Japanese company Sumitomo Electric, a cable manufacturer for the automotive industry,  part of the Sumitomo Electric Bordnetze SE (SEBN) group active in 13 countries, is launching "a plan to reorganize its activities" in Bulgaria for the following two years, which involves the transfer of manufacturing operations to Romania and the Republic of Moldova, according to Profit.ro and Radio Bulgaria.

As labor cost is a key element of the decision, it is likely that the company will prefer Moldova for expanding its operations rather than Romania, where the wages are higher.

"The decision to relocate production is driven by competition in the cable assembly industry. The high production costs in Bulgaria, in particular the increase in labor costs, adversely affected the company's ability to outsource new mass production projects of cable assemblies to its locations in Bulgaria," the company explained.

The relocation will reportedly lead to the dismissal of more than 1,000 employees in Bulgaria.

Sumitomo Electric will suspend the operation of one of its factories in Bulgaria, the one in the city of Mezdra, in 2025, and the second factory, in the city of Karnobat, will continue to operate only at reduced capacity.  

The Mezdra factory, which opened in 2008 and employs approximately 950 people, is slated for closure at the end of March 2025. 

The Karnobat plant is planned to "optimize" about 100 jobs starting in February 2025. It currently has 1,000 employees.

iulian@romania-insider.com

(Photo source: Aksakalko/Dreamstime.com)