The company expects its consolidated revenues during this year to remain around BGN 100 million
Increased and more cost-effective exports have compensated for the almost 10 percent decline in trade in electrical materials on the domestic market. This sums up the business situation of Plovdiv’s company “Filkab” during the year. “The crisis that the coronavirus brought to the economy affected our business as well. The company is building solar parks and working in the energy sector.
It was beneficial for us that we managed to complete the projects started in 2019. This helped us maintain good profitability.”, Atanas Tanchev, CEO of the company, told Capital. The projects are several photovoltaic energy plants in Cyprus. The Plovdiv company built a 7.5MW solar park as a general contractor and acts as a subcontractor in the construction of another with a 5MW capacity. Next year it plans to build its own solar power plant for €9 million.”
“The crisis is helping us reconsider our business model and the way we work,” Tanchev said. For 2021-2023, Filkab does not expect or seek large revenue growth, but plans to increase profitability significantly. The company has set a goal of consolidated sales revenues of about BGN 100 million. Workers, currently about 270, will not be laid off neither during the crisis nor in the upcoming years.
Compensatory mechanism
The group’s sales revenue for 2018 was BGN 84.8 million, reaching BGN 90.5 million in 2019. “We have achieved smooth revenue growth, which is the better option for us,” said the CEO of Filkab. Sales in Bulgaria have been declining this year, mainly due to the slowdown in investments by energy distribution companies, which are the company’s main customers. Conclusion of new projects in Filkab’s subsidiaries abroad has served as compensation for the problems on the Bulgarian market.
Transformer stations, manufactured by Filkab’s subsidiary “Engineering”, are the most complex product that they offer. Another area of Filkab’s business is photovoltaic systems. According to the company, they have once again become relevant on the market, because the cost of investment in such a project has dropped significantly and the return is not more than 6-7 years. This means that a state grants and incentives for the purchase price of electricity are no longer needed to build a photovoltaic park. Grants have done their job and technology has reached a level where the principle of market economy is already working. 10 years ago, the price of 1 KWp (kilowatts peak, which is the nominal installed power) for solar panels was €1,600. In 2020, it is already below €300.
Own power plant
Filkab’s largest finished project of a photovoltaic power plant is in Turkey and has a capacity of 35MW. There, the company is a subcontractor for the electrical part. In Bulgaria the company makes more solar parks, but with less power. Nowadays the demand is for much smaller systems – mostly solar roofs and power for own consumption. “We have investment intentions to build a solar system with a capacity of 15MW on our land near Plovdiv. The project is still in its infancy, but it is possible to start construction in 2021. We will sell the produced electricity on the free market.
Preliminary estimates for the cost of the project are about €9 million. We are considering two financing possibilities. One is through loan funds for project financing, and the other is to find a partner with investment intentions in this area. The big question regarding this project is how the market will move and what the European regulations will be in the upcoming years. “I believe that the fight against global climate change will not be affected by the current economic situation,” Atanas Tanchev concluded.
New markets
Filkab is expanding its overseas markets. Near are those in Macedonia, Hungary and Romania, where several SPV companies have been established – owners of photovoltaic projects of the company. The withdrawal of European investors in Turkey has had a negative impact on the Plovdiv company. On a project basis Filkab also works in countries far from Bulgaria. Equipment was delivered to Myanmar, Spain, the United Kingdom, Belarus, Lebanon and Iraq. “Virtually we have no geographical restrictions on the export of our products. We are steadily increasing our competitiveness, which will help expand our markets,” said the CEO of Filkab.
Source: Capital
