 0.58 0.16 0.37 0.40 0.77 0.62 0.10 Manufacture of chemical products 0.18 0.59 0.80 0.57 1.26 0.18 0.71 0.89 0.58 0.70 Manufacture of basic pharmaceutical products and 0.02 0.09 0.21 0.11 0.10 0.02 0.10 0.26 0.12 0.07

Economic activity (CODE) Groups non-financial companies Companies (num) pharmaceutical preparations Value added 1,2 (thousand BGN) Value added 1,2 (thousand Turnover 1 (thousand BGN) Employed (num) Export (thousand BGN) Companies (num) Turnover 1 (thousand BGN) BGN) Employed (num) Export (thousand BGN) 2009 2009 2009 2009 2010 2010 2010 2010 22 23 25 Manufacture of rubber and plastic products 0.66 0.97 1.40 1.35 1.43 0.62 1.06 1.37 1.31 1.12 Manufacture of other nonmetallic mineral products 0.50 1.00 1.58 1.23 0.41 0.47 0.76 1.25 1.06 0.29 Manufacture of fabricated metal products, except machinery and equipment 1.40 1.52 2.43 2.61 1.36 1.30 1.31 2.26 2.39 1.09 26 27 28 30 Manufacture of computer, electronic and optical products 0.12 0.26 0.49 0.35 1.05 0.12 0.37 0.74 0.36 0.52 Manufacture of electrical equipment 0.17 0.44 0.69 0.62 1.00 0.16 0.45 0.65 0.57 0.74 Manufacture of machinery and equipment with general and special purpose 0.29 0.57 1.10 1.08 0.96 0.29 0.72 1.41 1.09 0.81 Manufacture of other transport equipment, other than cars 0.03 0.14 0.23 0.15 0.27 0.02 0.11 0.16 0.15 0.18 31 Manufacture of furniture 0.78 0.44 0.83 1.38 0.49 0.73 0.46 0.81 1.29 0.42 STRUCTURE Share of the SMEs in 18 sectors in the SMEs in the manufacturing industry 10 Manufacture of food products 15.01 27.65 18.51 17.93 15.57 29.14 20.27 18.50 11 Manufacture of beverages 2.44 2.37 1.80 1.96 2.57 2.45 2.11 2.05 13 14 Manufacture of textile and textile products, except apparel 2.14 1.50 1.32 1.75 1.97 1.39 1.64 1.74 Manufacture of wearing apparel 15.46 7.79 12.35 21.07 14.72 7.69 11.86 20.46 15 Manufacture of leather and related products 1.68 1.22 2.06 3.28 1.62 1.24 2.19 3.43 8

Economic activity (CODE) Groups non-financial companies Companies (num) 16 Value added 1,2 (thousand BGN) Value added 1,2 (thousand Turnover 1 (thousand BGN) Employed (num) Export (thousand BGN) Companies (num) Turnover 1 (thousand BGN) BGN) Employed (num) Export (thousand BGN) 2009 2009 2009 2009 2010 2010 2010 2010 Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials 6.63 2.48 2.53 3.59 6.45 2.67 2.61 3.64 17 18 20 21 22 23 25 Manufacture of paper, paperboard and paper products 1.74 2.33 2.41 1.88 1.70 2.10 1.80 1.74 Publishing, printing and reproduction 3.68 2.52 3.37 2.26 3.81 2.76 3.59 2.46 Manufacture of chemical products 1.75 4.17 3.84 2.21 1.90 4.91 4.12 2.31 Manufacture of basic pharmaceutical products and pharmaceutical preparations 0.18 0.63 1.02 0.41 0.18 0.71 1.22 0.47 Manufacture of rubber and plastic products 6.52 6.85 6.70 5.29 6.35 7.35 6.35 5.20 Manufacture of other nonmetallic mineral products 4.99 7.08 7.57 4.81 4.82 5.26 5.82 4.20 Manufacture of fabricated metal products, except machinery and equipment 13.86 10.73 11.61 10.19 13.35 9.12 10.46 9.50 26 Manufacture of computer, electronic and optical products 1.22 1.84 2.34 1.38 1.19 2.55 3.43 1.43 27 Manufacture of electrical equipment 1.67 3.11 3.30 2.41 1.67 3.15 3.03 2.26 28 Manufacture of machinery and equipment with general and special purpose 2.89 4.03 5.27 4.23 2.94 4.98 6.53 4.34 30 Manufacture of other transport equipment, other than cars 0.26 0.96 1.08 0.60 0.24 0.78 0.72 0.58 31 Manufacture of furniture 7.70 3.14 3.95 5.39 7.49 3.18 3.76 5.13 9

STRUCTURE by sub sectors Manufacture of wearing 14 apparel 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 14.1 14.2 14.3 15 Manufacture of wearing apparel, except fur apparel 93.95 88.47 88.60 91.90 92.77 93.81 89.44 88.95 92.21 93.36 Manufacture of articles of fur; Manufacture of other crocheted materials 0.69 0.07 0.04 0.19 #VALUE! 0.69 0.06 0.07 0.15 #VALUE! Manufacture of knitted or crocheted apparel 5.36 11.46 11.36 7.92 #VALUE! 5.49 10.50 10.98 7.63 6.64 Tanning and dressing of leather, manufacture of footwear and related leather products 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 15.2 Manufacture of footwear 78.13 81 87 84 81 79 80 84 85 80 Note: 1. Data are calculated according to the methodology of the Structural business statistics 2. At factor prices 10

Number of companies and employed in sector Manufacture of wearing apparel, including leather apparel, tanning of leather Small and medium companies in the sector predominate. In this sector, similar to the national industry total, a trend is outlined in the period 2009-2010 of decrease in the number of companies, respectively in the number of employed, in the sector (Table 2). The sector is one of the major employers in the country. In 2009, a total of 5 459 companies in the sector provided employment to 96 712 persons, whereas in 2010 the number of companies fell to 4 971 and the number of employed to 87 772 persons. In 2010, the sector provided employment to almost 24% of total employed in SMEs in the manufacturing industry, as well as to 6% of the employed in SMEs in the industry total. In terms of number of SMEs and number of employed the sector is a leader in the manufacturing industry. Table 2. Number of companies and employed in the sector Companies (num.) Employe d (num) Companies (num.) Employed (num) SMEs Industry 315 804 1 549 591 312 314 1 458 958 SMEs Manufacturing industry 31 860 397 161 30 409 367 468 SMEs Manufacture of wearing apparel, including leather apparel, tanning of leather 5 459 96 712 4 971 87 772 Source: NSI Distribution of companies in Manufacture of wearing apparel, including leather apparel, tanning of leather by number of employed The ownership in Manufacture of wearing apparel, including leather apparel, tanning of leather is entirely private and most of the companies are micro-, small- and medium-sized enterprises. The development 3 in the number of micro, small and medium enterprises in Manufacture of wearing apparel in the period 2008-2010 is as follows: 2008 4 681 enterprises, 2009 4 924 enterprises and 2010-4 477 enterprises, i.e. in 2010 a drop of 204 enterprises (4,4%) compared to 2008 is reported. The regional distribution of companies in sector Manufacture of wearing apparel, including leather apparel, tanning of leather in 2011 is as follows: North-Western region 231 companies; North Central region 547; North-Eastern region 381; South-Western region 1109; South Central region 1212; South-Eastern region 385. The next graph shows the distribution of companies and employed in the sector in the six regions.. 3 Based on data are from NSI for FOCUS 2020 Strategy for development of sector Manufacture of wearing apparel in Bulgaria

Graph 4. Distribution of companies and employed in Manufacture of wearing apparel by regions, 2011 35,0% 30,0% 25,0% 29,9% 28,7% 25,4% 31,4% 20,0% 15,0% 10,0% 12,4% 6,0% 17,7% 14,2% 8,8% 9,9% 5,8% 10,0% 5,0% 0,0% NWR NCR NER SWR SCR SER % of the employees in the sector % of the companies in the sector Source: Amadeus database, MEET, 2011 The largest number of companies is in the South Central region, whereas the South-Western region contributes to the highest share of the employed in the sector. The number of the employed in SMEs in Manufacture of wearing apparel, including leather apparel, tanning of leather is decreasing. According to data of the NSI for 2009 their number is 83 680. In 2010 their number falls to 75 000 persons, whereas 69 317 persons (92%) are the employed in Manufacture of wearing apparel, except fur apparel, 5 738 are employed in Manufacture of knitted and crocheted apparel and only 116 persons in Manufacture of articles of fur. In 2010 the number of companies in the sector accounts for 14,7% of the total number of SME in manufacturing industry and 1,4% of the total number of SMEs in the industry. The employed in these companies are 20,45% of the total number of employed in the SMEs in the manufacturing industry and 5,15% of the total number of employed in SMEs in the industry as a whole. Distribution of companies in Tanning and dressing of leather; manufacture of footwear and other leather products by number of employed The ownership in Tanning and dressing of leather, manufacture of footwear and related leather products is entirely private. In this sector, too, the predominating part of the companies is micro, small and medium enterprises. According to data of the NSI, in 2009 and 2010 the number of micro, small and medium companies in the division is as follows: 2009 535, 2010 494 companies. The distribution of companies in Tanning and dressing of leather, manufacture of footwear and related leather products by regions is presented in the table below. Data include also large companies. 12

Table 3. Regional distribution of companies in Tanning and dressing of leather, manufacture of footwear and related leather products Companies (num.) Regions NWR NER NCR SCR SER SWR 104 64 109 404 96 380 Source: Amadeus database, MEET, 2011 In the period 2000-2010 the number of employed in Tanning and dressing of leather, manufacture of footwear and related leather products also decreases. While in 2005 the employed in micro, small and medium enterprises are nearly 15 500 persons, in 2009 they are 13 032, and in 2010 12 601 persons. In 2010 the employed in Manufacture of footwear are 10 742 persons or 85% of all employed in the SMEs in Tanning and dressing of leather, manufacture of footwear and related leather products. In 2010 the number of companies in Tanning and dressing of leather, manufacture of footwear and related leather products constitutes 1,6% of the total number of SMEs in the manufacturing industry and 0,16% of the total number of SMEs in industry. Employed in these companies are 3,43% of total employed in SMEs in the manufacturing industry and 0,86% of total employed in SMEs of industry. Distribution of companies according to the manufactured production (product groups) Distribution of companies in terms of the manufactured production (product groups) in Manufacture of wearing apparel. Distribution of companies in terms of the manufactured production (product groups) in Manufacture of wearing apparel is shown on Graph 5. Graph 5. Distribution of companies in Manufacture of wearing apparel by manufactured products Source: NSI Largest is the number of companies in the group Manufacture of wearing apparel, except fur apparel, followed by companies in the group Manufacture of knitted and crocheted apparel. According to manufacturers, one of the main reasons for the small number of 13

companies, producing articles of fur is the dramatic decrease in breeding animals for fur in the period after 1990. The reduction in local stock-breeding imposed the necessity of importing fur for this production. Distribution of companies in terms of the manufactured production (product groups) in Tanning and dressing of leather; manufacture of luggage, handbags, saddlery and harness; dressing and dyeing of fur. Distribution of companies in terms of the manufactured production (product groups) in Tanning and dressing of leather; manufacture of luggage, handbags, saddlery and harness; dressing and dyeing of fur is shown on the next graph. Graph 6. Distribution of companies in Tanning and dressing of leather; manufacture of luggage, handbags, saddlery and harness; dressing and dyeing of fur by manufacture products Source: NSI The manufacture of footwear is the leader in group Tanning and dressing of leather; manufacture of luggage, handbags, saddlery and harness; dressing and dyeing of fur. This is due to a great extent to the Bulgarian specialization in this type of production until 1989 and the fast restructuring and orientation of the companies towards the Western European markets, due to the professional experience they had, qualified work force and good qualityprice ratio of Bulgarian shoes. In the period 2009-2010 the number of companies in this group decreased by over 7%, due mainly to the decrease in the number of companies in Tanning of fur; saddlery and harness. According to experts in the branch, this development is related mainly to the low production profitability and the insufficiency of raw material. Turnover and value added of SMEs in sector Manufacture of wearing apparel, including leather apparel, tanning of leather In 2009, SMEs in the sector realized a turnover of 1 572 444 BGN and generated value added of 610 086 BGN. They create 9% of the turnover and nearly 14,4% of the value added of SMEs in the manufacturing industry in 2009. In 2010, an insignificant decrease is observed in both indicators and their values are respectively 8,92% for turnover and 14,04% for value added created by SMEs in the manufacturing industry. In terms of these indicators the sector ranks second after sector Manufacture of food products. The value added, created by SMEs in Manufacture of wearing apparel in 2009 is approximately 12,35% of the value added of SMEs in the manufacturing industry, and 14

turnover is approximately 7,8% of the turnover in the manufacturing industry. These indicators for Tanning and dressing of leather; manufacture of luggage, handbags, saddlery and harness; dressing and dyeing of fur are as follows: Value added 2,1% of value added in the manufacturing industry. Turnover 1,2% of turnover in the manufacturing industry. In 2010 compared to 2009, the average growth rate of turnover in the manufacturing industry is 1,75%. The increase of the turnover in 2010 compared to 2009 for sector Manufacture of wearing apparel, including leather apparel, tanning of leather is hardly 0,76%. The generated value added by SMEs in the manufacturing industry in 2010 compared to 2009 decreases and accounts for approximately 99,08% of total value added created in 2009. This trend is registered also in sector Manufacture of wearing apparel, including leather apparel, tanning of leather, where the decrease in value added in 2010 compared to 2009 is 3,5%. Within the sector, value added in Manufacture of wearing apparel decreased by 4,8%, while in Tanning of leather and etc. it increased by 5,3%. Labour productivity Albeit the growth trend in labour productivity in the SMEs of sector Manufacture of wearing apparel, including leather apparel, tanning of leather, in general it remains relatively low, and is about 60% of the average labour productivity of SMEs in the manufacturing industry and 49% of the average labour productivity of SMEs in industry total. The labour productivity of the sector is 4 times lower than the productivity of the leading sector in the manufacturing industry, Manufacture of pharmaceuticals products and pharmaceutical preparations. The reported growth of labour productivity of SMEs in Manufacture of wearing apparel in 2010 compared to 2009 is approximately 6%. The reported growth of labour productivity of SMEs in Tanning and dressing of leather; manufacture of luggage, handbags, saddlery and harness; dressing and dyeing of fur in 2010 in comparison to 2009 is 8,9%. Results from the survey among companies in sector Manufacture of wearing apparel, including leather apparel, tanning of leather A total of 27 companies in 17 locations in the country are surveyed 4 in sector Manufacture of wearing apparel, including leather apparel, tanning of leather. The distribution of the surveyed companies by number of employed and annual turnover is given in table 4. Table 4. Distribution of companies by number of employed and turnover Employed Number Percent Less than 10 persons 0 0,0 From 11 to 50 persons 5 18,5 From 51 to 250 persons 22 81,5 Total 27 100,0 4 The survey was carried out in the period 31 October 28 November 2011 with the management staff of 5 (five) small and 22 (twenty two) medium enterprises (total of 27), operating in the sector. 15

Annual turnover Number Percent Lees than BGN 3 900 000 26 96,3 From BGN 3 900 000 to BGN 19 500 000 1 3,7 From BGN 19 500 001 to BGN 97 500 000 0 0,0 Total 27 100,0 In more than 80% of the surveyed companies the number of employed belongs to the highest group (between 51 and 250 persons). At the same time, 26 out of the total 27 interviewed companies have annual turnover up to 3 900 000 BGN (that of the lowest group). Therefore, it could be considered that there are some problems related to the labour productivity level in the sector. Data for the changes in turnover of the surveyed companies in sector Manufacture of wearing apparel, including leather apparel, tanning of leather are given in table 5. During the studied years (2008 2010) the number of companies with turnover, which has become lower in comparison to the pre-crisis year 2007 (base 2007 =100%), has increased. However, in 2011 there is a decrease, as the number of companies with reduced turnover returns to the levels of 2008. The number of companies with increased turnover varies, as well as the ratio between those with increased and decreased turnover. It is positive that the ratio between the companies with increasing and decreasing turnover for the four studied years is above 1. A logic consequence thereof is the fact that the average turnover rate, measured by the median is always bigger than 100. Table 5. Changes in turnover of the companies in the period 2008 2011 (2007 =100%) Year Number of companies with reduced turnover Number of companies with maintained turnover Number of companies with increased turnover Ratio between the companies with increasing and decreasing turnover Average value of change in turnover in % 2008 9 1 17 1.89 105 2009 12 0 15 1.25 102 2010 13 0 14 1.08 103 2011 9 1 16 1.78 105 The change rates of the turnover of companies, fallen under the level of 2007 and those, who have increased their turnover during the years, are presented in graph 7. It may be seen that during the studied period the average turnover growth of the companies turnover surpasses its average decrease. It is noteworthy that as a whole there is gradual movement away between the observed values, where most of the interviewed companies register bigger increase of their turnover, while the rest are record progressively lower turnover levels in comparison with 2007. 16

Graph 7. Average change in the turnover of surveyed companies by years (in %) 80.00 60.00 51.60 57.79 60.53 40.00 20.00 28.56 Average turnover increase average turnover decrease 0.00 2008 2011-20.00-40.00-18.44-17.33-24.54-30.44 Financial state of the surveyed companies in sector Manufacture of wearing apparel, including leather apparel, tanning of leather In addition to information from the survey, data have been collected from the Commercial Register at the Registry Agency, Ministry of Justice, and analysis is made of the financial state of SMEs participating in this survey. This approach is applied as there are no data available on the financial situation of the sector as a whole. The analysis of financial state of companies in sector "Manufacture of wearing apparel, including leather apparel; tanning of leather" is conducted on the basis of the following groups of financial and operational indicators: Profitability indicators; Efficiency indicators; Financial stability/independence indicators; Liquidity indicators. The analysis is based on data from financial statements of 27 SMEs of the sector, and the input data for analysis are presented in table 6: Table 6. Input data for the analysis of financial state 2007 2008 ASSETS 22625 27050 25970 24033 Fixed assets 13285 13569 13987 13230 Current assets - total, incl.: 9340 13363 11923 10731 Inventories 2516 3284 2973 2675 Receivables 3112 6176 5470 5505 Cash and cash equivalents 3453 3763 3497 2552 LIABILITIES 22625 27050 25970 24033 A. Shareholders equity 9953 13433 12824 12061 Equity 1653 1073 1111 960 Reserves 6091 7079 7637 7125 B. Non-current liabilities 4826 5169 5030 5582 C. Current liabilities 7846 8448 8116 6390 17

2007 2008 Short-term liabilities 7617 8248 7918 6238 Payables to suppliers and clients 1903 2955 1862 1130 Revenues for future periods and funding 229 200 198 152 TOTAL REVENUE 30075 37952 27488 20069 Net revenue from sales 29326 33172 24355 18931 TOTAL EXPENDITURE 28036 34172 27101 19255 Profit before tax 2039 3780 387 814 Tax 157 367 135 88 PROFIT 1882 3413 252 726 In the analysis of the financial state of the sector, the following indicators are examined: 1. Profitability indicators these are considered as indicators of profit or return. They show the efficiency of use of resources or revenues of the companies. Profitability indicators are positive values, when the financial result is a profit and negative values when the financial result is a loss. Such coefficients are: Return-on-sales (ROS) ratio - it indicates the amount of financial result (profit) made by the company per unit of income, or, in other words, how much profit/loss in BGN is generated by BGN of net revenue; Return-on-equity (ROE) ratio it indicates the amount of profit/loss per BGN of shareholder s equity, respectively the share of current profit/loss in shareholder s equity. This ratio is widely used in analysis on potential investment; Return-on-assets (ROA) ratio it shows the financial result earned by using all of company s assets. The values of these ratios in the period 2007-2010 for sector Manufacture of wearing apparel, including leather apparel, tanning of leather are given in the next table, Profitability indicators in the period 2007-2010. Table 7. Profitability indicators in the period 2007 2010 Indicators 2007 2008 Return-on-sales (ROS) ratio 0.0641 0.1038 0.0106 0.0399 Return-on-equity (ROE) ratio 0.1890 0.2564 0.0201 0.0627 Return-on-assets (ROA) ratio 0.0831 0.1273 0.0099 0.0315 2. Efficiency indicators quantitative characteristics of the company s income-to-cost ratio. They show the economic effects generated by enterprises per unit of costs or per unit of income. Cost efficiency ratio and income efficiency ratio are the classic efficiency indicators. These are reciprocal and the difference between them is in the magnitude of ratios and their direction of change. For this reason, only the income efficiency ratio (IER) is used in the present analysis. It shows how much cost is spent to produce a BGN of income. In case of positive financial outcome, the income efficiency ratio is under one. 18

3. Financial stability/independence indicators - these provide a quantitative characteristics of the degree to which enterprises are financially independent of creditors. These show the ratio between the shareholder s equity and the total amount of all sources of funding for the company. Financial independence ratio the financial independence ratio (FIR) provides a quantitative characteristics of the degree to which enterprises are financially independent of creditors. If the ratio is less than 1, then liabilities exceed shareholder s equity, and vice versa.. Debt ratio - it shows how much the enterprise relies on its creditors to settle its obligations. Usually, it is less than 1 and shows the amount of liabilities reported per a BGN of shareholder s equity. 4. Liquidity indicators these indicators show the company s ability to cover its current liabilities. Higher the liquidity ratio value, bigger the readiness of the company to face its debts. A value under one is an indicator for the impossibility of the company to pay its current payables, if they are to be paid at once. In such situation the company would probably use alternative sources of funding (for example a loan). When examining the liquidity indicators, the following ratios should be considered: Current ratio; Quick ratio; Immediate ratio; Cash ratio. Graph 8 shows the dynamics of different indicators in the period 2008 2010. Graph 8. Dynamics of the indicators of efficiency, financial stability and liquidity, 2007-2010 1,8 1,6 1,4 1,2 1 0,8 0,6 0,4 0,2 income efficiency ratio financial independence ratio debt ratio current ratio quick ratio immediate ratio cash ratio 0 2007 2008 The following summary conclusions can be made on the situation of SMEs in the sector "Manufacture of wearing apparel, including leather apparel, tanning of leather": 19

In general for sector Manufacture of wearing apparel, including leather apparel, tanning of leather The ownership in the sector is entirely private and most of the companies are micro, small and medium enterprises. This is a precondition for higher flexibility of production and adaptation to market trends. The dynamics of the manufactured production and the turnover of companies in the sector measured by the indices of industrial production and turnover, show trends, similar to that of the development of industry total and of the manufacturing industry in the period 2001-2010. The stable growth is cut off after 2007 and in 2010 the pre-crisis levels are recovered in terms of turnover on international markets, while the drop on the domestic market remains unchanged. There is an uneven distribution of the companies in the sector. Biggest is the concentration of companies in the South-Western region and the South Central region, which is related to the traditions in manufacturing. For SMEs in sector Manufacture of wearing apparel, including leather apparel, tanning of leather In terms of number of SMEs and number of employed the sector is one of the leaders in the manufacturing industry. The sector comes to be one of the biggest employers in the country and in 2010 the sector provided employment to nearly 24% of the total employed in SMEs in the manufacturing industry and to more than 6% of the total employed in SMEs in industry total. The percentage of decrease in the number of companies and employed in 2010 compared to 2009 is higher than the average for the manufacturing industry and is one of the highest of the 18 analysed sectors, suggesting a significant impact of the global economic crisis on the sector. In inner-sector aspect, highest is the number of the companies in sub-sectors Manufacture of other outerwear, other than work wear, Manufacture of other wearing apparel and clothing accessories and Manufacture of footwear. SMEs in the sector account for 9% of turnover and more than 14% of value added in the manufacturing industry. The change in 2010 compared to 2009 of both indicators is insignificant, and in terms of these indicators the sector ranks second after sector Manufacture of food products. Notwithstanding the growth trend in labour productivity of SMEs in sector Manufacture of wearing apparel, including leather apparel, tanning of leather, in general, the labour productivity stays relatively low, and it is approximately 60% of the average labour productivity of SMEs in the manufacturing industry or 49% of the average labour productivity of SMEs in the industry. The labour productivity of the sector is 4 times lower than the productivity of the leading sector in the manufacturing industry Manufacture of pharmaceuticals products and pharmaceutical preparations. The workforce quality assessments and the relatively low priority of the measures for increasing the staff qualification give ground to believe that the sector has a skilled workforce, able to apply the traditionally good practices in manufacturing. 20

2. EXPORT ORIENTATION OF SMEs IN THE SECTOR The analysis of the export orientation of sector "Manufacture of wearing apparel, including leather apparel, tanning of leather in Bulgaria is organized so as to answer the following questions: 1. What is the dynamics of the export of goods by sectors in the period 2001-2010? 2. What is the position of the export of SMEs in the total export of the sector? 3. What is the position of the analyzed sector among the 18 sectors, for which export strategies are developed? 4. What is the dynamics of the export of SMEs in the sector in the period 2009 2010? 5. How the exports of different NACE-2008 classes rank within total exports of the sector? Due to the lack of longer time series of comparative data on total exports by sectors from the NSI, the dynamics of total exports of goods by sectors is analyzed on the basis of information from the International Trade Center (see Table 8). Accounting for the fact that the Harmonized Commodity Description and Coding System (2010) is applied in the ITC, all four-digit positions are analyzed and related to a corresponding NACE 2008 class, so as to secure the comparability of data provided by the NSI. Notwithstanding this distribution, there is a possibility for a discrepancy between the values of sector exports according to the ITC data and the official NSI data (due to possible discrepancies in some of the six-digit codes), but this difference should be negligible in terms of the analysis. 21

Table 8. Exports dynamics by sectors, 2001-2010 Sector number Export of Bulgaria 1 Manufacture of food products 2 Manufacture of beverages 3 Manufacture of textile and textile products, except wearing apparel 4 Manufacture of wearing apparel, incl. leather clothes, tanning of leather 5 Manufacture of rubber and plastics products 6 Manufacture of chemical and pharmaceutical products 7 Manufacture of nonmetallic and mineral products 8 Manufacture of machinery, equipment and household appliances 9 Manufacture of medical, precise and optical apparatus and instruments 10 Manufacture of office equipment and 2001 Thous. BGN 2002 Thous. BGN 2003 Thous. BGN 2004 Thous. BGN 2005 Thous. BGN 2006 Thous. BGN 2007 Thous. BGN 2008 Thous. BGN 2009 Thous. BGN 2010 Thous. BGN 644297,7 904893,0 817561,4 1050215,7 1199256,1 1297381,9 1434796,1 2379559,2 2404247,4 2953443,6 150226,7 144940,5 141343,9 140430,5 162754,3 174695,0 217350,3 209699,1 157279,2 180504,0 340105,5 409171,9 493301,6 581648,7 589545,0 701292,8 803214,5 738479,1 560334,7 614506,7 2435681,3 2691711,0 3068584,8 3190831,3 3159990,7 3320430,1 3321842,9 3034999,1 2598558,5 2741347,6 244250,9 275738,1 309562,9 364164,7 458864,1 579484,6 702892,1 662774,9 575682,6 785503,3 953533,6 850754,7 890119,1 923062,5 1250677,4 1322021,6 1775909,1 2138948,8 1603436,0 2144402,2 258748,7 265124,7 293742,9 301229,7 334480,7 514661,0 614248,3 633728,5 562709,0 688931,9 700231,9 767646,2 800179,7 948099,8 1154034,7 1390424,5 1931544,2 2181999,2 1537950,9 1925968,4 68484,0 114332,5 153731,1 150824,0 205425,3 303755,3 359473,4 395080,3 392529,1 479543,1 47476,8 70640,4 97961,0 121756,7 151726,6 189026,4 227643,6 271219,9 228431,4 281847,5

Sector number Export of Bulgaria computers 11 Manufacture of electric machinery and apparatus 12 Manufacture of wood and products of wood, except furniture 13 Manufacture of pulp, paper and paperboard 14 Manufacture of furniture 15 Publishing, printing and reproduction 2001 Thous. BGN 2002 Thous. BGN 2003 Thous. BGN 2004 Thous. BGN 2005 Thous. BGN 2006 Thous. BGN 2007 Thous. BGN 2008 Thous. BGN 2009 Thous. BGN 2010 Thous. BGN 359450,3 406486,0 545047,9 598251,6 701611,2 899523,6 1154155,5 1325826,2 1327215,0 1774543,6 192265,1 220109,1 245501,8 288059,3 285975,5 311237,9 380906,0 274022,1 259803,1 359102,0 120607,2 129009,0 170598,0 196676,6 200373,1 191179,5 237182,0 264951,0 134306,5 303874,6 86524,4 124681,4 161768,1 196365,2 221591,5 237477,5 273462,2 256685,4 206577,8 237082,0 4173,1 6289,9 10103,3 7668,5 9301,8 11379,5 22014,7 25751,0 17772,6 14790,8 16 Manufacture of motor vehicles, except cars 28605,2 41531,5 34692,9 42269,1 77655,9 99974,1 150461,6 208852,4 253659,2 390099,0 17 Manufacture of metal products, except 525909,1 508218,1 539211,9 748526,9 851665,2 1256090,9 1615683,5 1508280,3 1107334,1 1427109,8 machinery and equipment 18 Manufacture of radio, television and 89242,5 155225,2 170705,2 186213,9 473170,9 514533,2 421408,3 528136,6 490199,3 464114,5 telecommunication equipment Total for the 18 sectors 7249814,1 8086503,1 8943717,2 10036294,7 11488100,0 13314569,6 15644188,4 17038992,9 14418026,3 17766714,6 Total export of BG 11155564,1 11886800,6 13026809,9 15613700,2 18436113,4 23511655,4 26503711,3 29889710,1 23143142,6 30353296,3 Structure (Share of the sector in the country export, %) 1 Manufacture of food products 5,78 7,61 6,28 6,73 6,50 5,52 5,41 7,96 10,39 9,73 23

Sector number Export of Bulgaria 2 Manufacture of beverages 3 Manufacture of textile and textile products, except wearing apparel 4 Manufacture of wearing apparel, incl. leather clothes, tanning of leather 5 Manufacture of rubber and plastics products 6 Manufacture of chemical and pharmaceutical products 7 Manufacture of nonmetallic and mineral products 8 Manufacture of machinery, equipment and household appliances 9 Manufacture of medical, precise and optical apparatus and instruments 10 Manufacture of office equipment and computers 11 Manufacture of electric machinery and apparatus 2001 Thous. BGN 2002 Thous. BGN 2003 Thous. BGN 2004 Thous. BGN 2005 Thous. BGN 2006 Thous. BGN 2007 Thous. BGN 2008 Thous. BGN 2009 Thous. BGN 2010 Thous. BGN 1,35 1,22 1,09 0,90 0,88 0,74 0,82 0,70 0,68 0,59 3,05 3,44 3,79 3,73 3,20 2,98 3,03 2,47 2,42 2,02 21,83 22,64 23,56 20,44 17,14 14,12 12,53 10,15 11,23 9,03 2,19 2,32 2,38 2,33 2,49 2,46 2,65 2,22 2,49 2,59 8,55 7,16 6,83 5,91 6,78 5,62 6,70 7,16 6,93 7,06 2,32 2,23 2,25 1,93 1,81 2,19 2,32 2,12 2,43 2,27 6,28 6,46 6,14 6,07 6,26 5,91 7,29 7,30 6,65 6,35 0,61 0,96 1,18 0,97 1,11 1,29 1,36 1,32 1,70 1,58 0,43 0,59 0,75 0,78 0,82 0,80 0,86 0,91 0,99 0,93 3,22 3,42 4,18 3,83 3,81 3,83 4,35 4,44 5,73 5,85 24

Sector number Export of Bulgaria 12 Manufacture of wood and products of wood, except furniture 13 Manufacture of pulp, paper and paperboard 14 Manufacture of furniture 15 Publishing, printing and reproduction 2001 Thous. BGN 2002 Thous. BGN 2003 Thous. BGN 2004 Thous. BGN 2005 Thous. BGN 2006 Thous. BGN 2007 Thous. BGN 2008 Thous. BGN 2009 Thous. BGN 2010 Thous. BGN 1,72 1,85 1,88 1,84 1,55 1,32 1,44 0,92 1,12 1,18 1,08 1,09 1,31 1,26 1,09 0,81 0,89 0,89 0,58 1,00 0,78 1,05 1,24 1,26 1,20 1,01 1,03 0,86 0,89 0,78 0,04 0,05 0,08 0,05 0,05 0,05 0,08 0,09 0,08 0,05 16 Manufacture of motor vehicles, except cars 0,26 0,35 0,27 0,27 0,42 0,43 0,57 0,70 1,10 1,29 17 Manufacture of metal products, except 4,71 4,28 4,14 4,79 4,62 5,34 6,10 5,05 4,78 4,70 machinery and equipment 18 Manufacture of radio, television and 0,80 1,31 1,31 1,19 2,57 2,19 1,59 1,77 2,12 1,53 telecommunication equipment Total for the 18 sectors 64,99 68,03 68,66 64,28 62,31 56,63 59,03 57,01 62,30 58,53 Total export of BG 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 Base index, 2001=100 1 Manufacture of food products 2 Manufacture of beverages 3 Manufacture of textile and textile 100,00 140,45 126,89 163,00 186,13 201,36 222,69 369,33 373,16 458,40 100,00 96,48 94,09 93,48 108,34 116,29 144,68 139,59 104,69 120,15 100,00 120,31 145,04 171,02 173,34 206,20 236,17 217,13 164,75 180,68 25

Sector number Export of Bulgaria products, except wearing apparel 4 Manufacture of wearing apparel, incl. leather clothes, tanning of leather 5 Manufacture of rubber and plastics products 6 Manufacture of chemical and pharmaceutical products 7 Manufacture of nonmetallic and mineral products 8 Manufacture of machinery, equipment and household appliances 9 Manufacture of medical, precise and optical apparatus and instruments 10 Manufacture of office equipment and computers 11 Manufacture of electric machinery and apparatus 12 Manufacture of wood and products of wood, except furniture 2001 Thous. BGN 2002 Thous. BGN 2003 Thous. BGN 2004 Thous. BGN 2005 Thous. BGN 2006 Thous. BGN 2007 Thous. BGN 2008 Thous. BGN 2009 Thous. BGN 2010 Thous. BGN 100,00 110,51 125,98 131,00 129,74 136,32 136,38 124,61 106,69 112,55 100,00 112,89 126,74 149,09 187,87 237,25 287,77 271,35 235,69 321,60 100,00 89,22 93,35 96,80 131,16 138,64 186,25 224,32 168,16 224,89 100,00 102,46 113,52 116,42 129,27 198,90 237,39 244,92 217,47 266,26 100,00 109,63 114,27 135,40 164,81 198,57 275,84 311,61 219,63 275,05 100,00 166,95 224,48 220,23 299,96 443,54 524,90 576,89 573,17 700,23 100,00 148,79 206,33 256,46 319,58 398,15 479,48 571,27 481,14 593,65 100,00 113,09 151,63 166,44 195,19 250,25 321,09 368,85 369,23 493,68 100,00 114,48 127,69 149,82 148,74 161,88 198,11 142,52 135,13 186,77 26

Sector number Export of Bulgaria 13 Manufacture of pulp, paper and paperboard 14 Manufacture of furniture 15 Publishing, printing and reproduction 2001 Thous. BGN 2002 Thous. BGN 2003 Thous. BGN 2004 Thous. BGN 2005 Thous. BGN 2006 Thous. BGN 2007 Thous. BGN 2008 Thous. BGN 2009 Thous. BGN 2010 Thous. BGN 100,00 106,97 141,45 163,07 166,14 158,51 196,66 219,68 111,36 251,95 100,00 144,10 186,96 226,95 256,10 274,46 316,05 296,66 238,75 274,01 100,00 150,73 242,11 183,76 222,90 272,69 527,54 617,07 425,89 354,43 16 Manufacture of motor vehicles, 100,00 145,19 121,28 147,77 271,48 349,50 525,99 730,12 886,76 1363,74 except cars 17 Manufacture of metal products, except 100,00 96,64 102,53 142,33 161,94 238,84 307,22 286,79 210,56 271,36 machinery and equipment 18 Manufacture of radio, television and 100,00 173,94 191,28 208,66 530,21 576,56 472,21 591,80 549,29 520,06 telecommunication equipment Total for the 18 sectors 100,00 111,54 123,36 138,44 158,46 183,65 215,79 235,03 198,87 245,06 Total export of BG 100,00 106,55 116,77 139,96 165,26 210,76 237,58 267,94 207,46 272,09 Source: International Trade Centre 27

The analysis of presented data shows that: In 2010, the largest export volume was recorded in sector Manufacture of food products, followed by sector Manufacture of wearing apparel, including leather apparel, tanning of leather with 9,03% of the total export of the country. These values indicate clearly that the export potential of the sector is significant. The highest increase in terms of export value is recorded in sector Manufacture of motor vehicles, except cars more than 13 times compared to 2001, while in sector Manufacture of wearing apparel, including leather apparel, tanning of leather this increase is only 1,1 times. In 2010, the biggest increase compared to 2009 was registered in sector Manufacture of pulp, paper, paperboard and articles thereof over 2 times. The increase in sector Manufacture of wearing apparel, including leather apparel, tanning of leather is close to the average increase of the 18 sectors 1,05 times. Table 9 outlines the position of the export of SMEs in the analyzed 18 sectors according to data of NSI on exports by NACE 2008. sector Table 9. Export of SMEs in the analysed sectors and share in the total export Sector Export of the SMEs, 2009, (thous. BGN) Export of the SMEs, 2010, (thous. BGN) Share of export of SMEs in the total export of the sector, 2009, % Share of export of SMEs in the total export of the sector, 2010, % 1 Manufacture of food products 987553 912774 59,62 42,08 2 Manufacture of beverages 77517 47556 54,36 30,97 3 Manufacture of textile and textile products, except wearing apparel 4 Manufacture of wearing apparel, incl. leather clothes, tanning and dressing of leather 130252 103323 24,27 18,12 1677369 1618805 64,27 57,21 5 Manufacture of rubber and plastics products 327153 341186 66,68 49,50 6 Manufacture of chemical and pharmaceutical products 7 Manufacture of non-metallic and mineral products 8 Manufacture of machinery, equipment and household appliances 310651 233260 18,14 10,07 94125 88967 16,67 12,59 199895 224946 15,78 12,86 9 Manufacture of medical, precise and optical apparatus and instruments 5 n/a n/a n/a n/a 10 Manufacture of office equipment and computers 11 Manufacture of electric machinery and apparatus n/a n/a n/a n/a 229947 225533 19,51 14,89 5 For sectors Manufacture of medical, precise and optical apparatus and instruments, Manufacture of office equipment and computers and Manufacture of radio, television and telecommunication equipment the share of SMEs in the total export cannot be calculated, as these sectors differ in scope from NACE-2008. NSI provides export data by the Classification of Economic Activities at sector and division levels.

sector Sector 12 Manufacture of wood and products of wood, except furniture Export of the SMEs, 2009, (thous. BGN) Export of the SMEs, 2010, (thous. BGN) Share of export of SMEs in the total export of the sector, 2009, % Share of export of SMEs in the total export of the sector, 2010, % 114357 82920 47,06 25,04 13 Manufacture of pulp, paper and paperboard 61824 39800 43,90 12,65 14 Manufacture of furniture 111034 127390 38,80 35,17 15 Publishing, printing and reproduction 36288 31197 4942,48 5028,21 16 Manufacture of motor vehicles, except cars 62813 55352 19,37 15,61 17 Manufacture of metal products, except machinery and equipment 18 Manufacture of radio, television and telecommunication equipment Source: NSI 310201 331204 52,62 36,02 18064 16663 n/a n/a The analysis of data shows the following: Regarding exports volume in 2010 compared to 2009, the overall trend observed is of a decrease in SMEs exports with an increasing total export of the sector, which implies that small and medium enterprises are much more affected by the global financial and economic crisis. The share of SMEs in total exports of sector Manufacture of wearing apparel, including leather apparel, tanning of leather is 57,2%. This indicator shows the leading place of small and medium enterprises in terms of the export of the sector. In total for the 18 studied sectors, the share of the export of SMEs in the total export varies widely from 10,1% to 57,2%. In 2010, the share of the SMEs exports in the total export of the respective sector, decreased in comparison with 2009 in all studied sectors. The smallest decrease of 2,9 p.p. is registered in Manufacture of machinery, equipment and household appliances and the greatest decrease of 31,3 p.p. is in Manufacture of pulp, paper and paperboard and articles, resulting in the biggest drop in the ranking of the sector compared to the rest of the sectors. The decrease in the SMEs export share in the total export of "Manufacture of wearing apparel, including leather apparel, tanning of leather" is relatively small by only 7 p.p. In 2010, the sector ranks first in terms of the indicator share of the SMEs in the total export of the sector and in 2009 it ranks second after sector Manufacture of rubber and plastic products. This ranking is indicative for the importance of the SMEs for the development and the export possibilities of the sector. The next table gives information, characterising the export of the SMEs in the 18 analyzed sectors. 29

Table 10. SME export indicators in 18 analyzed sectors Groups of enterprises Manufacture of food products Share of export of SMEs in the sector in the total export of 18 sectors (%) Change in the export 2010/2009 in% Export volume per 1 employed (BGN) 19,79 19,65 92,43 13867 13428 Manufacture of beverages 1,55 1,02 61,35 9933 6325 Manufacture of textile and textile products, except apparel 2,61 2,22 79,33 18701 16139 Manufacture of wearing apparel 28,33 28,56 93,83 16896 17649 Tanning of leather; manufacture of footwear and other leather products 5,28 6,29 110,87 20217 23182 Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials 2,29 1,79 72,51 8030 6198 Manufacture of paper, paperboard and paper products Publishing, printing and reproduction 1,24 0,86 64,38 8282 6233 0,73 0,67 85,97 4040 3449 Manufacture of chemical products 5,78 4,60 74,07 32860 25165 Manufacture of basic pharmaceutical products and pharmaceutical preparations 0,45 0,43 88,16 13785 11410 Manufacture of rubber and plastic products 6,56 7,35 104,29 15586 17860 Manufacture of other non-metallic mineral products Manufacture of fabricated metal products, except machinery and equipment Manufacture of computer, electronic and optical products Manufacture of radio, television and telecommunication equipment 1,89 1,92 94,52 4928 5768 6,22 7,13 106,77 7667 9490 4,81 3,44 66,50 43944 30410 0,36 0,36 92,24 18173 14242 Manufacture of electrical equipment 4,61 4,86 98,08 23978 27133 Manufacture of machinery and equipment with general and special purpose 4,38 5,29 112,23 13024 15408 Manufacture of other transport equipment, other than cars 1,26 1,19 88,12 26492 25793 Manufacture of furniture 2,23 2,74 114,73 5187 6764 Source: NSI Analysis of data from the table allows making the following conclusions: SMEs in sector Manufacture of wearing apparel, including leather apparel, tanning of leather rank first among the studied 18 sectors in terms of share of the export in the total export of the 18 sectors for both years of the analysed period. In terms of the indicator volume of the export per 1 employed sector Manufacture of wearing apparel, including leather apparel, tanning of leather ranks third among the analyzed sectors. First place is held by Manufacture of computer, electronic and optical products. 30

Results from the company survey During the analyzed five-year period (2007-2011) direct exports of companies predominate they export individually their production. Only 6 of 26 respondents export permanently via intermediaries (other companies or trade organizations), yet their export during the studied period is both direct and through intermediaries. Year Table 11. Number of companies by share of individual export (2007-2011) Export share Without export Up to 30 % 31 60 % 61 99 % 100% No answer 2007 5 1 4 5 11 1 2008 5 1 0 9 11 1 2009 4 1 2 7 12 1 2010 4 1 2 7 12 1 2011 3 1 1 8 12 2 Based on data presented in Table 11, it can be pointed out that: The structure of the companies in terms of their share of direct export is favourable for the whole studied period the number of companies, exporting over 60% of their production prevails, and in 2011 the percentage of such companies reaches 80%. Reduction is observed in the number of companies which have not realized direct export at all. For the period 2007 2008 there are 11 companies with direct export of 100% of their production, and in the next three years the number of these companies increased to 12. The following summary conclusions can be drawn for sector "Manufacture of wearing apparel, including leather apparel, tanning of leather" in general and for SMEs: In general for sector Manufacture of wearing apparel, including leather apparel, tanning of leather The sector ranks first among the 18 sectors, which have export potential. In the period 2001-2010 the Bulgarian export of wearing apparel amounts to approximately 29,6 billion BGN and constitutes 14,54% of the total export of the country in this period, and 23,9% of the export of the 18 analyzed sectors. The position of Bulgarian products on the international market in terms of both the manufacture of wearing apparel and tanning of leather and footwear manufacture is stable, recording progress until 2007. At the end of 2010 the levels of 2007, the period before the world economic crisis, are restored indicating a revival of the demand on foreign markets and an increase in orders. 31

For SMEs in sector Manufacture of wearing apparel, including leather apparel, tanning of leather In 2010 the sector ranks first in terms of share of the SMEs in the total export of the sector (more than 57%) and in 2009 ranks second. This ranking is indicative for the great importance of the SMEs for the development of the export possibilities of the sector. The overall observed trend regarding the export volume in 2010 compared to 2009 is of decrease in the export of SMEs, while at the same time there is an increase in the total export of the sector, showing that small and medium enterprises are significantly more affected by the global financial economic crisis compared to large companies. The largest export share in 2010 is held by enterprises in Manufacture of wearing apparel, except fur apparel - 93,36% of the export of companies in Manufacture of wearing apparel and by enterprises in Manufacture of footwear, which account for 80% of the export of companies in Tanning and dressing of leather, manufacture of footwear and related leather products. By volume of the export per 1 employed sector Manufacture of wearing apparel, except fur apparel ranks third among the studied sectors, showing its strong orientation to external markets. SMEs, which participated in the survey, work mainly for export for the whole studied period the number of companies, exporting more than 60% of their production is prevailing, as in 2011 the share of such companies reaches 80%. The companies in the sample export directly without the mediation of trade companies, creation of joint trade activity with other companies, etc. 3. ANALYSIS OF GOODS AND SERVICES WITH EXPORT POTENTIAL The product groups, manufactured and exported in sector Manufacture of wearing apparel, including leather apparel, tanning of leather are extremely numerous. Therefore the selection of product groups with export advantages and potential was done on the basis of several criteria, namely higher relative share in the export of the corresponding product group, increase during the studied period or high export volumes before the beginning of the global economic crisis. The analysis includes also the product groups where there is relatively stable export during the studied period. These criteria were applied for the whole sector, as official statistical information for the SMEs is not available. Applying the selected criteria to data of the International Trade Center (ITC) allowed determining the following 13 product groups, having export advantages and potential: 1. Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear) 2. Men s or boys suits, ensembles, jackets, blazers, trousers, bib and brace overalls, breeches and shorts (other than swimwear) 3. Women s or girls overcoats, capes cloaks and anoraks other than those of heading 6204 4. Women s or girls blouses, shirts and shirt-blouses, knitted or crocheted 32

5. Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or crocheted. 6. T-shirts, singlets and other vests, knitted or crocheted 7. Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, knitted or crocheted 8. Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; travelling bags, insulated food bags 9. Articles of apparel and clothing accessories, of leather or of composition leather 10. Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather 11. Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials 12. Other footwear 13. Parts of footwear (including uppers, whether or not attached to soles other than outer soles); removable in-soles, heel cushions and similar articles, gaiters, leggings and similar articles and parts thereof For each of the product groups, estimated as having export advantages and potential, main exporters, export dynamics, share of the Bulgarian export, and positioning of the country according to data of ITC are presented. Available data refer to the sector in total, and not only to SMEs. 1. Goods with export potential in group Apparel and clothing accessories, not knitted or crocheted Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear) Main exporters, export dynamics, and Bulgaria s ranking by this group of products according to ITC data are presented in the tables below. Table 12. Ranking of exporters of Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear), worldwide in the period 2001-2010 (thousand EUR) No. to 2010 Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 33 876 942 34 348 577 32 088 052 33 479 384 37 354 036 39 478 661 38 500 564 36 456 258 32 669 969 36 119 513 1 China 5 469 133 6 179 241 6 117 379 6 598 106 8 487 597 9 935 121 9 808 060 9 569 744 9 427 275 11 325 123 2 Hong Kong 4 516 664 4 348 529 3 781 753 3 829 483 4 477 502 4 663 053 4 027 775 3 420 695 2 811 486 2 923 568 3 Italy 2 856 399 2 797 077 2 646 847 2 655 448 2 830 492 2 985 011 3 217 326 3 095 320 2 474 009 2 564 354 4 Germany 1 800 662 1 899 950 1 773 898 1 833 802 1 916 832 2 074 936 2 095 184 2 025 540 1 768 960 1 741 681 5 India 1 099 721 925 731 734 265 786 291 1 265 801 1 466 942 1 278 804 1 273 483 1 410 167 1 412 978 25 Bulgaria 230 061 246 529 274 237 282 619 267 394 280 224 295 780 260 558 209 678 204 503 Bulgaria ranks 25 th in the world export of Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear) with a share of 0,57%. 33

Table 13. Dynamics of world export in the period 2001-2010 (%, 2001=100) Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 100 101 95 99 110 117 114 108 96 107 China 100 113 112 121 155 182 179 175 172 207 Hong Kong 100 96 84 85 99 103 89 76 62 65 Italy 100 98 93 93 99 105 113 108 87 90 Germany 100 106 99 102 106 115 116 112 98 97 India 100 84 67 71 115 133 116 116 128 128 Bulgaria 100 107 119 123 116 122 129 113 91 89 The export to the top five exporters has different change rate compared to 2001 from a significant fall of 35% in Hong Kong to a significant increase in China with 207%. Bulgarian export is decreasing also in the ten-year period, but with more slowly rate than the one of Hong Kong. Table 14. Position of Bulgaria in the world export in the period 2001-2010 Year 2001 2002 2003 2004 2005 2006 2007 2008 Position in the world export 27 30 27 25 25 27 23 25 25 25 The positioning of the country is relatively constant during the analyzed period for the tenyear period Bulgaria moved 2 places up in the ranking, notwithstanding the fall in the volume of export of the examined group. Table 15. Share of the export of Bulgaria in the export of the leading world exporter in 2010 (%) 2001 2002 2003 2004 2005 2006 2007 2008 Bulgaria 4.21% 3.99% 4.48% 4.28% 3.15% 2.82% 3.02% 2.72% 2.22% 1.81% The share of the export of Bulgaria in the export of the leading exporter worldwide is significantly decreasing during the studied ten-year period. This is due to the fact that the volume of the export of the leading country-exporter China is increasing significantly and the volume of Bulgaria is decreasing for the analyzed period. Men s or boys suits, ensembles, jackets, blazers, trousers, bib and brace overalls, breeches and shorts (other than swimwear) Main exporters, export dynamics, and Bulgaria s ranking by this group of products according to ITC data are presented in the tables below. 34

Table 16. Ranking of the exporters of Men s or boys suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear), worldwide in the period 2001-2010 (thousand EUR) No. to 2010 Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 27 093 935 26 266 457 24 506 475 24 542 390 26 937 226 28 615 709 27 991 361 27 824 488 24 710 315 27 238 525 1 China 4 638 393 4 129 240 3 890 860 4 083 286 5 217 454 6 349 309 6 214 996 6 358 209 5 972 977 7 030 544 2 Bangladesh 945 477 941 564 996 253 1 123 385 1 531 150 1 593 145 1 592 940 1 823 717 2 148 068 3 Germany 1 233 515 1 294 539 1 246 311 1 399 776 1 534 679 1 658 758 1 768 341 1 924 108 1 692 703 1 780 825 4 Italy 2 144 345 2 033 116 2 060 501 2 089 791 2 164 955 2 176 750 2 363 477 2 369 818 1 892 039 1 757 752 5 Hong Kong 2 050 377 1 597 158 1 329 096 1 267 867 1 446 470 1 600 616 1 478 299 1 338 272 1 123 429 1 248 586 29 Bulgaria 161 657 174 256 215 273 249 851 272 417 280 081 255 674 237 673 175 108 183 709 Bulgaria ranked 29 th in the world export of Men s or boys suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear) with a share of 0,67%. Table 17. Dynamics of the world export in the period 2001-2010 (%, 2001=100) Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 100 97 90 91 99 106 103 103 91 101 China 100 89 84 88 112 137 134 137 129 152 Bangladesh 100 0 0 0 0 0 0 0 0 0 Germany 100 105 101 113 124 134 143 156 137 144 Italy 100 95 96 97 101 102 110 111 88 82 Hong Kong 100 78 65 62 71 78 72 65 55 61 Bulgaria 100 108 133 155 169 173 158 147 108 114 The volume of the export of Bulgaria increases during the studied ten-year period. An increase is observed in the case of two of the leading exporters worldwide China and Germany and their growth rates are higher. The export of Italy and Hong Kong decreases compared to the base year 2001, while in the case of Bangladesh the available data do not allow making a conclusion regarding the export development. Table 18. Position of Bulgaria in the world export in the period 2001-2010 Year 2001 2002 2003 2004 2005 2006 2007 2008 Position in the world export 32 33 30 29 27 26 25 25 28 29 The growth within the analysed ten-year period substantiates the better positioning of the country at the end of the analysed period for the ten-year period Bulgaria is going 3 places up in the ranking. Table 19. Share of the export of Bulgaria in the export of the leading world exporter in 2010 (%) 2001 2002 2003 2004 2005 2006 2007 2008 Bulgaria 3.49% 4.22% 5.53% 6.12% 5.22% 4.41% 4.11% 3.74% 2.93% 2.61% As the volume of the export of the leading country exporter worldwide China is increasing significantly faster than that of Bulgaria, the share of Bulgarian export in the export of the leading worldwide exporter decreases at the end of the studied period. 35

In the case of the leading product groups Women's or girls' suits and Men s or boys suits of Articles of apparel and clothing accessories, not knitted or crocheted, Germany is keeping its position of the most important partner importer from Bulgaria. Despite the difficulties after 2008, related to the economic crisis, Germany continues to be ahead of the rest of the second countries in these groups France and Italy respectively. This trend is mainly due to the many Bulgarian companies, working as sub-contractors for German companies, completely or partially with client materials or with ready product design, given by the client. Women s or girls overcoats, car-coats, capes cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles other than those of heading 6204 Main exporters, export dynamics, and Bulgaria s ranking by this group of products according to ITC data are presented in the tables below. Table 20. Ranking of the exporters of Exporters of Women s or girls overcoats, car-coats, capes cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles other than those of heading 6204 worldwide in the period 2001-2010 (thousand EUR) No. to 2010 Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 4 882 116 5 237 508 5 336 505 5 696 536 5 823 960 6 533 373 7 181 046 7 862 363 7 261 521 8 767 928 1 China 1 169 018 1 644 346 2 055 570 2 152 298 2 274 713 2 936 227 3 137 432 3 506 552 3 330 203 4 241 571 2 Italy 334 698 342 708 315 600 360 850 430 926 490 227 595 658 631 743 540 842 628 484 3 Germany 370 204 409 104 383 352 410 736 433 239 480 755 501 911 593 386 577 406 577 793 4 Vietnam 239 318 197 199 129 137 196 222 200 137 176 532 231 282 243 839 256 381 464 307 5 Hong Kong 320 691 276 582 240 041 244 393 252 333 247 425 276 120 277 094 245 697 277 090 17 Bulgaria 34 717 38 649 41 215 58 589 52 079 51 323 51 703 64 350 59 416 64 586 Bulgaria ranked 17 th in the world export of Women s or girls overcoats, car-coats, capes cloaks, anoraks with a share of 0,74%. Table 21. Dynamics of the world export in the period 2001-2010 (%, 2001=100) Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 100 107 109 117 119 134 147 161 149 180 China 100 141 176 184 195 251 268 300 285 363 Italy 100 102 94 108 129 146 178 189 162 188 Germany 100 111 104 111 117 130 136 160 156 156 Vietnam 100 82 54 82 84 74 97 102 107 194 Hong Kong 100 86 75 76 79 77 86 86 77 86 Bulgaria 100 111 119 169 150 148 149 185 171 186 The volume of the export of Bulgaria is increasing during the studied ten-year period. Similar trend is observed in the case of the four leading exporters worldwide. The increase rate registered by the leading exporter of the studied product group China, as well as the one of Vietnam and Italy, however is faster that the increase rate of Bulgaria. Table 22. Position of Bulgaria in the world export in the period 2001-2010 Year 2001 2002 2003 2004 2005 2006 2007 2008 Position in the world export 25 26 23 18 18 18 18 17 17 17 36

The analysed above growth results in a better positioning of the country for the analysed period in the studied 10 years Bulgaria is going 7 places up in the ranking. Table 23. Share of the export of Bulgaria in the export of the leading world exporter in 2010 (%) 2001 2002 2003 2004 2005 2006 2007 2008 Bulgaria 2.97% 2.35% 2.01% 2.72% 2.29% 1.75% 1.65% 1.84% 1.78% 1.52% As the volume of the export of the leading country exporter worldwide China is increasing significantly faster than that of Bulgaria, the share of the export of Bulgaria in the export of the leading worldwide exporter is decreasing at the end of the studied period. 2. Goods and services with export potential in group Articles of apparel and clothing accessories, knitted or crocheted Women s or girls blouses, shirts and shirt-blouses, knitted or crocheted Main exporters, export dynamics, and Bulgaria s ranking by this group of products according to ITC data are presented in the tables below. Table 24. Ranking of the exporters of Women s or girls blouses, shirts and shirtblouses, knitted or crocheted worldwide in the period 2001-2010 (thousand EUR) No. to 2010 Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 5 022 374 5 246 235 4 920 292 4 923 810 5 480 856 5 773 180 6 379 350 5 627 219 4 444 434 4 627 040 1 Turkey 106 369 171 800 186 655 191 275 229 921 323 700 428 079 467 538 423 457 472 655 2 Guatemala 1 711 1 563 1 633 1 461 470 131 2 395 381 843 360 872 335 894 390 414 3 Hong Kong 1 635 655 1 569 590 1 257 935 1 241 185 1 100 936 881 402 766 636 584 610 416 489 388 671 4 China 85 171 100 348 87 618 116 284 196 263 788 218 847 514 493 548 327 419 375 280 5 India 103 777 128 917 165 643 192 523 245 525 288 611 270 460 275 887 329 452 262 587 18 Bulgaria 88 582 114 307 164 746 159 700 138 356 143 332 150 492 121 808 115 078 101 226 Bulgaria ranked 18 th in the world export of Women s or girls overcoats, car-coats, capes cloaks, anoraks, knitted or crocheted with a share of 2,19%. Table 25. Dynamics of the export of Women s or girls blouses, shirts and shirtblouses, knitted or crocheted worldwide in the period 2001-2010 (%, 2001=100) Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 100 104 98 98 109 115 127 112 88 92 Turkey 100 162 175 180 216 304 402 440 398 444 Guatemala 100 91 95 85 27 477 140 22 317 21 091 19 631 22 818 Hong Kong 100 96 77 76 67 54 47 36 25 24 China 100 118 103 137 230 925 995 579 384 441 India 100 124 160 186 237 278 261 266 317 253 Bulgaria 100 129 186 180 156 162 170 138 130 114 Data for the export dynamics show certain increase of the export of this product group, originating from Bulgaria during the studied period. Four of the leading countries exporters, however record significantly faster growth rates. An exception is Hong Kong only, where there is a significant fall in the volume of the export during the analysed period. 37

Table 26. Position of Bulgaria in the world export in the period 2001-2010 Year 2001 2002 2003 2004 2005 2006 2007 2008 Position in the world export 14 11 6 6 11 10 12 14 12 18 The positioning of the Bulgaria in the world export is deteriorating as a result of the commented above relatively low growth rates of the export volume of this product group originating from Bulgaria for the ten-year period Bulgaria is moves 4 places down. Table 27. Share of the export of Bulgaria in the export of the leading world exporter in 2010 (%) 2001 2002 2003 2004 2005 2006 2007 2008 Bulgaria 83.28% 66.53% 88.26% 83.49% 60.18% 44.28% 35.16% 26.05% 27.18% 21.42% During the studied ten-year period the share of the export of Bulgaria in the export of the leading worldwide exporter decreases significantly. This is due to the significant increase in the volume of the Turkish export of this product group. T-shirts, singlets and other vests, knitted or crocheted Main exporters, export dynamics, and Bulgaria s ranking by this group of products according to ITC data are presented in the tables below. Table 28. Ranking of the exporters of T-shirts, singlets and other vests, knitted or crocheted worldwide in the period 2001-2010 (thousand EUR) No. to 2010 Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 17 458 967 17 342 320 17 305 302 18 829 098 21 418 509 24 918 866 25 205 602 24 168 671 22 008 126 26 305 317 1 China 2 490 732 2 612 135 2 650 334 3 147 114 4 250 872 5 929 958 6 202 774 5 477 739 4 011 412 5 517 711 2 Bangladesh 587 554 759 750 1 000 680 1 184 249 1 501 842 1 522 629 1 863 121 1 977 086 2 498 760 3 Turkey 1 321 495 1 551 663 1 818 709 1 998 851 2 220 224 2 282 971 2 252 455 1 974 198 1 720 097 2 078 358 4 Germany 577 969 649 132 758 153 877 874 1 089 183 1 186 738 1 209 365 1 262 481 1 181 085 1 365 354 5 India 613 925 736 140 793 986 671 753 898 364 1 178 382 1 188 348 1 100 503 1 394 809 1 278 719 39 Bulgaria 93 752 100 277 108 002 126 515 118 960 119 627 121 862 98 839 89 870 85 534 Bulgaria ranked 39 th in the world export of T-shirts, singlets and other vests, knitted or crocheted with a share of 0,33%. Table 29. Dynamics of the export of T-shirts, singlets and other vests, knitted or crocheted worldwide in the period 2001-2010 (%, 2001=100) Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 100 99 99 108 123 143 144 138 126 151 China 100 105 106 126 171 238 249 220 161 222 Bangladesh 100 0 0 0 0 0 0 0 0 0 Turkey 100 117 138 151 168 173 170 149 130 157 Germany 100 112 131 152 188 205 209 218 204 236 India 100 120 129 109 146 192 194 179 227 208 Bulgaria 100 107 115 135 127 128 130 105 96 91 During the studied ten-year period the share of the export of Bulgaria in the export of the leading worldwide exporter has decreased, while for four of the five leading countries 38

exporters a significant increase is observed. The available data for Bangladesh do not allow making an assessment of the development trend of the export of the country. Table 30. Position of Bulgaria in the world export of T-shirts, singlets and other vests, knitted or crocheted in the period 2001-2010 Year 2001 2002 2003 2004 2005 2006 2007 2008 Position in the world export 30 32 31 30 35 35 31 38 36 39 The commented above findings explain the poor positioning of the country at the end of the studied period for the ten-year period Bulgaria moves 9 places down in the ranking. Table 31. Share of the export of Bulgaria in the export of the leading world exporter in 2010 (%) 2001 2002 2003 2004 2005 2006 2007 2008 Bulgaria 3.76% 3.84% 4.08% 4.02% 2.80% 2.02% 1.96% 1.80% 2.24% 1.55% The findings above regarding the decrease in the export of Bulgaria for the studied group during the analysed period are substantiating the decreasing share of the Bulgarian export in that of the leading worldwide exporter China. Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or crocheted Main exporters, export dynamics, and Bulgaria s ranking by this group of products according to ITC data are presented in the tables below. Table 32. Ranking of the exporters of Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or crocheted worldwide in the period 2001-2010 (thousand EUR) No. to 2010 Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 28 866 091 27 333 605 24 744 497 24 319 767 26 945 369 30 967 966 32 034 801 31 494 211 29 692 684 34 163 391 1 China 5 368 515 5 503 280 5 162 971 5 429 778 7 553 771 10 236 044 11 710 370 10 917 896 10 687 093 12 815 443 2 Hong Kong 5 271 771 4 774 703 4 100 204 3 838 765 4 691 970 5 173 994 4 888 955 4 636 471 4 025 196 4 377 122 3 Bangladesh 648 302 681 166 723 238 798 930 962 726 948 414 1 815 263 1 983 721 2 311 172 4 Italy 2 947 637 2 637 675 2 315 167 2 190 407 2 024 769 2 000 898 1 996 327 1 958 667 1 628 742 1 704 206 5 Germany 993 264 1 052 880 1 043 256 1 088 139 1 157 418 1 271 418 1 304 125 1 376 990 1 440 912 1 526 479 34 Bulgaria 80 498 97 386 108 046 111 566 114 390 123 910 103 828 99 405 97 762 95 216 Bulgaria ranked 34 th in the world export of Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or crocheted with a share of 028%. Table 33. Dynamics of the export of Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or crocheted worldwide in the period 2001-2010 (%, 2001=100) Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 100 95 86 84 93 107 111 109 103 118 China 100 103 96 101 141 191 218 203 199 239 Hong Kong 100 91 78 73 89 98 93 88 76 83 Bangladesh 100 0 0 0 0 0 0 0 0 0 Italy 100 89 79 74 69 68 68 66 55 58 Germany 100 106 105 110 117 128 131 139 145 154 Bulgaria 100 121 134 139 142 154 129 123 121 118 39

The volume of the export of the analysed product group, manufactured in Bulgaria, increases during the studied ten-year period. Similar trend is observed in the case of the leading exporter worldwide China and in Germany, where the growth rates of the export of these countries is higher than the Bulgarian one. The export of Italy and Hong Kong is decreasing. The data available for Bangladesh do not allow making a conclusion regarding the export development trend of the export of the analysed product group. Table 34. Position of Bulgaria in the world export of Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or crocheted in the period 2001-2010 2001-2010 Year 2001 2002 2003 2004 2005 2006 2007 2008 Position in the world export 37 38 38 35 36 33 39 36 30 34 The growth of the export volume of this product group, manufactured in Bulgaria, substantiates the better positioning of the country among the exporters worldwide at the end of the analysed period. Table 35. Share of the export of Bulgaria in the export of the leading world exporter in 2010 (%) 2001 2002 2003 2004 2005 2006 2007 2008 Bulgaria 1.50% 1.77% 2.09% 2.05% 1.51% 1.21% 0.89% 0.91% 0.91% 0.74% The share of the export of Bulgaria in the export of the leading exporter worldwide decreases significantly during the studied ten-year period. This is due to the significantly faster growth rate of the export of the leading country exporter China. Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear), knitted or crocheted Main exporters, export dynamics, and Bulgaria s ranking by this group of products according to ITC data are presented in the tables below. Table 36. Ranking of the exporters of Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear), knitted or crocheted, worldwide in the period 2001-2010 (thousand EUR) No. to 2010 Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 7 377 342 7 868 221 8 378 958 8 615 793 8 241 192 11 212 379 15 103 421 13 840 670 15 126 448 20 266 253 1 China 1 847 590 2 444 628 3 048 813 3 572 182 2 995 865 5 280 095 8 136 300 6 789 915 7 514 524 10 929 336 2 Hong Kong 481 390 458 443 350 040 329 124 446 321 582 744 705 328 678 986 675 121 868 431 3 Turkey 414 477 467 297 556 513 498 523 465 265 515 021 648 072 528 547 585 361 793 593 4 Germany 198 851 197 222 208 531 215 236 231 972 277 059 363 740 444 933 510 834 683 441 5 Cambodia 271 980 312 564 387 364 390 930 463 834 489 176 492 412 477 898 448 219 617 454 28 Bulgaria 27 435 32 669 34 468 35 216 29 801 41 126 62 168 56 487 60 599 73 696 Bulgaria ranked 28 th in the world export of Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear), knitted or crocheted with a share of 0,36%. 40

Table 37. Dynamics of the world export in the period 2001-2010 (%, 2001=100) Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 100 107 114 117 112 152 205 188 205 275 China 100 132 165 193 162 286 440 368 407 592 Hong Kong 100 95 73 68 93 121 147 141 140 180 Turkey 100 113 134 120 112 124 156 128 141 191 Germany 100 99 105 108 117 139 183 224 257 344 Cambodia 100 115 142 144 171 180 181 176 165 227 Bulgaria 100 119 126 128 109 150 227 206 221 269 The export of the leading five exporters increases during the studied ten-year period. The export of Bulgaria is developing quite dynamically in the ten years, as well, but at a slower rate than China s and Germany s export rates. Table 38. Position of Bulgaria in the world export in the period 2001-2010 Year 2001 2002 2003 2004 2005 2006 2007 2008 Position in the world export 32 34 36 37 40 36 31 33 27 28 The significant growth within the analysed ten-year period of the studied product group substantiates the better positioning of the country at the end of the analysed period for the ten-year period Bulgaria goes 4 places up in the ranking. Table 39. Share of the export of Bulgaria in the export of the leading world exporter in 2010 (%) 2001 2002 2003 2004 2005 2006 2007 2008 Bulgaria 1.48% 1.34% 1.13% 0.99% 0.99% 0.78% 0.76% 0.83% 0.81% 0.67% The share of the export of Bulgaria in the export of the leading exporter worldwide decreases significantly during the studied ten-year period. This is explained with the significantly higher growth rates of the volume of the export of China. 3. Goods with export potential in Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; travelling bags, insulated food bags Main exporters, export dynamics, and Bulgaria s ranking by this group of products according to ITC data are presented in the tables below. 41

Table 40. Ranking of the exporters of Trunks, suit-cases, vanity-cases, executivecases, brief-cases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; travelling bags, insulated food bags, worldwide in the period 2001-2010 (thousand EUR) No. to 2010 Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 18063214 16816203 15574270 16932083 18903791 21338723 23371715 25421943 23523660 30698531 1 China 4323469 4606116 4467641 5015348 5870120 6928017 7961664 9573838 9171382 13565956 2 Hong Kong 4821569 4274103 3589593 3655836 3835221 4030238 3952767 3888763 3497591 4009391 3 France 1735556 1754503 1736361 1900449 2123524 2399894 2510967 2699803 2572114 3070786 4 Italy 1781043 1580734 1622115 1892189 2094578 2425658 2837625 2901240 2375496 2900549 5 Germany 389326 407473 393017 425809 527845 640250 709203 766795 714318 796486 32 Bulgaria 24925 28340 33756 33351 29820 32079 36727 34778 23552 30344 Bulgaria ranked 32 nd in the world export of Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; travelling bags, insulated food bags with a share of 0,10%. Table 41. Dynamics of the world export in the period 2001-2010 (%, 2001=100) Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 100 93 86 94 105 118 129 141 130 170 China 100 107 103 116 136 160 184 221 212 314 Hong Kong 100 89 74 76 80 84 82 81 73 83 France 100 101 100 110 122 138 145 156 148 177 Italy 100 89 91 106 118 136 159 163 133 163 Germany 100 105 101 109 136 164 182 197 183 205 Bulgaria 100 114 135 134 120 129 147 140 94 122 Data for the export dynamics show certain increase of the export of this product group, manufactured in Bulgaria, during the studied period, and the same trend is observed in all leading exporting countries, except in Hong Kong. In comparison to Bulgaria, however, the growth rate of the export volume is faster in China, France, Italy and Germany. Table 42. Position of Bulgaria in the world export in the period 2001-2010 Year 2001 2002 2003 2004 2005 2006 2007 2008 Position in the world export 32 31 28 30 32 31 33 33 32 32 The relatively low growth rate of the export volume of Bulgaria during the analysed period is substantiating the relatively constant positioning of the country among the exporters of this product group. Table 43. Share of the export of Bulgaria in the export of the leading world exporter in 2010 (%) 2001 2002 2003 2004 2005 2006 2007 2008 Bulgaria 0.58% 0.62% 0.76% 0.66% 0.51% 0.46% 0.46% 0.36% 0.26% 0.22% The higher growth rate of the export volume of this product group in China substantiates the smaller share of the export of Bulgaria in that of the leading exporter worldwide at the end of the studied period. 42

Articles of apparel and clothing accessories, of leather or of composition leather Main exporters, export dynamics, and Bulgaria s ranking by this group of products according to ITC data are presented in the tables below. Table 44. Ranking of the exporters of Articles of apparel and clothing accessories, of leather or of composition leather worldwide in the period 2001-2010 (thousand EUR) No. to 2010 Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 7846830 7427133 7209310 6376234 6868515 6541939 6275925 5956964 5077151 5883204 1 China 3177295 3291618 3559078 2747959 2781953 2302855 1874224 1520610 1313104 1669213 2 Italy 699687 670940 581418 592972 638961 741122 855201 832421 632842 751495 3 India 490551 340005 347204 397340 415587 411264 386102 485034 445422 446946 4 Pakistan 372184 378161 498606 492674 486372 505083 395996 444854 5 Hong Kong 747190 623317 537798 542504 590925 550313 512900 452479 367819 430710 48 Bulgaria 2632 2755 3071 2899 2311 2472 3115 2403 1842 3390 Bulgaria ranked 48 th in the world export of Articles of apparel and clothing accessories, of leather or of composition leather with a share of 0,06%. Table 45. Dynamics of the export of Articles of apparel and clothing accessories, of leather or of composition leather worldwide in the period 2001-2010 (%, 2001=100) Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 100 95 92 81 88 83 80 76 65 75 China 100 104 112 86 88 72 59 48 41 53 Italy 100 96 83 85 91 106 122 119 90 107 India 100 69 71 81 85 84 79 99 91 91 Pakistan 100 0 0 0 0 0 0 0 0 0 Hong Kong 100 83 72 73 79 74 69 61 49 58 Bulgaria 100 105 117 110 88 94 118 91 70 129 Data for the export dynamics show a significant increase of the export in this product group, manufactured in Bulgaria, and the same trend is observed in Italy (where the registered growth rate is lower). In the rest of the leading exporting countries there is a decrease in the export volume. Table 46. Position of Bulgaria in the world export of Articles of apparel and clothing accessories, of leather or of composition leather in the period 2001-2010 Year 2001 2002 2003 2004 2005 2006 2007 2008 Position in the world export 48 45 46 47 53 53 56 57 57 48 The positioning of Bulgaria stays relatively constant during the analysed period, notwithstanding the registered export volume growth. Table 47. Share of the export of Bulgaria in the export of the leading world exporter in 2010 (%) 2001 2002 2003 2004 2005 2006 2007 2008 Bulgaria 0.08% 0.08% 0.09% 0.11% 0.08% 0.11% 0.17% 0.16% 0.14% 0.20% The faster export volume growth rate of the studied product group, registered in Bulgaria, substantiates the increase of the share of the Bulgarian export in that of the leading exporter worldwide at the end of the studied period. 43

4. Goods with export potential of group Footwear, gaiters and the like; parts of such articles Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather Main exporters, export dynamics, and Bulgaria s ranking by this group of products according to ITC data are presented in the tables below. Table 48. Ranking of the exporters of Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather worldwide in the period 2001-2010 (thousand EUR) No. to 2010 Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 29 139 178 28 719 461 26 253 953 26 072 019 29 039 350 31 737 758 32 755 875 32 729 786 29 252 272 35 526 835 1 China 4 777 489 5 024 903 4 663 370 5 023 512 6 415 736 6 923 700 6 885 195 6 614 077 5 955 610 7 808 958 2 Italy 6 086 056 5 730 423 5 298 967 5 123 743 5 128 570 5 489 445 5 917 750 5 803 289 4 878 500 5 359 276 3 Vietnam 421 492 500 482 585 688 612 095 721 094 1 008 451 1 423 791 1 584 985 1 472 859 2 888 634 4 Hong Kong 3 621 131 3 548 409 3 046 978 2 694 484 3 001 310 2 987 733 2 722 466 2 658 690 2 195 787 2 759 297 5 Germany 1 015 745 1 235 672 1 132 146 1 191 897 1 348 853 1 491 308 1 508 890 1 658 835 1 451 732 1 562 859 36 Bulgaria 50 166 58 909 62 366 59 390 71 241 73 304 73 327 66 510 65 923 73 951 Bulgaria ranked 36 th in the world export of Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather with a share of 0,21%. Table 49. Dynamics of the export of Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather worldwide in the period 2001-2010 (%, 2001=100) Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 100 99 90 89 100 109 112 112 100 122 China 100 105 98 105 134 145 144 138 125 163 Italy 100 94 87 84 84 90 97 95 80 88 Vietnam 100 119 139 145 171 239 338 376 349 685 Hong Kong 100 98 84 74 83 83 75 73 61 76 Germany 100 122 111 117 133 147 149 163 143 154 Bulgaria 100 117 124 118 142 146 146 133 131 147 The export of the top five exporters has different rate of change compared to 2001 from a substantial decrease in Hong Kong by 24% to a significant increase in Vietnam of 685%. Bulgarian export is also developing dynamically in the ten-year period, but with lower rates of those of Vietnam, China and Germany. Table 50. Position of Bulgaria in the world export of Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather in the period 2001-2010 Year 2001 2002 2003 2004 2005 2006 2007 2008 Position in the world export 33 32 32 35 31 33 35 40 36 36 The slower growth rate of the export volume of Bulgaria in comparison with some of the main exporting countries explains the poor positioning of Bulgaria at the end of the analysed period - for the ten-year period the country moves 3 positions down in the ranking. 44

Table 51. Share of the export of Bulgaria in the export of the leading world exporter in 2010 (%) 2001 2002 2003 2004 2005 2006 2007 2008 Bulgaria 1.05% 1.17% 1.34% 1.18% 1.11% 1.06% 1.06% 1.01% 1.11% 0.95% The registered in China faster export volume growth rate of the studied product group substantiates the smaller share of Bulgarian export in that of the leading exporter worldwide at the end of the studied period. Parts of footwear (including uppers, whether or not attached to soles other than outer soles); removable in-soles, heel cushions and similar articles, gaiters, leggings and similar articles and parts thereof Main exporters, export dynamics, and Bulgaria s ranking by this group of products according to ITC data are presented in the tables below. Table 52. Ranking of the exporters of Parts of footwear (including uppers, whether or not attached to soles other than outer soles); removable in-soles, heel cushions and similar articles, gaiters, leggings and similar articles and parts thereof; worldwide in the period 2001-2010 (thousand EUR) No. to 2010 Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 5 787 287 5 402 301 4 814 830 4 695 614 4 722 475 4 999 574 4 783 134 4 920 583 4 299 117 5 482 878 1 China 467 701 432 859 410 741 463 280 496 882 635 829 852 852 1 090 484 1 036 166 1 482 608 2 Italy 1 161 019 1 139 565 1 081 021 1 049 168 1 037 490 1 106 926 795 928 714 854 621 583 753 087 3 Romania 370 798 426 216 421 663 362 310 331 891 342 459 283 189 270 776 218 583 267 130 4 Hong Kong 365 670 317 920 261 424 260 669 253 807 263 768 235 493 213 940 182 523 250 862 Republic of 5 Korea 390 078 345 353 287 965 278 720 289 553 298 844 270 514 262 003 201 465 236 500 18 Bulgaria 81 889 83 239 89 130 72 213 72 845 74 301 75 637 69 776 53 421 70 904 Bulgaria ranked 18 th in the world export of Parts of footwear (including uppers, whether or not attached to soles other than outer soles); removable in-soles, heel cushions and similar articles, gaiters, leggings and similar articles and parts thereof with a share of 1,29%. Table 53. Dynamics of the export worldwide in the period 2001-2010 (%, 2001=100) Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 100 93 83 81 82 86 83 85 74 95 China 100 93 88 99 106 136 182 233 222 317 Italy 100 98 93 90 89 95 69 62 54 65 Romania 100 115 114 98 90 92 76 73 59 72 Hong Kong 100 87 71 71 69 72 64 59 50 69 Republic of Korea 100 89 74 71 74 77 69 67 52 61 Bulgaria 100 102 109 88 89 91 92 85 65 87 Data for the export dynamics show certain decline in the export of this product group from Bulgaria; a decrease (more significant than the registered in Bulgaria) is observed in four of the leading exporters worldwide while there is an increase only in the case of the leading exporting country China. 45

Table 54. Position of Bulgaria in the world export in the period 2001-2010 Year 2001 2002 2003 2004 2005 2006 2007 2008 Position in the world export 16 16 14 15 15 15 15 19 21 18 The registered decrease in the volume of the export of Bulgaria substantiates the poor positioning of Bulgaria at the end of the studied ten-year period. Table 55. Share of the export of Bulgaria in the export of the leading world exporter in 2010 (%) 2001 2002 2003 2004 2005 2006 2007 2008 Bulgaria 17.51% 19.23% 21.70% 15.59% 14.66% 11.69% 8.87% 6.40% 5.16% 4.78% The faster export volume growth rate of the studied product group, registered in China, substantiates the smaller share of Bulgarian export in that of the leading exporter worldwide at the end of the studied period. Other footwear Main exporters, export dynamics, and Bulgaria s ranking by this group of products according to ITC data are presented in the tables below. Table 56. Ranking of the exporters of Other footwear worldwide in the period 2001-2010 (thousand EUR) No. to 2010 Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 1 524 705 1 955 176 2 323 520 2 111 134 2 392 881 2 579 520 2 647 997 3 554 434 3 070 442 3 411 980 1 China 389 443 487 645 713 502 639 249 963 285 1 082 946 1 305 882 2 304 423 1 936 203 1 962 056 2 Italy 194 901 184 526 159 851 138 814 96 100 108 560 113 712 110 232 99 750 128 559 3 Dominican Republic 833 81 724 64 829 93 204 107 103 142 390 80 510 86 296 91 356 124 031 4 Vietnam 118 942 349 179 486 776 307 063 274 154 229 864 138 496 83 404 65 212 107 468 5 Poland 61 928 55 858 57 065 50 494 62 217 56 058 55 209 47 914 67 109 102 380 22 Bulgaria 31 654 17 377 25 265 30 292 27 180 30 978 16 385 12 060 12 385 19 097 Bulgaria ranked 22 nd in the world export of Other footwear with a share of 0,56%. Table 57. Dynamics of the export of Other footwear worldwide in the period 2001-2010 (%, 2001=100) Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 100 128 152 138 157 169 174 233 201 224 China 100 125 183 164 247 278 335 592 497 504 Italy 100 95 82 71 49 56 58 57 51 66 Dominican Republic 100 9 811 7 783 11 189 12 858 17 094 9 665 10 360 10 967 14 890 Vietnam 100 294 409 258 230 193 116 70 55 90 Poland 100 90 92 82 100 91 89 77 108 165 Bulgaria 100 55 80 96 86 98 52 38 39 60 Data for the export dynamics show a significant decrease in the export of this product group from Bulgaria during the studied period. A decline is observed in Italy and Vietnam, but with slower rates compared to the registered in Bulgaria. In the other three leading exporting countries a significant growth in the export volume is observed. 46

Table 58. Position of Bulgaria in the world export of Other footwear in the period 2001-2010 Year 2001 2002 2003 2004 2005 2006 2007 2008 Position in the world export 9 20 17 15 15 14 26 26 24 22 The commented above finding regarding the volume of the export of this product group from Bulgaria explains the poor positioning of the country at the end of the studied period for the ten-year period Bulgaria moves 13 places down. Table 59. Share of the export of Bulgaria in the export of the leading world exporter in 2010 (%) 2001 2002 2003 2004 2005 2006 2007 2008 Bulgaria 8.13% 3.56% 3.54% 4.74% 2.82% 2.86% 1.25% 0.52% 0.64% 0.97% The significant decrease in the volume of the export of this product group from Bulgaria, along with the registered by the leading exporter growth, explain the lower share of the export of Bulgaria in that of China at the end of the studied period. Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials Main exporters, export dynamics, and Bulgaria s ranking by this group of products according to ITC data are presented in the tables below. Table 60. Ranking of the exporters of Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials worldwide in the period 2001-2010 (thousand EUR) No. to 2010 Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 5 619 828 5 268 993 4 669 314 5 175 894 5 874 799 6 464 601 6 584 276 7 002 691 7 345 630 10 021 929 1 China 1 562 748 1 499 796 1 424 004 1 506 875 1 911 435 2 289 945 2 539 235 2 717 061 2 985 753 4 281 175 2 Vietnam 888 806 913 541 582 538 928 376 1 132 993 1 181 404 726 924 831 896 778 572 1 289 993 3 Belgium 677 201 645 746 517 327 501 951 548 078 514 110 455 339 501 398 557 556 608 019 4 Italy 270 900 277 382 292 731 341 279 343 481 377 205 424 305 430 088 372 410 475 980 5 Hong Kong 374 906 352 885 279 365 249 950 281 138 256 240 291 198 335 153 338 463 407 091 34 Bulgaria 8 915 10 064 11 543 8 509 8 727 10 185 9 494 9 995 9 235 13 135 Bulgaria ranked 17 th in the world export of Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials with a share of 0,13%. Table 61. Dynamics of the export of Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials worldwide in the period 2001-2010 (%, 2001=100) Exporters 2001 2002 2003 2004 2005 2006 2007 2008 Total 100 94 83 92 105 115 117 125 131 178 China 100 96 91 96 122 147 162 174 191 274 Vietnam 100 103 66 104 127 133 82 94 88 145 Belgium 100 95 76 74 81 76 67 74 82 90 Italy 100 102 108 126 127 139 157 159 137 176 Hong Kong 100 94 75 67 75 68 78 89 90 109 Bulgaria 100 113 129 95 98 114 106 112 104 147 47

Data for the export dynamics show significant growth of the export of this product group from Bulgaria, and the same trend is observed in four of the leading countries exporters. In China, as in Italy, the export volume growth is higher compared to that of Bulgaria. Table 62. Position of Bulgaria in the world export of Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials in the period 2001-2010 Year 2001 2002 2003 2004 2005 2006 2007 2008 Position in the world export 33 32 30 32 31 31 37 35 37 34 During the studied period the position of Bulgaria in the world export remains relatively constant, notwithstanding the registered increase in the export volume of the studied product group. Table 63. Share of the export of Bulgaria in the export of the leading world exporter in 2010 (%) 2001 2002 2003 2004 2005 2006 2007 2008 Bulgaria 0.57% 0.67% 0.81% 0.56% 0.46% 0.44% 0.37% 0.37% 0.31% 0.31% The share of the export of Bulgaria in the export of the leading country exporter China decreases during the studied ten-year period. This observation can be explained by the registered higher export volume growth rates in China. The above presented data on the analyzed product groups refer to all companies in the sector, and not only to the SMEs. The significant share (57% in 2010) of SMEs in the total export of the sector gives grounds to consider that small and medium enterprises are also represented in the export of the analyzed product groups. The results from the survey show that the main products exported by Bulgarian SMEs in 2010 are swimwear, underwear, outerwear, women's and men's clothing and shoes. Data of the production capacity of the companies, related to their potential to produce export goods and the attitude of their management to export are quite positive. 92,6% of the respondents declare to have enough production capacity. In 96,3% of the surveyed companies management teams have will to export their production. In other words, as far as capacity and management attitude of the companies are concerned, according to the interviewed experts, there are no obstacles for the realization of successful export. Not that successful seem the data concerning the skills and knowledge of employees in the field of export activity. The interviewed managers indicate that less than 1/3 of their employees have high knowledge and skills. Abilities of the personnel are concentrated in the middle of the assessment scale. The knowledge of foreign languages is extremely critical. In Table 64 are presented the estimations of the respondents on factors related to companies success in the export of goods. 48

Table 64. Respondents estimations of the degree of importance of key factors related to export success (in %) Key factors Estimation Very important Important Not important Low labour cost 51,9 44,4 3,7 High qualification of the personnel 70,4 29,6 0 High technology level 66,7 29,6 3,7 Own R&D base 44,4 37 18,5 Personnel, experienced in foreign trade 40,7 37 22,2 Logistic state support to export 55,6 18,5 25,9 The most important condition for successful export is the high qualification of the personnel. There is certain discrepancy in the experts estimations with their previous opinions for analogue factors. For example, while the lack of qualified work force in previous questions has not been assessed as serious obstacle for the sector export, here the personnel qualification has leading importance. Another critical factor for successful export is determined to be the high technology level. At last place in terms of importance among the studied factors is the personnel with experience in foreign trade, as assessed to be less important factor for the export success (only 40,7% of the respondents consider it to be very important for the successful export). It must be noted that the role of the state in supporting the export of the SMEs in previous questions has always been estimated as high priority, while here it has gathered only 55,6% of the answers. Possible explanation for this insignificant discrepancy is, for example, that the question here concerns only the logistic, but not the overall support of the state. More than 85% of the interviewed small and medium companies indicate that they manufacture finished products, designed for export, as in 82,6% of the cases there is high degree of processing, while in the rest of the cases it is equally divided between average and low. Slightly over 11% of the SMEs export raw materials with high or average degree of processing and the same (11,1%) semi-manufactured articles with high processing degree (The sum of percentages exceeds 100, as the respondents have given more than one answer). More than 40% of the respondents do not consider there are goods with higher share of value added in sector, contributing to the export growth. The answers of the questioned persons, considering that such goods exist are in the range of their own assortment. At the end, the following conclusions can be made on the situation of sector "Manufacture of wearing apparel, including leather apparel, tanning of leather" and of SMEs: In general for sector Manufacture of wearing apparel, including leather apparel, tanning of leather The product groups, manufactured and exported in sector Manufacture of wearing apparel, including leather apparel, tanning of leather are extremely numerous. Therefore the selection of product groups with export advantages and potential was done on the basis of several criteria, namely highest relative share in the export of the corresponding product group, increase during the studied period or large export volumes before the beginning of the global 49

economic crisis. The analysis includes also the product groups where there is relatively stable export during the studied period. These criteria were applied to the sector in general, as official statistical information for SMEs is not available. The application of the selected criteria to data of the International Trade Centre gives ground to determine the following 13 product groups, having export advantages and potential: 1. Articles of apparel and clothing accessories, knitted or crocheted Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, knitted or crocheted Women s or girls blouses, shirts and shirt-blouses, knitted or crocheted T-shirts, singlets and other vests, knitted or crocheted Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or crocheted. 2. Articles of apparel and clothing accessories, not knitted or crocheted Women s or girls overcoats, capes cloaks and anoraks other than those of heading 6204 Men s or boys suits Women's or girls' suits 3 Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; travelling bags, insulated food bags Articles of apparel and clothing accessories, of leather or of composition leather 4. Footwear, gaiters and the like; parts of such articles Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials Other footwear Parts of footwear (including uppers, whether or not attached to soles other than outer soles); removable in-soles, heel cushions and similar articles, gaiters, leggings and similar articles and parts thereof. The main findings of the analysis of the ranking of the country in world exports, the export dynamics, and the position of Bulgaria in terms of export of the selected product groups in the sector are summarized in the table below: 50

Product groups Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear) Men s or boys suits, ensembles, jackets, blazers, trousers, bib and brace overalls, breeches and shorts (other than swimwear) Women s or girls overcoats, car-coats, capes cloaks, anoraks (including ski-jackets), windcheaters, wind-jackets and similar articles other than those of heading 6204 Women s or girls blouses, shirts and shirt-blouses Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or crocheted T-shirts, singlets and other vests, knitted or crocheted Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear), knitted or crocheted Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; travelling bags, insulated food bags Articles of apparel and clothing accessories, of leather or of composition leather Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather; Parts of footwear (including uppers, whether or not attached to soles other than outer soles); removable in-soles, heel cushions and similar articles, gaiters, leggings and similar Rank in the world export in 2001 Rank in the world export in 2010 Share in the world export in 2010 Share in the export of the leading world exporter in 2010, as of 2001 Share in the export of the leading world exporter in 2010 Export Growth 2010/2001 27 25 0.57% 4.21% 1.81% -11% 32 29 0.67% 3.49% 2.61% 14% 25 17 0.74% 2.97% 1.52% 86% 14 18 2.19% 83.28% 21.24% 14% 37 34 0.28% 1.50% 0.74% 18% 30 39 0.33% 3.76% 1.55% -9% 32 28 0.36% 1.48% 0.67% 169% 32 32 0.10% 0.58% 0.22% 22% 48 48 0.06% 0.08% 0.20% 29% 33 36 0.21% 1.05% 0.95% 47% 16 18 1.29% 17.51% 4.78% -13% 51

Product groups articles and parts thereof Rank in the world export in 2001 Rank in the world export in 2010 Share in the world export in 2010 Share in the export of the leading world exporter in 2010, as of 2001 Share in the export of the leading world exporter in 2010 Export Growth 2010/2001 Other footwear 9 22 0.56% 8.13% 0.97% -40% Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials. 33 34 0.13% 0.57% 0.31% 47% Source: ITC The data shows that the product groups Women s or girls overcoats, car-coats, capes cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles other than those of heading 6204, Women s or girls blouses, shirts and shirt-blouses, knitted or crocheted and Parts of footwear (including uppers, whether or not attached to soles other than outer soles); removable in-soles, heel cushions and similar articles, gaiters, leggings and similar articles and parts thereof have the best ranking among the world exporters in 2010, as the last two groups are holding leading positions in the share of Bulgaria in the world export (respectively 2,19% and 1,29%). Among the most successful product groups on international markets are goods both with high and low value added. The product groups women's or girls' suits and men s or boys ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear) are among the product groups with the largest export volume. The huge demand and the respective supply of such widely used goods determine also the more unfavourable ranking among the analysed products, despite their higher value added. Changes in the export volume of the analysed products within the studied ten-year period are not one-way. The most significant growth of the export of Bulgaria in 2010 compared to 2001 is registered for the product groups Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear), knitted or crocheted and Women s or girls overcoats, car-coats, capes cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles other than those of heading 6204, while in the case of the group Other footwear is observed a significant fall in the export volume (respectively loss of lots of positions in the ranking of the exporters worldwide). Both in the beginning and at the end of the studied ten-year period, product group Articles of apparel and clothing accessories, of leather or of composition leather has the smallest share in the world export (registering the rearmost position of Bulgaria among the world exporters). It should be concluded, therefore, that products in this product group do not answer the demand and preferences of consumers in different partner-countries in the foreign trade of Bulgaria. 52

For SMEs in sector Manufacture of wearing apparel, including leather apparel, tanning of leather The above presented data on the studied product groups refer to all companies in the sector, and not only to the SMEs. The lack of sufficient statistical information does not allow identifying the share of the export of SMEs in the export of the analysed product groups. The results of the survey carried out in the period 31 October 28 November 2011 give certain orientation. Companies in the sample declare that swimwear, underwear, overcoats, women s and men s ready-to-wear clothing, footwear are the most often exported products in 2010. Approximately 93% of the interviewed managers of SMEs consider that the companies have sufficient production capacity for the development of export goods. Even part of the companies, which do not export, but are willing to, declare the presence of such capacity. In 96% of the studied companies the management teams have will to export the manufactured production. Due to the profile of the surveyed companies, they are exporting finished products with more specific qualities (according the offered classifications raw materials, semi-manufactured goods and finished product) with higher level of processing and respectively high value added. It could be assumed that this is the niche, where the SMEs would have more serious export success in. The above conclusion is confirmed by the fact that the management staff of the interviewed SMEs consider as key (most important) factors for the export success the high technology level and staff qualification of small and medium enterprises, which are the main precondition for the creation of products with high added value. 4. COMPETITIVENESS OF THE EXPORT OF GOODS ON FOREIGN MARKETS Traditionally, labor productivity, measured as the ratio of value added and number of employees, is the indicator that measures the competitiveness of enterprises. The purpose of this analysis, however, is to assess the prospects of markets in and outside the EU for the export of Bulgarian goods, and the potential competitors (countries) in the export of particular goods. To this end, certain key export markets of Bulgaria for each product group are determined that are identified in the previous chapter of the Export strategy as having export potential and advantages, respectively five EU countries and five non-eu countries. The market share of our country is calculated for each of these ten countries. Data on Bulgarian exports by country are provided from the export statistics of the ITC, and market shares are calculated with regard to exports of the examined countries. In some cases, these figures differ, mainly because of different commercial systems (e.g., inclusion or exclusion of free zones), different ways of measuring quantity (e.g., gross or net), time lags in reporting periods, re-export, etc. Available data allow estimating important and promising markets with regard to the sector Manufacture of wearing apparel, including leather apparel, tanning of leather in total. The substantial presence of SMEs in the export of the sector suggests that they export on the same 53

markets, too. Moreover, if a particular market is a priority to large enterprises it makes an important export destination for SMEs as well. Information for the required standards for entering foreign markets is available on: www.standardsmap.org Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear) The top 10 importers worldwide are forming approximately 71% of the total import of Women's or girls' suits, ensembles, jackets,, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear). Table 65. Main 10 importers in 2010 Importers Import, 2010 Structure, % Total 36302288 100.00 USA 8309530 22.89 Germany 2997313 8.26 UK 2686221 7.40 Japan 2626637 7.24 France 2312905 6.37 Hong Kong 1958356 5.39 Spain 1774329 4.89 Italy 1288289 3.55 The Netherlands 902882 2.49 Canada 792160 2.18 In 2010 Bulgaria is exporting in all given countries, but its main markets are: in the EU Germany, France, Italy, UK and Greece outside the EU Canada, Serbia, Turkey, Albania and Croatia. In the next table are given the top five competitors and their share on the main markets of Bulgaria in the EU in 2009-2010 (the ranking of the countries is valid to 2010). Table 66. Main competitors on EU markets, where Bulgarian export is the highest, 2009-2010 Germany BG export in 2010-74277.39 thousand EUR France BG export in 2010-39621.59 thousand EUR 1 China 34.25% 34.65% 2 Turkey 11.52% 12.43% 3 Bangladesh 5.75% 5.58% 4 Italy 5.10% 4.98% 5 India 4.06% 4.29% 1 China 33.81% 34.50% 2 Belgium 3.43% 3.06% 3 Italy 10.39% 9.38% 4 Spain 1.79% 1.66% 5 Germany 3.40% 3.16% 9 Bulgaria 2.64% 2.55% 13 Bulgaria 1.68% 2.04% 54

Italy BG export in 2010-38770.61 thousand EUR 1 China 24.22% 25.54% 2 Tunisia 14.90% 13.36% 3 France 9.80% 9.11% 4 Romania 7.36% 7.31% 5 Turkey 6.35% 6.29% UK BG export in 2010-10607.08 thousand EUR 1 China 36.53% 35.41% 2 India 8.54% 9.72% 3 Turkey 9.58% 9.58% 4 Bangladesh 4.33% 4.61% 5 Italy 4.43% 4.58% 9 Bulgaria 2.72% 2.98% 23 Bulgaria 0.60% 0.69% Greece BG export in 2010-10279.49 thousand EUR 1 Italy 27.00% 26.92% 2 Spain 17.76% 20.68% 3 China 7.09% 8.73% 4 UK 6.52% 6.97% 5 France 7.57% 6.14% 6 Bulgaria 4.23% 4.92% The analysis of the data shows that: Bulgaria is not among the five suppliers in none of the studied five markets in the EU. The main market of Bulgaria in the EU is Germany. Bulgaria has the largest market share (and respectively is holding front position among the main suppliers 6 th ) on the Greek market, although the volume of the export of Bulgaria is significantly smaller than that of Germany. Main competitors of Bulgaria on the five analysed markets in the EU are China, Italy and Spain. The market share of the Bulgarian export is increasing in 2010 compared to 2009 on 4 of the studied five markets within the EU, while on its main marker Germany, Bulgaria records a drop. Data for the trade balance, import and export on the leading market (Germany) of the analyzed product groups, are shown in the next table: Table 67. Trade balance, import and export on the leading market of the product group, in thousand EUR Germany 2006 2007 2008 Trade balance -1381646.91-1215002.36-1029859.51-1111085.36-1255632.27 Import 3456582.91 3310186.36 3055399.51 2880045.36 2997313.27 Export 2074936 2095184 2025540 1768960 1741681 55

The significant deficit of the trade balance of Germany shows dependence on import, being a factor, granting additional importance of the German market for the Bulgarian manufacturers. The main three products by export volume in value expression in this product group, exported to the leading market Germany, are shown in the next table. Table 68. Top 3 products in product group Women's or girls' suits, exported to the largest market (Germany) Top 3 products, exported to the relevant market Women's or girls' trousers, breeches, of cotton (not of cut corduroy, of denim or knitted or crocheted and excl. industrial and occupational clothing, bib and brace overalls, briefs and tracksuit bottoms) Women's or girls' trousers, breeches, of artificial fibres (not of cut corduroy, of denim or knitted or crocheted and excl. industrial and occupational clothing, bib and brace overalls, briefs and tracksuit bottoms) Women's or girls' jackets and blazers of synthetic fibres (excl. knitted or crocheted, wind-jackets and similar articles) Import from Bulgaria (thous. EUR) Share of the Bulgarian export of the product in the whole product group Total import of Germany (thous. EUR) Share of the Bulgarian export in the total import of Germany 20419.75 23947.82 27.7% 32.2% 641496.26 605337.55 3.2% 4.0% 11722.1 12452.11 15.9% 16.7% 260953.78 252277.45 4.5% 4.9% 7434.23 8028.54 10.1% 10.8% 164423.53 174621.76 4.5% 4.6% Given data show general trend of increase of the volume of the Bulgarian import to Germany. Notwithstanding there is an increase of the volume of the Bulgarian import of the three top products to Germany, it remains relatively low and does not exceed 5%. The top five competitors and their share on the main markets of Bulgaria out of the EU in 2009-2010 (the ranking of the countries is valid to 2010) are given in the table below. Table 69. Main competitors on non-eu markets, where Bulgarian export is the highest, 2009-2010 Canada BG export in 2010-570.08 thousand EUR 1 China 58.02% 58.13% 2 Bangladesh 7.11% 7.65% 3 USA 6.88% 6.75% 4 Cambodia 3.24% 4.20% 5 India 3.82% 3.58% 22 Bulgaria 0.61% 0.28% Serbia BG export in 2010-564.81 thousand EUR 1 China 37.70% 41.23% 2 Italy 12.87% 9.65% 3 Turkey 6.89% 7.64% 4 Morocco 4.05% 5.22% 5 India 4.66% 4.52% 12 Bulgaria 2.06% 2.02% 56

Turkey BG export in 2010-514.35 thousand EUR 1 Bangladesh 14.37% 20.55% 2 China 18.22% 21.14% 3 India 10.58% 9.51% 4 Italy 7.36% 5.44% 5 Sri Lanka 7.26% 9.78% 17 Bulgaria 0.47% 0.46% Albania BG export in 2010-265.84 thousand EUR 1 Italy 58.56% 49.56% 2 China 14.17% 16.40% 3 Greece 18.22% 15.31% 4 Turkey 3.53% 5.36% 5 USA 1.83% 5.21% 22 Bulgaria 0.01% 0.09% Croatia BG export in 2010-216.13 thousand EUR 1 China 38.05% 39.84% 2 Italy 11.90% 9.60% 3 Turkey 7.16% 8.12% 4 Morocco 2.97% 4.22% 5 Tunisia 4.02% 4.22% 9 Bulgaria 1.84% 1.98% The volume of the Bulgarian export on the markets out of the EU is relatively smaller than that on the EU markets. Bulgaria is not among the five suppliers in none of the studied five markets out of the EU. The main market of Bulgaria out of the EU is Canada, and the main competitors are China, Italy and Turkey. The market share of the Bulgarian export is decreasing in all studied markets, except for Albania and Croatia. Men s or boys suits, ensembles, jackets, blazers, trousers, bib and brace overalls, breeches and shorts (other than swimwear) The top 10 importers worldwide are forming approximately 69% of the total import of Men s or boys suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear). 57

Table 70. Main 10 importers in 2010 Importers Import, 2010 Structure, % Total 26563613 100.00 USA 5880272 22.14 Germany 3040313 11.45 Japan 1682711 6.33 UK 1528064 5.75 France 1527062 5.75 Italy 1352271 5.09 Spain 1018650 3.83 Hong Kong 901443 3.39 The Netherlands 767603 2.89 Belgium 614307 2.31 In 2010 Bulgaria is exporting to all given states, but its main markets are: in the EU Germany, Italy, Greece, France and Spain outside the EU Turkey, Switzerland, Serbia, Macedonia and Georgia In the next table the top five competitors and their share on the main markets of Bulgaria in the EU in 2009-2010 are given (the ranking of the countries is valid to 2010) Table 71. Main competitors on the EU markets, where Bulgarian export is the highest, 2009-2010 Germany BG export in 2010-71633.34 thousand EUR Italy BG export in 2010-33325.87 thousand EUR 1 China 24.02% 26.05% 2 Turkey 9.83% 10.90% 3 Bangladesh 10.97% 10.26% 4 Tunisia 6.19% 5.74% 5 Romania 5.76% 5.41% 1 China 21.02% 20.47% 2 Tunisia 14.23% 15.22% 3 Romania 10.51% 10.31% 4 Bangladesh 4.37% 5.09% 5 Germany 3.63% 4.34% 9 Bulgaria 3.31% 2.97% Greece BG export in 2010-27553.54 thousand EUR 1 Italy 22.11% 21.24% 2 China 14.76% 15.65% 3 Spain 8.38% 9.60% 4 Germany 8.74% 8.39% 5 Bulgaria 5.41% 8.02% 12 Bulgaria 2.57% 2.18% France BG export in 2010-10693.68 thousand EUR 1 China 24.05% 26.59% 2 Italy 11.53% 10.58% 3 Bangladesh 6.81% 8.22% 4 Tunisia 9.45% 7.59% 5 Morocco 6.72% 7.16% 15 Bulgaria 0.92% 1.09% 58

Spain BG export in 2010-5312.2 thousand EUR 1 China 22.86% 24.39% 2 Turkey 15.06% 14.58% 3 Morocco 11.42% 11.00% 4 Bangladesh 6.62% 6.82% 5 Italy 7.27% 5.68% 24 Bulgaria 0.81% 0.63% The analysis of the data shows that: Bulgaria is among the main suppliers of Men s or boys suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear) on the Greek market (with market share of over 8%). However, the main market of Bulgaria (by export value) is Germany. Main competitors of Bulgaria within the EU are China, Italy, Tunisia and Turkey. The market share of the Bulgaria is increasing in 2010 compared to 2009 only on the Greek and French markets. However the most significant growth is observed on the Greek market (over 2.5 p.p.). Data for the trade balance, import and export on the leading market for the analysed product groups Germany, are shown in the next table: Table 72. Trade balance, import and export of the product group on the leading market, in thousand EUR Germany 2006 2007 2008 Trade balance -1175647.16-1061650.55-1059088.47-1053900.53-1259488.16 Import 2834405.16 2829991.55 2983196.47 2746603.53 3040313.16 Export 1658758 1768341 1924108 1692703 1780825 The growing at the end of the studied period deficit of the trade balance of Germany shows significant dependence on the import of the analyzed product group, a factor which gives additional importance of the German market for Bulgarian manufacturers. The main three export products in this product group by value, exported to the leading market Germany, are shown in the next table. 59

Table 73. Top 3 products in product group Men s and boys suits, exported to the largest market (Germany) Top 3 products, exported to the relevant market Men's or boys' suits of textile materials, knitted or crocheted, of wool or fine animal hair (excl. tracksuits, ski suits and swimwear) Men's or boys' jackets and blazers of wool or fine animal hair (excl. knitted or crocheted, and wind-jackets and similar articles) Men's or boys' trousers and breeches of wool or fine animal hair (excl. knitted or crocheted, bib and brace overalls and underpants) Import from Bulgaria (thous. EUR) Share of the Bulgarian export of the product in the whole product group Total import of Germany (thous. EUR) Share of the Bulgarian export in the total import of Germany 36226.81 38118.45 46.2% 43.1% 214423.88 211092.47 16.9% 18.1% 15589.08 19247.87 19.9% 21.8% 125025.27 150979.69 12.5% 12.7% 6589.56 8505.24 8.4% 9.6% 62144.08 67898.09 10.6% 12.5% The export value of all three analyzed products is growing in 2010 compared to 2009. Bulgaria is among the main suppliers of Men's or boys' suits of textile materials of wool or fine animal hair on the German market in 2010 with approximately 20% share in the total import of Germany. The top five competitors and their share on the main markets of Bulgaria out of the EU in 2009-2010 (the ranking of the countries is valid to 2010) are given in the table below. Table 74. Main competitors on non-eu markets, where Bulgarian export is the highest, 2009-2010 Turkey BG export in 2010-13064.36 thousand EUR 1 Bangladesh 22.97% 29.86% 2 China 9.24% 12.38% 3 Sri Lanka 6.77% 10.03% 4 Pakistan 12.31% 10.01% 5 Italy 9.30% 7.31% 8 Bulgaria 2.54% 2.69% Switzerland BG export in 2010-3413.69 thousand EUR 1 Germany 35.27% 37.60% 2 Italy 26.38% 22.91% 3 China 7.03% 7.75% 4 Spain 4.69% 4.05% 5 Bangladesh 3.69% 3.81% 16 Bulgaria 0.92% 0.70% 60

Serbia BG export in 2010-339.64 thousand EUR 1 China 36.64% 35.70% 2 Turkey 8.40% 10.30% 3 Italy 7.88% 6.36% 4 Tunisia 5.60% 5.60% 5 Bangladesh 2.80% 3.65% 12 Bulgaria 1.85% 2.13% Macedonia BG export in 2010-248.52 thousand EUR 1 China 29.18% no data 2 Turkey 20.99% no data 3 Greece 18.68% 4 Switzerland 3.78% 5 Italy 3.40% no data no data no data 17 Bulgaria 0.78% no data Georgia BG export in 2010-142.33 thousand EUR 1 Turkey 57.25% 56.49% 2 China 9.45% 19.05% 3 Azerbaijan 4.45% 3.81% 4 France 2.99% 3.67% 5 Germany 7.05% 3.63% The analysis of the data shows that: 8 Bulgaria 0.07% 1.09% The volume of Bulgarian export on non-eu markets is relatively smaller than that on the EU markets. Bulgaria is not among the top five suppliers in none of the studied five markets out of the EU. The main competitors of Bulgaria are Turkey, China and Italy. The main market of the country outside the EU is Turkey. On the Turkish market Bulgaria is realizing the largest export volume, occupies the front position 8 th (Bulgaria is ranked 8 th among the suppliers on the Georgian market, but the export volume export is significantly smaller) and has the largest market share (over 2.5%). The market share of the Bulgarian export is increasing on all studied markets, except in Switzerland. The available data for the Macedonian market do not allow evaluating the development trend of the import for the studied product group. 61

Women s or girls overcoats, car-coats, capes cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles other than those of heading 6204 The top 10 importers worldwide are forming approximately 71% of the total import of Women s or girls overcoats, car-coats, capes cloaks, anoraks, wind-jackets and similar articles. Table 75. Main 10 importers in 2010 Importers Import, 2010 Structure, % Total 9175532 100 USA 1393519 15.19 Germany 1082810 11.80 Japan 945634 10.31 Italy 657343 7.16 France 570978 6.22 UK 551978 6.02 Spain 423461 4.62 Russia 404723 4.41 Republic of Korea 272997 2.98 The Netherlands 251783 2.74 In 2010 Bulgaria exports in all given countries, except Republic of Korea and Japan, but its main markets are: in the EU Italy, Germany, France, UK and Austria outside the EU Serbia, Switzerland, Turkey, Hong Kong and Georgia. The top five competitors and their share on the main markets of Bulgaria in the EU in 2009-2010 are given in the table below (the ranking of the countries is valid to 2010). Table 76. Main competitors on the EU markets, where Bulgarian export is the highest, 2009-2010 Italy BG export in 2010-28726.08 thousand EUR 1 China 53.50% 55.80% 2 Romania 12.48% 11.33% 3 Bulgaria 4.28% 4.41% 4 France 4.78% 3.98% 5 UK 3.49% 3.63% Germany BG export in 2010-14868.73 thousand EUR 1 China 64.48% 64.63% 2 Vietnam 4.72% 4.84% 3 Italy 4.33% 4.28% 4 UK 3.29% 3.37% 5 Indonesia 2.45% 2.51% 9 Bulgaria 1.11% 1.33% 62

France BG export in 2010-6636.86 thousand EUR 1 China 54.39% 56.00% 2 Italy 12.84% 11.30% 3 Morocco 3.47% 3.35% 4 Vietnam 2.46% 2.71% 5 Romania 2.14% 2.40% UK BG export in 2010-6294.96 thousand EUR 1 China 51.06% 51.48% 2 Italy 8.46% 9.19% 3 Germany 7.07% 6.03% 4 Vietnam 5.48% 4.98% 5 Turkey 2.59% 3.25% 10 Bulgaria 1.50% 1.49% 11 Bulgaria 1.52% 1.15% Austria BG export in 2010-2377.46 thousand EUR 1 China 40.72% 39.14% 2 Germany 18.94% 19.27% 3 Italy 8.95% 9.75% 4 Bulgaria 3.10% 4.40% 5 Slovakia 3.47% 3.08% The analysis of the data shows that: Bulgaria is among the main five suppliers of Women's or girls' anoraks, jackets and similar articles on the markets of Italy and Austria. The main market of Bulgaria in the EU is Italy; there Bulgaria is holding the headmost position among the suppliers 3rd and is representing the largest market share in relation to the rest four main for the country markets in the EU. The main competitors of Bulgaria regarding the studied product group are China and Italy. The market share of the Bulgarian export is increasing in 2010 compared to 2009 on 3 of the studied markets, while it is decreasing in the UK and remaining relatively stable in France. Data for the trade balance, import and export on the leading market for the analysed product groups Italy, are shown in the next table: Table 77. Trade balance, import and export of the product group on the leading market, in thousand EUR Italy 2006 2007 2008 Trade balance -78661.64 29475.56 33952.64-38508.03-28859.47 Import 568888.64 566182.44 597790.36 579350.03 657343.47 Export 490227 595658 631743 540842 628484 63

The growing deficit of the trade balance of Italy, together with the increase of the share of Bulgarian import on the market of Italy are factors, determining the importance and perspective of the studied market for the Bulgarian manufacturers. Table 78. Top 3 products of product group Women s and girls overcoats, car-coats, capes cloaks, anoraks other than those of heading 6204, exported to the largest market (Italy) Top 3 products, exported to the relevant market Women's or girls' anoraks, jackets and similar articles, of synthetic fibres (not knitted or crocheted and excl. suits, ensembles, jacket, blazers, trousers and ski ensembles) Women's or girls' overcoats, raincoats, car coats, capes, cloaks and similar articles, of wool or fine animal hair (excl. knitted or crocheted) Women's or girls' overcoats, raincoats, car coats, capes, cloaks and similar articles, of cotton, of a weight per garment of <= 1 kg (excl. knitted or crocheted) Import from Bulgaria (thous. EUR) Share of the Bulgarian export of the product in the whole product group Total import of Italy (thous. EUR) Share of the Bulgarian export in the total import of Italy 10611.42 14022.28 42.8% 48.3% 271608.93 300895.28 3.9% 4.7% 6130.66 7239.32 24.7% 24.9% 75180.51 76214.3 8.2% 9.5% 3429.58 3045.44 13.8% 10.5% 76573.71 108395.5 4.5% 2.8% The import volume of Bulgaria for the two top products of the analyzed product group is increasing in 2010 compared to 2009, while in the case of the third in importance product group - Women's or girls' overcoats, raincoats, car coats, capes, cloaks and similar articles, of cotton, of a weight per garment of <= 1 kg (excl. knitted or crocheted) a significant drop in the export value is observed and respectively in the share of the Bulgarian export for the studied period in the total import of the largest market of Bulgaria Italy. The top five competitors and their share on the main markets of Bulgaria out of the EU in 2009-2010 (the ranking of the countries is valid to 2010) are given in the table below. Table 79. Main competitors on non-eu markets, where Bulgarian export is the highest, 2009-2010 Serbia BG export in 2010-94.89 thousand EUR 1 China 58.05% 59.64% 2 Italy 9.86% 6.90% 3 Vietnam 5.38% 5.77% 4 Indonesia 2.96% 4.67% 5 Morocco 3.62% 3.95% 11 Bulgaria 1.26% 1.04% Switzerland BG export in 2010-76.81 thousand EUR 1 Germany 33.98% 36.05% 2 Italy 24.17% 21.86% 3 China 15.93% 14.80% 4 France 7.78% 7.96% 5 Spain 2.52% 3.24% 44 Bulgaria 0.01% 0.01% 64

Turkey BG export in 2010-41.42 thousand EUR 1 China 60.31% 68.56% 2 Bangladesh 7.68% 7.39% 3 Vietnam 4.68% 5.20% 4 Italy 4.25% 3.41% 5 Myanmar 2.79% 2.95% 15 Bulgaria 0.59% 0.32% Hong Kong BG export in 2010-39.91 thousand EUR 1 China 77.85% 69.31% 2 Italy 8.46% 13.22% 3 Japan 1.84% 2.80% 4 France 1.61% 2.61% 5 UK 1.67% 2.12% 36 Bulgaria 0.00% 0.01% Georgia BG export in 2010-33.89 thousand EUR 1 Turkey 47.44% 42.28% 2 China 11.29% 22.15% 3 Italy 6.12% 6.62% 4 France 5.98% 6.01% 5 Azerbaijan 4.92% 5.50% 12 Bulgaria 2.22% 0.97% The analysis of the data shows that the Bulgarian export of Women's or girls' Overcoats, carcoats, capes cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles to non-eu countries is extremely small in value, determining the small market shares of Bulgaria on the studied markets. Women s or girls blouses, shirts and shirt-blouses, knitted or crocheted The top 10 importers worldwide are forming approximately 75% of the total import of Women s or girls overcoats, car-coats, capes cloaks, anoraks, knitted or crocheted. Table 80. Main 10 importers in 2010 Importers Import, 2010 Structure, % Total 4674849 100.00 Japan 799839 17.11 USA 725114 15.51 Germany 451886 9.67 Hong Kong 281457 6.02 France 246198 5.27 UK 242268 5.18 Spain 142956 3.06 Italy 127370 2.72 Greece 124691 2.67 Denmark 100145 2.14 65

In 2010 Bulgaria is exporting in all given countries, but its main markets are: in the EU Greece, Germany, Italy, Spain and UK outside the EU USA, Switzerland, Norway, Hong Kong and Canada. The top five competitors and their share on the main markets of Bulgaria in the EU in 2009-2010 are given in the following table (the ranking of the countries is valid to 2010) Table 81. Main competitors on the EU markets, where Bulgarian export is the highest, 2009-2010 Greece BG export in 2010-54723.02 thousand EUR 1 Bulgaria 35.98% 39.21% 2 Macedonia 23.24% 19.22% 3 Italy 9.58% 8.34% 4 France 5.80% 7.54% 5 UK 2.77% 3.76% Germany BG export in 2010-14730.17 thousand EUR 1 Turkey 35.04% 35.35% 2 China 18.27% 17.85% 3 Bangladesh 10.83% 9.70% 4 India 6.85% 7.53% 5 Greece 3.47% 2.83% 15 Bulgaria 1.10% 1.02% Italy BG export in 2010-7014.9 thousand EUR 1 China 18.41% 20.96% 2 France 13.56% 10.63% 3 Turkey 8.84% 8.29% 4 Bangladesh 7.27% 7.08% 5 India 5.82% 6.54% 6 Bulgaria 3.87% 5.53% Spain BG export in 2010-4647.99 thousand EUR 1 Portugal 19.99% 16.59% 2 Turkey 15.23% 14.29% 3 China 13.15% 12.37% 4 India 12.35% 10.43% 5 Bangladesh 4.50% 10.08% 43 Bulgaria 0.34% 0.04% UK BG export in 2010-4562.89 thousand EUR 1 Turkey 17.15% 16.90% 2 China 17.23% 16.05% 3 India 12.27% 9.95% 4 Moldova 6.04% 6.86% 5 Morocco 6.08% 5.03% The analysis of the data shows that: 42 Bulgaria 0.09% 0.06% Bulgaria is the leading supplier of Women's or girls blouses, shirts and shirt-blouses, knitted or crocheted on the Greek market. A significant increase of the market share of Bulgaria is observed in it in 2010 compared to 2009 (over 3% pp). 66

A significant increase of the country s market share, in combination with approaching to the fifth main supplier, is observed on the Italian market, where Bulgaria holds 6 th place. Main competitors of Bulgaria in the EU are Turkey, China and India. The market share of Bulgaria on the markets of Germany, Spain and UK is decreasing in 2010 compared to 2009. Moreover, Bulgaria holds significantly rear positions among the main suppliers in comparison with the two markets above. Data for the trade balance, import and export on the leading market for the analysed product groups Germany, are shown in the next table: Table 82. Trade balance, import and export of the product group on the leading market, in thousand EUR Greece 2006 2007 2008 Trade balance 343340.72 175251.08 66354.13 47574.91 35846.69 Import 51606.28 167166.92 176962.87 143192.09 124691.31 Export 394947 342418 243317 190767 160538 Although the Greek market is not characterised by high dependence on import of the studied product group, Bulgaria is the main importer there, indicating that the efforts of the Bulgarian manufacturers should be focused on strengthening the strong market positions of Bulgaria. The main three products by export value in product group Women's or girls blouses, shirts and shirt-blouses, knitted or crocheted, exported to the leading market Greece, are given in the next table. Table 83. Top 3 products of product group Women's or girls blouses, shirts and shirtblouses, knitted or crocheted, exported to the largest market (Greece) Top 3 products, exported to the relevant market Women's or girls blouses, shirts and shirt-blouses, of cotton, knitted or crocheted (excl. singlets and jackets) Women's or girls blouses, shirts and shirt-blouses, of synthetic or artificial fibres, knitted or crocheted (excl. singlets and jackets) Women's or girls blouses, shirts and shirt-blouses, of cotton, knitted or crocheted (excl. excl. of wool, fine animal hair, cotton or manmade fibres singlets and jackets) Import from Bulgaria (thous. EUR) Share of the Bulgarian export of the product in the whole product group Total import of Greece (thous. EUR) Share of the Bulgarian export in the total import of Greece 23998.48 25624.16 46.5% 52.4% 77504.42 72320.9 31.0% 35.4% 27073.13 23175.16 52.5% 47.4% 58826.35 47252.51 46.0% 49.0% 509.1 125.76 1.0% 0.3% 3779.5 3584.64 13.5% 3.5% 67

There is certain increase in the export to Greece of the first product by importance in the analyzed product group, while the export of the following two products registers a drop. Despite the decrease in the volume of Bulgarian import of Women's or girls blouses, shirts and shirt-blouses, of synthetic or artificial fibres, knitted or crocheted (excl. singlets and jackets) on the Greek market in 2010 compared to 2009, Bulgaria remains among the main suppliers of this product with approximately 50% market share. The top five competitors and their share on the main markets of Bulgaria out of the EU in 2009-2010 are given in the table below (the ranking of the countries is valid to 2010). Table 84. Main competitors on non-eu markets, where Bulgarian export is the highest, 2009-2010 USA BG export in 2010-914.99 thousand EUR 1 China 20.26% 24.55% 2 Vietnam 19.24% 18.19% 3 Indonesia 13.72% 13.98% 4 Cambodia 7.15% 9.03% 5 Peru 3.73% 3.97% 46 Bulgaria 0.05% 0.03% Switzerland BG export in 2010-576.1 thousand EUR 1 Germany 44.86% 43.02% 2 Italy 9.38% 9.97% 3 France 7.65% 7.13% 4 Turkey 5.99% 6.71% 5 China 7.09% 5.91% 25 Bulgaria 0.36% 0.14% Norway BG export in 2010-282.4 thousand EUR 1 Turkey 31.22% 29.65% 2 China 21.19% 25.72% 3 Lithuania 5.21% 6.38% 4 India 7.08% 5.88% 5 Denmark 8.16% 4.85% 13 Bulgaria 1.91% 1.43% Hong Kong BG export in 2010-175.47 thousand EUR 1 China 90.42% 89.07% 2 Italy 2.78% 3.37% 3 France 1.44% 1.22% 4 Japan 0.91% 1.18% 5 UK 0.63% 0.70% 26 Bulgaria 0.02% 0.02% Canada BG export in 2010-168.69 thousand EUR 1 China 46.79% 44.77% 2 USA 9.10% 11.69% 3 Cambodia 8.05% 8.98% 4 Vietnam 6.52% 7.41% 5 Indonesia 4.18% 5.08% 29 Bulgaria 0.46% 0.18% The analysis of the data shows that: 68

The volume of the Bulgarian export on the markets out of the EU is relatively smaller than that on the EU markets. Bulgaria is not among the top five suppliers in none of the studied five markets out of the EU, as the market share of the country is exceeding 1% only on the Norwegian market. Main competitors of Bulgaria on the markets outside the EU are Turkey, China and Italy. Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or crocheted The top 10 importers worldwide are forming approximately 78% of the total import of Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or crocheted, speaking for low level of concentration on the studied market. Table 85. Main 10 importers in 2010 Importers Import, 2010 Structure, % Total 36172188 100.00 USA 10468979 28.94 Germany 3208778 8.87 Japan 3078676 8.51 Hong Kong 2747147 7.59 France 2208173 6.10 UK 2197659 6.08 Italy 1568399 4.34 Spain 1207474 3.34 Canada 826360 2.28 The Netherlands 770712 2.13 In 2010 Bulgaria exports in all given countries, as its main markets are: in the EU Italy, Germany, Spain, France and Austria outside the EU Switzerland, USA, Canada, Serbia and Republic of Korea The top five competitors and their share on the main markets of Bulgaria in the EU in 2009-2010 are given in the following table (the ranking of the countries is valid to 2010). 69

Table 86. Main competitors on the EU markets, where Bulgarian export is the highest, 2009-2010 Italy BG export in 2010-31327.96 thousand EUR Germany BG export in 2010-26001.46 thousand EUR 1 China 34.39% 37.80% 2 Tunisia 9.28% 8.15% 3 Romania 7.28% 7.19% 4 Bangladesh 6.22% 6.98% 5 France 6.32% 5.54% 1 China 39.59% 40.62% 2 Bangladesh 14.07% 14.94% 3 Turkey 10.60% 10.84% 4 Italy 5.68% 4.74% 5 Cambodia 3.68% 3.81% 12 Bulgaria 2.00% 1.84% Spain BG export in 2010-12672.01 thousand EUR 1 China 35.63% 36.80% 2 Bangladesh 13.31% 13.95% 3 Turkey 5.80% 7.62% 4 Cambodia 7.08% 5.73% 5 Italy 7.54% 5.71% 16 Bulgaria 0.84% 0.89% France BG export in 2010-7039.75 thousand EUR 1 China 37.05% 40.77% 2 Bangladesh 12.26% 13.21% 3 Italy 11.17% 10.14% 4 Turkey 4.89% 5.36% 5 Germany 5.57% 4.64% 11 Bulgaria 1.71% 1.66% 22 Bulgaria 0.52% 0.44% Austria BG export in 2010-4385.16 thousand EUR 1 China 26.56% 27.95% 2 Germany 23.57% 23.58% 3 Italy 10.93% 9.35% 4 Bangladesh 7.03% 8.20% 5 Turkey 6.03% 6.33% 6 Bulgaria 2.17% 3.15% The analysis of the data shows that: Bulgaria is not among the top five suppliers of Jerseys, pullovers, cardigans, waistcoats and similar articles in none of the studied five markets out of the EU. Bulgaria holds the headmost position among the main suppliers of the studied product group 6 th, and has the largest market share (over 3%) on the Austrian market. The main market of Bulgaria in the EU is Italy, as its main competitors are China, Turkey and Bangladesh. The market share of Bulgaria is decreasing on three of the analysed markets and is relatively constant in Germany; there is an increase on the Austrian market in 2010 compared to 2009 of almost 1 p.p. 70

Data for the trade balance, import and export on the leading market for the analysed product groups Italy, are shown in the next table: Table 87. Trade balance, import and export of the product group on the leading market, in thousand EUR Italy 2006 2007 2008 Trade balance 581181.14 565904.2 439046.97 161075.43 135807 Import 1419716.86 1430422.8 1519620.03 1467666.57 1568399 Export 2000898 1996327 1958667 1628742 1704206 The increasing total volume of import of Italy of the studied product group, together with the decreasing in the analyzed period export are making the Italian market a perspective one for the Bulgarian manufacturer. The main three products by export value of this product group, exported to the leading market Italy, are shown in the next table. Table 88. Top 3 products of product group Jerseys, pullovers, cardigans, waistcoats and similar articles, exported to the largest market (Italy) Top 3 products, exported to the relevant market Import from Bulgaria (thous. EUR) Share of the Bulgarian export of the product in the whole product group Total import of Italy (thous. EUR) Share of the Bulgarian export in the total import of Italy Men s or boy s jerseys, pullovers, cardigans, waistcoats and similar articles, of wool, knitted or crocheted (excl. jerseys and pullovers, containing >=50% with article weight >=600 g, and quilted jackets Women s or girls jerseys, pullovers, cardigans, waistcoats and similar articles, of synthetic or artificial fibres, knitted or crocheted (excl. Lightweight fine knit roll, polo or wadded waistcoats) Lightweight fine knit roll skirts and pullovers, of synthetic or artificial fibres, knitted or crocheted 14042.43 12862.54 47.9% 44.6% 163854.92 165375.49 8.6% 7.8% 3604.54 4754.17 12.3% 16.5% 266741.69 293051.99 1.4% 1.6% 1844.93 2398.55 6.3% 8.3% 12158.06 16784.56 15.2% 14.3% The data show that the volume of the Bulgarian import of Men s or boy s jerseys, pullovers, cardigans, waistcoats and similar articles, of wool, knitted or crocheted (excl. jerseys and pullovers, containing >=50% with article weight >=600 g, and quilted jackets to the Italian market is decreasing in 2010 compared to 2009, while in the rest two top products there is an increase. It should be noted that despite the growth of Bulgarian export of Lightweight 71

fine knit roll skirts and pullovers, of synthetic or artificial fibres, knitted or crocheted, the share of Bulgaria in the total import of Italy is decreasing. The top five competitors and their share on the main markets of Bulgaria out of the EU in 2009-2010 are given in the next table (the ranking of the countries is valid to 2010). Table 89. Main competitors on non-eu markets, where Bulgarian export is the highest, 2009-2010 Switzerland BG export in 2010-1930.89 thousand EUR 1 Germany 29.05% 30.49% 2 Italy 19.56% 15.88% 3 China 12.82% 13.65% 4 France 9.27% 9.28% 5 Bangladesh 4.93% 5.76% 21 Bulgaria 0.14% 0.34% USA BG export in 2010-328.34 thousand EUR 1 China 39.75% 42.77% 2 Vietnam 9.48% 9.55% 3 Indonesia 6.94% 7.14% 4 Honduras 5.01% 4.80% 5 Guatemala 3.92% 3.42% 50 Bulgaria 0,03% 0,02% Canada BG export in 2010-315.54 thousand EUR 1 China 63.84% 62.17% 2 Bangladesh 7.54% 9.10% 3 Cambodia 4.37% 4.73% 4 USA 3.39% 4.17% 5 Vietnam 3.33% 3.23% 32 Bulgaria 0.15% 0.11% Serbia BG export in 2010-77.57 thousand EUR 1 China 46.45% 49.33% 2 Bangladesh 15.99% 15.97% 3 Italy 10.04% 6.23% 4 Turkey 5.73% 5.87% 5 Cambodia 2.96% 3.68% 7 Bulgaria 2.14% 2.37% Republic of Korea BG export in 2010-58.74 thousand EUR 1 China 71.52% 70.61% 2 Italy 9.69% 7.36% 3 Vietnam 5.97% 6.70% 4 Indonesia 1.01% 2.30% 5 Japan 1.84% 1.74% 21 Bulgaria 0.24% 0.20% The analysis of the data shows that the Bulgarian export of Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or crocheted to non-eu countries is relatively small in value, forming a market share of less than 0,35% of all studied markets, except Serbia (where despite the small volume of the Bulgarian export Bulgaria takes 7 th place among the main suppliers with market share of over 2%). 72

T-shirts and singlets and other vests, knitted or crocheted The top 10 importers worldwide are forming approximately 70% of the total import of T- shirts and singlets and other vests, knitted or crocheted. Table 90. Main 10 importers in 2010 Importers Import, 2010 Structure, % Total 23532185 100.00 USA 3810083 16.19 Germany 2854920 12.13 UK 1968248 8.36 France 1544366 6.56 Japan 1487858 6.32 Spain 1178186 5.01 Italy 1069189 4.54 Hong Kong 907960 3.86 The Netherlands 796672 3.39 Belgium 733711 3.12 In 2010 Bulgaria exports to all given countries, but its main markets are: in the EU Germany, Greece, Italy, France and Belgium outside the EU Switzerland, Canada, USA, Turkey and Serbia The top five competitors and their share on the main markets of Bulgaria in the EU in 2009-2010 are given in the table below (the ranking of the countries is valid to 2010) Table 91. Main competitors on the EU markets, where Bulgarian export is the highest, 2009-2010 Germany BG export in 2010-22710.51 thousand EUR 1 Turkey 26.39% 28.37% 2 Bangladesh 18.59% 19.98% 3 China 14.44% 14.63% 4 India 6.63% 6.08% 5 The Netherlands 2.67% 2.75% 10 Bulgaria 1.51% 1.52% Greece BG export in 2010-19492.62 thousand EUR 1 Italy 13.26% 17.24% 2 Spain 15.16% 15.28% 3 Bulgaria 11.48% 10.36% 4 Germany 8.08% 8.02% 5 China 6.83% 7.84% 73

Italy BG export in 2010-18755.36 thousand EUR 1 China 18.96% 20.09% 2 Turkey 12.33% 10.87% 3 Bangladesh 8.91% 9.80% 4 Belgium 6.56% 6.80% 5 France 6.52% 5.44% France BG export in 2010-6372.53 thousand EUR 1 Bangladesh 16.42% 17.44% 2 China 14.29% 16.39% 3 Turkey 12.66% 13.10% 4 India 8.86% 8.63% 5 Portugal 6.62% 6.63% 14 Bulgaria 1.54% 1.79% 26 Bulgaria 0.29% 0.28% Belgium BG export in 2010-3077.07 thousand EUR 1 Bangladesh 13.69% 17.21% 2 Germany 11.28% 12.00% 3 The Netherlands 10.43% 10.32% 4 China 9.99% 9.62% 5 France 11.33% 9.13% The analysis of the data shows that: 23 Bulgaria 0.54% 0.52% Bulgaria is among the main exporters on the Greek market. Bulgaria holds 3rd place among the main suppliers of T-shirts, singlets and other vests, knitted or crocheted, with market share, exceeding 10%. The market share of Bulgaria on the Greek market however is decreasing in 2010 compared to 2009 by over 1 p.p. The main markets of Bulgaria in the EU are Germany and Greece, and Bulgaria s main competitors not members of the EU are China, Turkey and Bangladesh. The market share of Bulgaria is increasing in 2010 compared to 2009 only on the Italian market, while in France, Belgium and Germany stays relatively constant and in Greece it decreases. Data for the trade balance, import and export on the leading market for the analysed product groups Germany, are shown in the next table: Table 92. Trade balance, import and export of the product group on the leading market, in thousand EUR Germany 2006 2007 2008 Trade balance -1364540.68-1369484.77-1263245.8-1289277.54-1489566.15 Import 2551278.68 2578849.77 2525726.8 2470362.54 2854920.15 Export 1186738 1209365 1262481 1181085 1365354 The increasing deficit of the trade balance of Germany shows dependence on import of the studied product group. Bulgaria holds 10 th place among the main suppliers of T-shirts and singlets, knitted and crocheted for the German market (Table 91). The export of Bulgaria to 74

Germany is the largest by value, exceeding even the export to our neighbour Greece. German market is perspective for Bulgarian manufacturers, as the emerging trend is German import of products of the analyzed product group to increase (Table 92). The top five competitors and their share on the main markets of Bulgaria out of the EU in 2009-2010 are given in the table below (the ranking of the countries is valid to 2010). Table 93. Main competitors out of the EU markets, where Bulgarian export is the highest, 2009-2010 Switzerland BG export in 2010-860.77 thousand EUR 1 Germany 49.94% 47.59% 2 Italy 6.00% 6.52% 3 Turkey 4.80% 4.53% 4 Bangladesh 3.24% 4.27% 5 China 4.50% 4.21% 31 Bulgaria 0.11% 0.15% Canada BG export in 2010-797.51 thousand EUR 1 China 29.41% 29.09% 2 Bangladesh 14.26% 16.14% 3 Mexico 8.11% 8.19% 4 Cambodia 5.61% 7.32% 5 USA 7.77% 6.74% 39 Bulgaria 0.06% 0.05% USA BG export in 2010-514.35 thousand EUR 1 China 11.58% 13.27% 2 Honduras 10.44% 12.45% 3 Mexico 12.38% 11.28% 4 Salvador 10.57% 11.22% 5 Vietnam 5.77% 5.67% 47 Bulgaria 0.02% 0.02% Turkey BG export in 2010-452.6 thousand EUR 1 Bangladesh 29.02% 34.62% 2 China 8.13% 11.52% 3 India 7.46% 7.35% 4 Portugal 5.62% 4.28% 5 Spain 4.18% 4.06% 20 Bulgaria 1.00% 0.85% Serbia BG export in 2010-277.13 thousand EUR 1 China 26.89% 19.16% 2 Turkey 10.43% 12.86% 3 Bangladesh 10.00% 12.75% 4 Hong Kong 7.89% 8.51% 5 Italy 9.41% 6.65% 14 Bulgaria 1.34% 1.27% The analysis of the data shows that the Bulgarian export of T-shirts, singlets and other vests, knitted or crocheted to non-eu countries is relatively small in value, determining the back positions of the country among the main suppliers, as well as small market shares (less than 1% for all studied markets, except Serbia). 75

Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear), knitted or crocheted The top 10 importers worldwide are forming approximately 70% of the total import of Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear), knitted or crocheted Table 94. Main 10 importers in 2010 Importers Import, 2010 Structure, % Total 13725401 100.00 USA 3022182 22.02 Germany 1297127 9.45 UK 993820 7.24 Japan 953100 6.94 France 786558 5.73 Hong Kong 614692 4.48 Spain 569501 4.15 Italy 486808 3.55 UAE 464789 3.39 The Netherlands 370932 2.70 In 2010 Bulgaria export to all given countries, but its main markets are: in the EU Greece, Italy, Germany, France and Austria outside the EU USA, Switzerland, Turkey, Canada and Norway. The top five competitors and their share on the main markets of Bulgaria in the EU in 2009-2010 are given in the following table (the ranking of the countries is valid to 2010) Table 95. Main competitors on the EU markets, where Bulgarian export is the highest, 2009-2010 Greece BG export in 2010-19928.65 thousand EUR 1 Italy 24.43% 21.25% 2 Bulgaria 15.36% 13.91% 3 Spain 9.34% 11.38% 4 China 7.68% 8.67% 5 Germany 6.43% 6.97% Italy BG export in 2010-13129.88 thousand EUR 1 China 25.44% 29.48% 2 France 10.59% 8.79% 3 Romania 7.11% 7.58% 4 Turkey 6.92% 6.03% 5 Bangladesh 5.11% 5.83% 10 Bulgaria 1.86% 3.18% 76

Germany BG export in 2010-12403.16 thousand EUR 1 China 31.38% 32.05% 2 Turkey 19.33% 21.60% 3 Bangladesh 8.44% 8.50% 4 India 4.87% 3.76% 5 Cambodia 2.00% 3.33% France BG export in 2010-7334.96 thousand EUR 1 China 30.38% 35.21% 2 Italy 13.13% 10.64% 3 Turkey 7.73% 7.66% 4 Bangladesh 4.79% 5.52% 5 Tunisia 4.10% 5.35% 15 Bulgaria 0.91% 0.92% 22 Bulgaria 0.59% 0.56% Austria BG export in 2010-3266.09 thousand EUR 1 Germany 23.62% 22.90% 2 China 20.50% 21.08% 3 Turkey 10.47% 12.19% 4 Italy 10.31% 8.55% 5 Bangladesh 4.03% 4.24% The analysis of the data shows that: 8 Bulgaria 1.14% 2.62% Bulgaria ranks 2nd among the main suppliers of Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear), knitted or crocheted in Greece. The Greek market is the main one of Bulgaria, although there is a decrease of the market share of Bulgaria in 2010 compared to 2009. Main competitors of Bulgaria in the EU are again China and Turkey. The market share of Bulgaria is decreasing on the markets of Greece and France, while in the rest of the three analysed markets it is increasing. Data for the trade balance, import and export on the leading market for the analysed product groups Greece, are shown in the next table: Table 96. Trade balance, import and export of the product group on the leading market, in thousand EUR Greece 2006 2007 2008 Trade balance -6213.64-36932.1-57419.03-61202.08-62673.5 Import 61014.64 97563.1 114347.03 117231.08 117453.5 Export 54801 60631 56928 56029 54780 The increasing deficit in the trade balance of Greece, together with the ranking of Bulgaria among the leading suppliers of the analysed product group on the Greek market determine its primary importance and perspective for Bulgarian manufacturers. 77

The main three products by export value, exported to the leading market Greece, are given in the next table. Table 97. Top 3 products of product group Women s suits, ensembles, jackets, dresses, skirts, exported to the largest market (Greece) Top 3 products, exported to the relevant market Women's or girls' skirts of synthetic fibres, knitted or crocheted (excl. divided skirts) Women's or girls', trousers, bib & brace overalls, breeches & shorts (excl. swimwear) Import from Bulgaria (thous. EUR) Share of the Bulgarian export of the product in the whole product group Total import of Greece (thous. EUR) Share of the Bulgarian export in the total import of Greece 3406.64 3282.66 18.9% 20.1% 12360.98 13570.43 27.6% 24.2% 3273.27 2889.55 18.2% 17.7% 23522.37 24700.89 13.9% 11.7% Women's or girls' skirts of synthetic fibres, knitted or crocheted (excl. divided skirts) 2730.47 2277.3 15.1% 13.9% 15903.14 14165.36 17.2% 16.1% The data show general trend of decrease of the Bulgarian import volume on its main market Greece. There is a decrease in the export value of the three top products. Despite the drop, Bulgaria remains among the main suppliers of Women's or girls' dresses of synthetic fibres, knitted or crocheted (excl. divided skirts) on the Greek market with a share of approximately 25% in 2010. The top five competitors and their share on the main markets of Bulgaria out of the EU in 2009-2010 are given in the next table (the ranking of the countries is valid to 2010). Table 98. Main competitors on non-eu markets, where Bulgarian export is the highest, 2009-2010 USA BG export in 2010-1247.09 thousand EUR 1 China 32.59% 36.61% 2 Vietnam 13.56% 13.28% 3 Indonesia 9.48% 9.86% 4 Cambodia 6.12% 6.36% 5 Philippines 3.57% 3.16% 42 Bulgaria 0.07% 0.05% Switzerland BG export in 2010-990.29 thousand EUR 1 Germany 36.49% 40.73% 2 Italy 18.75% 11.62% 3 China 9.48% 10.65% 4 France 9.01% 8.39% 5 Turkey 2.77% 3.04% 24 Bulgaria 0.58% 0.35% 78

Turkey BG export in 2010-548.24 thousand EUR 1 China 20.64% 30.08% 2 Bangladesh 14.95% 16.29% 3 Spain 5.78% 6.33% 4 India 8.38% 5.90% 5 Italy 6.54% 5.58% 27 Bulgaria 0.70% 1.11% Canada BG export in 2010-372.77 thousand EUR 1 China 54.20% 54.10% 2 Cambodia 8.21% 9.90% 3 USA 9.15% 7.35% 4 Bangladesh 6.16% 5.85% 5 Vietnam 4.36% 4.33% 19 Bulgaria 0.23% 0.26% Norway BG export in 2010-320.81 thousand EUR 1 China 48.21% 48.51% 2 Turkey 11.53% 12.98% 3 Cambodia 2.54% 4.22% 4 India 4.41% 3.95% 5 Bangladesh 3.53% 3.79% 21 Bulgaria 0.65% 0.64% The analysis of the data shows that: The volume of the Bulgarian export on non-eu markets is relatively smaller than that on the EU markets. Bulgaria is not among the top five suppliers in none of the studied five markets out of the EU, as the market share of Bulgaria is exceeding 1% only on the Turkish market. Main competitors of Bulgaria on the markets outside the EU are China, Vietnam, India and Italy. Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; travelling bags, insulated food bags The top 10 importers worldwide are forming approximately 70% of the total import of Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; travelling bags, insulated food bags. 79

Table 99. Main 10 importers in 2010 Importers Import, 2010 Structure, % Total 32656506 100.00 USA 6400960 19.60 Japan 3474271 10.64 Hong Kong 3373225 10.33 France 1869791 5.73 Italy 1689281 5.17 UK 1688381 5.17 Germany 1685242 5.16 Spain 894746 2.74 Republic of Korea 889779 2.72 Canada 705349 2.16 In 2010 Bulgaria exports to all given countries, except Canada, but its main markets are: in the EU Italy, France, Germany, Belgium and Romania outside the EU Hong Kong, Turkey, Switzerland, Russia and Republic of Korea The top five competitors and their share on the main markets of Bulgaria in the EU in 2009-2010 are given in the following table (the ranking of the countries is valid to 2010). Table 100. Main competitors on the EU markets, where Bulgarian export is the highest, 2009-2010 Italy BG export in 2010-21662.98 thousand EUR France BG export in 2010-2279.56 thousand EUR 1 China 54.73% 53.72% 2 France 17.01% 16.23% 3 Switzerland 3.86% 4.23% 4 Belgium 2.75% 3.23% 5 Romania 2.73% 2.60% 1 China 48.70% 51.29% 2 Italy 23.80% 22.31% 3 Spain 6.67% 5.41% 4 Vietnam 3.26% 2.92% 5 Belgium 1.98% 2.07% 13 Bulgaria 0.88% 0.88% Germany BG export in 2010-1405.24 thousand EUR 1 China 58.88% 58.03% 2 Italy 6.09% 5.88% 3 India 5.93% 5.88% 4 France 5.10% 5.54% 5 Vietnam 5.42% 5.23% 51 Bulgaria 0.02% 0.01% Belgium BG export in 2010-942.1 thousand EUR 1 China 49.27% 49.33% 2 France 12.07% 10.97% 3 Vietnam 7.62% 8.17% 4 The Netherlands 6.40% 6.60% 5 Hungary 2.91% 4.76% 33 Bulgaria 0.09% 0.06% 35 Bulgaria 0.09% 0.06% 80

Romania BG export in 2010-901.43 thousand EUR 1 China 29.22% 24.47% 2 Italy 18.33% 16.01% 3 Belgium 6.29% 8.82% 4 Poland 4.47% 7.02% 5 Germany 7.48% 6.75% 18 Bulgaria 1.18% 0.34% The analysis shows that: The main market of Bulgaria is Italy. Only on this market Bulgaria keeps its market share for 2009 and 2010, while on the French, German, Belgium and Romanian markets in 2010 compared to 2009 it goes down. Bulgaria is not among the top five suppliers in none of the studied five EU markets. Bulgaria is holding headmost position (13 th ) and has largest market share on the Italian market (even there it does not exceed 1%). The export to the rest four studied markets within the EU is significantly smaller in volume, which determines the very small market shares and back positions in the ranking of the main suppliers. Bulgaria s main competitors within the EU are China, France and Italy. Data for the trade balance, import and export on the leading market for the analysed product groups Italy, are shown in the next table: Table 101. Trade balance, import and export of the product group on the leading market, in thousand EUR Italy 2006 2007 2008 Trade balance 1071337 1293748 1343484 952761 1211268 Import 1354321 1543877 1557756 1422735 1689281 Export 2425658 2837625 2901240 2375496 2900549 As shown in Table 101, both import and export of Italy of trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; travelling bags, insulated food bags register growth in 2010 compared to 2006. The growth of import (24.73%) outruns the export (19,58%). From this point of view the Italian market is perspective for the Bulgarian manufacturers. The main three products by export volume in value expression in this product group, exported to the leading market Italy are shown in the next table. 81

Table 102. Top 3 products of product group Trunks and suit-cases, exported to the largest market (Italy) Top 3 products, exported to the relevant market Handbags, whether or not with shoulder straps, incl. those without handle, with outer surface of plastic sheeting Wallets, purses, key-pouches, cigarette-cases, tobacco-pouches and similar articles carried in the pocket or handbag, with outer surface of leather, composition leather or patent leather Handbags, whether or not with shoulder straps, incl. those without handle, with outer surface of textile materials Import from Bulgaria (thous. EUR) Share of the Bulgarian export of the product in the whole product group Total import of Italy (thous. EUR) Share of the Bulgarian export in the total import of Italy 10745.5 11856.43 85.9% 79.3% 265087.49 304199.03 4.1% 3.9% 494.75 1181.58 4.0% 7.9% 97709.06 119877.65 0.5% 1.0% 513.4 686.05 4.1% 4.6% 208848.92 241435.41 0.2% 0.3% Bulgarian import of all three products of the analyzed product group in Italy increases. However, the share of the Bulgarian export in the total import of Italy remains quite low. The top five competitors and their share on the main markets of Bulgaria out of the EU in 2009-2010 are given in the next table (the ranking of the countries is valid to 2010). Table 103. Main competitors on non-eu markets, where Bulgarian export is the highest, 2009-2010 Hong Kong BG export in 2010-460.88 thousand EUR 1 China 63.30% 60.12% 2 France 20.15% 20.07% 3 Switzerland 5.70% 8.03% 4 Italy 5.18% 6.54% 5 USA 1.61% 1.10% 30 Bulgaria 0.00% 0.01% Turkey BG export in 2010-369.76 thousand EUR 1 China 72.43% 73.30% 2 Italy 11.44% 9.58% 3 France 4.86% 6.05% 4 Vietnam 3.09% 2.67% 5 India 2.61% 1.83% 31 Bulgaria 0.06% 0.04% 82

Switzerland BG export in 2010-236.47 thousand EUR 1 Italy 27.26% 23.41% 2 France 18.42% 19.46% 3 China 17.09% 18.76% 4 Germany 14.92% 14.89% 5 Thailand 3.65% 4.73% 40 Bulgaria 0.00% 0.02% Russia BG export in 2010-173.21 thousand EUR 1 China 70.45% 74.76% 2 Italy 13.26% 10.60% 3 France 4.95% 4.31% 4 Vietnam 2.78% 1.95% 5 Germany 1.56% 1.36% 40 Bulgaria 0.06% 0.04% Republic of Korea BG export in 2010-172.45 thousand EUR 1 China 43.61% 43.87% 2 Italy 23.73% 22.83% 3 France 23.21% 22.48% 4 Vietnam 2.80% 3.10% 5 Spain 2.15% 1.93% 28 Bulgaria 0.00% 0.01% Data analysis shows that the Bulgarian export of trunks, suit-cases, vanity-cases, executivecases, brief-cases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; travelling bags, insulated food bags to non-eu countries is extremely small in value, leading to a market share of less than 0,05% and around 30th place on the markets. Articles of apparel and clothing accessories, of leather or of composition leather The top 10 importers worldwide are forming approximately 68% of the total import of Articles of apparel and clothing accessories, of leather or of composition leather. Table 104. Main 10 importers in 2010 Importers Import, 2010 Structure, % Total 5808041 100.00 USA 1132293 19.50 Germany 592402 10.20 France 435319 7.50 Hong Kong 363177 6.25 Japan 332382 5.72 Italy 286789 4.94 UK 258389 4.45 Spain 199330 3.43 The Netherlands 184201 3.17 Canada 172689 2.97 83

In 2010 Bulgaria exports to all given countries, except the USA, Japan, The Netherlands and Canada, but its main markets are: in the EU Italy, Germany, France, Romania and Spain outside the EU Hong Kong, Macedonia, Serbia, Switzerland and Georgia. The top five competitors and their share on the main markets of Bulgaria in the EU in 2009-2010 are shown in the table below (the ranking of the countries is valid to 2010). Table 105. Main competitors on the EU markets, where Bulgarian export is the highest, 2009-2010 Italy BG export in 2010-1192.87 thousand EUR Germany BG export in 2010-499.29 thousand EUR 1 India 28.68% 25.44% 2 China 21.77% 19.66% 3 France 10.73% 10.13% 4 Turkey 6.70% 7.46% 5 Romania 3.28% 5.32% 1 China 29.25% 25.83% 2 India 23.71% 24.42% 3 Pakistan 11.06% 12.21% 4 Italy 9.57% 9.47% 5 Turkey 8.84% 8.71% 36 Bulgaria 0.18% 0.05% France BG export in 2010-469.17 thousand EUR 1 Italy 24.24% 20.65% 2 India 17.23% 19.03% 3 China 17.11% 18.09% 4 Pakistan 11.67% 12.29% 5 Turkey 7.83% 7.05% 67 Bulgaria 0.00% 0.00% Romania BG export in 2010-401.39 thousand EUR 1 Italy 17.60% 23.08% 2 Germany 12.88% 9.28% 3 Austria 14.46% 7.64% 4 Turkey 8.74% 7.20% 5 China 10.37% 6.98% 43 Bulgaria 0.01% 0.02% 13 Bulgaria 3.13% 2.39% Spain BG export in 2010-393.86 thousand EUR 1 India 23.55% 27.93% 2 Pakistan 19.47% 18.59% 3 China 12.93% 13.51% 4 Italy 10.43% 9.57% 5 Turkey 15.05% 9.49% The analysis of the data shows that: 79 Bulgaria 0.00% 0.00% Bulgaria is not among the top five suppliers of Articles of apparel and clothing accessories, of leather or of composition leather on none of the studied five markets in the EU. As a whole the volume of the exported production from Bulgaria of the 84

studied product group is small, which determines the small market share and the back positions among the suppliers. Bulgaria holds relatively anterior position (13th) and has market share exceeding 1% only on the Romanian market. Main competitors of Bulgaria are India, Italy, Pakistan and China. The market share of Bulgaria in Romania and Italy is decreasing in 2010 compared to 2009, while on the rest three markets it is relatively constant (and extremely small). Data for the trade balance, import and export on the leading market for the analysed product groups Italy, are shown in the next table: Table 106. Trade balance, import and export of the product group on the leading market, in thousand EUR Italy 2006 2007 2008 Trade balance 441328.1 537329.75 510286.75 366809.45 464706.34 Import 299793.9 317871.25 322134.25 266032.55 286788.66 Export 741122 855201 832421 632842 751495 As in the above product group, here Italy is again the biggest consumer of Bulgarian products. The most demanded goods of product group 4203 Articles of apparel and clothing accessories, of leather or of composition leather are shown in the next table. Table 107. Top 3 products of product group Articles of apparel and clothing accessories, exported to the largest market (Italy) Top 3 products, exported to the relevant market Belts and bandoliers with or without buckles, of leather or of composition leather Articles of apparel, of leather or composition leather (excl. clothing accessories, footwear and headgear and parts thereof, and goods of chapter 95, e.g. shin guards, fencing masks) Specially designed gloves for use in sport, of leather or composition leather Import from Bulgaria (thous. EUR) Share of the Bulgarian export of the product in the whole product group Total import of Italy (thous. EUR) Share of the Bulgarian export in the total import of Italy 41.59 128.02 8.7% 94.4% 50173.16 53247.74 0.1% 0.2% 409.43 3.77 86.0% 2.8% 160849.82 177793.71 0.3% 0.0% 0 1.51 0.0% 1.1% 30043.09 26997.02 0.0% 0.0% The export of the most important product of the studied product group registers significant increase, while of the second there is significant fall. Data show that in 2010 Bulgaria starts to import, although small in volume, specially designed gloves for use in sport, of leather or composition leather, for all purposes on the Italian market. It should be noted that the share of Bulgarian import of all three studied products in the total import of Italy is insignificant in the analyzed period. 85

The top five competitors and their share on the main markets of Bulgaria out of the EU in 2009-2010 are shown in the next table (the ranking of the countries is valid to 2010). Table 108. Main competitors on non-eu markets, where Bulgarian export is the highest, 2009-2010 Hong Kong BG export in 2010-74.55 thousand EUR 1 China 61.38% 53.63% 2 France 12.89% 18.98% 3 Italy 11.51% 12.00% 4 Switzerland 5.04% 6.38% 5 Germany 1.94% 2.46% 28 Bulgaria 0.00% 0.02% Macedonia BG export in 2010-48.95 thousand EUR 1 Italy 23.46% no data 2 Turkey 14.04% no data 3 China 13.02% no data 4 Germany 12.00% no data 5 Serbia 11.16% no data 9 Bulgaria 2.76% no data Serbia BG export in 2010-47.44 thousand EUR 1 China 28.05% 27.68% 2 Italy 22.41% 19.31% 3 India 14.10% 14.74% 4 Pakistan 9.77% 11.64% 5 Turkey 6.99% 6.33% 30 Bulgaria 0.03% 0.07% Switzerland BG export in 2010-8.28 thousand EUR 1 Italy 44.03% 37.93% 2 Germany 22.22% 24.96% 3 France 9.16% 10.57% 4 China 6.74% 6.93% 5 India 3.81% 3.54% 43 Bulgaria 0.00% 0.01% Georgia BG export in 2010-4.52 thousand EUR 1 Turkey 44.50% 39.58% 2 Azerbaijan 0.90% 21.14% 3 China 4.75% 14.89% 4 Italy 7.63% 4.81% 5 Germany 9.49% 4.01% 17 Bulgaria 0.30% 0.20% Data analysis shows that the Bulgarian export of Articles of apparel and clothing accessories, of leather or of composition leather to non-eu countries is extremely small in value, determining the back positions of the country among the main suppliers, as well as small market shares (less than 0,20% on all studied markets, except Macedonia). 86

Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather The top 10 importers worldwide are forming approximately 71% of the total import of Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather. Table 109. Main 10 importers in 2010 Importers Import, 2010 Structure, % Total 36600816 100.00 USA 8654414 23.65 Germany 2920363 7.98 France 2495748 6.82 Hong Kong 2422643 6.62 Italy 2359323 6.45 UK 2305096 6.30 Russia 1678696 4.59 The Netherlands 1225838 3.35 Belgium 1049228 2.87 Spain 968714 2.65 In 2010 Bulgaria exports to all given countries, except the USA and UK, but its main markets are: in the EU Italy, Hungary, France, Romania and Greece outside the EU Macedonia, Hong Kong, Switzerland, Afghanistan and Russia. The top five competitors and their share on the main markets of Bulgaria in the EU in 2009-2010 are given in the table below (the ranking of the countries is valid to 2010). Table 110. Main competitors on the EU markets, where Bulgarian export is the highest, 2009-2010 Italy BG export in 2010-44018.05 thousand EUR 1 Romania 13.44% 13.69% 2 China 9.93% 10.55% 3 Belgium 7.75% 7.86% 4 The Netherlands 8.42% 7.12% 5 Tunisia 7.17% 7.03% 14 Bulgaria 2.28% 2.28% Hungary BG export in 2010-16617.38 thousand EUR 1 Germany 24.25% 15.51% 2 Bulgaria 0.04% 12.84% 3 Italy 9.28% 8.96% 4 Romania 13.35% 8.93% 5 Belgium 13.28% 8.04% 87

France BG export in 2010-5570.5 thousand EUR 1 Italy 30.41% 28.89% 2 Portugal 13.59% 13.00% 3 China 9.62% 9.35% 4 Vietnam 7.47% 7.57% 5 Spain 6.92% 6.52% Romania BG export in 2010-2503.22 thousand EUR 1 Italy 27.69% 27.65% 2 Slovakia 1.16% 16.09% 3 Germany 8.63% 8.27% 4 Belgium 7.16% 5.94% 5 China 7.22% 5.35% 25 Bulgaria 0.23% 0.28% 25 Bulgaria 0.53% 0.25% Greece BG export in 2010-1289.27 thousand EUR 1 Italy 39.31% 38.34% 2 Spain 10.79% 11.36% 3 Belgium 8.38% 8.58% 4 China 9.08% 7.72% 5 The Netherlands 4.89% 5.36% 18 Bulgaria 0.19% 0.45% The analysis of the data shows that: The main market of Bulgaria in the EU is Italy, while the main competitors regarding the export of Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather are Italy and Spain. Bulgaria is the second most important supplier of the studied product group on the Hungarian market. There is significant increase of the market share of Bulgaria in 2010 compared to 2009 (by about 13 p.p.). The market share of Bulgaria increases in three of the analyzed five markets in the EU, while it decreases in Romania and remains stable in Italy. Data for the trade balance, import and export on the leading market for the analysed product groups Italy, are shown in the next table: Table 111. Trade balance, import and export of the product group on the leading market, in thousand EUR Italy 2006 2007 2008 Trade balance 3322012.17 3705844.11 3636611.18 2773654.45 2999952.9 Import 2167432.83 2211905.89 2166677.82 2104845.55 2359323.1 Export 5489445 5917750 5803289 4878500 5359276 The increasing in the studied period total volume of the export of the analysed group on behalf of Italy, in combination with the small share of Bulgarian import in the total Italian import in 2010, determine the high perspective of this market for the Bulgarian manufacturers. 88

The main three products by export volume in value expression in this product group, exported to the leading market Italy are shown in the next table. Table 112. Top 3 products of product group Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather, exported to the largest market (Italy) Top 3 products, exported to the relevant market Import from Bulgaria (thous. EUR) Share of the Bulgarian export of the product in the whole product group Total import of Italy (thous. EUR) Share of the Bulgarian export in the total import of Italy Women s and girl s footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather, with insole of length 24 cm or more (excl. those covering the ankle, with a protective metal toecap; or a base platform of wood). Men s and boys footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather (not covering the ankle), with insole of length 24 cm or more (excl. those of 6403.11-00 to 6403.40.00, 6403.99.11, 6403.99.36, 6403.99.50) Women s and girl s footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather (covering the ankle), with insole of length 24 cm or more (excl. those of 6403.11-00 to 6403.40.00,nor 6403.91.18) 8547.79 9231.96 18.4% 17.1% 407381.14 435668.02 2.1% 2.1% 6923.7 8925.46 14.9% 16.5% 376099.72 388403.47 1.8% 2.3% 6454.04 6782.96 13.9% 12.6% 113538.35 146578.71 5.7% 4.6% All three products of the analyzed product group record increase of the volume of Bulgarian import on the Italian market in 2010 compared to 2009. however, it should be noted, that the registered increase (in value) does not lead to increase in the share of the Bulgarian import in the total import of Italy there is even certain fall of the share regarding the third most important product. The top five competitors and their share on the main markets of Bulgaria on non-eu markets in 2009-2010 are given in the table below (the ranking of the countries is valid to 2010). 89

Table 113. Main competitors on non-eu markets, where Bulgarian export is the highest, 2009-2010 Macedonia BG export in 2010-156.64 thousand EUR 1 China 30.72% no data 2 Italy 14.57% no data 3 Slovenia 12.59% no data 4 Serbia 12.38% no data 5 Vietnam 8.25% no data 13 Bulgaria 0.86% no data Hong Kong BG export in 2010-149.11 thousand EUR 1 China 83.19% 83.29% 2 Italy 5.26% 5.38% 3 France 3.44% 3.53% 4 Switzerland 2.16% 2.24% 5 Vietnam 1.85% 1.61% 19 Bulgaria 0.00% 0.01% Switzerland BG export in 2010-102.42 thousand EUR 1 Italy 38.01% 34.95% 2 Germany 22.02% 22.51% 3 France 6.43% 6.66% 4 China 5.79% 5.69% 5 Austria 4.98% 4.80% 44 Bulgaria 0.00% 0.02% Afghanistan BG export in 2010-64.01 thousand EUR 1 China 49.64% 64.29% 2 Russia 30.48% 14.54% 3 Pakistan 10.51% 7.44% 4 Tajikistan 1.93% 5.90% 5 Thailand 1.04% 2.32% - Bulgaria 0.00% 0.00% Russia BG export in 2010-61.75 thousand EUR 1 China 54.37% 63.57% 2 Italy 15.37% 10.24% 3 Turkey 2.44% 4.07% 4 Vietnam 4.91% 3.50% 5 Indonesia 3.45% 2.46% 28 Bulgaria 0.01% 0.07% Data analysis shows that the Bulgarian export of Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather for non-eu countries is extremely small in value, which determines the small market shares (less than 1%) and the rear positions of Bulgaria among the main suppliers of the analysed product group. 90

Parts of footwear (including uppers, whether or not attached to soles other than outer soles); removable in-soles, heel cushions and similar articles, gaiters, leggings and similar articles and parts thereof The top 10 importers worldwide are forming approximately 57% of the total import of Parts of footwear (including uppers, whether or not attached to soles other than outer soles); removable in-soles, heel cushions and similar articles, gaiters, leggings and similar articles and parts thereof. This fact is a sign for relatively low level of concentration on the studied market. Table 114. Main 10 importers in 2010 Importers Import, 2010 Structure, % Total 6560401 100.00 Italy 859354 13.10 Germany 509959 7.77 USA 401286 6.12 Romania 357310 5.45 Vietnam 334997 5.11 Japan 324676 4.95 Hong Kong 300699 4.58 China 272448 4.15 France 196535 3.00 Russia 181915 2.77 In 2010 Bulgaria exports to all given countries, except of Vietnam, Japan, Hong Kong and China, but the main markets are: in the EU Italy, Romania, Greece, Hungary and France outside the EU Belarus, Macedonia, Russia, USA and Switzerland. The top five competitors and their share on the main markets of Bulgaria in the EU in 2009-2010 are shown in the table below (the ranking of the countries is valid to 2010) Table 115. Main competitors on the EU markets, where Bulgarian export is the highest, 2009-2010 Italy BG export in 2010-65071.04 thousand EUR 1 Romania 18.80% 27.17% 2 Tunisia 16.23% 13.32% 3 Albania 11.28% 10.59% 4 Bulgaria 8.41% 8.93% 5 Serbia 9.15% 8.08% Romania BG export in 2010-2917.42 thousand EUR 1 Italy 69.23% 65.41% 2 Germany 7.43% 7.51% 3 Hungary 7.92% 7.11% 4 Ukraine 1.82% 6.10% 5 Slovakia 6.25% 5.73% 8 Bulgaria 0.51% 0.91% 91

Greece BG export in 2010-1935.41 thousand EUR 1 Bulgaria 48.07% 52.09% 2 Italy 24.08% 23.27% 3 Germany 6.77% 6.01% 4 Spain 2.76% 4.55% 5 Egypt 3.62% 4.14% Hungary BG export in 2010-118.23 thousand EUR 1 Italy 26.84% 27.75% 2 Romania 10.91% 17.48% 3 Austria 15.48% 13.24% 4 Germany 10.94% 11.72% 5 India 10.21% 9.45% 33 Bulgaria 0.00% 0.00% France BG export in 2010-85.1 thousand EUR 1 Tunisia 18.72% 20.04% 2 Morocco 17.27% 17.55% 3 India 11.02% 11.90% 4 Spain 10.78% 10.53% 5 Italy 9.98% 9.77% 45 Bulgaria 0.29% 0.01% The analysis of the data shows that: Bulgaria is among the main five suppliers of the analysed product group for the markets of Italy and Greece, as Bulgaria holds leading position on the Greek market with share exceeding 50%. However, in terms of export volume Bulgaria s main market within the EU is the Italian. The main competitors of Bulgaria in the EU are Italy and Germany. The market share of Bulgaria increases in Italy, Romania and Greece (as on the Greek market the increase is highest approximately 4 p.p.), while in France it decreases significantly and stays constant and extremely small in Hungary. Data for the trade balance, import and export on the leading market for the analysed product groups Italy, are shown in the next table: Table 116. Trade balance, import and export of the product group on the leading market, in thousand EUR Italy 2006 2007 2008 Trade balance 308031.23 110165.21 92051.7 114096.5 105928.1 Import 798894.77 685762.79 622802.3 507486.53 647158.87 Export 1106926 795928 714854 621583 753087 Bulgaria is among the main suppliers of the analysed product group for the market of Italy, that in combination with the increasing at the end of the period volume of the total import of Italy, indicating that the efforts of the Bulgarian manufacturers should be focused on strengthening the strong market positions of Bulgaria. 92

The main three products in terms of export in value expression, exported to the leading market Italy are given in the next table. Table 117. Top 3 products of product group Footwear parts, exported to the largest market (Italy) Top 3 products, exported to the relevant market Footwear uppers and parts thereof (other than stiffeners) Uppers (whether or not attached to soles other than outer soles, and parts thereof (other than stiffeners and general parts made of leather or asbestos) Assemblies of uppers affixed to inner soles or to other sole components (excl. of asbestos or fixed to outer soles) Import from Bulgaria (thous. EUR) Share of the Bulgarian export of the product in the whole product group Total import of Italy (thous. EUR) Share of the Bulgarian export in the total import of Italy 27868.32 40831.03 66.3% 70.5% 315287.18 402216.39 8.8% 10.2% 8965.82 9600.21 21.3% 16.6% 96181.06 101734.54 9.3% 9.4% 4533.82 5886.8 10.8% 10.2% 11750.07 23793.44 38.6% 24.7% All three products register increase in export volume in 2010 compared to 2009 as the increase is most significant for the top product - Footwear uppers and parts thereof (other than stiffeners). Bulgaria is among the main suppliers of Assemblies of uppers affixed to inner soles or to other sole components (excl. of asbestos or fixed to outer soles) on the Italian market, despite the share of the Bulgarian export in the total import of Italy decreases in 2010 compared to 2009. The top five competitors and their share on the main markets of Bulgaria out of the EU in 2009-2010 are given in the table below (the ranking of the countries is valid to 2010). Table 118. Main competitors on non-eu markets, where Bulgarian export is the highest, 2009-2010 Belarus BG export in 2010-309.51 thousand EUR 1 China 60.42% 69.49% 2 Poland 11.91% 9.78% 3 Russia 7.87% 7.55% 4 Ukraine 9.61% 6.89% 5 Italy 4.70% 3.71% 6 Bulgaria 0.43% 0.93% Macedonia BG export in 2010-126.52 thousand EUR 1 Italy 85.64% no data 2 Germany 7.14% no data 3 Serbia 3.07% no data 4 Turkey 1.62% no data 5 Spain 0.46% no data 8 Bulgaria 0.25% no data 93

Russia BG export in 2010-104.68 thousand EUR 1 China 75.04% 77.40% 2 Turkey 2.62% 3.62% 3 Ukraine 4.14% 3.55% 4 Germany 4.23% 3.51% 5 Italy 3.10% 2.91% 52 Bulgaria 0.05% 0.00% USA BG export in 2010-70.04 thousand EUR 1 China 67.83% 65.55% 2 Mexico 12.60% 11.06% Dominican 3 Republic 4.24% 7.98% 4 Chinese Taipei 3.01% 3.29% Republic of 5 Korea 1.89% 2.29% 34 Bulgaria 0.01% 0.03% Switzerland BG export in 2010-21.84 thousand EUR 1 India 24.28% 24.07% 2 Germany 24.15% 23.43% 3 Italy 24.86% 22.51% 4 France 5.24% 5.58% 5 China 5.31% 5.57% 30 Bulgaria 0.07% 0.04% Data analysis shows that: The volume of the Bulgarian export on non-eu markets is relatively smaller than that on the EU markets. Bulgaria is not among the top five suppliers of the studied product group for none of the studied five markets out of the EU. Bulgaria holds the headmost position (6 th ) on the main for Bulgaria market out of the EU (Belarus). The market share of Bulgaria, however, does not exceed 1% in none of the analysed markets. A significant growth of the market share of Bulgaria in 2010 compared to 2009 is observed only on the Belarusian market. 94

Other footwear The top 10 importers worldwide are forming approximately 73% of the total import of Other footwear. Table 119. Main 10 importers in 2010 Importers Import, 2010 Structure, % Total 3572890 100.00 USA 1706011 47.75 UK 222542 6.23 Germany 122794 3.44 Tajikistan 102350 2.86 France 93290 2.61 Singapore 89152 2.50 Italy 79167 2.22 The Netherlands 73765 2.06 Japan 63053 1.76 Poland 57677 1.61 In 2010 Bulgaria exports to four of the given countries (Germany, France, Italy and Poland), but its main markets are: in the EU Italy, Hungary, France, Romania and Greece outside the EU Macedonia, Republic of Korea, Armenia, Hong Kong and Montenegro. The top five competitors and their share on the main markets of Bulgaria in the EU in 2009-2010 are given in the following table (the ranking of the countries is valid to 2010) Table 120. Main competitors on the EU markets, where Bulgarian export is the highest, 2009-2010 Italy BG export in 2010-9533.94 thousand EUR Hungary BG export in 2010-7321.4 thousand EUR 1 China 50.88% 43.14% 2 Romania 14.02% 20.64% 3 Poland 5.98% 5.66% 4 Spain 4.98% 5.19% 5 France 3.75% 3.51% 1 Slovakia 49.97% 43.22% 2 Germany 9.08% 23.66% 3 Austria 10.64% 7.28% 4 Poland 4.50% 6.09% 5 Italy 2.45% 4.62% 12 Bulgaria 0.80% 1.26% 30 Bulgaria 0.00% 0.00% 95

France BG export in 2010-829.14 thousand EUR 1 China 21.42% 24.08% 2 Italy 25.99% 20.74% 3 Spain 18.20% 19.83% 4 Germany 10.09% 8.85% 5 Portugal 6.66% 6.07% Romania BG export in 2010-617.52 thousand EUR 1 Italy 30.03% 39.51% 2 Germany 11.76% 11.19% 3 China 4.87% 9.93% 4 Bulgaria 12.02% 6.99% 5 Greece 8.32% 5.80% 16 Bulgaria 0.00% 0.34% Greece BG export in 2010-446.57 thousand EUR 1 Italy 23.44% 19.19% 2 Germany 2.28% 14.81% 3 China 10.42% 14.40% 4 The Netherlands 10.75% 11.52% 5 Spain 14.01% 11.34% 11 Bulgaria 4.54% 1.85% The analysis of the data shows that: Bulgaria is among the main five suppliers of product group other footwear only in Romania. There Bulgaria registers the largest market share (approximately 7%) and holds headmost position in comparison with the rest four studied markets. As far as the total export volume is concerned, the main market of Bulgaria in the EU is Italy (where despite the significantly bigger export volume in comparison with the Romanian market, Bulgaria holds hardly 12 th place among the main suppliers). The main competitors of Bulgaria in the EU are China, Germany, Italy and Spain. The market share of Bulgaria decreases significantly in 2010 compared to 2009 in Romania and Greece, stays relatively stable (and extremely small) in Hungary and increases in Italy and France. Data for the trade balance, import and export on the leading market for the analysed product groups Italy, are shown in the next table: Table 121. Trade balance, import and export of the product group on the leading market, in thousand EUR Italy 2006 2007 2008 Trade balance 50494.67 57199.61 62788.07 41988.45 49391.89 Import 58065.33 56512.39 47443.93 57761.55 79167.11 Export 108560 113712 110232 99750 128559 The increasing volume in the total import for the studied product group in Italy, in combination to the increasing share of the Bulgarian import, substantiates to a great extent the 96

importance and perspective of the Italian market from the point of view of the Bulgarian manufacturers. The main three products in terms of export in value expression, exported to the leading market Italy are given in the next table. Table 122. Top 3 products of product group Other footwear, exported to the largest market (Italy) Top 3 products, exported to the relevant market Footwear with uppers of leather or composition leather (excl. those with outer soles of rubber, plastics, leather or composition leather, and orthopaedic shoes) Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of materials other than rubber plastics, leather, composition leather or textile materials (excl. orthopaedic footwear) Import from Bulgaria (thous. EUR) Share of the Bulgarian export of the product in the whole product group Total import of Italy (thous. EUR) Share of the Bulgarian export in the total import of Italy 83.18 475.94 21.6% 70.3% 8487.56 18964.71 1.0% 2.5% 33.7 198.81 8.7% 29.4% 17226.79 22455.97 0.2% 0.9% Footwear with uppers of textile materials and with outer soles of wood or cork (excl. orthopaedic shoes or toy footwear) 0 2.26 0.0% 0.3% 668.28 518.87 0.0% 0.4% The main market for this product group of Bulgaria is Italy. Increase in the volume of the Bulgarian import on the Italian market is observed in all three top products. Despite this, the share of the Bulgarian export in the total import of Italy stays very small. The top five competitors and their share on the main markets of Bulgaria out of the EU in 2009-2010 are shown in the table below (the ranking of the countries is valid to 2010). Table 123. Main competitors on non-eu markets, where Bulgarian export is the highest, 2009-2010 Macedonia BG export in 2010-12.8 thousand EUR 1 China 62.00% no data 2 Serbia 16.89% no data 3 Turkey 11.14% no data 4 Italy 3.44% no data 5 Slovenia 1.47% no data 13 Bulgaria 0.16% no data Republic of Korea BG export in 2010-8.28 thousand EUR 1 USA 17.00% 40.85% 2 China 48.12% 37.38% 3 Italy 20.82% 10.00% 4 UK 0.94% 2.78% 5 Vietnam 4.28% 2.29% 47 Bulgaria 0.00% 0.00% 97

Armenia BG export in 2010-6.78 thousand EUR 1 China 38.74% 74.63% 2 Turkey 14.81% 18.60% 3 Russia 0.00% 2.20% 4 Ukraine 0.00% 1.56% 5 USA 40.85% 0.89% 9 Bulgaria 0.00% 0.21% Hong Kong BG export in 2010-3.77 thousand EUR 1 China 92.13% 86.53% 2 Italy 5.01% 10.95% 3 Switzerland 0.05% 1.15% 4 France 1.00% 0.67% 5 Japan 0.37% 0.24% - Bulgaria 0.00% 0.00% Montenegro BG export in 2010-3.77 thousand EUR 1 China 31.28% 41.76% 2 Serbia 20.20% 28.70% 3 Vietnam 13.75% 8.62% 4 Areas (n.c.e) 14.24% 7.19% 5 Indonesia 4.37% 6.13% 17 Bulgaria 0.45% 0.10% Data analysis shows that the Bulgarian export of Other footwear to non-eu countries is extremely small in value, substantiating the small market shares (less than 0,30%) the country is having on the studied markets. 98

Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials The top 10 importers worldwide are forming approximately 62% of the total import of Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials. Table 124. Main 10 importers in 2010 Importers Import, 2010 Structure, % Total 9892217 100.00 USA 988712 9.99 Germany 791686 8.00 Japan 787694 7.96 France 734940 7.43 UK 720030 7.28 Italy 599634 6.06 Spain 410929 4.15 Hong Kong 390509 3.95 The Netherlands 379415 3.84 Belgium 328369 3.32 In 2010 Bulgaria exports to all given countries, except the USA and Japan, and its main markets are: in the EU Italy, Romania, The Netherlands, Cyprus and UK outside the EU Switzerland, Russia, Macedonia, Albania and Serbia. The top five competitors and their share on the main markets of Bulgaria in the EU in 2009-2010 are given in the following table (the ranking of the countries is valid to 2010) Table 125. Main competitors on the EU markets, where Bulgarian export is the highest, 2009-2010 Italy BG export in 2010-8126.44 thousand EUR Romania BG export in 2010-1116.81 thousand EUR 1 China 36.80% 37.79% 2 Vietnam 13.99% 14.99% 3 Belgium 15.35% 13.47% 4 France 6.94% 4.79% 5 Indonesia 3.85% 4.77% 1 China 29.21% 27.99% 2 Italy 7.00% 12.63% 3 Germany 9.73% 8.14% 4 Spain 7.86% 7.66% 5 Greece 15.92% 7.33% 12 Bulgaria 1.01% 1.19% 15 Bulgaria 1.70% 1.24% 99

The Netherlands BG export in 2010-752.32 thousand EUR 1 China 39.59% 42.75% 2 Belgium 29.18% 18.99% 3 Vietnam 13.15% 15.33% 4 Germany 7.13% 6.34% 5 Indonesia 3.13% 3.48% Cyprus BG export in 2010-377.29 thousand EUR 1 Greece 39.16% 38.67% 2 Spain 20.87% 23.05% 3 Italy 9.07% 9.35% 4 China 8.30% 8.03% 5 UK 6.42% 6.91% 67 Bulgaria 0.00% 0.00% 12 Bulgaria 0.00% 0.52% UK BG export in 2010-369.76 thousand EUR 1 China 50.76% 51.37% 2 Vietnam 13.39% 12.70% 3 Belgium 7.38% 7.09% 4 Italy 5.42% 5.15% 5 The Netherlands 3.74% 3.96% The analysis of the data shows that: 57 Bulgaria 0.00% 0.00% The main market of Bulgaria in the EU is Italy, where it holds headmost position among the main suppliers of the analysed product group (Bulgaria holds 12 th place also on the market of Cyprus, but the volume of Bulgarian export there is many times smaller). Bulgaria is not among the main five suppliers in none of the studied markets in the studied EU countries, as its market share does not exceed 1.3%. The market share of Bulgaria increases in 2010 compared to 2009 in Italy and Cyprus, decreases in Romania and remains relatively constant (and extremely small) in the Netherlands and UK. Data for the trade balance, import and export on the leading market for the analysed product groups Italy, are shown in the next table: Table 126. Trade balance, import and export of the product group on the leading market, in thousand EUR Italy 2006 2007 2008 Trade balance 308031.23 110165.21 92051.7 114096.5 105928.1 Import 798894.77 685762.79 622802.3 507486.53 647158.87 Export 1106926 795928 714854 621583 753087 100

The increasing share of Bulgarian import in Italy in 2010 compared to 2009, in combination with the growth of the total volume in the import for the studded product group registered on the Italian market show that this market is perspective for the Bulgarian export. The main three products by export volume in value expression in this product group, exported to the leading market Italy are shown in the next table. Table 127. Top 3 products of product group Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials, exported to the largest market (Italy) Top 3 products, exported to the relevant market Import from Bulgaria (thous. EUR) Share of the Bulgarian export of the product in the whole product group Total import of Italy (thous. EUR) Share of the Bulgarian export in the total import of Italy Slippers and other house shoe with outer soles of rubber and uppers of textile materials (excl. sports footwear, tennis shoes, basketball shoes, training shoes and the like) 2351.88 4010.88 48.9% 58.3% 32743.45 40716.56 7.2% 9.9% Footwear with outer soles of rubber, plastic, leather or composition leather and uppers of textile materials (excl. sports footwear, tennis shoes, basketball shoes, training shoes and the like 1904.45 2736.68 39.6% 39.8% 229176.18 309137.7 0.8% 0.9% Sport shoes, incl. tennis shoes, basketball shoes, training shoes and the like, with outer soles of plastics or textile materials 557.85 130.28 11.6% 1.9% 214779.53 238038.29 0.3% 0.1% While Bulgarian import of the first two top products of the studied product group on the main market Italy increase in volume, Sport shoes, incl. tennis shoes, basketball shoes, training shoes and the like, with outer soles of plastics or textile materials) registers significant fall. As a conclusion it may be said that the main client of Bulgaria for the products in group Footwear, gaiters and similar articles; parts thereof is Italy. This is a sign of very strong dependence of Bulgarian manufacturers from one client. The top five competitors and their share on the main markets of Bulgaria out of the EU in 2009-2010 are given in the table below (the ranking of the countries is valid to 2010). 101

Table 128. Main competitors on non-eu markets, where Bulgarian export is the highest, 2009-2010 Switzerland BG export in 2010-558.78 thousand EUR 1 China 26.12% 26.94% 2 Germany 23.10% 21.51% 3 Italy 18.47% 14.64% 4 France 8.89% 9.26% 5 Vietnam 6.40% 6.92% 28 Bulgaria 0.00% 0.08% Russia BG export in 2010-142.33 thousand EUR 1 China 71.84% 75.73% 2 Vietnam 9.60% 6.31% 3 Italy 3.42% 4.07% 4 Indonesia 3.00% 2.32% 5 Ukraine 3.11% 2.18% 19 Bulgaria 0.00% 0.01% Macedonia BG export in 2010-30.88 thousand EUR 1 China 58.06% no data 2 Vietnam 13.75% no data 3 Italy 6.61% no data 4 Turkey 5.98% no data 5 Serbia 4.65% no data 20 Bulgaria 0.05% no data Albania BG export in 2010-21.09 thousand EUR 1 China 85.79% 86.79% 2 Italy 8.26% 8.88% 3 Slovenia 0.70% 1.26% 4 Turkey 2.09% 1.08% 5 Vietnam 0.87% 0.56% 7 Bulgaria 0.61% 0.23% Serbia BG export in 2010-21.09 thousand EUR 1 China 62.65% 55.71% 2 Vietnam 14.56% 15.41% 3 Italy 5.50% 6.19% 4 Indonesia 2.42% 3.84% 5 Romania 1.29% 2.90% 9 Bulgaria 0.03% 1.58% The analysis of the data shows that: The volume of Bulgarian export to non-eu markets is relatively smaller than that on the EU markets. Bulgaria is not among the top five suppliers of the studied product group for none of the studied five markets out of the EU. Bulgaria holds the headmost position (7 th ) on the Albanian market. The market share of Bulgaria, however, is exceeding 1% only on the market of Serbia. 102

The above presented data on the export by main product groups on the respective markets give ground for the following conclusions regarding the traditional and potential markets for sector Manufacture of wearing apparel, including leather apparel, tanning of leather : Traditional markets Traditional markets for sector Manufacture of wearing apparel, including leather apparel, tanning of leather are the EU countries, mainly Greece, Germany, Italy, Spain and France. Germany, Italy, France and Greece are traditional markets for the products of the sector. Germany, Italy, Spain and France are in top 10 of the biggest consumers worldwide, an argument in favour of their selection for priority target markets of the main product groups in sector Manufacture of wearing apparel, including leather apparel, tanning of leather. Markets with potential for development The markets of the EU countries retain their first position among the markets with potential, where Bulgaria currently trades and will trade its goods in future. In addition to them, the East Asian markets and the markets of USA and Canada have also high potential. The presence of own trademark and internationally recognized standards increase the competitiveness of companies. Own trademark According to data from a survey for FOCUS 2020 - Strategy for development of sector Manufacture of wearing apparel in Bulgaria, at the end of 2009 the following situation is observed with regards to the possession of own trademark by enterprises in sector Manufacture of wearing apparel : 48% of the interviewed companies have their own trademark, of them, 24% have registered only 1 trademark, 14% - 2 trademarks and 10% do not indicate the number of their trademarks. Regarding sector Tanning and dressing of leather; manufacture of luggage, handbags, saddlery and harness; dressing and dyeing of fur, according to the developed in 2007 Strategy for development of sector Footwear and leather articles in Bulgaria, 2008-2013, 64,7% of the interviewed companies give positive answers, and 29,4% - negative. 35,5% of companies owning trademark offer it both in Bulgaria and abroad. Only 23,5% of the companies offer it entirely on the Bulgarian market. According to experts in the sector, the main reason for CMT working and not developing own collections (trademarks) is the lack of state policy and support for participation in trade exhibitions and fairs to demonstrate own collections and promote Bulgarian trademarks. The development of own trademark is costly process, time-, funds and human resource consuming. Several years are necessary in order to establish a trademark on the market and to conquer stable market positions, leading to profit for the manufacturer. Imposing a given trademark on the international market means not only to develop a collection, but also serious advertising, including: the organization of fashion-shows on world platforms, attraction of celebrities for product advertising, aggressive advertising in all channels (leading world fashion magazines, TVs, etc.). Bulgarian manufacturers do not possess free financial resources to be totally directed at the development and imposing of own collection. Moreover, they have small production capacity and are not able to satisfy big orders. Therefore, currently it is more profitable for Bulgarian manufacturers to work as sub-contractor for leading world 103

manufacturers. The predominating in the sector micro, small and medium enterprises would difficultly compete with world trademarks already established in foreign markets. It is important that the BSMEPA, the MEET and the Ministry of Finance adopt a long-term programme (e.g. five years) that will enlist the exhibitions where Bulgarian trademarks shall be presented in order to establish on international markets. Internationally recognized standards 6 Implementation of international standards and good manufacturing practices in the production activities of companies in the sector still lag behind. This process has started to some degree in sector Manufacture of textile and textile products, but falls quite behind in sector Manufacture of leather and leather products. Data, regarding the introduced standards in both sectors are given below. According to information of the Bulgarian certification register (www.bgcert.com), as of mid- January 2012 in sector Manufacture of textile and textile products (EA Code 4) only 1 company has an ISO 9001:2000 certificate and 15 companies maintain ISO 9001:2008. Regarding sector Manufacture of leather and leather products (EA Code 5) one company maintains ISO 9001:2000 and only 5 companies have ISO 9001:2008. Regarding the introduction of systems for environmental management in sector Manufacture of textile and textile products only 1 company maintains certificate ISO 14001:2004, while in sector Manufacture of leather and leather products none of the companies has such a certificate. Regarding healthy and safe working conditions, only 2 companies in sector Manufacture of textile and textile products maintain certificate OHSAS 18001:2007. In both sectors none of the companies has introduced SA 8000 System for social responsibility management and GMP: 2008 Good manufacturing practices. As already mentioned above, the data provided for the leading markets in this chapter refer to the sector in general. The carried out survey is the source of information for the markets, where SMEs export their products. The graph below shows the export markets of the surveyed companies. 6 The published data regarding the introduction of internationally recognized standards refer to sector Textile and textile products (ЕA Code 04), which according to the classification, used by the Bulgarian certification registry, includes also the companies, dealing with wearing apparel manufacturing. 104

Graph 9. Export markets of the surveyed companies (in %) 1.85% 3.70% 7.41% EU countries 3.70% Other European countries Asian countries 83.33% USA and Canada Others The main competitors on world markets for the surveyed companies are the EU countries. The competition is focused in 9 countries. First, with 40% of the answers is ranked Romania, followed by Italy (25%) and France (20%). The rest of the competitors (Germany, Poland, Spain, Greece, Macedonia and Belgium) form 55% totally. It is interesting to note that 7 of the interviewed managers consider they have no competitors in the EU. Among the non-eu countries, the main competitor of Bulgaria is China, indicated by 72,7% of the respondents. Next ranked is Turkey with 31,8%%. India, Tunisia and Vietnam are also mentioned, as well as some European countries, out of the EU: Macedonia, Serbia, Ukraine, Albania, Moldova and the ex-soviet republics. USA manufacturers are also indicated as important competitors for the Bulgarian companies. Five of the interviewed managers indicate that they have no competitors out of the EU. For both types of markets (in and out the EU), it can be noted that Bulgaria s neighbouring countries are its competitors, which hampers finding market niches on their markets. Main advantages of the EU competitors are associated with lower prices for competing products (according to 88% of the respondents); higher productivity of the competitors; state support. In other words, the advantages of the competitors of the EU are exactly those things, the studied managers consider critical and with great priority for Bulgarian companies. It is necessary to mention that the main advantages of the competitors are logical sequence of the manufacturing characteristics of the competitor countries themselves. The advantage of China is namely the low labour cost. But this advantage is valid also for the Bulgarian companies, because it is known that payment in Bulgaria is also quite low. Therefore, the other advantage high productivity seems more important. It is related not only to labour, but to high technological level, access to cheaper financial resources, etc., i.e. to factors, competitors of these countries dispose of and Bulgarian companies does not. The third advantage of the competitors is also important state support. It is typical for Turkey, where the state is subsidizing the sector and gives greater chance to companies to enter and strengthen positions on international markets. Not surprisingly Turkey is recognized as one of the main competitors of Bulgaria. This fact doesn t seem hopeful, having in mind that Turkey is a neighbouring country and could easily fill the market niches in the region. The portfolio of the perspective markets and the assessment of their viability according to the company managers vary in a wide range. For that reason it is difficult to present these data in a more summarized way see, next table. 105