불가리아 주요 경제뉴스 ( 19 - 26 OCTOBER 2007)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 19 - 26 OCTOBER 2007)

 

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

·        Bulgaria and South Korea will collaborate in the social sector

·        Bulgaria leader in EU fund absorption

·        EU provides �18 M for the construction of 16 industrial zones in Bulgaria

·        Bulgaria to receive �2 B for infrastructure

·        Bulgaria receives funds for curbing economic differences

·        Bulgaria's economy registers 6.4% annual growth

·        Undeclared work in Bulgaria accounts for 35% of GDP

·        Emerging Markets names Oresharski FM of the Year

·        PM Stanishev: GDP expected to grow over 6% in 2007

·        Bulgarian PM promises Nobel Prize

·        Bulgaria to import electricity if winter is cold

·        One more energy block considered

·        Price hike of Bulgarian goods tops EU’s average

·        Bulgarian Customs collected BGN 5.12 B in the first 9 months of 2007

·        50% growth in corporate credits in Bulgaria in 2007

·        Bulgaria 2008 budget to target even bigger surplus

·        Brussels suspends Trakia Highway deal

·        More foreign visitors but less revenue from Bulgarian tourism

·        Italians on dental tourism in Bulgaria

·        Arab tourists welcome in Bulgaria

·        Bulgaria, Romania leaders in property market growth

·        Adoption of zero excise duty on biofuels delayed

·        Bulgaria's Plama refinery to restart in 6 months

·        Used car dealers screen VAT frauds

·        World Bank: Overregulation still bane to local business

 

 

 

 

INVESTMENTS:

 

·        Investments intermediaries expand their activity

·        BGN 1 billion to be invested in roads

·        Bulgaria's Silistra with new industrial park for �10 M

·        Austrian company to build a ski-resort near Dobriniste

• Spanish co starts work on Ruse ceramic tiles factory
• Spanish Marina D'Or to build 2 vacation villages in Bulgaria
• Spanish company Catalonia invests in Pamporovo area apartment resort

·        Spanish company to invest �5 M in dairy farm in Bulgaria

·        �60 M villa complex to be built off Tsarevo's coast

·        Lachita, Ital Food open new factories

·        Hypermarket chain Carrefour enters Bulgaria's Grand Mall Varna

·        French plaster cardboard maker to invest �51 M in Bulgaria

·        Bulgarian-USA military facilities cost US $60 M

·        Bulgarska Roza to invest over BGN 7M in 2007

·        Sofia to pay BGN 5 М for waste plant study

·        Hotel Bulgaria to become commercial centre

 

COMPANIES:

 

·        Sofia can expect healthy inflow of companies

·        Two tobacco giants want to buy Bulgartabac

·        World IT company ‘Micro Focus' officially opened its new office

·        Bulgartabac's exports soar Jan-Sep

·        Elana clients eligible for Overgas Capital loans

·        Slatina Bulgarplod sold for BGN 75.4М

·        Raiffeisenbank raises capital to BGN 310.1M

·        Four companies to replace water pipes in Stara Zagora

·        Italian brand enters Bulgaria`s olive oil market

·        61 Bulgarian companies planning stock exchange listing

·        Overgas: Over 7,000 households use natural gas in Sofia

·        Bulgaria's Uninet starts selling domains in cyrillic

·        Strong interest expected in BAIT Expo

 

ANALYSIS:

 

·        Bridget Czarnota: European money should not be considered a solution to all problems

·        IMF: Economic growth is at hand, unemployment has dropped sharply

·        IMF: Bulgaria is in for a financial collapse that slashed the Asian Tigers a decade ago

 

Articles:

 

 

MACROECONOMY:

 

Bulgaria and South Korea will collaborate in the social sector

 

The Bulgarian government approved the Agreement for social confidence between Bulgaria and Korea. The agreement will serve as a base for future negotiations. The government directed the Minister of Labor and Social Policy together with the director of the National Insurance Institute and the executive director of National Revenue Agency to conduct the negotiations and to conclude the agreement under the condition of a following ratification. The agreement aims to regulate the employment insurance in both countries, as well as the payment of retirement, disablement and inherited pensions. The agreement also regulates the interactive consideration of the insurance period, provided by the legislations of the both countries.

Bulgaria leader in EU fund absorption

The SAPARD Agency has agreed 110% of the European subsidies allocated to Bulgaria, the executive director of the State Agriculture Fund, Dimitar Tadarakov, said. The 10-percent overperformance is the result of a bonus won by Sofia. Thus Bulgaria has topped the list of the last 12 EU newcomers in fund absorption.More than 3,500 agreements have been closed under the SAPARD programme worth EUR 1.4 billion, Tadarakov said. Over 51,000 jobs have been opened with investments made under SAPARD.A total of 77 frauds for BGN 28 million have been registered in relation to SAPARD financing. That is less than 2% of all subsidies. As much as BGN 7.5 million has been recovered, Tadarakov said.

EU provides �18 M for the construction of 16 industrial zones in Bulgaria

The minister of economy and energy Peter Dimitrov made the first dig of the Industrial park in Silistra. 10 M EUR are invested in the project, which will be realized in 3 years.
Construction gaskets and water-based dispersions will be produced in the future Industrial park. There will be also a harbour complex, logistics, packing, re-packing and storage of liquid products, loose and packed goods.Over 80 % of the production will be exported. It is expected more than 200 workplaces to be created.Investor of the Silistra Industrial park project is Bross Holding.“Bross Holding” is a Bulgarian company with international activity and is member of the Bulgarian chamber of commerce and industry and of a range of other national organisations, commented the chairman of the Board of the directors Sergei Lipchev. The company is in the list of the biggest taxpayers in Bulgaria.The Bulgarian and the EU policy is the construction of industrial zones and parks as the Silistra one, claimed during the ceremony minister Peter Dimintrov. So far 88 Bulgarian towns have submitted projects for industrial parks. However, the EU is supplying 18 M EUR for the construction of only 16 industrial zones in Bulgaria, added the minister.

 

 

Bulgaria to receive �2 B for infrastructure

Bulgarian Ministry of Transport and the European commission brought to an end  the negotiations for the approvement of the EU operative programe "Transport" 2007-2013 which boasts about 2 bln euro EU budget, announced the Ministry of Transport. The programe supposes some important infrastructural projects related to the improvement of the railway and sea transport system as well as other types of transport inside the country.Among the most important projects which are funded by the programe are the modersnization of the railway between Vidin-Sofia, the building of the Struma and Maritsa Highways, the Sofia  Subway`s lay-by and the building of Intermodal terminal in Sofia.These projects will improve the comfort and enhance the traveller`s security. As well as this the modernization of the transport sctructures will reduce the time for travel and the freight costs.One of the specific goals of the programe is to balance the use of the different kinds of transport. After the end of the programe the national transport system of Bulgaria is expected to have reached the level of the European Union`s one.

 

Bulgaria receives funds for curbing economic differences

 

Тhree countries from the European Economic Area (EEA) have announced they will pledge EUR 41.5 million for ecology, qualifications improvement and for restoration of historic sites in Bulgaria. Norway, Iceland and Lichtenstein are members of the EEA. The funds will be used to contribute to the social and economic development of the two EU newcomers. Romania will be also financed likewise. The funds will be paid by the end of April 2009, 24 Chasa daily reports.

Bulgaria's economy registers 6.4% annual growth

Bulgarian economic think-tank Industry Watch said on Sunday it upped its gross domestic product forecast for this year to 6,4%, having downgraded it to 5,8% earlier in April."The data available for the first half of the year give reasons for increased optimism for this year, as well as grounds to believe the trend will carry-over into next year," the think-tank said in a report.Industry Watch also raised its forecast for next year to 6,3%, compared to its earlier estimate of 4,9%.Bulgaria's statistics board NSI reported last month that the country's economy grew by 6,4% in the first half of the year, to BGN 24,47 B, raising hopes that it would finally buck the downward trend of recent years.Last year Bulgaria's economy grew by 6,1%, a touch slower than the 6,2% in 2005, and well below the 6,5% official target. In nominal terms, Bulgaria's GDP for 2006 was BGN 49,1 B, or EUR 25,1 B.The think-tank's economists, however, do not believe that Bulgaria's economy could be overheating."Although we expect consumer price inflation to pick up, compared to our earlier forecast, we do not see a risk for the country's monetary and financial stability. It's also important to note that no political party has shown any interest in abolishing the currency board regime," the report read.Its authors now believe inflation will reach 8,5% this year before slowing down to 5,7% in 2008. In April, they forecast inflation falling to 4,9% in 2007 and 3,9% in 2008, compared to 7,3% last year.Nine-month data released by NSI show year-on-year inflation reaching 13,1% at end-September and 8,9% for the year so far.High inflation remains the main obstacle preventing Bulgaria from adopting the common European currency.Industry Watch's forecast is the averages figure obtained by polling five Bulgarian analysts.

 

Undeclared work in Bulgaria accounts for 35% of GDP

Bulgaria outstrips all European Union member states in the extent of undeclared work, which accounts for 35% of GDP, a survey has found.The extent and characteristics of undeclared work appeared to differ widely in the member states, with highs of 20% of GDP in Italy, Spain and Portugal and lows of 10% in the other countries in Southern and Eastern Europe, a Eurobarometer survey shows.Undeclared work is more concentrated among students, the unemployed and the self-employed, and has a higher incidence in the construction and household services sectors. The detection risk also matters - people who consider the risk to be small are more likely to be involved in undeclared work.The survey found almost a quarter of the EU's 500 million citizens have at some point been involved in undeclared work, either by paying for it or working for cash. on average, 5 percent of the 26,755 people who participated in the EU questionnaire said they carried out undeclared work last year.Vladimir Spidla, the EU's employment chief, said Europe's black market economy "undermines the financing" of national social security programs and hinders efforts to boost economic growth."There are no signs that the phenomenon is decreasing. Indeed in certain sectors and certain forms of work it appears to be growing," Spidla said. "We need to step up our approach and take more decisive action across the EU."In light of the survey findings that European Commission has proposed a further cut in taxation on labour, review of the transitional arrangements as soon as possible, hassle-free exchanges of good practices, better measurement of undeclared work, active involvement of workers' and employers' representatives in the fight against undeclared work.

Emerging Markets names Oresharski Finance Minister of the Year Emerging Europe

 

Emerging Markets has named Plamen Oresharski Finance Minister of the Year Emerging Europe, the Finance Ministry said.The publication has been a source of information for investors, bankers and brokers working in the debt markets of the developing world for 20 years now.Oresharski won recognition for his strict fiscal policy, which protected Bulgaria from any populist moves that might endanger macroeconomic stability. The Emerging Markets Publication also noted that the low rate of GDP redistribution helped increase business activity and reduce unemployment to about 7 per cent.The finance minister's policy has improved the business climate and the labour market, at the same time guaranteeing a linkage between income and higher labour productivity, according to the Emerging Markets Publication.Oresharski will not be able to receive the award in person and will not go to Washington, DC, for the World Bank/IMF Annual Meeting, the Finance Ministry said. Due to his commitments in the drafting of the 2008 budget and the ongoing teachers' strike, he will be represented by Deputy Minister Dimiter Ivanovski.

 

PM Stanishev: GDP expected to grow over 6% in 2007

 

Meeting with representatives of the business circles in Bourgas Region, Prime Minister Sergei Stanishev said the gross domestic product is expected to grow by 6.4 per cent in 2007, which is a very good rate not only for the European Union as a whole but for any new Member State, BTA reports."Data show that the situation with foreign direct investments (FDI) is also good. At the end of August, FDI amounted to 3,350 million euro, and if their growth rate is sustained, they will exceed last year's level and will cover more than 100 per cent of the deficit in the current account, which causes a serious disbalance in our economy," Stanishev said. The apocalyptic predictions from the end of 2006 about a shock rise in prices did not come true. The Bulgarian economy has been integrating successfully in the common market in this first year of EU membership, Stanishev said. The fears that as a result of entering the common market Bulgaria will have problems with the collection of budget revenues have been dispelled. The budgetary institutions and, first of all the National Revenue Agency, guarantee a high degree of the budget implementation and, therefore, this country's financial stability."The EU has given our country a serious chance for a more dynamic development," the prime minister said. The European funds must be utilized presenting good and defendable projects that should be then executed well in order to produce the desired social, economic and infrastructure effect."It should be clear to everybody that we cannot turn overnight from the poorest country in the EU into a country with standards like those in Germany, France or the Czech Republic," Stanishev observed.The prime minister visited Bourgas to inaugurate a new mobile crane in the western port of the city. It is designed to hoist containers and has a capacity of 100 tonnes. He was shown a repaired bridge facility at the West Terminal of the port.

Bulgarian PM promises Nobel Prize

After Parliament voted down the third non-confidence motion for the Government, tabled as a result of the teachers' strike and the crisis in the education system, Bulgaria's Prime Minister Sergey Stanishev promised a Nobel Prize for the right-wing economists if they managed to prove that loosening purse strings leads to low inflation rates. The non-confidence motion was rejected by 160 votes 'against,' 61 - 'for' and one abstention of an independent MP.  The parties of the ruling coalition demonstrated unity and all their MPs were present in the plenary hall. only the leader of the Movement for Rights and Freedoms, Ahmed Dogan missed the sitting as he was on a campaigning tour outside Sofia.  Prime Minister clearly demonstrated what the consequences would be in case everybody's income was raised at once. Stanishev showed a banknote of 50 levs and a coin of the same value of ten years ago, before the currency denomination in Bulgaria. "Certain political forces are interested in prolonging the strike and obviously this has something to do with the coming mayoral elections," Stanishev summed up. Stanishev allows himself to treat the teachers awfully as if he were the Godfather who is making and withdrawing offers, according to Ivan Sotirov of the United Democratic Forces.  He believes the coalition Cabinet, led by the Socialists, will drive Bulgaria into a fourth national catastrophe just like the other leftist governments, those led by Todor Zhivkov, Andrey Lukanov and Jean Videnov, did previously.For the two days of voting, the MPs let themselves have Wednesday, Thursday and Friday off. Traditionally the Fridays before elections are Parliament's non-working days. This time the MPs will have three days off before the elections due October 28.

Bulgaria to import electricity if winter is cold

"If winter comes cold, our power engineers will have to make a difficult choice - import of electricity or payment of fines to Brussels because of two inefficient power units of the Maritsa-Iztok 2 thermal power plant," deputy Energy Minister Yordan Dimov said in an interview with the Bulgarian National Radio.The first and the second power units of Maritsa-iztok 2 should be stopped by January 1, 2008 because they do not meet the environment protection standards. The installation of the units' sulphur removal filters, planned to end by the end of the year, will most probably take more time. In Bulgaria's EU Accession Agreement it is provided that we should decommission the power units by the beginning of the next year, if they do not meet the EPA requirements. If Bulgaria does not fulfil this commitment, the country is threatened by fines in the size of 110-120,000 levs per month, the Standart was informed.

One more energy block considered

The American company AES declared interest in building up one more, third energy block for the new- constructing Electric Power- Station in Gulabovo area. The head executor of the project- French company Alstom Power, though, have problems with the supplies delivery, because of the overloading of  their factories all over the world. New energy block with 300 MW power will be finished in 2015. The first of the two blocks drops three months behind from the plans.The reasons for the delay are high temperatures in the summer and delayed deliveries of metal constructions from Turkey.  

 

Price hike of Bulgarian goods tops EU’s average

The price hike of Bulgarian goods tops the average of the EU, shows Eurostat’s Harmonised Index of Consumer Prices (HICP). From 2005 to August 2007 hike in Bulgaria is 17.22%, whereas EU’s average rate is 4.54%. only Latvia has a higher rate than the Bulgarian one – 17.88%. The September index for Bulgaria is 118.63, whereas it is 104.95 for the EU.

Bulgarian Customs collected BGN 5.12 B in the first nine months of 2007

The Bulgarian Customs collected 5.12 billion levs (1euro=1.95levs) in the first nine months of 2007. This is by 3.4% more than planned. By the end of 2007, the Bulgarian customs are expected to collect 6.8-6.9 billion levs.

50% growth in corporate credits in Bulgaria in 2007

Banks and other credit institutions in Bulgaria extended 50 per cent more credits to businesses in the first nine months of 2007, compared to the same period of 2006, Bulgarian National Bank (BNB) said on October 23, as quoted by investor.bg.The corporate credits for non-financial enterprises reached a total of 19.77 billion leva at the end of September, which was a four per cent growth on a monthly basis. The share of bad and restructured corporate credits was 1.92 per cent of the total, while at the end of 2006 it was 2.43 per cent BNB said.Meanwhile, loans to households and non-business organisations serving the households registered a growth of 1.7 per cent on a monthly basis to reach 12.23 billion leva by September 30. Compared to the end of 2006, the growth was 35.2 per cent.Overdraft credits to households grew by 5.2 per cent by end-September to 1.13 million leva, while housing and retails loans market an increase of one per cent and 1.2 per cent, respectively, to 5.23 billion leva and 4.94 billion leva, respectively. In the housing loans sector, the share of bad and rescheduled credits on September 30 2007 was 2.17 per cent of the total, compared to 2.12 per cent on December 31 2006.Net foreign assets marked an increase of 1.9 per cent throughout September to 19.86 billion leva, while net domestic assets also grew by 1.9 per cent to 27.76 billion leva, BNB said.

 

Bulgaria 2008 budget to target even bigger surplus

The key parameters of Bulgaria's 2008 budget plan are the 10% flat tax coupled with an even tighter fiscal policy, shows a report issued by the finance ministry.The finance ministry has budgeted an inflation of 6.9% for 2008 and a record-setting c/a deficit of 21.9% of GDP.Therefore the top priority of the budget plan is to counteract the deficit. To this end, the government will aim for a budget surplus of 3% and throughout the year will seek further opportunities for overperformance.In line with the restrictive fiscal policy, the planned increase in budget-subsidised wages from July 1, 2008 is 5% to 10%.The tax policy initiatives that usually precede the budget bill have not yet been submitted for review by the government but the finance ministry report indicates that the flat tax rate on personal income will be fixed at 10%. There will be several deduction brackets for the liberal professions: 10%, 25% and 40%.There will be one-off compensations for low-income earners in the budget-subsidised sector who are expected to suffer from the introduction of the flat rate as they will lose their untaxable income base. The size of the compensations was not specified in the report.The minimum contributory income will increase by 20 levs to 240 levs in 2008 and will be revised upwards by 10 levs in each of the following two years. The maximum contributory income will be raised from 1,400 to 2,000 and will stay there through 2010. The patent tax is reclassified as local tax and will be collected by the municipalities.The report also shows that the government has accepted the proposal of tobacco monopoly Bulgartabac to level the cigarette excise with the EU minimum in three goes through 2010.The initial plan of the incumbents was to implement half of the increase in 2008 and the other half in 2009 but that would have spiked cigarette prices. A top-selling brand like Victory, for instance, would have appreciated to 3.40 levs a pack from 2.60 levs at present. It is not clear what will be the effect on cigarette prices from the decision to opt for three equal excise hikes with the first 33% adjustment coming in 2008.

Brussels suspends Trakia Highway deal

It seems that the Trakia highway concession deal will be suspended once again, despite the assurances of Minister of Regional Development and Public Works Assen Gagauzov that the Cabinet will ratify the deal at Thursday's sitting. As The Standart was informed, the European Commission would start an investigation into charges of unnotified aid of the Bulgarian state concerning in the concession agreement, signed under the Saxe-Coburg-Gotha-led Cabinet.We believe that the compensations, which the concessionaires of the Trakia Highway will receive, are overestimated and this is why the European Commission qualifies the state aid as unnotified, her statement reads.The European Commission is expected to announce the start of the new investigation in a few days and the agreement will not come into force until its end. Lawyers say that Brussels has activated a suspension clause on the Trakia highway concession agreement.Two years ago, the European Commission warned Bulgaria that the private joint venture that would take the highway as a concession might have been put in a more favourable position than its competitors.MEP Nikolai Mladenov, who last week questioned the legitimacy of the highway concession agreement before the European Commission, said that the ministers should again postpone their decision on the deal, lest they should violate some of the EU regulations again."The clause of the agreement regulating the state warranty should be written off or the agreement itself should be canceled, because it harms the Bulgaria's interests," says Sofia Mayor Boyko Borissov, who runs for a second term-of-office.

More foreign visitors but less revenue from Bulgarian tourism

More than 4.5 million foreigners visited Bulgaria in the January-September 2007 period but the country lost some revenue because of a tougher visa regime after the country’s accession in the European Union (EU), Anelia Kroushkova, chairperson of the State Agency on Tourism (SAT), said at a news conference on October 22, as quoted by Focus news agency.Around 7.4 per cent more tourists visited Bulgaria compared to the same period of 2006, while more than 73 per cent of them, or 3.3 million, were visitors from EU member states.Revenue from foreign tourist visits in Bulgaria for the first nine months of 2007 was more than 1.83 billion euro, which represented a growth of 17.8 per cent, compared to the corresponding period of 2006. Meanwhile, the money spent by Bulgarians on foreign trips through the end of September 2007 grew by 14.1 per cent on an annual basis.Turkey, Greece and Spain were the main competitors to Bulgaria as tourist destinations in Europe.German and UK tourists said they would go to one of those three countries if not visiting Bulgaria. Russians said Turkey, Egypt or Spain could be their alternative destinations. Scandinavian tourists would prefer Greece, Spain and Croatia if unwilling to come to Bulgaria, while Balkan countries’ holiday makers would have gone Turkey or Romania as alternatives.Bulgaria lost around 250 million leva from a decrease in the number of Serbian and Macedonian tourists. Citizens of both neighbouring states had to apply for visas after Bulgaria joined EU and that had made some of them give up their plans to come to this country’s resorts.

Italians on dental tourism in Bulgaria

Foreigners are visiting Bulgaria for dental tourism more and more often. Their visitings are especially planned only for meets with local dental specialists. Two Bulgarian stomatologists tell that in their clinic were inscribing mostly Italians and Greeks.The ‘tourists' take a hotel room for a couple of days, go to a dentist and leave after that. The dental services come out five time cheaper than in their country. In return the foreigners receive good quality.According to the information that the Italians have, in Bulgaria people can get the most modern materials and the best work in whole Europe.

Arab tourists welcome in Bulgaria

Attracting Arab tourists is very important for the development of Bulgarian tourism. A citizen of the United Arab Emirates averagely spends between US$30 and 200 000 in Bulgarian resorts, according to Bulgaria's Foreign Minister Milen Keremedchiev who has recently returned from Dubai where he worked as Bulgarian consul.  What hinders the development of tourism business in Bulgaria is the visa regime for non-EU citizens. on the other hand, it is equally important to meet all EU requirements. The lack of sufficient number of Bulgarian consulates is another obstacle for issuing of tourist visas, explained Deputy Minister Keremedchiev.  Call centres with the Bulgarian consulates that could operate after the office hours would greatly facilitate those who wish to obtain a Bulgarian visa, summed up their demands the representatives of the Union of Tourism Investors.

Bulgaria, Romania leaders in property market growth

Bulgaria and Romania were the most rapidly growing real estate markets in Europe in the first half of 2007, a survey conducted by consultancy firm CB Richard Ellis (CBRE) shows.One of the main reasons for that is the fact that the markets in the two Balkan countries are still undeveloped, unlike those in Central Europe, Valeri Leviev, managing director of Elta Consult, told the Pari daily. The company represents CBRE in Bulgaria. According to Leviev, there is potential for development in the field of office, retail and industrial space. The office market in Prague for instance is expected to reach 2.7 million sq. m by this year's end, while in Bulgaria it is estimated at only 650,000 sq. m. Besides, business property deals in Bulgaria provide a return of 8%, while the rate in Central Europe is just 5.5%, Leviev added.

Adoption of zero excise duty on biofuels delayed

All types of fuels, sold and produced in Bulgaria, should contain 5% biofuel as of 2008. The fuels, however, will continue to be levied 100% excise duty, even though biofuel should be excise duty free.This may result in a increase of between BGN 0.001 and BGN 0.002 in the end price of petrol and diesel fuels, Dimitar Zamfirov, chairman of the National Biofuels Association in Bulgaria (NBAB), told the Pari daily. Fuel prices are not likely to go down even if the zero excise duty rate is applied, according to Zamfirov. This is because the production of bioethanol and biodiesel is still more expensive than crude oil processing, Zamfirov added. The excise duty levied on biofuels will not affect the end fuel prices, according to Kostadinka Todorova of the ministry of economy and energy. Even now companies, such as Lukoil, add biofuels to their products at present, Todorova added.Biofuels are yet to be levied zero excise duty as the move has to be approved by the European Commission. The whole procedure may take about a year and a half, according to Lyudmila Elkova of the ministry of finance.The ministry of economy and energy will come up with a short-term programme of measures in an attempt to encourage biofuel producers. The programme will be tabled for approval to the Council of Ministers within two weeks. The programme envisages the establishment of lower interest credit facilities.

Bulgaria's Plama refinery to restart in 6 months

The new owners of Bulgaria's bankrupt oil refinery Plama plan to modernise the outdated plant and restart production in six months, a company official said on Wednesday.Plama, which has been idle since 1999, will initially process 600,000 tonnes (about 12,000 barrels per day) of crude oil a year, said Ivailo Ivanov, representative of Bulgarian-based Highway Logistic Centre which bought the Balkan country's second-biggest refinery this year.The new owners would then add a reforming and a cracking unit to the refinery in northern Bulgaria and expand its capacity to an annual 2 million tonnes of crude in the next year and a half, Ivanov told Reuters."We will initially invest between 20 and 30 million euros to modernise and restart the refinery. And then we plan an investment of 80 to 120 million euros to build cracking and reforming units," Ivanov said.Plama's new owners have hired UK-based oil services company Petrofac Ltd to conduct an audit of the refinery and advise them about its restart, he said.Ivanov said his company had secured crude oil supplies from Russia. Highway Logistic Centre is part of a holding company which has stakes in Russian oilfields and business partners in Britain and China, he said but did not give other details.Highway Logistic Centre acquired the debt-ridden Plama for 44.4 million levs ($32 million) at an auction earlier this year.The communist-era refinery, Bulgaria's second biggest, had changed hands several times in the 1990s after its initial privatisation. Critics say various owners had siphoned its funds, which culminated with its insolvency last year.Some have questioned the logic of having a refinery far away from sea and river ports. Plama is located some 50 km from the river Danube and about 340 km from the Black Sea. Bulgaria's other refinery, Neftochim Burgas, owned by Russia's LUKOIL expects to process 7 million tonnes of oil this year. The refinery at the Black Sea port of Burgas supplies about 80 percent of the country's motor fuels needs.

Used car dealers screen VAT frauds

After Bulgaria's accession to the EU, considerable changes in the tax legislation took place. Have any new schemes for VAT frauds emerged? Will any novelties in the procedures for paying of the taxes be introduced by the State Revenues Agency? Standart Daily turned for comment to Mrs. Maria Murgina, Executive Director of the Agency.

Mrs. Murgina, Bulgaria's first year as a full-fledged member of the EU is now at its end. Have there been any VAT frauds committed by Bulgarian companies via deals made within the common European market?

There have been attempts closely resembling those previously committed in other EU member states. Right now we are launching audits targeted at second-hand car traders. In the EU, business with old cars is one of the most frequently used screens for fraudulent operations. We suspect that recently many attempts have been made in Bulgaria at VAT drain, already well familiar to the tax authorities of the EU countries with a broader membership experience. A prerequisite for such frauds is the specificity of the taxation on old car sales. Despite it, and thanks to the VAT Information Exchange System (VIES), through which Bulgaria shares VAT information with every other EU member state, we very much hope that the state budget would not suffer any losses. Yet another convenient cloak for VAT frauds are the Bulgarian companies, transporting materials from the EU in order to convert them into a product here using the cheap labour and then transporting the produce back - the so-called outsourcing. But fortunately the State Revenues Agency has thoroughly studied the experience of the EU member states' tax agencies and we are already rather knowledgeable about the most frequently utilized schemes for VAT draining.Moreover, we have developed a special program for training of auditors and 600 officers passed through it.

Will the tax return forms be simplified next year? Would their simplification make both citizens and administration officers' life easier?

Making everyone's life easier is namely the ultimate result we are hoping to achieve. If the taxpayers won't have to submit 40-page-long declarations, the officers receiving and processing the documentation won't have to work as strenuously as they do. Shrinking the format of the documents would also curtail the expenses for paper and printing. This year, in line with the e-government project, we will provide another new service, which will immensely ease up our clients. This is the so-called offline submission of Corporate Revenues Taxation Act tax certificates and Natural Persons Incomes Taxation Act tax certificates.

How is this year's tax collection going? What will be the amount of the overfulfillment of the budget?

The expected fulfillment of the state budget for 2007 will amount to 11, 282 billion levs (1 Euro = 1.95 levs), which means about 13% more than the planned for the year. The results achieved by end-September 2007 are more than satisfactory. Nearly 8,5 billion levs entered the accounts of the National Revenue Agency by the end of the nine-month. This makes 85% of the envisaged for the whole year. In comparison to last year, largest growth-rate has been registered by the incomes from the taxation of the natural persons incomes as well as from the taxation of the corporate revenues. The corporate tax has contributed to the state budget by 1,250 billion levs end-September, and this is 40% more than the registered for the same period of 2006. The revenues from taxes on people's incomes are 30% more than last year, and this at a mere 17-percent increase in the average income. We expect that the central budget be overfulfilled by 950 million levs and the insurance funds - by 350 millions.

World Bank: Overregulation still bane to local business

Cumbersome administrative procedures for the registration and licensing of new businesses or the expansion of existing operations continue to be a drag on Bulgarian entrepreneurs despite the unsuccessful attempts of the Bulgarian government to simplify the administrative environment, said the annual report of the World Bank and the Bulgarian finance ministry on reforming administrative procedures in the tourism, food and road transportation sectors, Dnevnik a.m. reports.The cost to register a Bulgarian business with the Commercial Register is similar to that in comparator countries. However, the time needed to complete the registration procedures is high compared to that in benchmarking countries. It takes 32 days to incorporate a company in Sofia, compared to 11 in Romania, 24 in the Czech Republic and 19 on average in the OECD countries.While registration times are high, the cost of establishing a company in Bulgaria is broadly aligned with that in comparator countries.According to the document, the shortcomings affecting the Bulgarian tourism industry include an excessive number of licensing procedures, redundant and outdated requirements for the classification of hotels and restaurants, high registration fees for travel agents and tour operators and inefficient control.The report cites an industry poll which found that in the tourism sector, 40% of the interviewed businesses see administrative barriers as a major problem. The report recommends classification to become voluntary. The star-rating system applied in the tourism sector is cumbersome and mainly irrelevant and should be abolished. An important issue in the food industry is the split of responsibility and control between the ministries of health, farming and economy. In addition, the municipalities impose regulations and all types of fees on food production and distribution.

 

INVESTMENTS:

Investments intermediaries expand their activity

As the popularity of Bulgarian Stock Exchange increases, more and more companies are deciding to go public.A reason for this interest are the investment intermediaries (including the work of front office, back office, brokers, analysts, consultants, procurers, directors etc.), as well as the Stock Exchange itself, which has done a lot in the recent years to increase its popularity and people's awareness of the advantages of raising capital on the stock market (by organizing round tables in different cities, and aiming at direct contact with investors).The media also has a considerable impact on the rising interest in BSE, in the companies, in collective investment schemes, REITs, asset management funds etc.Since the beginning of the year two banks listed their stock, as well as some companies from the IT sector, from the sectors of industrial minerals, food industry, infrastructural companies etc.So we are seeing a new competition these days – investments intermediaries are competing in luring new companies to the stock market. This is a process that takes about 4 to 6 months, although professionals make it look easy.
The company has to say how, when and how much, and the intermediary does everything else for them. In 2007 First Financial Brokerage House organized two IPOs – that of Bianor and First Investment Bank, while BenchMark was underwriter of one (Todoroff) and co-underwriter of another (Lomsko Pivo).Bulbank, UBB, Capman, Elana Trading, Bulgarian Post Bank and Somoni International all underwrote one. According to Profit.bg the business of investment intermediation is about to expand. Some investment intermediaries have already teamed up a special unit to carry out that sort of business, which seems to be a big advantage on their part.

BGN 1 billion to be invested in roads

The investments in road infrastructure in Bulgaria will reach BGN 1 billion in a year, minister of regional development and public works Assen Gagauzov said in the town of Radomir. That is a record high amount for Bulgaria, he added. The investments in road construction this year have doubled, compared to 2006. Road building companies have purchased a lot of new equipment, which allows them to carry out bigger orders, Gagauzov said and promised that there will be enough work for the companies in the sector. In 2008 the ministry will focus on the reconstruction of third-class roads.

Bulgaria's Silistra with new industrial park for �10 M

Bulgaria's Economy and Energy Minister Peter Dimitrov will turn the first sod of ‘Industrial Park Silistra', situated in the Danube city of Silistra.‘Industrial Park Silistra', which is investment suggestion of ‘Bross Holding' foresees the building of harbor complex with three wharfs, production of fittings for building materials, packaging of silicon fittings and others.The total area of Industrial Park Silistra is 70,000 sq m. The planned investment for a period of three years goes to 20 million BGN (10 million EUR). It is foreseen that will be opened 200 new work positions.‘Bross Holding' wants to start the constructional sides by the end of the year so the Park can start function in 2008. The investments are common between ‘Bross Holding' and the US company ‘Dow Corning', world leader in silicon's production.

Austrian company to build a ski-resort near Dobriniste

Austrian company "Orbel Development" Ltd in association with Bulgarian building company "Galchev еngineering group" are planning to build a ski resort near Dobriniste with a capacity reaching 10 000 beds, announced Dnevnik.The project is a joint-venture between the two companies. According to the investors, the area of the resort will be about 2000 hcr with total length of the ski trails around 22 500 metres.About 6 km long cabin lift will be going up from Dobriniste. The rest of the ski trails and the area around Bezbog peak will be equipped with seat lifts. About 13 000 sq.m of the ski trails and the facilities are government`s property, the rest of it is municipal land.The new ski trails will be about 19 km long. There will be a cyclist zone and 39 km long tourist routes.It is expected some 40 mln.euro to be invested in the construction of the cabin lift and the machinery equipment.

 

Spanish co starts work on Ruse ceramic tiles factory

Keros Ceramica, the Spanish ceramic tiles manufacturer, Wednesday broke ground for its new factory in the industrial zone of Bulgarian city Ruse, on the Danube. The plant, due to open in mid-'08, will create 150 jobs during the first stage of the project. Some 80-90% of the input materials will be supplied by local mining company Kaolin. The Keros Ceramica investment project will be implemented on a 11.5 ha site.

Spanish Marina D'Or to build 2 vacation villages in Bulgaria

Spanish tourism and property investment group Marina D'Or has announced plans to build two holiday compounds in Bulgaria.The first development will occupy a 2.25 ha site near Varna. The land was purchased from local furniture company Yavor for 12 mln euro.The Bulgarian office of the company said more information about the coastal development will be made public in November.Earlier this year, the idled Yavor factory announced it was cashing its assets.The second project of the Spanish investor is a villa community near the village of Ribaritza, in the Balkan Range, Northern Bulgaria. The Old Ribaritza (site in Spanish) complex, with a footprint of 4.7 ha, will deliver a total of 700 apartments and houses. Total built-up area will be 85,000 sq m.The list of leisure amenities includes swimming pool, gym and spa center. The first of the project's three phases should be completed in May 2009.

Spanish company Catalonia invests in Pamporovo area apartment resort

Spain's Catalonia Real Estate company said it is investing in a resort development in the Rhodope mountains, Southern Bulgaria.The company, which initially planned to develop a residential scheme in Sofia but was put off by steep land prices, said it chose ski resort Pamporovo for the location of its Vistas resort complex due to the smooth interaction with the local authorities in Smolian, the municipality that has jurisdiction over the area.Three years ago, Catalonia Real Estate bought 1 ha of land in Pamporovo at 35 euro/sq m and then added 1.5 ha to the site.Vistas will be located in the area of the village of Levochevo which is itself is situated 6 km from Smolian and 4 km from Pamporovo.The complex, due for completion in 2008, comprises six apartment buildings with approximately 30 housing units each. Prices will range from 900 to 1,200 euro/sq m.The leisure amenities of the property will include swimming pool, gym, sauna and steam bath. In addition to skiing, the area also offers opportunities for mountain-biking and horse-backing riding

Spanish company to invest �5 M in dairy farm in Bulgaria

Spanish investment fund GED will invest five million euro in the production facilities of Fama milk processing company.Viktor Zarev, Fama executive director said that the fund purchased the company and already prepared the documents needed for a license for export in the EU.Standart daily quoted Zarev as saying that it was impossible for dairy product prices in Bulgaria to decrease.“In only three months the price of raw milk, which we buy from the farmers, went up from 0.52 to 0.68 leva. Its value is 65 per cent of the price of the final product,” he said.The usage of corn for bio fuel was another problem for the sector. The decrease in the amount of fodders and their price raise influenced the milk price, Zarev said.

�60 M villa complex to be built off Tsarevo's coast

А total of 30 family houses will be built on a platform in the sea off the coast of the Bulgarian town of Tsarevo as part of a new holiday complex, Costa del Croco. The total investment in the project is expected to exceed EUR 60 million.The complex is due to be finalised in 2009. It will also include 53 buildings on the beach with a total of 927 apartments, some of which have been sold already to Russian buyers. The prices at present are about EUR 1,300 per sq. m. A marina, a bank, theatres, a casino, swimming pools and tennis courts are also planned.Costa del Croco is a project of Laudis Building, which is backed by Russian capitals. The investment will be carried out through Bulgaria Consult, a locally-registered company.

 

Lachita, Ital Food open new factories

 

Two snack manufacturers, Lachita and Ital Food, have opened new production facilities.
The owner of Veliko Tarnovo-based Lachita, Ivaylo Lyubenov, has invested EUR 15 million in a factory for biscuits and crackers. The green-field project is built on 7,000 sq. m in the city's industrial zone. It is equipped with the biggest production line in Bulgaria with an output capacity of 40 t a day. Currently 200 people are employed in the factory, another 200 jobs will be opened within two years, Lyubenov said.
Shumen-based Ital Food Industry has opened a BGN 8 million factory in cooperation with its majority owner, Ficosota Syntez. The facility is equipped with three fully-automated production lines. Besides its well-known brands Bruschetti Maretti and Kubeti, the company will start manufacturing its first candy product, Franka. Ital Food sells about 30% of its output in Bulgaria, the remainder is exported.

 

Hypermarket chain Carrefour enters Bulgaria's Grand Mall Varna

 

Carrefour, the biggest retail chain in Europe, officially signed a long-term lease contract with Grand Mall Varna in the Bulgarian Black Sea port of Varna, Orchid Developments Group announced Tuesday.The Carrefour hypermarket will have a total area of 9,300 square meters, located underground which makes the company the biggest tenant in the mall. Carrefour will also turn into the largest hypermarket in Varna.The contract with Carrefour is exceptional considering the size and the potential of the companies and shows the trust between them. The agreement was signed for a period of 30 years. The contract is expected to start immediately after completion of construction.Last monsth Scottish property development holding Miller Group closed the acquisition of the Mall Varna complex for EUR 120 M in the biggest deal of its kind in Bulgaria.Mall Varna, developed initially by local firm Interserviz Uzunovi following a EUR 30 M investment, is one of the six malls being built in the city.Construction on it began a year ago and was scheduled to complete in November, but its grand opening has since been postponed for spring 2008.Miller Group is active in construction, as well as house building and property development.

 

French plaster cardboard maker to invest �51 M in Bulgaria

 

French plaster cardboard manufacturer Saint-Gobain was planning to invest 51 million euro in building a plant in Bulgaria via its local subsidiary Saint-Gobain Construction Products Bulgaria, investor.bg said on October 24.The InvestBulgaria Agency on October 24 handed a First Class Investor Certificate to Saint-Gobain for the project to build the Plaster Cardboard Maritsa Plant. The certificate entitles the project to infrastructure funding from local and state government.The company would not borrow any money for the project implementation but would use its own funds for the entire development process. The plant would be built in the area around the Maritsa Iztok thermal power plants. This would place it close to the raw material the company uses, namely the gypsum waste products of the sulphur purifying installations of the coal-based power plants.The annual production capacity of the plant would be 25 million sq m of plaster cardboard with different thickness and purpose (standard, moisture resistant, fire resistant and reinforced). The new facility would open more than 80 jobs.Saint-Gobain had been present on the Bulgarian market so far only as seller of its brands Rigips (plaster cardboards), Isover (insulation materials) and Weber (industrial coatings). Saint-Gobain had an annual turnover of more than 4.7 billion euro and was represented in 54 countries worldwide.

Bulgarian-USA military facilities cost US $60 M

The US Government will invest sixty million dollars in the construction of the joint military facilities in Bulgaria."This will be the value of the first of a series of tenders, which are to be announced," a high-placed officer in charge of defence issues at the US Embassy in Sofia.The NATO will allot to the Bulgarian Ministry of Defence fifty million levs (1 euro = 1.95 levs) and the Ministry of Regional Development and Public Works will allot another ten million levs for the construction of the infrastructure around the US bases."The construction of the US military bases is behind schedule," said Colonel Ivan Ivanov, chairman of the NATO Defense College Alumni Association."Last year we announced that the joint military facilities would be operational by the end of 2007, but there are two reasons for the delay, one of them being the big expenses of the Pentagon in Iraq and Afghanistan," the Colonel added.To his words, the second reason for the delay concerns the procedure of the Bulgarian-American negotiations.The first American soldiers will arrive at the Novo Selo military base, the airbases in Bezmer and Graf Ignatievo and the warehouses near Aitos in the spring of 2008Yesterday, Col. Ivanov said that during the latest Bulgarian-American military exercise Bulgarian companies won all nine tenders for the provision of logistics for the US contingent in Bulgaria.

 

Bulgarska Roza to invest over BGN 7M in 2007

 

Bulgarska Roza Sevtopolis will make investments for BGN 7.29 million in 2007, it emerged from the prospectus for the capital raise of the company. Bulgarska Roza, which specialises in the production of essential oils, will attempt to raise BGN 6.03 million of the figure on the Bulgarian Stock Exchange (BSE). The remaining BGN 1.26 million will be secured through loans and own funds.The Kazanlak-based company is expected to offer on November 14 more than 6 million shares with BGN 1 par and issue value each.
The proceedings from the issue will be used for the implementation of the investment programme of the company. Part of the funding will be used for the renovation of production facilities and the the purchasing of new equipment. The company will also invest in infrastructure and in a video control system. Bulgarska Roza, owned by Sopharma, invested in new technological equipment in March. The move helped the company expand its output capacity by 30%.Bulgarska Roza posted BGN 650,000 profit for the first half of 2007, compared to BGN 1.66 million profit booked a year earlier. The decline may be put down to the increasing material costs of the company. The weak US dollar also affected the performance of the company during the first six months of 2007.
Bulgarska Roza's stock appreciated by 0.52% to an average of BGN 3.87 per share on Tuesday.

 

 

 

Sofia to pay BGN 5 М for waste plant study

 

Тhe municipality of Sofia will pay BGN 5 million for a feasibility study of the future waste treatment plant, the deputy mayor on environment, Maria Boyadjiyska, said. Acting mayor Minko Gerdjikov signed a contract on Wednesday with a consortium of Germany's Fichtner and Bulgaria's BT Engineering and Aqua Consult. The consultant has to conduct the necessary surveys, prepare financial analyses and conceptual projects and help the municipality in applying for financing under the operative environment programme. That has to be completed in 16 months.The revenue from waste fees in Sofia is expected to jump by BGN 5 to 10 million in 2008 due to the finished new buildings, Gerdjikov said. As much as BGN 97 million will be collected in 2007.

 

Hotel Bulgaria to become commercial centre

 

BT Development Services will invest BGN 80 million to transform Grand Hotel Bulgaria into a commercial centre. The facility will accommodate luxury commercial space, as well as office space and a cultural and entertainment centre. The reconstruction is expected to take three years. The investor will receive a first-class investor certificate for the project on Friday. BT Development Services is owned by Liechtenstein-registered Balkan Tourist Ltd, which in turn is part of former Multigroup. The implementation of the project will create more than 50 jobs.

 

 

 

COMPANIES:

 

Sofia can expect healthy inflow of companies

Bulgaria's capital Sofia can expect a healthy inflow of companies on its market as the city sees greater interest from investors, showed a survey by Cushman & Wakefield, conducted among Europe's major business cities each year since 1990.Prague, Warsaw, Budapest and Bucharest can also expect a big inflow, with Prague seeing a significant rise in interest year on year.Still, regarding familiarity with other European cities, Sofia scored last. The study this year allowed for 33 major cities to be studied in depth. Companies were asked which other European cities they felt were important as business locations and how well they know them. This year the list is headed by Valencia followed by Turin and Marseille.In light of further expansion towards Eastern Europe, Sofia scored fourth in terms of greatest business opportunities, standing behind Bucharest, Istanbul and Moscow. The data was researched independently for Cushman & Wakefield by Taylor Nelson Sofres and senior executives from 500 European companies gave their views on Europe's leading business cities.In the overall rating of best cities for business, the top cities of London and Paris continue to lead by some margin. London increases its lead yet again over Paris in terms of actual score. Frankfurt and Barcelona consolidate their position.

Two tobacco giants want to buy Bulgartabac

Two of the world's biggest tobacco companies have set their business aspirations on the Bulgarian Bulgartabac Holding Group and will most likely partake in its privatization, the holding's Executive Director Hristo Lachev revealed in an interview for The Standart. Unfortunately he didn't want to mention the names of the interested parties."There are no more than 4 or 5 big companies left in the business. Three of them wouldn't even care to participate, definitely. on the other hand the other two would certainly be very excited," Mr. Lachev stated enigmatically. The five big players are British American Tobacco (BAT), Philip Morris USA, Imperial Tobacco, Gallagher Group Plc. and Altadis USA - Gallagher's most recent acquisition. The other global tobacco manufacturer is Japan Tobacco Inc. however they find the Bulgarian market rather small. British-American Tobacco and Philip Morris already own production facilities in Serbia and Romania, respectively; Gallagher have a couple of factories in the region of Southeastern Europe too - the one is in Romania and the other in Ukraine. Imperial Tobacco possess tobacco mills in both Turkey and Hungary."Exactly which are the corporations that have a particular interest for the Bulgarian factories may not be disclosed until a political decision about Bulgartabac's fate is made," Lachev added."Such decision will be taken after the local elections," promised Bulgaria's Minister of Economy and Energy Peter Dimitrov.

World IT company ‘Micro Focus' officially opened its new office in Bulgaria

The firm is specialized in the development of new and finding solutions for the applying of one ones IT products. The company is on the market of 25 countries in Europe, North America, Australia and Japan. Main partners of ‘Micro Focus' are IBM, Microsoft and Oracle. It has more than 1 million licensed products' consumers and round 15,000 clients.The company's income for the last year is $ 171,6 million.In the Bulgarian office of ‘Micro Focus' already are employed 50 specialists, as in the passed year its number has doubled.

Bulgartabac's exports soar Jan-Sep

The financial results of Bulgartabac Holding for the first nine months of 2007 are considerably better compared to the corresponding period of 2006, Hristo Lachev, CEO of the company, said. Bulgartabac occupied 70% of the market in the period, according to Lachev. The figures will be published officially on Monday. The strong results may be put down mainly to the exports of the company in 2007, Lachev told the Pari daily. Bulgaratabac is expected to export 4,500 tonnes of cigarettes in 2007, which would represent an 80-percent year on year increase. A total of 40% of the output of Blagoevgrad BT in the first nine months of 2007 was exported. The figure stood at 20% in the corresponding period of 2006, Petar Popucharov, executive director of the company, said. Bulgartabac exports mainly to the countries in the Middle East and Africa. The company has already signed two contracts with Russian clients, interested in the Victory and Eva cigarette brands. Bulgartabac will also start exporting BG-2000 for the Czech Republic.Cigarette contraband will increase by 30-40% in 2008, as a result of the higher excise duties, according to Lachev.

 

Elana clients eligible for Overgas Capital loans

Certain Elana Trading clients are now eligible to borrow up to 80,000 levs for 3 to 12 months from Overgas Capital, the financial services arm of local gas distributor Overgas Inc. The product is available to Elana clients invested in BG40 components or in Elana mutual funds. The size of the Overgas loan could be equal up to 70% of the value of the equity holdings or, respectively, the mutual fund share units. The annual interest rate is 13%.

Slatina Bulgarplod sold for BGN 75.4М

Тhe Sofia Municipal Privatisation Agency (SMPA) has sold Slatina Bulgarplod EAD for BGN 75.4 million to the namesake consortium represented by Svetlana Kamenova and Spassimir Kanazirev. The buyer will have to invest BGN 3 million in the company over a 15-year period and keep the core activity of the company unchanged by virtue of the contract. The buyer is also obliged to repay the USD 1.3 million loan from the European Bank for Reconstruction and Development (EBRD) within 20 days from the signing of the privatisation contract.

Raiffeisenbank raises capital to BGN 310.1M

Raiffeisenbank Bulgaria has raised its shareholder capital from BGN 173.2 million to BGN 310.1 million, through the issuing of 136.9 million new shares with BGN 1 par value each. The decision was taken by Raiffeisen International Bank-Holding AG, the owner of Raiffeisenbank Bulgaria. Thus, Raiffeisenbank Bulgaria's capital base has increased to BGN 594.5 million. The move is aimed at supporting the dynamic development of the bank on the Bulgarian market. Raiffeisenbank Bulgaria's assets amounted to to BGN 4.6 billion as at the end of June 2007, up 52.46% year on year. The bank occupied 9.79% of the market in terms of assets, while its credit portfolio totalled BGN 2.62 billion.

Four companies to replace water pipes in Stara Zagora

4 companies have been picked up to replace main water pipes in Stara Zagora, the manager of the local water supply and sewerage company, Rumen Raykov, said. The EUR 9 million project will be financed with a loan from the European Bank for Reconstruction and Development. The six lots of the project will be carried out by a consortium between Trace AD and Raicommerce, PSI and Pons Holding of Bourgas.
The contracts have been signed already, the municipality is now expected to issue the necessary construction permits. The supervisor will be chosen by the lending bank by the end of October. The term of the credit is 15 years, with a three-year grace period. The finalisation of the project will reduce water losses in Stara Zagora to less than 50% from more than 60% now, Rumen Raykov said.

Italian brand enters Bulgaria`s olive oil market

Bulgarian distribution company Avendi, part of BM Holding, entered the Bulgarian olive oil market with the Italian brand Filippo Berio, said Bogdana Kroumova, manager of the company’s Foods division, as quoted by Dnevnik daily on October 24.The Filippo Berio product series was positioned in the higher price range and was aimed at retail stores, as well as hotels, restaurants and coffee shops. It was the seventh new food brand that the company had launched on the Bulgarian market since the beginning of 2007. Avendi planned to market only this brand of olive oil on the local market, following a strategy of exclusivity for certain products, said Kroumova.The launch of Filippo Berio on the Bulgarian market further intensifyed the competition among olive oil brands, said Dnevnik. In the past few years, a number of olive oil products entered the local market and currently there were at least 20 positioned in the three price segments. In the high-price part of the market Filippo Berio would compete with Costa d’Oro and Carpelli, and brands like Borges, Hojiblanca, Monini, Minerva and others.The Filippo Berio series included extra virgin olive oil, which was was the most expensive one, pure olive oil – a mixture of extra virgin and refined, and light olive oil.

61 Bulgarian companies planning stock exchange listing

There were 61 Bulgarian companies planning to enter the Bulgarian Stock Exchange – Sofia (BSE) via an initial public offering (IPO) of securities or secondary public offering (SPO) of shares, investor.bg said on October 23, quoting own information and different announcements made to the BSE.IPOs of seven firms and an SPO of one were expected to happen before the end of 2007.Four of the IPO prospectuses – of Trace Group Hold, Hydroisomat and CBA Asset Management – and an SPO – of Etropal – had already been approved by the Financial Supervision Commission (FSC). Other three were in an advanced stage of the approval procedure, namely those of Enemona, Billboard and Durvoobrabotvane-VT and Herti, investor.bg said. Quite recently, the FSC refused to give green light to the prospectus drafted by Finance Engineering.The companies that were expected to premiere on the stock exchange in 2008 were Lev Ins, Investbank, Agria, Astera, Sopharma Trading, Lakprom, Synergon Hotels, Armeets insurance company, Evropa chain of retail stores and others.Only a few SPOs of private companies had successfully made it to the BSE in the past few years, with DZI Bank, BACB, EuroIns, Media Systems, Lomsko Pivo, Pirinsko Pivo, FIA Bulgaria and Prime Tourist among them.Meanwhile, the state had also managed to complete the SPO procedure for a number of companies, partly or majority owned by it, like the Bulgarian Telecommunication Company, Bulgartabac Holding, Bulstrad, Energoremont Holding, Alcomet, Sopharma, Albena, Balkancar Record and others. After a merger between Eurohold and Starcom Holding, the new Eurohold Bulgaria had been traded on BSE since the beginning of 2007. A new listed company on the stock exchange was also Zlaten Lev Holding, which became public because of legal requirement that companies with more than 10 000 shareholders were subject to obligatory listing.

Overgas: Over 7,000 households use natural gas in Sofia

 

The affiliated companies to the Overgas gas distributor have increased their natural gas sales by about 40% this year. The same tendency is noticed in the rest of gas distribution companies operating in the country, Overgas told the Focus News Agency.There are gas distribution and supply licenses issued for 90 Bulgarian municipalities, i.e. for 34% of the municipalities. Overgas’ affiliated companies have license to serve 51 of them. Gas supply is available in about 40 Bulgarian cities.In Sofia, there are over 7,000 households commanding the advantages of natural gas, while another 8,000 have demanded the service.

 

Bulgaria's Uninet starts selling domains in cyrillic

 

Internet users in Bulgaria can now experiment with their name in their language on their Internet after the launch of the sale of domain names in Cyrillic. The selling company is called Uninet Association in cooperation with i-DNS.net International.In 1999, i-DNS.net pioneered the Internationalized Domain Name System, becoming the first Registry to resolve, administer, and deploy full multilingual, native-character domain names. To date, i-DNS.net supports domain name registrations in more than 60 languages, and the list continues to grow.The first domains on sale will be the .bg, .info and .ime zones, written in Bulgarian. The users can buy domains in these zones by the members and the registrars of Uninet. Every Internet provider can become a registrar of Uninet on several simple conditions.The first Internet provider, which became a registrar of domains written in Bulgarian alphabet in Cyrillic, is BG8. The only thing the Internet providers must do to help users use the domains in Cyrillic is to add a small setting in the DNS servers - Currently Uninet is negotiating with the Bulgarian Internet providers, which will allow the use of the domains in Cyrillic before they are officially approved by the Internet Corporation for Assigned Names and Numbers (ICANN) next year. Since the Internet came into widespread use, those among the 70 percent of the world that doesn't speak English have argued that the Web is inaccessible.Currently ICANN conducts a test to see whether domains written entirely in foreign scripts can work without crashing the Net. For several years, the company has allowed domains that are half in foreign characters, such as [Chinese text].com or [Arabic text].org. For the test, domain names will look like [Korean text].[Korean text].Qestions of political and linguistic sovereignty, alongside accusations of American "digital colonialism," have motivated some countries to create their own Internets, effectively mounting a challenge to the World Wide Web. Experts say the difficulties of typing in a foreign script have probably held back development of online economies abroad.The full introduction of IDNs will mean that people can write the whole of a domain name in the characters used to write their own language. Presently you can only use these characters before the dot, so .com, .net, .org and the like can only be written in characters from basic Latin. IDNs will change this so that literally tens of thousands of characters will be available to the world.The "example.test" labels with the associated scripts, the languages that were used for translation of the two terms "example" and "test", and the A-labels for second and top level that are inserted in the IDN TLD zones and DNS respectively.

 

Strong interest expected in BAIT Expo

 

A total of 104 companies will participate in the 12th edition of the biggest IT exhibition in Bulgaria, BAIT Expo, the organisers said. Compared with 2006, the increase is 10%. The number of visitors is expected to rise by 25-30%. The exhibition will open on October 30 in Inter Expo Centre in Sofia and will continue until November 3, 2007. The event will be accompanied by two forums on the development of information technologies in Bulgaria and their implementation in education.The market in Bulgaria has changed, and so have exhibitors, the chairman of the Bulgarian Association of Information Technologies (BAIT), Boyan Boychev, told the Pari daily. Companies have focused their attention on a special group of people, the decision makers, he added.

 

 

 

 

 

 

 

 

 

 

ANALYSIS:

 

Bridget Czarnota: European money should not be considered a solution to all problems

Author: evroportal.bg

Bridget Czarnota, who was Head of the Bulgaria Team Unit at the Enlargement Directorate General of the European Commission, called upon representatives of Bulgarian business to be active in seeking information, both about legislative initiatives of the European Parliament and the opportunities for financing projects from the European funds.She was speaking at a seminar Monday titled "How to Make Friends and Win EU Contracts" organized by the Bulgarian Chamber of Commerce and Industry, the Confederation of Employers and Industrialists in Bulgaria and the American Chamber of Commerce in Bulgaria.Access to information can either be achieved individually or through branch and other nongovernmental organizations, Czarnota said, but in any case they are related to the readiness of business to pay for that access.In addition, she recommended active involvement in the work in Brussels, with a statement of Bulgarian interests. Czarnota also added that European money should not be considered a solution to all problems for much of the funds would go for major infrastructure projects and small sums of money were not given easily.According to another speaker, independent MP Maria Kapon, the possible mechanisms through which business could influence EU decisions include the 18 Bulgarian MEPs, with a wide debate in Bulgaria preceding that in European Parliament.Kapon suggested that a joint programme for work with business be developed at the level of the Bulgarian and the European Parliament in relation to all directives and laws pertaining to business circles.

Economic growth is at hand, unemployment has dropped sharply - IMF

Author: Press Releases, International Monetary Fund

 

An International Monetary Fund (IMF) mission visited Sofia during October 4-16, 2007 to conduct the regular annual Article IV consultation with Bulgaria. The mission issued the following statement at the conclusion of its work on October 16: "Economic growth is performing well, while unemployment has dropped sharply. But some disquieting developments raise challenges for policy makers and other social partners: the persistent gap between Bulgaria's aggregate spending and income is reflected in a widening of the external current account deficit; inflationary pressures are on the rise, partly reflecting one-off shocks, but also steadily accelerating private sector wage increases as labor market conditions have tightened; difficult structural reforms that require strong political will to implement have been put on the backburner, including reforms needed to raise the low efficiency of the public sector; and since July, the external environment has taken a turn for the worse, reflecting credit tensions in mature economies."Given the need to contain and eventually reverse economic imbalances in a difficult external environment, the mission sees the following broad policy requirements:

Fiscal policy should continue to broadly maintain the current stance (around 3 percent of GDP surplus), with the public sector's real wage growth roughly tied to labor productivity trends. Spending and tax levers should be used to accelerate real convergence and productivity growth, including through the efficient absorption of EU funds. We see maintaining significant fiscal surpluses as a key ingredient of a sustainable policy framework. An immediate challenge for the government and its social partners is to avoid excessive wage hikes in the public sector. Such wage hikes would exacerbate domestic overheating and drive up real wages to levels well above those justified by productivity growth. This would undermine external competitiveness, leading to a potentially unsustainable external situation.

Safeguarding financial stability requires continued close monitoring of banks' risk management and capacity to absorb adverse shocks. Further measures to develop capital markets could help to diversify risks away from the banking system and strengthen financial intermediation.The scope for raising living standards and real wages in a sustainable manner depends ultimately on raising the efficiency of available human and real resources while providing incentives to add to available resources. From this angle, substantial progress on structural reforms is essential for accelerating real convergence. Raising public sector efficiency, activating labor supply, and improving the business climate remain key priorities."

 

IMF: Bulgaria is in for a financial collapse that slashed the Asian Tigers a decade ago

Author: Standart News Daily, Issue 438, Year XIV

 

Bulgaria may be hit by a financial disaster similar to the one Asia lived through ten years ago, IMF experts warn. According to them, the Bulgarian economy is far from flourishing. Just like in Romania, Serbia and Croatia the macroeconomic indicators in Bulgaria are corresponding to those registered prior to the Korean crisis and the collapse of the Asian markets in 1996. Then, bad credits severely hit the economies of the Asian Tigers. The debts precipitated massive bankruptcies and unprecedented devaluation of Korean currency. Nowadays, the IMF experts see the signs heralding a similar crisis in Bulgaria. This emerges from a report quoted by the Croatian daily Vecernji List titled "Vulnerability of the Developing Countries of Southeastern Europe." The experts are highly concerned over the huge current account deficit, which is expected to reach 20 percent of the country's GDP by end-2007, according to a report by the IMF mission in Bulgaria that finished its work October 16. The deficit is twice higher than it was in Asia before the crisis and should be curbed urgently. Bank loans have recently avalanched, housing loans alone have increased by 73 percent, show statistics of the Bulgarian National Bank. So far the banking system is steady, but it has to be closely watched.By the end of the current year the inflation rate in Bulgaria will hit 10 percent in the least. The reasons are rocketing foods and fuels prices coupled with pay rises in the public sector. Wrapped up, it may lead to spiraling inflation.With this in mind, the IMF insists that wages should be increased in parallel with the increase of labor productivity. Budget'2007 will be fulfilled with a surplus of 3 percent. However, in the opinion of the IMF, it must be 3-3.5 percent of the GDP to keep the economy stable.