Bulgaria Love/불가리아 뉴스

불가리아 주요 경제뉴스(12 - 19 OCTOBER 2007)

KBEP 2007. 10. 20. 19:34





Sections/headline briefs:




·        Varna and Burgas ports with new terminals for �145 M

·        �4,7 billion allocated for local transport infrastructure until 2015

  • Bulgaria to get credit ratings from S&P by 2009

·        Bulgaria's current account deficit up to 11,7% of GDP

·        Bulgaria again with the second high growth of inflation in the EU

  • State debt down to �5.7bn end-September

·        IMF wants Bulgaria to curb public sector salaries

·        IMF sees east european economies slowing

  • Power exports seen at 3.6bn kWh in 2007

·        Bulgaria imports Chinese work force for NPP Belene construction

  • NEK says Belene nuke plant project on track

·        New chance for decommissioned NPP units

·        Bulgaria Guarantees Belene NPP Construction with �600 M

·        Bulgaria , EVN agree on sale of Slanchev Briag electricity distribution company

  • Five companies file indicative bids as strategic investors in Belene NPP
  • Over 100 Bulgarian co's eye Belene subcontracts

·        Power centres to develop small Bulgarian towns

  • Bulgaria to stop electricity exports in November
  • Bulgaria new car sales up 24% y/y

·        Rila highway in project

·        Bulgarians become world gold market players

·        Increased mobility encourages employment

·        A compromise on taxes will balance inflation

·        Bulgaria's consumer prices up with 13.1% in September

·        Bulgaria's industrial output growing at a third fastest pace in EU

·        EC opens infringement case against Bulgaria over inadequate waste infrastructure in Sofia

  • Old players make re-entry into telecom market
  • Telecoms’ monopolies to be smashed
  • Bulgaria to give competition encouragement grants
  • Bulgaria glancing at a gas pipeline project 
  • Some M&A in Bulgaria could avoid regulation

·        Bulgaria expects a breakthrough in the Euro issue



·        Korean investors build �30 M ecological spaghetti factory in Bulgaria

·        UK is number 1 in Foreign Direct Investments in Bulgaria

  • Bulgaria ranked 7th in foreign direct investment
  • FDI in Bulgaria seen topping �5 B in 2007

·        Constructional fever - 13 malls to be build in Sofia in 3 years

  • Melina to build new type of shopping centres

·        Belgians to build hi-tech park near Plovdiv

·        Israeli billionaire invests in Bulgaria's biodiesel production

  • Israeli tycoon  seeks to buy another Bulgarian asset
  • Equest to build office center on Iztok cinema site in Sofia

·        Estonians invest �30 M in recycling factory in Bulgaria

  • Greece among biggest investors in Bulgaria

·        Bulgarian realty - a hit among Russian investors

·        German investors eye Vidin airport

  • Investment certificate handed to Bulgarian airport operator

·        Arsenal to invest EUR 1m in new weapon

  • Irish property High-Flyer with investments in Bulgaria "Faces Collapse"

·        Bansko ski resort still interesting despite building boom

·        Cheap labor attracts investors

·        Nearly BGN 10M invested in land by Agro Finance

·        Swiss company invests BGN 20 M to make headlights




·        EU metes out �1,2 Billion for Bulgarian companies

·        Over 700 firms on "Stroiko 2000" Expo

·        Sopharma is back on track

·        Czech Budvar beer enters Bulgarian market

·        Bulgarian companies with $ 662,000 supplies for the US Army

  • Kremikovtzi looks for financing from other companies

·        Kremikovtsi smelter sold at pieces

  • Bulgarian steel mill to enter real estate business
  • Bulgaria's Kremikovtsi woos investors for BGN 308 M environmental plan
  • Two more companies in NABUCCO gas pipeline project
  • Suez looks to U.K., Romania, Bulgaria for nuclear projects

·        Pirogov hospital closes the year at BGN 15m loss, financial report shows




·        Bulgaria 2007: Preparing for turbulence











Varna and Burgas ports with new terminals for �145 M

The Government decided to grants a state loan on the amount of 145 million EUR for the construction of new terminals for container processing on Burgas -West and Varna - East reported money.bg.The constructions will be financed with state loan by Japanese Bank for International Collaboration (JBIC). The credit will be presented by the Transport Ministry.In the last five years is noticed considerable increase of container cargos through the ports, which leads to the building of new modern terminals in Varna and Burgas.The new terminals will make easier the transit of goods through European transport corridors. It is expected with the project  realizing to be opened 450 work positions in Burgas and 550 more in Varna.

�4,7 billion allocated for local transport infrastructure until 2015

The strategy for Bulgaria's transport infrastructure until 2015 is ready.This was announced by the Transport Minister Peter Mutafchiev in the meeting of the transport ministers of the countries members of the Central European Collaboration in South Eastern Europe.The investments are on the amount of 4,712 billion EUR.1,725 billion of the sum are foreseen for the auto transport and 1,188 billion EUR - for other sectors.Priority infrastructural projects ate the railroad Plovdiv- Svilengrad, rail bridge Vidin- Kalafat, highway Trakia and highway Maritsa to the Turkish border.


Bulgaria to get credit ratings from S&P by 2009


Bulgaria will extend its agreement with international credit rating agency Standard&Poor's. Finance minister, Plamen Oresharski, has been authorised to sign the new contract, which will run until December 31, 2009. Bulgaria signed its first contract to get credit ratings from S&P in 2004. A credit rating assigned by an international agency is an important condition for the country to get access to foreign capital markets. Bulgaria also has contracts with international agencies Moody's, Fitch Ratings and the Japan Credit Rating Agency (JCR).

Bulgaria's current account deficit up to 11,7% of GDP

Bulgaria's current-account deficit widened to 11,7% of GDP at the end of August from 7.5% a year ago as imports surged.The monthly deficit widened to 160.7 million EUR ($ 227 million) in August from 87 million EUR a year ago as imports were double that of exports, the Sofia-based central bank said on its Web site today.The seven-month current-account gap reached 3.3 billion EUR compared with 1.6 billion EUR a year ago.The negative trade balance continue to make worse the negative current account. For a period of one month the negative cost increased with 29 million EUR more reaching the level of 4,47 billion EUR or 16,7% of the GDP.Direct Foreign Investments in the country for the first seven months increased to 3,39 billion EUR or 12,7% from the GDP.

Bulgaria again with the second high growth of inflation in the EU

In September Latvia and Bulgaria remain on the first places for growth of the annual inflation in the EU, shows the statistical data from Eurostat, but the gap between those two is narrowing, which shows a bad trend for Bulgaria.The Baltic state Estonia has replaced Hungary on the third place for this indicator.In Latvia the annual growth rate in September is 11.5% compared with 10.2% for the previous month and in Bulgaria it is 11%, compared with 9.3% in August.In Estonia the annual inflation has reached 7.5%, while a month earlier it was 6.1%.The lowest annual rates were observed in Malta (0.9%), Denmark (1.2%) and the Netherlands (1.3%).In the whole Euro area the average annual inflation goes up in September to 2.1%, compared to 1.7% for the previous month. From the countries, which use the Euro, Slovenia shows the highest ratio - a rise of 3.6% for a year.


State debt down to �5.7bn end-September


Bulgaria's state and state-guaranteed debt totalled EUR 5.7 billion as at the end of September 2007, down by EUR 44 million month on month. Domestic debt stood at EUR 1.6 billion, while foreign debt totalled EUR 4.2 billion as at the end of September. The decrease may be put down to debt payments during the month and currency exchange differences. Debt-to-GDP stood at 22% in September, down by 0.1 percentage points compared to August.Bulgaria has paid BGN 2.2 billion principal and interest since the beginning of the year. The amount includes BGN 1.7 billion payments on the foreign debt.

IMF wants Bulgaria to curb public sector salaries

"The salaries of teachers and public servicemen should not be increased excessively," said Albert Jaeger, IMF mission chief for Bulgaria and Romania, after his fortnight's stay in Bulgaria.The International Monetary Fund recommends that the Cabinet should keep its current line of policymaking and not yield too much to the claims of the striking teachers.According to Mr. Jaeger, the only option for a feasible increase in the teachers' salaries is to bind them with reforms in the Bulgarian education aimed, among other things, at raising productivity of the teachers' labor.According to IMF representatives, a too generous rise in the teachers' payments will trigger an increase in the salaries in the private sector as well, which in turn will result in an overheating in the Bulgarian economy and the country will become less attractive to foreign investors.Asked if there are any threats to the currency board, the IMF officials said that one of the primary conditions for keeping the Lev pegged to the Euro was that the country's economy should remain stable and competitive and the Cabinet's fiscal policy, rigorous.IMF analysts say that the growth in Bulgaria's GDP for this year will reach 6 or 6,4%; the inflation rate will hit ten percent by the end of the year and the current account deficit will rise to twenty percent of the GDP. The IMF experts also say that these indices will hardly change very much the next year and the surplus to Budget'2008 should be at least three percent of the GDP.Mr. Jaeger also recommends that the bank directors should be well aware of possible crediting risks, so as to be ready to cope with complications, such as last month's mortgage loan crisis in the USA.


IMF sees east european economies slowing

East European economies have weathered the global credit crunch so far, but they are becoming increasingly vulnerable and governments must tighten fiscal policy to avoid overheating, the IMF told Reuters on Wednesday.Speaking at the Reuters Central European Investment Summit, International Monetary Fund regional representative Christoph Rosenberg said he expects a slight economic slowdown in the European Union’s east European members „These countries have done very well with the market turmoil until recently. We do think the countries have not used fiscal policies appropriately, some have really poured oil on the fire with their fiscal policies,” he told Reuters.The IMF said in a report on the world economic outlook that it had revised downward all of its 2008 GDP forecasts for EU members in east Europe, with the exception of Lithuania which remained unchanged. The IMF report said the Baltics would see 2008 growth of 6.3%, down 0.2%age points from the previous estimate, while the outlook for central European members was revised down by the same amount to 4.9%. Southeastern Europe’s EU members will see growth of 5.7% in 2008, down 0.8 points from the IMF’s July forecast.


Power exports seen at 3.6bn kWh in 2007


Bulgaria has exported 3 billion kWh of electricity since the beginning of 2007, Lyubomir Velkov, CEO of the National Electric Company (NEK) said. Exports are expected to amount to 3.6 billion kWh for the entire 2007. The figure stands at half the amount Bulgaria used to export prior to the de commissioning of units 3 and 4 of the Kozloduy nuclear power plant. NEK posted BGN 400,000 profit from electricity exports for the period January to August, Velkov said.

Bulgaria imports Chinese work force for NPP Belene construction

Chinese construction workers will probably build Bulgaria's second nuclear power plant Belene, because Bulgaria lacks qualified specialist for the construction of a nuclear power plant and, more specifically, welders. "If you lack specialists, you can take hands from Beijing. Their labor is quite cheap and at the same time they have certain experience with this sort of constructions, which they gained during the construction of NPP Tianwan," said Alexander Selihov, Atomstroyexport CEO for China.The Russian company was selected to construct NPP Belene. Bulgarian companies are pushing to take up the construction the nuclear power plant's canteen, the bathrooms and the first buildings of the small town, which will be built to accommodate the Russian engineers.


NEK says Belene nuke plant project on track

With the exception of the upfront payment [for the drafting of the technical blueprint] there have been no delays in any payments to AtomStroyExport, said Lyubomir Velkov, chief executive director of Bulgaria's national power grid operator NEK in response to statements made last week by the PRO of the Russian corporation. According to the statements, the appraisal of the unassembled equipment mothballed on the site of the future Belene nuclear power plant and delays in payments remitted by NEK to AtomStroyExport have slowed down work on the project. Velkov declined to name the size of the upfront payment, citing confidentiality constraints. 'We have not been reproached by the Russian side for any delayed payments. There was a delay but we had agreed with AtomStroyExport that even if the upfront payment is delayed that would not affect the deadlines and schedules which started to count down from January 1,' said Velkov. The NEK official said it has been determined which of the unassembled equipment will be utilised and added that the valuation of the hardware mothballed in the early 1990s when the Belene project was abandoned is almost complete. There has been no delay in the project for the construction of the Belene NPP and there are no indications that cost overruns may be on tap, assured Velkov. The official said more details about the project will be made public after the strategic partners eyes a 49% stake in the power station submit their offers on October 17. The number of contestants is eight. NEK is currently in talks with banks ready to loan-finance the project. The names of the banks and the parameters of their offers were withheld at their request. NEK said loan-financing will amount to 4-4.5 bln euro.

New chance for decommissioned NPP units

Bulgaria will have a new opportunity to resubmit to the European Parliament a claim for a flexible approach towards Kozloduy NPP and thus give a chance for rehabilitation of the decommissioned third and fourth units, according to Bulgarian MEP Vladimir Urutchev. He believes the right time has not come yet for such an initiative, as the Union is currently presided by non-nuclear Portugal. Soon Slovenia will assume the presidency, though. "As Slovenia experiences difficulties akin to Bulgaria's and renders us powerful support, in the course of its half a year of presidency, it is more likely that the Balkans' energy generation problems to be put on the agenda of the European Parliament. It will then be possible to advocate the necessity of working third and fourth NPP units and the new Belene NPP for the energy balance of the region," Urutchev believes.

Bulgaria Guarantees Belene NPP Construction with �600 M

Bulgaria's state treasury will provide 600 million euro to guarantee the construction of NPP Belene, Bulgaria's Council of Ministers decided yesterday. The funds will be provided as a warranty for the provision of loans from Euratom and the European Investment Bank (EIB) in 2008. With its decision, Bulgaria's Cabinet explicitly backs the majority investor of the project - Bulgarian National Electric Company (NEC).
Meanwhile, it transpired that Brussels is ready with its assessment on the financing scheme and the Russian technology to be used in the NPP Belene  construction. The decision is to be made ppublic by the end of 2007.Atomstroyexport announced they were not concerned with the answer of the EU, because they had all grounds to believe it would be positive. But it is mainly the decision of Brussels that is one of the stumbling blocks for the banks to provide loans for the construction of the NPP Belene. NEC fears that in case the answer of Brussels is negative this may scare away the banks, thus hindering the provision of funds for the Belene nuke.As the Standart has already wrote, there is a possibility that the construction costs of Belene will up by about 30%. But how this might happen will be specified in the agreement between NEC and Atomstroyexport. The agreement has to be signed by the end of 2007.

Bulgaria , EVN agree on sale of Slanchev Briag electricity distribution company

Austrian energy utility EVN, the Privatisation Agency (PA) and the Agency for Post-Privatisation Control (APPC) signed late Thursday an out-of-court settlement on Slanchev Briag Electricity Distribution Company. For three years, the Bulgarian energy firm has been the apple of discord between the sales authority and the energy authority.The agreement obliges the Austrians to pay 44.232 million leva only, in return for which they are withdrawing litigation at the International Court of Arbitration in Paris for Bulgaria's failure to carry out duties under the Slanchev Briag EDC privatisation agreement, the company said.The said agreement signed in November 2004 and entailed the bundled sale of 67 per cent in each of the electricity distribution companies in Plovdiv and Stara Zagora.

Five companies file indicative bids as strategic investors in Belene NPP

Five companies placed indicative bids to play a strategic role in the Belene nuclear power plant project, said the main investor National Electric Company (NEK), cited by BTA.These are Electrabel, CEZ, E.ON AG, ENEL and RWE AG.All companies were divided into two groups. The first group comprises those willing to acquire directly or through a consortium a stake of up to 49 per cent in a planned joint venture with NEK for the plant's construction and operation. These are CEZ, Electricite de France, E.ON, Electrabel, ENEL and RWE.The second group consists of companies willing to acquire directly or through a consortium stakes of 25 per cent or less in the joint venture with NEK for the plant's construction and operation. These are Endesa, EGL, Cumerio Med and ATEL.The first group of companies, designated as Shortlist A, were sent a Confidentiality Agreement to sign, followed by an Information memorandum on the Belene plant construction project. They were given the opportunity to conduct technical and economic analysis of the project and to file indicative bids as a basis for negotiations with NEK.

Over 100 Bulgarian co's eye Belene subcontracts

Over 100 Bulgarian corporations have submitted references for the selection of subcontractors to AtomStroyExport, the Russian company that will build a nuclear power plant at Belene, on the Danube river.Under a preliminary agreement signed in 2006 by the Russian company and Bulgaria's national power grid operator NEK, AtomStroyExport is obliged to farm out to local subcontractor at least 30% of project activities.The deal ensures a 1.2 bln euro gusher of engineering, construction, assembly, procurement and equipment tuning contracts for Bulgarian corporations over the next eight years.The 2006 agreement and the final accord that is being drafted expressly state the activities that can and those that can't be outsourced by AtomStroyExport without NEK's prior consent.AtomStroyExport plans to hire the local subcontractors on a competitive basis.The candidates for the engineering works include Atomenergoremont, Tita Consult and Atomtoploproket.The assembly works are contested by Energoremont Holding, Inter Pribor Service, Enemona and Euro Sparky, among others.Glavbolgarstroy, Minstroy Holding and Enemona are among the candidates for the construction works.

Power centres to develop small Bulgarian towns

New kind of trade complexes will be build in 12 towns in Bulgaria, informed money.bg. This will contribute for decrease of the unemployment.The project is elaborated by Israeli company with Bulgarian participation of ‘Melina'. The chief of the company Yakov Niv, explained that the Power centers look like 1-floor trade objects, situated on 3 km away from towns.Its distinctive features will include big parking lots, which envelop more than 70% of the built territory, supermarkets, furniture shops, boutiques, cafes and restaurants.The company already bought areas for its projects in the towns of Vidin (North-Western Bulgaria, on the Danube River), Vratsa (North - Western Bulgaria), Plovdiv (central Bulgaria), Rousse (North - Eastern Bulgaria, on the Danube River) and Dobrich (North - Eastern Bulgaria).In the towns of Haskovo (South Bulgaria), Blagoevgrad (West Bulgaria), Yambol (South - East Bulgaria) and Sliven (South Bulgaria) are foreseen to be made power centers in short term.We chose to invest in peripheral towns, because no one direct to it yet. We also will support the decrease of unemployment in these settlements, said Yakov Niv. There will be a 1,000 new work positions on every centres.The first trade center of the kind will be opened in the city of Vratsa in one year.


Bulgaria to stop electricity exports in November


Bulgaria will halt exports of electricity at the end of November, to ensure it has enough to cover domestic consumption, deputy economy minister Yordan Dimov said on Thursday.
"I don't expect we'll have to introduce electricity rationing, but this is the first time we are entering the winter period with four reactors [at Kozloduy nuclear power plant] offline," Dimov told reporters.The ministry is counting on increased production from the Bobov Dol, Varna and Maritza Iztok thermal power plants to compensate for shutting down two Soviet-made 440 MW units at its Kozloduy nuclear power plant last January, before joining the EU.The key power plant will be Maritza Iztok II, which will work at full capacity in January-March 2008, even if that means paying high fees for greenhouse emissions, Dimov said.The ministry is resolute that the Japanese consortium between Mitsui and Toshiba, which has won the tender to upgrade the plant with emissions-cutting technology, pays the fines because of delays in carrying out the project.Bulgaria has exported 3,5 million MWh of power so far this year, according to government statistics.


Bulgaria new car sales up 24% y/y

The local auto dealers moved 35,516 units in January-September 2007, up 24.32% year-on-year, shows data of the Union of the Importers of Automobiles in Bulgaria.Actual domestic sales are somewhat higher because several importers are not members of the union.The top-selling brand over the review period was Toyota with a 43% year-on-year increase to 4,145 units and a market share of 11.67%. Ford was runner-up with an increase of 23% to 3,337 units and a market share of 9.4%. It was followed by Peugeot with 3,036 units, Opel with 2,922, VW with 2,819, Citroen with 2,256 and Skoda with 2,248. Dacia pipped Renault with 2,141 units versus 2,105 while Chrysler reported 1,978 sales.New truck and bus sales topped 2,093 units in January-September.Mercedes held the top spot on the truck segment with 700 units. The company also sold 32 buses over the review period.Iveco reported sales of 460 trucks and 34 buses.Volvo trucks sold 393 units.

Rila highway in project

The construction side of highway ‘Rila' are considering in the moment.The road is foreseen to be 80 km long, informed Georgy Krumov, executive director of Rila - Samokov 2004 after the first sod of Super Borovetz mega complex.The road will pass through Dupnitsa, Samokov, Vakarel, Vitinia and will link the highways Struma, Trakia and Hemus. After the constructions end the distance Sofia centre - Borovets resort will be 35-40 minutes.Regional development Minister Asen Gagauzov said that the highway will be announced on auction next year.

Bulgarians become world gold market players

The Bulgarians can now trade on the world's gold markets. Raiffeisen Bank started promoting bank accounts that allow customers to invest their money in the precious metal. The charge for opening such an account is 20 Euros and choosing how much gold you'd like to buy is initially entirely up to you. The bank recommended to Bulgarian companies dealing with Romania to open current accounts in Romanian Leus.

Increased mobility encourages employment

If mobility increases in a country, vacant working positions would be filled and thus employment would raise, and this would affect the growth of the economies, Zina Andreeva, Manager of the Eures network in Bulgaria and Director of the Information and Analyses Department of the Employment Agency said in an interview for FOCUS News Agency. According to Andreeva, it was true that the EU falls behind the levels of mobility of the working people in Japan and the US.

A compromise on taxes will balance inflation

Another report, sending an alarm about record-breaking inflation rates was issued by the National Statistical Institute (NSI). By the end of the third trimester of 2007 the rate of inflation in Bulgaria is 8,9 %. Set against the same month of the last year, however, it is 13,1%. This is according to NSI's statistical methods. The figures cited by Eurostat are very close to those of the NSI and, in fact, a bit smaller - 8,1% by end third trimester of this year and 11% compared to September 2006, respectively. Nearly two-thirds of the final inflation rate was formed by the growing food prices. All other goods and services in Bulgaria made a mere three-percent contribution. In other words, 10 out of the 13% is directly or indirectly related to the hike in foods prices. So it turns out that food is the "culprit" for the alarming inflation rates. The reasons for the increase in the prices of foods have been a main topic of discussion recently. To be more specific, the key reasons are the unreformed Bulgarian agriculture, producing less and less each year, the unfavorable weather conditions in Bulgaria and the other granaries of the world (Canada, Australia, Europe), as well as the increasing demand for cereals utilized in bio-fuels production.There is, though, yet another issue, which is too often overseen - the rise in foods prices has a very strong negative effect on poorer countries. In countries like Bulgaria foods comprise the larger share of the consumer basket, and this further strengthens the influence of the changes in their prices on the rate of inflation. In addition, VAT in poorer countries is lower, that is, in the poorer countries, prices in general are much more closely related to prices of foods than they are in the wealthier states.
On the macroeconomic level inflation does not cause trouble for now, insofar as it has been provoked not by a macroeconomic issue but by a rise in food prices. It is the government policy on the macro level that needs more attention. Usually, as the end of the year approaches, the Bulgarian government would pour enormous sums of state budget money to many, most often quite irrelevant expenditures, and this is another reason for the rocketing inflation rates in the end of the year. Ministries would try to do their best to spend all the money they had received as an annual budget even though the layouts might be completely unnecessary - this is done with the sole purpose not to receive a smaller budget in the year to follow. Will we bear witness to such practices this year too? We'll see it very soon.

Bulgaria's consumer prices up with 13.1% in September

Consumer prices in Bulgaria increased with 13.1% in September, up from an 12% annual rate recorded in August, informed International Herald Tribune, citing Bulgarian government statement. Food prices accounted for most of the rise, increasing with 2.1% in September over August, says data of National Statistics Institute (NSI).Prices of nonfood products increased with 1.3%, while services' payments dropped by 0.1% over August.Comparing on annual level, consumer prices in 2006 rose by 7.3% over this year.Currently one bread in the Rhodope city of Smolian increased to 1 BGN (0,50 EUR).Just for a day the flour's price per ton jumped from 780 BGN (390 EUR) to 830 BGN (415 EUR).


Bulgaria's industrial output growing at a third fastest pace in EU


In August Bulgaria's industrial output dropped 1%, but still remains 7.3% up on an annual basis, according to a Eurostat survey.The nation's industrial output ranks third in the EU in terms of growth pace. Number one is Lithuania, which added 13.7% y/y, while Slovenia (10%) ranks second.Romania is second in terms of August decline rate (2%). Still, on an annual basis the country's output climbs 3.8%.Greece's industrial production indicator has also dropped y/y.The Eurozone as a whole added a total of 1.2% in August, and 4.3% year on year.


EC opens infringement case against Bulgaria over inadequate waste infrastructure in Sofia


The European Commission has decided to launch an infringement procedure against Bulgaria over inadequate waste management infrastructure in its capital, Sofia, teh press service of the European Commission informs.The shortcomings, which include the lack of a system and installations for the recovery and disposal of household waste, are posing a serious risk to human health and the environment. Bulgaria should have complied with the relevant EU waste legislation since its accession on 1 January 2007.Environment Commissioner Stavros Dimas said: "It is alarming that Sofia does not appear to have a functioning system for managing its waste without putting public health and the environment in danger. This is a basic requirement of EU legislation and I would urge the relevant authorities to resolve Sofia's waste problems rapidly."The Commission is sending Bulgaria a first written warning after receiving information that Sofia's waste management infrastructure is not adequate and is the source of severe problems. The present situation has arisen partly because Sofia's only waste landfill was closed two years ago, even though it still had spare capacity.Among the deficiencies identified by the Commission, the most important are the lack of a system and installations for the recovery and disposal of the city's household waste, the lack or inadequacy of temporary storage sites – some of which are located close to residential areas - and the lack of adequate pre-treatment of the waste.These shortcomings represent a serious risk for human health and the environment and a clear breach of the EU's Waste Framework Directive, which establishes basic waste management requirements that member states must meet. Bulgaria's accession treaty foresees no transitional period for meeting these requirements and thus it should have complied with them from 1 January 2007.

Old players make re-entry into telecom market

The heated rivalry among mobile and fixed-line operators has prompted the return of somewhat forgotten names from the dawn of telecommunications in Bulgaria. The first owner of Bulgaria's first wireless operator Mobiltel, Krassimir Stoychev, and Mobikom's one-time CEO, John Munnery, have rolled out a fourth-generation network based on the WiMAX technology. It will allow Max Telecom to provide wireless internet, IP voice services, virtual private networks, real-time mobile television etc.Max Telecom's WiMAX network is the first to be launched in Europe. The company will compete with major players in the internet and telecommunications market. Max Telecom has its own prefix, 0999, and provides connectivity to all fixed-line, mobile and alternative operators. Customers are also offered free calls within the network and internet access to 40 television channels.Currently the network covers nearly 30% of the country's territory, the CEO and owner of the company, Krassimir Stoychev, said. By the end of 2008 the coverage will reach 90%. More than EUR 15 million has been invested in the network, as much is planned for next year.Max Telecom makes its market debut thanks to the licence of Cablenet, an unknown company that won a point-to-multipoint permit for BGN 5.044 million in 2005. The document allows the holder to build a WiMAX network. Cablenet was later renamed to Max Telecom and the actual owners, Krassimir Stoychev and John Munnery, were gradually revealed. The two have very strong experience in the field of communications.

Telecoms’ monopolies to be smashed

The European Commission will conduct a policy for dividing ownership of big telecommunication monopolists, Internet portal Euractiv announced.
At a meeting with top officials of the Italian regulatory authority for telecommunications, Information Society Commissioner Viviane Reding was determined to introduce functional separation as a "last-resort remedy" in telecoms liberalisation. Italy is one of two countries (besides Poland) which is considering applying the functional separation remedy to its incumbent telecoms operator. This means that Telecom Italia would have to be split into two separate entities, each managing the operational business and the country's network infrastructure respectively. As a part of the review of the telecoms regulatory framework, Commissioner Reding would like to give regulators all over Europe the opportunity to apply such a remedy.

Bulgaria to give competition encouragement grants


The launch of three grant-providing schemes under the 1.163 billion euro Operational Programme Development of the Competitiveness of the Bulgarian Economy 2007-2013, was announced by Economy and Energy Minister Petar Dimitrov on October 17, as quoted by the web site investor.bg.Of the total, 998 million euro was to be extended by the European Regional Development Fund (ERDF), whose aim was to reduce regional disparities in the European Union while at the same time encouraging the development and conversion of regions. The remaining 175 million euro was to come from the Bulgarian government.The Programme’s budget for 2007 had slated 25 million euro to be spent on the technological modernisation of businesses. Small and medium-sized enterprises were eligible for grants under this scheme and the deadline for applying for it was January 22 2008, investor.bg said. The minimum sum to apply for was 50 000 leva and maximum size of the grant could reach two million leva. Each project should be co-financed by the applicant, Dimitrov said.Under the second scheme, for covering international quality standards, only companies registered by the end of 2003 and with an annual turnover of at least 100 000 leva could apply for grants. The total amount to be spent on the scheme for 2007 was five million euro, and the deadline for applications was January 15 2008.The third grant scheme was aimed at encouraging new innovative businesses. It was not limited in time and its budget was four million euro, Dimitrov said.


Bulgaria glancing at a gas pipeline project 

Bulgaria was hoping that the 900-km South Stream gas pipeline project of Russia’s Gazprom and Italian group Eni would strengthen a long-standing partnership between Gazprom and Bulgargaz, the natural gas distribution company in Bulgaria, Energy Business Review wrote in an article on October 17.The new pipeline was expected to transport gas from Russia to Italy via Bulgaria’s Black Sea port of Bourgas, cross Greece and pass through the Adriatic Sea.The Financial Times quoted Bulgarian President Georgi Purvanov as saying that the country was “attempting to build modern relations with Russia”, based on economic activities. Energy Business Review said.Purvanov further said that Bulgaria had contacts with Moscow because Russia was the major source of energy for the region. However, the Balkan country’s vision was to become a part of European Union’s energy policy through diversifying its oil and gas sources as well as the pipeline routes, Purvanov was quoted as saying.As part of its attempts to diversify EU energy sources, Sofia also signed up for the Nabucco gas pipeline project, a proposed natural gas pipeline expected to transport natural gas from Turkey to Austria, via Bulgaria, Romania and Hungary.A recent article in Eurasia Daily Monitor however, said that Bulgarian authorities seemed to prefer Russia’s South Stream project seeing it as the cheaper and better of the two. Should it materialise, Bulgaria’s opportunity would be a loss for a number of countries: mainly those involved in the Nabucco project, but also Ukraine and, ultimately, European consumers, Eurasia Daily Monitor said.
South Stream is a rival to the Nabucco project, both for gas resources in Central Asia and for markets in Southern and Central Europe.

Some M&A in Bulgaria could avoid regulation

Part of the mergers and acquisitions (M&A) in Bulgaria could be left out of the control of the Competition Protection Commission (CPC) according to proposed texts for legislation changes that were to be approved by Government in November 2007, mediapool.bg said on October 17.The changes would move up the turnover threshold above which participants in M&As should ask for permission from the CPC before completing the deals. Currently, companies with a total turnover of less than 15 million leva were allowed to merge without the approval of the anti-trust body. If the proposed amendments enter the Competition Protection Act, the new threshold would be 20 million leva.The turnover threshold was necessary because its current level was too low and the new one would not be so high to keep important M&A deals out of sight of the CPC, the Commission’s chairman Petko Nikolov said, as quoted by mediapool.bg.After the amendments become a fact, which was expected to happen next spring, CPC’s inspectors would have more freedom to investigate businesses and business associations that are suspected of secret cartel agreements, Nikolov said. The CPC was now only allowed to first ask the suspects to voluntarily provide documents and software for checks, while the search was authorised by the respective district court, he said.For unveiling price-fixing agreements, the new piece of legislation also provided for companies that co-operate in the investigation process to be relieved of property sanctions, with regard to the level of their participation in the schemes. European and world experience in the field had shown that price-fixings could be proven in court only if a member of the secret cartel agreed to co-operate against a remittance of or decrease in the sanction the law prescribed for the violation, mediapool.bg said.

Bulgaria expects a breakthrough in the Euro issue

Bulgaria has good grounds to hope for a breakthrough on the issue concerning the spelling of the name of the common European currency, Euro, at the informal EU summit in Lisbon, which started yesterday. At the forum, our country is represented by President Georgi Parvanov and Minister of Foreign Affairs Ivaylo Kalfin. Diplomatic sources told The Standart that the European Commission had made it clear that a possible compromise reached at the meeting in Lisbon would concern only the spelling of the name of the common European currency in Cyrillic, but not its spelling in any other languages. The issue will be solved only if none of the member states, which at an earlier stage lodged claims concerning the spelling of the common European currency in their languages, raise an objection. It is hardly probable, however, that a document regulating the spelling of the Euro will be adopted at the meeting.Sofia said that the Bulgarians would not approve the EU Reform Treaty, intended to replace the voted down European Constitution, unless the issue concerning the Cyrillic spelling of the Euro was resolved.




Korean investors build �30 M ecological spaghetti factory in Bulgaria

The Bulgarian–Korean company “Sammi Remion” is going to build a factory for production of spaghetti for fast consummation near the village of Zdravetz which is in Varna region. The news was reported by sgrada.com. This particular kind of spagfetti is popular in the East Asian countries like the Republic of Korea, China, Japan, Vietnam. The project is estimated at 30 million Euro. If the building and assembling process finishes as planned the factory will start producing till the end of 2008. 120 000 packages  and 100 000 cups of spaghetii per shift are expected to be produced by the first two factory lines. Enlargement of the factory with four more technological lines is being considered in the near future. The production of spaghetti will be mainly for export to the EU countries. The flour used for the spaghetti is made by durum and that gives very good opportunities for the agriculture development in Varna region. The locally produced sunflower-seed oil will be used as well. The producing technology is high class ecological. It does not cause any air pollution. When steaming the spaghetti dough only water vapour and  1 cubic  meter waste water from clear condensate per shift is given off . The project  intends refining devices for the condensate and the waste water to be constructed. The designers also have decided  to collect the rain water from the roofs in a reservoir and to use it  for cleaning, for watering the green areas around and in case of emergency for fire fighting.

UK is number 1 in Foreign Direct Investments in Bulgaria

According to recent data of the Bulgarian National Bank, United Kingdom is the country whose capital inflows rank first reaching 12.5% of the total FDI.Austria and Belgium are following UK with respectively 11.2% and 9.4%.The inflow of  foreign direct investments in Bulgaria for January -August 2007 amounts 3.39 bln. which is about 12.7% of GDP.On year-to-year base they show an increase by 1.6 percentage points since last year they were just 11.7% of GDP.The amount of attracted capital is about 2.2 bln. euro and represents 65% from the total amount of the foreign direct investments. This is almost 1 mln. euro more than the same period last year.The proceeds from real estate deals with foreigners amount 1.17 bln euro which is 0.75 porcentage points up on year to year base.For January-August 2007 the joint stock capital from privatization deals with non-residents reaches 18.6 mln euro.

Bulgaria ranked 7th in foreign direct investment

Bulgaria is seventh in foreign direct investment among 141 countries included in the 2007 world report of the United Nations Conference on Trade and Development (UNCTAD). The comparison takes into account the gross domestic product of each country. Bulgaria is third in investments among EU members and an unrivalled leader in the southeastern region. For comparison, in 1990-92 Bulgaria was ranked 92nd in foreign direct investment (FDI) on a global scale.According to forecasts of the InvestBulgaria Agency, FDI in Bulgaria is expected to reach EUR 5.5 billion in 2007. For the first eight months of the year investments totalled EUR 3.400 billion. About 35% of the amount was invested in real estate, 25% in production.


FDI in Bulgaria seen topping �5 B in 2007


Foreign direct investment in Bulgaria (FDI) will top EUR 5 B this year, the country's investment agency BAI forecast on Tuesday.Last year, Bulgaria attracted EUR 4,4 B, nearly one fifth of the total flow into southeastern Europe, according to the data from the latest United Nations Conference on Trade and Development (UNCTAD) World Investment Report, presented in Sofia on Tuesday.The biggest chunk of the funds, nearly 35%, was in real estate, with another 25% into production capacities, according to BAI.
Bulgaria ranked seventh in terms of FDI-to-gross domestic product ratio over the 2004-06 period, largely due to the inflows ahead of joining the European Union in January 2007.And the figures will remain high if Bulgaria pushes through with the EU-mandated reforms in the judiciary, accountability and fight against corruption, which will further improve the business climate, the authors of the UNCTAD report said.

Constructional fever - 13 malls to be build in Sofia in 3 years

Fever of mall constructions embraced the biggest investors. In the next two years is foreseen high-speed construction of more than 10 huge trade centers.Only in Sofia the constructional sides are 13.World leader ‘Carrefour' will take the empty plot on ‘Tsarigradsko Shouse' blvd, on the way to the airport.Another big participant in the constructional boom is the Austrian-German consortium ECE, which already expressed intentions to invest in mega malls.Another Austrian investor - ‘Shopping City West' along with the Bulgarians ‘Silvana Forest' plan to erect a mall called ‘Eurogate', situated in the Western part of Sofia. The project is on the amount of 250 million EUR.‘Eurogate' will be near main highway E80, that links Sofia to Belgrade. The project foresees more than 10,000 parking places.

Sofia Malls in period 2007-2010:

Already finished:

1. City Centre Sofia (next to National palace of Culture - NDK)

2. Mall of Sofia (West Sofia)

3. SkyCity Shopping Centre (Slatina residential district)

Planned for 2008:
4. Carrefour
5. Olympian Mall and Tower
6. Commercial Centre

Planned for 2009:
7. Sofia Acropolis
8. Bulgaria Mall
9. World Office Centre

Planned for 2010:
10. Trade Centre Central Train Station

Other planned malls:
11. Tsarigradsko Shosse
12. Mall next to Business Park Sofia
13. Sitniakovo


Melina to build new type of shopping centres


Bulgarian-Israeli company Melina will set up the first chain of power centres in Bulgaria. The chain will have shopping centres in twelve towns, while the total investment is expected to amount to between EUR 120 and 150 million.Power centres are usually built in the city outskirts and comprise several single-floor stores with a common parking area shared among the retailers. The power centres usually attract 2-3 key tenants, most commonly discount chains. The first power centre in Bulgaria will be opened within a year in Vratsa. Land plots for the project have already been purchased in Plovdiv, Vidin and Rousse. Power centres will also be built in Dobrich, Bourgas, Sliven, Yambol, Haskovo and Blagoevgrad. The power centres will attract supermarkets, DIY chains and furniture stores as tenants. They will also accommodate cafes, movie theatres and restaurants. The company is not disturbed by the low purchasing power in some of the towns. The rents for tenants will range between EUR 6 and 10 per sq. m, which will allow for lower prices of the offered goods and services, according to the company. Melina has been operating on the Bulgarian market for several years. Plovdiv's Markovo Tepe is the biggest investment of the company so far. The company also plans to set up a large-scale business centre in Sofia.


Belgians to build hi-tech park near Plovdiv

The Belgian company IMMO Industry Group is thinking to invest about 50 mln. euro in a modern tailor-made industrial, assembly and logistics park in Plovdiv, announced stroitelstvo.bg.According to the plans of the company, there will be industrial buildings, depos, loading and unloading areas and offices following the tenant's operational needs. A possible expansion and second phase parcels is planned too.Tailor-made real estate solutions will vary from 2,000 sq. m to 72,000 sq. m on a 145,000 sq. m land plot.The park is going to be located about 5 km from the city centre. Thus there will be a direct access to Highway E80, which is part of Pan European Corridors no. 6, 8 and 10, making it a prime gateway to the EU, Russia, Turkey and the Middle East.Another important fact is that the Plovdiv International Airport which is the biggest Balkan cargo airport will be at just a few minutes from the park.The works will start in the beginning of 2008 and is expected to last approximately 2 years.The procject will be officially presented today during the „Investments business forum" which will take place in „Novotel Plovdiv". More than 10 Belgian companies are expected to participate.

Israeli billionaire invests in Bulgaria's biodiesel production

Petro Group Ltd., controlled by Arkadi Gaydamak through Ameris Holdings Ltd., is in negotiations to acquire the controlling interest in a Bulgarian company that is building an oil refinery for an initial investment of 15 million EUR.Construction of the refinery is due to be completed soon. The company is also building a biodiesel plant and a facility to purify and use sludge and oil-saturated waste.Petro Group owns 280 gas stations and convenience stores in the US. This is the first time that the company has shown an interest in the refining side of the fuel industry. Last month, the company called off talks to buy to buy 110 gas stations and convenience stores on the US East Coast for $60 million, plus inventory, through its subsidiary GPM Investments LLC.Petro Group said at the time that it cancelled the negotiations because of financial findings uncovered during a preliminary examination, it cannot be ruled out that the company had decided to channel its resources to new activity rather than expand its current business.


Israeli tycoon  seeks to buy another Bulgarian asset

Arkadiy Gaydamak, an Israeli tycoon of Russian origin, is in talks to buy a biodiesel refinery, Haaretz daily reported, as quoted by investor.bg.The refinery in question is currently under construction and the deal is said to be struck through Petro Group, a company quoted on the Tel Aviv stock exchange. The transaction entails the buyout of the company owning the project, as well as facilities recycling high fat content refuse. The company, whose name will be disclosed on deal signing, has made 15 million euros in first-time investments.Gaydamak is owner of assets in Europe- and Israel-based companies active in the mining, crude refining and real estate sectors.He joined the Bulgarian market early this year with the purchase of Ocif Group in a 144 million U.S. dollar deal. The firm is among the main investors of Mall Sofia, Mall Plovdiv and a retail project in Rousse.Recent media reports saw Gaydamak pursuing the purchase of a minority stake in Atlas Estate Ltd., an investment fund listed on the London Stock Exchange.



Equest to build office center on Iztok cinema site in Sofia

Investment fund Equest plans to build a 16-floor office center on the site of the Iztok cinema theater, show the revised regulations for the development of the residential district of the same name in the Bulgarian capital Sofia.The new zoning plan for the district will be tabled for a public discussion on Wednesday. According to the authors of the zoning plan, the Equest high-rise, which will have a built-up area of 2,000 sq m, will act as a counterpoint to the Pliska Hotel located across the Tsarigradsko Shose boulevard.The revised zoning plan of the Iztok borough, one of Sofia's prime residential districts, covers an area of 46 ha locked between the Tsagrigradsko Shose and Dragan Tsankov boulevards and the Atanas Dalchev and Nezabravka streets.The plan allows for construction height of up to 17 floors.The public discussion of the new zoning plan of the Dianabad district is scheduled to take place on Thursday. It cover an area of 65 ha.

Estonians invest �30 M in recycling factory in Bulgaria

Estonians plan building up a recycling factory in Pleven as the investment counts on 30 million EUR, announces stroitelstvo.bg.The company " Envatech Baltic Service OU" seated in Talin foresees the factory will be finished in 15 to 18 months and it will solve a significant part of the ecological problems of the Pleven region.Taxes to the amount of a million EUR per year will enter in the municipal treasury.Two technologies will be used in the equipments' work - the first one will recycle to 25 tones per day hospital, animal and pharmaceutic rubbish, and the second- 150 tones mixed plastics per day.The investment validity is about five years. The project is presented before the Ministry of Environment and Water, the district director and the Regional Inspectorate of Environment and Water in Pleven. At the moment the project awaits confirmation.


Greece among biggest investors in Bulgaria


Greece is among the biggest investors in Bulgaria, the country's Finance Minister Plamen Oreshararski said Friday at a meeting with his Greek counterpart Yeoryios Alogoskoufis.
Greece is third in foreign investing in Bulgaria, following closely behind Austria and the Netherlands. Greek investments represent 9% of the volume of all direct foreign investments in the country, Oresharski added.At their meeting the two finance ministers discussed the economic development of the two neighbopur countries, as well as the creation of a joint working group on the customs administrations of Bulgaria and Greece.They conferred also on the trans-border cooperation.

Bulgarian realty - a hit among Russian investors

The Bulgarian real properties are among the most attractive offers at the DomExpo in Moscow. Twenty-seven real estate companies among the 150 participants in the realty expo represent Bulgaria. Twenty-seven Russian companies offer real properties in Bulgaria to their clients. The big Bulgarian construction entrepreneurs try to find secure investments for their businesses. Real estate experts are divided over the issue of the market trends in Bulgaria - some say that the real estate market in Bulgaria is already saturated and the investors' interest will soon ebb away, while others say that Russian entrepreneurs show an increasing interest in Bulgaria's real property market.



German investors eye Vidin airport


The status of the defunct Vidin airport, which was shut down 10 years ago, will be specified soon. Vidin's regional governor Krastyo Spassov has already sent a letter to transport minister Petar Mutafchiev requesting that concession procedure be launched for the airport. The proposal must be tabled to the government for approval. The request was prompted by the strong investor interest in the Vidin airport, both from local and foreign companies. Three offers for the participation in a future procedure for the concessioning off of the airport have been submitted over the last year. The latest offer was submitted on October 11, 2007 by a German entrepreneur. The investors offer to restore aviation operations at the airport, as well as the maintenance of airplanes. The airport will also become a base for emergency help airplanes and helicopters.The reconstruction of the Vidin airport, the setting of the Danube Bridge 2, the modernisation of the Vidin-Sofia railway line and the overall upgrade of the road infrastructure will turn the city into a modern transport and communications centre, according to Krastyo Spassov.

Investment certificate handed to Bulgarian airport operator

Transport Minister Petar Motafchiev handed a First Class Investment Certificate to Andereas Helfer, executive director of Fraport Twin Star Airport Management, for the company’s project to extend and modernise the operations at Bulgaria’s Bourgas Airport, investor.bg said on October 17.Fraport was planning to invest the total of 49.6 million euro in the different stages of the project by 2009. The certificate entitles the project to infrastructure funding from local and state government.The largest portion of the slated investment, or 33.5 million euro, would be spent on the construction of a new passenger terminal at Bourgas Airport that will spread on 43 200 sq m. The project includes an improvement of the adjoining infrastructure of the airport worth six million euro  and a complete replacement of the air traffic control equipment, investor.bg said.Fraport Twin Stars Management is a Bulgarian-registered consortium of Germany’s Fraport and Bulgaria’s BM Star. Last year it signed a 35-year concession agreement with the Government to operate the Black sea airports of Varna and Bourgas. According to the contract, the consortium was to take over complete operations and master planning for both airports, as well as development of modern passenger terminals. In total the planned investments for the concession period were to reach 563 million euro for the two airports, Fraport said.

Arsenal to invest EUR 1m in new weapon


Kazanlak-based ordinance plant Arsenal has launched on the market its latest handgun model, branded Arsenal P-MO2 compact. The handgun is equipped with a laser pointer and will be priced at between USD 300-350. Arsenal will invest more than EUR 1 million in the production line of this weapon alone, Nikolay Ibushev, executive director of the company, said. The interest in the new weapon is very strong, according to Ibushev. The special forces of the ministry of defence are already armed with the weapon. The total investment of the company will exceed EUR 3 million in 2007. Part of the funding will be used for the completion of the optic network that will link the computers located in the different complexes of the company.





Irish property High-Flyer with investments in Bulgaria "Faces Collapse"


Michael Lynn, an Irish solicitor and property developer, whose international property empire has expanded to include Bulgaria, has tried to assuage fears over its collapse. The solicitor, who is believed to have been in Portugal to weather a EUR 30 M property crisis, says he has not "absconded" and is preparing to return to Ireland, the Irish Sunday Independent newspaper reported.Michael Lynn, a high-flyer in the property world in Ireland and abroad, is believed to have borrowed up to EUR 80 M to invest in property. According to the report leading financial institutions are looking to secure up to EUR 30 M in the belief that the Mayo-born businessman re-mortgaged many of the properties in his portfolio with different lenders to expand his business.Mr Lynn's "main concern" now is to return to Ireland, the head of a large and reputable Dublin firm of solicitors told the Sunday Independent."He says he has enough assets to go around and there will not be a problem -- I don't know, but he has assured me that he is coming back to face all this," the solicitor said.Last year, one of the property tycoon's companies gave away a EUR 100,000 apartment in Bulgaria on the Late Late Show as part of a promotion. He also used the services of high-profile footballers in Ireland and Portugal to promote his ventures.According to Sunday Independent a combination of slow sales and rising interest rates have precipitated the current crisis.Lynn's company Kendar Global Properties stepped on the Bulgarian property market earlier this year with the launch of the construction of a residential and vacation complex near the town of Razlog, close to the ski resort of Bansko.The company announced plans for EUR 75 M of investments in apartments and real estate in Bulgaria by 2010.

Bansko ski resort still interesting despite building boom

This winter season Bulgaria's top ski resort Bansko expects more than 800,000 guests, informed Standart news, citing sources from the resort's municipality.Hotels and apartments for rent can accommodate 15,000 people. After the constructional works on hotels in Bansko ends, the resort will offer lodgings to 30,000 people.The investments are estimated to more than 1 billion EUR. 10 new 4-star hotels will be open soon.We guarantee there will be no problems of water or electricity-supply character, said from the resort's municipality.The funds given for infrastructure improvements in 2008 are on the amount of 25 million BGN (12,5 million EUR).  In spite of the construction boom, the interest to Bansko is still growing. Square meter land on the municipality territory costs 200 EUR and the price of residential buildings reached 1,200 EUR per sq m.

Cheap labor attracts investors

Foreign investors are attracted to Bulgaria because of her EU accession, cheap labour and strategic location in the Balkan region. According to the UNDP report on world investments, Bulgaria is the seventh most investment-attractive country in the world. Bulgaria, Romania, Russia, Kazakhstan, and Ukraine draw in eighty-five percent of all investments in Central and South Eastern Europe, last year.By August 2007, the foreign investments to Bulgaria amounted to 3.4 billion euros; thirty five-percent of this sum went in real property and twenty-five percent, in the country's industry."To keep the investors interested in our economy, the Government should reduce the bureaucratic burden and keep the taxes and employment insurance premiums low," sources from the Confederation of the Employers and Industrialists in Bulgaria told The Standart.  They will propose a reduction of the employment insurance premiums by another three points, provided that the collected revenues to the Budget for 2008 keep the level of this year. 


Nearly BGN 10M invested in land by Agro Finance


Bulgaria's Agro Finance had 4,660 ha of land in its portfolio at the end of September, according to a bulletin posted on the website of the Bulgarian Stock Exchange (BSE). Month on month, the land purchased by the special purpose vehicle increased by 15.26%.
Agro Finance's investments totalled BGN 9.985 million at the end of September, the land was acquired at an average price of 2,140 per ha. Nearly 96% of the company's portfolio consists of agricultural land.During Wednesday's session on the BSE Agro Finance's shares cheapened by 7.41%. A total of 11,573 shares changed hands, the average price dropped to BGN 1.25.

Swiss company invests BGN 20 M to make headlights

Swiss Oskar Ruegg AG will invest 20 million levs (1euro = 1.95 levs) in the construction of a plant that will produce lightning facilities for Volvo, Volkswagen and Audi. The plant is planned to be situated near Stara Zagora, southern Bulgaria, according to Eduard Hany, CEO of Oskar Ruegg Bulgaria at the inauguration of the first stage of the project.
Four million levs are invested in the first stage of the production and the construction of the production base will have to be completed by 2011.






EU metes out �1,2 Billion for Bulgarian companies

By 2013, private sector companies in Bulgaria will have to have absorbed 1,2 billion Euros of EU funds to develop their business. Yesterday, Bulgarian Minister of Economy Petar Dimitrov gave a start of the first three projects under the operative program Development of the Competitiveness of the Bulgarian Economy. Twenty-five million Euros is the amount of funding Brussels has earmarked for technological modernization of the small and medium-sized Bulgarian enterprises. All application documents must be submitted no later than January 22, 2008. The minimum amount that a company will be able to apply for is 50 000 Euros. The maximum will be 2 million. The budget envisaged for introduction of the international standards and quality management systems is 5 million Euros. Applications will be accepted until January 15 2008. The newly started innovative companies will also benefit from the program. They will be able to absorb as much as 4 million Euros under it.

Over 700 firms on "Stroiko 2000" Expo

The specialized trade exposition for construction, architecture and furniture "Stroiko 2000" is opened. Over 700 Bulgarian and foreign firms participate in the expo.The ceremony was opened by the vice- minister of the Regional Development and Public Works Savin Kovachev in the central foyer of National Palace of Culture.One of the attractive offers on "Stroiko" expo will be door shanks, opened by fingerprints. The system is developed by brand new technology and till now it was used in NASA and FBI.The shank's price is 1000 BGN (500 EUR) . It can be programmed so that with one finger to unlock a door, with other finger to run security and so on.Organized twice a year, the " Stroiko" expo established itself as a business contact meeting, as among specialist in the branch, so among producers and customers.The exposition is led for 29th time and will proceed till October 23 on area of nearly 5000 square meters.The enter is free.

Sopharma is back on track

Pharmaceuticals giant Sopharma has acquired another 4.72% of the Veliko Tarnovo-based enterprise for medical disposables Momina Krepost AD, the Bulgarian Stock Exchange informed. Thus Sopharma’s overall share is 42.26%. The company’s stocks went cheaper by 20.92% by reaching an average BGN 60.99. Our interests in Momina Krepost are to invest and raise its production, Sopharma’s executive director Ognyan Donev told Pari daily.

Czech Budvar beer enters Bulgarian market

Danish brewer Carlsberg said on Wednesday it signed a deal with Czech Budweiser Budvar, NC to market Budvar beer in Bulgaria.Carlsberg will import Budvar beers from the Czech Republic, starting initially with 33 cl glass bottles and 50 cl cans, with 50 cl bottles and kegs to follow suit in the near future."Carlsberg Bulgaria is and important partner for us and we see a lot of potential in the Bulgarian market. This partnership is another sign of the quality and recognition of our brand in the world," Budweiser Budvar CEO Jiri Bocek said in a statement.The Czech brewer, owned by the state, exports its beers to 50 countries worldwide, relying occasionally on partnership agreements with other brewing companies.Carlsberg markets Budvar beers in Sweden, Croatia and Finland as well, reporting a 37% rise in sales for the first seven months of the year.Budweiser Budvar becomes the second to Czech beer to step on the Bulgarian market, with Belgium's InBev launching production of its Staropramen brand at one of its three Bulgarian brewers in 2005.The beer is sold under the Budweiser Budvar or Budejovicky Budvar throughout the world and Czechvar in the US and Canada, due to a trademark dispute with Anheuser-Busch, which owns the rights to the Budweiser name in North America.

Bulgarian companies with $ 662,000 supplies for the US Army

Supplies for US army provided  by Bulgarian companies estimates more than $ 662 000, announced from the Economic chamber of Stara Zagora.More than 70 American and 100 Bulgarian companies joined a seminar for companies meeting the supply needs of  the US army. The event  took place in Stara Zagora.The executive officer Mark Lumer, engaged with the supplies for the army in Bulgaria,  said that US army is the most important client in the world with its budget reaching $ 425 bln. He added that the army itself needs a variety of goods and devices especially transport and building services, food, water, garment and hoisting devices.Reminding that after 2 weeks in Graf Ignatovo will be staring a regular NATO practice regarding the Italian squadrons F16., Mr.Scot said  that  between 18-26 agreements were signed during the previous practice.Mr.Scot added that in the short run an agreement for water supply for the American soldiers in the Middle East is expected to be signed. The contractor will be a Bulgarian company. Bulgarian company is suppling coca cola for the NATO contingent in Romania too.Despite the big number of law regulations, (more than 800), which hinder the assignment procedures there is a big interest coming from Bulgarian companies.


Kremikovtzi looks for financing from other companies


Kremikovtzi will try to attract financing from other companies to carry out 12 investment projects. That will accelerate the metallurgical plant's environmental programme and diversify its production, CEO Alexander Tomov said. That will also help Kremikovtzi divest of non-core activities.If at least 15 partners take part in the projects, the term for implementation of the environmental programme will be shortened by two years and it will be completed by the end of 2009. As much as BGN 308 million has been allocated for it. More than a third of the money, BGN 122 million, will be spent on rehabilitation of coke production.Kremikovtzi's site can be transformed into a commercial and industrial zone and even housing projects can be developed on the land outside the production ground, Tomov said. A plant for household waste recycling can only be built if the facility meets the environmental requirements.

Kremikovtsi smelter sold at pieces

Kremikovtsi smelter will be sold piece by piece. Fifteen different companies wish to lay hands on various manufacturing activities in return of investments in environment protection systems. "Together with our partners we would more easily fulfill the environment protection program," said Kremikovtsi's Executive Director Mr. Alexander Tomov. Furthermore he said that 1,100 workers have to be laid off as of November 1, but would be rehired by companies servicing the plant.


Bulgarian steel mill to enter real estate business


Bulgaria’s largest metallurgical plant, Kremikovtzi, was planning to become a player on the country’s real estate market, the company’s management announced on October 15, as quoted by mediapool.bg.Kremikovtzi, which is owned by India's Global Steel Holdings Limited, has 1 200 hectares of land on its site near the capital Sofia. The land represents the largest single plot on the territory of Sofia Municipality.A week earlier, Sofia’s chief architect Petar Dikov said the plant should be demolished and a new business centre, a new “city”, should be built in its place. Sofia Mayor Boiko Borissov, who is currently running in the local elections for a second mandate, backed the idea.Responding to the pleas, Kremikovtzi’s executive director Alexander Tomov said they were ready to support such a project if the future “city” would coexist with the plant. The company was open to real estate developers willing to participate and was ready to co-operate with Sofia Municipality on any project that would boost the economic growth of the northern part of Sofia, Tomov was quoted by mediapoool.bg as saying.
Kremikovtzi planned to get rid of some of its non-core business operations to avoid financial losses, Tomov said.By the end of 2007, Kremikovtzi would transfer 900 of its current 6800 employees to a new engineering division. The separate company would accept orders from Kremikovtzi but would be paid as an external supplier and would have a license to do business with other clients.Kremikovtzi was ready to invest 308 million leva in measures aiming to align production operations to the relevant environmental protection requirements. The Environment and Waters Ministry had been pressuring the plant to stick to the norms, which was the prerequisite for the steel mill to acquire the mandatory integrated pollution prevention and control permit that it had so far failed to obtain.


Bulgaria's Kremikovtsi woos investors for BGN 308 M environmental plan


Bulgarian steel mill Kremikovtsi, the country's biggest polluter, plans to invest BGN 308 M by 2011 to clean up its act, but hopes to woo investors to cover part of the expenses by offering some of its extensive land plot for real estate development.The extensive environmental programme includes 12 separate projects, aimed at cutting emissions, which alone will account for half of the investment, and upgrading production lines, steel mill CEO Alexander Tomov said.To streamline operations, Kremikovtsi will also spin-off non-core assets into subsidiaries, which will cut the steel mill's 6,800 payroll by nearly a quarter.Kremikovtsi's land plot sprawls on 1,200 hectares and the steel mill could sell parts of it to cover the costs of the upgrades.But first the city hall has to change its designation for the entire plot, which can now be used only for industrial purposes. The councillors have already started the process of changing the designation to "multipurpose use".The large land plot in the eastern suburbs of capital Sofia would make an attractive proposition for any real estate developer, but only if Kremikovtsi's fumes are absent.The steel mill is now trying to convince Bulgaria's Environment Ministry that its plan to cut emissions will bring it in line with EU environmental standards.The ministry is expected to rule on Kremikovtsi's application for a new environmental permit to continue operations by the end of the month.Kremikovtsi is owned by Global Steel Holdings, the holding company of Indian brothers Pramod and Vinod Mittal.


Two more companies in NABUCCO gas pipeline project


Economy and Energy Minister Peter Dimitrov has okayed in principle the inclusion of two more companies in the NABUCCO gas pipeline project, during a meeting with the European Coordinator of the project, Johannes van Aartsen, his Ministry said in a press release.The two companies in question are Gaz de France and the German company RWE, who are to join Nabucco Gas Pipeline International comprising the Bulgarian Bulgargaz company, OMV of Austria, the Romanian partners, Botas of Turkey and MOL of Hungary, says the press release.The Nabucco pipeline is a proposed natural gas pipeline that is planned to transport natural gas from Turkey to Austria, via Bulgaria, Romania, and Hungary. The project is one of the four priority projects of the EU in the energy sector. At his meeting with Johannes van Aartsen, Dimitrov reiterated Bulgaria's support for the project.


Suez looks to U.K., Romania, Bulgaria for nuclear projects


French energy and utilities company Suez (SZE), which plans to merge with Gaz de France in the first half of 2008, is interested in building and operating nuclear power plants in the European Union, the company reaffirmed, Market Watch informs.
Suez CEO Gerard Mestrallet, who is set to lead the future GdF-Suez combine, confirmed Monday at a joint conference with GdF CEO Jean-Francois Cirelli, that the company is examining opportunities in Bulgaria, Romania and the U.K., a company spokeswoman confirmed Tuesday. Mestrallet did not exclude the possibility of building a European pressurized reactor, EPR, in France, the spokeswoman added. The EPR was principally developed by Siemens of Germany and French state-owned nuclear services and engineering company Areva. Suez is able to build and operate nuclear power stations and is interested in expanding in both areas, the spokeswoman said. The company has said it is "actively participating in the nuclear energy revival in Europe."
Like Electricity de France, which is positioning itself as a contender to build reactors in the U.K., Suez said it has close links with Areva.While the French state owns most of EdF, it also will hold a controlling minority stake in the future GdF-Suez.

Pirogov hospital closes the year at BGN 15m loss, financial report shows


Pirogov hospital’s liabilities to suppliers amount to nearly BGN 11 million. The hospital’s medicines and consumables in storage are below the critical minimum. Pirogov will close the year at a BGN 15 million loss, says a financial report, which will be presented Tuesday by hospital director Dimitar Radenovski. The Healthcare Ministry’s orders have not been fulfilled – no business program, financial plan and financil reports have been drawn up. The hospital does not have a three-year program 2007-2009, business and financial plans for 2007.






Bulgaria 2007: Preparing for turbulence

Author: Emil Bonev, based on Financial Times


The country is enjoying another year of strong growth, rising foreign investment and a steady decline in unemployment, says Financial Times in an analytical article about the situation of the Bulgarian markets and the risk for the country, deriving from the wake of a world financial crisis.There has been fierce competition among international banks to lend to an emerging middle and a rush by foreigners to acquire property in Bulgaria.Transfers from the European Union structural funds are due to start flowing next year, enabling Bulgaria to start on the long process of catching up with richer partners.But this sunny outlook could soon turn cloudy, says the article.On one hand there are some suggestions that East European economies might face a short term liquidity crisis and more important consequences in the longer term as growth will come down from very high levels due to the difficulties and higher risks associated with obtaining credit.The World Bank, cited by the author, says that tightening credit would weaken growth in developed markets, which will have an effect on the emerging market exports.There is also a possibility of a deepening financial crisis and of a sustained reduction in external financing, which would affect countries with a high current account deficit.Bulgaria is among those seen as vulnerable. Fuelled by rapid credit expansion, the first-half current account deficit reached �2.5bn, equal to 10.6 per cent of gross domestic product. It is projected to end the year at a record 19 per cent of gross domestic product.Plamen Oresharski, the finance minister, says that before the credit crunch hit, the deficit had not given cause for concern, mainly because a high percentage of imports covered equipment and machinery for fast-growing local companies and foreign investors setting up in Bulgaria."It's clear we may face risks if European growth slows, as more than 60 per cent of our trade is with the EU," he says.Foreign direct investment of around �4bn in the run-up to EU accession fully covered the current account deficit last year, but there are some doubts whether this performance can be repeated.The central bank intervened this year to slow credit expansion, which had been growing at an annual rate of more than 40 per cent, by raising the mandatory reserve requirement for banks from 8 to 12 per cent.The surge in private sector borrowing has already pushed up Bulgaria's gross external debt to 80 per cent of GDP.Still there exist opinions, that the presence of foreign-owned banks will underpin financial stability. The sector is dominated by subsidiaries of banks based elsewhere in the EU that rely on parent groups to provide funds for lending.After three years of annual growth above 6 per cent of GDP, a cooling-off period could even bring benefits, Mr Oresharski suggests."At the moment we have issues with both wage and price inflation, while a damping of demand would have a positive effect on the current account," he says.Mr Oresharski says Bulgaria has no choice but to maintain the tight fiscal policies that have resulted in budget surpluses, given that the country's currency board arrangement takes away the option of using monetary policy as a tool.The surplus this year is set to rise to 2.7 per cent of GDP, boosted by higher tax revenues following the introduction of a 10 per cent corporate rate. Income tax will also fall next year to a flat rate of 10 per cent in a renewed effort to capture more of the grey economy in its net.Next year's budget is still being prepared but Mr Oresharski says it will assume "another year of sustained growth".Provided, that is, the new EU member-states can weather further turbulence in global financial markets, says the author in conclusion.