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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
·
· 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
· 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-based coffee makers advocate excise duty refund
·
· Trade deficit in
· Industrial production in
· Bulgarian wine makers set sight on
· Swissport takes over at
·
·
· Bulgarians spent 700 M EUR for holidays abroad in 2006
· Bulgarian parliament ratifies TADT
·
· 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,
· Austria's Cuubuus to invest 150-160 mln EUR in Ruse
·
· 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
· Third building in
· 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
· 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
· 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
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.
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
Industry shocked by power price hike
Industrial enterprises, which are the consumers of high- and medium-voltage electricity in
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
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
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
EBRD Lends
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
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).
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
A record-setting 4,807 new motor vehicles were sold in
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
Consumer prices in
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
Industrial production in
Industrial production in
Bulgarian wine makers set sight on
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
The funding will be redirected for measures that will be beneficial to the country, Panayotov added.
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.
Swissport takes over at
Swissport has officially taken over the ground handling services at the
More than 20 Bulgarian businessmen are to take part in the event.The governments of
In the framework of his visit to
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
Bulgarian Parliament Ratifies TADT
The Bulgarian Parliament has ratified July 11 the Treaty for Avoidance of Double Taxation (TADT) between the
Тhe project for the setting up of the second stage of the
GDP per capita in Bulgaria 60 per cent lower than in EU
The GDP per capita of
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
Germany is No1 Tourism Partner to 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
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
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
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
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
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
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
More than 500 000
More than 500 000
Third building in
AIKO to invest BGN 8m in new warehouse
Furniture retailer AIKO will invest some BGN 8 million in a new warehouse facility in
AIKO plans to open three more outlets in
Citypoint to build network of small shopping centres
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
EFG New Europe Funding of Amsterdam, Bulgaria's Postbank,
Ceratezit to invest EUR 3m in 2007
Ceratezit
EUR 227 bn invested in real estate in
Мore than EUR 227 billion was invested in real estate in
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
COMPANIES:
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:
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
Six Bulgarian and foreign companies will take part in the tender to choose a concessionaire for the port in the town of
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
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
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.
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