불가리아 주요 경제뉴스(17 – 24 AUGUST 2007)

BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT (17 – 24 AUGUST 2007)

 

Sections/headline briefs:

MACROECONOMY:

Fresh price hike expected in September
Economist Intelligence Unit: Bulgaria c/a deficit to decline through 2011
Flat tax introduction to increase salaries in Bulgaria
Bulgaria tops Europe's industrial output growth list
Bulgaria construction equipment market to double through 2010
Outgoing Japanese ambassador receives highest Bulgarian honour
China approves Bulgaria as outbound tourist destination
Holiday complexes - goldmine for realtors
Bulgarians numbered 7,679,300 in end-2006, birth rate rose
State debt up to EUR 5.76 bn end-Jul
German consultant to seek waste treatment options for Sofia
3, 25 Million Bulgarians Work
Inflation in Bulgaria among highest in Europe
Euro bills to resemble Bulgarian banknotes
Scandals in milk, meat processing sectors
Foreign ambassadors are interested who funds the construction boom on the Bulgarian Black Sea coast
Concession for Trakia motorway granted to grafters
EUR 22m EU funding expected for vine-growing

 

 

 

 

INVESTMENTS:

Nissan to build car sales complex in Veliko Tarnovo
Conflicting forecasts on FDI in 2007
Bulgaria to curtail mayoral oversight of major investment projects
Polo Commerce invests 6 mln levs in Nesebar poultry factory
Foreigners Buy EUR 817 M of Bulgarian Real Estate in H1
Businessman to invest 2 M EUR in a hotel for people with disabilities
Estonian firm to build industrial park near Sofia
Spain's Detea, Bulgaria's Technopolis to build commercial center in Kardjali
Spanish companies invest in Bansko, Razlog
Borovets expansion kicks off with construction of lift facility
Massive Mall Construction in Bulgaria
Aladin to invest BGN 38 M in mall in Kardjali
Elatsite Med to invest 50 mln euro annually
UK-based Equest, Omani Fund To Kick off 566 Mln Euro Mountain Resort Project in Bulgaria

COMPANIES:

Minister: No outflow of companies from Bulgaria
Jewish bank to open in Sofia
AIG Investments acquires 90% in BTC
Fast-food chain Burger King to set foot in Bulgaria
Bulgaria Air, Lufthansa join hands
23 Companies in contest for the Bulgarian Shipping Company
Bulyard sets up ship design JV with norwegian partner
Bulgarian telco Max Telecom unwires Simeonovo, Dragalevtsi boroughs
Toyota and Lexus with a new official distributor
Chimiport to build repair shop for Mercedes trucks
Germany's Kloeckner to buy Bulgarian rival Metalsnab
Austria's Knauf to build gypsum-cardboard plant
Kremikovtzi fined BGN 500,000 for monopoly
Bulgaria's M-Tel Helps Offset Telekom Austria Domestic Losses in H1
Bulgaria sells shares in power distribution companies
Assets of Raiffeisen funds exceed BGN 100m
Miroglio opens new textile plant in Yambol

 

Articles:

 

MACROECONOMY:

Fresh price hike expected in September

The prices of the main commodities and raw materials in Bulgaria will continue rising in the autumn, a Pari daily's survey shows. The shock increase is explained with the poor harvest, the implementation of the European standards, and traders' desire to make quick profits.The price hike is nothing abnormal, nor is it due to speculation, the executive director of the Sofia Commodity Exchange, Vassil Simov, said. That is the result of the higher prices of raw materials, electricity and fuels. Bread in Bulgaria is the cheapest in Europe, he went on to say. For the past few months wheat has appreciated 2.5-fold, while bread prices have jumped by just 20%.The executive director of the Rousse Commodity Exchange, however, thinks differently. This is not a purely market situation, because there is a strong speculative element, Ivan Ivanov said. The world markets also exert their effect, because Bulgaria is not isolated from the EU and the USA. If the situation followed the market rules, prices would not be rising so quickly. From a market viewpoint, this is a snowball effect, he added. According to the chairman of the Plovdiv Commodity Exchange's board of directors, Krassimir Davchev, the hike is triggered by retailers. For the first time in 16 years there are no offers for sale of wheat and sunflower from the new crop. By the end of September it will be clear whether there is an actual price increase or it is all due to retail trade, he forecast.

Economist Intelligence Unit: Bulgaria c/a deficit to decline through 2011
Bulgarian trade data for the first five months of 2007 suggest a deterioration in the current-account deficit this year towards 20% of GDP, forecasts the analytical unit of The Economist.According to the Economist Intelligence Unit (EIU), the c/a gap will start to narrow over the next five years falling to 17.2% of GDP by 2011. EIU forecasts released in early July had the c/a deficit widening to over 26% through 2011.The rapid credit growth and persistently large c/a deficits are cited as possible threats to the sustainability of the GDP growth recorded so far in 2007.The Bulgarian economy will expand 6.2% in 2007 but growth will be slowed down to 4% through 2011 mainly by negative population trends.Nevertheless, Bulgaria's GDP per head will grow significantly more quickly than in the developed west European economies, rising from 12% of that in Germany (31% adjusted for differences in purchasing power) in 2006 to around 46% of the German level in 2030 (58% in adjusted terms).Bulgaria's average monthly wage is forecast at $322 by 2011 versus $937 for the rest of Eastern and Central Europe.Bulgaria will be able to offer among the lowest labor costs in the EU in the coming years. Although labor-based advantages usually prove transitory, the EIU expects these to remain for the forecast period, increasing Bulgaria's attractiveness as a destination for inward investment, especially in relation to regional competitors such a Romania.The influx of foreign direct investment is seen falling to 4.2% of GDP over the next five years versus a target of 9.2% of GDP for 2007.Bulgaria's development is being held back by high levels of perceived corruption, an inefficient public administration and a poorly functioning legal and judicial system. Levels of investment in research and development are low, and investment in information technology has been held back by the delay in the liberalisation of the telecommunications market, said the EIU.
Flat tax introduction to increase salaries in Bulgaria

One of the main positive results from the introduction of a flat tax in Bulgaria would be an increase in salaries and improved tax collection.Accounting specialist Svetlana Naidenova said, as quoted by investor.bg, that one of the flat tax advantages was its low rate of 10 per cent and its easy administration, which meant lower costs.So far, 15 countries in the world have introduced a flat tax. Macedonia, Montenegro, Mongolia and Iceland are among the countries to most recently introduce a flat tax.The flat tax rate in Iceland is 35.7 per cent, in Lithuania, 27 per cent and in Latvia, 25 per cent.Only Mongolia and Kyrgyzstan have a flat tax of 10 per cent. Macedonia has 12 per cent flat tax rate, Romania, 16 per cent and Russia, 13 per cent.One of the negative consequences of the flat tax is that incomes of up to 350 leva would have higher a tax rate than the current one, Naidenova said. A possible solution to the problem could be to maintain a minimal non-taxable income or flat tax postponement until incomes in Bulgaria increase as a whole.It is still unclear whether people with lower labour efficiency and families with children would continue receiving tax concessions.

Bulgaria tops Europe's industrial output growth list

Bulgaria's industrial growth sets a record among the EU member states, "Troud" daily cites Eurostat. In June Bulgarian industry posted 4.1 per cent month-on-month increase, while the 13 euro area member states marked a decrease of 0.1 per cent compared to May. In the all 27 EU member states output remained unchanged in June. In June 2007 compared to June 2006, industrial production rose by 2.3 per cent in the euro area and by 2.5 per cent in the 27 EU member states.In June Bulgaria is quite ahead of the Netherlands, which is ranked second with 2.9 per cent growth and Slovenia, which is third with 2.5 per cent.Regarding annual industrial output increase, Bulgaria is the indisputable leader with 14.6 per cent growth, followed by Slovakia, 12 per cent and Slovenia with 10 per cent increase.

Bulgaria construction equipment market to double through 2010
Bulgaria’s torrid property market is widely expected to keep demand for construction equipment on the boil over the near-term. Although there is no official data available, industry experts estimate that the domestic sales of construction equipment came in around 400-500 mln levs in 2006. Two of the biggest local vendors, Euromarket Group and Kirov, posted sales of 180 mln and 110 mln levs last year. Sales of construction equipment should double over the next two years, said Euromarket Group chief manager Dimitar Ilchev. The company official forecast Euromarket sales to reach 240 mln levs in 2007 and top 1 bln levs through 2010 as long as the local construction industry continues to provide a strong tailwind, said the company executive. Ivan Kirov, owner of the Kirov store chain, said the company is targeting 150 mln levs in sales for 2007.A 2.5 bln euro gusher in EU funding for road infrastructure will generate additional demand for construction equipment.In anticipation of the pick-up in road construction, Euromarket will start distributing the equipment for trenchless installation of cables and pipes of Dutch manufacturer Vermeer. The company will also add to its product mix the curb and gutter machines and concrete pavers of U.S. manufacturer Gomaco. More local contractors are expected to start renting construction equipment and reselling surplus machinery. The leasing of construction equipment is becoming an affordable option even for small-size companies.The experts also forecast an increase in demand for high-rise construction equipment as developers continue to unveil projects for tall structures at various locations in Sofia and around the country.
Outgoing Japanese ambassador receives highest Bulgarian honour

President Georgi Purvanov on Wednesday conferred the highest Bulgarian state honour, the Order of the Balkan Range, First Class, on outgoing Japanese Ambassador Koichiro Fukui for his outstanding role in promoting relations between the two countries.Purvanov said the honour is a sign that Sofia is highly pleased with its relations with Tokyo. "Our two nations maintain intensive political dialogue which influences our relations in
all other fields and our efforts to invigorate economic contacts," Purvanov said.He noted Japan's growing interest in Bulgaria as a tourist destination, saying that over 10,000 Japanese tourists visited this country last year.Purvanov thanked Japan for being Bulgaria's largest financial donor and for its consistent effort to promote cultural relations with Bulgaria and provide training to Bulgarian students.Ambassador Fukui said he accepts the honour as a recognition for all those who work to promote friendship between the two nations. He underscored the intensity of political dialogue at all levels, economic relations and cultural exchange. Tokyo will continue to provide loans for various projects in Bulgaria, grants for cultural initiatives and support for local-level projects, he said.

China approves Bulgaria as outbound tourist destination

The Chinese government has approved six more countries as the destinations for outbound tourist groups, Bulgaria being one of them, Xinhua news agency reported Monday.The five other countries are Oman, Morocco, Monaco, Syria and Namibia Bulgaria, said sources with the China National Tourism Administration.In the first half of the year, China's outbound tourism saw rapid growth, with the number of tourists up 14.04 percent from the same period of last year, said the administration.The country remained Asia's largest source of outbound tourism last year, with 34 million Chinese tourists travelling abroad, up 10 percent year-on-year.China has so far approved 132 countries and regions as destinations for outbound tourism, 86 of which receive Chinese tourist groups.
Holiday complexes - goldmine for realtors
Apartments in holiday complexes have become a real goldmine at Bulgaria's realty market. The number of such complexes at the seaside of this country has increased by 82%. In the western part of Slanchev Bryag (Sunny Beach) alone, 25000 apartments have been sold up to now at an approximate price of 1000 euros per sq. m. Eastern part apartment prices, respectively, cost up to 2600 euros per sq. m. And, not surprisingly, the clientele does insist on higher quality construction and uniqueness in return for their money, especially the Russians, who seem to fall for the most luxurious places possible. Englishmen, on the other hand, are keener to see the investment to pay off.
The future of "second home" sales in Bulgaria is the holiday residential complexes. Seaside holiday villages comprise small buildings, which may be sold either in chunks - separate apartments - or as detached houses. The high quality of construction, the year round upkeep, security, and beach cleanliness maintenance is among the advantages of such complexes. The major shortcoming of second home seaside properties is the unavailability of maintenance and security when the holiday season is out. These problems, however, are nonexistent at VIP holiday complexes. The segment is yet to be developed along the southern Bulgarian Black Sea coast. Stage one of a luxurious 200 apartments containing complex near the village of Lozenetz was recently finished.

Bulgarians numbered 7,679,300 in end-2006, birth rate rose

At the end of 2006, Bulgaria had a population of 7,679,300, a decrease by 3,000 people less than in 2005 due to a higher birth rate last year, according to a 2006 report on socio-economic development published by the National Statistical Institute.In 2006, deaths outnumbered births, resulting in a drop in the population by 39,500 people (0.5 per cent).
The number of children born out of wedlock grew in both relative and absolute terms, from 12.4 per cent in 1990 to 25.7 per cent in 1995 to 42 per cent in 2001 to 49 per cent in 2005. At the end of 2006, live out-of-wedlock births totalled 37,572 (50.8 per cent).
Births totalled 74,495, of which 73,978 live births (99.3 per cent). This is the largest number of live births since 1995, up 2,903 from a year earlier. The birth rate was higher among the urban population than among the rural population.Natural population growth has been negative since 1990, resulting in a steady decrease in the population. In 2006, the population decreased by 39,460 people.The number of fertile-age women (aged between 15 and 49) dropped to 1,852,000 - down 16,000 from a year earlier. It was down by 55,000 from 2001. The slight increase in birth rates in the last three years is due to the increased fertility of the fertility contingents, measured by the total fertility rate.The ageing of the population deteriorated. The number and proportion of Bulgarians aged under 15 dropped, while the proportion of those aged over 65 increased. In 1995, 17.7 per cent of Bulgarians were aged under 15, as against 15.2 per cent of over-65-year olds. in 2006, the respective figures were 13.4 per cent and 17.3 per cent.The average life expectancy in 2004-2006 was 72.61 years (men 69.07, women 76.32). The life expectancy of the urban population was higher by 1.5 years.In 2006, deaths totalled 113,438, close to the 2005 level of 113,374. At 14.7 per thousand, the total mortality rate (TMR) was higher than in most EU countries, where it varies between 9.0 and 10.0 per thousand. Ireland has the lowest TMR of 6.6 per thousand. only Latvia has a mortality rate close to Bulgaria's at 14.2 per thousand.

State debt up to EUR 5.76 bn end-Jul

Bulgaria's state and state-guaranteed debt amounted to EUR 5.76 billion at the end of July 2007, up by EUR 2.5 million month on month, finance ministry data show. Domestic debt totalled EUR 1.54 billion, foreign debt stood at EUR 4.21 billion. Debt-to-GDP remained unchanged at 22%. Internal debt went down by 0.1 percentage points to 5.9% of GDP, external debt rose by 0.1 percentage points to 16.1% of GDP in July.
Since the beginning of the year Bulgaria has paid BGN 2.07 billion principal and interest. The amount includes BGN 1.61 billion payments on the domestic debt and BGN 461.4 million on the foreign one.

German consultant to seek waste treatment options for Sofia

The consortium of Fichtner GmbH&Co, Aqua Consult and BT Engineering has to propose three technologies for solid household waste treatment. The German-Bulgarian tie-up won the tender of the Sofia municipality for project consultant.The consortium has to prepare conceptual plans for the facilities, site surveys, financial and economic analyses. It also has to present an application form for EU funding for the project. The term of the contract is 16 months, i.e. the construction of a waste treatment plant will not begin before 2009. The value of the feasibility studies stands at BGN 4.2 million without VAT. The financing is provided by the municipality but it can be recovered under the environment operative programme.
3, 25 Million Bulgarians Work
The economic active population in Bulgaria is 3.49 million or 52% of the people aged 15 or more.This show the results of the conducted by the National Statistic Institute research on the work force in the second quarter of 2007.The index of economic activity of men (58.1%) is with 10.6 points higher than that of women (47.5%). In the second quarter of 2007 the employed people are 3.25 million or 49% of the people aged over 15. In the cities the employed are 53.7% and in the villages – 37.7%.From the overall number of employed 121.2 thousand (3.7%) are employers, 241.7 thousand (7.4%) are self-employed (don't hire people), 2 852.9 thousand (87.7%) are employed and 37.3 thousand (1.1%) - unpaid family workers.From the employed people -2.02 million or 70.9% are in the private sector, 830.2 thousand or 29.1% - in the public one.The predominant part of the workers -1.82 million or 55.9% work in the service sector, 1.17 million (36.0%) - in industry, 264 thousand (8.1%) - in agriculture and forestry.In the second quarter of 2007 the unemployed people are 237.8 thousand or 6.8% of the economic active population.
9.8% of the unemployed are with higher education, 47.7% - with secondary and 42.5% - with primary or lower.The trend of growing economic activity and employment continues, with the number of employed people growing with 114 thousand compared to the second quarter of 2006. The increase is totally due to the private sector, where the number of employed has risen with 170.2 thousand. The number of those hired in the public sector decreases.
Inflation in Bulgaria among highest in Europe

Bulgaria is among the European countries with the highest inflation for July 2007, Eurostat data show. The inflation in the country stood at 6.8% in July. only Hungary (8.3%) and Latvia (9.5%) had higher inflation rates than Bulgaria for the month. Malta (-0.2%), Denmark (1.1%) and Slovakia (1.2%) were the countries with the lowest inflation in Europe for the month of July. Inflation in the eurozone stood at 1.8% in July, down by 0.1 percentage points month on month.

Euro bills to resemble Bulgarian banknotes

The Euro bills will most probably have the same special transparent square mark on them, similar to this on the new BGN 20 bills, the German agency DPA reports. According to the latter, the Bulgarian currency is the sole money to use this type of protection.
‘We’re working on a new series of banknotes’, the European Central Bank president Jean-Claude Trichet confirmed.BNB’s chief cashier Stefan Tsvetkov made it clear yesterday that it goes about the BGN 20 banknote series that had been launched back in 2005 on the occasion of the 120th anniversary of the first Bulgarian bill, 24 Chasa Daily reports.

Scandals in milk, meat processing sectors

The milk produced in Bulgaria would be sufficient, if only milk processing companies that have been licensed or have applied for licensing operated in the country, Dimitar Zorov, CEO of Parshevitsa dairy and chairman of the Association of Dairy Processors in Bulgaria, said. Thus, Zorov named the actual reason for the recent media scandals in the milk and meat processing sectors. The problem is not so much about the transition period, which will be introduced in the beginning of September and which prompted the scandals. It is actually about the expected deficit of milk and meat. The deficit is a fact even at present and processing companies forecast that the problem will get even worse. They will probably be forced to produce Bulgarian cheese from 100% German milk and lukanka dry sausage from Belgian pork and beef. The deficit of domestically produced raw milk amounts to 15% at present and Bulgarian dairies have not been utilising their full capacity for years. The German milk is of excellent quality, according to Zorov and Stefan Dimitrov, owner of Markelli dairy. The problem is that there is already a deficit of milk on a global scale and its price is expected to grow. Parshevitsa dairy has not used milk from Germany for two months as its price has gone up by BGN 0.2 per litre, Zorov said. The transportation of 20,000 litres of milk from Germany costs EUR 2,500, Zorov added. The milk processing sector split in two associations a few months ago as a result of the different ideas for avoiding the forthcoming crisis. Mihail Tachev, owner of the Old Liben dairy, spun off from the Association of Dairy Processors in Bulgaria to establish the National Association of Milk Processors. Tachev and the companies that followed him support the introduction of a transition period, which would help more companies, including small and medium sized enterprises in the sector, to survive. A similar move would also be of help to the stock-breeding sector. Meat processors are in a similar situation but they have at least avoided splitting up.
Foreign ambassadors are interested who funds the construction boom on the Bulgarian Black Sea coast

Construction and tourism are the two pillars of the grey and black economy in Bulgaria. It is a public secret that two sectors are in fact one huge dirty money laundry. Hundreds of hotels mushrooming at the Black Sea coast legalize the incomes of smugglers, drug traffickers and illegal arms traders. According to the US Human Rights Observance annual report, in Sofia alone about two billion euro have been buried last year and 80% of the construction sector is in fact grey and black. There is no official information about the construction works along the Black Sea coast but the money flowing under the counter is much more there. This is the reason why many of the bosses do not care that the tourist flow is decreasing and deluxe four- and five-crown hotels offer rooms for seven to ten euro and prices drop gradually every year. Hundreds of hotels stay empty and wait for somebody to buy them, but buyers never come. Curiously these tendencies bother none of the big players and construction keeps its feverish pace. The answer is very simple. The leading figures in these sectors are the same who have been piling wealth for years from shady deals. In the beginning of the 1990s they drained state enterprises, in 1996 and 1997 they bankrupted banks and later plundered what was left via privatization. The monstrous graft ruined millions of Bulgarians and our state remains the poorest in Europe. The names of those involved are known but none is sentenced. This is how things are in Bulgaria. only, since January 1, 2007 things have changed. After acceding to the EU, Bulgaria has become its outer border and we should accept the rules that are common for the whole community. And they do not tolerate bags of money being delivered here and there for no obvious purpose. The European services are always keen to know exactly and how much one earns and how much one spends. Foreign embassies have raised the alarm about the blatant money laundering going on in Bulgaria, not to mention that the deals tend to involve more and more foreigners. The EU services insist on tightening measures aimed at combating dirty money laundering. The European Anti-Fraud Office demanded stricter control and more verdicts. The Bulgarian investment pattern of investing capitals of dubious origin and trading with clients from Old Europe seems to bother EU governments. The Western services cannot stay indifferent to what is going on at the new Black Sea border of the European Union.
Concession for Trakia motorway granted to grafters
A company that progresses by means of bribes will construct Trakia motorway. The Portuguese SOMAG reportedly illegally financed the campaigning of the Social Democratic Party whose leader is the European Commission President Jose Manuel Barroso, broke the news La Libre Belgique. The Social Democratic Party received 233 415 euro on March 15, 2002, reads the document of Constitutional Court in Lisbon.
Barroso is one of the main foreign lobbyists insisting the motorway concession to be granted to the Bulgarian-Portuguese company. The committee he headed considered the appeals against the motorway concession. This committee, however, never spoke positively against the deal, although it is not up to EU legislation because it has been concluded without a tender.

EUR 22m EU funding expected for vine-growing

Bulgaria has proposed a EUR 22 million budget for vine-growing with the support of the European funds in 2007-8, the executive director of Agriculture Fund, Dimitar Tadarakov, said. We expect that the budget will be approved shortly, so that we can invite applicants to submit their documents, he added.The first 14 contracts for EU-funded vine-growing projects were signed on Thursday, August 23. The projects amount to BGN 1.451 million. Half of the financing is provided by the European budget, the remainder has to be secured by vine-growers.

 

 

 

 

 

 

 

INVESTMENTS:

Nissan to build car sales complex in Veliko Tarnovo

Еurohold Imoti, part of Eurohold Bulgaria, will invest EUR 1.5 million in the setting up of an automobile sales and repair complex for the Nissan, Dacia and Renault makes in Veliko Tarnovo. Nissan Sofia, the official dealer of the three makes for Bulgaria, is part of Eurohold Bulgaria's portfolio. The investor has already acquired a 7.500-sq. m plot. The project envisages the setting up of a showroom, a car service and repairs shop, a spare parts outlet, offices and parking space for 60 new vehicles. The complex is slated for completion in the autumn of 2008. Nissan Sofia sold 1,000 new vehicles in the period January to July 2007.

Conflicting forecasts on FDI in 2007

Foreign direct investments (FDI) in Bulgaria for 2007 will exceed the EUR 4.1 billion FDI attracted in 2006, Stoyan Stalev, chairman of InvestBulgaria Agency forecast. The volume of FDI in Bulgaria since the beginning of 2007 has decreased in comparison to the corresponding period of 2006, Kamen Kolev, deputy chairman of the Bulgarian Industrial Association said a day earlier. Low taxes and wages are not enough to keep the large-scale companies in Bulgaria, Kolev said.

Bulgaria to curtail mayoral oversight of major investment projects
An effort is underway to revise yet again Bulgaria's much-patchworked Spatial Planning Act to significantly trim the powers vested in municipal mayors to greenlight major infrastructure projects like power stations, roads and railways.The draft legislative changes will give the regional development minister the final word on the launch of the large-scale infrastructure projects.The initiative is related to the reallocation of construction oversight authority between the central and the local governments.The Construction Control National Directorate (CCND) will oversee only major infrastructure projects while the remainder will be within the jurisdiction of the respective municipal mayor.The amendments aim to eliminate the duplication of duties and improve the oversight mechanisms for combating illegal construction, said CCND director Ivan Simidchiev. According to the CCND experts, the mayors interpret creatively the legislation and often delay projects or simply do nothing.The law-making project enjoys the support of the transport ministry which believes that the fewer chances mayors have to intervene in investment projects, the smoother their implementation.
Polo Commerce invests 6 mln levs in Nesebar poultry factory
Polo Commerce, the Bulgarian producer of poultry products, said it is investing 6 mln levs in a second plant near the town of Nesebar.The company will be seeking a larger market footprint not only in Western Bulgaria, where its first poultry plant is located, but also in the coastal regions.The launch of the Nesebar facility will increase daily output to 20 tons. It will also create opportunities for export to the EU and neighboring countries.
Polo Commerce, which packages poultry meat supplied by Razgrad-based producer Pilko, has an annual out of 1,200 tons.The domestic poultry market is expected to rise to 100,000 tons in 2007, said Boris Stoimenov, chairman of the industry branch union.In 2006, consumption was reported at 90,000 tons of locally-produced poultry and 30,000 tons of imported poultry.
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. 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.
Businessman to invest 2 M EUR in a hotel for people with disabilities
The owner of “Deva 90” Ltd. Lyubomir Kalchev wil invest 2 M EUR In the construction of two hotels with SPA centers for rehabilitation of people with disabilities from Bulgaria and from abroad, announced Yantra Daily.This will be the first complex in Bulgaria for medical-rehabilitation procedures for people with disabilities.The working projects are ready, the funding options are being discussed, informed the entrepreneur. one of the possibilities is a bank credit, another is to use the EU Cohesion fund.Lyubomir Kalchev has bought two lots. one is 3 decares and is 1.5km from the Mineral baths in Voneshta voda.A hotel complex and 4 small houses will be constructed. The buildings will be equipped and adjusted for people with disabilities. There will be also a business center for meetings and conferences, explained Kalchev.The other lot is in Voyneja and there the entrepreneur plans to build 12 houses for people with disabilities amid a field of chokeberries (aronia).For 14 years the Rousse-based company deals with organisations of people with disabilities from Bulgaria and abroad. This is the first company in the country, licensed by the Ministry of labour and social policy to deal with distribution of assistant technical means for people with disabilities.
Estonian firm to build industrial park near Sofia

Estonia's Delta Marina will invest nearly BGN 116 million in an industrial park in the village of Mramor, Sofia region. The company, which has two Estonian and a Lithuanian partner in the project, will be certified as a first-class investor on Wednesday, August 22.
Industrial Park Mramor will be located on 60 ha of land, its total built-up area will be 300,000 sq. m. The project will be carried out in four stages and has to be completed in three years. Delta Marina is owned by Estonia's AS Eastern Europe Real Estate Investment Trust. The fund's shareholders participate in another project in Bulgaria, too: the first satellite village near Sofia, Delta Hill.

Spain's Detea, Bulgaria's Technopolis to build commercial center in Kardjali
Technopolis, the Bulgarian retailer of home appliances and consumer electronics, has teamed up with Spanish property developer Detea for the construction of a commercial center in the town of Kardjali, Southern Bulgaria.The news was announced by Technopolis which has already broke ground for the commercial development.The 2,000 sq m Technopolis outlet will anchor the 5,000 sq m commercial complex which will also feature other retailers as well as a bus station and a 100-car parking lot.The electronics retailer said it will invest 5 mln levs in the Kardjali outlet, its 17th nationwide. The company said it has so far pumped 106 mln levs in the development of its store network. Detea has invested 100 mln levs in various projects in Bulgaria to date.
Spanish companies invest in Bansko, Razlog
New Life OOD, which is registered in Bourgas with Spanish capital, will build the Pirin Lakes Ski and Golf Resort holiday complex near Razlog. The property will be built on an area of 5,000 sq. m and is estimated to cost some EUR 3 million. The complex will feature some 100 apartments, a restaurant, a swimming pool and a spa centre.
The company is also acquiring plots near Bourgas with the purpose of constructing apartment buildings for seasonal use.
A Spanish investment fund has also acquired 2 ha of land near Bansko. The complex is located to the west of the city's DownTown residential complex. The Spanish investors plan to build an apartment complex.

Borovets expansion kicks off with construction of lift facility
The much-anticipated expansion of Bulgarian ski resort Borovets, dubbed the Super Borovets project, is set to finally get underway in early October this year with the construction of a lift connecting the city of Samokov with the Markudjik ski runs.The news was produced by Tuesday's meeting of the board of Rila-Samokov 2004 AD, the project company that owns 2 mln sq m of land in Bulgaria's Borovets mountain area for further development into residential second homes and associated infrastructure.The whole project will be implemented into three phases.The so called Lower Borovets tract will deliver 7,000 beds and a built-up area of 350,000 sq m.A further 1,500 hotel beds are planned for the so called tourist core Beli Iskar. They will be distributed among family-run hotels, vacation villages and condo buildings. The area will also accommodate a lift connecting the eponymous river with the Borovets resort.The bed capacity of Borovets proper is seen rising to 8,000 beds from 6,500 at present.Another 1,000 hotel beds are planned for the upper Borovets.Upon completion, the supersized resort will have 25,000 beds and 100 km of ski runs.The investors expected to inject at least 350 mln euro in the Super Borovets project.Borovets Invest, a joint venture between investment fund Equest and Oman investors, owns 67% of Rila Samokov 2004. The Samokov municipality controls a 25% share with construction company Glavbolgarstroy holding 8%.
Massive Mall Construction in Bulgaria
There is a total of 201,000 square meters of shopping mall GLA (Gross Leasable Area) under construction in Bulgaria, according to new Colliers International Bulgaria research. That is an increase of 138,500 square meters in the H1 of the year.This can be attributed, say Colliers in their new “Bulgaria Retail Market Overview” for the H2 of 2007, to the initiation of several big new shopping developments.Three major new shopping centers broke ground this year. The construction of Carrefour Mall was initiated in January in Sofia followed by Serdika Center also in the capital and Mall Stara Zagora. Colliers International also reports that the city of Varna on the Black Sea coast is shaping up as a very competitive market for shopping center developers and investors with five projects located within a 1-km radius. Two of them, Pfohe Mall and Mall Varna, are already in an advanced construction phase with scheduled delivery in 2008. Construction of Mall Plovdiv in Bulgaria’s second most populous city is also progressing as planned with expected completion next year as well.Atanas Garov, Managing Director of Colliers Bulgaria, said, “Our research shows that retail in Bulgaria continues its rapid expansion. Prospects are very promising, as the Bulgarian retail market is still vastly under supplied, while tenants are bullish on their expansion plans.”Ivan Velkov, General Manager of Colliers Bulgaria, added, “Varna is attracting a lot of attention from developers in all segments. Colliers established an office in the city two years ago to support the real estate business on the Black Sea Coast.”Philip Bay, Regional Director, Colliers International Southeast Europe, concluded, “I am proud of the high level of the market research we produce. It is a valuable tool for clients, media and other real estate professionals, and just another reason why Colliers International Southeast is the leading property consultants in the region.”Colliers International is a worldwide affiliation of independently owned and operated companies. In 2007 Colliers International Southeast Europe was named Property Consultant of the Year for the region for the second straight year.
Aladin to invest BGN 38 M in mall in Kardjali
Sofia-based Aladin will invest BGN 38 million in the construction of a mall in Kardjali. The company, which has a similar project in Pleven, won the tender of the municipality for a plot in the centre of Kardjali. According to the terms of the procedure, Aladin has to build a commercial and entertainment complex within three years. The plot is included in a project for construction of a business zone. The local authorities also plan to build an underground parking lot.The new mall has to open by the end of 2010. The project will also help improve Kardjali's infrastructure, Aladin said.

Elatsite Med to invest 50 mln euro annually
Local copper producer Elatsite Med will invest 50 mln euro in annual investment through 2012 in a bid to extend the life of its mine resource to '20, executive director Kostadin Naidenov told news agency SeeNews. A project has been drafted that, if approved, will ensure Elatsite Med stays in operation until '32. A go/no-go decision on the project will be taken by the end of '08. A strategy currently being implemented by the company will increase copper extraction to 140 mln tons annually by '20. In '07, the copper producer has earmarked 100 mln levs for new equipment and eco projects.
UK-based Equest, Omani Fund To Kick off 566 Mln Euro Mountain Resort Project in Bulgaria

UK-based Equest Investments Balkans and a state-controlled Omani fund will launch a 566 million euro ($763.3 million) mountain resort project in Bulgaria on October 8, Bulgarian authorities said on Wednesday.On October 8 the construction of a ski lift will begin, the municipality of Samokov where the future resort Super Borovets will be located, said in a statement.A 67%-stake in the project is split equally between UK-based Equest Investments Balkans and Omani State General Reserve Fund. The town of Samokov and construction company Glavbolgarstroy are the other two shareholders in the project, holding stakes of 25% and 8%, respectively.Borovets, one of Bulgaria's oldest mountain resorts, is located some 60 kilometres south of the capital Sofia. It has 42 kilometres of ski runs.The project envisages the construction of 653,815 square metres of residential apartments, hotels and retail space, as well as associated infrastructure, including an additional 36.5 kilometres of ski runs to complement the existing skiing area. It is expected to be completed in 2012.Tourism is an important source of revenue for the economy of the Black Sea state, famous for its skiing and summer resorts. It generates about 10% of Bulgaria's gross domestic product. Tourism revenue helps the country partly finance its rising current account deficit.

COMPANIES:

Minister: No outflow of companies from Bulgaria

Оne of the obstacles before companies operating in the country has been removed, Nikolay Vassilev, minister of state administration said. The revocation of the unnecessary licensing and registration regimes for investors in Bulgaria is no longer a priority of the government, Vassilev said. There is not a clear trend that foreign companies operating in Bulgaria, are shifting their operations away from the country, according to Vassilev.
Jewish bank to open in Sofia
Bank Leumi will have opened a branch in Sofia by next spring, the Israeli financial daily Globes reports. According to well informed sources, Bank Leumi decided to use Leumi Romania to expand into Bulgaria after resolving that it was not worthwhile acquiring a Bulgarian bank because of their high prices. "The large Israeli business community in Bulgaria is what motivated the expansion," said Prof. Daniel Tsiddon, Leumi's Capital Markets Department head. "The Sofia branch will open doors during the first quarter of 2008 and provide services to the Romanian community in Bulgaria as well," Prof. Tsiddon added. 

AIG Investments acquires 90% in BTC

US investment fund AIG Investments has acquired 259.962 million shares, accounting for 90% of the capital of the Bulgarian Telecommunications Company (BTC), for BGN 2.78 billion. AIG Investments purchased Viva Venture Holding's 65-percent, or 187.697 million shares, in BTC for BGN 2.008 billion. The remaining 25% were acquired from certain minority shareholders. AIG Holdings is expected to launch a tender offer to the remaining minority shareholders in the company in the beginning of September.

 

Fast-food chain Burger King to set foot in Bulgaria
Quickservice restaurant chain Burger King is poised to enter the Bulgarian market, Dnevnik learned from market sources.The information was confirmed by Petar Tsikalov from the team that is negotiating the launch of the first local Burger King outlets.No details will be released before the purchase of the outlet sites is finalised, said Tsikalov. Sources told Dnevnik that the Polish division of Dutch AmRest Holdings NV, a franchisee of Pizza Hut, KFC and Burger King with restaurants in Central and Eastern Europe, had initially planned to bring the quickservice brand to Bulgaria.The Polish company declined to confirm, saying that all new information should first be notified to the Warsaw bourse where it is listed. In March 2007, AmRest said it will expand to Bulgaria after receiving approval from franchise holder Yum! Brands Inc. Their first KFC outlet in Bulgaria should open by the end of 2007. The company did not say how many launches are planned for Bulgaria.The Samex company is the other KFC franchisee in Bulgaria while Excel Associates has a Pizza Hut franchise.Burger King arch-rival McDonald's already has over 20 franchises around Bulgaria. The company said it owned 20% of the local quickservice restaurant market in 2006.
Bulgaria Air, Lufthansa join hands

Lufthansa Technique, a unit of Lufthansa and shareholders in Bulgaria's flag carrier Bulgaria Air have signed the contract for the joint use of the the aviation base at the Sofia airport, Bulgaria Air CEO, Dimitar Pavlov, told the Pari daily. The official ceremony will be held in the beginning of September 2007. Nearly EUR 20 million will be invested in the aviation base, where Boeing 737 and Airbus 320 aircrafts will be repaired.
23 Companies in contest for the Bulgarian Shipping Company
23 companies had bought the documentation necessary for the participation in the tender for Navigation Maritime Bulgare, the Bulgarian shipping company, as the Bulgarian Privatization Agency (PA) announced.The tender is going to be carried out in two phases in which 70% of the capital of the company should be sold. The deadline for further clarifications and questions regarding the tender is set until August, 24th 2007, while the final day for handing in the preliminary offers is October 18th, 2007.Tomorrow from PA are going to give further information about the companies participating.
Bulyard sets up ship design JV with norwegian partner
Bulyard Shipbuilding Industry (BSI), the former Varna shipyard, will set up a joint venture with Norway's Vik Sandvik, a major ship design consultancy, said BSI managing board chairman Dimitar Zhelev. The idea for the creation of the ship design joint venture was prompted by the conducive market environment, said Zhelev. 'The BSI is selling quality vessels at good prices,' said the company executive. The company's order book is full through '12.
Bulgarian telco Max Telecom unwires Simeonovo, Dragalevtsi boroughs
Bulgarian start-up telco Max Telecom said it has blanketed with a wireless signal the Simeonovo and Dragalevtsi residential districts in the capital Sofia.The company previously had coverage only on the territory of Pazardjik, a city in Southern Bulgaria where the Max Telecom WiMAX network made its commercial debut in June this year. Max Telecom zeroed in on Pazardjik due to its compact territory, population density and the abundance of area villages not yet wired for Internet, said marketing director Plamen Vutov.The company is set to roll out this fall a VoIP service with a carrier selection code 0999. Max Telecom plans to achieve a 90% nationwide coverage within the next two years.
Toyota and Lexus with a new official distributor
Toyota Balkans LTD is the official distributor of Toyota and Lexus for Bulgaria from 1 July 2007, informed from the press center of the company.Until recently this function was performed by TM Auto LTD, which preserves its functions as supplier to the end customers.Toyota Balkans LTD is a company completely owned by the British holding “Inchcape”. Ever since its creation in 1999 the company undertakes the planning and the administration of the distribution in Bulgaria, Romania and Macedonia. The company has offices in Sofia and Bucharest and since recently Albania was added to the list. TM Auto LTD is established in 1993 as a 100% property of the Japanese corporation “TOMEN”. At the end of 1995 the company signs a management contract with the British holding “Inchcape”. In 1998 “Inchcape” became partner of TM Auto with 40% share and in March 2006 “Inchcape Group” holding is already 100% owner of the company. To remind that Toyota holds the leadership position on Bulgarian market for new cars.
Chimiport to build repair shop for Mercedes trucks
Chimimport Holding has acquired 44,305 shares accounting for 36.92% of the capital of Varna-based Electroterm. The deal is estimated at BGN 700,019, which translates into BGN 15.8 per share, Chimimport management board chairman Alexander Kerezov said. Electroterm specialises in the manufacturing and sales of electric household appliances and the letting of office and warehouse space. This is a routine deal for the acquisition of slightly under 37% of the capital of a company specialising in electric household appliances. Electroterm's real estate properties in Varna are of greater interest to Chimimport as they are adjacent to a property of the holding company, Kerezov said.
A repair and maintenance shop for Mercedes trucks will be built on the plot that will be used by the two companies, Kerezov added. The shop is currently being designed as it has to meet certain requirements of DaimlerChrysler, Kerezov added. Chimimport's stock appreciated by 0.65% to an average of BGN 13.83 per share on Tuesday. A total of 18,853 shares in the company traded hands on the day.

Germany's Kloeckner to buy Bulgarian rival Metalsnab
German steel distributor Kloeckner&Co AG has agreed to acquire the majority in the distribution company Metalsnab Holding AD, based in Sofia, Bulgaria, the company said in a press release quoted by news agency Dow Jones. The financial details of the deal were not immediately available.'Bulgaria is a growing, very interesting market in Eastern Europe. The acquisition of the majority holding in Metalsnab Holding is thus an important step in advancing our activities in Eastern Europe,' stated Thomas Ludwig, CEO at Kloeckner&Co AG.Kloeckner&Co AG, already holds a 7.3% stake in Metalsnab, has signed an agreement to buy 70% of the shares in the Bulgarian holding company. Thus Kloeckner & Co will hold 77.3% of the shares. The remaining shares stay with the original shareholders. The acquisition is subject to approval from the Bulgarian anti-trust authorities.Metalsnab Holding chief co-ordinator Victoria Kashukeeva declined to comment. The company's managing board chairman Alexander Kashukeev could not be reached.The Bulgarian company, which trades in ferrous and non-ferrous metals, metal products, raw materials and metal scrap, posted sales of 36 mln euro in 2006.
Austria's Knauf to build gypsum-cardboard plant
Austria's Knauf will turn the first sod on August 29 on the project for the construction of a plant for the processing of raw gypsum and the production of gypsum-cardboard. The project is estimated at EUR 60 million, the company said. The facility will be built near the Enel Maritsa Iztok 3 thermal power plant (TPP). Knauf has invested more than EUR 20 million in Bulgaria so far. The new plant will employ at least 80 and will use raw gypsum from the desulphurising installations at the TPP.Construction works on a similar plant are also expected to be launched near the Maritsa Iztok 2 TPP by the end of the year as well.
Kremikovtzi fined BGN 500,000 for monopoly
Bulgarian metallurgical plant Kremikovtzi will have to pay a total of BGN 500,000 as a penalty for violation of the anti-trust legislation. The sanction was imposed by the Commission for Protection of Competition (CPC) a day ago. Kremikovtzi's fine amounts to BGN 300,000, the remaining BGN 200,000 is the sanction imposed on its subsidiary, Kremikovtzi Trade.The company had not received an official notification from the CPC before the Pari daily went to press. However, it said it would appeal the decision at the Supreme Administrative Court.The fine was imposed for contractual breaches concerning the sale and delivery of slag in 2005 and 2006. At that time Kremikovtzi had a dominant position in this field and its subsidiary was the only supplier of slag gravel. The metallurgical plant sold slag at unreasonably high prices, while Kremikovtzi Trade limited slag trade to the detriment of consumers.
Bulgaria's M-Tel Helps Offset Telekom Austria Domestic Losses in H1
Mobile operations, particularly in southeastern Europe, including Bulgarian subsidiary M-Tel, helped Telekom Austria offset losses from domestic operations in the first half of this year, the telecom said on Wednesday.The Austrian company reported a net income EUR 277,8 M for the first six months of 2007, a 2,5% decrease over the same period of last year.Operating income was EUR 407,4 M, down 1,6% compared to the first half of last year, although total revenue in January-June grew by 1,1% to EUR 2,35 B.M-Tel contributed EUR 100,1 M in operating income to the bottom line of its parent company, a 5,9% increase compared to last year. The Bulgarian subsidiary's total revenue grew by 11% to EUR 300,7 M.The figures show Bulgaria to be Telekom Austria's most important overseas market.M-Tel had 4,55 million subscribers at the end of June, an 18% increase over the same month of 2006, but its market share dropped from 55,3% to 50,6% as competition with its two domestic rivals took its toll.Bulgaria's other two mobile operators are Greek Cosmote's unit Globul and fast-growing start-up Vivatel, owned by Bulgaria's dominant fixed-line telecom BTC.Mobile penetration in Bulgaria rose to 117,4% as many users own more than one SIM card, compared to 90,6% a year ago.

Bulgaria sells shares in power distribution companies
The Bulgarian Government intends to sell minor shares in two regional companies for power distribution, announced the business media Money.bg The state owes 33% share in the power distribution companies of the cities of Varna and Gorna Oriahoviza.The German E.ON has 59% of the regional companies, while the European Bank for Reconstruction and Development owes the rest 8%.The spokesmen of the Bulgarian Ministry of Economy and Energy (MEE) confirmed that there is such a possibility and a formed ad-hoc working group is investigating it.There is no deadline for the final decision of the group.Meanwhile E.ON has already expressed its interest to buy the shares, if the government sells them, says an official of the company.
Assets of Raiffeisen funds exceed BGN 100m
Raiffeisen Asset Management is the first managing company in Bulgaria the assets of which have exceeded BGN 100 million. Raiffeisen's total assets have already topped BGN 120 million. The net assets amounted to BGN 100.2 million as at August 21, 2007, giving the managing company a market share of 14.63%.At the end of July Raiffeisen Asset management's assets totalled BGN 94.05 million, its share was a touch above 14.87%. The slight drop is due to redistribution in the sector and the emergence of two new managing companies. Year on year, the assets of Raiffeisen's mutual funds have increased by 268%.Raiffeisen Balanced Fund had BGN 49 million assets as at August 21, up by some BGN 3 million compared with July. The high-yield fund attracted BGN 44.9 million.
Miroglio opens new textile plant in Yambol
E.Miroglio will open a new BGN 100 million textile manufacturing plant in Yambol on Friday. The new plant is equipped with a wool and cotton spinning facility, a dye-works and a waste water treatment facility. The plant will employ more than 600. E.Miroglio, which has a first-class investor certificate, is a subsidiary of Italy's Miroglio Group along with Miroglio Bulgaria. The two companies own textile manufacturing plants in several Bulgarian towns, as well as a winery with 800 ha of vineyards. A total 1,500 guests are expected to attend the inauguration of the new plant on Friday, including ambassadors, ministers and business partners.