Bulgaria Love/불가리아 뉴스

불가리아 주요 경제뉴스 (26 OCTOBER – 2 NOVEMBER 2007)

KBEP 2007. 11. 2. 23:13





Sections/headline briefs:





·        Foreign Minister Kalfin to pay official visit to Japan

·        Bulgaria inks Danube bridge infrastructure deal

·        Land disputes stall Danube Bridge II project

·        Bulgaria gets BGN 270 M from EU for road repairs

·        Bulgaria to receive �240 M EU funds to protect borders

·        Industry Watch: Bulgaria household wealth tops 26 bln levs

·        Oxford Business Group forecasts 10% inflation in Bulgaria

·        Bulgaria plans drastic tobacco and fuel excise hikes in 2008

·        Chausev negotiates natural gas from Iran

·        State Budget 2008: every third lev goes to the poor

·        RZB Research: Bulgaria 2007 c/a gap seen at 20% of GDP

·        EU Funds Raise Prices at Stock-exchange

·        More Phare financing for industrial clusters

·        German businesses to help Bulgarian partners in EU funds use

·        Construction chamber awards seven golden certificates

·        Bulgaria property boom has environmental cost

·        Environmental fund to Bourgas-Alexandroupolis project under consideration

·        Bulgaria makes progress on energy efficiency

·        E-Government saves �75 M from budget

·        Local PC market increased with 40% in 2007

·        Austria welcomes Bulgarian workers

·        Bulgaria pays off its debt to Switzerland

·        BGN 3B budgeted for loans in 2008

·        Bulgaria`s industrial PPI goes up in September

·        Bulgaria expects �2.5 B from tourism, could do four times better

·        Bulgarian pharmacy owners lobby for legislative changes






·        Bulgaria expects �4.7 B direct foreign investments for 2008

·        Vivartia to invest � 800M in CEE

·        Sofia and Varna are perspective for investors

·        Green Fuel to build �50 M plant in Pleven

·        Arabesque plans to open five Bulgarian shopping centres in 3 years

·        New airport for Sofia is considered

·        Bulgarian Pamporovo resort to get new ski lift, runs

·        Poultry co Gradus to invest in factory for self-basting chicken products

·        FairPlay to build BGN 21M residential complex

·        Linexa to build apartment complex in Razlog

·        � 12M centre to be built in Gotse Delchev

·        � 3M business centre opens in Stara Zagora

·        Petrol AD invests BGN 32M-plus in fixed assets

·        Austria's Wienerberger opens retooled Lukovit brick factory





·        Bulgarian Chamber of Commerce presents Top 100 rankings

·        Bulgaria Air, Lufthansa forge partnership

·        Bulgarian company has been invited as a subcontractor to the Japanese consortium of Penta Ocean/Mitsubishi

·        Over 200 Bulgarian companies to compete for US military projects

·        Sopharma enters the Serbian medicine market

·        Companies fight for IT specialists and engineers

·        Excise on cigarettes to be hiked in 3 steps

·        Trace Group IPO 1,500 times oversubscribed at 32 bln levs

·        Investors to get up to 135 shares in Trace

·        Oracle to rely on Bulgarian call centre

·        Monbat exports to top BGN 100M in 2007





·        Nuclear ambitions fan controversy in Bulgaria

·        Bulgarians voted too emotionally














Foreign Minister Kalfin to pay official visit to Japan


Confirmation of the priority character of relations with Japan, boosting traditional friendship, mutually beneficial cooperation and partnership in the new conditions of Bulgaria's EU membership and in the context of the global EU-Japan partnership are among the main objectives of a forthcoming official visit of Foreign Minister Ivailo Kalfin to Japan, BTA reports. The visit, from November 4 to 7, is at the invitation of Japanese Minister of Foreign Affairs Masahiko Komura, the ministry's information service said Thursday. The visit will feature official talks with Komura, a meeting with Prime Minister Yasuo Fukuda, the President of the House of Councilors of the National Diet of Japan Satsuki Eda, with the parliamentary friendship groups in the two chambers of the Diet and the new Honorary Consul of Bulgaria in Japan Shinichi Munemasa (name may be misspelt). Meetings with representatives of Japanese business circles have also been planned.The visit will focus on presenting Bulgaria's potential as an economic partner, as well as this country's advantages for business, investments and tourism. In another development, Kalfin received the newly-appointed Japanese Ambassador in Sofia Tsuneharu Takeda, the ministry said. Kalfin welcomed the Japanese Ambassador and expressed conviction that during his mandate the traditionally friendly relations with between the two countries will continue to develop successfully and that political dialogue will introduce new ideas in them. He pointed out that Bulgaria's EU membership creates conditions for boosting cooperation, outlining new prospects in all fields - from economy to culture.The talk centered on the forthcoming visit of Kalfin to Japan, in relation to which the Bulgarian Foreign Minister recalled with satisfaction the visit paid by Japanese Foreign Minister Taro Aso to Bulgaria last January, the first one in 23 years. Kalfin merited highly Japan's support in the form of preferential loans for key infrastructure projects, grants in the field of culture and education, and the sending of volunteers and experts along the line of the Japan International Cooperation Agency (JICA), among others. he hailed the interest of major Japanese investors in Bulgaria and expressed hope for a more tangible presence of Japanese business in this country. Kalfin also stressed Bulgaria's desire to boost relations in the field of culture and presented the idea of Days of Bulgaria in Japan on the occasion of the 50th anniversary of the restoration of bilateral diplomatic relations in 2009.


Bulgaria inks Danube bridge infrastructure deal


Bulgaria signed on Friday the deal with Spain's FCC Construccion to build the road and railway infrastructure on the Bulgarian side of the second bridge over Danube linking the EU's two newest member states.The Spanish firm will have to build 15 kilometres of railway, complete with the electrical wiring, plus a cargo station and upgrade the existing passenger station. FCC Construcction will have until end-2010 to complete the works and will be paid EUR 62,6 M for them. The firm won the EUR 100 M tender to build the bridge proper earlier this year.The total costs of the project are estimated at EUR 236 M and will be funded largely with money from ISPA programmes of the EU, from the European Investment Bank and other international financial institutions.British firm High-Point Rendel will be paid EUR 2,7 M to supervise the execution of the contract, Bulgarian deputy transport minister Vessela Gospodinova told reporters at the signing ceremony.Bulgaria's cabinet hopes to complete the buyout of the land that will be used for the project by the end of the year, she added.The bridge will link the Bulgarian Danube port of Vidin to the Romanian city of Calafat by road and rail. It is a key element of a European transport corridor from the German city of Dresden to Istanbul in Turkey.The facility will be 1971 meter-long, including a road and a rail bridges with two lanes in each direction as well as one railway track. Bulgaria and Romania, which both joined the European Union on January 1, signed an agreement to build the Vidin-Calafat bridge in 2000, but various obstacles delayed the project.


Land disputes stall Danube Bridge II project

Glitches with the compulsory purchase of private properties are plaguing the construction of Danube Bridge II, spanning the river at Vidin-Calafat.The Bulgarian transport ministry expects to receive from independent appraisers the estimates for 20 private properties by November 5 and to start negotiations with the respective proprietors.The 2.7 mln euro site supervision contract with Franco-British consortium Ingerop/Highpoint Rendel were signed last week.Spain's FCC will build the cross-bridge railway and road connecting Vidin and Calafat at a cost of 62.6 mln euro.The 2 km four-lane facility should be launched by the end of 2010. Construction is due to begin in March 2008.The EIB and EU's ISPA program each provide 70 mln euro for the construction of the 225.8 mln euro bridge, 5 mln euro will come from the French Development Agency, 20 mln euro from Germany's КfW and 60.6 mln euro from the state budget.

Bulgaria gets BGN 270 M from EU for road repairs

"The first tranche of 270 million levs (1 Euro= 1.95 levs) that Bulgaria will receive from the EU structural funds is meant for the repair and reconstruction of roads," said Assen Gagauzov, Minister of Regional Development and Public Works.Seventeen contracts for the repair of second and third class roads have already been signed. "We expect that twenty-one road repair contracts will be signed by the end of this year," said Vesselin Georgiev, Director of the National Road Infrastructure Fund.The repair of the roads in the small municipalities and of those leading to national landmarks will be carried out with priority.Meanwhile, it transpired that the Cabinet would wait for Brussels' decision as to whether there had been instances of unratified state aid in the Trakia Highway Concession Agreement signed by the Bulgarian-Portuguese Consortium Magistrala Trakia JSC and the Bulgarian Government. Also, the Ministry of Regional Development and Public Works will send a group of experts to Brussels to compare the authentic text of the Concession Agreement with the one submitted at the European Commission, because, to Minister Gagauzov's words, there might be some discrepancies between the texts of the two documents."Even if Brussels comes up with a positive decision on this issue, it is not certain that the contract will come into force. The Council of Ministers will take the final decision on the Trakia deal. We can still assign the construction of the highway to Bulgarian companies," Mr. Gagauzov said.



Bulgaria to receive �240 M EU funds to protect borders

The EU is to allot a total of 239,5 million euro to Bulgaria till 2009 on guarding its borders which are also borders of the EU, sources from the press service of Franco Frattini, the EC Vice President and EU Commissioner for Justice Freedom and Security reported for the Bulgarian News Agency.The funds for 2007 and 2008 amount to 180,0 million euro. Bulgaria's EU Accession Treaty includes a Mechanism for Funds Influx and Facilitation about Schengen Zones with regard to its outer borders. Possibilities have been discussed for Bulgaria's receiving patrol cutters, helicopters and unmanned watch gliders.


Industry Watch: Bulgaria household wealth tops 26 bln levs

Domestic household wealth in cash and equity holdings and bank deposits totalled 26.3 bln levs by the end of the second quarter of 2007, up a third over the same period a year ago, said Industry Watch, the Bulgarian economic analysts and forecasters.The economic growth, the stock market rally and conducive tax reforms should ensure stable gains in personal savings over the medium-term, said Industry Watch.In Q2, bank deposits increased their popularity as a savings product among Bulgarian households. According to central bank data, household deposits were chasing 17 bln levs by August with over half of their balance denominated in a foreign currency.Recent inflationary gains, especially in the month of August, wiped out deposit returns, providing an additional incentive for banks to amp up deposit rates over the past couple of months. In response to competitive offerings from the mutual funds, the local lenders have also created risk-weighted deposit products. The ongoing improvement in deposit terms and conditions will continue in 2008, said Industry Watch.The domestic cash holdings of were reported unchanged at 6.8 bln levs at end-August. Equities posted the biggest gain in terms of a share in household wealth portfolios, up 150% year-on-year by end-September. Industry Watch estimates that local households have invested more than 1.67 bln levs in stocks.

Oxford Business Group forecasts 10% inflation in Bulgaria

Consumer price inflation in Bulgaria is expected to reach 10% this year, while real GDP growth will remain high at 6,4%, analysts from the Oxford Business Group said on Tuesday.Next year, economic growth should remain high, albeit a slowdown caused by adverse global trends is possible, the group said in a report on Bulgaria's first year after joining the EU.One of its main challenges the country faces is the deficit of qualified labour, especially in key sectors like information technologies (IT), said Andrew McDowell, Oxford Business Group editorial manager for Bulgaria.IT, tourism and energy are the key sectors that Bulgaria should strive to develop further, he added.Bulgaria remains one of the most attractive destinations for foreign investment, which stood at EUR 11,5 B over the past three years, with another EUR 4,7 B expected next year, foreign minister Ivaylo Kalfin said.

Bulgaria plans drastic tobacco and fuel excise hikes in 2008

Bulgaria's draft budget bill includes drastic hikes to excise duties on tobacco and fuels, but will leave alcohol duties unchanged, it emerged on Monday.Cigarette duties will rise by 34% starting from January in the first step of a three-year programme that will see the duty rise to EUR 64 per thousand cigarettes by 2010, from the current EUR 31.The average duty hike for fuels will be around 10%, with lower increases imposed on fuels with higher biofuels content and higher for the more polluting kinds. Excise duties on coals will rise by 33 %.No excise duties will be imposed on electricity for household consumption, but the duties on electricity for industrial needs will rise by 20%.Despite considering an increase in the duties imposed on alcoholic and coffee beverages, none will go into effect next year, according to the budget bill drafted by the Finance Ministry, which was presented to employer organisations and trade unions on Monday.

Chausev negotiates natural gas from Iran

"Sofia is eager to further develop bilateral relations with the Islamic Republic of Iran" said Bulgaria's Deputy Foreign Minister Feim Chaushev during his visit to Tehran, reported the Iranian on-line edition Press TV. The deputy Foreign Minister expressed his hopes for the establisment of a committee for trade and export of natural gas from Iran to Bulgaria. Chaushev had an official meeting with Iran's Foreign Minister Manuchehr Mottaki and emphasized that Iran and Bulgaria enjoyed close and friendly relationships.
Last week, Washington imposed new economic sanctions on Iran, which will have an impact on foreign companies trading with the Islamic Republic.

State Budget 2008: every third lev goes to the poor


Every third lev from state budget 2008 will be pocketed by the poor. Over 7,6 million levs (1 EUR = 1.95 BGN) is envisaged for pensions, unemployment compensations and welfare expenditures. The amount comprises 30% of the total budget layouts for next year. Today Bulgaria's ruling coalition will be discussing the draft budget for 2008. The deadline for its approbation by the Council of Ministers and its submission to Parliament is Wednesday, October 31. In 2008 the budget resources designated for building of roads and teachers salaries is to be increased the most. The investments in road infrastructure will gross up to 1 billion levs, which sets yet another record for Bulgaria. The major share of investments will come from EU funds. Thus the Bulgarian citizens will finally see some manifest results of their country's recent accession to the Union. Nearly 3 billions will be poured into the education system, which means 22% more. The healthcare budget will also be considerably expanded. The ceiling of social insurance contributions will be raised by 20 levs to 240, as specified in the report on state budget 2008. The ceiling on employees' national insurance contributions will rise from 1400 to 2000 levs. The ratio between the social insurance amounts paid by the employer and the employee will remain unchanged - 60:40.According to economic prognoses, by 2008 the public sector salaries will undergo a 5 to 10-percent increase, and pensions - a 9,5%. Nearly 3% of GDP is the planned budget surplus, which, if achieved, would mean Bulgaria has strictly adhered to the recommendations of the European Comission and the International Monetary Fund aimed at preserving economic stability in Bulgaria. Furthermore, this ample surplus will help filling the enormous gap in the country's foreign trade. According to expectations, next year the current account deficit will hit 21,9% of GDP. The treasury's expenses for 2008, contribution to the EU budget included, will amount to 25,37 billion levs or 41,1% of GDP. To accumulate a surplus closing 3%, the revenues must amount to 27,19 billion or 44% of GDP. The most crucial change in next year's taxation system will be the introduction of a 10% flat tax on the incomes. As a result 180 million levs will remain at citizens' disposal. The flat tax and abolition of the non-taxable minimum income will make people with lower income pay larger taxes. For this reason, the civil servants, who make no more than 430 levs a month, will be compensated by a salary rise as of January 1. Also on this date there will be a hike in the excise duties on gasoline and cigarettes, as well as electricity prices for industry. The expected end-result is additional revenue of 676 million levs to the treasury. The amount of the planned revenues from taxes is to increase from 34,2 % of GDP, as it is this year, to 35,8 % of GPD in 2008. So actually, the Bulgarians will make a much more considerable contribution to the state budget buying costlier gasoline and cigarettes, than they will benefit from the flat tax introduction.     


RZB Research: Bulgaria 2007 c/a gap seen at 20% of GDP

The widening of Bulgaria's c/a deficit did not cease temporarily in the summer but only slowed down due to smaller monthly deficits, said the Bulgaria Monthly Economic Report released by Raiffeisen Research.The c/a deficit in January-Aug reached 11.4% of our GDP projection for 2007 but was more than 100% covered with FDI.In 12-month rolling terms, the deficit expanded to 19.6% of GDP as of August, suggesting that our most recent forecast of 20% for the full 2007 may be too optimistic, said the report.The gap is forecast to narrow to 16.5% of GDP in 2008.Inflation sped up further in September on food prices, reaching a multi-year record of 13.1% year-on-year. The steep rise of inflation in the summer and early autumn has called for an upward revision of the 2007 inflation forecast to 8% year-on-year in annual average terms, said the report.The report draws attention the growing shortage of skilled workers. It cites a recent survey of Manpower (a multinational recruitment agency) among 300 Bulgarian companies which found that 86% of employers in the country face difficulties in finding appropriate staff.Industrial output and sales growth averaged 10.8% and 8.5% year-on-year in July-August respectively, suggesting that even if GDP growth may slow down in Q3, it will stay high enough in the order of 6% year-on-year, said the report.

EU Funds Raise Prices at Stock-exchange

The forthcoming absorption of EU funds for construction and repair of roads in Bulgaria results in the huge interest of investors at the stock-exchange in road construction companies. "Trace Group Hold" released at the stock-exchange 200,000 shares with a nominal value of 1 levs (1euro=1.95levs) and issuing value of 110,50 levs. The subscription of shares started last Friday. The preliminary data shows that the submitted orders amount to 32 billion levs, which is an oversubscription by 1480 times, informed investor.bg. This is much more than all layouts of Bulgaria's state budget planned for 2008. Recently, the shares of the construction companies of tycoon Vassil Bozhkov, Roads Holding and Moststroy started increasing in price.


More Phare financing for industrial clusters


Candidates planning to create industry clusters will be able to apply for 2.4 mln euro in additional grants provided by EU's Phare program in support of existing or for the launch of new sectoral alliances. The program has so far supported the creation of furniture industry clusters in the Troyan area and tourism clusters in the Smolian area. Funding applications should be received by Dec 17. The minimum subsidy will amount to 50,000 euro per project while the maximum amount is fixed at 200,000 euro.


German businesses to help Bulgarian partners in EU funds use

Business representatives of the German federal state of Baden-Württemberg were coming to Bulgaria with proposals to co-operate with partners in this country on using European Union (EU) funds, Deputy Foreign Minister Evgenia Koldanova said in Varna on October 30, as quoted by Dnevnik daily.Koldanova took part in a Bulgarian-German business forum in the seaside resort of Riviera, near Varna. The German delegation was led by Willi Stächele, state minister of Baden-Württemberg and head of the Bundesrat (German parliament’s upper chamber) committee on EU affairs. German businesses which took part in the forum were from the car industry, machine building, construction, transport and trade sectors.Since last year, Bulgaria had been working on joint projects with Baden-Württemberg, mostly in areas of the economy and environmental protection, Koldanova said. The Germans had an outstanding experience in managing water supply and waste that were hot topics for Bulgaria too. Baden-Württemberg, which had a population of 11 million, was the second ranking German state in terms of gross domestic product growth and income percapita.The business forum, organised by the Ministry of Economy and Energy, was hosted by Varna Regional Governor Petar Kandilarov. Around 50 Bulgarian businesses were taking part in it. The purpose of the event was to encourage inter-company co-operation and establishing contacts with new trading partners, Dnevnik said.

Construction chamber awards seven golden certificates

The Bulgarian Construction Chamber (BCC) granted golden certificates for best construction practice to seven companies in the sector, as part of its annual Top 50+ ranking. The awards were handed by regional development and public works minister Assen Gagauzov and BCC chairman, Simeon Peshov.Winners in the category of big enterprises include Glavbolgarstroy Holding with BGN 300m turnover in 2006, Enemona and Varna-based Planex and AT Engineering 2000 of Sofia.Companies are ranked by several criteria, including scale of operations, financial indicators, qualified staff,possession of necessary equipment and premises.

The documents are valid for a year and certify companies' quality and reliability.

Bulgaria property boom has environmental cost


The citizens of Bansko, a ski resort in Bulgaria's Pirin mountains, are selling their land with gusto to buy fancy cars and replace communist-era furniture, cited by Reuters.
The same is true of other mountain resorts, as well as Bulgaria's Black Sea coast, as foreigners snap up cheap second homes, sending the price of resort and farming land to 250 euros a square metre from just 20 euros five years ago.
But this growth comes at a cost. The once idyllic little town with cobblestone streets and traditional architecture, which in the 1980s was popular among skiiers and hikers from the former Soviet bloc, has changed beyond recognition.

Environmental fund to Bourgas-Alexandroupolis project under consideration

At a 2-day meeting today in Athens, representatives of the shareholders of the International Project Company from Russia, Bulgaria and Greece will discuss the establishment of environmental fund to the Bourgas-Alexandroupolis project, announced the press center of the Ministry of regional development and public works.The idea is the funds in it to be raised through deductions from the company's revenues and in case of eventual damages, the money to be used.During the meeting, the representatives will discuss the ways for protection of the minority shareholders – the companies from Bulgaria and Greece, the place of registration of the company and the supply of oil for full capacity of the pipeline. In Athens, serious attention will be paid to the environmental parameters.The Bulgarian side will suggest before the construction of the Bourgas-Alexandroupolis pipeline to start, a preliminary environmental assessment of the Bay of Bourgas to be made.To remind that on 15 March this year, a Trilateral agreement for the oil pipeline “Bourgas-Alexandroupolis” was signed in Athens. According to this agreement, owner of the pipeline is the International Project Company in which the shares are distributed as follows: 51% - for the Russia side and 24,5% for each of the Bulgarian and the Greek sides.

Bulgaria makes progress on energy efficiency

By 2016, Bulgaria had to lower the end use of energy by nine per cent, according to an approved national action plan for energy efficiency, Deputy Economy and Energy Minister Galina Tosheva said during an energy efficiency and renewable energy sources conference, as quoted by the Bulgarian News Agency (BTA).The goal could be achieved only if all the players in the sector – state institutions, municipalities, power suppliers and distributors, and citizens, would act in one and the same direction, Tosheva said.A considerable amount of energy efficiency measures had already been put into action and they had started to have a positive impact on Bulgaria’s economy, Energy Efficiency Agency (EEA) executive director Tasko Ermenkov said. The agency had spent a lot of effort in the last several years to research, certify and renovate more than 5000 public and municipal buildings, he said.EEA had also launched similar energy efficiency procedures in more than 340 industrial enterprises, which were larger power users with a total annual power consumption of more than 3000 megawatt-hours. The buildings and plants were subject to obligatory research and certification under the Energy Efficiency Act.The Economy and Energy Ministry had raised the budget for public buildings’ energy inspection from two million leva to six million leva for next year. Meanwhile, Bulgaria suffered 1.2 billion leva in losses because of poor energy efficiency of publicly-owned buildings. The buildings in the poorest condition in this regard were hospitals, schools and kindergartens.

E-Government saves �75 M from budget

Bulgaria will be able to save 75 million euro a year after the entire network of the electronic government start functioning, the system model being copied from Denmark. The electronic government in Bulgaria has already begun providing over 1300 services. BAIT Expo (Bulgarian Association of Information Technologies) experts reported that in 2008 four million levs (1euro = 1.95 levs) are planned to be allotted for the development of e-government systems.

Local PC market increased with 40% in 2007

The Bulgarian ICT market can reach 2,3 billion EUR in 2007, Boian Boychev, chairman of Bulgarian Association for Information Technologies (BAIT), said at the BAIT Expo, Dnevnik reported. Boychev was citing data of European Information Technology Observatory.The data shows that local PC market increased with 40% this year, with average annual growth of almost 20% through 2011, Dnevnik informed. Software sales were reported to 57 million EUR with IT services to 69 million EUR.The hardware devices present the biggest segments of the market - 224 million EUR, network equipment are on the amount of 253 million EUR and end-consumer communication devices for 311 million EUR. In the first half of 2007, laptops accounted for 40% of the local PC market. Almost 65,5% of Bulgarians still don't have Internet access despite the domestic abundance of ISPs.

Austria welcomes Bulgarian workers

Austria will open its labor market for Romanian and Bulgarian citizens from January 1,  2008.The state of Austria determined 50 groups of professions, for which the new EU members (including Bulgaria and Romania) will have free access to the Austrian labor market.Among the required professions are: constructors, dyers, carpenter, cooks, crane operators etc.In 2007 Austria entered quota for about 800 turners, cutter workers and welders from Eastern European EU members.The new legislation that will start to operate from January next year will include quota for brick layers, car mechanics, meat cutters and the graduated courses in Technical Universities.

Bulgaria pays off its debt to Switzerland

"Bulgaria's 28,6-million-lev debt to Switzerland has been paid off," announced from the Bulgarian Financial Ministry. This was the second successive money transfer to Switzerland this year connected with the pre-term repayment of Bulgaria's debt. In the end of April 2007 Bulgaria paid off in advance the remainder of its loan from the International Monetary Fund. As a result from the prepayment of the debt to Switzerland, Bulgaria's state budget for this year will save 16 million levs from not paying loan interests.

BGN 3B budgeted for loans in 2008

A total of BGN 3 billion will be alloted from the state budget for new loans in 2008. The figure represents a three-fold increase compared to the sum budgeted for loans in 2007. Up to an additional BGN 1.2 billion is budgeted for new state guarantees in 2008, Martin Dimitrov, an MP for the United Democratic Forces (UDF), said. The higher sum allocated for loans is related to the project for the setting up of the Belene thermal power plant (TPP). The introduction of a flat tax rate without a tax-exempt minimum was a mistake as regards to the budget for 2008, according to Dimitrov. The new threshold means that a person receiving BGN 2,000 monthly salary will have to pay BGN 650 in social security contributions, according to Dimitrov. This would keep the share of the gray economy high, Dimitrov added.

Bulgaria`s industrial PPI goes up in September

The Industrial Producer Price Index, as calculated by the National Statistics Institute (NSI), in September inched up 49.1 points from the month before to 149.1 points, NSI data released on November 1 shows. The index stood at 108.7 points during September 2006.The index takes as benchmark the 2000 PPI for the industrial sector, at 100 points.The extracting industry was the largest contributor to the increase, where PPI rose from 95.7 points in August and 105.4 points in September 2006 to 241.4 points.The processing industry was also among the items on the rice, where PPI was up from 100.6 points in August and 107.9 points in September 2006 to 141.3 points.The industrial PPI for the domestic market alone also gained against both in month-on-month and year-on-year terms. Industrial PPI came in at 15.2.7 points, up from 100.6 points from the month before and 109.0 points from the same month a year ago.All segments within the industrial sector reported gains, the biggest contributor being the extracting industry. At 231.5 points, it was up from 96.9 points in August and 108.5 points in the same month a year ago.The processing industry PPI reported more modest increases – from 101.2 and 108.3 points in August 2007 and September 2006, respectively, to 143.6 points.

Bulgaria expects �2.5 B from tourism, could do four times better

Bulgaria expects profits accounting for 2.5 bln. EUR from its tourism branch until the end of the current year. This was the opinion of the chairman of the Bulgarian Tourism association, Mr. Tsvetan Tonchev, during the thirtieth edition of the "Tourism and leisure time fair", which is taking place in the port of Varna. This is a rise of 10-15%.These good, but not surprising news were supplemented by the more shocking opinion that Bulgaria could rise its profits up to 10-12bln. EUR per year. This could happen only if a well developed infrastructure is present. Bulgaria should also use all of its natural assets like thermal springs and forests and develop all possible types of tourism well enough (e.g. golf tourism, hunting tourism, cultural tourism etc.)This was the opinion of the chairman of the Bulgarian association of owners of hotels and restaurants, Blagoy Ragin.Otherwise in the country the biggest share of the profits is made by the seaside resorts - they generate 68% of the lump sum. This is due to the fact that the tourism season there is longer, the vice-president of the State Tourism Agency Stanislav Novakov said.He also commented that the rise of the profit of Bulgaria from international tourism is already almost equal to the expenditure of Bulgarian tourists abroad.

Bulgarian pharmacy owners lobby for legislative changes

Bulgarian pharmacy owners are threatening to take the country's government to court in the EU unless lawmakers change the current pharmacy law in the country.Earlier this year, the MPs adopted the new law, which requires all pharmacies to be owned by qualified pharmacists, who, additionally, cannot own more than one pharmacy.The disputed provision effectively bans pharmacy chains, unless they are based on a franchising principle.More than 30 pharmacies have been shut down throughout the country over the last two weeks alone, based on this requirement, the head of Bulgaria's pharmacy owners association Nikolay Kostov told Darik News on Friday.The industry union has already asked the European Commission to rule on the provisions of the law and is expecting a reply by the end of the year."Should we get a positive answer, that will set off a complex procedure, with which the Commission will effectively ask the Bulgarian government to change the law. If the cabinet doesn't, that paves the way for legal action in the European Court of Justice," said Kostov.The pharmacy owners claim the particular stipulation is needlessly complicating matters, because ownership has no effect on the quality of the services, which are rendered by licences professionals.Moreover, Bulgaria's pharmacies market needs consolidation to provide better and cheaper services, said Kostov.Roughly 1300 pharmacies throughout the country are owned by firms that breach the law and are subject to closure, according to the association.But some pharmacists challenge Kostov's conclusions, which focus on the economic side of the business."Pharmacies are first and foremost institutions that dispense health care, and as such, need to be independent and work in accordance with good pharmaceutical practices,'' said Gabriela Vuteva, secretary-general of Bulgaria's pharmacists union.




Bulgaria expects �4.7 B direct foreign investments for 2008

Bulgaria expects round 4,7 billion EUR direct foreign investments for 2008, informed vice Minister and Foreign Minister of Bulgaria Ivailo Kalfin. According to the DFI the Bulgarian side is not co-financing.In addition in the next 7 years Bulgaria will has the chance to absorb about 7 billion EUR from the European funds on different operative programs, reminded Kalfin.The Minister also pointed out that the edition of 'Oxford Business Group' is extremely useful especially for the DFI, because gives a picture of the economy development and the different economy indexes.

Vivartia to invest � 800M in CEE


The Greek food company Vivartia has earmarked EUR 800mn for investments in Central and Eastern Europe until 2012. Most of the funds are directed to its milk business in Bulgaria and Cyprus but expansion on the pastry and bakery markets in the two countries is also envisaged. The company intends to invest in frozen fruit and vegetables in Bulgaria and Romania . Vivartia also plans to expand its network of fast-food chains. Main trade marks of the Greek company are the ice-creams Delta, pastry 7 Days and the fast-food chains Goodys, Flocafe and Uncle Stathis. In the spring, Vivartia acquired the country’s largest milk processing and packaging company United Milk Company, which produces UHT milk, yoghurt and cheese products under the brand names Vereia, Fibella, Vitalact, Khansko, and Russalka.

Sofia and Varna are perspective for investors

Bulgarian cities Sofia and Varna are perspective for people, interested in investing in immovable property for short- term and middle- term period. That announces the British electronic issue Holidaylettings.According to Property Secrets there will be a change far from seaside and ski resorts and mainly in the towns, where most people are likely to buy ‘green' property.Analysis specialist Simon Tweedule explains the market expansion in Bulgaria dues partly to the plenty of foreign investors trough last few years. Thanks to them at the moment finances are more advanced than the neighbour countries, maybe the most advanced on the Balkans.According to Tweedle Sofia is not the most beautiful place, but the near mountains on south are advantage.Quite recently research of consult company Colliers Bulgaria showed lodgings of the new building in Sofia have got up with 1000 EUR per square meter.



Green Fuel to build �50 M plant in Pleven

Green Fuel of Spain unveiled plans to build a 50 million euro plant to produce biodiesel and bioethanol in the Pleven region, member of the Green Fuel Corporacion Bulgaria AD Antonio Alvear was quoted by local media as saying.Construction of the facility is due to begin in February next year. The company has already picked  a site, in the village of Riben, on the Danube. Green Fuel preferred this location for logistics purposes to ensure quick transportation of input materials from neighbouring Romania.The second site for the facility will be selected within a month, which will house the remainder of the production and maintenance facilities.Green Fuel's factories will have an annual output of 110 000 tonnes of biodiesel and 60 million tonnes of bioethanol. once reaching full capacity, the plants will produce half of Bulgaria's total biodiesel output, Alvear was quoted as saying.To operate at full capacity, the facilities will need 250 000 tonnes of oil crops for biodiesel production and 100 000 tonnes of grain for bioethanol production.

Arabesque plans to open five Bulgarian shopping centres in 3 years

Arabesque, the largest distributor of construction and finishing materials on the domestic market, intends to develop a network of five sales centres in Bulgaria, after it recently opened its first sales and logistic centre in Sofia, reported ZF.ro.The value of this year's investments is expected to amount to 27m euros, which includes both the Romanian market and foreign markets, whilst the company (founded in Galati) operates in the Republic of Moldova, Ukraine and Bulgaria. After opening its new centre in Sofia (which covers a total warehousing area of 17,500 square metres), Arabesque's next main targets are Varna, Burgas, Plovdiv and Veliko Trnovo."We will open 5 centres in Bulgaria in the coming years, which will operate under the Budmax brand. Like in Romania, our target market includes construction companies, architects, residential and office space decorating firms, and we intend to distribute more than 25,000 products through these centres," stated Arabesque officials, cited by ZF.ro.The Bulgarian centres will operate under the Budmax brand, which belonged to one of the top 3 players on the Ukrainian business-to-business construction materials market (which registered turnover worth 50m-euro in 2006) and which Arabesque acquired in June 2006. "Investments operated in the Bulgarian constructions sector are estimated at 2.3-2.6bn euros, which accounts for a third of overall investments in Romania," explained Arabesque representatives.This year, Arabesque expects to generate turnover worth above 450m euros, up 30-35% year-on-year. For the future, the company targets turnover worth around 1bn euros by 2011-2013. Arabesque, founded in 1994 by businessman Virgil Cezar Rapotan, specialises in the distribution of construction and finishing materials to companies and professional users. only 5% of the company's customers are natural persons.

New airport for Sofia is considered

A new airport for Sofia was demanded few days ago from the Initiative committee for defense of Sofia citizens from airport activity.Behind the idea also stand other civil associations, arch. Dimitrov and other designers in Sofia and inhabitants of regions ‘Liulin', ‘Oborishte', ‘Poduene'  announces Money.bg. The new (last) capital terminal has already exhausted its potential of 2 million people per year and needed expansion.The provided place is in the North- Western part of Sofia because 86% of the flights are directed to west and this will prevent flying over the whole territory of the city, thinks arch. Dimitrov and his colleges.When, after few years, till 2017, Bulgarian capital turns to ‘Brussels on the Balkans', East European center in South- Eastern Europe, it is possible flights to go beyond 12- 15 million passengers per year.That's why new airport should be built in the Western quarter Vrajdebna and this could be realized to 2 years. In 2009 Capital can start the project and the building itself can be done rapidly.According to architects, the track should be projected for 25 million people. Investment will count to 200- 300 million EUR.With this project the Eastern parts of Sofia will be saved and progress as attractive living areas.


Bulgarian Pamporovo resort to get new ski lift, runs

Pamporovo AD, the company running the skiing facilities in Bulgaria's eponymous mountain resort, said it will invest 5 mln euro in two new ski runs and a new six-seat lift connecting the Snejanka peak with the Stoikata area.The new lift will have an hourly capacity of 2,400 skiers and should be operational by the mid-December kick-off of the skiing season.The two new ski runs will have a combined length of 5 km, bringing the total length of ski runs in the Rhodope mountain resort to 32 km.The Q3 financial report of the company showed a quarter-on-quarter decline in profit to 2.5 mln levs from 6.7 mln levs.The Pamporovo resort is expected to go into the new skiing season with a 20,000 bed capacity. It is a destination popular mainly with British and Russian ski aficionados but the tour operators expect an uptick in Romanian tourists this year as well. However, early-season bookings have been down on year-ago figures. According to Pamporovo AD executive director, the fall is within 10%. Last year's snowless winter is partly to blame for the downturn as wary holiday-makers await to check longer-term weather forecasts.

Poultry co Gradus to invest in factory for self-basting chicken products

Gradus, the local poultry products company, said it making good headway on a 15 mln euro project for a new factory for chicken products. The new unit will produce self-basting, marinated, breaded and seasoned chicken products earmarked mainly for export to the rest of Europe and beyond.Gradus is eyeing a niche market unaddressed by the other Bulgarian chicken meat producers which currently ship only hard-chilled or frozen products to the EU.In 2006, Gradus opened in Stara Zagora the biggest poultry slaughterhouse on the Balkans, sinking 28 mln levs in the project.In 2007, Bulgarian chicken and duck exports are expected to jump 25% over the 9,000 tons shipped in 2006. Over 60% will end up in other EU member states.Duck products made up the bulk of poultry exports 5-6 years ago but now the share of chicken breasts and strips is on the rise, said Gradus owner Ivan Angelov.Bulgarian chicken strips are hot-sellers in Germany, France, Britain and Romania while chicken wings are in strong demand in France, said local poultry producers.

FairPlay to build BGN 21M residential complex

FairPlay Properties will invest BGN 21 million in a gated residential development in the town of Sandanski, PARI reported. This will be the first residential project of the special purpose vehicles, which traditionally invests in holiday properties in coastal and mountain resorts.The complex will be located on 18,000 sq. m at the entrance of Sandanski. The town is one of the most dynamically developing balneological centres in Bulgaria and attracts a lot of Greek buyers. The company will build four-storey blocks of flats, a mall is also planned near the complex. The project is targeted mainly at foreign investors who look for a second home in Bulgaria, the executive director of FairPlay Properties, Manyu Moravenov, said. The company expects BGN 32 million sales in the next three years, the return is estimated at 40-50%.

Linexa to build apartment complex in Razlog

Linexa Lansdowne is launching construction works on an apartment complex in Razlog. The company is the legal successor of part of the assets of Linexa Properties. The investor plans to build a five-star hotel complex with apartments for sale in Razlog. The project envisages the setting up of a spa centre, indoor and outdoor entertainment facilities, apartments and servicing areas. A total of BGN 105 million will be invested in the project over a three-year period. A total of 580 new jobs will be created after the project is completed. The project is expected to receive a first-class investment certificate on Thursday.

� 12M centre to be built in Gotse Delchev

Bulgaria's Megastroy 2000 is launching the construction of the biggest residential and commercial centre in Southwest Bulgaria. The consortium unties two Gotse Delchev-based construction companies, Slanchev Dom and BKS. The project, City Centre of Gotse Delchev, is expected to be ready by the middle of 2009.The complex will consist of 80 shops with an area of 30 to 1,000 sq. m, four bars and restaurants, two fast food restaurants, underground parking lots and 60 apartments. The total built-up area of the complex will exceed 22,000 sq. m. The investment will amount to more than EUR 12 million.

� 3M business centre opens in Stara Zagora

Bulgaria's Megadom has opened a business centre in the city of Stara Zagora. The investment in the project exceeds EUR 3 million.The centre has a built-up area of 3,296 sq. m and already accommodates Hippoland, the hypermarket for children's goods, and several other stores. It is part of the Praktis chain, which plans to build another four such projects in the next two years. The centre was designed by Bayer bureau, the construction works were carried out by Leso Invest.

Petrol AD invests BGN 32M-plus in fixed assets

Bulgaria's Petrol AD invested BGN 32.23 million in the purchase of fixed tangible assets, the fuel retailer's report for the first nine months of 2007 shows. The amount was used for the company's module programme for renovation of 52 petrol stations and purchase of new plots.The type of our petrol stations allows moving them from one place to another within the framework of eight days, Petrol's financial director, Tsvetan Dimitrov, told the Pari daily. The new system was developed by the company itself.Petrol AD transferred several subsidiaries to its parent company, Petrol Holding. The receipts were reported as positive differences from operations in financial assets and instruments, which amounted to BGN 18.08 million at the end of September, compared with BGN 5.47 million for the year-ago period.As a result of the sale of subsidiaries, Petrol's net profit reached BGN 28.98 million for the first nine months, compared with BGN 12.2 million for the year-ago period. Sales rose to BGN 577.6 million, up by BGN 100 million year on year.


Austria's Wienerberger opens retooled Lukovit brick factory

Wienerberger, the Austrian producer of bricks, roof tiles and pavers, said it has launched into operation a brick factory in Bulgarian city of Lukovit.The company invested 25 mln euro in the 12-month complete overhaul of the disused Uspeh plant.The new plant site has an area of 107,000 sq m, including 15,000 sq m of production floor area.The factory, one of the most contemporary facilities of its type in Europe, will manufacture bricks for Wienerberger's Porotherm product range.The input clay materials will be quarried from a nearby site.Wienerberger initially used to import bricks to Bulgaria from Romania and Hungary but was overwhelmed by local demand. The Austrian company then bought the Uspeh plant to better position itself to meet the requirements of local customers.





Bulgarian Chamber of Commerce presents Top 100 rankings


Bulgaria's Industry and Commerce Chamber (BICC) presented its top 100 firms ranking, which it has selected out of more than 4500 applicants.The entrants accounted for 55% of the nation's gross domestic product last year, or BGN 27 B, BICC said.Sales revenue of the applicant firms grew by 20,4% last year, compared to a economy-wide 17,2% mark.The firms operating in the services sector, including commerce4, transport, communications and tourism accounted for 58% of the rankings, with the rest coming from the industry and agriculture sectors.The criteria used by BICC to draft the rankings took into account only economic performance and are the same used by influential business magazines Forbes and Fortune, BICC officials said.


Bulgaria Air, Lufthansa forge partnership


Bulgaria's flag-carrier Bulgaria Air and Lufthansa Technik, a unit of Germany's Lufthansa, have officially signed a contract for the setting up of a joint venture company, which will operate the aviation base at the Sofia airport. Lufthansa Technik will own an 80-percent stake in the new company, while Bulgarian Aviation Group, owner of Bulgaria Air, will hold the remaining 20%. Bulgarian Aviation Group is the legal successor of Balkan Hemus Group.The initial investments in the aviation base will amount to EUR 20 million, Thomas Stueger, member of the executive board of Lufthansa Technik, said. The aviation base will offer maintenance mainly for aircrafts servicing short- and medium-haul flights.The renovated aviation base will start operation in October 2008. The joint-venture company, which is to be established, is expected to turn to profit in 2009, Stueger said. Similar bases may be opened in other Bulgarian cities in three years, according to Stueger.

Bulgarian company has been invited as a subcontractor to the Japanese consortium of Penta Ocean/Mitsubishi

Domostroene of Bourgas has been invited as a subcontractor to the Japanese consortium of Penta Ocean/Mitsubishi, which will built the new port in the Romanian city of Constanta, the executive director of the Bulgarian company, Nedelcho Georgiev, said. Domostroene will supply reinforced concrete elements under a French licence. That gives us a competitive edge, Georgiev said.The company will start producing the elements in January, as construction works in Constanta will begin in March 2008. The total value of the order is BGN 90 million.This is Domostroene's second project with Penta Ocean/Mitsubishi. The Japanese consortium participated in the expansion of the port in Bourgas.

Over 200 Bulgarian companies to compete for US military projects

Many Bulgarian companies will be able to take part in the tenders organised by the Pentagon for the setting up of shared military facilities in Bulgaria. The local companies will compete in the spring of 2008 with companies from Turkey, Romania, Greece, the USA and Germany. Ministry of defence data show that a total of 530 Bulgarian companies have received a NATO code, Valentin Georgiev, executive director of the US Chamber of Commerce in Bulgaria (AmCham Bulgaria), told the Pari daily. Nearly half of these companies are interested in the contract awarding procedures, Georgiev said.This means that more than 200 Bulgarian companies are ready to join the competition for the US dollars. A total of USD 64 million will be allocated for the shared military bases in 2008. Bulgarian companies will benefit mainly from the construction, maintenance and tourism aspects related to the setting up of the military facilities in Bulgaria. The main advantage of Bulgarian companies is the fact that they are familiar with the situation in the country, according to Valentin Georgiev. They are also familiar with the labour force and the prices. Another advantage is the fact that some Bulgaria companies have already co-operated with the US military during joint practices. The lack of experience is the main disadvantage of Bulgarian companies, experts say. Bulgarian companies are concerned by the fact that they will be assigned only small orders, while the lion's share will be given to large-scale European and US companies. In order to be more successful, Bulgarian companies may use stable partnerships with foreign companies, according to Valentin Georgiev.

Sopharma enters the Serbian medicine market

Bulgaria’s largest pharmaceutical producer Sopharma had entered the Serbian market for the first time after registering its Tabex anti-tobacco medicine, the company said in a message to the Bulgarian Stock Exchange – Sofia (BSE) on October 30, as quoted by Dnevnik daily. Tabex was an original Bulgarian medicine of plant origin for the treatment of tobacco smoking. It was based on an alkaloid called Cytisine, contained in the plant Golden Rain Acacia (Cytisus laborinum). Cytisine was a toxic pyridine-like alkaloid. Pharmacologically it exhibited similar effects to nicotine due to structural similarity of the two molecules. In the human body, Cytisine played the role of nicotine substitution substance, and reduced the period of interaction of the received nicotine with relevant nicotine receptors, thus preventing the appearance of restraint problems. This resulted in a gradual reduction and suspension of the dependency on nicotine. In February 2007, Sopharma started manufacturing products of the Flixotide series of GlaxoSmithKline, which were proven efficient in the treatment of bronchial asthma and could be used by both adults and children. GlaxoSmithKline had already transferred the rights and licences for them to Sopharma. In September, the Bulgarian company signed a contract to create a joint-venture with Polish firm Natur Produkt Zdrovit, which manufactures and markets vitamins, mineral and herbal supplements, as well as over-the-counter medicines and cosmetics.

Companies fight for IT specialists and engineers

"Bulgaria is lacking specialists. Bulgaria may have to import skilled hand from abroad," the members of the Bulgarian business association constantly complain of.
In the same time the Bulgarian university students are constantly not attending their lectures, working as waiters or porters, or making hamburgers. The truth is that by doing such things for a living, they earn quite decent money. Unfortunately, with every year in just carrying trays, their dreams for a glamorous career as economists, lawyers or engineers slowly and certainly fall apart. There is, however,   way to escape from the vicious circle. And it is called practice - practices during and after university. Thanks to training, you don't only have just a diploma in your hands but also invaluable experience and contacts. Most companies in Bulgaria have already started developing training programs. And the shortest cut from the university bench to the nice office at some reputed company is the career center. Right now in Bulgaria there are 34 centers working with universities from all over this country. Such centers have existed in the West for many years, offering various services to both students and employers. Here in Bulgaria they are still making their first steps, but nevertheless they make it much easier for university students who wish to get a job related to what they've been studying. The services the career centers are free of charge for the students. These centers are the intermediary between the universities, the students and the business. Hundreds of companies are recruiting their personnel via career centers. Most wanted are the young IT specialists, according to information from the career centers at the Technical University and Sofia University. There is a serious shortage of computer specialists which forces companies fight seriously against each other for no other reason than to attract as many as of IT specialists as possible in the shortest terms. And soon means while still attending university. Also, the IT companies offer the largest salaries. Computer specialists start earning as much as a thousand levs a month while still being university students. The moment they take their university degrees their payment rises up to 2,000 levs.
"There is a huge demand for engineers," the Head of the Career Center at the Technical University explains."The most wanted graduates are IT specialists and economists," explains the Director of the Professional Orientation Center at the Sofia University Petya Uzunova. Many job offers are being made to philology graduates too due to the mushrooming of call centers where young people with excellent command of foreign languages are in high demand. Despite empoyers' interests, however, training continue being ill paid. Companies would give 200 to 300 levs of monthly wages to the trainees and make use of them as secretaries in the majority of cases."What a training should be is the acquisition of professional knowledge and skills," Mrs. Uzunova is convinced.
In her opinion, the young specialists must get around 500-600 levs during the training period, and then this amount be increased at least once a year."If this doesn't happen the fresh graduates will continue earning their crust as waiters, making 1,500 levs a month, or, in the worst case, continue immigrating," she stated further.Thus the fears of the Bulgarian business that they might have to "import" young and capable foreigners would certainly turn into reality.

Excise on cigarettes to be hiked in 3 steps

Excise on cigarettes will be levelled with the average in the European Union in three steps. The first will take place next year and the other two will be carried out through 2010, said Hristo Lachev, CEO of tobacco company Bulgartabac Holding, referring to plans of the finance ministry.In an interview with Pari newspaper, Lachev said the excise hike will have a detrimental impact on the company under his management as it will lead to a consequential hike in locally-manufactured cigarette prices. He also said the success of Bulgartabac privatisation will be largely depend on the degree of the excise increase.According to Lachev, the term for the sale of the holding has long expired and only political will could finally transfer Bulgartabac into private hands.

Trace Group IPO 1,500 times oversubscribed at 32 bln levs

Over 4,000 retail and non-retail investors stampeded to place bids for the IPO of local holding company Trace Group Hold, oversubscribing the offering some 1,500 times at 32 bln levs, showed preliminary data released by Somoni Finance Brokerage which is handling the operation.There was no requirement to make an upfront full or partial payment on the placed bids. Nevertheless, some investment intermediaries required a security equal to a portion of the bid amount or accepted as security the accounts that they manage for their clients. This means that the investors behind the placed bids probably do not have at their immediate disposal the 32 bln levs indicated by the bid total.The latest data shows that to get a single share, an investor must bid at least 164,000 levs.The official results from the bid process will be announced on Monday.Trace Group is offering 200,000 shares with nominal value of 1 lev and issue price of 110.5 levs. If the share sale is more than four times oversubscribed, up to 40,000 additional old shares will be offered to select investors.The IPO aimed to raise long-term financing and therefore did not employ a book-building mechanism where the price could have jumped significantly, said Nikolai Grancharov from Somoni. If the price was fixed, the offering would not have spark the interest that it did, he said.

Investors to get up to 135 shares in Trace

The share issue of Bulgaria's Trace Group Hold was oversubscribed 1,480-fold, according to preliminary data of issue manager Somoni Financial Brokerage. A little more than 620 participants in the initial public offering (IPO) subscribed the whole amount of 200,000 shares for BGN 22.1 million. The data show that the maximum number of shares an investor can receive is 135 shares.The majority shareholder in Trace Group Hold, Nikolay Mihaylov, will not offer for sale another 40,000 shares as was initially announced. Given the strong investors' interest, the package will be insufficient, he explained.The holding's shares will be offered for secondary trade on the Bulgarian Stock Exchange in early December.

Oracle to rely on Bulgarian call centre

Oracle signed a contract with Bulgaria's Fadata for first line support of its business management system, E-Business Suite, Oracle's country managing director for Bulgaria, Klod Kolaro, said. Fadata implemented the US giant's software back in 2000 but now it will also be responsible for the system's support in Central and Eastern Europe.
The call centre itself will be divided into two parts, one in Bulgaria and one in Serbia. We hope to increase the number of centres and we have plans to open offices in Zagreb and Ljubljana, Kolaro added.A total of ten employees will be deal with Oracle's support for the time being, Fadata's president, Anri Levi, told the Pari daily. But as the number of customers increases, more people will be hired to ensure the same level of service, he added.Oracle's business in Bulgaria continues growing steadily. Every year the market of our business applications rises by 30 to 40%, Klod Kolaro said.Oracle is not the first IT company to rely on the services of Bulgarian specialists. Hewlett Packard also has a support centre in Bulgaria which is envisaged to employ about 1,250 people.


Monbat exports to top BGN 100M in 2007


Starter battery maker Monbat booked BGN 84.9 million sales revenue for the first nine months of 2007, compared to BGN 55.9 million generated for the year-ago period. More than 85% of Monbat's output is exported, which means that the exports of the company exceeded BGN 72 million for the first nine months of 2007. Monbat's exports to Germany marked a 111-percent year on year increase for the period January to September 2007. Monbat's Sales in the Czech Republic marked a 133% year on year increase for the period. Sales in Poland and Italy marked six-fold and ten-fold year on year increase, respectively. Monbat registered a decrease in exports to the Switzerland, Serbia and Albania. The company expects BGN 122 million sales in 2007. Exports are expected to account for over BGN 100 million of the figure. Monbat considers setting up battery recycling facilities in Serbia and Romania, in order to reduce its dependency on lead prices. The modernisation of the company's manufacturing plant in Montana is scheduled for completion in March 2008. A total EUR 3.47 million will be invested in the project.A total of EUR 1.1 million were invested in Monbat's Romanian plant as at the end of September 2007. Some EUR 7 million will be allocated for Monbat's Serbian plant. A total of EUR 3.2 million of the figure have already been invested in the facility. The net profit of the battery maker totalled BGN 12.4 million for the first nine months of 2007, up from the BGN 5.4 million booked a year earlier. The increase may be put down mainly to the sales revenue of the company, which totalled BGN 80.1 million for the period.






Nuclear ambitions fan controversy in Bulgaria
International Herald Tribune,

Matthew Brunwasser

As governments around the world struggle to secure energy supplies, cut carbon emissions and adapt to rising oil prices, Bulgaria has adopted an ambitious solution: Construct a new nuclear power plant, the country's second, near the northern town of Belene, across the Danube from Romania.Critics say the project is economically flawed, open to corruption and mismanagement, and will cement Russian dominance of Bulgaria's energy sector while putting Bulgarian taxpayers at risk of footing the bill. The government says global energy pressures make the project necessary.At a cost that is likely to exceed the contracted â¬4 billion, or $5.8 billion - already 16 percent of Bulgaria's gross domestic product last year - the nuclear plant at Belene is the most expensive public works project in the country's post-Communist history. Construction was actually started in the Communist era, in 1981, but the project was cancelled in 1990, before reactors were installed but after some $1 billion had been spent, as Bulgaria struggled with an economic crisis.In 2003, the government of the then prime minister and former exiled king, Simeon Saxe-Coburg-Gotha, announced the resurrection of the Belene project.NEK, the state-owned national electricity company, will hold a 51 percent stake in the plant. Bids for the remaining 49 percent stake were taken until Oct. 17 from five short-listed private investors: Enel, of Italy; E.ON and RWE, from Germany; the Czech power utility CEZ; and the Belgian power company Electrabel, owned by the French utility Suez.Construction restarted this year with a â¬250 million loan from BNP Paribas. The project is awaiting a technical report by the European Commission before applying for an additional â¬350 million loan from Euratom to finance the second stage of construction. If the loan is approved, it would be the first time that Euratom financed the construction of new nuclear capacity rather than expanding existing facilities.The government is pushing Belene to offset the loss of production that followed last year's closure of two reactors at the country's Kozloduy nuclear plant, in the northwest of the country. Bulgaria agreed to shut down the reactors for safety reasons as part of its entry into the European Union in 1999.After the reactor closures, electricity exports were expected to end completely. But NEK announced this month that Bulgaria still planned to export 3.6 million megawatt-hours this year, down from 7.7 million in 2006.In the past, Bulgaria covered 70 percent of the power import requirements of Greece, Romania, Serbia and Macedonia. Belene is seen as a carbon-free means to win back these markets.The Bulgarian Prime Minister, Sergei Stanishev, told Parliament in January that Bulgaria's energy policy was "totally consistent with the priorities of the EU energy policy, to build competitive national, regional and European-wide markets while protecting the environment and ensuring safe energy supplies.""Not having its own resources of natural gas, oil and high calorie coal, Bulgaria's choice of building the Belene nuclear power plant is first and foremost a choice in favor of energy independence from fossil fuel supplies, which come precisely from Russia," he said.Independence from Russia energy supplies, however, is not self-evident at Belene. Bulgaria has awarded a contract to Atomstroyexport, in which the Russian gas giant Gazprom owns an 84 percent stake, to build the plant and install two 1,000 megawatt water-pressurized reactors. As a result, Belene will be the first Russian nuclear plant built in the European Union.Russia already provides 100 percent of Bulgaria's natural gas, 89 percent of its imported crude oil - which is processed at the only Bulgarian oil refinery, owned by the Russian company Lukoil - and 36 percent of its hard coal imports. Russia also provides all the nuclear fuel for the Kozloduy power plant, and recycles all its spent fuel."All the economists have attacked Belene on the basis of price, state guarantees and independence," said Georgy Ganev, an economist at the Center for Liberal Strategies in Sofia. "You can't completely lock yourself into Russian technology and Russian-supplied fuel at a moment when you are capable of diversifying."Critics say that money spent on Belene would be better used on less glamorous improvements of energy efficiency like insulating buildings. Bulgaria, according to 2004 figures from Eurostat, the European statistics office, is by far the most energy-inefficient state in Europe, using eight times more energy than the average amount used in the 27 EU member states to produce every â¬1 of gross domestic product.Analysts have also attacked the lack of public debate and the inconsistency of government statements on the extent of state-backed financial guarantees, saying the opacity masks a determination to build the plant regardless of cost.
One vocal critic, Krassen Stanchev of the Institute for Market Economics in Sofia, has estimated the cost to the state at 2.1 percent of Bulgaria's annual GDP."Belene has no clear economic or technical rationale," said Ivan Ivanov, a member of Parliament from the opposition party, Democrats for a Strong Bulgaria, who sits on the parliamentary energy commission. "Electricity exports are not profitable when the state invests â¬4 billion in the construction of Belene. If it was profitable, the private sector would do it."
One possibility could be for NEK to offer a 15-year fixed-price electricity purchasing guarantee, said Djurica Tankosic, a senior vice-president at WorleyParsons, the architect and engineering contractor on the project. "We are looking at the optimal structure of the securitization of this project," Tankosic said.Financial guarantees are currently the subject of negotiation with potential investors, but Tankosic said the state would not cover 100 percent of the investment risks.One major unknown for the project is what the price of electricity will be in 2014, when Belene is expected to begin producing for the national electricity grid. Other countries are also building new capacity to feed the growing economies and energy needs of the region. In neighboring Romania, for example, the Cernavoda nuclear power plant started commercial operation of its second 700 megawatt reactor this month.According to Standard and Poor's, the credit rating agency, "NEK's intention to participate as a majority owner in the Belene nuclear project could significantly increase the company's exposure to operating, regulatory, market, and environmental risk."Some critics say that rather than meeting Bulgaria's economic needs, the project is a response to lobbying pressures from the country's several thousand nuclear professionals whose livelihood has been threatened by the progressive closure of Kozloduy. They also say that corruption has long been rampant in the arcane world of public procurement in energy, dominated by a handful of companies close to those in power.Ognyan Minchev, director of the Institute for Regional and International Studies, in Sofia, charged that Russian interests had used direct cash payments to individuals to influence procurement decisions in similar projects. "Russian companies and Russian authorities have absolute freedom of what we might call 'informal personal influencing' of public officials in countries like Bulgaria," Minchev said, without citing specific examples.Ganev, the economist, said that as much as one-third of the cost of Belene could be channeled into questionable payments.One allegation of corruption surfaced this year when the city council of Svishtov, a town located 10 kilometers, or six miles, from Belene that opposes the project on environmental grounds, brought to the attention of prosecutors a $7.8 million contract for an environmental impact statement and feasibility study signed by NEK with Parsons E&C Europe, which has since been renamed WorleyParsons Europe.Some Bulgarian nuclear engineers said that nearly the same work had already been carried out at the site by the state firm Energoproekt, for about $150,000.Justifying the contract and its cost, Tankosic, who signed on behalf of Parsons, said the work involved was a "very in-depth review" by a large group of licensed companies. "The process was absolutely transparent and it was absolutely by the books when it comes to Bulgarian regulations," he said. Officials at NEK declined to comment.
Three months after receiving the complaint, the prosecutor's office has yet to determine in which jurisdiction it should be investigated. Bulgaria has long been criticized by the EU for a dilatory approach to corruption issues.Deutsche Bank and UniCredit backed out of financing Belene in July, after Deutsche Bank cited environmental risks as well as the bank's commitment to social responsibility. German environmentalists say there is a danger of seismic activity in the region, and that the Russian reactor should not be licensed because it lacks a safety appraisal."According to our laws and solid political orientation, we are in the European Union and NATO," said Ivanov, the opposition member of Parliament. "But in the most important economic sector of the 21st century - energy - we are still in the sphere of Russia."










Bulgarians voted too emotionally

Deutsche Welle,
Franz-Lothar Altmann


Boyko Borissov's triumph at the Sofia's competition in the local elections was highly expected. When we take into an account the small number of people, who voted in these local elections, Borissov's victory does not come as a surprise - something typical for the local elections in this country. Normally, in situations like this, candidates, who criticize the government are those who win at the end. I wouldn't go too far to say that there is a crisis in the ruling Socialists Party. Certainly, the results from the local elections in Bulgaria came as a blow to the Bulgarian Socialist Party, but the blow was not as hard as it was expected. on the whole, the socialists received a large percentage of the votes. However, the big towns and cities, the percentage of people to vote for the socialists was ways too smaller, when compared to the percentage of people, who voted for Citizens for European Development of Bulgaria (CEDB). The Socialist Party in Bulgaria lost the elections because of scandals, recently published in the media and because of the criticism that came from the EU. on the whole, the results from the local elections could have been worse for BSP. It did not turn otherwise only thanks to the Bulgarians from the smaller towns and villages -  obviously they refuse to accept these critics. In Bulgaria's small districts and communities, the social dissatisfaction from the party's management is not as obviously expressed as it is in the big cities. It is quite curious a fact that Bulgarians react very emotionally at elections. They have a tendency to go to extremes - they either react with great enthusiasm or with a complete apathy. It seems that this kind of attitude of the Bulgarian citizens has already become a habit.
I believe that after the elections, Boyko Borissov will seriously consider putting a pressure on the government and insisting on early elections in Bulgaria. However, it must be said, that despite CEDB's firm position, the other right-wing parties in Bulgaria as the Union of the Democratic Forces and the Democrats for Strong Bulgaria are too weak. That's why I assume that Borissov will try to stabilize his positions first in the first place, and thereafter seek partners for the next general elections in Bulgaria. Then, I suppose that Borissov will be clever enough to make compromises.