불가리아 경제뉴스((6 – 13 JULY 2007)

 

 

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (6 – 13 JULY 2007)

 

 

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

·        UniCredit sees good outlook for Bulgarian economy

·        Registration of Bourgas-Alexandroupolis Project-Constructor to be Discussed

·        Bourgas kept in dark about oil pipeline

·        Bulgaria gets ready for south stream gas pipeline agreement

·        Industry shocked by power price hike

·        Bulgaria power consumers get option to return to regulated market

·        High electricity price - expensive goods next autumn

·        EBRD fund provides cash for Kozloduy heat plant

·        EBRD Lends Bulgaria's MKB Bank EUR 5 M for Energy Efficiency

·        125 M EUR More for the Earlier Closure of the NPP Kozloduy Blocks

·        Belene NPP construction to kick off in 2009

·        Nuclear energy development among Bulgaria`s government priorities

·        Bulgaria new vehicle dealers report record June sales

·        Bulgaria-based coffee makers advocate excise duty refund

·        Bulgaria reports 0,4% deflation in June

·        Trade deficit in Bulgaria up by 44 per cent at the end of April 2007

·        Industrial production in Bulgaria increases by 11.7 per cent on annual basis

·        Bulgarian wine makers set sight on Russia and the Asian countries

·        Swissport takes over at Sofia airport

·        Bulgaria to spend EUR 500 M on road repairs in 2008

·        Bulgaria, Georgia open joint business forum

·        Bulgarians spent 700 M EUR for holidays abroad in 2006

·        Bulgarian parliament ratifies TADT

·        Sofia underground stretch to cost BGN 235m

·        GDP per capita in Bulgaria 60 per cent lower than in EU

 

 

INVESTMENTS:

 

·        120 mln euro investments put Bulgaria on auto industry map

·        Germany is No1 tourism partner to Bulgaria

·        Projects for EUR 200m vie for Rose Valley

·        Borosport to invest 70 mln levs in Borovets ski runs

·        Sultan of Oman buys Super Borovets

·        Super Borovets to allocate BGN 8m for dividend

·        Greek fund to invest 15 bn EUR in Bulgaria, Greece, Serbia

·        Austria's Cuubuus to invest 150-160 mln EUR in Ruse

·        Austria's EVN to invest 7 mln levs in Plovdiv heating utility

·        Bulgarian co plans to build 220 mln euro solar energy plant in Shumen

·        Bulgarian co Ficosota Syntez to invest 32 mln levs

·        EU encourages use of IT with EUR 3.6bn

·        More than 500 000 UK tourists visited Bulgaria in 2006

·        Third building in Business Park Varna under construction

·        AIKO to invest BGN 8m in new warehouse

·        Citypoint to build network of small shopping centres

·        Sheraton's owner to invest EUR 10m

·        Ceratezit to invest EUR 3m in 2007

·        EUR 227 bn invested in real estate in Europe in 2006

·        Fund to invest EUR 150m in Southeast Europe

 

 

 

COMPANIES:

 

·        Raiffeisenbank opened 12 centers for microfinancing

·        3 banks in contention for 120 mln euro BDZ bond loan

·        6 companies from Bulgaria and abroad to take part in Lom Port concesion bid

·        OMV and Vienna Ins. Group launch local collaborations in Bulgaria and Romania

·        Chimimport buys REIT Hyundai Properties

·        1st Private Post Office in Bulgaria Opens Doors for Customers

·        Bulgarian BTC gets 200 000 leva sanction for monopoly misappropriation

 

 

 

 

 

 

 

 

Articles:

 

 

MACROECONOMY:

 

UniCredit sees good outlook for Bulgarian economy

Bulgaria's GDP growth of 6.2% for the first quarter of 2007, compared with a 5.5-percent forecast, surprised analysts, UniCredit Group points out in its quarterly report on Bulgaria. The outlook for GDP growth until the end of the year is optimistic. Investments will reach a peak in Bulgaria's first year as a EU member, the report reads.At the same time the current account deficit will worsen, due to the pressure of domestic demand on imports and one-off sector-specific factors that will limit exports. one of these factors is the intention of a major non-ferrous metal producer to temporary terminate operations for repairs.The insufficient progress in fighting corruption and organised crime may entail financial sanctions from the EU, UniCredit analysts warn. That will affect the sentiments of international investors and will limit the potential benefits of EU membership.The average annual inflation will not drop below 5.1% in the second half of the year, due to higher administered prices and more expensive foods and fuels, the report reads.The budget surplus may reach 4.8% at the end of the year, which will be a record high figure. The big revenue improves the comfort of the government but it may miss its chance to give more stimuli to the economy by means of a more aggressive reduction in labour taxation.

Registration of Bourgas-Alexandroupolis Project-Constructor to be Discussed

A working meeting of the shareholders of the international project company for the construction of the Bourgas-Alexandroupolis pipeline is expected to be held in Sofia.
The meeting will be attended by representatives of the official authorities of Bulgaria, Russia and Greece – parties on the contract for the oil pipeline construction.Among the topics to be discussed during the meeting are the process of the company's registration and working versions of its statute.

Bourgas kept in dark about oil pipeline

The lack of information about the Bourgas-Alexandroupolis oil pipeline is the main reason for the increasing public concern in Bourgas, the mayor of the Bulgarian coastal city, Yoan Kostadinov, says in a letter to minister of regional development and public works Assen Gagauzov. Fishing and tourism are the main businesses in the region but people do not know how the project will affect them. The mayor insists on the organisation of an information campaign to explain the benefits and losses from the implementation of the project.The people in Bourgas want to know where the pipeline will pass, what facilities will be built and where, and how that will affect the economy and environment. The only information available is the tripartite agreement with Russia and Greece and the promise for USD 30 to 36 million receipts a year. It is not clear, however, what part of the amount will remain in Bourgas.A referendum will be held on September 2, 2007, where the city residents will decide whether they approve the project agreement or not.

Bulgaria gets ready for south stream gas pipeline agreement

An expert group from various institutions will prepare a proposed intergovernmental agreement on the South Stream gas pipeline construction.The expert group will include a deputy economy and energy minister and representatives of the Economy and Energy, Regional Development and Public Works, Foreign, Finance, Environment and Water Affairs and Administration Ministries, the Cabinet and Bulgargaz Holding.The experts will have to give regular reports to the Cabinet on the negotiations’ stages, a Cabinet media statement said.South Stream pipeline will transport gas from Russia to Bulgaria under the Black Sea. The gas will head to Southern Europe.The project will turn the Bulgaria into a strategic centre for distribution of natural gas towards Europe.It would also improve Bulgaria’s the security of Bulgaria’s energy supplies. South Stream’s capacity would be 30 billion cubic metres of gas a year, the statement said.

Industry shocked by power price hike

 

Industrial enterprises, which are the consumers of high- and medium-voltage electricity in Bulgaria, have demanded a transition period for the phase-out of regulated prices. Representatives of companies from different sectors and the Bulgarian Industrial Association had a meeting with experts of the State Energy and Water Regulation Commission (SEWRC) on Monday to try and find a solution to the problem.
The liberalisation of the market from July 1 and the drastic increase in prices by the National Electric Company (NEK) have shocked enterprises. We thought the price would rise gradually by 2 or 3%, the coordinating director of Biovet, Petar Domuschiev, said. But the SEWRC approved NEK's new tariff, raising the prices for high-voltage consumers by 34% on business days and 41% at weekends. The charge for transmission of high-voltage power was also drastically increased: by 45%.The hike will raise our product prices by some 10% in the first month, Georgi Petrov of Radomir Metal Industry said. That means an inflation boom and non-competitive exports. The pricing scheme itself is not transparent enough, the CEO of the Branch Chamber of Ferrous and Non-Ferrous Metallurgy, Politimi Paunova, said.The free market is not yet functioning, there is no electricity exchange. Such things are not done overnight, Viohalco's manager for Bulgaria, Anton Petrov, said. The Greek company is owner of the metallurgical plants of Stomana Industry, Steelmet, and Sofia Med. There are quotas on the free market, which are absolutely insufficient to meet the needs of the industry, Petrov added.

 

Bulgaria power consumers get option to return to regulated market

Electricity consumers that have opted for a new carrier will have the option of reverting to the regulated segment of the market where the State Energy and Water Regulatory Commission fixes transmission, distribution and access tariffs as well as the prices at which the regional electricity distribution utilities sell to their customers.This option will provided under changes to the guidelines for the liberalisation of the local energy market approved last week by the power regulator.EU consumer protection commissioner Meglena Kuneva called attention to the absence of the option, saying the restriction was to the consumers' detriment.Even in the aftermath of the July 1 market deregulation, the local electricity traders have been unable to offer competitive prices and lure clients from their rivals.Officials from the SEWRC will meet this week with representatives of the Federation of Major Energy Consumers and the Bulgarian Industrial Association to discuss a more gradual market liberalisation model after the business community complained it was taking the brunt of the recent electricity tariff hike.Source from the SEWRC said it was unlikely that the new prices will be revised.

High Electricity Price - Expensive Goods Next Autumn

A 45% hike in the electricity price accompanied by a 40% rise in electrical power transference costs will unavoidably lead to higher inflation rates. Since electricity plays a major part in the price-forming policy, large-scale price increases are expected in Bulgaria. Metal and cement will get rather costly, as well as construction and transport services connected with it. Bulgaria's trade balance deficit will rapidly increase because companies and consequently the goods exported from this country will lose competitiveness. At any event, it will be very difficult for the Bulgarian economy to overcome such a serious inflation stress. By October-November, price hikes will be quite conspicuous.

EBRD fund provides cash for Kozloduy heat plant

The 13th assembly of the Kozloduy International Decommissioning Support Fund donors last week voted to provide 39 mln euro for the construction of a thermal power station on the site of Bulgaria’s Kozloduy nuclear power plant. In addition to the NPP, the new thermal power plant will also supply heat to the city of Kozloduy. Bulgaria stands to receive an additional 125.8 mln euro from the fund for an array of nuclear and non-nuclear projects. The EBRD-administered fund has so far extended some 200 mln euro to Bulgaria for various nuclear projects.

EBRD Lends Bulgaria's MKB Bank EUR 5 M for Energy Efficiency

The European Bank for Reconstruction and Development (EBRD) inked a deal to extend Bulgarian bank MKB Unionbank a credit line worth EUR 5 M to help local industries reduce emission levels and boost energy efficiency.It builds up on a previous EUR 3 M extended to MKB in 2004, which helped nine private industrial business cut energy waste, the banks said in a joint statement on Monday.This project reflects the EBRD's strong emphasis on supporting Bulgaria's efforts in the development of an energy efficiency programme, which was one of the conditions for Bulgaria's accession to the EU, EBRD director for Bulgaria, James Hyslop, said.The development bank originally allocated EUR 50 M for six participating banks as part of its energy efficiency programme, which was supplemented by an additional EUR 55 M last year.MKB Unionbank, part of German banking group Bayern LB, had assets worth BGN 700 M at the end of April. EBRD is a minority shareholder in Unionbank.

125 M EUR More for the Earlier Closure of the NPP Kozloduy Blocks

The participants in the 13-th session of the Assembly of donors of the International fund “Kozluduy”, administered by the European bank for reconstruction and development (EBRD), approved all grant agreements proposed by the Bulgarian side for projects in the nuclear and non-nuclear sector of the country.The total amount of these grants is 125M EUR. Bulgaria will get additional 11.84M EUR for the processing of solid radioactive waste, and another 20M EUR on the program for the stopping of the operation of blocks 3 and 4 of Kozluduy NPP, announced from the press center of Ministry of economy and energy.The donors of the International Fund “Kozloduy” decided also to compensate the earlier closure of part of the NPP reactors through financing the construction of a new heating plant in Kozloduy worth 39 М EUR.During the meeting the Minister of economy and energy Rumen Ovcharov and the head of the “Nuclear safety” director of the EBRD Vince Novak signed 5 agreements worth 55 M EUR in the framework of the strategy for reduction of the negative consequences of the earlier closure of the two NPP “Kozloduy” blocks.The five agreements will provide additional financing for “Maritza-Iztok-2” heating plant, NEK EAD as well as for the construction of a gas-pipeline in Silistra. The supplied resources will also be used to rehabilitate public buildings and the street lights in 20 municipalities.

Belene NPP construction to kick off in 2009

Construction works on the Belene nuclear power plant (NPP) may commence in 2009, according to Sergey Tsochev, chairman of the Nuclear Regulatory Agency (NRA). Russia's Atomstroyexport is expected to submit the project to NRA by the end of the year. After all necessary documents have been presented, the nuclear watchdog will have nine months to approve the project, NRA deputy chairman, Borislav Stanimirov, said. The infrastructure and communications at the Belene NPP site may be built simultaneously with the procedure, as no permission from the NRA is required for similar activities.
The first and the second units of the new NPP should start operation 6.5 and 7.5 years after the launch of construction works, respectively. The possible delay of the implementation of the project depends on the licensing body, according to NRA experts. The licensing of each unit will be carried out separately. Atomstroyexport won the procedure for the construction of the Belene NPP. The overall value of the project stands at EUR 3.977 billion. The other bid for the project was submitted by Skoda Alliance and was for EUR 4.098 billion.

 

Nuclear energy development among Bulgaria`s government priorities

Bulgaria’s nuclear energy development in line with the common European energy policy will be a priority for the Bulgarian Government, Foreign Minister Ivailo Kalfin said. Kalfin took part in the 50th anniversary of the Nuclear Regulatory Agency (NRA), Focus news agency reported. After a certain period of doubt, Europe was beginning to revive the idea of nuclear energy development, Kalfin said. He said that the active participation of Bulgaria in various discussions helped the Council of Europe adopt a text allowing countries to freely choose their energy sources.Outgoing Economy and Energy Minister Roumen Ovcharov said that Bulgarian nuclear energy had good prospects for development.NRA head Sergei Tsochev said on July 9 that the construction of the Belene nuclear power plant in Belene, a town in north-western Bulgaria, could start as early as 2009.

Bulgaria new vehicle dealers report record June sales

A record-setting 4,807 new motor vehicles were sold in Bulgaria in June, including 4,491 cars and vans, shows data of the Union of the Importers of Automobiles.The H1 new vehicle market added 26% year-on-year.The truck segment raced ahead with a hefty 76% year-on-year growth in the first half of the year with sales topping 1,249 units. Trucks in the 18-44 ton category continue to drive more than half of the market. The nation's top-selling truck manufacturers are Mercedes, Iveco and Volvo.The auto segment grew by a fourth in H1 to 23,615 units.Toyota dealer TM Auto leads the competition ahead of the Ford and Peugeot dealers. Bulgaria's top-selling car in H1 was Dacia Logan with 1,500 units.The sales of pre-owned cars doubled year-on-year to 130,000 units in H1 2007.

Bulgaria-based coffee makers advocate excise duty refund

Coffee producers are urging the Bulgarian government to legislate the reimbursement of the excise on EU-bound coffee exports.The absence of this option makes their products uncompetitive and could divert future investment to countries with more favorable production and export rules, said the coffee makers.The finance ministry has taken the issue to heart and has shown readiness to initiate the necessary changes to the Excises and Tax Warehouses Act.Any change to the current excise rules will not take effect before the beginning of 2008. The on-reimbursement of coffee export excise has cost Kraft Foods Bulgaria, which owns the Nova Brasilia and Jacobs coffee brands, some 0.5 mln euro so far in 2007 and has prompted the company to put on hold a 1 mln euro investment in new equipment. Kraft Foods Bulgaria packages coffee for export to Romania and Austria. Bulgaria levies an excise of 0.70 levs/kg on raw coffee and 1 levs/kg on instant coffee.

Bulgaria Reports 0,4% Deflation in June

 

Consumer prices in Bulgaria fell by 0,4% in June, compared to the previous month, preliminary data from the country's National Statistics Institute showed on Thursday.
Food prices, which account for more than half of the consumer price index (CPI), fell by 1,3%, compensating for the small increases across the other sectors. Non-food prices grew by 0,1%, while service prices rose by 0,2%.Year-on-year inflation at the end of the month rose to 5,6% from 4,3% the previous month. Cumulative inflation for the first quarter of the year was 2,0%.Bulgaria's economic forecasts agency AEAF sees the annual inflation figure falling to 3,4% in 2007, which would allow the country to join the Exchange Rate Mechanism (ERM II), the euro "waiting room", at the beginning of next year.

 

Trade deficit in Bulgaria up by 44 per cent at the end of April 2007

Bulgaria's trade deficit at the end of April 2007 was 4.72 billion leva compared to 3.28 billion leva for the same period of 2006, says the National Statistical Institute (NSI).The increase was 43.7 per cent on an annual basis. In April 2007 alone, the trade deficit was 1.12 billion leva, investor.bg reported.Exports (FOB, Freight on Board) in the end of April were 7.56 billion leva compared to 7.17 billion leva in 2006 and import (CIF, Cost Insurance and Freight) were 12.28 billion leva compared to 10.46 billion leva at the end of April 2006.Foreign trade data is still insufficiently precise, said Bulgarian National Bank (BNB) and NSI. They said the new way of collecting information was still not effective, which meant that export growth was being underestimated.Despite export underestimation data showed that it grew in the first four months of 2007. The only exclusion is the group of mineral fuels and similar products which registered export decrease of nearly 40 per cent to 775.6 million leva.The largest import increase was registered within soft drinks, alcohol and tobacco products, more than 220 per cent year-on-year.

 

 

Industrial production in Bulgaria increases by 11.7 per cent on annual basis

Industrial production in Bulgaria in April 2007 went up by 11.7 per cent on an annual basis, said the National Statistical Institute (NSI).Industrial production on a monthly basis went down by 8.6 per cent.Primary industry grew by 3.4 per cent on a monthly basis and 9.7 per cent on an annual basis.Production of tobacco products experienced 7.3 per cent growth for the month and 17.4 per cent over one year.Electricity, water and gas production and distribution saw a decrease of 1.1 per cent for April and a 23.4 per cent growth on an annual basis.Industry sales in April went down by six per cent compared to March figures and increased by 10.2 per cent on an annual basis.NSI preliminary data for May 2007 showed that industrial production grew by 1.4 per cent on a monthly basis and by 6.9 per cent on an annual basis.

Bulgarian wine makers set sight on Russia and the Asian countries

 

The forthcoming large scale reform in EU's the vine and wine sector presents Bulgarian wine makers with new expansion opportunities. The revocation of the bulk of subsidies, which have proven inefficient throughout the years, is one of the most important measures proposed by Mariann Fischer Boel, European Commissioner responsible for Agriculture and Rural Development. A similar move would make Bulgarian companies more competitive as they currently have no access to such funding. The figure amounts to EUR 1.3 billion annually, spent by the EU mostly on getting rid of the wine that cannot be sold. We are satisfied with the fact that the rules will become equal for all and that Italians, French and Spanish will not be able to receive subsidies, which allowed them to sell their products at lower prices on the European markets and outside of Europe, Yordan Panayotov, executive director of Black Sea Gold of Pomorie, said.
The funding will be redirected for measures that will be beneficial to the country, Panayotov added. Brussels will budget EUR 120 million for promoting wine in third countries in the period 2008-14. Bulgaria will get EUR 2.5 million of that sum, according to Nikola Nikolov, chairman of the Bulgarian Vine and Wine Chamber (NVWC).
The criteria for applying are not clear yet, but NVWC is getting prepared to utilise the funding as efficient as possible. All NVWC company members have filled in a questionnaire stating their European countries of interest as regards to promoting wine with EU funding. Russia and the Asian countries, where sales of Bulgarian wine have grown considerably in recent years, are among the most preferred destinations. A total of 64% of Bulgarian wine exports go to Russia, Natalia Kazakova, manager of Vinprom Rousse, said. Bulgaria remains the number one wine importer in Russia in the low-price segment, following Russia's termination of imports from Moldova and Georgia.The most important measure is the unification of the labels of the various types of wine, according to Branimir Botev, chairman of the supervisory board of Rose Valley Winery. The present European labelling regulations do not provide room for information, such as year of production and the grape variety. Consumers are offered instead a complex terminology of table, regional and quality wines, which is confusing. The worries of Bulgarian wine producers that the adding of sugar to the wine will be prohibited are in vain, Botev said. Bulgaria obtained that right for certain regions and in cases of poor crop in the course of negotiations for the Agriculture chapter.

 

 

 

 

Swissport takes over at Sofia airport

 

Swissport has officially taken over the ground handling services at the Sofia airport, the Pari daily learned. The press office of the airport also confirmed the information. Swissport competitors, however, consider approaching the European Commission (EC) on the fact that the company was selected for a second ground handling services provider at the airport without a tender procedure, according to Pari daily's sources. Such tender procedure is not required by law, the Civil Aviation Administration (CAA) told the Pari daily. Furthermore, the Sofia airport is not obliged to sign a commercial contract for the service with Swissport, according to the CAA. The Swiss company has been issued a licence for this type of services by the CAA. The licence allows Swissport to take the ground handling services of the airport, if the company signs a contract with a client or an airline as in this case, experts say. Swissport has signed a contract with Air Malta, the Sofia airport said.

 

Bulgaria To Spend EUR 500 M on Road Repairs in 2008

 

Bulgaria will spend EUR 500 M on repairs to its road network in 2008, double the amount allocated for this year, Regional Development Minister Assen Gagauzov said on Sunday.The money will be used to restore between 2,500 and 3,000 kilometers of roads, Gagauzov told reporters.Gagauzov opened a 4-kilometer road stretch linking the village of Zlatar to a neighbouring monastery, some 20 kilometers south of Shumen in western Bulgaria.

 

Bulgaria, Georgia Open Joint Business Forum

 

Bulgaria's Foreign Minister Ivaylo Kalfin and his Georgian counterpart Gela Bezhuashvili will open Monday a joint business forum in the capital city of Tbilisi.
More than 20 Bulgarian businessmen are to take part in the event.The governments of Bulgaria and Georgia are to sign an agreement over classification information exchange.
In the framework of his visit to Georgia, Minister Kalfin is also scheduled to meet the country's Prime Minister Zurab Noghaideli and the Parliament's Deputy Speaker Jemal Inaishvili.

Bulgarians Spent 700 M EUR for Holidays Abroad in 2006

Bulgarians had spend round 700 million EUR for resting abroad last year, reported from the State Agency of Tourism (SAT).Bulgarians most desirable destinations in 2006 were Turkey, Greece and Macedonia.12% increase is noticed this year among the Bulgarians that travel abroad. Most often they go to Turkey, Macedonia and the countries from Central Europe.Meanwhile the interest of the Bulgarian tourist to local seaside does not go down. Bulgarian tourist is most frequently met on resorts like ‘Sunny Beach'.We already informed you about the increased interest by foreign tourists to Bulgaria, considering the Bulgarian membership in the EU.The interest of Romanians, Germans and Russians is still very strong.It is noticed a decrease of Serbian and Macedonian tourists mainly because of the visa regime.According to Stanislav Novakov's words (SAT's vice chairman) the resort of ‘Golden Sands' has the biggest future because unites sea and mountain.He added that the future of the Bulgarian tourism is in the quantity, not in the quality.

 

 

 

Bulgarian Parliament Ratifies TADT

The Bulgarian Parliament has ratified July 11 the Treaty for Avoidance of Double Taxation (TADT) between the United States and Bulgaria. The document was signed in Washington on Feb. 23 this year by Bulgaria's Minister of Finance Plamen Oresharski and the U.S. Deputy Secretary for the Department of Treasury, Robert M. Kimmitt.The list of tax breaks available to residents of either state now includes a reduction from 10% to 5% of tax on copyright and licensing royalties and a tax exemption for cases when the beneficial owner of the dividends is a pension fund that is a resident of either state; a 5% tax on the gross amount of the dividends if the beneficial owner is a company that owns directly at least 10 percent of the voting stock of the company paying the dividends; 10% of the gross amount of the dividends in all other cases. U.S. companies shipped goods worth $490.5 mln to Bulgaria last year while Bulgarian exports to the U.S. topped $438.9 mln.The Treaty should go for ratification by the U.S. Senate and will come into force as of January 2008.

Sofia underground stretch to cost BGN 235m

 

Тhe project for the setting up of the second stage of the Sofia underground will cost more than BGN 235 million, according to a notice on the public procurement contract published in the Official Journal of the European Union. The stretch is 6.5-km long and will include the setting up of 7 railway stations. Some 85% of the financing for the project will be secured from EU's accession funds under the Transport Sectoral Operational Programme. The state will provide the remainder as co-funding. Metropoliten, which is the contracting authority on the project, has already developed a project and conducted an environmental impact assessment. The tender documentation is ready as well. Construction works will most likely start in the beginning of 2008, while the stretch will be operational in 2011. Candidates should have an average annual turnover of at least EUR 200 million for the last three years or the equivalent in euro.

 

GDP per capita in Bulgaria 60 per cent lower than in EU

The GDP per capita of Bulgaria and Romania is 60 per cent lower than the average GDP for the 27 European Union (EU) countries, Bulgaria’s National Statistical Institute (NSI) said, referring to data from European statistics agency Eurostat.Preliminary data for 2006 show that GDP per capita expressed in purchasing power standards varies between 37 per cent to 280 per cent of the average figures for EU countries, investor.bg reported.GDP per capita in Luxembourg is more than two-an-a-half times the average for the EU-27.Ireland is nearly 40 per cent above the average while Denmark , the Netherlands , Austria and Belgium are nearly 20 per cent above the average. UK and Sweden are 15 per cent above the average and Finland , Germany and France, 10 per cent. Italy and Spain are slightly above the average level for the EU-27.Cyprus, Greece and Slovenia are at of five to 15 per cent below the average. The Czech Republic , Malta and Portugal are nearly 20 to 25 per cent below average GDP levels.

 

 

 

 

INVESTMENTS:

 

 

120 mln euro investments put Bulgaria on auto industry map

A raft of projects by multinational companies will generate 120 mln euro in local investment while positioning Bulgaria as an emerging manufacturer of components for the automotive industry, Yulian Balchev from the InvestBulgaria Agency, said on Thursday in Ruse.Belgian manufacturer of automotive semiconductor ICs Melexis, Yazaki, the Japanese producer of electric and electronic systems for the automotive industry, and French automotive components maker Montupet all set foot on the Bulgarian market in the past 12 months with operations in Sofia, Yambol and Ruse, respectively.The projects of the three investors will create a combined 4,000 jobs upon completion and may well shape Bulgaria up as a regional center for the automotive industry over the next couple of years, said Balchev. Montupet has completed the construction of its production facilities in the Ruse industrial park. It was just reported that the plant should be operational within three months.

Germany is No1 Tourism Partner to Bulgaria

Germany is leading foreign investor, foreign - trade and tourism partner to Bulgaria, but exists much more potential that could be developed. This was the words of Bulgarian Prime Minister Sergei Stanishev on the meeting with the German President Horst Koehler. He was on a 3-days official visit in Bulgaria.For the last year the size of the German investments in Bulgaria counts 100 million EUR, which considering the 4 billion EUR foreign investment in a total, shows unused potential in those relations, said Stanishev.He cited social researches which indicate that 85-90% of the German companies investors are satisfied of the business climate in the country and have intentions to enlarge its investments in Bulgaria.

 

Projects for EUR 200m vie for Rose Valley

 

Investments for a total of EUR 200 million will be proposed at Tuesday's extraordinary meeting of the Karlovo municipal council. The four candidates compete for the right to dispose of the sports base and the park in the town of Banya and to build on nearby municipally-owned plots in exchange. only one of the four projects, however, may be discussed, municipal councillors warned. only Banya Golf & Spa Resort's project has been proposed for discussion so far. The other investors have also been invited but their projects will be discussed only of they are included in the agenda for the day, Stoyo Karagenski, chairman of the Karlovo municipal council, said. The case is an example of neglecting the public opinion in Banya, independent councillor Branimir Botev said. Talks should be held with all short-listed candidates, according to Botev. Otherwise, the neglected candidates may challenge the procedure in court, Botev added.Mineral waters, which enable the development of spa tourism, are Banya's great capital. The idea was embraced by Rose Valley Investments, which plans to build a spa holiday village. Rose Valley Investments is owned by Sigma Capital, which announced its intentions to invest EUR 120 million in its project in Banya. Banya Golf & Spa Resort vows up to EUR 80 million investments in a golf course near Banya. Both candidates envisage setting up a joint venture company with the Karlovo municipality. The latter in turn, should contribute the sports base and the park in Banya to the capital of the JV. The move, however, is impossible as the plots are municipally-owned. Banya football club offers a BGN 20 million investment in a new sports and recreation centre. Georgi Genov, a businessman from Dolna Banya offers investments for between BGN 6 and 10 million.

 

Borosport to invest 70 mln levs in Borovets ski runs

Borosport AD, the company managing the skiing facilities in Bulgarian mountain resort Borovets under a concession arrangement, said it will invest 70 mln levs over the next 3 years in new ski runs, skiing equipment and installations for artificial snow. The size of the investment has qualified the company for a First Class Investor certificate issued by the InvestBulgaria Agency. The combined length of the Borovets ski runs will be extended to 120 km over the investment period. The company will attempt to make the best of the skiing locations with altitude between 1,600 and 2,500 m where snow shortage, which has plagued many an international winter resort, is less of a problem.Borosport will replace some of the existing ski lifts and will install a number of new ones. The new ski lift locations include the Markudjik 1 and 2 ski runs.The concessionaire will develop the resort as a year-around tourist destination, said Borosport managing board chairperson Nedyalka Sandalska.Borovets is the scene for a slew of major investment projects. The biggest development is the Super Borovets project that will add a significant number of hotel beds to the resort capacity.The list of investors include British fund Equest, local businessman Hristo Kovachki and holding company Chimimport.

Sultan of Oman Buys Super Borovets

His Majesty Sultan Qaboos bin Said of Oman is going to participate in the construction of a luxurious winter resort called Super Borovets in Bulgaria. The State Fund of Oman has bought a 33.5-percent-stake in the project from the Rila Borovets 2004 venture. The British investment fund Equest acquired 33.5-percent stake in the Super Borovets project. The news was spread by Equest managing partner Georgi Krumov and Stoyan Denchev, Honorary Consul of the Republic of Bulgaria in Oman. Representatives of His Majesty Sultan Qaboos bin Said visited Bulgaria about six months ago and started the negotiations with Glavbolgarstroy, which holds the majority share in Super Borovets. Two weeks ago a representative of the State Fund of Oman came to Sofia and the deal was finalized. Apartments, hotels and retail centers with a total floorage of 653,815 sqm along with the duly infrastructure will be constructed under the Super Borovets Project; the existing forty-two kilometers of ski runs in the resort will be extended by another thirty-six kilometers.The Super Borovets construction is expected to kick off in September this year and to be finished in 2012. The project will cost about 566 million euro.

Super Borovets to allocate BGN 8m for dividend

 

The investors in Super Borovets Property may receive BGN 12.28 per share if the shareholders decide to distribute BGN 7.984 million of the 2006 profit as dividend. A general meeting of the company is scheduled for August 24, 2007. According to the law, companies investing in real estate shall allocate at least 90% of their profit for dividend to shareholders.Super Borovets Property posted a BGN 8.871 million profit for 2006. Last year the company received BGN 9.9 million from the sale of a property in Samokov, which was previously acquired for BGN 550,000.

 

Greek fund to invest 15 billion EUR in companies in Bulgaria, Greece, Serbia

Greek investment fund Marfin Investment, part of Greek Marfin Popular Bank will invest 15 billion euro in company acquisitions in Bulgaria, Greece and Serbia.The company will act as a public investment fund with transparent structure of making operations, Financial Times reported as quoted by investor.bg reported. The fund will refrain from imposing service fees. Top managers will have an option to receive company's shares when their price reaches 10 euro per share. Investor concerns are related to the choice of appropriate for acquisition companies from the target markets. Another concern is Marfin's competitiveness in the telecommunications and healthcare sectors on which it will focus. one of the largest shareholders in Marfin Investment is the investment fund Dubai Financial Group which is expected to hold eight per cent of the company's capital.

Austria's Cuubuus to invest 150-160 mln EUR in Ruse

Austrian property developer Gruppe Cuubuus plans to invest 150-160 mln euro in a multi-phase project for a retail and entertainment center in Bulgarian city Ruse, said a company official.The Ruse municipal council has already received a request for the purchase of a 15.3 ha plot of arable land south of the Metro Cash&Carry outlet in Ruse. The project will be developed by Cuubuus Real Estate&Development Bulgaria OOD and Cuubuus Real Estate AD.According to the sketchy description of the project provided in the land purchase request, the complex will feature shops, restaurants, playgrounds, cinema theaters, bowling alleys and casino.The size of the planned investment is striking and warrants the presence of a company executive at the municipal council session when the project is reviewed, said council chairman Iskren Veselinov.Half of the plot eyed by Cuubuus will be occupied by various structures while the other will be parkland.The Austrian company is also in the process of acquiring a 8.0 ha lot east of Ruse for the construction of a logistics center. No further details about the project were immediately available.Cuubuus Real Estate&Development Bulgaria OOD is currently building a 75 m office high-rise in Sofia at a cost of 55 mln euro.

Austria's EVN to invest 7 mln levs in Plovdiv heating utility

Austrian utility company EVN plans to invest around 7 mln levs in the Plovdiv district heating company through 2009, it was announced after the signing of the privatisation contract on Thursday.The investment resource will be spent primarily on the modernisation of the heating infrastructure.The new owner has also budgeted 32 mln euro for the construction of a co-generation facility. EVN is paying 32.1 mln euro for 100% control of the heating utility.The new owner will be barred from divesting any equity or lowering his equity holdings below 51% over the next three years.EVN also undertakes to align the operation of the utility with the EU requirements towards large combustion installations. The Austrian company has also agreed to settle an outstanding debt of 12 mln levs owed to gas supplier Bulgargaz. In Bulgaria, EVN also owns the regional power distribution companies in Stara Zagora and Plovdiv.The Austrian company Thursday declined to comment on the progress of the sale of the Sunny Beach resort power distributor which it is poised to take over.

 

 

Bulgarian co plans to build 220 mln euro solar energy plant in Shumen

The local Innovation Company intends to build a solar power station in the high-tech park of Bulgarian city Shumen, said the company's board chairman Emil Minev.The 220 mln euro facility will generate 120MWh of electrical and 570MWh of heating power. Funding is provided by German-Swiss fund ICS.Construction should get underway in 2008 and wrap in four years.Innovation Company intends to deploy over the next four years a network of solar energy installations in Ruse, Silistra, Shumen, Dobrich and Varna.A plant for solar panels with an annual capacity of 10,000 units is also in the works, said Minev.

Bulgarian co Ficosota Syntez to invest 32 mln levs in new production ops

Ficosota-Syntez, the Bulgarian maker of foods, household cleaners, body care and laundry products, said it will invest 31.5 mln levs in new production facilities in the remainder of 2007.The investment spending will bring the number of Ficosota factories to six, all based in Shumen.The biggest chunk of the investment resource - 17 mln levs, has been earmarked for the construction of a new factory for toilet paper, sanitary towels and diapers. The four production lines of the new factory will be operational by the end of 2007.A further 7 mln levs have been invested in a new factory for snack foods.The capacity of the Ficosota soap production will be boosted on 2 mln levs while 5.5 mln levs have been set aside for expansion of the company's storage facilities.Ficosota Syntez has forecast turnover of 115 mln levs for 2007. Last year, sales climbed to 76 mln levs, up 60% over 2005. Earnings before taxes, depreciation and amortisation topped 5 mln levs in 2006 and should jump to 10-12 mln levs in 2007, said the company.Abroad, the Ficosota brands are marketed in Romania, Moldova, Serbia, the Ukraine, Macedonia, Albania, Kosovo, Montenegro and Bosnia.In addition to Shumen, the company has production operations in Sofia and in neighboring Serbia.In 2008, Ficosota plans to build a factory in the Ukraine with a local partner. The cost of the project is seen at $13 mln with the Bulgarian company contributing $4-5 mln.

EU encourages use of IT with EUR 3.6bn

 

Тhe European Union will provide a total of EUR 3.6 million to encourage the use of information and communications technologies in Bulgaria, the deputy chairman of the State Agency for Information Technology and Communications, Dimitar Stanchev, said. The amount will be allocated in 2007-13 under the competitiveness and innovations programme.The programme is aimed at enhancing the implementation and use of ICT by citizens, governments and especially by small and medium-sized enterprises. It is divided in three parts, each with a separate budget. As much as EUR 2.170 billion is envisaged for entrepreneurship and innovations, EUR 727 million for intelligent energy sources, and EUR 728 million for policies in the ICT sector.

 

More than 500 000 UK tourists visited Bulgaria in 2006

More than 500 000 UK tourists visited Bulgaria in 2006.Many tourists came to Bulgaria, bought real estate and stayed in the country, UK deputy chief of mission Nick Leake said, as quoted by Focus news agency.Leake was on a day visit to Smolyan during which he met the mayor of Smolyan and management of the regional administration.With tourism sector representatives, he discussed opportunities for the development of the region. Leake said that it was important for tourism companies to decide which is more important, to attract fewer but wealthy tourists or larger groups of tourists with less money to spend. Nearly 600 UK people live in the region of Smolyan. Britons come toBulgaria attracted by the mountains, the sea and the exceptional nature, Leake said.

Third building in Business Park Varna under construction

 

Bulgaria's Sistec Holding has started the construction of the third building in Business Park Varna. The investor opened the first building in the high-tech business complex in August 2006, the second one is under construction.The third building has a key location, as it faces the Devnya-Varna road, providing a second major approach to the complex. The other entrance of the park is on the road to Sofia. The new building will have a total area of 20,695 sq. m and will meet the A-class standards for such type of structures. The offices will be of the open-space type, which allows maximum flexibility. Bigger tenants can be offered space exceeding 1,800 sq. m.Business Park Varna already has more than 60 tenants but there is still demand for offices. The space in the new building is already offered at a base rent of EUR 10 per sq. m. The second building is expected to be completed in the next few months.On launching the project in 2005 Sistec Holding said it planned to invest more than EUR 50 million in the complex. The investor unites a group of companies operating in the field of telecommunications, IT and financial services.

 

AIKO to invest BGN 8m in new warehouse

 

Furniture retailer AIKO will invest some BGN 8 million in a new warehouse facility in Sofia, the company said. The new furniture depository will be opened in September and will service the two outlets of the company in Sofia. The warehouse will have a built-up area of 10,000 sq. m and will be the biggest furniture logistics centre in the country.
AIKO plans to open three more outlets in Bulgaria by the end of 2008. The turnover of the company totalled BGN 25 million in 2006, up 170% year on year.

 

Citypoint to build network of small shopping centres

 

Bulgaria's Citypoint is launching the construction of a network of small shopping centres countrywide in partnership with Business BG Group, managing partner Emil Dobrev said. This is the first such project in Bulgaria. The centres will be built in two formats: Citypoint Shopping in cities with more than 50,000 residents and Citypoint Park in cities with at least 20,000 residents. The space will be rented out to traders and shopping chains willing to do business in the respective regions. In the next two years the company plans to invest nearly EUR 50 million in five such projects in Bulgaria, the number of centres will increase to 15 or 20 later on. The first Citypoint Shopping centres will be built in Rousse, Dobrich and Sliven, where construction is expected to begin by 2008. Citypoint Parks will be built in Svilengrad and Botevgrad. The shops will be located in the city centres, where people can reach them on foot, Dobrev explained.

 

Sheraton's owner to invest EUR 10m

 

Тhe shareholders of Sofia hotel Balkan have give permission to Serbian subsidiary Metropol Palace to start talks for obtaining EIR 23 million loans. The company plans to start talks for obtaining up to EUR 20 million for the reconstruction and renovation of Hotel Metropol in Belgrade. The loan will have an interest rate equal to the six-month EURIBOR + no more than 2.6%. The repayment period of the loan will be set to 20 years.
EFG New Europe Funding of Amsterdam, Bulgaria's Postbank, Greece's EFG Eurobank Ergasias and Piraeus Bank are among the potential creditors. Other EUR 3 million will be used by the company for short-term financing and turnover money. Sofia hotel Balkan acquired a EUR 29.1 million loan from EFG Private Bank Luxembourg. The company used the funding to buy Belgrade's Hotel Metropol. Sofia hotel Balkan's stock lost 7.71% of its value over the last year. The stock appreciated by 4.17% to BGN 50 per share on Wednesday.The Sheraton Sofia hotel Balkan in Sofia will undergo reconstruction, which is expected to continue two years. The value of the project is estimated at EUR 10 million.

 

Ceratezit to invest EUR 3m in 2007

 

Ceratezit Bulgaria will invest EUR 3 million in company development in 2007, the shareholders decided at a general meeting. The amount will be invested mainly in the manufacture of high-tech products and in staff training in Luxembourg, executive director Dimitar Radev said.The consolidated profit of the Gabrovo-based company amounted to EUR 2.102 million in 2006, its sales totalled EUR 13.950 million.The general meeting also elected a new supervisory board chairman. No changes were made to the management body.

 

EUR 227 bn invested in real estate in Europe in 2006

 

Мore than EUR 227 billion was invested in real estate in Europe in 2006, a report of CB Richard Ellis and its Bulgarian partner, Elta Consult, shows. Investments last year went up by 46%, year on year, and doubled over the past two years.The biggest growth was registered in Russia, where property investments rose by more than 10-fold last year to EUR 2.6 billion. Bulgaria also posted a three-digit increase: 129%. As a volume, however, Bulgaria was last on the list of surveyed countries with total investments of EUR 1.373 billion, according to BNB data. The UK was first in volume with EUR 82.4 billion.

 

Fund to invest EUR 150m in Southeast Europe

 

Investment fund SECURE Investment (South Eastern Continent Unique Real Estate) plans to invest nearly EUR 150 million in Southeast Europe. The business interests of the fund are focused mainly in Bulgaria, Romania and Serbia. Italy's Aedes Investissement, which also has business interests in the region, owns nearly 40% in SECURE Investment. The fund is interested mainly in projects with large residential space, which are already under development. SECURE Investment is currently working on a project in Belgrade comprising hotel, residential and commercial space.

 

 

 

 

 

 

 

 

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Raiffeisenbank Opened 12 Centers for Microfinancing

Raiffeisenbank opened twelve specialized centers to serve small companies and freelancers.The twelve cities where the clients can use the centers' services are: Sofia, Plovdiv, Varna, Blagoevgrad, Veliko Turnovo, Haskovo, Sliven, Bourgas, Pazardjik, Stara Zagora, Rousse and Pleven.The centers offer small enterprises and freelancers financing at a most simplified procedure and reply to a credit request in 24 hours. Raiffeisenbank (Bulgaria) EAD has also 6 minibuses – mobile credit centers, which visit the towns where the bank does not have offices. Thus, the small business can benefit from the bank's services locally.In the centers for micro financing, the small enterprises and the freelancers could draw an unsecured Micro credit of 60 000 BGN (30 000 EUR) with a 7-year period of paying back. Other services the clients can enjoy are Credit card MasterCard Business with a limit of 20 000 BGN (10 000 EUR), online banking and others.In the first quarter of 2007, Raiffeisenbank strengthened its positions of one of the leading banks in small and medium enterprises crediting in Bulgaria. By 31 March 2007, the credits in this segment exceeded 1 bln BGN, and the number of clients increased with 55%.

 

3 banks in contention for 120 mln euro BDZ bond loan

Three unnamed banks have filed offers to provide 120 mln euro in bond financing to Bulgarian state-owned railway carrier BDZ, said transport minister Petar Mutafchiev. The provider of the 10-year facility will be selected by the end of July.The debt will finance the payment of 50 mln levs in overdue electricity bills and the repair of 1,200 cargo cars at a cost of 40 mln euro.The carrier is facing a shortage of 2,800 cargo cars by the end of 2007 on the backdrop of forecasts that rail cargo shipments will rise by 3% annually through 2017.BDZ said H1 cargo shipments totalled 5.1 mln tons with the average shipping distance falling from 231.4 to 176.4 km.A portion of the bond proceeds will be used to restructure old debts, refinance the loan for the purchase of Siemens trains and repay outstanding infrastructure charges. The carrier owed the National Railway Infrastructure Company 90 mln levs at the beginning of 2007 and recently made a 17 mln lev payment.Mutafchiev said the government should increase the subsidies for passenger traffic from 88.2 mln to 122.6 mln levs by 2017.The BDZ management admitted the cross-subsidising of passenger and cargo haulage.

6 companies from Bulgaria and abroad to take part in Lom Pоrt Concesion bid

 

Six Bulgarian and foreign companies will take part in the tender to choose a concessionaire for the port in the town of Lom.The state fee for the concession will be at least 33 million euro, experts said, as quoted by Focus news agency.The procedure will be launched by the end of July 2007. The tenders for the ports in Lom and Vidin are expected to start simultaneously. The third Danube port in northwestern Bulgaria, Oryahovo, already has a concessionaire that will manage the two cargo quays and the passenger quay for a period of 25 years. The town of Lom is on the right bank of the Danube. It is the second most important Bulgarian port on the Danube after that in Rousse.

OMV and Vienna Ins. Group Launch Local Collaborations in Bulgaria and Romania

Austrian oil and gas player OMV and Vienna Insurance Group have launched a joint venture initiative that will see them co-operate on marketing in 10 central European countries and offer their respective customers joint offers and service packages.The joint venture is due to start in mid-July 2007 with a summer promotion allowing 400,000 motorists at selected European border crossings in central and eastern Europe to receive free holiday packages with useful travel information from OMV filling stations. The package includes a road map featuring all OMV filling stations and Vienna Insurance Group offices in central and eastern Europe, a voucher for a Vienna Insurance Group travel guide (redeemable at all OMV filling stations) and refreshments. The promotion will be carried out on weekends from mid-July to mid-September 2007.
In addition to the summer promotion, the companies are launching customized local collaborations, including information on insurance products at selected OMV filling stations in Romania and Bulgaria, loyalty schemes and raffles in Romania, Croatia and Bulgaria and joint direct mailings and promotions in all countries of co-operation. The companies hope that their joint venture will allow them to leverage their significant regional synergies to the benefit of their customers. For example, Vienna Insurance Group is planning to launch a customized insurance service for OMV patrons.
Gunter Geyer, CEO of the Vienna Insurance Group, stated: “Together, we offer our customers useful information across borders in 10 countries. The customers benefit doubly: OMV offers the service at its filling stations and Vienna Insurance Group offers information on insurance products.” OMV deputy CEO, Gerhard Roiss, added: “OMV filling stations are increasingly turning into multifunctional service centers, they are filling stations for people. We offer the mobile customers whatever they need - now including information on insurance products.”OMV has a market share of 20% in central and eastern Europe. The group has a network of more than 2,500 filling stations in 13 countries with approximately two million customer contacts a day.

Chimimport buys REIT Hyundai Properties

Chimimport, Bulgaria's biggest holding company, has acquired a 77% stake in real estate investment trust Hyundai Properties. The bourse transaction involved just over a million shares that changed hands at 1.46 levs per share. The share package was sold by the REIT's majority owner Industrial Commerce. Hyundai Properties used to shop around for properties suitable for car dealership on behalf of its parent company. According to the public offering prospectus of the REIT, it plans to issue bonds to the total amount of 28 mln levs in '07 and '08.

1st Private Post Office in Bulgaria Opens Doors for Customers

The first private post office in Bulgaria T-Post opened doors for customers on Wednesday.T-Post's firs office is located in the Sofia district Mladost 1. The second office will be opened by the end of September, which will be followed by opening of offices in other cities in the country like Plovdiv, Blagoevgrad and Sliven.The company will have opened a total of 12 post offices by the end of the year, and the plan is to have 48 private post offices around Bulgaria by end 2008.T-Post plans to expand its network to 1,000 offices in the country until 2012 that will have to cover the needs of 87% of Bulgaria's population.The Commission of Telecommunications approved the process and the general conditions on the contract of the first post office in the country in April. The company that won the licence for the service is Tip Top Courier. The office of the company is already finished and is functioning from the beginning of February, CEO of the company Lachezar Kaparashev said. The first private post office company in Bulgaria is given a licence for the next 20 years.

 

Bulgarian BTC gets 200 000 leva sanction for monopoly misappropriation

The Consumer Protection Commission has fined the Bulgarian Telecommunications Company (BTC) 200 000 leva for abusing its monopoly position. The complaint against BTC came from NetPlus Ltd. The company previously asked BTC to agree to a reciprocal connection of the two companies' networks, investor.bg reported.The request was made in July 2003 but the commission’s investigation found that BTC had reacted in the autumn of 2004.This meant that BTC had broken the law, depriving NetPlus of the right to re-negotiate its network connection.This is not the first time that BTC has been sanctioned by the commission for abuse of its monopoly.