BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT (24 – 31 AUGUST 2007)
Sections/headline briefs:
MACROECONOMY:
· � 6,5 bn for Bulgarian agriculture
· Bulgaria to join to Singapore Treaty on the Law of Trademarks
· Bulgaria's government approved BGN 220 minimum wage, 10% flat tax for 2008
· Brussels to scrutinize Trakya Highway deal
· FT: Hope takes root in Bulgarian vineyards
· Bulgaria`s grape crops decreased by 70 per cent in some areas
· Bulgaria's Highest Wine Export is to Poland
· Bulgaria and Romania Have Reported the Biggest Growth in the Import in EU
· Importers Report 25% increase in sales of new automobiles
· EU used-car reseller eyes Bulgarian market
· Heavy vehiles import increases by 50% In H1
· BGN 7 for one-minute call to non-EU country
· 5 % rise in the number of foreign tourists in Bulgaria
· Bulgaria to launch national tourism campaign
· Russia sets new conditions for Burgas-Alexandroupolis oil pipeline
· Bulgaria's Minister Djevdet Chakurov will not approve an environmental impact assesment
· Environment Ministry develops working programmes for wastewater plants in coastal areas
· In August 2007 the business climate in industry fell by 3.7 percentage points
· Mobile communications dominate Bulgaria's � 1,55 B telecom market
· Bulgaria's wireless market up 19% in 2006, fixed line market down 8%
· Kazakhstan-Bulgaria: New prospects for cooperation
· Another BGN 14m provided for Bourgas port
INVESTMENTS:
· FDI expected to reach � 5bn in 2007
· Austria's Meinl To Invest � 168 M in Bulgarian Shopping Centre
· Verbio AG to invest � 100 M for a Biofuel Plant in Bulgaria
· Knauf Bulgaria to build � 80m plant
· � 60m commercial park to be built in Bourgas
· � 12m invested in Katarzyna Estate
· Miroglio's 11 plants on Textile Road
· Perelik year-round tourist center project kicks off in fall
· Zagora Holding invests BGN 8.5m in subsidiaries
· Sopharma to build BGN 73m plant in Sofia
· Bulgarian-Russian co to invest � 7 M in 4 Simitli area factories
· New casinos open in Bulgaria
· Investment intermediaries to turn into banks
· Largest Romania`s electronic company enters Bulgaria
· Danish Greentech To Put 80 Mln Euro in Bulgarian Wind Power Plant
· Greek GEK's Bulgarian unit to invest �72 Mln in mountain holiday complex near Sofia
· Scandinavian CandinaVians offer joint venture with Bulgaria on renewable energy sources
COMPANIES:
· Over 3,600 companies to take part in Plovdiv Fair
· E.ON ready to buy Bulgarian state out of regional power distributors
· Kremikovci put into the market new steel brand
· Elana Trading to cooperate with Reuters
· Bulgarian company launders the uniforms of US troopers
· Icelandic mogul Bjorgolfsson retains nearly 3% in BTC
· Tishman to open property presentation suite for Sofia scheme
· KRZ Port Burgas sells floating dock for 1.15 mln euro
· Slovak power utility acquires Bulgarian power plant
· Bulgarian mobile operator Globul reports BGN 374,2 M revenue in H1
· Indian Elder Pharma purchases 51 % stake in Bulgaria`s Biomeda
· Drug maker Actavis reports 11% H1 sales growth in Bulgaria
· Piraeus Bank to acquire Dirent Bulgaria
ANALYSIS:
· Japan eyes Bulgaria for outsourcing
Articles:
MACROECONOMY:
� 6,5 bn for Bulgarian agriculture
Bulgaria should acquire 6,5 bn EUR for the development of its agriculture in the period 2007-2013, said the executive director of State fund “Agriculture” Dimitar Tadarukov at the opening of the 15th exhibition “Agriculture and all about it”, informed radio Varna.
3,2 bn EUR from the subsidy are for the development of agriculture and rural areas.The remaining 3,3 bln EUR are for direct payments to the producers and for market support.
A big information campaign and a range of seminars introducing to the producers the ways to acquire European money will start in September. State fund “Agriculture” will organize training seminars for agriculture producers.
Bulgaria to join to Singapore Treaty on the Law of Trademarks
Bulgaria will join to Singapore Treaty on the Law of Trademarks , the patent department announced. Decision that approves Bulgarian joining to the treaty was taken at the last session of the Council of Ministries of Bulgarian government which will propose the Parliament to make a ratification of the Singapore Treaty on the Law of Trademarks.This agreement unifies and simplifies in worldwide importance the administrative procedures of the national and regional requirements about trade marks registering and registers renewing. The aim is creating institutional frame and harmonizing the administrative procedures of the trademark offices in line with developments in technology and trademark practice and also enhancing the regulatory environment for the branded goods industry. A revised and updated Trademark Law Treaty, known as the Singapore Treaty on the Law of Trademarks, was adopted by a diplomatic conference of World Intellectual Property Organization member states in 2006. The Singapore Treaty deals mainly with procedural aspects of trademark registration and licensing. By agreeing to common standards in that area, member states create a level playing field for all economic operators that invest in branded goods. More than that, the Singapore Treaty creates a dynamic regulatory framework for brand rights. Due to the creation of an Assembly of the contracting parties, the Treaty has a built-in review mechanism for administrative details of a less order, although of great practical importance for brand owners.The Treaty recognizes developments in the branded goods industry and marks a new approach to securing investment in product differentiation. Brands are no longer confined to stickers or labels and today the brand stands for the product’s identity. Creativity and investment goes into the development of brands, and it is vital for the industry to be able to secure that investment. New rules applicable to all types of trademarks, as contained in the Singapore Treaty, address those needs.
Bulgaria's government approved BGN 220 minimum wage, 10% flat tax for 2008
Bulgaria's government approved a minimum monthly wage of BGN 220, a flat tax rate of 10% and an annual GDP growth of 6% among the key points in the medium-term fiscal framework for 2008-2010, Sofia News Agency wrote.The framework was drafted after the leaders of the three-party ruling coalition gave it the nod of approval at their meeting at the end of July at the coastal Euxinograd residence. The draft sets medium-term inflation at 3.7%, to go down to 2.6 by the end of the period, and a budgetary surplus of 2.5 %. Corporate tax will remain unchanged at 10% and VAT at 20%. Budget salaries and pensions are planned to increase by 10% as of July 1 and October 1 respectively. Excise taxes on cigarettes and fuels will increase starting from next year to reach the minimum rates in the other European Union member states.
Brussels to scrutinize Trakya Highway deal
Brussels demanded that Bulgarian cabinet give an explanation on several scandalous clauses in the Trakya Highway concession contract. The European Commission (EC) has already sent in a letter asking concrete questions. They invite the Bulgarian government to make some clarifications, particularly with regard to the compensations in case of low traffic rate on the Sofia - Bourgas route, the guarantees for the bank loan to be drawn by the foreign companies for the project's completion and the interest rates at which state subsidies are to be reimbursed. Depending on the answers Brussels will decide if they should launch a lawsuit for inadmissible state aid, i.e. granting a concession without a competitve procedure, and eventually terminate the concession of the Bulgarian-Portuguese consortium Trakya Highway JSC. The EC is expected to come out with a decision by mid-September. It is a must for Brussels to pass its judgement on the complaint filed by Sofia City Mayor Boyko Borissov, who criticized the concession contract as "unprofitable to Bulgaria".Yet another occasion for the uncertainty of the future of Trakya Highway is a recent scandal incriminating one of the concession parties - the Portuguese Somague Grupo. It turned out that the company has been illegally financing EC President Jose Manuel Barroso's political party during the local elections in Portugal in 2001. It is namely Barroso's institution that considers all complaints concerning the Bulgarian highway project. As the Standart previously wrote, Somague is part of the Spanish Sacyr Vallehermoso S.A.,which has the son of the Bulgarian ex-king and former MP Simeon Saxe Coburg-Gotha, prince Kiril, among its shareholders. And it was exactly his father's cabinet that signed the infamous contract.
FT: Hope takes root in Bulgarian vineyards
Bulgarian wines were one of the country's steadiest sources of hard currency in Communist times, but the industry has fallen on hard times in recent years, the Financial Times on Sunday.Facing competition from California and the southern hemisphere, as well as plagued at home by the restitution of farmland to the people that owned it prior to 1947, many of Bulgaria's vineyards are now choked with weeds.Bulgaria has always promised to do for Europe what Chile does for the southern hemisphere, but millions of euros of investment, and a decade of land negotiation, stands in its way, author Andrew Jefford claims in a piece in the paper's Food&Drink section.
Bulgaria`s grape crops decreased by 70 per cent in some areas
In some regions in south-western Bulgaria, this year’s grape crop has been decreased greatly. Wine may have been one of Bulgaria's rare success stories in the past, but the industry faces an uphill struggle this year with grape crop seen at 70% lower than expected.The gloomy forecast comes after a summer of droughts and hailstorms that damaged a large part of the grape. The good news for wine producers is that the sun has pushed the level of the sugar in the grapes and consequently its quality up."This year's grape crop is high quality, even though not as abundant as last year," producers commented.They insist that wholesalers buy grape at a price of BGN 1, 50 per kilogram. Currently it stands at BGN 0, 70.
Bulgaria's Highest Wine Export is to Poland
In 2006 Bulgaria's highest wine export is to Poland, says the report of the Minster of agriculture Nihat Kabil.The export to Poland is 18 million liters, followed by that for Germany and UK, where Bulgaria has exported over 3 million liters of wine.The report points that Bulgaria has 153 497 hectares vineyards of wine sorts.The registered wine enterprises are 255 with 174 of them being producers. Last year they have produced 171 209 518 liters of wine.Bulgaria has exported altogether 33 539 604 liters of wine to all EU-countries which is under the country's quota of 734 700 hectolitres.The producers of alcohol, distillates and spirits are 122. The amounts realized by them are 26 020 314 liters. The produced drinks are mainly grape and fruit rakya, vodka, gin, mastic brandy.
Bulgaria and Romania Have Reported the Biggest Growth in the Import in EU
For the first five months of this year, Bulgaria and Romania have reported the biggest growth in the import in comparison with the other members of EU, accordingly with 45 and 50 %. This was shown of the European statistical service Evrostat's data.In the third place in EU is Latvia,whose import for the period January - May has growth with 29 per cent and has become 4.4 billion euro. The trade deficit of Latvia has increased by 2 billion euro in comperison with 1.5 billion euro for the same period in the previous year.The import of Lithuania has growth with 16 per cent, and Estonia's- with 10 per cent. In Lithuania and Latvia, the growth of the import has become bigger than the growth of the export, in Estonia these indexes are equal.The Latvia's export for the first five months of 2007 has increased with 25 per cent to 2.3 billion euro from the export of the previous year, and on this index Latvia takes second place in the EU's export.The biggest export growth for this year is reported in Slovakia, where the export has growth with 36% to 16.7 milliard euro. Czech and Slovenia has increased their export with 21 %, accordingly to 36.3 billion euro and 8.9 billion euro.The export of Estonia for the first six months has growth with 10% to 3.3 billion euro, and Lithuania's-with 6% to 4.8 billion euro and they take 11 and 21 place among the 27 members of EU.Britain, Luksemburg and Cyprus'export for the period has growth accordingly with 21,17 and 7 per cent.The biggest exporters in EU for the current period were Germany, France and Netherlands, whose export volume reach accordingly 396 billion euro, 167.3 billion euro and 161.2 billion euro.The biggest trade excess in EU have registered Germany- 80.6 billion euro, Netherlands- 16.2 billion euro and Ireland- 12.7 billion euro. The biggest trade deficit has been registered in Britain-153.9 billion euro, Spain- 36.9 billion euro and France- 16.1 billion euro.
Importers Report 25% increase in sales of new automobiles
Between January and the end of July this year, the sales of new automobiles in
Bulgaria were 25.64 per cent more than last year, the executive director of the Union of Autotomobiles Importers in Bulgaria, Stefan Hadjinikolov, said Friday. He was speaking at the opening of the Varna 2007 Motor Show.A total of 29,381 new automobiles were sold in the observable period.The increase is much more significant for used cars, said Hadjinikolov. some 150,000 old cars were sold from January to the end of June and the Union expects the figure to reach 310,000 until the end of the year, against an expected 60,000 for new cars.Participating in the Varna Motor Show are 30 companies with over 100 automobiles. The event will continue until September 2.
EU used-car reseller eyes Bulgarian market
AAA Auto Group NV, the biggest central European used-car dealer, plans to bolster current operations in the Czech Republic, Slovakia, Hungary, Romania and Poland and expand into the Balkans and countries of the former Soviet Union, reports news agency Bloomberg. AAA is also considering expanding to Ukraine, Slovenia, Bulgaria and Croatia in 2009 and 2010, according to the top executive of the company. It will aim to open 15 to 18 car dealerships in 2008, including one in Belgrade and another in Moscow.
Heavy vehiles import increases by 50% In H1
After Bulgaria joined the European Union on January 1 2007, the import of cargo vehicles has increased by 50 per cent, Association of Automobile Importers representative Hristo Hristov said on August 28 2007.The import of used cargo vehicles maintained its tendency toward annual increase of 15 to 20 per cent, he said as quoted by Focus news agency.Import growth of new vehicles is sufficiently high, Hristov said.
The increase has been attributed to the introduction of lighter license regimes and less bureaucracy in organising trips abroad.Buyers already focus their interest on cargo vehicles that are in better condition and of higher class.According to Hristov, the choice for purchase of a new or used cargo vehicle should depend mainly on the distance it will have to cover throughout the year.If the truck will have to drive more than 100 000 km per year, a new vehicle would be the better investment. If the vehicle will cover no more than 50 000 to 60 000 km, the best choice would be a used vehicle.
BGN 7 for one-minute call to non-EU country
Mobile operator Mtel's clients will pay as much as BGN 7 for one-minute calls in roaming from Turkey, Serbia and Macedonia as of September 1, 2007, when the new standard roaming tariff will take effect. It offers much cheaper prices of calls in all EU member states – BGN 1.15 for a one-minute outgoing call. At the same time there are companies that offer foreign SIM cards in Bulgaria with a very cheap roaming.
The so-called global SIM cards have been offered on the Bulgarian market for a few months now. They belong to British GSM operator O2 and are offered by the Bulgarian company SimTel. The business of the company is legal, it is not an operator, it simply sells SIM cards, a SimTel manager explains. The cards cost EUR 34.99, EUR 15 call time included. As of September EU citizens won’t pay costly rates for roaming calls within the EU, after the European Commission and the European Parliament imposed caps on roaming tariffs. Maximum rates are EUR 0.49, VAT excluded fore outgoing calls and EUR 0.24 for incoming calls. Short messaging is not included in the regulations of the EC. Next year the Commission is expected to impose maximum rates both for SMSs and data transfer.
5 % rise in the number of foreign tourists in Bulgaria
The number of foreign tourists who visited Bulgaria between January 1 and July 31 2007 registered an increase of 4.49 per cent, compared to the same period in 2006.The total number of the foreign tourists over the period reached 2 972 789.More than 2.178 million EU citizens visited the country, which was an increase of 30.26 per cent, State Agency for Tourism data showed. The EU was the main source for tourists to Bulgaria, Bulgarian news agency BTA said.Bulgaria’s income from international tourism for the first six months of 2007 totalled 866.5 million euro, BTA reported.The sum was by 15.86 per cent more than the one collected during the same period in 2006.Bulgarian citizens spent abroad 609 million euro, or 15.63 per cent more, during the same period, compared to the 2006 figures.The number of Romanians who visited Bulgaria rose by 140 per cent, while the Macedonians dropped by 73.87 per cent.
Bulgaria to launch national tourism campaign
The State Agency for Tourism (SAT) will launch a national tourism campaign aiming to promote internal tourism.The campaign will involve a number of advertising videos presenting the huge inside potential of the country and the wide range of tourism opportunities and forms, Focus news agency reported.The main target of the campaign is to inform Bulgarian society about the cultural, historical and natural treasures of the country.The campaign will be aired starting August 28 on Bulgarian National Television (BNT) and private television bTV.The first video to be broadcast on BNT, bTV and Fox Life last 30 seconds and will be devoted to sea tourism.The TV advert includes footage from advertising clips owned by SAT. The video shows that summer continues in Bulgaria through September with unforgettable feelings. SAT said that the Bulgarian tourist was the most important one for the country.
Russia sets new conditions for Burgas-Alexandroupolis oil pipeline
A new set of conditions tabled by Moscow have raised question marks over the implementation of the Burgas-Alexandroupolis oil pipeline project and have undermined Bulgaria's possible benefits from the facility.At a meeting in Athens, the Russian side has demanded that its partners in the project, Bulgaria and Greece, provide 49% of the oil that will be pumped.Unless Sofia and Athens comply, they will be facing financial penalties.When the Bulgarian parliament ratified the intergovernmental agreement on the pipeline it was announced that the government will have no financial commitments towards the project. It was claimed that the facility will generate over $35 mln in annual income for Sofia.The oil is the responsibility of the Russian side, deputy regional development minister Kalin Rogachev told Dnevnik in an interview at the time. This was also the explanation for Sofia's consent to grant Moscow a project-controlling 51% stake in the project.Russia gave no guarantees that the pipeline will pump oil drilled in Kazakhstan by the Caspian Pipeline Consortium (KTK), news agency Focus reported on Tuesday.There were warnings in March when the three states endorsed the pipeline agreement that the Russian participants in the project will be unable to provide sufficient oil to operate the facility at full capacity and that they will rely on additional supplies, mostly from KTK.If the clause binding each participant to provide oil volumes corresponding to its stake in the project is included in the agreement, Bulgaria will be hard pressed to supply 8.5 mln of the 35 mln tons of oil that the pipeline is expected to transmit annually from Novorosiisk through Bulgarian Black Sea port of Burgas to Greek port Alexandroupolis.Kazakhstan is the only oil producer that has so far indicated a desire to join the project. Moscow has been supportive and the new conditions unveiled at the Athens meeting are interpreted as further pressure in this direction.The negotiations in the Greek capital ran late into Tuesday evening and it was not clear if an agreement was reached where to seat the company that will build and operate the pipeline. Cyprus, Luxembourg and the Netherlands are the most likely contenders.
Bulgaria's Minister Djevdet Chakurov will not approve an environmental impact assesment
Bulgaria's Environment and Water Minister Djevdet Chakurov will not approve an environmental impact assessment for the Bourgas-Alexandroupolis Oil Pipeline Project unless it categorically guarantees protection of the environment and human health, Chakurov's Ministry said in a press release Wednesday.The Minister expressed this position when he met in Bourgas on Wednesday with a working commission of the Bourgas Municipal Council tasked with addressing the problems that may arise in implementation of the project.The councillors voiced concern over the risk of oil leaks and heavy pollution of the Black Sea which will threaten the two principal sources of livelihood for the local people: tourism and fishing.Chakurov called on the local authorities in Bourgas to engage actively in the debate on the environmental impact assessment that the investor will prepare and, if necessary, to commission its own experts to make an independent analysis."The investor has not yet submitted any documents on the project to the Ministry, and when this is done we will organize broad discussions and we will make a decision in full interaction with local government," Chakurov said. He vouched that the pipeline route will be fixed with utmost care, considering both the
possible risks of Black Sea pollution and its crossing of protected areas included in the NATURA 2000 network and the environmentally safest option will be approved.
The Bourgas-Alexandroupolis project was initiated in 1994 by Greek and Russian companies as an alternative for moving Russian and Caspian oil to Western Europe, bypassing the traffic-congested and environment-risky Turkish straits. Under the 700 million euro project, oil will be tankered across the Black Sea from Novorossiysk, Russia, to Bourgas, Bulgaria, and will be piped from there over 288 km (including 155 km on Bulgarian territory) to Alexandroupolis (on the Greek Aegean coast). The annual capacity of the pipeline is designed at 35 million t, with a possibility for an increase to 50 million t.
Environment Ministry develops working programmes for wastewater plants in coastal areas
The Environment and Waters Ministry is going to present a working programme for each municipality along the Black Sea coast in connection with the construction of wastewater treatment plants there, Environment and Waters Minister Djevdet Chakurov said turning the first sod for a new rainwater drainage system in Karlovo on Monday, the Ministry said in a press release.The building of wastewater treatment plants in Bulgaria is a key priority for the Environment and Waters Ministry, and the construction of such plants along the Black Sea coast is of particular importance, Chakurov pointed out.The programmes will be implemented in coordination with the programme for development of agriculture, which allows the financing of water projects carried out in small municipalities.Chakurov emphasized that 25 wastewater plants should be constructed every year if Bulgaria is to meet its commitments made to the European Union in regard to water management.Funds for improving water services in this country are also provided by the Enterprise for Environmental Conservation Activities.The Karlovo project, the implementation of which started on Monday, includes new water mains, a rainwater drainage system and pavement of streets in the town's Iztok residential district. Its cost is 1,800,000 leva. The project is financed by the Enterprise for Environmental Conservation Activities, which provided 800,000 leva for its first stage.
In August 2007 the business climate in industry fell by 3.7 percentage points
In August 2007 the total business climate indicator decreased by 1.9 percentage points as compared to the previous month. After three consecutive long-term maximums for the last 13 years in August the business climate in industry fell by 3.7 percentage points below its July level, because of the shifting of opinions about the business situation in enterprises from optimistic to more moderate assessments and expectations.In August 2007 the economic conjuncture in construction remained favourable, regardless the composite indicator of business climate decreased by 2.2 percentage points as compared to the previous month.The greatest impediment for the business development in the branch remained the competition in own sector. However during the last month more and more managers pointed out “uncertain economic environment” and “shortage of labour force” as factors limiting activity, which was accompanied also by intentions of additional hiring of personnel over the next 3 months.As regards the selling prices in construction the last business inquires recorded considerable inflationary expectations.In August 2007 the composite indicator of business climate in retail trade kept its level of the previous month. Managers' assessments about the present business situation in trade enterprises were positive as their expectations for the next 6 months showed also that it would keep the same level (61.2% of the enterprises) or improve (36.0%).In August 2007 the economic conjuncture in service sector remained also favourable as the composite business climate indicator kept approximately its July level. The managers were more moderate in their prognoses about both expected business situation of enterprises over the next 6 months as well as expected demand for services.The competition in the branch continued to be with the greatest weight among factors limiting the enterprises in the sector (pointed out by 57.9% of them). But in the last month the relative share of managers pointed out the uncertainty in economic environment and weakness in economic legalization as problems for development of activity was decreased.As regards the selling prices most enterprises (76.5%) foresaw no change over the next 3 months.
Mobile communications dominate Bulgaria's � 1,55 B telecom market
Mobile communications accounted for 59,3% of Bulgaria's telecoms market last year, which was worth a total EUR 1,55 B, according to the data made public by the Bulgarian telecoms regulator.The market grew by a nominal 10% last year. In real terms, the growth was 3,5%, falling below the overall economic growth rate for the first time in years, the regulator said in its annual report.Revenue from mobile services reached EUR 920,5 M and the subscriber base grew by 32% to 8,25 million users for a mobile penetration rate of 107%.M-Tel, owned by Austria Telekom, remained the dominant telecom despite dropping market shares, with 51,7% of all users and 59,7 of all revenue.
Its main competitor, Greek Cosmote-owned Globul, had a market share of 39,9% of all users and 36% of revenue.Start-up Vivatel, the mobile arm of former fixed-line state monopoly BTC, amassed 8,5% of all users and 4% of revenue in its first year of existence.
Bulgarians increasingly use cell phones, cancelling their fixed-line services, which pushed fixed-line penetration to 70% of all households and 31% of total population.
Fixed-line services revenue fell by 8% to EUR 399 M, with BTC, recently acquired by the investment arm of US insurer AIG, dominating the market with 97% market share.
The regulator expects cross-segment competition to grow, with an increasing number of telecom firms branching out to offer packages that include both mobile and fixed-line services, as well as access to Internet.Cellphone operators could begin offering such packages already before the end of the year, as they already have the necessary infrastructure in place, the report claimed.Telecom firms continued investing heavily in 2006, spending an estimated EUR 415 M. The figure shows a 14% decrease over the previous year, which is due to the fact that the bulk of the investments have already been made, the regulator said.In 2007, investments are estimated to grow to EUR 470 M.
Bulgaria's wireless market up 19% in 2006, fixed line market down 8%
The Bulgarian mobile telecommunication market grew by 19% to 1.8 billion levs ($1.3 billion/922 million euro) last year, while the fixed-line segment lost 8.0% to 780 million levs, in line with global trends, the country's telecoms regulator said. The high growth rate of the mobile services segment and its increasing share in the total revenue of telecoms companies in the country was helped by the continuing trend for customers to switch from fixed-line to mobile services and the aggressive marketing campaigns of wirelss operators, the Communications Regulation Commission (CRC) said in a report. The mobile segment generated 59.3% of the revenue of the Bulgarian telecoms market last year, up from 55% for 2005, said the report posted on the CRC's website. Three mobile operators are active in Bulgaria - Mobiltel, a unit of Telekom Austria, Globul, an arm of Greece's Cosmote, and Vivatel, owned by Bulgaria's dominant fixed-line operator BTC. Mobiltel had a 51.7% market share at end-2006 in terms of number of subscribers, down form 57% in 2005, while Globul had a 39.6% share at the end of 2006, compared to 38.3% a year earlier. Vivatel, which was launched in late 2005, had a 8.5% market share at the end of 2006. In terms of revenue, Mobiltel held 59.7% of the market at the end of 2006, down from 66.5% in 2005. Globul increased its share to 36% last year from 32.5% in 2005 and Vivatel generated 4.0% of the revenue in 2006, up from 0.8% in 2005. Voice services continued to be the main driver of the mobile segment, generating 47% of its revenue. Fixed-line services generated 25.8% of the telecoms market revenue in 2006, compared to nearly 31% in 2005. The country's fixed-line market remained uncompetitive in 2006 as BTC retained its leading position in th segment with revenue accounting for 96.9% of the total, down by less than one percentage point from 2005. Bulgaria currently has 13 operators providing an alternative to BTC's fixed-line services. Under data from the CRC, their revenue has increased by 13% in 2006. The CRC said competition on the market would intensify as some of the mobile operators are expected to launch fixed-line services this year. Planned investments in the telecoms business this year are more than 918 million levs, compared to the 815 million levs invested in 2006, according to the CRC. The Internet market in the EU newcomer of 7.7 million people grew 26% on the year in 2006 to 142 million levs. Internet penetration in the country is still low compared to the EU average, but is seen quadrupling by 2010, reaching 44.9%, the CRC said quoting data of the business information on global emerging markets publisher Business Monitor International. Bulgaria joined the EU in January.
Kazakhstan-Bulgaria: New prospects for cooperation
On September 3-4 Vice Premier, Foreign Affairs Minister of Bulgaria Ivailo Kalfin, representatives of the large business are expected to arrive in Kazakhstan, the press service of the Kazakh Investments Promotion Centre reports.A business forum "Kazakhstan-Bulgaria: new prospects for cooperation" will take place within the frame of the visit on September 4. The Bulgarian entrepreneurs are to get familiarized with the terms of the accession to the Kazakhstan-based market.The Bulgarian business delegation will consist of the representatives of 17 companies, involved in tourism, banking sector, construction and production of building materials, food industry, telecommunications and IT technologies, etc.
Another BGN 14m provided for Bourgas port
The Bulgarian government will provide nearly BGN 14 million for the construction of an approach channel, as part of the project for expansion of the Bourgas seaport. The money will be transferred from the budget for reconstruction and electrification of the Plovdiv-Svilengrad railway line and will be used for expropriation procedures.The financing will allow the successful implementation of the expansion, the cabinet said. The project is being carried out with a Japanese loan and Bulgarian co-financing. The whole expansion amounts to more than USD 193 million.
INVESTMENTS:
FDI expected to reach � 5bn in 2007
Foreign direct investment (FDI) in Bulgaria will reach EUR 5 billion in 2007, the director of InvestBulgaria Agency, Stoyan Stalev, forecast for the Pari daily.A substantial increase in FDI was registered in the first half of the year. The amount injected in the Bulgarian economy totalled EUR 2.150 billion, up by some EUR 700 million year on year, Stalev said. In 2006 the total volume of FDI amounted to EUR 4.1 billion.Robust growth has been observed in property investment, which accounts for more than 50% of the attracted capital, Stalev said. The main reason for the increase is the implementation of large-scale projects for commercial and business centres and industrial parks.
Austria's Meinl To Invest � 168 M in Bulgarian Shopping Centre
Austrian real estate developer Meinl European Land will invest EUR 168 M in a shopping centre in Bulgarian capital Sofia and will be certified as a first-class investor by InvestBulgaria Agency.The shopping centre will be completed by end-2009.The centre, Forum Sofia, will have a total built-up area of some 170 000 square meters, including 88 000 square meters that will be rented out.It will be located in the southeast of the Bulgarian capital, across the Sofia orbital motorway from Mladost 3 residential district and the Sofia Business Park.Its blueprint includes a furniture store, a shopping mall with a big food store, a cinema, restaurants and a total 200 shops. It will consist of several separate buildings, separated by green areas.The company estimates at least 350 people will be involved in construction. When completed, the centre will create 700 jobs.Meinl European Land, incorporated on the British island of Jersey, had investment projects worth a total EUR 3,7 B in central and eastern Europe, to be completed by end-2010, the company said on Tuesday.
Verbio AG to invest � 100 M for a Biofuel Plant in Bulgaria
The German Verbio AG (Verbio Vereinigte BioEnergie AG) is exploring the opportunities to invest 100 000 000 euro for the construction of biofuel plant in Bulgaria. The investment intentions have been claimed today by the company's executive director Klaus Sauter at a meeting with the minister of economy and energy Petar Dimitrov, informs BNR.Verbio AG is the biggest producer of such fuel in Europe, is said in the statement.The company is so far looking for the appropriate area for the construction of the plant. Minister Dimitrov has suggested the region of Varna as an option.The foreign managers expect the plant to be situated close to a harbor. It will produce simultaneously biodiesel and bioethanol.Most probably the company will apply for a first class investor in Bulgaria. A partner of Verbio AG is “Evroethyl” JSC, which is the first to produce bioethanol in Bulgaria and has a plant near Alfatar, Silistra region. The minister is well acquainted with the development of the biofuel market, is pointed out in the statement. As a former chairman of the parliamentary budget committee, he was among the promoters of this business in Bulgaria, add from the company. Petar Dimitrov actively participated and has highly contributed to the introduction of zero rate for biofuel through an amendment in the Law of excise and tax storehouses, continue from Verbio AG.“Verbio” has several plants for biodiesel and bioethanol in Germany. Their overall production capacity exceeds 700 000 tones per year or 2 100 000 liters per day. of them 400 000 tones are biodiesel and 300 000 tones – bioethanol.The company is also working in the field of renewable energy sources. It possesses a 120-MW wind-power plant in Germany.The whole business is united in Verbio Group, where 1000 employees work. The business is estimates at more than 1 bn EUR. The company's shares are traded at the Frankfurt Stock Exchange.
Knauf Bulgaria to build � 80m plant
Germany's Knauf will invest between EUR 60 and 80 million in the setting up of a state-of-the-art plant for production of gypsum-cardboard near Galabovo. Franz Satzinger, executive director of Knauf Bulgaria and Mariya Neykova, Stara Zagora regional governor, turned the first sod on the project. The company has acquired 12 ha of land near the Maritsa Iztok 3 thermal power plant (TPP). The new plant will use raw gypsum from the desulphurising installations at the TPP for the production of gypsum-cardboard. The raw gypsum processing lines should be operational by the end of 2008. They are expected to process 350,000 tonnes of raw gypsum annually. Knauf has also signed a 25-year contract with Maritsa Iztok 3 TPP.Half of the output will be exported. Gypsum-cardboard consumption in Bulgaria amounts to some 21 million sq. m annually, receiver Stefan Vassilev said. The new facility will employ a some 100.
� 60m commercial park to be built in Bourgas
UK fund European Convergence Development Company (ECDC) and Plovdiv-based Sienit plan to invest EUR 60 million in the setting up of a commercial park in Bourgas. The Bourgas Retail Park will be the second joint project of the two companies after the Galleria Plovdiv shopping mall, which is currently under construction. ECDC and Sienit have already signed a preliminary contract for the purchase of land in the southern part of Bourgas. A total of 60,000 sq. m of commercial space will offered for rent at the Bourgas Retail Park. Construction works are expected to continue 30 months.
� 12m invested in Katarzyna Estate
Bulgaria's most modern winery, Katarzyna Estate, is opening on September 3. The inauguration will be attended by president Georgi Parvanov, ministers, foreign diplomats, winery owners, journalists. As much as EUR 12 million has been invested in Katarzyna Estate.The winery is located near Svilengrad, close to the border with Greece. The vineyard has a total area of 365 ha. Katarzyna Estate wines will be bottled in late September. Wines of the winery's owner, Belvedere Bulgaria, received two gold, four silver and five Wine of the Year medals at the Vinaria exhibition. The company was also awarded Pari daily's Golden Cask prize for biggest foreign investor in the Bulgarian wine sector.
Miroglio's 11 plants on Textile Road
The latest large-scale investment planned by Italian textile entrepreneur Edoardo Miroglio is the construction of a plant for viscose staple fibres. The project amounts to some EUR 200 million, our desire is to manufacture 70,000 tonnes a year, Miroglio said. Feasibility studies are under way for the plant, which will be located in Svishtov and will provide 570 jobs. Another of Miroglio's investments, Svilosa, is also located in Svishtov. The plant for viscose rayon, now renamed to Svilosa Yarn, was acquired by the Italian businessman in April 2007. As much as EUR 10 million will be invested in reconstruction and equipment renovation by this year's end. Svilosa is the only viscose rayon manufacturer in Bulgaria. We want to double its capacity to 8,500 tonnes a year and raise the share of coloured rayon to 50%, Miroglio said. Another 200 jobs will be opened in the plant. Miroglio is the biggest textile producer in Bulgaria. Since 1998 the Italian has invested BGN 400 million in the industry. His E. Miroglio AD and Miroglio Bulgaria EOOD already own 11 textile factories in Bulgaria, manufacturing more than 15 million kg of yarn, over 7 million m of wool fabric and 13 million m of knitted fabric a year. Some 55% of the output is exported to EU countries, 20% is sold in Turkey and the remainder finds market in China and Ukraine. Sales in 2007 are expected to reach about BGN 280 million. A couple of days ago the businessman opened a new spinning factory in Yambol. He was certified as a first-class investor for his BGN 73.5 million project. The plant is equipped with a wool and cotton spinning facility, a dye-works and a waste water treatment facility.
Perelik year-round tourist center project kicks off in fall
The first phase of the 300 mln euro Perelik tourist center development, in the Rhodope mountains, South-western Bulgaria, will be flagged off this fall, said the project investor, local company Sports and Tourism Center Perelik.Under the large scale project, the investor will deploy facilities for winter and summer tourism and will upgrade the infrastructure in the city of Smolian and the villages of Stokite, Gela, Solishta, Stikal and Mugla.The project is advised by Alfa Finance Holding.The resort concept has been designed with natural preservation in mind as well as attention to the compatibility of architectural styles, said Kiril Asenov, one of the project investors. The resort development will feature ski runs with a combined length of around 200 km and 100 km in ski lifts. In May 2006, the InvestBulgaria Agency issued a First Class Investor certificate to Sports and Tourism Center Perelik which entitles the project to infrastructure funding from the central and local governments.The Smolian municipality, a partner in the project, will made a non-cash contribution to the joint venture company. The necessary building permits will be issued shortly, said city mayor Dora Yankova.
Zagora Holding invests BGN 8.5m in subsidiaries
The 16 companies included in the structure of Stara Zagora-based Holding Zagora will make investments for nearly BGN 8.5 million by the end of 2007, Irina Dineva, board of directors chairwoman, told the Pari daily.A total of BGN 1.5 million will be invested in the reconstruction of the administrative building of the company into a four-star hotel complex. The hotel is expected to open in 2008.Hraninvest-HMC AD and Progress AD have allocated BGN 2.25 million for the purchase of a laser cutting machine and a vertical milling machine and for the setting up of a second production line for cast iron moulds. Investments in tailoring company Natalia AD and Zagora Holding's Centre for testing and European Certification amount to BGN 1 million and BGN 1.5 million, respectively.A total of BGN 1 million have been invested in Construction Company Zagora, while investments in Zagora Mobile transport company total BGN 500,000.
A joint-venture for the processing of machine-building parts established with an Italian company started operation in the beginning of 2007.
Sopharma to build BGN 73m plant in Sofia
Bulgaria's Sopharma will build a high-tech tablet plant in Sofia. The project amounts to BGN 73 million and has been developed in partnership with a German-Austrian team, the executive director of the pharmaceutical company, Ognyan Donev, told the Pari daily.
The construction of the plant has to be completed in 2009. It will be the final stage of the company's overall renovation after the privatisation, Donev said. We are applying with the project for a first-class investor certificate, he added.In July, Sopharma posted a 48-percent increase in sales abroad and 21% in domestic sales. The average rise was 29%. The public company's sales revenue for the first half of the year jumped by 15% to BGN 80.9 million. That was mainly due to exports, which went up by 40%.
Bulgarian-Russian co to invest � 7 M in 4 Simitli area factories
Bultera, a Bulgarian-Russian company, will invest 7 mln euro in polystyrene, simprolit, biodiesel and rape oil plants near the town of Simitli, South-western Bulgaria, reports news agency BTC, citing company representative Georgi Uzunov.In 2006, Bultera bought an old 20 ha industrial property in the Simitli area for just over one million levs. All on-site production buildings will be demolished to make room for the new plants.The 1.25 mln euro polystyrene factory will be the first to become operational around November this year.The simprolit factory should be completed by January 2008. Initially, the factory will supply simprolit (a construction material) exclusively for Bultera projects.Bultera has a patent on the production of simprolit insulation bricks and roof tiles.The company plans to build a 130,000 sq m balneological center in Sandanski, South-western Bulgaria, an 80,000 sq m development in the village of Shkorpilovtsi, on the Black Sea, and a rural tourism facility.The Simitli biodiesel plant will process input materials from Russia. The facility is expected to go into operation next year.
Investment intermediaries to turn into banks
There are no real investment banks in Bulgaria at this point, neither Bulgarian nor foreign. Specialists attribute it to the small market, on which a large-scale institution, such as an investment bank, will hardly be successful in the competition of investment intermediaries and investment intermediary services offered by commercial banks.
A change seems to be underway. The willingness of Elana and Eurofinance investment intermediaries to be transformed into investment banks, has been widely discussed recently. Intercapital Markets have also indicated that they have similar intentions.
Eurofinance, has BGN 14 million subscribed capital, which gives good grounds for the company to be transformed into an investment bank, Assen Hristov chairman of the management board of Eurohold, which owns Eurofinace, told the Pari daily. The Bulgarian National Bank (BNB), however, has been obstructing Eurofinance's attempts to obtain an investment bank license, Hristov said.There are no major differences between an investment bank and an investment intermediary. The main difference is the fact that the bank is accountable to the BNB, while the investment intermediary is accountable to the Financial Supervision Commission (FSC). Another difference is the requirement for subscribed capital. An investment bank has to have at least BGN 10 million capital, while the capital of the investment intermediary should be at least BGN 1.5 million. The major advantage of the banks is that they can collect deposits, whereas investment intermediaries are not allowed to do so. Most banks in Bulgaria are owned by foreign banks, which have their own investment units. Bulgarian banks prefer to collect resources in the country and transfer them to the foreign units, which subsequently manage and invest them.
Largest Romania`s electronic company enters Bulgaria
The Romanian electronics producer Altex, which is considered the largest one in the country, plans to enter the Bulgarian market in 2008.The company started working on its expansion in the Bulgarian market in 2005, but temporarily froze its plans due to problems with its performance in Romania, Romanian newspaper Ziarul Financiar reported as quoted by investor.bg.Currently, the company is working on an investment project worth 20 million euro. As a result of this, its total area of trade sites in Romania will reach 100 000 sq m.Altex has 90 stores in Romania's largest cities. In Bucharest alone there are ten stores. The company previously announced its plans to enter the Serbian market as well.Another Romanian company that focuses on furniture sales, Mobexpert, already operates in Bulgarian territory. The company announced in June 2007 that it was going to invest six million euro in a new store in Sofia’s residential district of Lyulin.
Danish Greentech To Put 80 Mln Euro in Bulgarian Wind Power Plant
Standart Danish company Greentech plans to invest some 80 mln euro ($108.8 mln) in a wind power plant near Chiprovtsi, northwestern Bulgaria, mayor Ivan Markov said on August 28, 2007. The municipality and the investor will set up a joint venture for the project. The municipality will make an in-kind contribution of 1,000 hectares of land. The wind power plant will be located on 1,800 m attitude in the Balkan mountain range. The facility will comprise 30 wind turbines with a total capacity of 60 MW. Construction works will start in 2008 and will take two years. The construction will create 200 temporary jobs, while after the completion the wind plant will employ 30 people. The wind power plant will be the largest investment in northwestern Bulgaria in the past 20 years.
Greek GEK's Bulgarian unit to invest �72 Mln in mountain holiday complex near Sofia
The Bulgarian unit of Greek construction group GEK, plans to build a 72 million euro ($98.2 million) holiday complex close to the ski resort of Borovets, ICON said on Thursday. The complex, to be built near the ski resort of Borovets in the Rila mountain some 60 kilometres south of the capital Sofia, will feature a spa hotel, a mini golf course, a trade centre, sports facilities, a leisure park and villas. ICON said ealrier this month it had bought 16.6 hectares of land in the area for 19.6 million euro. "Construction works will run in parallel with the Super Borovets project," a ICON official told SeeNews. Borovets, which is the oldest ski resort in the European Union newcomer, has attracted huge investor interest. A Bulgarian-registered firm majority owned by foreign businesses, plans to invest 566 million euro in the Super Borovets project that envisages large-scale construction of ski runs, leisure facilities and hotels. Construction works will kick off in October and the project is sheduled for completion in 2012. Bulgaria's real estate market has thrived in the last few years with local and foreign investors launching large-scale projects in the hope of high yields after the country's accession to the European Union. Bulgaria joined the EU on January 1. Last year, Bulgarian media reported that GEK, which is the sole owner of ICON, planned to build a hotel complex in Borovets, a hotel and a motel in the town of Vidin, on the Danube River, and a shopping and office centre in Sofia. GEK (www.gek.gr) is the parent of a group of companies active in the construction, real estate and energy sectors.
Scandinavian CandinaVians offer joint venture with Bulgaria on renewable energy sources
A consortium of Scandinavian investors offered to Bulgaria’s Economy and Energy Minister Petar Dimitrov to establish a joint venture to invest in renewable energy resources, infrastructure and residential property construction projects. Most of the companies in the consortium were Danish, mediapool.bg reported. Dimitrov approved of the idea, saying that Bulgaria’s participation in the possible new joint venture would be “under the guise of consultancy help aiming at environmental preservation”. Bulgaria’s part in the company would also conform to the country’s long-term policy for tourism and infrastructure development, he said, as quoted by mediapool.bg. The consortium will take part in the construction and optimisation of the country's infrastructure and will support Bulgaria in accessing European Bank for Reconstruction and Development financial resources and Danish manufacturers of wind turbines. The companies envision 35 per cent of the wind park production facilities to be assembled in Bulgaria, thus creating jobs. The same consortium has so far invested some one billion euro in various European countries, mediapool.bg said.
COMPANIES:
Over 3,600 companies to take part in Plovdiv Fair
A total of 3,612 companies from 46 countries have confirmed participation in the International Technical Fair, starting on September 24 in Plovdiv. The number of international companies amounts to 2,281, which represents a 4% compared to the 2006 edition of the fair. The overall size of the exhibition area has grown by 10% compared to 2006. The exhibition area reserved by foreign companies has grown by 22%. A total of 25 construction companies are currently working on the reconstruction of the entire fair complex.
E.ON ready to buy Bulgarian state out of regional power distributors
E.ON Bulgaria, the local division of German utility E.ON, said it is interested in buying the 33% stake each in the local Varna and Gorna Oriahovitsa regional power distribution companies it does not already own. The buyout of the 33% state-owned stakes has been discussed between E.ON Bulgaria chairman of the management board Manfred Paasch and economy minister Petar Dimitrov. The E.ON executive described as excellent the interaction between the two co-owners over the near-term. The distribution and reinvestment of the dividend has been the only point of contention, said Paasch. The insistence of the Bulgarian power regulator that E.ON deliver monthly paper bills to all of its Bulgarian customers will cost the company an additional 6 mln levs, said Paasch. The utility is advocating more cost-efficient channels like online and mobile bill-checking options.An additional 4 mln levs will be saved if the company switches from monthly to quarterly billing. The cost-efficiency of the longer metering period will also prevent a further hike in electricity prices.A surge in the number of new clients connected to the Varna power transmission grid is the main factor for the decision to open a new regional center at a cost of 6 mln levs by the end of 2007.No less than 3,500 new power consumers have been connected to the grid in the Varna area in the first eight months of 2007 and their number is expected to reach 5,000 by the end of the year.E.ON Bulgaria said it is about to launch the second phase of the construction of the Trakata substation in the Varna area at a cost o1 mln levs.The construction of the Slatina substation in Ruse should be completed by the end of 2007. The project is worth 5.7 mln levs.
Kremikovci put into the market new steel brand
"Kremikovci“AD has already offered to the market the new brand steel in the varieties S 235 JRC and S 275 JRC, announced from the assosiation.It pass the trials in „Independent laboratory for analysis 2000“ and received an excellent mark for cleanness and stability of its characteristics. A brand, which correspond to the european standard 10025.The plasticity and the chemical composition of the new product correspond totaly to the quality of the searching steel on the market,it happens because of the possibility for next cold machining.The new brend has already included in the price list.For the last three months this is the second new product, which comes out to the market.The first one was a specialized brand steel for machining to an oil-conduit pipes.For the pass week on the possition were concluded 51 deals for 2269 numbers to the total value of 37 959.79 leva.
Elana Trading to cooperate with Reuters
Bulgaria's Elana Trading will publish profiles and recommendations about companies listed on the Bulgarian Stock Exchange on Reuters' services, the company said. The investment intermediary, which is part of Elana Holding, has signed an agreement to deliver weekly and monthly market analyses, company profiles and other analyses of the Bulgarian financial sector to the international information agency.
Elana Trading also provides business information to other leading agencies, such as Bloomberg and Bulgaria's See News. It prepares regular comments, daily and weekly bulletins about the financial markets and analyses intended for Bulgarian and international individual and institutional investors.
Bulgarian company launders the uniforms of US troopers
A Bulgarian firm will launder and dry-clean the uniforms of the US troopers during the oncoming military exercise at the Novo Selo training ground near the town of Sliven, the Standart was informed. The M&N International Ltd was chosen to provide the laundering and dry-cleaning of the troopers' outfits," sources from the US Command in Germany said. Sources from the US Army said the company would take care of two hundred US troopers.This year's military exercise at Novo Selo military base will be a tripartite one. It is to start in Romania at the beginning of the next month. The participants in the exercise will cross the Danube on September 13 and will march through northern Bulgaria to the US base in Novo Selo," sources from the exercise coordination center told The Standart.
The exercise will continue for two weeks in Bulgaria. Two hundred US soldiers and just as many Bulgarian and Romanian soldiers will practice the detainment of terrorists.
The US military aircraft Apache, which are to take part in the exercise, will arrive in Bulgaria this week. US militaries in charge of the security and logistics during the exercise have been arriving in Sliven town for several days now. They are to provide accommodation for the commanders of the exercise and will inspect the quality of food and drinking water.
Icelandic mogul Bjorgolfsson retains nearly 3% in BTC
BTC, Bulgaria's former telecom monopoly, was sold on the very day on which Icelandic tycoon Thor Bjorgolfsson exercised an option to acquire 100% of Viva Ventures Holding GmbH, the holding company that owns 65% of the telco, Dnevnik learned from sources close to the deal. Novator Holdings, also controlled by Bjorgolfsson, had an option to buy Viva Ventures Holding GmbH, granted in early 2006 by Boston-based private equity firm Advent International Corp.Last Friday, the Bulgaria's financial watchdog said it will launch a probe into the take-over to determine whether a requirement for a tender offer to the minority shareholders was disregarded at some point during the transaction, a requirement that would have been triggered depending on when the option was exercised. Under Bulgarian law, when an entity acquires a stake of 50% or more in a publicly traded company, it is required to either pitch a tender offer or lower its equity holdings below 50% within the ensuing 14 days.If the take-overs of both Viva Ventures and BTC were simultaneous, Novator was not in breach of the tender offer regulations. An investment arm of U.S. insurance giant AIG earlier this month bought a 65% stake in BTC held by Viva Ventures and a further 25% from minority shareholders in a deal worth around 2.8 bln euro.The new owner is required to make a buyout offer by early September. The minority shareholders that cashed in all or some of their BTC equity were Landsbanki (15.74%) and Barclays Bank (9.26%). Landsbanki, controlled by Bjorgolfsson companies, retains a 2.79% share.
Tishman to open property presentation suite for Sofia scheme
U.S. company Tishman will employ a new channel for the marketing of its 200 mln euro commercial park development near the Sofia International Airport, said M3 Communications Group which handles the PR account of the investor.Tishman will open in November a 200 sq m onsite marketing suite where potential tenants will be able to see samples of the building exteriors and of the office layouts and furnishings.Sofia Airport Center is a multi-purpose mix of office, logistics, storage and hotel buildings located 300 m from the new terminal of the Sofia airport.The commercial park will have a 10 ha footprint and built-up area of 256,000 sq m, including 100,000 sq m of office space, 20,000 sq m of warehouse floor area and 40,000 sq m of hotel premises. A subway station, providing a transportation link with the downtown and the western-most boroughs of the capital, should open in the vicinity of the commercial park within 3 years.A total of 90,000 sq m of office space will be placed on the market during the initial stage of the project.Some 20,000 sq m of logistics and industrial floor area will be built by the fall of 2007.30,000 sq m of Class A low to mid-rise office buildings will be ready in the first half of 2008.
KRZ Port Burgas sells floating dock for 1.15 mln euro
KRZ Port Burgas, a ship repair company owned by Industrial Holding Bulgaria, said it has sold its floating dock to Turkey's İnebolu Denizcilik ve Ticaret A.Ş. For 1.15 mln euro. The sale proceeds will be invested in the purchase of port cargo handling equipment. The buyer of the dock has a maritime fleet but intends to branch out into ship-building and repair.
Slovak power utility acquires Bulgarian power plant
Slovak power utility Slovenske Elektrarne signed on Tuesday the deal to acquire full control of the power plant in the town of Russe on the Danube in northern Bulgaria. Earlier this year, Bulgaria's privatisation agency picked the Slovak company to buy 100% of the plant's shares for EUR 85,1 M.Under the contract, Slovenske Elektrarne cannot sell a majority stake in the power plant in the first three years after acquisition without the accord of the Bulgarian government.Additionally, it cannot shut down the power plant, nor cut its payroll during the same period.
Bulgarian mobile operator Globul reports BGN 374,2 M revenue in H1
Bulgaria's second-biggest cellphone operator Globul, majority owned by Greece's Cosmote, said on Tuesday its revenue for the first half of the year was BGN 374,2 M, a 22,5% increase over the same period of last year.Net revenue in the same period was BGN 47,3 M, nearly 60% more than in January-June 2006, Globul said in a statement.
Globul had 3,57 million subscribers at the end of June, a 33% increase over the same month of last year, for a market share of 39,7%. The share of post-paid subscribers rose to 38%.The operator's two competitors in Bulgaria are Austria Telekom-owned M-Tel, which had a market share of 50,6% at the end of June, and Vivatel, the mobile arm of Bulgaria's dominant fixed-line telecom BTC, launched at end-2005.Mobile penetration in Bulgaria rose to 117,4% this year as many users own more than one SIM card, compared to 90,6% a year ago, industry data shows.
Indian Elder Pharma purchases 51 % stake in Bulgaria`s Biomeda
India’s Elder Pharma bought a 51 per cent stake in the Bulgarian pharmaceutical manufacturer Biomeda, according to Thompson Financial as reported by the UK investment website Hemscott online.The deal for the manufacturer of oral medications was entirely made in cash.Elder Pharma’s deal with the Bulgarian company is hoped to help them to secure a place in the European pharmaceuticals market. According to a representative of the Indian company, the Bulgarian market is attractive to Elder because of its skilled labour pool and lower production costs compared to those of other European countries.
Drug maker Actavis reports 11% H1 sales growth in Bulgaria
Actavis, Bulgaria's largest generic drug manufacturer, posted double-digit growth in the first half of 2007 thanks to its broad product portfolio.The company said H1 sales rose 10.65% to 23.1 mln euro.Despite the slow growth of the prescription segment and enormous price erosion in the market, Actavis has managed to deliver solid over 2006 through using cross selling opportunities and new OTC and food supplement launches, the company said in a press release posted on its corporate website.Actavis Bulgaria launched a record number of 24 new products during the first half of the year.Over 20 more are expected to be launched until the end of the year 2007.The growth is also supported by the dynamic product pipeline and highly motivated sales force team of over 70 people, the company said.Iceland-based Actavis is one of the world’s leading generic pharmaceutical companies specialising in the development, manufacture and sale of generic pharmaceuticals.Actavis expects 2007 sales to total 1.6 bln euro, with approximately 4% of sales coming from Bulgaria, remaining one of the group’s key markets in Eastern Europe.
Piraeus Bank to acquire Dirent Bulgaria
The Commission for Protection of Competition (CPC) has given green light to Piraeus Bank Bulgaria for the acquisition of 100% of the shares of leasing company Dirent Bulgaria. The planned deal will not affect the banking services market and will not change the positions of Bank Piraeus Bulgaria in the sector, according CPC's experts. The concentration of economic activity will not violate or restrict the effective competition, the CPC said.
ANALYSIS:
Author: Leo Lewis, Times online
Japan eyes Bulgaria for outsourcing
From high-tech consumer electronics and solar panels to bathroom tiles and tanker hulls, corporate Japan is leading an Asian manufacturing switch from China to Vietnam, Eastern Europe and South America in its relentless hunt for lower labour costs.It is Japan to which the eyes of manufacturers around the world are now turned. For years, living in fear of a “hollowing-out” of its production skills, the world’s second-largest economy has staunchly resisted letting too much of its output seep overseas. Now, faced with the mass retirement of baby-boomers and low fertility rates, Japan has been forced to outsource. Analysts believe that the choices made by its largest companies – such as Canon, Toyota and Mitsubishi – will inform decisions of major corporations elsewhere.Japan has already gained a useful feel for the way that global manufacturing is tending. As the world’s largest producer of machine tools – it set a record last year of Y1.43 trillion (£5.82 billion) – Japan has a unique view on where production is being set up. In Europe, for example, the pursuit of cheaper labour costs can be seen as machine tools head towards Romania, Bulgaria, Slovenia and Hungary.Although Japanese direct investment in China remains substantial, at just under $4.5 billion (£2.25 billion) last year, Japan Inc’s interest in using China as its workshop was contracting long before TTI redrew its plans for further investment there. For while China remains a huge resource of cheap labour, the advantages of other Asian hubs – in terms of transport and energy infrastructure, proximity to major trade routes and availability of materials – have begun to shine.
Japan’s investment in China in 2006 was more than 30 per cent lower than in 2005, and it is expected to fall another 30 per cent this year.As Japan’s industrial giants – from a wide range of sectors – make their choices, they are forcing huge changes in their parts supply chains. So as Nissan and Toyota set up factories in Brazil and Russia, the companies that make tyres and exhaust pipes must do the same. In electronics, the Philippines and India are becoming more attractive, with Fujitsu and NEC building huge armies of engineers in those countries.Towering over corporate Japan’s recent strategic rethink is the economic rise of Vietnam. Vietnamese workers earn average monthly pay of about $80 – half that of a Chinese worker and just a fifth of what a domestic Japanese would cost. However, Japanese companies say there is more to the shift than cheap labour. They began to invest heavily in Vietnam after the Sars crisis of 2003, which, for a while, appeared to threaten the viability of Japanese factories in China. The military coup in Thailand last year has also forced the Japanese to reconsider projects there.Japanese chief executives, whose 2006 investments in Vietnam were twice those of the previous year, at $1.3 billion, believe that the Vietnamese work ethic is closer to Japan’s, in terms of a strong belief in quality.Even before China Inc’s image as a manufacturer was tainted by recent scandals of toxic toys and shoddy food products, Japanese bosses have privately been saying that they “trust” Vietnamese workers over their Chinese counterparts. Thus, Yamaha has unveiled plans to boost motorcycle capacity in Vietnam to 700,000 units per year, Canon now assembles photocopiers there, and IHI has shifted its ship-design operations to the port of Hai Phong. Toshiba has also set up R&D operations in Vietnam, a project that it would be reluctant to take to China.Japan’s largest trading house, Mitsui, has just set up a subsidiary in Hanoi. “Vietnam,” the subsidiary’s president, Ken Ozeki, recently told Japanese media, “could become even more reliable than China or India.”