KNOWN as the place where the first Bulgarian republic was established, the small town of Radomir in South-Western Bulgaria is on its way to turn into a centre for manufacturing spare parts for German vehicles.

Back in 1918, this town was the birth place of an army rebellion, which put an end to the participation of Bulgarian in World War I. Led by the agrarian leader Alexander Stamboliiski, the rebels proclaimed the so-called Radomir Republic in an attempt to stop the suicidal belonging of Bulgaria to the German alliance. Ironically enough, this is where spare parts for the future German vehicle supplies for the Bulgarian Army will be manufactured.

The news came after the visit of Deputy Prime Minister and Economy Minister Lidya Shuleva to Germany on December 1. German company Kuhn Technology announced its decision to establish a factory for the production of parts.

Kuhn Technology, which is located in Germany's Saarland Province, is one of DaimlerChrysler's large suppliers. The investment is part of the car manufacturer's development programme, related to the order, which DaimlerChrysler carries out for upgrading Bulgarian Army's vehicles.

Kuhn will invest eight million euro in Bulgaria over the next three years to launch the production of car components and machinery. It specialises in the production of sheet metal forming and plastic forming, and supplies parts also for Opel and Volkswagen among others.

Kuhn has purchased a storage facility in Radomir for 500 000 euro. The new production in Radomir is to start by end-2004 and most of its output will be designated for export.

DaimlerChrysler, the world's third-largest car manufacturer, will begin deliveries for the Bulgarian armed forces under a December 2003 agreement it signed with Defence Ministry. During the last visit to Bulgaria of German chancellor Gerhard Schroeder back in August, documents of two contracts - for deliveries and an offset agreement - were exchanged between Defence Minister Nikolai Svinarov and Dr. Klaus Mangold, executive adviser to the chairman of DaimlerChrysler for Central and Eastern Europe and Central Asia.

The contracts envisage the upgrading of Bulgarian Army's park of transport and specialised vehicles. The contract value is believed to be within the range of 500 000 million to one billion leva and will spread within several years.

Under the agreement, the carmaker will deliver 12 900 vehicles, among which trucks between 1.5 and 8.5 tonnes, all-terrain vehicles, buses, and personnel carriers. At least 70 percent of the contract value will be implemented according to the offset programme with Bulgarian sub-contractors.

The first delivery, scheduled for 2004 and 2005, will include 112 vehicles - all-terrain vehicles, trucks, carriers, and buses. Under the offset agreement, equipment, instruments, spare parts, and training services will be delivered.

In another development, during the business day of Bulgaria in Germany, Shuleva presented the economic development of this country on its road to the EU accession to some 120 representatives of established German companies, and other interested parties.