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This month the Bulgarian silk cluster will sign an agreement for a $37 million loan, organisation head Simeon Beshkov said.

The funds would be used for the development and re-construction of silk production facilities. One of the main project aims will be the renewed activity within the sector, in which Bulgaria has long-term experience, Dnevnik newspaper reported.

Bulgarian silk cluster unifies 12 producers. The cluster plans to invest in the purchase of land and equipment. All 12 producers will receive loan grants.

Production will start in 2008, according to plans. The main markets will be Germany, Japan, Greece, Italy and Turkey. Only seven to eight per cent of the production will be allocated for the domestic market.

International markets have increased their demand for high-quality silk, Beshkov said.

Due to the unsuccessful privatisation many producers in the sector were forced to stop working. In 2000 some renewed their activity but currently produce significantly lower amounts than their capacity.