BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT (10 – 17 AUGUST 2007)
Sections/headline briefs:
MACROECONOMY:
· PM: Drought pushes up prices of bread, grain in Bulgaria
· Bulgaria to ask EU for permission to import duty free grain
· No wheat supply on Sofia Commodity Exchange
· Rеuters: drought sends Bulgaria inflation soaring to 8.4%
· Bulgarian firms need to import 500,000 T maize 2007/2008
· Flat tax adoption must be done professional
· Bulgaria to start new sell-off tender for Bobov Dol power plant
· Inflation level in Bulgaria exceeds the prognosed by Bloomberg
· Bulgaria's imports from EU up 28% Y/Y Jan-May
· Bulgarian CPI rises in July
· Bulgarian foreing trade gap hits BGN 6.2 billion
· Bulgaria’s export to non-European Union countries at BGN 4.4 billion
· Bulgarian tourism sector lags behind Greece, Turkey
· Bulgaria auto lease market jumps 77%
· New automobile sales surge 25.6% y/y in Jan-Jul
· Gasoline A95 Out of Use
· Bulgaria's Varna, Burgas airports process 920 000 passengers in July
· Bulgaria's Burgas eyes up to USD 50 M from pipeline project
· Sofia Subway to serve 450 000 after extension
· Over 300,000 sq. m of office space under construction in Sofia
· Foreigners buy EUR 817 M of Bulgarian real estate in H1
· Bulgarian rose oil price up to EUR 4,700 per kg
· EBRD to lend Bulgaria's Plovdiv EUR 9,1 M
· Alcohol Sale on the grey market in Bulgaria is up to 85%
· Bulgarians drink 60 million liters of alcohol a year
· Work on SAPARD programme in Bulgaria to continue by October
· Danish and Bulgarian patent offices discussed bilateral cooperation
INVESTMENTS:
· Japanese Yazaki to invest EUR 31.8 M in Plant in Yambol, Bulgaria
· UK leader in FDI in Bulgaria
· Irish company invests in 15 real estate projects in Bulgaria
· Svilengrad okays solar power park project for EUR 250 M
· EUR 20 M to be invested in aviation base
· Investors build new mega resort in Bulgaria's Rodopi Mountain
· Spanish investor to build Bulgaria`s largest retail center to date
· France's Dalkia to invest EUR 5 M in Varna heat utility
· Real estate operations with most direct investment for June
· EUR 12 M upscale hotel complex to pop up in Burgas center
· Bulgaria's biggest heating plant to invest EUR 23.2 M in Upgrades
· Siemens invests more than EUR 2 M in Bulgaria
· Bulgarian car batteries maker Monbat to invest EUR 8 M by end '07
COMPANIES:
· Bulgarian fuel retailer Eko Elda eyes power trader licence
· Xerox Europe Plans to Outsource Jobs to Bulgaria, India, Philippines
· UK Low-Fare EasyJet Steps in Bulgaria
· Bulgaria Grants BGN 1,7 M to Liebherr for construction of new road
· Polish developer enters Bulgaria, Romania markets
· First Nanotechnology Centre in Bulgaria
· Fitch Ratings Affirms Bulgaria's Post Bank Ratings
· Bulgaria rail operator receives power trader permit
· Chimimport issue price per share set at BGN 11
· Kaufland opens 14th store in Bulgaria
· Bulgaria's Apis in talks to sell its legal info services business
Articles:
MACROECONOMY:
PM: Drought Pushes up Prices of Bread, Grain in Bulgaria
The steady climb in the prices of bread and grain in Bulgaria is because the 2007 yield is very poor, the country's Prime Minister said on Saturday.The prices are constantly growing because many of the crops were destroyed by the severe drought that hit the country from mid spring to mid summer, PM Sergey Stanishev said but did not answer the question whether the grain crisis will end in opening the state reserve.The parliament commission that monitors the movement of prices in the country will be summoned to asses the situation, Stanishev added.
Bulgaria to Ask EU for Permission to Import Duty Free Grain
Bulgaria will ask the European Commission for permission to import duty free grain from EU member states, 24 hours daily reported.The aim is to stop the rising prices of the grain and to prevent a grain crisis, as the yield in the country this year will be very poor because of the continued drought.The measure is one of the several that were elaborated Wednesday by the government commission dealing with prices.The commission was summoned by Prime Minister Sergey Stanishev.The commission decided to make a proposal in the parliament for the import of grain from Ukraine and South America.
No wheat supply on Sofia Commodity Exchange
The demand for large-scale quantities of wheat at prices ranging between 380 and 400 leva/tonne was strong over the past week on the Sofia Commodity Exchange (SCE). There was no supply of the commodity, however. Most wheat producers are likely to hold their bids in view of the quickly developing global grain market condition. The prices of main food commodities remained unchanged on SCE over the last week.
Rеuters: drought sends Bulgaria inflation soaring to 8.4%
A severe drought that damaged Bulgaria's crops sent consumer price inflation soaring to 8.4% year-on-year in July from 5.6% in June, news agency Reuters reported on Monday, citing official statistics. Consumer prices rocketed 2.2% on a monthly basis in July, following a 0.4% fall in June, driven mainly by a 3.9% rise in food prices. 'It's a huge unprecedented rise ... The last time we had a positive change in food prices in July was in 2000,' Agata Urbanska, economist at ING Wholesale Banking Europe said. The statistics office data showed prices of flour, bread, poultry meat, dairy products, fruit and vegetables led the rise in food prices in July.
Bulgarian Firms Need to Import 500,000 T Maize 2007/2008 - Deputy Farm Minister
Bulgaria will need to import 500,000 tonnes of maize in the 2007/2008 marketing year to meet domestic demand, deputy Agriculture Minister Svetla Bachvarova said on Friday. "Some 500,000 tonnes of maize are needed, we do not mean only imports but also purchases from European countries, because domestic production will cover no more than 30% of the needs," Bachvarova told SeeNews. She added part of Bulgaria's maize needs could be covered through Hungary's intervention stores, which will offer 1.2 million tonnes for sale through October 2007. Bulgaria joined the EU in January. Bachvarova also said Bulgaria would probably not need to import wheat despite a sharp fall in wheat output this year resulting from unfavourable weather conditions. The government said earlier this week that Economy Minister Petar Dimitrov would propose to the cabinet that the country import grain in order to beat a surge in domestic prices caused by snowless winter followed by unusually dry spring weather that damaged grain sowings in most of southeast Europe, including Bulgaria. Prices of wheat in the country have more than doubled this year to some 400 levs ($281.5/204.8 euro) per tonne. "There will be no problem for Bulgaria's grain balance () I suppose we will not need [to import] grain," Bachvarova said. "Prices have started to regulate themselves, this week the highest prices fell by 20 levs per tonne." Bulgarian farmers harvested 2.2 million tonnes of wheat this year, below expectations and significantly less than last year's harvest of 3.2 million tonnes of wheat. Some 150,000 tonnes of wheat are left from last year's harvest. Bachvarova said the country would seek to buy 100,000 tonnes of grain for the state reserve. The reserve buys grain every year to replenish stocks.
Flat tax adoption must be done professional
The imposing of the flat tax must follow the concrete social economy conditions in the state it is not the first importance if the tax will be 10, 15 or 20%. The adoption of this tax is connected with amendments in many laws, deputy chairman of the Bulgarian Taxpayers Association Georgi Lazarov told FOCUS News Agency.
Adoption of the flat tax must be done professional, so our position is that before its imposing there must be serious discussion by specialists, Lazarov added.
Bulgaria To Start New Sell-off Tender for Bobov Dol Power Plant
Bulgaria will launch a new tender for the privatisation of Bobov Dol power plant next month, business news website Investor.bg reported on Monday.The Bulgarian Privatisation Agency will publish the tender announcement next month, after the new evaluation of the power plant's assets is finalised, according to a report.The power plant is for sale after Greek state-owned utility Public Power Corporation (PPC), picked to buy the plant in the previous tender, failed to meet all the prerequisites to sign the privatisation contract.Bulgarian authorities insisted PPC agreed a deal regarding a minimum amount of coal it would buy from local miners, whose livelihood depends on the power plant buying their lignite.Following a year-long contract wrangle between the firm and the miners, the privatisation agency cancelled the deal.Bulgarian coal has high sulphur content and can be used only in tandem with expensive equipment that would cut sulphur oxide emissions, which PPC refused to install at Bobov Dol.Russian steel and coal conglomerate Mechel, which reported USD 4,4 B in revenue in 2006, has been mentioned as a prospective bidder in Russian media.But the corporation, which lost out on the Russe power plant earlier this year, would find it hard to beat off competition from European utility firms like E.ON or Enel, which have a strong presence in the country, Russian business daily Vedomosti said.
Inflation level in Bulgaria exceeds the prognosed by Bloomberg
Inflation in Bulgaria for June has risen to 8.4% on an annual basis, announced from National statistics Institute.This level exceeded the prognosis of Bloomberg, whose experts expected the inflation to reach 6.7% on an annual basis for July after being 5.6% in June.On a monthly basis (compared to June) the customers price index has also grown to 2.2%. The NSI experts report on 14.5% increase of the prices of food, which accounts for 36 percent of the consumer basket. This is due to the rise in the price of bread, vegetable oil, fruits and chicken.On an annual basis, the price of alcohol and tobacco have decreased and the deflation is 3.2%.The inflation in the non-alimentary sector has grown with the minimal 0.2% with the highest growth being that of goods and services prices (10.9%).The harmonised inflation, which is the reference criterion adopted by the European Central Bank and all EU countries for the assessment of the price stability, in Bulgaria has risen to 6.8% in July.
Bulgaria's imports from EU up 28% Y/Y Jan-May
Bulgaria's imports from the EU member countries have gone up by 28.4% in the period January to May 2007, compared to the corresponding period in 2006, data of the National Statistical Institute shows. Exports have gone up by 10.1%. Bulgaria's largest exports were to Germany, Greece and Italy. Exports to Germany marked a 28.2-percent year on year increase. The volume of Bulgaria's exports to Slovakia went up by 259%, while imports rose by 210%.
Bulgarian CPI rises in July
Bulgarian consumer prices index or CPI grew 2.2% on month in July, National Statistics Institute revealed Monday.Consumer prices in the services sector grew 2.7% on month in July, including 7.8% increase in the power prices.Compared to June, food prices grew 3.9% in July, while non-food prices remained flat.In July, the year-on-year inflation increased to 8.4% from 5.6% in the prior month. The cumulative inflation for the first seven months of the year was 4.3%.
Bulgarian Foreing Trade Gap Hits 6.2 Billion Levs
For the first six months of 2007 Bulgaria's foreign trade deficit exceeded 6.2 billion levs (1 � = 1.95 levs). The country's import is growing much faster than export, that is why the foreign trade gap is widening by a billion levs a month. If this tendency persists until the end of the year, the deficit may swell up to 20% of GDP. To solve the problem, Bulgarian Ministry of Finance will target at a budget surplus of 2.3% of GDP for striking the balance in 2007.
Bulgaria’s export to non-European Union countries at 4.460 billion leva
Bulgaria’s export to non-European Union countries reached nearly 4.460 billion leva in the first half of 2007. Exports in the first half of 2007 amounted to 4.337 billion, an increase of 2.8 compared with 2006, the National Statistical Institute said, as quoted by Focus news agency.Imports from non-European Union countries reached 7.796 billion leva for the first half of 2007, compared with 7.151 billion leva for the same period of 2006. This is an increase of nine per cent.Bulgaria exported food and livestock worth 200.1 million leva for the period January to June 2007. Import of the same products reached 201.5 million leva. Export of soft drinks and tobacco products amounted to 121.6 million leva and import, 51.3 million leva. Mineral fuels and export of similar products reached 1.025 billion leva, compared with an import of 3.159 billion leva. Bulgaria registered the largest trade turnover of BGN 2.82 billion with Russia in the period.
Bulgarian tourism sector lags behind Greece, Turkey
A total of 2 million foreign tourists visited Bulgaria in the first half of 2007, down 1.5% year on year. The number of foreign tourists who visited Turkey in the period totalled 9.2 million, up 17% year on year. The number of foreign tourists who are expected to visit Greece in 2007 is forecast to reach 16.5 million, which would represent a 10-percent increase compared to 2006. Foreign tourist to Romania topped 15 million for the period, up 15% year on year.
Bulgaria auto lease market jumps 77%
The Bulgarian leasing companies financed auto purchases for 250 mln levs in the second quarter of 2007, shows data released by the central bank. In Q2, automobiles remained the commodity most often purchased under a leasing scheme, generating a third of the new business. Car leases topped 988.5 mln levs towards the end of the first half of the year, up 77% over June 2006. Contracts for the purchase of machinery, plant and industrial equipment account for 28% of total contracts. In the past 12 months, the local companies have lease-purchased equipment for 338 mln levs.Vans and light trucks are the third most-leased type of asset with a 26% share of the market.The value of financial leasing contracts rose 697 mln levs in Q2 alone after adding 494 mln levs in Q1. The increase between July 2006 and June 2007 was reported at 2.264 bln levs.Outstanding net lease receivables under financial leasing contracts account for 97.5% of the local leasing market.Their value was reported at 2.8 bln levs by end-June, up 75% over the year ago period.
New automobile sales surge 25.6% y/y in Jan-Jul
Sales of new passenger cars and heavy duty vehicle retained a fast growth rate of 25.6% y/y to 29,381 units in Jan-Jul marking a minor deceleration from 26.2% y/y in H1, according to data presented by the local association of automobile imports. Sales of passenger cars increased at a slightly lower rate of about 24% y/y to 27,781 units in Jan-Jul. Toyota, Ford and Peugeot retain leading market shares in the ranking of carmakers, while Dacia Logan is the best selling brand in Jan-Jul. The market for heavy duty vehicles continue to grow at a much quicker race due to expanding trade volume and modernisation of truck haulers’ fleets.
Gasoline A95 Out of Use
One of the most popular gasoline types - A95 - will soon disappear from the markets just as years ago did its inexpensive counterparts A86 and A91. European fuel producers intend to cease all A95 production. Consumers' preference for it will be eradicated by setting and maintaining high prices, AFP reported.
Bulgaria's Varna, Burgas airports process 920 000 passengers in July
The airports in Bulgaria's Black Sea cities of Varna and Burgas processed nearly 920,000 passengers in July, German firm Fraport, who owns a 35-year concession for the two airports, said on Monday.The Burgas airport processed 564,746 passengers, a 11,2% increase compared to July 2006, while Varna's 355,014 passengers meant an 0,3% drop over the same period of last year.Fraport's two Bulgarian international airports accounted for 11,2% of its total 8,2 million passengers processed by the company in July, with the Frankfurt international airport processing 5,2 million.Fraport and Bulgarian firm BM Star won the 35 years concession in 2006, pledging to invest EUR 403 M in new terminals, expansion and equipment over that period.
Bulgaria's Burgas eyes up to USD 50 M from pipeline project
The municipality of Bulgaria's Burgas may pocket between USD 35 - 50 M from transit fees from the oil pipeline between their port and Greece's Alexandroupolis.This emerged during a meeting of Regional Development Minister Assen Gagauzov and Interior Minister Rumen Petkov with representatives of the municipal council of the Black Sea town of Burgas and deputy mayor Venelin Todorov.The officials tried to assuage fears over the project environmental impact on the town. The residents of Burgas were recently urged to have their say on plans for constructing the major oil pipeline in a referendum. The vote was scheduled for September 2.Bulgaria, Greece and Russia agreed to build the pipeline, which would take Caspian oil to the Mediterranean skirting the congested Bosphorus, earlier this year after more than a decade of intermittent talks.The 280-kilometre pipeline, with 166 kilometres passing through Bulgaria, will have an initial annual capacity of 35 million tonnes, which could be later expanded to 50 million tonnes. Its costs are estimated at up to USD 900 M.
Sofia Subway to Serve 450 000 after Extension
Sofia subway will serve 30% of the passengers in the public transport or 450,000 people daily after its extension is completed, it emerged after the mayor toured the stations currently under construction.Sofia municipality has vowed to finish this year the construction works on the subway from the international trade centre Interpred to the residential district of Mladost.Tunnels, railways and part of the installations have been built in the section from Sveta Nedelya church to Interpred, the executive director of Metropoliten municipal company Stoyan Bratoev announced.The total length of all routes to complete the Sofia subway is seen to reach 54 km and be serviced by 48 stations.
Over 300,000 sq. m of office space under construction in Sofia
A total of 330,000 sq. m of office space is being built in the outskirts of Sofia at present, a survey conducted by Colliers International shows. Most of the space will be offered for letting, which will intensify the competition on the market. The class A and B office space available for letting amounts to 606,000 sq. m, Colliers International data shows. Most of the office space is located on the periphery of the capital.
Foreigners Buy EUR 817 M of Bulgarian Real Estate in H1
Foreign individuals and companies with foreign shareholders bought real estate worth EUR 817 M in the first six months of the year, Bulgarian National Bank (BNB) data showed on Tuesday.The figure is a 79% increase over the same period of last year, when foreign buyers paid EUR 457 M for real estate in the country.Real estate buys accounted for nearly 40% of all foreign direct investment in January-June, helping offset flagging inflows, according to the BNB figures.Bulgaria has attracted foreigners for years with its warm climate, seaside and winter resorts and relatively low-priced properties, but interest grew into a boom last year.Foreigners spent a total EUR 1,13 B on Bulgarian real estate in 2006 and will almost certainly spend even more this year, although overconstruction is turning some of them off.Brits remain the driving force of the boom and paid, as a whole, more than anyone else to buy houses in Bulgaria, focusing on seaside properties and accounting for 15,9% of the total money spent.Austria and Luxembourg follow in the rankings, with 13,2% and 11,8%, respectively, while Spaniards spent 7,5% of the total sum.Bulgaria joined the EU in January, but that had no effect on the market, as foreigners could buy real estate long before the accession, with the exception of the land itself.
Bulgarian rose oil price up to EUR 4,700 per kg
A total of 2 tonnes of high-quality rose oil were produced in Bulgaria in 2007, Nedko Nedkov, director of the Rose Institute in Kazanlak, said. Bulgaria produced half of the world’s rose oil output in 2007.Rose oil produced in Bulgaria in 2007 was by 20 per cent less than the planned 2.5 tonnes. The lower production resulted from the drought in recent months.Nedkov said that he expected that the price of rose oil will increase further.The price of rose oil stood at EUR 4,700 per kg in the middle of August. The price has gone up by EUR 500 per kg this year due to the lack of rose oil on the global markets. The price may increase even higher, Nedkov forecasts. Bulgaria exports rose oil mainly to France, US, Japan and Germany. Almost the entire quantity has already been sold to global perfumery companies .World famous perfume brands like Yves Saint Laurent, Christian Dior, Chanel and Estee Lauder feature among the country’s top clients.
EBRD To Lend Bulgaria's Plovdiv EUR 9,1 M
The European Bank for Reconstruction and Development plans to lend EUR 9,1 M to the regional water utility in Plovdiv, Bulgaria's second largest city.The bank will grant a further EUR 300 000 under its technical cooperation programme, the EBRD said in a project summary document on its website.The project is up for final review by EBRD on October 23, when it is expected to win the approval of the bank's board, which rarely rejects projects that have passed conceptual review.The goal of the project is to reduce water losses and operating costs, as well as improving the quality and reliability of the services the company provides, namely water supply and wastewater treatment. Its total costs are expected to run at around EUR 10-11 M.
Alcohol Sale on the Grey Market in Bulgaria is Up to 85%
The sale of alcoholic liquors on the grey market exceeds to 85%, reported from the ‘Liquor Producers, Importers and Traders Association' Partnership (LPITAP) in Bulgaria.According to the business law, low price is indicator for false excise label, reminded from Lev.bg.Bulgaria's excise band regime is not controlled. The chairperson of LPITAP, Pavlin Naidenov stated that the false bands are the most serious problem in the sphere.He also added that the 3 biggest alcohol companies in Bulgaria have permission for false excise bands, but he refused to give details, because he was threatened by the phone.The Associations suggests being signed memorandum for collaboration with the Finance Ministry, National Revenue Agency and Customs Agency. Price formation should be under control, the production of fake liquor should stop, just like the increase of the stakes of the alcohol drinks, informed from the economic media.
Bulgarians Drink 60 Million Liters of Alcohol a Year
The Bulgarians consume more than 60 million liters of alcohol a year. The favourite drink for proposing toasts is rakia (grape brandy,) some 26 million liters are sold in 12 months. Vodka comes second - 20 million liters per year. Some 10% of the drinks are stilled in small village distilleries. The total share of more exotic drinks like mastika (anise-flavoured liquor) and whiskey amounts to 14 million liters a year.
The current trend shows that the consumption of hard alcohol is growing, an American research has proved. The customs offices' data indicate just the opposite: the sale of excise labels has decreased twice in 2006 in comparison with 2005, which means that many producers sell alcoholic beverages with counterfeited labels.In 2007, the revenues from excise duties stand at 20-26 million levs. If all sold in Bulgaria alcoholic drinks were taxed, the sum would have amounted to 250-300 million levs a year. Bulgaria may lose one billion euro if the violations in the sector result in the suspension of the EU funds under different programs, Plamen Naydenov said.
Work on SAPARD programme in Bulgaria to continue by October 2007
The work on the SAPARD programme in Bulgaria will continue until October 12 2007, when all money on approved projects will have been distributed.State agricultural fund head Dimitar Tadarukov said, as quoted by Focus news agency, that, according to preliminary prognosis, additional programmes have applied for SAPARD funding worth 50 million leva.The Government will form a special committee by the end of August to decide on the programmes; there is a possibility that some projects be denied funding, Tadarukov said. Four committees have examined 335 projects at a total value of 58.904 million leva, with only two of the projects not receiving approval. Several agricultural projects worth nine million leva have been almost fully processed by the committees, Tadarukov said. Other additional subsidies will aid agricultural institutions and producers from regions damaged by drought.
Danish and Bulgarian patent offices discussed bilateral cooperation
The main topics that were discussed at Wednesday’s visit of the delegation of the Danish Patent and Trademark Office at the Bulgarian Patent Office have to do with improving the cooperation between the two offices that started when Bulgaria was in the stage of planning to join the EU, the director general of the Danish Patent and Trademark Office Jesper Kongstad announced during his visit to the Bulgarian office.
He noted a project for funding the Bulgarian Patent Office has been prepared thanks to the Phare program of the EU. The idea of the project is for the two offices to work together. It has to do with PC equipment in IT and funding by the Danish office.
INVESTMENTS:
Japanese auto components supplier Yazaki Corporation will invest more than 62 mln Bulgarian levs ($43.4 mln/31.8 mln euro) in a car cables plant currently under construction in the Bulgarian southeastern town of Yambol, president Shinji Yazaki said during a working visit to the town on August 11, 2007. The pilot plant of Yazaki in Bulgaria currently employs over 500 people. It will have more than 2,500 people on the payroll by 2009. The production should be moved to the new buildings by the end of 2007. The top production capacity of the plant is 1.2 million auto wiring systems a year. The output is sold to France and Spain. Yazaki Corporation is global leader on the auto wiring market with production units in over 50 countries and a headcount of over 170,000 people. Yazaki Corporation produces auto cables, conditioners and vehicle control systems.
UK leader in FDI in Bulgaria
Foreign direct investment in Bulgaria for the period January – June 2007 amounted to EUR 2112.7 million (7.9% of GDP) compared to EUR 2015.5 million (8% of GDP) attracted in January – June 2006, according to preliminary data released by Bulgarian National Bank.The attracted equity capital (acquisition/disposal of shares and equities in cash and contributions in kind by non-residents in/from the capital and reserves of Bulgarian enterprises and receipts/payments from/for real estate deals in the country) for the period January – June 2007 amounted to EUR 1411.5 million and its relative share in foreign direct investment amounted to 66.8%. It has increased by EUR 657.2 million compared to that attracted in the same period of 2006 (EUR 754.3 million). The receipts from real estate sales to nonresidents are included in the equity capital and they amounted to EUR 817.4 million compared to EUR 456.9 million for January – June 2006.The attracted equity capital on privatisation deals with non-residents, reported for the period January – June 2007 amounted to EUR 1.4 million. The attracted equity capital on non-privatisation deals totalled EUR 1410.1 million in the reporting period compared to EUR 727.1 million for the same period of 2006.The other capital (the change in the net liabilities of the direct investment enterprise to the direct investor on financial loans, suppliers’ credits and debt securities) amounted to EUR 555.2 million (net) for the period January – June 2007, compared to EUR 1122.5 million for the same period of 2006. According to preliminary data the reinvested earnings (the share of non-residents in the undistributed earnings/ loss of the enterprise) for the period January – June 2007 are estimated to EUR 146 million compared to EUR 138.7 million for the same period of 2006.By country, the largest investments in Bulgaria for the period concerned came from United Kingdom (15.9% of the total foreign direct investment), Austria (13.2%) and Luxembourg (11.8%). By branch, the largest investments for January – June 2007 were in real estate, renting and business activities (EUR 729.3 million), financial intermediation (EUR 439.3 million) and Construction (EUR 296.6 million). According to preliminary data for the period January – June 2007, direct investment abroad stood at EUR 91.7 million, compared to EUR 29.7 million for the respective period in 2006.
Irish company invests in 15 real estate projects in Bulgaria
Irish real estate company West Properties International, part of the West Incorporated group, has started working on 15 projects in Bulgaria, the company said. The construction of real estate properties in Sofia, along the Black Sea coast and in other regions of the country is already underway. The company offers residential, holiday and business properties to large-scale corporate investors from Ireland and the UK, as well as to individuals seeking for a second home abroad. West Properties International is licensed to operate in Bulgaria, Ireland and UK and has over 15 years of experience on the foreign real estate market.
Svilengrad okays solar power park project for EUR 250 million
The municipal council of Svilengrad has approved the sale of a 300 ha plot in the village of Pavlovo. Solar Hold AD is interested in building a solar power park at the site, as ipo.bg reported in July 2007. The company plans to invest EUR 250 million in the project. The plot will be auctioned in September, while the starting price is set at BGN 415,615. The power generated at the park will be sold at 39 eurocents per kWh.
EUR 20m to be invested in aviation base
Nearly EUR 20 million will be invested in the aviation base at the Sofia airport, Dimitar Pavlov, executive director of Bulgaria Air and Hemus Air, told the Pari daily. A join-venture company for the joint use of the base is expected to be established next week between the shareholders in the two companies and Lufthansa Technique. The German company will hold an 80-percent stake in the new joint-venture, while Bulgaria Air, Hemus Air and Viaggio Air will own the remaining 20%.
An additional 380 workers will be employed after the modernisation of the aviation base. The facility will repair Boeing 737 and Airbus 320 aircrafts.
Investors build new mega resort in Bulgaria's Rodopi Mountain
Investors have started the building of a new mega resort on the south slopes of Snezhanka Mount in Bulgaria's Rodopi Mountain.A total of nine hotels and apartment complexes are under construction in the area of the beautiful Smolyan lakes that are natural monuments.
Among the investors, who has bought building plots in the region are the football star Hristo Stoichkov and the businessman Valentin Zlatev.It is expected that the new complex will compete with the world famous Pamporovo resort, which is preferred by the ski maniacs.The air in the region is characterized by extremely strong negative ionisation, which allows speedy recovery of the human organism.The investors guarantee the area will not be overbuilt. They are obliged to construct also wide alleys and big parking places.
Spanish investor to build Bulgaria`s largest retail center to date
The Detea Grupo from Spain will invest 50 million euro in the construction of a shopping mall on the capital's ring road across from Business Park Sofia (BPS), said the Bulgarian Foreign Investment Agency. The mall will include retailers of foods, clothing, furniture, home decor and consumer electronics, according to Dnevnik daily.Detea Grupo is also involved in construction and engineering, energy and environment, real estate and agriculture.The mall will be the Spanish company's first investment in Bulgaria.The 18 ha site of the future mall was purchased for 6 million euro.
France's Dalkia to invest 5 mln euro in Varna heat utility
France's Dalkia International said it will inject 5 mln euro in the development of Varna district heating company over the next three years.Some of the resource will be spent on a biomass-fuelled co-generation installation, said Dalkia Bulgaria executive director Frank Jenen.The installation, set for a launch in September 2008, will run on waste timber or hay, said Ilia Nikolaev, executive director of the heating company.Dalkia will repipe in the next three years over 10 km of the heating transmission grid operated by the utility which is a third of its total length.The entire grid will be replaced within the next 10 years with outreaches to new residential districts where central heating is not currently available.Nikolaev said annual loss in transmission is 30%. That figure will be pared in half with the overhaul of the heating network.Dalkia paid 6.78 mln euro for the Varna heating utility, undertaking to align the operation of the company to relevant EU standard for large combustion installations.
Real estate operations with most direct investment for June
Bulgarian national bank (BNB) published data according to which most investment for the period January-June 2007 have been attracted to the sector connected with real estate operations, rents and business services. They amount to 729.3 M EUR.The revenues from the sale of real estate to foreigners are 817.4 M EUR compared to 456.9 M EUR for January-June 2006.Compared to the previous month the total amount of the direct investment has a little decrease of 0.1% and the preliminary data shows that for the period January-June 2007 a capital of 2112.7 M EUR has entered the country, which is 7.9% of the GDP.The BNB data shows that English and Austrian capital dominate the foreign investments in Bulgaria for th first six months of the year.Most investments have been attracted from Britain. They account for 15.9% of the total FDI (foreign direct investment) in Bulgaria.The percent of Austrian companies is also very high. They form 13.2% of the total FDI in the first half of 2007. The third place is held by capital from Luxembourg, which is 11.8% of the incoming capital flow.
12 mln euro upscale hotel complex to pop up in Burgas center
Bulgarien Direkt Reisen, a provider of travel and hotel accommodation services, said it will invest 12 mln euro in a luxury hotel and leisure complex in the Sea Garden beachfront park in Burgas, on the Black Sea. The scheme, with a top height of 21 m, will incorporate a business center, spa, various eateries and five-star hotel with 135 double rooms, 50 apartments and studios and four VIP suites. The hotel apartments will be leased long-term to business executives stationed in Varna.The developer has planning approval for the construction of an outdoor swimming pool.The investor estimates that the complex will serve 7,000 tourists annually. Bookings will be available through German tour operator LTI.Work on the project will get underway in October and should wrap in two years. Rough construction should be completed by the 2008 summer season.
Bulgaria's Biggest Heating Plant To Invest 23.2 Mln Euro in Upgrades by End-2007
Bulgaria's biggest steam-heating plant, Toplofikatsia Sofia, plans to invest 55 million levs ($38.3 million/23.2 million euro) to modernise its outdated infrastructure by the end of 2007, a company official said on Tuesday.The company will finance the programme from its own funds and loans from the European Bank for Reconstruction and Development (EBRD) and the World Bank, Toplofikatsia Sofia's executive director, Petko Milevski, told a news conference.The investment programme is part of a 114 million euro ($155 million) modernisation plan, launched in 2003. About half of total financing should come under loans from the EBRD and the World Bank. Toplofikatsia Sofia has already invested 71 million euro in upgrades, Milevski said.The company is 58%-owned by the city of Sofia, while the government has a 41.8% stake. The government has said it hoped to sell Toplofikatsia Sofia by the end of 2007, but controversies between the two shareholders have delayed the launch of a sale.Several international giants have shown interest in the company. French energy services provider Dalkia International and Czech utility CEZ have separately offered to the city of Sofia to acquire a stake in the company in exchange for assume the debts of Toplofikatsia Sofia.Toplofikatsia Sofia owes 150 million levs to state-owned gas company Bulgargaz for gas supplies. The company is owed 193 million levs in unpaid bills from its customers, Milevski said. The company collects just about 38% of its bills.Toplofikatsia Sofia ended 2006 with a net loss of 9.0 million levs and expects a loss of 29 million levs this year, Milevski added. He said the higher loss would be due to company's obligation to sell its services at a fixed price regardless of rising gas prices.Bulgaria signed last year a deal with Russian gas giant Gazprom, under which the price of Russian gas supplies to the southeast European country would gradually rise until 2013. Toplofikatsia Sofia is the third-largest energy complex in Bulgaria after the Kozloduy nuclear power plant and the largest coal mining complex Maritsa East. It can produce six million megawatthours (MWh) of heating energy and 850,000 MWh of electricity per year.
Siemens invests more than EUR 2 M in Bulgaria
Siemens Enterprise Communications Ltd has invested more than two million euro in Bulgaria since it entered the country at the end of December 2006. The telecommunications branch of Siemens has been operating in Bulgaria since January 2007, company manager Vassil Botusharov said, as quoted by Dnevnik daily. Siemens Bulgaria is 100 per cent owned by Siemens Austria. The company has so far employed 70 people. The average salary is 25 000 euro and for some of the staff it reaches 50 000 euro. The company plans to expand to 120 people by the end of 2007 and to 200 by 2008. Siemens has started recruiting young talent from South East Europe, including Bulgaria, Botusharov said. It is looking for people with university education in economics and high school graduates. Candidates must know English and German. High school candidates will undergo training in the spheres of finance, sales, service and supplies. They will be also able to work a year and a half in one of the countries in the region.
Bulgarian car batteries maker Monbat to invest 8 mln euro by end-'07
Monbat, the nation's biggest producer of car batteries, will invest 8 mln euro in new production capacity and equipment modernisation in the remainder of 2007, the company said in a filing with the Bulgarian stock exchange on Thursday, August 16.Under the project, which will bring total inward investment to 20 mln euro for 2007, Monbat will upgrade its plants in Dobrich and Montana while boosting their output capacity and will build car battery recycling factories in neighboring Serbia and Romania. The company had absorbed just over 12 mln euro in investment by the end of July, a tab that includes the acquisition of Bat Holding, the owner of the Dobrich-based Start factory for car batteries. The bulk of the investment so far was spent on the purchase of equipment for the upcoming start of construction abroad. Monbat recently loaned its Serbian subsidiary some 3 mln euro while its sister company in Romania received 2.5 mln euro.Monbat plans to have the two plants abroad up and running by March and June 2008. They will supply lead and polypropylene for the company's Montana-based operations, enabling a substantial cut in costs.The implementation of the program will increase the output of the Montana plant from 1.2 mln to 2.55 mln car batteries a year.Some 3.5 mln levs have been earmarked for the modernisation and capacity upgrade of the Montana installation for the recycling of used car batteries.The company also plans to increase the share of exports of total sales from 87% to 95%.
COMPANIES:
Bulgarian fuel retailer Eko Elda eyes power trader licence
Fuel retailer Eko Elda Bulgaria, part of the Greek petrochemicals company Hellenic Petroleum Group, has applied to be issued a 10-year licence to operate as a power trader, Dnevnik reported. The State Energy and Water Regulatory Commission reviewed the licence application last week and is due to respond promptly. Eko Elda Bulgaria said the move is part of its long-term strategy to snag a steady share of the regional power market. The company will draw on the experience of its parent company, which is a power producer and distributor in its home market. The fuel retailer plans to finance its power trading business with debt and securities. At the moment, the company operates a network of 42 gasoline stations in Bulgaria and will add a further eight outlets by the end of 2007. Over the near-term, the nationwide network is seen expanding to 100 filling stations.
Xerox Europe Plans to Outsource Jobs to Bulgaria, India, Philippines
Xerox Europe is planning to outsource some of its operations jobs to lower cost economies such as India, Bulgaria and The Philippines, along with redundancies to be introduced over an 18-month period, Bulgarian media reported.The decision follows an outsourcing deal with computer giant IBM.The good news for Bulgaria was accepted with an uproar among the Irish, as over half of the 900 Xerox Europe employees in Ireland whose jobs are on the line following the IBM outsourcing deal are already are seeking legal advice.Around 500 of the Xerox workers, whose jobs are being transferred to IBM next month, contributed EUR 10 each to a legal fund for advice on the way the companies made the decision.A circular sent by a staff committee last week to Xerox informed management that staff had sought legal advice on the way they were informed of the move.It claimed the company may have been in breach of transfer of undertaking obligations, as Xerox advertised the jobs on an IBM recruitment site prior to them being informed. "This means that the information on our jobs migrating to Bulgaria was in the public domain long before we had even been informed that anything was happening," it said.The circular also outlined ways to appease the affected staff, including proposals on redundancy packages.
UK Low-Fare EasyJet Steps in Bulgaria
British no frills airline EasyJet announced on Wednesday it would add seven new routes to its network this autumn, including Bulgaria.EasyJet, which is considered to be the second-biggest low fare airline company after Ryanair, will start regular flights from Sofia to London.The route will be serviced three times weekly on Tuesdays, Thursdays and Saturdays from Sofia airport to London Gatwick.The virgin flight will be conducted on November 6.Prices stand at EUR 33.99 for a one-way ticket and EUR 75.77 for a return ticket, airport fees included.A month ago London-registered low-cost carrier Wizz Air, the first no-frills carrier to enter the Bulgarian market, announced the launch of new flights from Sofia to Dortmund. This is the airline's third route from Sofia. It also services flights from the Black Sea airports of Varna and Burgas.Germanwings, Easyfly, Sky Europe, My Air, Air Italy and Norwegian Air are the other low-fare airline companies conducting flights from the three Bulgarian airports. Data shows that no-frills airlines account for about 40-50% of the aviation market in the country. Bulgaria attracted a number of low-cost carriers thanks to its accession to the European Union and fast economic growth.
Bulgaria Grants BGN 1,7 M to Liebherr for construction of new industrial road
Bulgaria's government granted Wednesday BGN 1,7 M to German investor Liebherr Hausgeraete Maritsa for constructing a new road in the industrial area in the village of Radinovo.Economic Minister Petar Dimitrov and the Economic Manager of the German company Hristo Georgiev officially signed the contract for building the infrastructure facility, which is to be 2,5 kilometre-long.The construction works will start in about ten days and are scheduled to continue for up to two months."The new road will serve the needs of more than 20 companies," municipal governor Zapryan Dachev explained. Liebherr is able to use the state aid in its capacity of first-class investor.
Polish developer enters Bulgaria, Romania markets
Polish property developer J.W. Construction is primed to launch new projects in Bulgaria and Romania, reports news agency SeeNews. At the moment, the company is processing the paperwork for the purchase of a development site in Bulgarian Black Sea resort Golden Sands. The deal should be sealed by Sept. J.W. Construction plans to develop the site into a condo complex. No figure has been cited for the potential size of the investment.
First Nanotechnology Centre in Bulgaria
BudgetSensors, a Bulgarian manufacturer of silicon and silicon nitride probes, as well as AFM accessories for Atomic Force Microscopes (AFM), has opened a state of the art Nanotechnology Centre in Sofia, Bulgaria.The Centre, which is the first of its kind in Bulgaria, is located in the BudgetSensors Head Quarters. It features different Atomic Force Microscopes from various manufacturers, as well as different kinds of related equipment.BudgetSensors' Nanotechnology Centre is headed by Dr. Yordan Stefanov.
"Dr. Stefanov's solid experience in AFM gives him the ideal theoretical and practical background, needed for heading this new facility of BudgetSensors", said Dr. Kamen Nikolov, CEO of BudgetSensors."After Bulgaria's joining the European Union in 2007, many exciting opportunities lie ahead of Bulgarian companies. Being the Bulgarian pioneer in Nanotechnology, BudgetSensors now offers all its expertise to the fast growing Bulgarian industry, which hereby will probably be the main beneficiary from one of the biggest investments of BudgetSensors in 2007.", added Dr. Nikolov.
Fitch Ratings Affirms Bulgaria's Post Bank Ratings
Fitch Ratings has affirmed the ratings of Bulgarian Post Bank, a subsidiary of Greek EFG Eurobank Ergasias, at "A-" with a stable outlook, the Bulgarian bank said on Wednesday.
The long-term rating of the Bulgarian bank is just one step below those of its parent company.The ratings agency noted as positive Post Bank's growing franchise as it now merges with Eurobank's other Bulgarian subsidiary, DZI Bank, and the good prospects for improved profitability.Fitch also said the bank's ratings incorporated rising credit risk from recent rapid growth in retail lending in Bulgaria, some volatility in its balance-sheet structure and the operational risks arising from the merger with DZI Bank.The two banks are expected to complete the merger next month and the new entity, which will be called Eurobank EFG Bulgaria, will become the fifth biggest lender in the country by assets and will have a network of 280 outlets.
Bulgaria rail operator receives power trader permit
The Bulgarian power regulator Tuesday said it will issue a 10-year licence to Tren, a wholly-owned unit of the National Railway Infrastructure Company (NRIC), to operate as an electricity trader.The licence, expected to be handed to the recipient within two months, will allow Tren to sell electricity to national railway carrier BDZ at a minimum premium.The engines operated by BDZ have no onboard electricity meters at the moment. NRIC is currently in talks to buy 50MW of electricity from the Kozloduy nuclear power plant. The negotiations were prompted by an electricity hike that took effect in early July this year which spelled a 15% increase in train fares.The access to cheaper electricity could allow BDZ to pare monthly costs by 12 mln levs, deputy transport minister Georgi Peterneichev said recently.NRIC intends to sell electricity to the train stations and other users in close proximity, said executive director Anton Ginev. These plans will require that the company obtain an end-supplier licence as well.Exports have commented it would be unlikely that NRIC will be able to sell electricity to end-consumers because they fall within the permit area of the respective regional power distributor.In related news, the NRIC managing board Tuesday discussed the rules for the selection of a strategic investor and an operator for the telecom division that BDZ intends to set up.The investor will be required to ensure financing for the development and modernisation of the telecom network.European and global telecoms are interested in a share of the future company and in the lease of the infrastructure, said Ginev.
Chimimport issue price per share set at BGN 11
Chimimport filed with the Financial Supervision Commission its prospectus for IPO of shares from the company's capital increase, BSE reported.The issue price per share has been set at 11 leva. The company is planning a capital increase from 130 mln leva (66.467 mln euros) to 150 mln leva (76.693 mln euros) by offering 20 mln new, common, paperless, voting shares.If all offered shares are subscribed and paid, the company will raise 220 mln leva (112.484 mln euros).The decision was adopted by the Management board and approved by the Supervisory board at the end of June. The increase will be succeessful if at least 10 mln new shares are issued.Chimimport will use the funds to finance investments and the activity of all companies in the group.Unicredit Bulbank is underwriter of the emission, Central Cooperative Bank AD is co-underwriter.As we already informed, Chimimport is appointing a general meeting of shareholders 17 September to vote amendments to the company's statute, which will entite the management body to increase capital to up to 175 mln leva (89.476 mln euros) by issuing new, common or privileged shares.If the GM approves the amendments, the Management board will be able to issue bonds, including convertible bonds, worth up to 100 mln euros (51.129 mln euros), or the equivalent in other currency.Main shareholder is Chimimport Invest AD controlling 64.26% of the capital.
Kaufland opens 14th store in Bulgaria
The German-owned retail chain Kaufland will open its 14 th store in the country this week. The outlet is located on 5,000 square metres in the country’s 7 th largest city of Pleven . The investment is estimated at BGN 10mn (EUR 5.1mn). The store will employ about 200 persons. The German company plans to expand the number of retail stores to 40 in five years, covering 20 cities in the country. Its investment plan is estimated at some EUR 300mn. The company operates outlets in 11 cities at present.
Bulgaria's Apis in talks to sell its legal info services business
Apis, the Bulgarian operator of the eponymous computerised legal information system, is in talks to sell its business to an unnamed company.
The news was confirmed by Apis owner Vasil Hristovich who declined to name the potential buyer, citing confidentiality arrangements, Dnevnik wrote. The Dutch buyer that courted Apis two years ago is completely out of the picture, said Hristovich.In April this year, Apis received a friendly take-over bid from another local legal software company, Lakorda, owned by a former Apis employee.'The pitch was decent. It rose above the emotional issues and misunderstanding between us. There was no concrete price offer because we don't have at or disposal an accurate appraisal of Apis' business. But the deal could have been in the seven figures at least,' said Lakorda owner Goran Goranov. He added that Apis' price has since declined as have its turnover and profit. Apis is yet to respond to the Lakorda offer.
Reported by:
Evgeni Mitev