Bulgaria Love/불가리아 뉴스

불가리아 주요 경제뉴스(21 – 28 SEPTEMBER 2007)

KBEP 2007. 9. 28. 14:53






Sections/headline briefs:







·        International Monetary Fund forecasts contained inflation in 2008

·        World Bank: Double the labor productivity

·        Bulgaria easier to do business in than Romania

·        Standard&Poor's: New EU members Bulgaria, Romania risk overheating

·        State debt up to � 5.79bn end-Aug

·        High oil prices hit Bulgaria badly

·        EU hiders the building of Bulgarian NPP

·        Electricity prices in Bulgaria to go up by 10 %

·        Nuclear power is only alternative

·        Belgium's Walloon region minister-President Demotte: Bulgaria is a place for successful business

·        Bulgaria's international tourism revenues up 16.04%

·        Sofia to host WATA general assembly 2007

·        Luxurious tourism is sector's hidden trump

·        US experts to train Bulgarian businessmen

·        300 000 large transactions in cash until September in Bulgaria

·        Harvested grain exceeds 2.4 Mln tones

·        Unionists: small pharmacies in Bulgaria threatened by bankruptcy

·        Nearly 90% of businesses in Bulgaria have trouble finding good employees

·        Deutsche Börse front-runner for sale of Sofia exchange

·        Dollar falls to another euro low







·        Which countries are Bulgaria's biggest foreign investors?

·        Bulgaria's energy investments mulls to invest � 50 M in solar park

·        Bulgaria to spend � 200 M on black sea water treatment plants

·        Bulgaria constructs wastewater treatment plants in 2 cities

·        Suvorovo wind park named top investment

·        Economy Minister: only financially blind do not invest in Bulgaria

·        Investment in environment for better quality of life forum opened

·        Austrian real estate investment group Real4You to build � 55 M mall

·        Israeli company invest � 200 M in Bulgaria

·        $ 660 М Czech investments in Bulgaria

·        � 300 M to be invested in residential district on Cape Foros

·        Bulgarian owners invest � 4 M in serbian factory

·        France's Avenir Telecom invests 5.3 mln levs in Bulgaria

·        Investments in offices in Bulgaria`s capital loose money

·        Romeptrol invests �10 M in oil terminal in Sofia



·        Companies in Bulgaria back up common tax base

·        Landmark buys Hyundai office center in Sofia in � 22 mln deal

·        Sopharma adds to stake in local syringe maker

·        Sopharma to set up and list two new companies

·        Sopharma Logistics sets BGN 1.626 M to reserves

·        Navibulgar to set up subsidiaries in Marshall Islands

·        Between � 500 M and � 1 B are necessary to eradicate Kremikovtsi

·        Kremikovtsi upgrades environment investment plans to � 312 M

·        Kremikovtzi mulls industrial zone

·        SkyEurope to connect Bulgaria to 11 European cities

·        UK-based Miller Developments buys Mall Varna for �120 M

·        Big UK currency speculator bets on Bulgarian property market

·        � 10.9m for water supply, sewerage upgrade

·        Toshiba targets 20% market share in SEE in Q4 2007

·        Equest fund to merge Technomarket, Domo units

·        Enemona to build green power plant in Nikopol



·        (No) inflation worries in Bulgaria?

·        Tumbling dollar and condition of US economy are not risk factors for Bulgarian economy

·        Bulgarian lev currency (BGN) to survive

·        Bulgaria ranks 46th in the world in terms of conditions for doing business






International Monetary Fund forecasts contained inflation in 2008


International Monetary Fund (IMF) experts will visit Bulgaria to prepare their annual monitoring report on the country. The regular annual consultations will take place between October 4 and 6. IMF experts expect inflation rate in Bulgaria to start declining in 2008. The growing prices in Bulgaria may be put down to the natural disasters, which wreaked havoc on the agricultural produce, according to IMF's experts.The decision for an additional indexation of the pensions will not ease the fiscal policy in 2008, according to the IMF.Despite IMF's warnings, the MPs decided to raise the pensions by 10% as of October 1. Social security installments will also be 0.3 percentage points lower as of the same date.The increase of pensions and budgetary salaries is one of the reasons for the record-high 12% inflation on an annual basis reported in August.

World Bank: Double the labor productivity

No earlier than 2040 will the average Bulgarian's salary be on a par with that of the average citizen of Western Europe, according to a World Bank report. It will be only when the present day Bulgarian's children grow up when making as much as a Western European will be possible. This is the only optimistic possibility, which can turn into reality only if the Bulgarians start working twice more efficiently. Since 2002 labour productivity rate in this country has increased by 2%. And if Bulgaria's wish is to run on the same track with Western Europe, this indicator will have to be rise to a 5%. "If the Bulgarians don't boost the their labour efficiency, their incomes will remain three times lower than the average in the rest of the EU, as the situation is at present," told Satu Kahkonnen, who is among the authors of the report. The World Bank also warned against the risk of salary rates to outpace those of labour productivity. Given the constrained mobility of the working population this will cause inflation rates to go up, and economic growth to retard. "Bulgaria's active population diminishes by forty to fifty thousand members each year", the World Bank points out. According to the report Bulgaria needs to invest more in innovations and human resources, modernize its educational system, and develop the skills of its work-hands.

Bulgaria easier to do business in than Romania

Bulgaria occupies the number 46 spot in a ranking on the ease of doing business in 2006-2007, World Bank's Doing Business 2008 report shows. Romania occupied the number 48 spot in the ranking, while Singapore topped the ranking for the second consecutive year. New Zealand and the USA rounded out the top three in the ranking. A total of 178 economies were included in the ranking. Hong Kong, Denmark, Great Britain, Canada, Ireland, Australia and Iceland also made it into the top ten countries in terms of ease of doing business.Eastern European and former soviet countries have implemented serious reforms in 2006-2007, according to the World Bank. Egypt, which implemented reforms in five out of ten fields, covered by the report, was the top reformer in the period. Bulgaria is among the top ten reformers along with Croatia, Macedonia, Georgia, Columbia, Saudi Arabia, Kenya, China and Ghana.

Standard&Poor's: New EU members Bulgaria, Romania risk overheating

The economies of Bulgaria and Romania, the two Balkan neighbours that joined the European Union in Januay, are at a risk of overheating, a report released by international ratings agency Standard&Poor's claims.The two countries, plus EU-hopeful Croatia, who targets entry to the bloc in 2009, have been at risk for some time, increasingly so in recent years, although price increases have been moderate as surging imports have kept a lid on inflationary pressures, according to S&P.But with current account deficits reaching unsustainable levels in Bulgaria and Romania, although somewhat less so in Croatia, making this "pressure valve" less likely to be effective in the future, so overheating could lead to a drastic increase in prices."This will require a prudent response by policymakers, especially because tighter global liquidity conditions loom and political risks are on the rise as the endgame for the resolution of the final status of Kosovo has begun," said S&P analysts Moritz Kraemer.The solution is to adopt a fiscal stance that would smooth out the fluctuations and prevent a hard landing, believes report author Remy Salters."Progress on that front is uneven among the trio, with Romania lagging in fiscal rigor, although this is partly balanced by a more flexible monetary policy," he said."A policy mix cooling down excessive domestic demand is therefore crucial to minimize the risk of asset and debt bubbles emerging and bursting, bringing the real economy down in the process," added Salters.Bulgaria is rated by S&P at "BBB+", with Croatia one notch down at "BBB" and Romania at "BBB-". All three ratings have a stable outlook.

State debt up to � 5.79bn end-Aug

Bulgaria's state debt amounted to EUR 5.79 billion as at the end of August 2007, up by EUR 28.7 million month on month, data of the ministry of finance show. Domestic debt stood at EUR 1.558 billion, while foreign debt totalled EUR 4.332 billion as at the end of August. Debt-to-GDP stood at 22.1% in August up by 0.1 percentage points on July. Foreign and domestic debt amounted to 16.2% and 6% of GDP, respectively.


High oil prices hit Bulgaria badly


Crude oil prices are expected to continue to increase, while the US dollar will continue to lose value against the euro, Bulgarian analysts forecast.The euro hit a new all-time high of USD 1.41 on Friday. The short-term depreciation of the dollar may be put down to the slashing of the interest rates in the USA, while in the long-term it may be attributed to USA's current account gap and budget deficit.Crude oil prices dipped slightly on Friday hovering around the USD 82-a-barrel mark. The latest record prices may be put down to oil refineries in the Gulf of Mexico, which shut down part of production due to the threat of a gathering tropical storm.Bulgaria will not be affected by the depreciation of the US dollar.The higher oil prices, however, will have a negative effect on the country.The weak dollar will offset insignificantly the higher prices.Higher oil prices do not improve the well-being of households and do not help the business achieve better productivity. This holds value for the whole world but Bulgaria seems to suffer more as the economy of the country is very energy inefficient at this point, Ganev said.Bulgaria continues to lag behind Romania and its other neighbouring countries in terms of energy efficiency. The good news is that the energy efficiency index has improved from 100 to 1995 to 66 in 2006. This means that the energy efficiency has improved by a third over the last decade. The strong results may be put down to the foreign and local companies investing in energy-saving technologies, as well as to the energy efficiency measures taken by households. The high oil prices stimulate these processes.

EU hiders the building of Bulgarian NPP

It transpired yesterday that, accidentally or not, the EU is to postpone the long-awaited permission for commencing the Belene Nuclear Power Plant construction. "The European Commission may delay its answer regarding the project," was what Ferran Taradellas, Spokesperson for Energy Commissioner Andris Piebalgs told to Bulgaria's surpsise in an interview for the Bulgarian Telegraphic Agency (BTA). The reason Mr. Taradellas gave was the need of more minute scrutiny of the nuclear project on the part of the EU. "Europe will have to reexamine the Belene NPP construction action plan that the Russian Atomexportstroy has prepared due to lingering doubts concerning the Russian technology," experts commented. "Belene will be the first power plant in the EU to put to use a new-generation of Russian nuclear reactors. It is quite possible that other countries also decide to build power plants utilizing the same reactors. Therefore we need more time to explore all the information having to do with the construction of Belene NPP the EC received from Bulgaria. The answer given might in future be of use to those other countries, as well," Taradellas explained. "Brussels is delaying its answer because it wants to curb Russian influence in the EU energy sector," analyzers remarked. Well before Atomexportstroy was selected to build up Belene NPP, it was very clear that Bulgaria was acting the part of Russia's springboard to the EU, and that Brussels did not like at all. Now it's counter reaction comes right in the moment when Bulgaria is closest to EU's authorization."Noone could ever tell the EU how or when should their decision about Belene NPP be made. And we will abide by it," officials from Republic of Bulgarian Nuclear Regulatory Agency told. "The EU has already issued a certificate to the new technology which will use the Russian reactor WWER 1000/466," some people reminded.


Electricity prices in Bulgaria to go up by 10 %


Prices of electricity would increase by five to ten per cent in the first months of 2008.The National Electricity Company (NEC) pressed the State Energy and Water Regulatory Commission (SEWRC) to increase prices, bgnes.com reported quoting an Energy and Economy Ministry source.As from July 1 2007 electricity prices for households increased by 7.5 per cent.The price at which electricity distribution companies had to buy electricity from NEC was increased by 13.15 per cent. NEC initially demanded an increase of 24.5 per cent claiming it would become insolvent.According to NEC's data the company lost nearly 380 million leva from electricity sales in the period from 2002 to 2006.The current price of electricity is 0.157 leva per kilowatt hour day tariff and 0.100 leva per kilowatt hour during the night. Average monthly electricity consumption for a household of 300 kilowatt during the day plus an average consumption of 100 kilowatt in the night would cost 57 leva.If SEWRC approved the increase, households' monthly bills would increase with nearly six leva.

Nuclear power is only alternative

Some 80% of the energy sources in Europe are fossil fuels. When processed, they emit huge quantities of hazardous gases that affect the environment. In Bulgaria, coal-run thermal power plants (TPPs) produce about 80% of the emissions of sulphur oxide and 60% of the carbon dioxide emissions.Since units 3 and 4 of the Kozloduy nuclear power plant (NPP) were shut down at the beginning of 2007, the structure of electricity production in Bulgaria has changed considerably. Until the end of 2006 TPPs accounted for 47.4% of the energy generated in Bulgaria and the NPP, for 42.6%. The remaining 10% or so was produced from water and other renewable energy sources. But now TPPs make 55.8% of the energy and the NPP, 36.8%. The output of hydro power plants has dropped by some 3%.The closure of units of the Kozloduy NPP has increased the use of solid fuels, triggering a rise in harmful emissions. The Bobov Dol TPP alone, which is the worst offender in Bulgaria, has boosted its output by 27.6% this year. The TPPs in the Maritsa basin have boosted their production by 12%.The installation of desulphurising facilities at the TPPs has to curb pollution by more than 90%. However, there are other hazardous by-products remaining that cannot be utilised. TPP production is more radioactive that NPP's. NPPs make the cheapest energy and are the safest power facilities, CEZ's regional manager for Bulgaria, Lubos Pavlas, told the Pari daily.

Belgium's Walloon region minister-President Demotte: Bulgaria is a place for successful business


"Bulgaria is a place where business could develop successfully and we are here because of this," Minister-President of Wallonia Rudy Demotte told a news conference here on Tuesday.Demotte is a member of the Greater Region of Western Europe, which is an official partner of the 63rd edition of the International Technical Fair in Plovdiv.The Greater Region links in interregional cooperation the Saarland, Lorraine, Luxembourg, the Rhineland-Palatinate and Wallonia with the French and German speaking communities in Belgium. Its economic strength lies in its assets covering many sectors: research, innovation, cooperation between universities, agreements between cross-border companies and cross-border employment, where there is a big potential. "The cooperation between the different regions is very important for us and it has be effected not only in Bulgaria but also in the Balkans. Thus the economies of the individual countries will perform better," Demotte said.Representatives of the Greater Region concluded a cooperation agreement with Stara Zagora region. In Demotte's opinion, one of the reasons for signing the agreement is that Stara Zagora region will play an important role in Bulgaria's energy sector in the future.Demotte also said that the economic situation in Bulgaria is favourable for investment. According to him, energy, machine-building and environment hold good prospects for Bulgaria.

Bulgaria's international tourism revenues up 16.04%

International tourism revenues increased 16.04 per cent year-on-year for the first seven months of 2007, the State Tourism Agency said Sunday. According to preliminary estimations, international tourism revenues stand at 1,347.4 million euro, BTA reports. The number of foreign tourists visiting Bulgaria from January to August 2007 rose 6.88 per cent year-on-year, and the number of tourists from the EU member-states increased 30.64 per cent compared to the same period of 2006.Bulgaria was visited by a total of 3,972,020 foreign tourists (excluding transit passengers) for the January - August period, of which 73 per cent or 2,930,927 were citizens of EU member states.Bulgarian citizens' expenditures for traveling abroad for the same period stood at 727 million euro, up 15.36 per cent year-on-year.In the January - August 2007 period, Bulgarian citizens had a total of 2,868,317 visits abroad. The visits to the EU member states rose 11.22 per cent in the eight months of 2007 compared to the same period of 2006.Bulgaria will take part in the Moscow International Travel and Tourism Exhibition MITT-2007 between September 25 and 28, said the State Tourism Agency. The exhibition is organized by Russia's Federal Tourism Agency. A total of 930 companies from 60 countries participated in the last year edition of the exhibition. The State Tourism Agency organizes also Bulgaria's participation in the Top Resa Travel Market Show to tale place from September 26 to 28 in Deauville, France. Over 400 representatives of 71 countries took part in the exhibition last year.The Bulgarian stall will also represent three Bulgarian tour operators. Last year the Bulgarian stall was visited by 83,062 French tourists, the statistic shows.

Sofia to host WATA general assembly 2007


More than half of the 60 travel agency members of the World Association of Travel Agencies (WATA) are expected to attend the 2007 WATA General Assembly in Sofia, WATA Executive Director Christine Fournier told a news conference Tuesday.WATA has become the global network of travel specialists managing individual travellers, organising incentives and special interest groups, having the best expertise in their field, being highly specialized in tailor made products, and giving the best personalized services.According to Fournier, the Assembly will prove to be an unparalleled event. A WATA conference is not only the place where travel experts from all over the world meet to make business but also a place where friends are gathering to show that the tourist industry is uniting the peoples in peace and harmony. According to Fournier, the venue is a good opportunity for acquaintance with Bulgaria and what it offers. The country has good potential in view of its historical heritage, as well as opportunities for developing the modern kinds of tourism.The Chairman of the Board of Miel Ltd., a WATA member, Ognyan Blagoev, pointed out that the incoming flow of tourists serviced by the agency has increased and that there is interest in higher quality services at reasonable but not low prices.Blagoev summed the problems faced by deluxe tourism in Bulgaria as "style, service and infrastructure".

Luxurious tourism is sector's hidden trump

Bulgaria can now offer to tourists with higher requirements bigger choice of boutique high stars hotels, spa resorts and cultural-history destinations. This was announced by Ognian Blagoev, director of ‘Migel' tourist agency. 'Migel' is the only Bulgarian agency - member of the World Association of Tourist Agencies.Bulgaria is still not much famous as destination for luxury tourism and special personal attitude to guests. That's why is very important agencies to start act this way so infrastructure problems could be soften.The interest to individual traveling nationwide increase all the time, informed Blagoev.‘Migel' revenues (85%) are coming from individual and luxury trips from Japan, Taiwan, Vietnam, China.

US experts to train Bulgarian businessmen

US military experts will train Bulgarian businessmen make millions from public procurements for the US Army. The training course will be the last one before the announcement of the big public procurements for the construction of the military base at Novo Selo. Dozens of millions of US dollars are expected to flow into the Bulgarian economy only in the form of construction investments. Experts say that the support of the 3,000-strong US contingent in Bulgaria will cost a hundred million US dollars a year. The training course is made for companies, which intend to compete in the tenders for the construction of joint Bulgarian-American military facilities.

300 000 large transactions in cash until September in Bulgaria

Cash payments registered by the Financial Intelligence Agency (FIA) has grown quickly in the past year and a half and exceeded 300 000 by September 1.On September 21, Evgeni Chachev parliament member for Democrats for Strong Bulgaria (DSB) asked Prime Minister Sergei Stanishev which measures the government intended to take in order to decrease the grey economy in Bulgaria, mediapool.bg said.According to the data Chachev quoted, in 2004 FIA had registered a total to 98 000 cash payments. FIA registers only cash payments larger than 300 000 leva.In 2005 148 000 cash payments were registered by the FIA, and in 2006 238 000. In 2007, until September 1, 300 000 cash payments had been registered.Chachev said in the past year over 10 billion leva has been paid in cash, compared to 3.5 billion in 2004.Annual economic growth of six to seven per cent was accompanied by a 76 per cent growth in cash payments, he said. He added that the increase in cash payments took place against the background of a developing bank system, card services and the fact that parliament forced pensioners and workers to open a bank account in order to receive their pensions and sick-leave payments.The figures quoted by Chachev were correct according to Stanishev, but their interpretation was politically motivated and manipulative. Stanishev said that Bulgaria had not accepted to limit cash payments as part of EU accession negotiations.Stanishev said the increase of cash payment registered  by FIA is caused by two factors. one was the improved control by national agencies of juridical entities, which lead to an increase in the number of registered deals. He added that on the website of FIA this factor was specifically mentioned to avoid wrong conclusions.The second reason was that one and the same sum of money would pass different deals and therefore be registered several times. As an example, he said, if a private person draws 20 000 euro from a bank account, changes that to leva and then uses that money to pay for real estate, FIA would register this as three separate transactions. If the person selling the real estate then changes the euros to dollars and puts them in a deposit account, the FIA would register another two transactions. But this doesn't mean the 20 000 euro became 100 000, Stanishev said.“No one would go and draw money in euro, change them for leva and then to dollars and in each transaction loose 2 per cent, while the FIA registered 5 transactions instead of one”, Chachev replied.Data from the Bulgarian National Bank (BNB) showed, according to him, that the number of 100 leva bank notes in circulation had increased relatively compared to those of 2, 5 and 10 leva.This way we help the suitcase economy, Chachev said.

Harvested grain exceeds 2.4 Mln tones

1,094,800 ha out of a total of 1,120,500 ha under wheat have been harvested, according to preliminary estimates of the Agrostatistics Directorate with the Ministry of Agriculture and Food Supply, BTA reports.Some 25,700 ha could not be harvested due to unfavorable climatic events and fires. Harvested grain exceeds 2.4 million tonnes. Some 193,800 ha were put under barley in 2006. Of these 186,800 ha have been harvested and the yield equals 43,700 tonnes.Over 84 percent of areas under oil-bearing sunflower have been harvested. They have yielded 459,000 tonnes.Figures show that 502,200 ha have been prepared for the autumn sowing. 3,300 ha have been cropped with wheat and 66,290 ha with winter barley.The quality of wheat is satisfactory and comparable to previous years. There is no shortage of seeds, according to data, submitted by the National Grain and Fodder Service. The quality tests cover 45 percent of the estimated production: a total of 1,409 samples from 1,021,701 tonnes of grain have been taken.

Unionists: small pharmacies in Bulgaria threatened by bankruptcy

The small pharmacies in Bulgaria will go bankrupt if the Health Ministry adopts the new regulation for the medicine prices, the Bulgarian Pharmaceutical Union warned on Sunday.The unionists labelled the new regulation "pseudo-social". If adopted, the new regulation will limit the access to medicines and pharmaceutical services, they believe.
Additionally, the new regulation will destroy a profession, which will lead to a shortage of qualified pharmaceutical personnel.

Nearly 90% of businesses in Bulgaria have trouble finding good employees

Research by Manpower, the leading world consultants on employee training and testing, found out that 86% of business in Bulgaria are having serious trouble finding good employees. According to Bulgarian companies, the reasons for the problem are mainly the lack of qualified candidates, especially in cities other than Sofia, lack of motivation among workers, or their unrealistic expectations, and the dynamics of the market.
Manpower surveyed 300 small, medium and large businesses in Bulgaria between July and August. The research aimed at discovering which professions are mostly sought by employers, who is responsible for approving candidates in a company, and in which cases do companies choose to use the services of a hiring agency. When asked “How do you cope with the long absence from work of one of your employees?”, just 34% of companies say they would hire someone to fill in temporary. The so-called “temporary staffing”, very wide-spread in Western countries, is still rare in Bulgaria, due to lack of regulations on one hand, and on the other, to the fact that people are reluctant to take up temporary jobs because they prefer something more secure. The research also found out that businesses in Bulgaria are currently using all possible channels to attract workers – print advertisements (20%), on-line job search engines (19%), unemployment office (20%), or through recommendations by people (18%). Companies are also actively using other means such as university career centers, internship programs, head-hunting methods, municipal organizations etc. Most of the surveyed companies (77%) said they had an HR department or an HR expert, which proves the understanding for the need of special methods when hiring and evaluating employees. Despite that, 82% of companies said they use employment agencies as mediators. These companies said their managers found it impossible to cope by themselves. They also said the outsourcing of this activity saves them time and additional efforts, and also guarantees to meet their requirements.
Businesses mainly seek employment agencies when they need employees with special qualifications (54%), when they try to attract employees from competing companies (31%), or when they need to find someone for a position outside their city.

Deutsche Börse front-runner for sale of Sofia exchange

Germany's Deutsche Börse Gruppe has taken the pole position for the upcoming privatisation of a 44% stake in the Bulgarian Stock Exchange (BSE) after clinching a deal to supply its Xetra electronic cash market trading system to its Sofia-based counterpart. The new trading system should be operational by the second quarter of 2008. The Xetra platform was chosen over the competing offering from Nordic exchange operator OMX which paves the way for a deal with Deutsche Börse for the state-owned BSE stake.BSE board chairman Viktor Papazov said the German offer was picked on its superior financial merits. Sources told Dnevnik the difference in the financial parameters of the Deutsche Börse and OMX offers was substantial but did not give further details.Papazov has been quoted as saying over the past couple of days that the supplier of the technical solution could be the strategic partner for BSE but not necessarily.In his view, the privatisation of the bourse is no longer a priority since it is now in a position to afford a new trading platform.

Dollar falls to another euro low

The dollar has fallen to yet another all-time low against the euro, after further weak US economic data. Figures showed that US consumer confidence has fallen to a near two-year low, while house prices have seen the sharpest drop in 16 years. Analysts said the data boosted expectations that the Federal Reserve will cut interest rates still further.In early trading, the euro hit a high of $1.4163, before pulling back to $1.4122 by late morning in Europe. The Fed cut US interest rates to 4.75% from 5.25% last week, in a move aimed at restoring confidence in both the housing and financial markets.

It was the first US rate cut in four years. "Momentum to sell the dollar remains strong," said Hideaki Inoue, foreign exchange manager at Mitsubishi UFJ Trust and Banking in Tokyo.Analysts are now turning their attention to the latest monthly report on sales of durable goods, which is due out later on Wednesday.The high value of the euro has caused concern among European exporters, as it makes their products more expensive in the US. Planemaker Airbus has already warned that jobs could be affected if the euro remains so strong.



Which countries are Bulgaria's biggest foreign investors?

Direct foreign investment in Bulgaria amounted to � 2.366 bln in H1 (851.8 mln euros in Q1 and 1.514 bln euros in Q2), shows preliminary data released by Bulgarian National Bank.In 2006 direct investment in Bulgaria stood at 4.364 bln euros, versus 3.103 bln euros in 2005.The biggest part of investment to Bulgaria in H1 came from Great Britain and Austria – 365.3 mln euros and 289.5 mln euros, respectively. Next are Luxembourg with 244 mln euros and Spain with 211 mln euros.Five other countries have invested more than 100 mln euros. These are Cyprus (146.9 mln euros), Germany (125 mln euros), USA (115.5 mln euros), The Netherlands (109 mln euros) and Ireland (105.4 mln euros). Greece (93.3 mln euros) is also in top 10.A total of 861.8 mln euros was invested in the area of real estate sector and business services, 430.3 mln euros in financial intermediation, and 303.4 mln euros in construction.Other sectors attracting foreign investment are trade, automobile repairs and maintenance, as well as telecommunications and the manufacturing industry.

Bulgaria's energy investments mulls to invest � 50 M in solar park expansion


Bulgarian-based company Energy Investments said on Monday it plans to invest some 50 million euro ($70.5 million) in the expansion of its solar energy park in the southern town of Srednogortsi.The investments include the acquiring of five to ten hectares of land, the company's executive director Dimiter Stanchev told reporters, without elaborating.Energy Investments will put its first solar units in Srednogortsii in late October. The units, covering 1,500 square metres, will have an installed generation capacity of 45 kilowatts per hour.The company, which also runs a hydroelectric power station in Srednogortsi, said its investments in the region so far exceed 1.2 million euro. Energy Investments (http://energy-investments.org) is equally owned by three individuals: Dimiter Stanchev, Ivan Krapov and Nikolay Velkov.


Bulgaria to spend � 200 M on black sea water treatment plants


Bulgaria will spend EUR 200 M to build water treatment plants along its Black Sea coastline, Environmental Protection Minister Dzhevdet Chakarov said on Tuesday.
Bulgaria has to build water treatment plants for every village on the Black Sea coast with more than 10 000 residents by 2010, according to the commitments it made to the EU prior to joining the bloc in January.By 2014, similar facilities have to be provided for villages with more than 2 000 residents.Currently, Bulgaria has 22 water treatment plants on the seaboard, and a total 69 throughout the country.Bulgaria plans to spend a total EUR 1,8 B to improve the water supply and the quality of drinking water in the country, Chakarov said.The EU is expected to contribute 80% of that sum via accession and cohesion funds, he added.


Bulgaria constructs wastewater treatment plants in Montana and Kozlodui

Construction of two wastewater treatment plants in Montana and in Kozlodui started on September 24 2007.The installation in Kozloduy was build with funds made available by the Environment and Water Affairs Ministry (EWAM), while the fund for the plant in Montana were provided by the ISPA programme of the European Commission, investor.bg said.The contract for the construction had been signed in June 2007 and the deadline for delivery of the plants was July 2009, investor.bg said.The installation would collect and treat wastewater in accordance with national and European requirements.The project would provide 140 temporary work places for the two years of the construction and some 30 permanent work places after the plants would be taken into production.

Suvorovo wind park named top investment

Spanish-Bulgarian company Eolica Bulgaria JSC will invest 174.9 million leva in a project for construction of wind energy park near the coastal city of Varna, InvestBulgaria Agency reported.The park will be of 60 MW and will be connected to Bulgaria’s national energy system, investor.bg reported.Eolica will construct the infrastructure needed and will reconstruct the existing municipal infrastructure.The park will spread on 1.2 million sq m. Its construction will open 700 temporary and 10 permanent work places.Eolica chose the place for the park considering the wind and the environmental protection. The terrain is outside the territories included in the European environmental network Natura 2000, the way of the migrating birds and is of no danger to the local flora and fauna, investor.bg said.On September 25 2007, InvestBulgaria Agency awarded Eolica first class investor because of the project.Eolica Bulgaria is 35 per cent Bulgarian and 65 per cent Spanish company. The Spanish partner Eolica already develops wind energy projects in Spain and other countries.

Economy Minister: only financially blind do not invest in Bulgaria

Only financially blind and lazy do not want to invest in Bulgaria, says Bulgaria's Minister of Economy Petar Dimitrov, thus figuratively describing the interest of foreign investors in Bulgaria. Having toured Plovdiv Autumn Fair, the Minister commented that the exhibition was a proof of the fantastic economic growth in Bulgaria. "Bulgaria's economic growth is 14% which ranks Bulgaria among the first in the EU," said Bulgaria's Prime Minister Sergey Stanishev, quoting Eurostat data covering the period from June 2006 to June 2007. These figures speak of the country's potential to provide greater employment, income rise and better development as a whole, Stanishev said

Investment in environment for better quality of life forum will be opened


The Fourth International Business Forum Investment in the Environment for a Better Quality of Life will be opened on October 2 at the National Palace of Culture in Sofia, the organizer Bulgarian Economic Forum said Tuesday.The forum will be opened by the Environment and Water Minister Djevdet Chakurov who will discuss the issues related to environment protection in the region with his counterparts from Romania, Macedonia, Albania, Montenegro and Croatia.The topics to be discussed during the forum include environment and sustainable development, energy and renewable energy sources, environment and investments in the water sector, waste management, funding of environment protection projects.During the forum, the biggest manufacturer of bleached sulphate pulp in the Balkan Peninsula Sviloza AD will represent its experience in the implementation of energy efficiency projects. The company has invested over 9 million Bulgarian leva in an environment protection programme. The investment is a part of a large-scale project for modernization of the company worth a total of 55 million Leva, which will be presented at the forum.Water supply utility Sofiiska Voda and steel mill Kremikovtsi will also present environment protection projects. In the waste management session, ECOBULPAC company will demonstrate its experience in the organization of a working system of divided waste collection.

Austrian real estate investment group Real4You to build � 55 M mall


Austrian real estate investment group Real 4You plans to invest some 55 million euro ($77.7 million) in the construction of a shopping mall in the Bulgarian capital Sofia, it said on Wednesday.Investment in the project is estimated at 55 million euro and the mall should be completed in November 2009," the managing director of Real 4 You, Robert Kern, told journalists during the groundbreaking ceremony.Mega Mall will be have a built-up area of 70,000 square metres, which will accommodate over 100 shops, cafes and restaurants. The mall will have a parking lot with 800 slots and an exit on an underground station. Real4You, which will operates in Bulgaria via its subsidiary Magnum Bulgaria, has projects in Hungary, the Czech Republic and Romania.



Israeli company invest � 200 M in Bulgaria

Israeli Company BSR Europe Ltd. will invest 200 Million EUR in Bulgaria.The firm, which is in partnership with European Investment Fund, has bought 4 property parcels with total area of 76,890 sq m. The territory coasts 37 million EUR.The constructions foresee residential buildings, offices and trade complexes. The total sum goes to 200 million EUR.BSR Europe will possess 42,5% of the projects. The same company will try investment in Brasov, Romania that costs 40 million EUR.

$ 660 М Czech investments in Bulgaria

Czech investments in Bulgaria are more than $ 660 million. This was announced by Emil Hashak, representative of Agency for trade support of the Czech Republic. Reason for the statement is the Czech participation on the International Technical fair in Plovdiv.Czech firms invest mostly in mechanic engineering, ecology and chemical industry. only in 2006 the investor that entered from the Czech Republic are more than $ 200 million.

� 300 M to be invested in residential district on Cape Foros

A luxurious holiday complex will be built between the central parts of Burgas city and the district of Kraymorie. The future pearl of the Bulgarian seaside will spread over 82.6 ha on the exotic Cape Foros, in the Burgas Bay. one of the investors in this engineering challenge is lawyer Todor Batkov, owner of FC Levski Sofia and The Standart daily, the other being the British investment fund ECDC, which will invest in the construction of a huge business park.The 21st Century City will be built in five years with ultra-modern technologies, communication and security systems that have never been used in Bulgaria before. The investors have already poured thirty million euro in the ambitious project, mostly for the purchase of plots. The construction of the whole complex and the infrastructure will cost 300 million euro. Half of the buildings in the 21st Century City are meant for permanent residents and the other half - for holiday lodgings. The investors in the Foros Project - lawyer Todor Batkov and Alexander Tsachev, ECDC Investment Fund - presented yesterday the program for the holiday complex's construction to the Burgas Municipal Council. The two businessmen emphasized on the cultural and historic importance of Cape Foros. At the bottom of the Burgas Bay lie the ruins of a Roman city, which sank centuries ago following an earthquake, and this is why the holiday complex will have a diving sports center. Todor Batkov is also negotiating with the board of a Swiss college to establish a tourism studies department in the new seaside complex.
The project provides that only half of the purchased 82.6 ha of land will be built up and the other half will be afforested with giant. deciduous and coniferous trees.
The 21st Century City will have a ferryboat port and a marina. The first stage of the construction, the infrastructure, has already started. It will cost twenty million euro. The construction of a breakwater which to protect the complex from gales and billows will start soon.

Bulgarian owners invest � 4 M in serbian factory

The new owners of Srbijanka, Bulgarian Media Svjat, have invested EUR 4M into the factory's production activities.Company Chief Executive Milojko Pantic said that there were only a few more small properties left to be sold, including a warehouse and small pieces of land around Valjevo.The Bulgarian company recently bought most of Srbijanka's property and facilities for some EUR 4mn.Pantic said that the new owners planned to invest EUR 2.5mn in equipment and other materials before the start of the next season of fruit production.


France's Avenir Telecom invests 5.3 mln levs in Bulgaria

French company Avenir Telecom said it has invested 5.3 mln levs so far in the roll-out of 36 outlets under its Internity concept in Bulgaria.The company has earmarked a further 4 mln levs for the development of the network of shops for mobile phones, accessories and services. It plans to have at least 100 Internity outlets in Bulgaria by the end of 2008. At the moment, only Greek-owned wireless carrier Globul has a distribution deal with the local Internity shop network. Internity also sells the ADSL packages of local telecom incumbent BTC. In 2006, Avenir Telecom bought Ask International, the operator of the local Da Da chain of outlets for mobile phones and accessories. Petar Petrov, head of the local office of the French company, said Internity will rebrand the outlets in some 30 local Billa supermarket vacated by office supplies company Office 1 Superstore.

Investments in offices in Bulgaria`s capital loose money

Investments in new office space in Sofia would receive a negative return on investment at the moment, an international research showed.Sofia had one of the lowest rents of retails space on shopping streets compared to other East European capitals, research by Cushman&Wakefield showed.Average rent for the main shopping streets was 100 euro per sq m, according to data from the research. Return on investment was seven percent. only in Warshaw was average rent lower, at 80 euro per sq m, but return on investment was 7.25 per cent.Highest average rent was charged in Prague, 170 euro per sq m, but return on investment was lowest at five per cent.Over the past year the rent for retail space in Sofia has fallen with 16.7 per cent, Cushman&Wakefield said. In Warsaw prices have gone up with 25 per cent over the same period.The report said the segment growth was stable, despite the fact that few modern retail spaces were being offered.
Prices have dropped because large investors were looking for large, modern spaces which in Sofia's central shopping street Vitosha were not available.Average rent for office space was 16 euro per sq m in Sofia, though in the centre of the city prices could go up to 24 euro per sq m. Office rents have decreased with 1.1 per cent over the past year. According to the report, investors in new office spaces would loose 3.1 per cent on their investment.Rental prices for offices in Warsaw have gone up by 58.8 per cent compared to last year and the average price was 27 euro per sq m.Return on investment in the Polish capital was 5.25 per cent, the report said.Despite active construction office, six per cent of office space in the city was unused. Announced projects had a combined 480 000 sq m and in planning phase were 723 000 sq m.

Romeptrol invests �10 M in oil terminal in Sofia

The Kazakh-owned Rompetrol will invest EUR 10 M in building a terminal for petroleum products in Sofia, the Romanian Ziua newspaper reported Thursday. The news for the future terminal with capacity of 14,400 cubic metres came from the Rompetrol CEO for Bulgaria Adrian Acatrinei.Rompetrol has decided to invest in the project as there is ever growing demand for liquid fuels in Sofia, which is the city that uses 50% of the fuel in the whole country.The company already has such a terminal in the Danube town of Russe. Romanian oil tycoon Dinu Patriciu, who sold a controlling stake in the country's second-largest oil company to Kazakhstan state company KazMunaiGaz, said recently the company now needed to "aggressively" pursue other acquisitions in the Balkans.





Companies in Bulgaria back up common tax base


Most companies in Bulgaria favour the adoption of a common tax base that is being discussed in the European Commission, an KPMG survey shows. According to the idea, which was promoted by EU tax commissioner Laszlo Kovacs, companies operating in more than one member state should use a common set of rules to calculate their profits. Then the profits should be allocated by countries of operation and imposed the respective tax rates. Currently each country has its own rules for determining the corporate tax base.
According to the survey, 70% of the big Bulgarian companies support the introduction of a common tax base. However, many see in that the first step to the adoption of a common corporate tax in the EU, though the European Commission has repeatedly denied having such plans. Such a move will affect the interest of Bulgaria and Bulgarian companies, which at present charge the lowest tax rate in the EU. Nevertheless, the survey returns the surprising result that 70% of the interviewed Bulgarian companies back up the adoption of a common tax rate, too.We firmly support the introduction of a common tax base but not of a common tax rate, the chairman of the Bulgarian Industrial Association, Bozhidar Danev, told the Pari daily. The rules for determining the tax base in Bulgaria are not know well. It is true that the tax rate is low but the tax base is very wide, Danev said. The tax rate should be a question of competition, so that economies can offer better conditions, he added.


Landmark buys Hyundai office center in Sofia in � 22 mln deal

Landmark Properties Bulgaria, the property investment and management company, said it has paid 22 mln euro for the Hyundai Center office building in Sofia. At the time the construction of the office center was launched, local Hyundai dealer Industrial Commerce said it had earmarked 7 mln euro for the project.The seller plans to complete the contemporary office building, located on the Sofia ring road across from Business Park Sofia, by July 2008.Industrial Commerce will retain ownership of the showroom and repair center premises of the transacted building.The office building, which will now be renamed to Sofia Business Center, has a build area of 30,000 sq m which breaks the sale price down to around 750 euro/sq m.Upon completion, Sofia Business Center will be among the few options for tenants seeking single-floor open plan office space of around 3,800 sq m. The Hyundai center deal is Landmark's 10th property transaction in Bulgaria. In Sofia, the company owns a 5,000 sq m logistics and office building near the Sofia International Airport leased long-term to express delivery company DHL as well as office centers on the Tsar Osvoboditel and Bulgaria boulevards.Landmark is also developing two office properties in Varna, on the Black Sea, and a commercial park in Plovdiv. The company also owns 50% of Black Sea Rama, a joint stock company currently building a golf course and villa resort under the same name near Balchik, on the Bulgarian Black Sea coast.Landmark is co-owned by Altima Partners, Iceland’s Landesbanki and Britain’s Gort Securities, the owner of the Radisson SAS Grand Hotel Sofia.


Sopharma adds to stake in local syringe maker

Bulgarian pharmaceuticals company Sopharma has added 5,119 shares to the stake it already owns in syringe maker Momina Krepost. Said the local stock exchange. The 1.82% package increases Sopharma's direct equity holdings in Momina Krepost to 36.01%. Entities connected to Sopharma own a further 1.20%. Sopharma's Momina Krepost stake is now almost equal to that of the other big shareholder, former privatisation fund Doverie Obedinen Holding, which has 36.27%.

Sopharma to set up and list two new companies


Sopharma AD is planning the establishment of two new subsidiaries, which will later be listed on the stock exchange. These are Sopharma Building and Doverie Properties, CEO Ognyan Donev said yesterday at the forum on the Future Of Capital Markets In Southeast Europe.“Two other companies – Unipharm and Sopharma Trading, are planning to file public offerings this year, or in the first months of 2008,” Mr. Donev also said. Asked about the company's recent acquisitions of stakes in other public enterprises, Donev said the deals were the result of Sopharma's efforts to consolidate its business. “As far as Lavena is concerned, this is just a portfolio investment, while the acquisition in Momina Krepost was a strategic one,” Donev added. Ognyan Donev has been CEO of the pharmaceutical company for seven years. Sopharma AD currently produces 210 products and exports to 28 countries. The company received a First Class Investor Certificate last week. Sopharma is planning to build a new modern plant for the production of tablets.The plant will be built in Sofia, on a plot near the company's ampullas plant on 16 Iliensko Shose Str. It is planned as a compact ensemble of buildings – a production building, a packaging building, a warehouse, an administrative building, and a laboratory. The plant will cover an area of 8,966 sq m on a land plot owned by Sopahrma. Total built-up area will be 13,502 sq m. 275 people will be employed in the new plant. The total value of the investment stands at 37.65 mln euros. Sopharma posted a net consolidated profit in the amount of 20.013 mln leva (10.232 mln euros) in 2007 H1, versus 15.978 mln leva (8.169 mln euros) a year ago. The stock was traded at levels between 7.61 and 7.78 leva yesterday.


Sopharma Logistics sets BGN 1.626 M to reserves, covers losses from prior periods


At a general meeting last week shareholders in Sopharma Logistics decided to set undistributed profit from prior periods (1997-2006) to the Reserves Fund, and to use some of the money to cover accrued losses.Sopharma Logistics has accrued a total of 1.626 mln leva (831,360 euros) in undistributed profit over the past 10 years. The company will set 156,525 leva from undistributed profit for the period 1997-2005 (which came to 1.565 mln leva in total) to the Reserves Fund, and another 821,025 leva will go to the Additional Reserves Fund.The rest of the money will be used to cover losses from prior periods in the amount of 587,703 leva (300,487 euros). The biggest part of the company's 2006 profit, which stands at 60,648 leva, will go to the Additional Reserves, and 6,065 leva will be added to the General Reserves.The stock dropped 0.31% to an average of 3.19 leva on Monday, when 225 shares changed hands at levels between 3.160 leva and 3.220 leva.


Top of Form

Bottom of Form

Navibulgar to set up subsidiaries in Marshall Islands


Navigation Maritime Bulgare (Navibulgar) will establish three subsidiaries in the Republic of the Marshall Islands, the Bulgarian Stock Exchange (BSE) said. Navibulgar has already sent a request to the ministry of transport, which represents the state's stake in the capital of the company. The three companies will be named Viden Maritime, Osogovo Maritime and Veslets Maritime. The new companies will have USD 500 capital each, divided in as many shares with 1 USD par value each. Navibulgar has obtained permission from the ministry of transport to sell 12 machines and some of its equipment. The sale is also pending approval by the Privatisation Agency.


Between � 500 M and � 1 B are necessary to eradicate Kremikovtsi


More than 40 years on all the persons that have been in the power were acquainted with Kremikovtsi misapprehension but the company still exists, main Sofia’s architecture Petar Dikov told BNR. Everybody pretend that they can’t see problem. The expert opinion is that there will be needed between EUR 500million and EUR1 milliard to eradicate Kremikovtsi. There are investors that will give that sum if we are not an obstacle for them. Sofia may become great place for living if Kremikovtsi will be closed, Dikov stressed.

Kremikovtsi upgrades environment investment plans to � 312 M


The country’s largest steel mill Kremikovtsi announced that it would invest EUR 312mn in environmental projects. The programme should be completed in 2011. However, the trade union in the plant as well as several environmentalist organisations have repeatedly warned that the statements coming from the still producer about technological upgrades and environment protection are false and manipulative. Kremikovtsi and state control bodies are even blamed for forging pollution indicators, which are anyway well above the targets set by EU and local institutions. A month ago, the European Commission requested information from the environment ministry on pollution parameters related to Kremikovtsi and also assigned own experts to evaluate the progress achieved by the company in meeting investment commitments set under Bulgaria’s accession treaty. As recalled, the ministry of environment has recently raised the monthly sanctions for Kremikovtsi, which is located near the capital city Sofia, following recent estimates that it is a much bigger polluter than all other industrial enterprises in the region taken together. In May, the steel producer announced plans to invest EUR 163mn in 97 projects for ecological improvement in the region in the next six years.


Kremikovtzi mulls industrial zone

Kremikovtzi, Bulgaria's biggest steel producer, said it plans to develop company-owned lots in the vicinity of the main plant site into an industrial and commercial zone. The zone will offer lettable office space and infrastructure for production and commercial operations. The necessary investment could be provided by the companies wishing to operate in the zone.The project aims to optimise the management of the company assets and monetise real estate properties located outside the main plant site.Kremikovtzi plans to sign over for management all non-core assets to subsidiary companies which will operate independently and will be subcontracted by the parent companies as well as other clients.In related news, the steel maker, controlled by India's Global Steel Holding Limited, said it will build a cement mill that will reuse slag and other waste materials from the main production.

SkyEurope to connect Bulgaria to 11 European cities

Low-cost airline Sky Europe launches new direct flights from Bulgaria to 11 European capitals and major cities in October 2007, Sky Europe commercial director Karim Maklouf said on September 24 2007.The company would launch daily flights to Amsterdam, Brussels, Paris, Innsbruck and Warsaw. Flights three times per week would be launched to Thessaloniki, Venice and Nice. The company would fly four times a week to Krakow and Athens.Sky Europe would fly twice a week between Sofia and Vienna, starting October 2007, Focus news agency reported.Ticket prices were announced to start at 27 euro. The company would make business offers for its regular clients, which would allow last-moment change of reservation or of the name of the passenger. In August 2007, the company sold 91 per cent of seat on its flights. The company transported nearly 50 000 passengers to and from Bulgaria in 2006.Maklouf said that Bulgaria was a key market for the company.Currently, Sky Europe has 14 Boeing 737 – 700 NG planes which are maximally nine months old. The company plans to own 32 planes by 2011.

UK-based Miller Developments buys Bulgaria's Mall Varna for � 120 M


Miller Developments, part of UK-based Miller Group, has acquired an unfinished shopping mall in Bulgaria's third-biggest city of Varna for 120 million euro ($169.3 million), real estate consultant Forton International said on Monday.Forton closed the negotiations over the sale of Mall Varna [] The buyer is Miller Developments", Forton said in a statement.The seller is Bulgarian-based Interservice Uzunovi which is active in imports and distribution of audio and video equipment, electric tools and furniture, as well as in project management of shopping centres, residential complexes, holiday villages and hotels. Mall Varna has a gross built-up area of 70,000 square metres and lettable area of 32,000 square metres. The construction of the mall's building is to be finished in the spring of 2008. Forton, which is also the exclusive rent agent, has already found tenants for some 26,000 square metres of the lettable area.

Big UK currency speculator bets on Bulgarian property market

Joe Lewis, the Cockney currency speculator who this month snatched a stake in Bear Stearns, one of Wall Street's big five investment banks, is now taking a Ј70m bet on the Bulgarian property market.The billionaire, who conducts his operations from the Bahamas, has emerged as the mystery backer behind Windsorville Investments, a vehicle that last week tabled a takeover offer, of "not less than 64p a share", for AIM-listed Bulgarian Property Developments (BPD).The property company was founded in May 2004 and admitted to AIM in January 2005, raising Ј4.2m after expenses. It later raised Ј32.9m in January 2006 via a share placing at 55p a share and Ј21m through an institutional placing in June 2007 at 64p a share.The group focuses on commercial property development in five of Bulgaria's major cities. The country has become increasingly popular with property investors. Sofia remains one of Europe's cheapest office locations and is in line for further EU and private investment in infrastructure. Lewis has also been sounding out bankers during the past few weeks in London about opportunities in the leisure sector. The tycoon, who was born above a pub in Bow, east London, made his name when he teamed up with speculators including George Soros to bet on the pound crashing out of the European exchange-rate mechanism 15 years ago. Now he is best known for having taken investment interests in Tottenham Hotspur and Rangers football clubs. His total wealth is difficult to analyse but recent estimates put it at Ј2.8 billion.

� 10.9m for water supply, sewerage upgrade

A total of 27 companies have taken part a the tender procedure for municipal water supply and sewerage system rehabilitation and reconstruction, organised by the ministry of regional development and public works. A total of EUR 10.8 million will be allocated for the project. Some EUR 8.1 million of the figure will be secured under the EU's PHARE programme. The project is divided into 10 lots comprising the Simitli, Boboshevo, Razlog, Bansko, Gotse Delchev, Smolyan, Dospat, Sevlievo, Dryanovo, Godech, Varshets, Tsarevo, Veliko Tarnovo, Elena, Zheravna, Byala, Dolni Chiflik, Kavarna and Balchik municipalities. A total of 24 companies will participate in the tender procedure for the upgrade of the road infrastructure in regions with potential for tourism development. The total funding of the project also amounts to EUR 10.8 million. Some EUR 8.1 million of the figure will be secured under the PHARE programme. Road infrastructure upgrade will be carried out in the Samokov, Kostenets, Velingrad, Rila, Simitli, Bansko, Sandanski, Panagyurishte, Smolyan, Chepelare, Dospat, Devin, Teteven, Troyan, Stara Zagora, Dryanovo, Veliki Preslav, Kavarna and Balchik municipalities.
The final selection of the contractors for the two orders is expected to be made in October 2007. The main selection criterion will be the lowest price offered.

Toshiba targets 20% market share in SEE in Q4 2007

Japanese personal computers producer Toshiba plans to increase its market share in southeastern Europe to 20% and expand its network in the region in the final quarter of 2007, the company's Regional General Manager for South Eastern Europe and Israel, Sandor van der Ham, said.At the moment the company's market share in southeastern Europe is estimated at close to 18%. Across the region, Toshiba has distribution centres and service units in Bulgaria, Romania, Croatia, Serbia and Slovenia.In Bulgaria we are market leader [] but in countries like Croatia, Serbia, Slovenia and Romania we have a growing market share as well," van der Ham told SeeNews in a recent interview. Our target is to have in Q4 a 20% share in the whole region."Bulgaria takes a top position with an estimated current market share of 23%, which has been rising for four quarters in a row now. In the other countries in the region Toshiba's market share varies from 10% to 15%.[This target will be achieved] by introducing new products and making sure our distribution channel have been growing so there is much more offering of Toshiba products on the market," van der Ham said. In the past we had one distributor per country, now we have two or three, it means there's much more supply towards the market."Toshiba presented last week in Sofia a range of new note pads and customer oriented services for all countries in the region. They include pick up and return service and on site service for all products as well as a new commercial return policy.The Japanese electronics giant also plans to launch a branding campaign in the last quarter of the year.It is meant to make Toshiba more known among the people, especially in countries like Serbia, Croatia and Slovenia. We will have this campaign also in Romania and Bulgaria," van der Ham said.The company expects to open a distribution centre in Albania by the end of 2007.We are now in discussions to set up distributions in Albania. I think this will happen in Q4, so in Q4 we will have to have also a service provider there," van der Ham said. Toshiba offers maintenance and support services in all the countries it has distribution centres.Toshiba currently operates in Macedonia through its Serbian subsidiary.At the moment people get trained for Macedonia and then we'll start up the service. We are already working in Bosnia through some of the existing partners we have in Croatia or Slovenia but we do not have plans yet for a service [there]," Sandor van der Ham said. Toshiba's net income surged by an annual 75.8% to $1.2 billion (852.6 million euro) in the first quarter of the year. Its net sales revenue rose 12.2% in the same period to over $60 billion, while its assets increased to $50 billion, up 25.5% on the year.The Japanese company has been present in Europe for 30 years through its London-based subsidiary. In southeastern Europe, it competes with other international leaders like Fujitsu-Siemens, Dell, IBM and Acer.

Equest fund to merge Technomarket, Domo units

Investment fund Equest has notified the Bulgarian anti-trust authority of its plans to merge the business of its consumer and home appliances retail chains Technomarket and Domo.According to the notification, K&K Electronics, the manager of the Bulgaria-based Technomarket chain is seeking regulatory approval to take over Domo's business on its Romanian home market and in Bulgaria as well.In 2006, Equest bought a 51% stake in Lynx Property BV, which owns 100% of Technomarket, and was granted options to acquire indirectly the remaining share capital. It was announced a couple of months ago that Lynx Property had acquired Domo with an option to buy out the remaining shareholders by 2008.At the time, Equest managing partner Georgi Krumov was quoted as saying that the fund may merge the two retail businesses under either of the brands.Technomarket is estimated to have a 45% market share in Bulgaria. It operates 25 outlets domestically as well as stores in Albania, Bosnia, Serbia, Macedonia and Romania.Domo operates 110 outlets in Romania and over 10 in Bulgaria.

Enemona to build green power plant in Nikopol

Nearly EUR 30 million will invested by would-be public company Enemona in the construction of a thermal power plant (TPP) in the town of Nikopol. The new power capacity will run on biomass. The hazardous gases that will be emitted in the air will be a sixth of the emissions produced by analogical plants that use conventional fuels, the regional authorities in Pleven said.The TPP will be built as a public-private partnership and will have a capacity of 10 mW. It will supply electricity to the industrial enterprises in Nikopol and, later on, to the administrative buildings in the town.Enemona has also signed a contract with the municipality of Haskovo for the construction of sewerage facilities and a water-treatment plant servicing the villages of Teketo and Trakiets. The contract amounts to BGN 6.5 million.













(No) inflation worries in Bulgaria?

Author: UkrAgroConsult news on-line


Bulgaria’s statistical authority, the National Statistics Institute (NSI), sent shockwaves in mid-September with the news inflation in August rose by 3.1 per cent month-on-month and 12 per cent in the 12 months to the end of August. Year-to-date, inflation came in at 7.5 per cent, the NSI report said. The result has not only surpassed Government expectations for full-year inflation of 4.4 per cent, but also placed Bulgaria atop of the inflation chart in the European Union. Domestically, this figure translates to a seven-year high. The NSI report sees foodstuffs as the category witnessing the highest inflation. Prices of eggs rose the most, by 27.2 per cent, potatoes by 26.1 per cent, edible oil 20.8 per cent, wheat by 14 per cent and bread by 12.4 per cent on the month. While the Government sought immediate reasons in the succession of cold and dry weather spells, which cut agricultural harvests and, therefore, supply of main food items, some find the core of the problem in deterioration of macro-economic parameters. In a report issued shortly after the NSI data release, the Scandinavian Danske Bank expressed concern that price acceleration was a sign that the country’s economy might be overheating. The bank saw soaring domestic demand as troublesome and called on the Government to take urgent political measures. Domestic demand picked up early this year as Bulgaria joined the EU and a number of European giants got unobstructed access to the local market, the bank’s analysts said. on another note, the incomes of the population have picked up by 18 per cent since the start of the year, another reason for growing consumption. Laxer spending has found its confirmation in another NSI report, which saw households spending more than they earned in July. Household budgets ending in the red occurred for the first time in recent times this year. While per capita income in July was at 254.51 leva, spending was 322.35 leva, the NSI report said. During the same month a year ago, average income was 203.64 leva per capita while spending was 244.66 leva. Finance Minister Plamen Oresharski sought to stave off inflation worries. At a conference dubbed “10 years of international monetary fund and challenges to euro adoption” in the week starting September 17, he said that the phenomenon was more a one-time occasion and its significance should not be exaggerated. He argued that domestic demand was not a factor to trigger overall price growth, though fiscal parameters should be contained at levels that should keep local demand at bay. So did Economy and Energy Minister Petar Dimitrov, who ascribed acceleration in prices to seasonal issues, namely lavish tourist spending. Government officials said that price increases in other categories were within normal limits. Rentals, for example, were up by 1.5 per cent, repair and home maintenance by 0.8 per cent, water supply by 0.5 per cent, utilities by 0.6 per cent, solid fuel by 1.4 per cent. Prime Minister Sergei Stanishev linked high inflation with the country’s high economic growth. He said that Bulgaria came first in terms of industrial output growth in the EU. “Against the background of such high industrial production growth and soaring revenues, high inflation was not out of the ordinary,” Stanishev said. He hinted that speculative price setting in a month within the summer season could have also contributed to August inflation levels. Georgi Stoev, an analyst with analytical unit Industry Watch, urged not to seek reasons behind inflation in Bulgaria alone. He said that inflation worldwide could all but bypass Bulgaria’s open economy. The surge in prices of basic commodities worldwide, including crude oil, gas, chemicals, had their impact on local prices, Stoev said. He also ascribed the increase in agricultural prices to inflation of the basic currencies (euro, US dollar) rather than to momentous shocks in supply. Calculated in US dollars, foodstuffs prices rose by 30 per cent in the 12 months to August 2007. Alexander Bozhkov, director of the Centre for Economic Development, took the reverse stance saying Bulgaria has been “not only geographically isolated but also pricewise”. He believes that the country will see price depreciations. Whether August inflation data are a reason for concern or not will be known once inflation data for September and October are out.



Tumbling dollar and condition of US economy are not risk factors for Bulgarian economy

Author: BTA Daily News


The decision of the US Federal Reserve to cut rates by 50 base points and the subsequent tumbling of the US dollar against the euro and the slow-down of the US economic growth, will not affect the economy of Bulgaria, according to several financial analysts approached by BTA for comment Monday. The surprise cut of the base interest rate by 0.5 per cent (against an expected cut of 0.25 per cent) was done to encourage the financial sector and mitigate the adverse effects from the lending crisis, said Valentin Ivanov, a dealer at Benchmark Finances AD of Sofia. He commented that in the short term such decisions obviously support the stock markets in the US and Europe because the interest rate is the price of the borrowed capital and when this price is lower stock markets experience a boost. In the longer term, a recession in the US economy seems very much likely, he commented. He expects the interests rate to continue falling in the US and rising in Europe. The effect of this will not be felt strongly in Bulgaria because the major aspect of the present situation in the US and Europe is the lending crisis and the big volume of high-risk mortgages, which Bulgaria does not have, Ivanov said. The mortgage expansion came at a later stage in Bulgaria and the risk mortgages are not that much, which is why the Bulgarian market will most probably remain unaffected by the credit crisis. "It is obvious even now because the Bulgarian indexes continue to set new records while the situation on the US and European stock markets has worsened considerably," he said. According to Ivan Hristov of Neftochim Invest Finance of Bourgas, Bulgaria is primarily an importer of equipment - not an exporter, and has a foreign trade deficit, which is why the processes in the US should not affect the Bulgarian economy. Hristov does not expect a recession in the US. Tsvetoslav Tsachev of Elana Trading of Sofia believes the lower rates are not a sign of impending recession in the US economy but a measure to prevent one. The Federal Reserve is trying to prevent a thorough serious problem in the financial system of the US which might escape to the real sector and cause an economic crisis. At this stage the problems with mortgages, financing and construction affect a limited part of the US economy but there is a very tangible possibility for these to spill over to the rest of the economy and then to Europe, including Bulgaria, Tsachev commented. He expects the aggressive interest rate cuts to calm down the investment community and reduce the risk of recession in the US and Europe. "This is why I donТt think economic problems in the euro-zone and in Bulgaria are very much likely."





Bulgarian lev currency (BGN) to survive

Author: Tsvetelia Ilieva and Justyna Pawlak, nab.ch


The International Monetary Fund said on Friday it saw no reasons for Bulgaria to change or abandon its lev currency (BGN) peg to the euro but warned about possible financing problems due to the global credit crunch.Some analysts say Bulgaria's economic imbalances, including a vast current account deficit and hefty foreign borrowing in the private sector, could put pressure on the central bank to let go of its currency board regime.IMF's representative to Romania and Bulgaria, Juan Jose Fernandez-Ansola, said this was not necessary but warned the new European Union member needed careful economic policies to safeguard its ability to finance the external shortfall."I do not see any real economic reasons to change the peg. Neither we or the authorities see a problem of competitiveness arising directly from the peg," he told a news conference ahead of a regular IMF mission to Bulgaria due next month. Earlier this week, the Bulgarian central bank reiterated that it would not consider changing the 10-year-old peg, which ties the lev at 1.95583 to the euro. Fernandez-Ansola praised Bulgaria's prudent fiscal policy, but said global liquidity problems had worsened Sofia's financing risks."What has happened in the world and in Europe on the financial side makes the situation more complicated, because a country like Bulgaria with a large current account deficit has some vulnerability to developments abroad," he said."It could create complications for financing." Bulgaria runs an external shortfall of nearly 20 percent of gross domestic product (GDP) on an annual basis. Its currency board means that tight fiscal policies are the key tool it has to contain domestic consumption, the current account gap and inflation. "The government needs to show awareness of this and have policies to contain those vulnerabilities and keep creating confidence in the economy. Strong fiscal policy is still key," Fernandez-Ansola said.The Socialist-led government plans to end this year with a fiscal surplus of 2.5 pecrent of GDP to counter external risks. It will target a similar surplus for 2008.Fernandez-Ansola said the IMF expected Bulgaria's inflation at around 8 percent at the end of the year, as August's steep spike to 12 percent made its previous forecast of 4.4 percent unattainable.


Bulgaria ranks 46th in the world in terms of conditions for doing business

Author: Doing Business


Bulgaria is improving its business conditions, and the country is once again moving forward in the chart Doing Business 2008.Bulgaria was one of the ten countries, which introduced the most reforms in improving business conditions. This year Bulgaria moved six spots up in the chart to 46, leaving behind countries like Romania, Italy, Slovenia, and Czech Republic.This year, many countries from Eastern Europe, including former Soviet republics have surpassed those from Eastern Asia.Estonia ranks best among the countries in the region - 17th, Latvia is also in the top 25.Singapore is number 1 for the second year in a row, followed by New Zealand, USA and Hong Kong.The 98 countries whose conditions for doing business since have improved, according to the data, have introduces nearly 200 reforms between April 2006 and June 2007, while those whose conditions have worsened are 27.Most reforms in Bulgaria have been made in order to facilitate the procedures for obtaining various licenses.Doing business continues to be most difficult in Kongo. To start a business there, you need to undergo 13 procedures, which requires 155 days. Moreover, starting capital amounts to five times the average annual income per person.Things are even worse for women, who need to obtain their husband's permission. Unmarried women need an approval from a judge. That explains why just 18% of small business in the country is managed by females.Gender limitations also exist in some Arab countries, such as UAE and Yemen, where women are not allowed to work at night.










New Zealand






Puerto Rico


Hong Kong






South Korea


Great Britain














St. Lucia














































The Netherlands








Saudi Arabia