불가리아 주요 경제뉴스(28 SEPTEMBER – 5 OCTOBER 2007)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (28 SEPTEMBER – 5 OCTOBER 2007)

 

 

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

·        World Bank director arrives in Bulgaria

·        New IMF mission arrived in Bulgaria

·        Bulgaria state administration seeks BGN 10 bln in '08 budget allocations

·        Bulgaria's budget surplus for first 6 Monts of 2007 is 5,9% from GDP

·        Bulgaria's treasury to save BGN 1.4 Billion

·        New Price-Tsunami to hit Bulgaria

·        Program facilitates the absorption of �200 Billion

·        Record automobile sales at Plovdiv Autumn Fair

·        Plovdiv Fair revenue at BGN 17.4m

·        Europeans rush to become farmers in Bulgaria

·        Bulgaria & Cyprus to boost trade and energy cooperation

·        EC ready to overhaul draft in wine reform

·        Natural gas in Bulgaria jumps with 9.2%

·        Wages in sewing industry grow by 17%

·        Deadline extension for strategic investors eyeing Bulgarian nuke plant

·        Kuzloduy NPP's power output beats Jan-Sep target

·        200.000 Bulgarians are members of Millionaires Club

·        220.000 Bulgarians work legally in EU

·        Sofia cab drivers slap 25% price hike

·        Bulgaria boasts Europe's highest rate of property ownership

·        EBRD warns of slowing growth in Eastern Europe

·        Share of green energy in Bulgaria at 4%

·        Romanians no wealthier than Bulgarians

·        Bulgaria to introduce electronic system to calculate taxes online

 

 

 

 

INVESTMENTS:

 

·        EU allots �1.8 Billion for Ecology in Bulgaria

·        State to invest �500 M in water supply

·        BGN 104 M industrial park to be built near Elin Pelin

·        Greece's Terna to build �122.8 M Carrefour mall in Sofia

·        Austria's EVN earmarks BGN 118 M for investment in Bulgaria

·        Austria's Soravia Gruppe to invest �300 M in Bulgaria

·        Sweden's Atlas Copco to invest �1.5 M in Bulgarian plant

·        Sienit to build two malls in Plovdiv

·        Golf resort for �35 M to pop up near Bulgaria's Pravets

·        EBRD to invest �15 M in Bulgarian REIT

·        Bulgarian shipyard Bulyard to build 2 ships for USD 82,2 M

·        Bulgarian top brewery Zagorka will invest �15 M

·        �10 M fuel storage facility to be built in Sofia

·        Developers to invest in 3 new Sofia business parks in Sofia

·        French-Belgian JV to start building �20 M business centre

·        Holcim Bulgaria invests �22 M in expansion of clinker production

·        Winslow Gardens awarded a first class investor certificate

 

COMPANIES:

 

·        149 insurance companies and 179 intermediaries from EU willing to operate in Bulgaria

·        Companies apply for EU funding in two weeks

·        Sopharma increases stake in Sopharma logistics to more than 30%

·        Sopharma to set up a company in Poland

·        Erato seeks partner for biofuel business

·        Bulgartabac Holding marks 60-th anniversary

·        Belgian KBC buys 75% of Bulgarian Economic and Investment Bank

·        Chimimport, realty co's eye sale of region's biggest wholesale market

·        51 gold medals awarded at autumn fair 2007

·        Bulgaria ERP market on the up

·        Sofia hosts premier event for Microsoft developers on the Balkans

·        A Billion is not enough for Mittal to sell Kremokovtsi

·        Germany's E.ON eyes 49% in Belene NPP

·        IBM opens customer support centre in Bulgaria

·        Finnish building company to expand on Bulgarian market

ANALYSIS:

 

·        Bulgarian government to keep tight fiscal stance - PM Stanishev

·        Bulgaria hears Estonian lesson on flat tax

 

Articles:

 

 

MACROECONOMY:

World Bank director arrives in Bulgaria

World Bank executive director Herman Wiefels arrived for an official visit in Bulgaria on Tuesday, meeting with Finance Minister Plamen Oresharski.Wiefels was appointed executive director of the Dutch constituency in the World Bank in November last year.He is now on a tour of the 12 countries that make up the constituency together with the Netherlands, most of them eastern European states, including Bulgaria.Wiefels's talks with Oresharski focused on Bulgaria's social and economic development after it joined the European Union in January, particularly reforms in the pensions and education sectors, for whose development the World Bank has extended Bulgaria big loans.He is also scheduled to meet with Foreign Minister Ivaylo Kalfin later in the day.

New IMF mission arrived in Bulgaria

New mission of the International Monetary Funs (IMF) arrived in Bulgaria on October 4 2007.The mission would hold consultations with Bulgarian cabinet and ministry representatives between October 4 and 16 2007, a Finance Ministry press release said.The IMF mission will meet representatives of the local Cabinet and the Bulgarian National Bank to discuss the execution of the macroeconomic indices and the financial and economic policies in Bulgaria in 2007, Bulgarian news agency BTA reported.Finance Minister Plamen Oresharski and his team would meet the IMF mission on.The two teams would discus the main measures of the fiscal policy, aiming at stable macroeconomic environment and continuance of the structural reforms for stability of economic growth and generating maximum benefits for Bulgaria from its EU membership, BTA said.

Bulgaria state administration seeks BGN 10 bln in '08 budget allocations

The Bulgarian state administration has asked for its spending allocations to be doubled in 2008.The various ministries were required to submit by August 30 to the finance ministry their draft budgets for next year.The collated data shows that the state administration, the police and the army have requested an increase of 73% (4.5 bln levs) over their combined 2007 budget allocations. These totalled 6.2 bln levs or around 12% of the nation's GDP and 1/3 of the 2007 budget outlays.None of the departments was able to rationalise their spending targets, sources told Dnevnik. Apparently, it is standard practice to overestimate in order to get a budget that is at least marginally bigger than last year's.The administration's 2008 spending thresholds have been fixed with a government decision. The maximum for the justice ministry, for instance, was set at 200.806 mln levs which is exactly the budget figure request by the ministry. It would represent a 21 mln lev increase over its 2007 budget allocation.The budget bill for 2008 should be submitted to the MPs by October 31.The ruling coalition has so far failed to deliver on earlier promises to downsize the state administration.During its first two years in office, the government has axed 5,059 administrative jobs. The redundancies amounted to a reduction of just 3.2% versus a pledge for 10%.Bulgaria's state administration had 89,165 staff on payroll by the end of August 2007.

Bulgaria's budget surplus for first 6 Monts of 2007 is 5,9% from GDP

Bulgaria's budget surplus reached 5.3% of expected 2007 Gross Domestic Product (GDP) at the end of August.The reasons are mainly outperformance in tax collection and spending cuts, said from the Finance Ministry.The January - August surplus was 2.87 billion BGN (1,43 billion EUR), compared with 1.99 billion BGN (1 billion EUR) in the same period 2006.Bulgaria's Finance Minister Plamen Oresharski said that the government would cut planned spending with 7% and would probably end the year with a surplus between 2.3-2.5% of GDP.Total fiscal revenues in the period January - August was 15.2 billion BGN (7,6 billion EUR) and spending was 12 billion BGN (6 billion EUR).

Bulgaria's treasury to save BGN 1.4 Billion

"Bulgaria's state budget will continue saving money in 2008," said Bulgarian Financial Minister Plamen Oresharski at a meeting with the World Bank's Executive Director Hermann Wijffels."A budget surplus of at least 2.5% from Bulgaria's GDP has been planned," Mr. Oresharski said further.Thus, by next year, the treasury will have saved at least 1.45 billion levs (1euro=1.95levs). The budget surplus has been of an almost equal level over the past several years, so that Bulgaria's fiscal stability could be guaranteed and inflation rates halted. That is why the World Bank and the International Monetary Fund have been always against rapid increases in pensions, public sectors salaries.

New Price-Tsunami to hit Bulgaria

A new price-tsunami will sweep through the pocket of the Bulgarian. Starting in 2008, electricity and natural gas prices will increase by 10% in Bulgaria, the Chairman of the State Energy Regulatory Commission (SERC) Mr. Konstantin Shushulov stated before the MPs from the Energy Commission with Bulgaria's Parliament."The blue fuel, which raised its price in October by 9.21%, is to become more expensive by another 10% in January, 2008," Mr. Shushulov said further."The reason for the increase is the growing prices of the alternative fuels on the Mediterranean markets," he pointed out. "Between 7 and 10% will be the hike in electricity price next year. However, it will be introduced no sooner than July because the regulatory period is one year," said Valentin Mirchev, Deputy Chairman with the (SERC). Expensive fuels are again the cause for the electricity price-hike. Shushulov also pointed out that last year's price of imported coal had went up by 20%, and this was exactly the type of coal used in most thermal power plants in Bulgaria.

Program facilitates the absorption of �200 Billion

A memorandum of co-operation was signed on October 1 between major banks, branch organisations and State Administration Ministry under the European Union Grant Advisor (EUGA) programme.EUGA is an initiative from Microsoft.The program helps medium and small enterprises in Bulgaria by providing more information about access to European funds and with technical as well as other forms of support in applying for funding, investor.bg reported.The memorandum was signed by State Administration Ministry, BTC, Bulgarian Chamber of Commerce and Industry (BCCI), State Agency for Information Technology and Communication, Confederation of Employers and Industrialists, Raifaizenbank, DSK Bank, Unioncredit Bulbank, Foundation for Reform of Local Self-governance and a representative of Microsoft Bulgaria.The programme started in 2003 and includes 17 countries. BCCI representative Bozhidar Bozhinov said that between 2007 and 2013, European Union funds would distribute 200 billion euro for funding of innovation and IT technology projects, for education and for new businesses.State Administration Minister Nikoloi Vasilev said Bulgaria had been slow in introducing electronic government, but was quickly catching up. According to him, Bulgaria made great advancement in the introduction of computers in education, the introduction of broadband internet and the use of mobile communication.

Record automobile sales at Plovdiv Autumn Fair

Nearly 1,000 automobiles worth a total of 35 mln leva (17.895 mln euros) were sold at Plovdiv Autumn Fair, a press release said today.Almost all major automakers were represented at the six-day event in Plovdiv.Automobile Hall Plovdiv is held for the sixth consecutive time within International Technical Fair Plovdiv.A lot of visitors decided to take advantage of the special offers traditionally available at the exhibition. Most special offers included additional equipment at no cost together with a purchase.Traditionally, the last day of the International Fair was the day of the lottery organized by Automobile Hall Plovdiv. All visitors who filled in a survey card participated in a lottery, the big prize was a choice between a the new Citroen С2, the FIAT Grande Punto, Mazda2, Peugeot 206 sedane, or the new Skoda Fabia.The big winner was Veselin Tiholov from Burgas, who chose a Mazda2.A total of 33,726 new vehicles were sold in Bulgaria in the first eight months of the year, which is 25.29% more than a year ago.The number of new cars sales stood at 31,920, and of motorbikes at 409 (versus 250 last year). Sales of new buses and trucks rose from 1,134 last August to 1,806 this August.Toyota is the leader on the car market. The brand sold a total of 3,725 vehicles in Bulgaria over the period, equal to a market share of 11.67%, while Ford and Peugeot sold 3,110 and 2,726, respectively. Opel and Volvo also make it into the top 5 with 2,552 and 2,470 unis, respectively.

Plovdiv Fair revenue at BGN 17.4m

The 63rd edition of the International Fair of Plovdiv generated a record-high BGN 17.4 million revenue, preliminary data show. The figure represents a 46-percent year on year increase.The strong results may be put down to the higher fees for participants, as well as to the bigger number of exhibitors, which rose by 3% compared to 2006.The fair attracted more than 139,000 visitors. Foreign businessmen accounted for 10% of the figure.The Plovdiv Fair manages to retain over 80% of its participants each year owing to the useful business contacts and services. A total of 3,661 companies from 49 countries took part in the 63rd edition of the fair. The number of Bulgarian and foreign companies stood at 1,336 and 2,325, respectively. The overall exhibition area grew by 9% to 125,322 sq. m compared to 2006. The exhibition area will be expanded by additional 15,000 sq. m in 2008.

Europeans rush to become farmers in Bulgaria

"There is no hindrance now for the EU grants to reach Bulgarian farmers. The European Commission has approved Bulgaria's agricultural payments agency, which is to distribute farming subsidies," said Bulgarian Minister of Agriculture and Forestry Nihat Kabil in Borovets. Big investors from England and Germany will rush to Bulgaria to put their money in local production of organic fruit, vegetables, milk and meat. This is what Bulgarian Minister of Agriculture and Forestry Nihat Kabil said at a seminar in the Borovets resort. The intent of the European investors is to grow and process bio-products in Bulgaria and then sell them on the EU market.The Bulgarian farmers may absorb a considerable amount of funds provided under EU's operative Rural Development Program for agroecological production. For example, if you are an apiarist and would like to develop your own bee farm, it is enough to have 20 bee families and be a registered honey producer. EU will give you 15 Euros per hive. If you are breeding stock of an endangered breed, you also get subsidized. 357 Euros per ha will be the subsidy Bulgarian organic potato- and mushroom-growers will be able to get, but they will be obligated to work without reducing the initially agreed size of arable land for 5 years, otherwise the money will have to be returned.

Bulgaria & Cyprus to boost trade and energy cooperation

Cypriot Minister of Commerce, Industry and Tourism Antonis Michaelides will be flying to Bulgaria on October 7 for a three-day official visit, at the invitation of the Minister of Economy and Energy of the country Petar Dimitrov.During his stay in Bulgaria, Michaelides will meet with Deputy Prime Minister and Minister of Foreign Affairs Ivailo Kalfin.Michaelides and Dimitrov will discuss ways to cooperate in the sectors of trade, energy and tourism, with an aim to develop further bilateral relations.In the framework of the visit, the Cyprus Chamber of Commerce (KEVE) will be organising a seminar in cooperation with the Bulgarian Chamber, to promote Cyprus as a business centre for the provision of services. Michaelides will be addressing the seminar.The Minister will be returning to Cyprus on October 10.He will be accompanied on his trip by Ministry officials, a representative of the Cyprus Tourism Organisation, KEVE officials and a 15-member business delegation.

EC ready to overhaul draft in wine reform

The European Commission has said it could agree to a compromise on its controversial wine reform package, amid persistent opposition to its original plan by a group of countries, led by France and Germany."To be frank, there was no unanimity on this issue," EU agriculture commissioner Marian Fischer Boel admitted when speaking to journalists after the ministerial session.She suggested the EU executive would be open to a compromise on some of the most contentious points raised by some national capitals while stressing that she expects them to "show the same openness.one of the widely debated articles is the one that allows full liberalization of the rights to plant vines to encourage the industrialization of the sector and adapt it to the market demands.

Natural gas in Bulgaria jumps with 9.2%

Natural gas's price jumps with 9,2%, decided today, October 1 on a close doors session of State Energy and Water Regulatory Commission.1,000 cubic meters gas will coat almost 349 BGN (175 EUR), without GST.This is the front price on which Bulgargaz can sell in the next three months. The gas associations can sell natural gas on lower than the affirmative prices.Minister of Economy and Energetic Peter Dimitrov said that the state is considering to refuse the dividend, that gets from Bulgargaz , so the company may sell on lower prices.

 

Wages in sewing industry grow by 17%

Wages in the clothing industry of Bulgaria have increased by 17%, according to the head of the Bulgarian Association of Apparel and Textile Producers and Exporters, Veleria Zhekova.  Productivity has increased by 20% despite a labour force ebb. Having gained ground on the European market, the Bulgarian garment manufacturing companies will try their luck in Russia where the annual turnover of the industry is 24 billion euro. The Bulgarian producers are gradually giving up outsourcing and prefer working for world known companies and establish their own trends.A hundred and thirty companies will show their new collections at the Balkan textile exhibition BGate to take place in Inter Expo Centre in Sofia October 4-6.

Deadline extension for strategic investors eyeing Bulgarian nuke plant

Bulgarian national power grid operator NEK said it has extended by two weeks to October 15 the deadline for the hand-over of indicative offers from strategic investors interested in the stake in the company that will operate the future 2,000MW nuclear power plant (NPP) at the local Danube town of Belene.The request for the deadline extension was made by some of the candidates on account of the substantial volume of information they are required to submit.In July this year, the NEK board shortlisted Italy's Enel, CEZ of the Czech Republic, Germany's RWE and E.ON, France's EDF and Belgium's Electrabel to advance to the next stage in the procedure to select an investor for an up to 49% stake in the Belene project.The six companies have completed their financial and business analysis of the project. NEK has also drafted a second list of candidate investors eyeing a stake of no more than 25% in the power station operator. The second group of candidate investors is made of Switzerland's Aare-Tessin AG fuer Elektrizitaet and Elektrizitaets-Gesellschaft Laufenburg AG, Spain's Endesa and local company Cumerio Med.The construction of the Belene NPP, estimated at around 4 bln euro, has been commissioned to Russia's AtomStroyExport.The final agreement for implementation of the project is expected to be signed before the end of 2007.

Kuzloduy NPP's power output beats Jan-Sep target

Bulgaria's Kozloduy nuclear power plant (NPP) generated 10,885,684,900 kWh of electricity for the first nine months of 2007. The figure exceeds by 8%, or 805,522,900 kWh, the initially planned output for the period, the company said. NPP's unit six is currently undergoing planned annual repairs, while unit five operates at full-capacity. The Kozloduy NPP beat by 4.25% the production target for the first six months of the year as well.

200.000 Bulgarians are members of Millionaires Club

At least 200,000 Bulgarians live in luxury. They run a business of their own, spend their vacations in their summer houses at the French Riviera and drive posh designer cars, according to a Market Link poll, presented at the Lux only fair in Sofia.It shows that some 3.5% of the Bulgarians consider themselves to be very rich, but only 10,000 of them have more than 1 million levs (1 euro=1.95 levs) invested in some kind of business, real estates or in bank accounts. To all the others, luxury is a lifestyle, the organizers explained.A Weissman limo worth 200,000 Euro and a Maserati for 500,000 Euro stirred admiration of all the visitors at the Sheraton.The rich Bulgarians can buy anything they want at this fair - from planes and yachts to bijoux worth hundreds of thousands euro. only several hours after the opening of the vanity fair a businessman bought a Chopard watch at the cost of 98.000 euro.

220.000 Bulgarians work legally in EU

More than 220,000 Bulgarians are working legally in the EU. From all countries that entered in the Union in 2004, 1 million people are working now out from their motherlands.Bulgarians are almost 4% of all Europeans that work out their countries, in the frames of the Union.Bulgarians and Romanians are a total of 1 million people, just that much like the employees from the 10 countries that joined the EU in 2004.Meanwhile on the EU territory, there are 4 million free working positions.Bulgarians, who work abroad, in the EU, are young, with families, without children, with secondary education and unqualified enough.The Bulgarians together with their North neighbors are the most ready to do low qualified work.

Sofia cab drivers slap 25% price hike

All major cab companies in capital Sofia have announced a 25% price hike for taxi services, starting from October 1. Daytime prices are set at BGN 0,59, nighttime prices at BGN 0,70 and BGN 0,60 is the charge for calling a cab.The price charged on every minute of standing still in also increased by 25%.Ten days ago the industry trade unions asked for a drastic price hike for taxi services in Sofia, ranging between 140% and 170%.
Until yesterday taxi service prices in Sofia ranged around BGN 0,5 during daytime, BGN 0,55 at night, BGN 0,12-0,15 for standing still and BGN 0,5 to call a cab.

Bulgaria boasts Europe's highest rate of property ownership

Bulgaria has one of the world's highest rates of property ownership and tops the chart in Europe, a study shows. A total of 94% of Bulgarians owned property in 2006, marking an increase of 3% over the previous year, according to the study of international real estate broker network ERA that compared data from seventeen European countries.Another 60% of Bulgarians own more than one property. Cyprus and Spain follow Bulgaria in ERA ranking with 85% and 84% of property ownership respectively. At the bottom of the table comes Switzerland with 37.2%. Europe's average rate of property ownership stands at 68.9%.Teodora Dimitrova, head of the Bulgarian branch of ERA, commented that the high rate of property ownership is a powerful engine for the market, because it boosts the potential for selling and buying real estate.Residential property prices in Sofia remain the lowest among European capital, standing on average at EUR 78 000, ERA says.Buyers deep deepest in their pockets when acquiring a property in Luxembourg - EUR 485 000 on average.

EBRD warns of slowing growth in Eastern Europe

The European Bank for Reconstruction and Development (EBRD) expects the global financial market turmoil to slow down economic growth and cause financing problems for Eastern Europe's more vulnerable economies, the Financial Times reported on Monday.EBRD's chief economist Erik Berglof wrote in a note to the bank's staff that five countries with high current account deficits, Bulgaria among them, have "come under pressure at some point". The other four are Latvia, Hungary, Romania and Serbia."Some cooling off may be a good thing for these countries. Their economies, particularly in sectors like real estate and construction, have been growing too fast, reaching sometimes unsustainable levels," Berglof said.Berglof's note echoes a World Bank report published last week, which describes the ten new EU member states as being in a good position, but still cautions that the countries with high current account deficits could see external financing flows dry out.The three Baltic States and Bulgaria are seen as the most vulnerable countries, although for now no evidence of that just yet.Analysts forecast that Bulgaria's current account deficit will exceed 20% of GDP, largely due to the growing trade gap.Imports to the country continue soaring to keep pace with growing household consumption, which in turn is fuelled by a credit boom that saw banks increase their loans portfolio by more than 50% in the 12 months ended in September.

Share of green energy in Bulgaria at 4%

The price of wind power may drop to 0.1-0.2 euro cents after the 12-year term in which it will be purchased preferentially expires in 2020, according to Velizar Kiryakov, chairman of the Association of Producers of Ecological Energy. The National Electric Company (NEK) is obliged to purchase the expensive environmental energy after the liberalisation of the market after July 2007.Green energy accounts for a mere 4% of the consumption in Bulgaria at present and cannot affect significantly the electricity price, according to Kostadinka Todorova of the economy and energy ministry.

Romanians no wealthier than Bulgarians

Romanians are no wealthier than Bulgarians, according to Georgi Angelov, senior economist at Open Society Institute. Comparisons showing that salaries and pensions in Romania are higher compared to Bulgaria are nominal and do not take into consideration the purchasing power.The overall price level in Romania is 32% higher compared to Bulgaria. This means that Romanians must have 32% higher salaries in order to have the same purchasing power as Bulgarians, according to Angelov.Only four out of 35 goods sold in both countries are cheaper in Romania. The remaining 31 goods are more expensive. Yoghurt is 31-percent more expensive in Romania. Soft drink prices are 132% higher, while tooth paste and butter are 67% and 46% more expensive in Romania, Regal magazine data show.

Bulgaria to introduce electronic system to calculate taxes online

A modernized system for payment of taxes and insurances online would be available by mid 2008, announced Maria Mourgina, executive director of National Revenue Agency (NRA).Mourgina made the announcement at a meeting of the Consulting council at NRA on October 3, investor.bg reported.The system would be connected with the so-called Citizens Tax and Insurance Bill and would show the exact amount owed through an internet page of the agency. New services to be introduced would also include payments of taxes and insurances with debit and credit cards via a simple online procedure, Mourgina said.Other topics of the meeting were the new tax declaration documents, which would consist of a main part and additional parts. The additional parts would only be filled in for specific types of income and only when applicable.
This way NRA expects to have simplified the procedure for tax declarations, with an expected reduction on the printing of declarations to result in additional savings on the state budget.

INVESTMENTS:

EU allots �1.8 Billion for Ecology in Bulgaria

Bulgaria will receive 1.8 billion euro from the European Union to be invested in environmental protection. By the end of October Brussels is expected to adopt the programme of the Bulgarian Government, emerged at the Investing in Environment Protection Fourth International Forum yesterday. Bulgaria's Ministry of Environment and Waters reported that from 25 to 35 million levs (1 euro = 1.95 levs) a year will e allotted for rehabilitation of water networks. By 2015 nine new dams will be constructed. By the end of October four new water treatment plants will start operating in the Rhodopes Mountains, southeastern Bulgaria.

 

State to invest �500 M in water supply

 

The government will invest at least EUR 500 in the development and modernisation of the water supply sector until 2015, Dimcho Mihalevski, deputy minister of regional development and public works said. The country stands a good chance of absorbing EUR 2 billion foreign funding for the water supply sector, according to Mihalevski. The parliament is yet to ratify the credit agreement with the World Bank for the development of the municipal infrastructure. A total of EUR 109 million will be invested mainly in the water supply sector until 2010 under the agreement. Some EUR 48.5 million will be allocated for the construction of four dams. The remaining sum will be spent on the modernisation of four water supply and sewerage utilities. The biggest investment of EUR 16 million will be made in the completion of the Luda Yana dam and the Panagyurishte water-power system.A draft law on the water supply and sewerage will be submitted to the government within the next two weeks, Mihalevski said. The new law will stipulate the rules for private investments in the water supply and sewerage sector. The law envisages that water supply and sewerage systems should remain public property and that public-private partnerships should be formed.

BGN 104 M industrial park to be built near Elin Pelin

Park Industry-Sofia Iztok will build an industrial park between Elin Pelin and the village of Novi Han near Sofia. The project, which is estimated at BGN 104 million, is scheduled for completion in three years. The park will be built on a 55-ha plot and will create a total of 2,000 jobs. Some 400 workers will take park in the construction works on the project. The complex will comprise light industry production facilities, as well as warehouse and logistic buildings.

 

Greece's Terna to build �122.8 M Carrefour mall in Sofia

Greek construction company Terna has been chosen to build a shopping and office mall in Sofia, worth 122.8 mln euro which it expects will be completed by the end of 2009, the firm said in a filing with the Athens exchange quoted by news agency AFX, Dnevnik reported.The project called 'Hermes Park Sofia' will be constructed on a plot of about 54,000 sq m belonging to the Bulgaria unit of French retailer Carrefour and will consist of a multifunctional shopping and entertainment center with an office complex, said Terna. According to Terna there will be three levels of underground car parking spaces and open air parking spaces for visitors.

Austria's EVN earmarks BGN 118 M for investment in Bulgaria

 

Austrian power utility EVN, which owns a majority stake in two Bulgarian regional power distribution firms, said on Tuesday its investment in Bulgaria would reach BGN 118 M this year.Some 68% of those funds were earmarked for power grid upgrades to raise efficiency, EVN Bulgaria managing board chairman Stefan Szyszkowitz said after meeting with Bulgarian economy and energy minister Petar Dimitrov.Dimitrov met with EVN officials to receive the annual report of the company, in which the Bulgarian state retains a 25% stake.EVN's investment in the two power utilities in southern Bulgaria is its largest outside its domestic Austrian market. It agreed to pay EUR 271 M for the two firms in 2004.It expects losses caused by dilapidated infrastructure to decline to 14,5% this year, from 16,9% when it took over the company.

 

Austria's Soravia Gruppe to invest �300 M in Bulgaria

Austrian Soravia Gruppe plans to invest some 300 mln euro in Bulgaria's property, outdoor advertising, soft drinks and fruit juice industries over the next three years, Martin Ohneberg, chief operating officer investments at Soravia, told news agency SeeNews. At the moment, the Austrian company is looking to buy land plots suitable for the development of logistics and office schemes. Local unit Soravia Real Estate has so far delivered three office buildings in Sofia: International Business Center, Soravia Center (sold to investment company Landmark in 2005) and Europark.The company is also on the lookout for real estate opportunities in Serbia and Romania. Potential acquisition targets for Soravia are also beverage, fruit juice and mineral water bottling companies in South-eastern Europe. Talks are already underway with several such companies. The potential deals could be closed within a year.

Sweden's Atlas Copco to invest �1.5 M in Bulgarian plant

Atlas Copco, the Swedish maker of compressors, generators, construction and mining equipment, said it will invest 1.5 mln euro to increase capacity at its hydraulic breakers plant in Ruse, on the Danube.The parent company will also double the area of the Atlas Copco Lifton plant site in Ruse to 4,000 sq m.The Ruse plant, acquired by Atlas Copco in 2005, produces a range of hydraulic breakers for machine-mounting, hand-held hydraulic breakers, hydraulic power-packs, hydraulic water pumps, augers and other accessories.The Swedish company plans to open a representative office in Sofia in November. It will represent Atlas Copco’s construction, mining and compressor equipment businesses. The company already has an office in Burgas, on the Black Sea.The investment spending is in response to the solid growth in local sales of construction, mining and compressor equipment estimated at 30% annually.

Sienit to build two malls in Plovdiv

Plovdiv-based construction company Sienit has been selected to build the Mall Plovdiv and Galeria Plovdiv shopping malls in the city. Construction works on Mall Plovdiv have already started. More than EUR 45 million will be invested in the project. The commercial and entertainment complex is expected to be completed in the end of 2008. GE Real Estate and Quinlan Private recently acquired 50% in the project from initial investors Cinema City International and Ocif Group.Galeria Plovdiv, which will also be built by Sienit, will cost some EUR 60 million. The mall will be built on a 3-ha plot in Plovdiv's Trakia district and is expected to open doors in the spring of 2009. The commercial centre will offer 45,000 sq. m of commercial space for rent.

Golf resort for �35 M to pop up near Bulgaria's Pravets

Former mayor of Pravets (Western Bulgaria, 60 km North from Sofia) and chief of ‘Tera tour Service' investment company Vasil Zlatev, will invest 71 million BGN (35 million EUR) in golf and hotel complex on the place of motel-residency of former Bulgarian communist leader Todor Jivkov. First step of project foresees constructions of golf and hotel complex over an area of more than 1,000 decares.The club will posses with golf playground with 18 holes and training ground for beginners.The hotel extension will have more than 200 rooms and 15 luxury apartments. The project also plans to be constructed 78 houses and 6 apartment blocks that will be emitted foe sale.The company-investor declared that the project will be finished till 2010.

 

EBRD to invest �15 M in Bulgarian REIT

The EBRD has announced it plans to make an equity investment in a Bulgarian real estate investment trust. The bank said the project is pending final review.The REIT will be established for the purpose of developing, acquiring, renovating, reconstructing, owning and managing real estate with a focus on industrial property, EBRD said in a press release.The REIT is expected to develop geographically quite diversified portfolio of various types of projects, mainly outside the capital of Sofia.Other investors in the REIT will include Sienit Holding Ltd, a Bulgarian construction and property development company, and possibly another major financial investor.The talks (with potential partners) are still ongoing, Sienit Holding project co-ordinator Vania Yordanova told news agency SeeNews, going only as far as to reveal that it's a Bulgarian corporation partly owned by foreign investors.She added that the REIT will embark on a series of capital hikes until it reaches a target of around 60 mln euro.

Bulgarian shipyard Bulyard to build 2 ships for USD 82,2 M

Bulgarian shipyard Bulyard Shipbuilding Industry will build two ships for Turkish firm Diler Shipping and Trading Inc, after inking two deals worth a total USD 82,2 M.The two identical cargo ships will have a capacity of 55,500 dead weight tonnes each, according to a statement by Industrial Holding Bulgaria (IHB) to the Bulgarian Stock Exchange, where it is listed.IHB owns 61,5% in Bulyard AD, the parent company of Bulyard Shipbuilding Industry.The first ship has to be delivered by December 2009 and the second one by September 2010.

Bulgarian top brewery Zagorka will invest �15 M

Bulgarian brewery Zagorka AD will invest 15 million EUR for extension the capacity of the brewery situated in Stara Zagora, stated company's general manager Jan Derck van Karnebeek. New warehouse will also be added to the plant site.The investment project for 2009 foresees funds for an increase in the bottling capacity and for the introduction of a new filtration line.The market share of the company is estimated at over 30%, which is an increase compared to the same period last year.The growth in the sales is round 15,5%.Zagorka's profits for the first 6 months of 2007 goes to 3,9 million EUR, without interests and taxes included.For 13 years on the market, in the local brewery were invested more than 90 million EUR.

 

�10 M fuel storage facility to be built in Sofia

 

Rompetrol will build a storage facility for petrochemicals in Sofia, the chief executive officer of Rompetrol Bulgaria, Adrian Acatrinei, told the Romanian press. The investment will amount to EUR 10 million. The facility will have a storage capacity of 14,400 cu. m, which will help cover the increased demand for liquid fuels in the region of Sofia. The consumption of liquid fuels in Sofia makes up 50% of the total consumption in Bulgaria, Acatrinei said.Rompetrol manages 50 petrol stations in Bulgaria and has a fuel storage facility in Rousse, with a capacity of 5,800 cu. m. The company's plans include investments in another 85 filling stations in Bulgaria by this year's end.

 

Developers to invest in 3 new Sofia business parks in Sofia

 

Three new clusters of multi-tenant office properties will take shape in Sofia, said Dian Diakov, office space manager at real estate consultancy Regent Property Advisors, Dnevnik reported. Business Park Sofia (BPS), in the capital city’s Mladost neighborhood, will soon be joined by similar developments sited on the Nikola Vaptsarov boulevard, in the vicinity of the Sofia International Airport and in the Lyulin district. According to Diakov, there is an undersupply of office properties for sale. The shortage has driven rent rates to 30 euro/sq m per month, a target that seemed unattainable just six months ago. Diakov said the cheapest office rentals at the moment are listed at 10 euro/sq m. Some 900,000 sq m of new office space inventory should be placed on the market in Sofia by mid-2009, adding to the 350,000 sq m already in active use.

French-Belgian JV to start building �20 M business centre

 

French-Belgian joint venture Ilpa Development will start building a 20 million euro ($28.3 million) business centre in the capital of European Union newcomer Bulgaria by the end of the year, the consultant to the project said on Tuesday.Work on the Ellipse Centre is due to begin by the end of the year and be completed at the end of 2009, Diyan Dyakov, office agency manager with the project's consultant, local firm Regent's Property Advisors, told a news conference.The high-class office centre will be built in the eastern part of Sofia on a key road linking the capital with the southeast of Bulgaria. It will have a total built-up area of 19,000 square metres."We are considering the sale of the project at this phase as a project," Dyakov said but declined to elaborate.Bulgaria-registered Ilpa Development was set up earlier this year. The company is an 80:20 joint venture between French private individual Claude Tabet and Belgian general contractor ILPA, according to data from the Bulgarian business registry Apis.Regent's Property Advisors, part of Bulgarian real estate holding group Adress Group (AG) Capital, provides consultancy services to real estate projects in the office, business, residential and industrial market segments. AG Capital (www.agcapital.bg ) has companies providing real estate brokerage and advisory services, financial services related to real estate and asset management and development.

 

Holcim Bulgaria invests � 22 M in expansion of clinker production

 

The local arm of the Swiss Holcim Group plans to invest a total of EUR 22mn in the expansion of the capacity of clinker production to 3,300 tonnes per day from 2,500 tonnes at present, the CEO of Holcim Bulgaria Todor Kostov said in an interview for Dnevnik Daily. Half of the financing has been already allocated and the project should be completed by the end of November next year. The clinker furnace complex of Holcim, located in the village of Beli Iskar in the north-western part of the country, was renovated last year. Kostov informed also that Holcim plans to expand its cement producing capacities by next spring. Holcim holds 32% of the local market and controls the sand making plants Holcim Karierni Materiali and Karieri, the concrete mixtures producer Komars, the cement plant Plevenski Cement and Ekorek Bulgaria . It acquired also the local reinforced concrete producer ZSK Kremikovtzi in June.

 

Winslow Gardens awarded a first class investor certificate

 

The Minister of Economy and Energy Petar Dimitrov will award a First Class Investor Certificate on behalf of the Bulgarian Investment Agency to Ivan Mekushin, executive director of Limex City. The ceremony will take place Friday, October 5, at 10.00h at the Ministry Of Energetics ( #8 Triadica Str). Limez City receives the prestigious award for the development of its project in eastern Manastirski Livadi area in Sofia - Winslow Gardens. Winslow Developments outlined the project plan at the end of May. Winslow Gardens will be a modern polyfunctional complex comprising five zones and situated at the foot of Vitosha Mountain near Sofia. The complex will comprise residential buildings, offices, commercial areas, a SPA center, restaurants, service areas and others. It will be built on a total area of 42 decares, the total built-up area will be 103,000 sqm, and it will take 20,000 sqm underground space. The total value of the investment stands at 200 mln euros (102.255 mln euros). So far the project has consumed 24 mln leva, and the remaining 180 mln leva will be invested in the following 3 years. The figure includes 80 mln leva for residential construction and 100 mln leva for non-residential costs. The project is to be completed within 3 years, and the first zone is scheduled to enter exploitation by the end of 2009. A total of 17.7 mln leva (9.049 mln euros) will be paid as taxes. When completed, the complex will employ 200 people. An additional 230 job places will be available in its commercial zones, and 2,500 in the office areas. This means that in the long term perspective Winslow Gardens will create some 3,000 jobs. The number of people employed in its construction will reach 300 at peak periods. Limex City is a subsidiary to Prima Investments, a joint venture between Winslow Developments (controlling 12%) and RREEF, a unit of Deutsche Bank (controlling 88%). Its main activity is the development of the Winslow Gardens project.

 

 

 

 

 

 

 

 

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149 insurance companies and 179 intermediaries from EU willing to operate in Bulgaria

 

149 insurance companies and 179 insurance intermediaries from EU are willing to enter the Bulgarian market.Of these 16 are Irish, 10 German, 11 Austrian, 48 British, 11 French and others.The Financial Supervision Commission received 10 notices from EU insurance companies between August 15 – September 30, expressing their intentions to enter the Bulgarian market, and providing information on the types of insurance they intend to offer here.Notices from insurance brokers received within the same period are 21. The Commission also received 3 notices of suspended licenses of insurance brokers by respective regulatory bodies.

 

Companies apply for EU funding in two weeks

 

Within two weeks, companies will be able to apply for financing under the EU operative programme for development of the competitiveness of the Bulgarian economy in 2007-13. All grant schemes will be ready by then, minister of economy and energy Petar Dimitrov said.Grant schemes will be provided for innovative enterprises, upgrade of equipment and machines, and implementation of international standards. Their total amount stands at EUR 40 million.Competitiveness is the first of seven operative programmes that were approved by Brussels. It amounts to EUR 1.162 million, including EUR 988 million from the European regional development fund, the remainder is national co-financing. By 2013 Bulgaria stands to receive more than EUR 7 billion from the EU.

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Sopharma increases stake in Sopharma logistics to more than 30%

Sopharma has acquired 0.0869% of the capital of Sopharma Logitics AD, the pharmaceutical company's stake thus grew to 30.075% according to Central Depository's monthly bulletin. Sopharma is also the largest shareholder in Momina Krepost AD, in which it controls 35.477%.Sopharma recently acquired 2.33% of Lavena AD (via related parties), increasing its interest in it to 5.18%.The executive director Ognyan Donev defined the acquisition as a portfolio type one, he pointed out that he knows personally and trusts Lavena's management.It became clear last week that Sopharma has signed a contract with the Polish Natur Product Zdrovit for the establishment of a joint stock company.This week the company announced its decision to list stock on the Warsaw Stock Exchange. If this happens Sopharma will be the first Bulgarian company to be listed on both BSE and another regulated market.

Sopharma to set up a company in Poland

On 27 September 2007 Sofia-based Sopharma AD and the Polish Natur Product Zdrovit signed a contract for the establishment of a company, BSE reports. Sopharma will control 50.01% of the new enterprise. The Polish company operate in the field of production and marketing of medicines. In 2006 its sales amounted to 101.8 Polish zloty, 38.18 mln dollars.Soparma corrently pridices 210 products and exports to 28 foreign countries.
Last week the company received a First Class Investor certificate. The company is planning to build a new modern tablet plant. 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. 3,310 shares have changed hands so far today on BSE at prices between 7.84 leva and 7.94 leva.share.

Erato seeks partner for biofuel business

Erato, the Bulgarian manufacturer of heating devices and systems, is exploring the opportunities to team up with a financial institution or an investment fund that will help bankroll projects for biomass-based fuel production, reports news agency SeeNews.The AmCham member Erato Holding, which has 13 subsidiary companies, operates fuel pellet lines in Haskovo and Stara Zagora and plans to add a further 3 production lines over then ext 3 years. The holding posted a 25% increase in sales to 33 mln levs in '06.

Bulgartabac Holding marks 60-th anniversary

Bulgartabac holding celebrates its 60th anniversary, a reporter of Focus News Agency informed. The party, held at the Boyana residence in Sofia, was attended by the Minister of Economy and Energy Petar Dimitrov, the former Minister of Economy and Energy Rumen Ovcharov, current and former cadres of the tobacco holding , MPs, Deputy Ministers, partners of the company from the country and abroad.

Belgian KBC buys 75% of Bulgarian Economic and Investment Bank

Belgian bank KBC Group NV has acquired 75% of the capital of Economic and Investment Bank, one of Bulgaria's top 10 banks, the nation's stock exchange was quoted as saying Friday by news agency Associated Press. KBC paid 295 mln euro for the stake, the Bulgarian Stock Exchange said.Under the deal, the Bulgarian bank's CEO, Tsvetelina Borislavova, will keep her minority share of 22.3% in the bank and will become KBC's partner in Bulgarian banking activities, said the AP.KBC plans to bid for the remaining 2.7% of the shares, which are listed on the Bulgarian Stock Exchange. The deal is subject to approval by the Bulgarian regulatory authorities.'KBC intends to complete the transaction before the end of this year,' the announcement quoted by the AP said.So far this year, KBC - Belgium's third largest bank by assets, has spent 1.7 bln euro on buying into new markets in Bulgaria, Romania, Serbia and Russia.

Chimimport, realty co's eye sale of region's biggest wholesale market

There is no strategic investor among the companies that have so far purchased the documents for participation in the sale of Slatina Bulgarplod in Sofia, the biggest wholesale market in the Balkan region, said the city's sell-off agency.A total of 18 corporations, one consortium and two individuals have bought tender papers to date.Most of the interested companies are in the property business. The list also includes Chimimport Finance, a Chimimport subsidiary, and property developer FairPlay International.The bids for the wholesale market, valued at 75 mln levs, are due by October 17. Experts, including former Slatina Bulgarplod boss Alexander Yotsev, said the asking price was too high. Yotsev recommends to sell the market as a buildable site.The buyer will be barred from altering the core business of the company for a period of 15 years after the sale. Sofia Municipal Privatisation Agency chief Ivan Dimitrov said the sell-off contract will specify a default payment on this clause equal to 100% of the deal price. Slatina Bulgarplod, a member of the World Union of Wholesale Markets, operates on footprint of 45 ha near the Sofia International Airport and major road arteries leading in and out of the capital. The wholesale market, which generate an annual turnover of 2 bln levs, offers 6,000 sq m of refrigerated storage facilities, quality control laboratory, gas station and bank and customs offices. It is also accessible by rail.

51 gold medals awarded at autumn fair 2007

The International Technical Fair turned into an exhibition event addressing the EU market of 600 million people”, declared the Minister of Economy and Energy, Peter Dimitrov.Fifty-one exhibits were awarded the highest prize of the 63^rd International Technical Fair – Gold Medal and Diploma. Thirty two of the award-winning products are manufactured by Bulgarian companies, and 19 – by foreign producers.Over 100 exhibits competed in the following sectors: machine building; information technologies and products, telecommunications, office equipment; transport and auto service equipment; electronics and electrical engineering; energy and ecology; water management and technologies; chemical industry; construction and architecture.At an official ceremony, the gold medals were handed by Mr. Peter Dimitrov, Minister of Economy and Energy, Mr. Georgi Peterneychev, Deputy Minister of Transport, Mr. Georgi Gergov, Executive Director of International Fair Plovdiv, Mr. Todor Petkov, Governor of Plovdiv Region, Mr. Tosho Toshev, Editor-In-Chief of Trud Newspaper, Mr. Tzvetan Simeonov, Vice-President of the Bulgarian Chamber of Commerce and Industry, Ms. Olga Manafova, President of the State Agency for Metrology and Technical Surveillance and Chair of the Gold Medal Awarding Committee.„This fair is not only a major exhibition event in Bulgaria, this is an event addressing the EU market of 600 million people and its potential”, stated the Minister of Economy and Energy, Peter Dimitrov. In his opinion that was one of the factors contributing to the 63^rd large-scale edition of the International Technical Fair.The Minister pointed out the partnership of the state, municipality and business as the main reason for the enormous success. „Plovdiv Fair embodies the implementation of the public private partnership between the state and the business, which is usually only talked about. I thank Mr. Georgi Gergov for the things done. There are so many positive changes accomplished within eight months, and I am eager to see what would happen in eight years”, commented Mr. Dimitrov.

Bulgaria ERP market on the up

The number of locally integrated Enterprise Resource Planning (ERP) systems could exceed 550 in 12 years, said CBN, an independent agency for market and business researches and sector analyses. According to CBN data, 459 ERP systems were integrated in Bulgaria in 1996-2006. The market is dominated by Microsoft Dynamics, SAP, Atlantis ERP, Scala/Epicor and Maconomy. The top local ERP system integrators are Siemens IT Solutions and Services Bulgaria, FTS Bulgaria, LLP Bulgaria, Team Vision and Scala SBS Consulta Bulgaria.

 

Sofia hosts premier event for Microsoft developers on the Balkans

 

The second edition of DevReach, the premier conference for Microsoft technologies in Bulgaria and Eastern Europe, kicked off on Monday in the Sofia Expo Centre.Telerik Corporation, a leading vendor of developer tools, and Kulov.net organize the event that will end on October 2.DevReach is a software conference of the highest level on the Balkans and is aimed at the software applications developers working with the Microsoft technologies. The event, featuring famous international industry speakers, works to give the developers an opportunity to gain valuable practical knowledge as well as insights on the Microsoft technology roadmap.The event follows the model of the biggest Microsoft conferences in North America -- TechEd and Professional Developers Conference.
The visitors of the 2007 DevReach edition will see among this year's lecturers Tim Huckaby -CEO of InterKnowlogy - a custom application development firm, Carl Franklin, who is the host of the popular .NET Rocks! Internet audio talk show, Miguel Castro, a principal consultant and trainer with SteelBlue Solutions and Dino Esposito, who is considered an authoritative guru and expert in software technologies that relate to ASP.NET and AJAX, and in general the Web.

A Billion is not enough for Mittal to sell Kremokovtsi

"Mr. Mittal does not agree on a billion-euro settlement for Kremikovsti Metal Works. Even three millions wouldn't be a deal." This is what the metallurgical plant's executive director Alexander Tomov told the Bulgarian National Television (BNT) yesterday. on behalf of the Indian owner of Kremikovtsi - Lakshmi Mittal - Sofia City Chief Architect Petar Dikov's rejected the proposal to close down the plant and build a financial and industrial business center in its place. According to Tomov "there are strong economic interests of real estate players behind the idea". Furthermore he said "they would bring their eggs to the wrong market because it will take 5 to 7 years and lots of money to close down the plant". Tomov promised that Kremikovtsi would stop belching smoke by 2009 and 308 million levs (1 Euro = 1.95 levs) will be invested in environment protection programs. 

Germany's E.ON eyes 49% in Belene NPP

German utility E.ON is interested in the full 49% stake in the outfit that will operate the future 2,000MW nuclear power plant (NPP) at the Bulgarian Danube town of Belene, the company told Dnevnik.The company is on the shortlist of strategic investors that will advance to the next stage of the procedure to select an investor for an up to 49% stake in the Belene project.Bulgarian national power grid operator NEK Monday said it has extended by two weeks to October 15 the deadline for the hand-over of indicative offers from strategic investors interested in the stake.NEK will retain a 51% in the company and will contribute to its assets the power plant site.E.ON said there are different options for their participation in the project and stressed their excellent track record in operating safe nuclear power facilities.The German company said the safety of the future Belene plant will be of crucial importance. It said it will demand to have the final say on all operational safety-related issues.The statement from E.ON followed news that the European Commission will take its time delivering a verdict on the Belene project. The commission has sent NEK a list of queries concerning the safety of the Belene power station and the project's spent fuel storage, waste management and environmental protection aspects.In July this year, the NEK board shortlisted Italy's Enel, CEZ of the Czech Republic, Germany's RWE and E.ON, France's EDF and Belgium's Electrabel to advance to the next stage in the procedure.They will also be allowed to form alliances with other shortlisted candidates.NEK has also drafted a second list of candidate investors eyeing a stake of no more than 25% in the power station operator. The second group of candidate investors is made of Switzerland's Aare-Tessin AG fuer Elektrizitaet and Elektrizitaets-Gesellschaft Laufenburg AG, Spain's Endesa and local company Cumerio Med.The construction of the Belene NPP, estimated at around 4 bln euro, has been commissioned to Russia's AtomStroyExport.The final agreement for implementation of the project is expected to be signed before the end of 2007.

IBM opens customer support centre in Bulgaria

 

U.S. computer giant IBM on Thursday said it has opened a customer support centre in Bulgaria to serve customers from central and eastern Europe, America and Asia.IBM, continuing on its corporate strategy to become globally integrated, announced today the expansion of the company's operations in Bulgaria with the opening of an IBM's Managed Business Process Services (MBPS) delivery centre in Sofia," the company said in a statement.The centre will transform and operate business processes such as procurement and finance and accounting for clients seeking to optimise business performance and generate growth. It will eventually support clients in central and eastern Europe, in the Americas and Asia.Investing in the global delivery centre in Bulgaria is a key part of IBM's strategy of becoming a globally integrated enterprise", IBM Bulgaria country general manager George Randelov said in the statement.IBM has 80 global delivery centers worldwide. Similar MBPS global delivery centres are located in Argentina, China, Hungary, India and the U. S. Computer and printer giant Hewlett-Packard has a customer support centre in Bulgaria's capital. Microsoft has said it will open one this year.Labour costs in Bulgaria are low compared to the EU average which attracts companies to outsource some of their operations in the EU newcomer. Bulgaria joined the European Union in January.

Finnish building company to expand on Bulgarian market

Rautaruukki is to strengthen sales of construction products and services in Bulgaria by establishing a sales office in the capital of Sofia. Ruukki aims to become the country's leading supplier of frame, wall and roofing structures for commercial and industrial construction. Later on, Ruukki plans to expand its own sales network in Bulgaria in line with its business growth there."Demand within commercial and industrial construction is growing rapidly in Bulgaria, as in other countries in Central Eastern Europe. Our plant currently being built in Romania will make the entire range of construction products from frames, to wall panels and roofing components.Our knowledge of the local construction market and deliveries from a plant in the region will ensure prompt, quality service in both the Romanian and Bulgarian markets," says Jukka Hirviniemi, SVP, Central Eastern Europe, Ruukki Construction.Ruukki will also serve residential construction customers in Bulgaria by supplying roofing systems through a network to be formed with local distributors.

 

 

 

 

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Bulgarian government to keep tight fiscal stance - PM Stanishev

Author: Tsvetelia Ilieva and David Christian-Edwards, nab.ch

 

Bulgaria's economy is not overheating and has potential to grow further but the government will keep its tight fiscal stance to prevent external risks, Prime Minister Sergei Stanishev said on Wednesday.Emerging market analysts and financial institutions have voiced concerns that the new European Union member is showing signs of overheating with its growing current account deficit and accelerating inflation."I do not think Bulgaria's economy is overheating ... There is a potential to grow further," Stanishev told a business forum."The problem is that these concerns, especially when coming from renowned sources, could create certain attitudes. So we have to react quickly and convince our partners that we see these potential risks and we are taking measures." Both the World Bank and rating agency Standard & Poor's have said Bulgaria is one of the European countries most vulnerable to a halt in financial flows due to global tighter liquidity conditions, because of its huge external gap.The Balkan country has seen its economic growth accelerating by around 6 percent annually since 2004, but its current account gap has expanded to record-high levels due mainly to strong imports and is seen reaching 20 percent of GDP this year. Rating agency Fitch has said the signs of overheating in Bulgaria would not allow it to tame inflation soon and has forecast the country could adopt the euro not earlier than 2013.Inflation hit 12 percent year-on-year in August due to strong wage growth and food price hikes.Stanishev noted that much of the external imbalance was due to strong foreign investment which needed imported goods and that in the long-term it would generate exports.He said the foreign direct investment is expected to reach 4.0 billion euros this year and this, along with the expected inflows of millions of euros under EU-sponsored programmes, would help speed up economic growth further. Bulgaria runs one of the tightest fiscal policies in Europe and Stanishev vowed to keep that stance. He said the Socialist-led government would not allow a fast jump in public wages and speed up reforms to improve the business environment.Bulgaria has pegged its leve to the euro under a currency board regime, which significantly curtails central bank operations, leaving fiscal policy as one of the few tools to influence the economy.Sofia will target a budget surplus of 2.5 percent of GDP next year and expects to end 2007 with a surplus of 2.3-2.5 percent."We have to guarantee through budget surpluses and administrative reforms that the potential risk would not endanger the financial stability," Stanishev said.

 

Bulgaria hears Estonian lesson on flat tax

Author: Elena Koinova, Sofiaecho.com

Mart Laar, former prime minister of Estonia, said the flat tax model was used by countries wanting to achieve speedy economic development, but the model was not without consequences and special requirements.Speaking on October 3 at a conference in Sofia entitled Second Decade of Growth: Risks and Opportunities, organised by Bulgarian weekly Kapital and German daily Handelsblatt in co-operation with Bulgaria’s Confederation of Employers and Industrialists, Laar said the Estonian model had been successfully used by Georgia to achieve economic reforms.The Estonian model consisted of radical reforms, in all spheres at once, he said, meaning radical tax reform, accompanied by health care and education reforms. These radical reforms did not lead to shocks, Laar said, they would just lead to speedier development.However, he said, the model does cause a certain amount of public discontent because of the speed of changes.A requirement for the Estonian model to function was a country's ability to absorb European structural funds, something which could only be done by a government which was not corrupt. This requirement was, under current circumstances, a problem for Bulgaria, Laar said.An important step in the radical reforms and the fight against corruption had been the establishment of e-government in Estonia. E-government had achieved higher transparency, holding public officials accountable for every penny spent while giving citizens access to the decision making process. People could read proposed bills online and have a public debate about them, before the bill would go to parliament to be voted into law. This process resulted in fewer mistakes being made in new legislation.Estonia's new problem had been its success. With its economy growing so fast, the need had arisen for new reforms. Where salaries before the reforms were at 50 per cent of European average salaries, they currently were at 70 per cent and cheap labour could no longer be found in the country.The new structural reforms Estonia needed were of the kind suited to a country with high living standards, Laar said.For Bulgaria, the introduction of a flat tax would be a challenge, but effects would be visible from the second year on and would always be tangible.Another major challenge for Bulgaria was the current brain drain, Laar said, and Bulgaria would have to do everything possible to ensure a reversal of the process.