BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT ( 2 – 9 NOVEMBER 2007)
Sections/headline briefs:
MACROECONOMY:
· Bulgaria 2008 excise hike to bump up fuel, cigarette prices
· CED projects 2007 inflation at 12%, GDP growth at 6.4% and more than �5 B in Direct Foreign Investment
· Czech PM Calls on Bulgaria to Back "Nuclear Energy Renaissance"
· EU lets russians build Belene NPP
· Brussels still indecisive on Belene Nuclear Power Plant
· Regulated power market quota to be raised
· Bulgaria to demand Russian guarantees for power project supplies
· Bulgaria: A difficult tango with Gazprom
· Port of Varna-East infrastructure programme discussed by PM,Mayor
· Japan bank to loan-finance Bulgarian sea port terminals
· Bulgarian wines grab medals in Moscow
· Bulgaria gains �18 M for vineyards from EC
· Bulgarian banks` profit reaches BGN 855 M
· BGN 501M EU funding for road rehabilitation
· Number of foreign tourists up by 9% end-Sep
· 50% credit growth till the end of 2007
· Business supports flat tax rate introduction
· Divident tax in Bulgaria to decrease
· Greek EFG Eurobank concludes merger of Bulgarian units
· Bulgaria ranks 55 of 150 in World Bank logistics index
· Bulgaria's Minister of Foreign Affairs: We miss Japanese companies
· Biggest warehouse deal signed in Bulgaria
· Women's unemployment in Bulgaria close to European standards
· Women earn 24% less than men in Bulgaria
· 19,000 Bulgarians declare incomes over �750
· Bulgaria and the EU labor market
· First Car Supermarket opens doors in Bulgaria
· US to be one flight away from Bulgaria
· Trakia Highway detours a Thracian sanctuary
· Key road rehab projects kick off in 2008
· Sofia hosts Bulgarian - Czech Business Forum
· 30% of Bulgarians use actively internet
INVESTMENTS:
· Yazaki to invest �20 М in Bulgaria over 2 yеаrs
· UK Winlan to invest BGN 184 M in Sofia retail park
· �20 M to be invested in Varna, Burgas airports 2008
· Shopping Mall projects are springing across all CEE
· Investment in Mall Pleven raised to BGN 80 M
· BGN 184 M investment in Mall complex in Sofia
· Austria's Palfinger investing �30 M in new Bulgarian plant
· Mayr-Melnhof to double investments in Nikopol
· Truststroy to build commercial complex in Bulgaria`s Targovishte
· IKEA open first store in Bulgaria
· Turkish businessman opens outlet mall in Sofia
· Bulgaria's president hunts for Qatari investments
COMPANIES:
· 500 companies participate in construction Expo in Varna
· Foreign companies delay local projects
· BSE to introduce XETRA trading platform
· All subscribed shares of Trace Group paid
· Companies to pay BGN 20,000 a month to owner
· France's Carrefour to open 20 hypermarkets in Bulgaria over 7 years
· Bulgarian electrical company Mega El buying cable factory in Macedonia
· Sopharma Trading primed for debut on stock exchange
ANALYSIS:
· Foreign minister Kalfin confers with chairman of Japanese chamber of commerce and industry and chief Toshiba official Okamura
· Bulgaria to have EU's lowest flat income tax
Articles:
MACROECONOMY:
Bulgaria 2008 excise hike to bump up fuel, cigarette prices
The upward revision of excise tariffs planned by the Bulgarian government for 2008 will add 0.55 levs to the price of a cigarette pack and 0.06-0.08 levs to the price of a liter of fuel, it emerged at a weekender seminar organised by the finance ministry to discuss the pipeline of tax changes. Sofia has agreed with Brussels to reach parity with the EU minimum cigarette excise in one more go through 2010. The initial plan of the incumbents was to implement half of the increase in 2008 and the other half in 2009. After a series of talks with cigarette makers and importers convinced the cabinet to opt for two equal 33% excise hikes in 2008 and 2009 and a 33% adjustment in 2010, said deputy finance minister Kiril Zhelev. The ad valorem component of the cigarette excise will remain unchanged at 54% of the retail price while the other component, the fixed (or specific) excise will increase from 6.50 levs to 14.50 levs per 1,000 pieces. The argument is that Bulgaria's fixed excise - just over 3 euro, is one of the lowest in Europe where the average is 20-50 euro per 1,000 pieces. The revision of the fixed excise rate will also ensure better visibility over budget revenue streams since it is charged per unit of production and not as a percentage of the retail price which is difficult to forecast. There is also a proposal to abolish coffee excise from 2008. The biggest changes are planned for the Local Taxes and Fees Act. Bulgaria's basic law has been amended to authorise the municipal councils to set local tax rates themselves. The municipalities will also administer the collection of the patent tax. The law fixes a minimum and a maximum for the respective local tax rate. The minimum tax rate for the next year will be equal to the tax rate enforced in the previous. only the tax rate on transportation vehicles will be allowed to exceed up to three time the benchmark minimum. All other local taxes - on property, donation, inheritance, will not be allowed to exceed the minimum more than twice.
CED projects 2007 inflation at 12%, GDP growth at 6.4% and more than �5 B in Direct Foreign Investment
The Center For Economic Development is forecasting a slight slow-down in economic growth for Q3 to 6.5%. According to the experts, the nation's GDP growth for the entire 2007 will come to 6.5% (compared with 6.7% in 2006 Q3 and 6.1% for the entire 2006). The prognosis is from CED's report on “Bulgarian Economy at the end of Q3 2007” released today.According to CED, we can expect a slight slow down in production output growth in the mid-term perspective. Sales in the sector have started to lag behind production pace y/y (8.5% and 8.7%, respectively, for Jan – Sept 2007). This is a result of the tendency to reduce production capacity in the sector (from 75% in October 2006 to 70% in July 2007).Since 2001 there has been a record hike in investments (29.6%). Household spending is also growing at a steady pace (6.8%).The value added in economy has been growing at an accelerated pace in H1 (by 8.2%, versus 6.1% last year). The value added in the industry sector rose 9.1% during the period and surpassed that of the service sector (8.8%). In Q2 processing industry was the fastest developing sector of industry with value added growth of 15% (versus 14.5% in Q1).The value added in the sector of financial intermediation climbed by more than 40%, while that of the agrarian sector declined by 2.3% y/y (after a 2.5% hike in Q1, and a 5.3% decline in Q2). According to CED, a rebound to last year figures is unlikely.Investments in core capital have risen 29.6% y/y, versus 16.5% last year. The growth in Q2 is however, 10 percentage points lower than in Q1 – 24.7% versus 35.9%, respectively. The majority of investments has been directed to the processing industry.Consumer spending growth has entered a standstill stage. In H1 it grew by 6%, versus 6.1% a year ago. In Q2 the figures rose by 5.2%, versus 7% in Q1, and is lower than Q1 2006 – 7.2%.The nation's current account deficit has grown from 7.5% to 12% of the GDP. Trade balanced deficit and lower positive balance from current transfers and net income account for more than 96% of it (1312 mln euros).The only positive contribution comes the balance in the service sector – in the amount of 277 mln euros. one of the highest risks for the macroeconomic conjuncture is the increasing trade balance deficit (more than 5 bln euros CIF/FOB for the Jan – Aug 2007 period).Direct foreign investment in the first eight months of 2007 exceed stand at 3.4 bln euros, which is 22% up from the same time last year. These figures are expected to continue to grow and to reach 5 bln euros by the end of the year. It is interesting to note that direct foreign investment is greatest in real estate sector (35%), than in production (25%) and financial intermediation (20%).In spite of the rising worries that the problems of the credit industry worldwide might reflect on the nation's real estate sector and its related areas – construction, tourism, and financial services, interest in it stays positive and investors are apparently still finding potential for good return on investments in the area. The real estate market in Bulgaria will continue to be attractive for foreign investors because of its good risk/return ratio. However, reforms in the public sector are a must, CED insists.Jan – Sept 2007 inflation stands at 8.9% since December 2006, versus 2.5% for the respective period in 2006. As a result of the relatively fast hike in consumer prices we saw in July, August and September, year on year inflation has doubled from 5.6% in July 2006 to 13.1% in July 2007.CED expects total 2007 inflation to come to 12%, against 6.5% for the entire 2006.Unemployment drops to 6.8% in Q2, versus 9% a year ago. Unemployment among young people (between 15 and 24 years of age) has declined the most – from 20.5% to 12.6%.
Czech PM Calls on Bulgaria to Back "Nuclear Energy Renaissance"
Czech Prime Minister Mirek Topolanek has urged Bulgaria, France, Finland, Slovakia, Italy and the Baltic countries to support a "nuclear energy renaissance."Topolanek made the statement at the European Energy Forum in Prague, which discussed ways to cut the European Union's dependence on imported energy and cooperate with Russia. Discussions on a common energy stance are being opposed by several groups in France, Germany and Italy," said Fraser Cameron, director of the EU-Russia Centre in Brussels.
"Mutual accusations among certain European countries are poisoning the atmosphere," he said.At the end of last year, hours before joining the European Union, the country shut down reactors number 3 and 4 at Kozloduy nuclear power station to meet the safety requirements of the European bloc.Units 5&6 remain online and working, while units 1&2, the oldest pair, were shut down in 2003.Bulgaria has adopted an ambitious solution to secure nuclear energies by constructing a new nuclear power plant, the country's second, near the northern town of Belene, across the Danube from Romania.
EU lets russians build Belene NPP
The European Commission has approved Bulgaria’s plan to build a second nuclear power plant at Belene on the Danube River using Russian-made reactors,UPI reported.
The EC had to give a final approval for the Belene nuke plant as an agreement on its construction was signed last year before Bulgaria joined the European Union in January, the Sofia News Agency reported Tuesday.The Bulgarian NEK power grid operator will own 51 percent of a mixed company to build and operate the Belene plant, north of the town of Pleven in northwestern Bulgaria.Bulgaria is to open an international tender for the remaining 49 percent of shares in the future company.Having received EC approval, Bulgaria is entitled to apply for a USD 430 million loan from the EU’s Euratom agency.
The Belene plant, whose total construction cost is estimated at USD 5.7 billion, will use two 1,000-megawatt, light-water reactors to be built by Russia’s Atomstroyexport.
Bulgaria’s only operating Kozloduy nuclear plant with six Soviet-type reactors, on the Danube west of Belene, had to close its four reactors to meet EU standards. The two operating reactors of the Kozloduy plant are of more modern design.
Brussels still indecisive on Belene Nuclear Power Plant
Brussels has not given a green light yet to the construction of Belene NPP, Bulgaria's would-be second nuke. "The European Commission has not approved launching of the project," said Ferran Tarradellas, spokesman of Commissioner Andris Piebalgs, quoted by the Bulgarian News Agency. Thus, he disproved press reports in Bulgaria maintaining that the European Commission had approved of Russian Atomstroyexport as subcontractor to the project. on Tuesday, the National Electrical Company, holder of 51% of the shares of the new NPP capitals, reported that a positive respond had been received from the EC Directorate General for Energy and Transport on the agreement between NEC and Atomstroyexport that was signed in the end of last year. Yesterday, however, sources from NEC clarified that it actually did not mean approval of Belene project. The positive response was in line with Bulgaria's commitment to submit for approval all agreements concluded with the non-EU members before Bulgaria's EU accession. Brussels' position makes difficult raising funds for the plant construction, the NEC explained. High-ranking sources maintain that if Brussels gives a positive signal for launching of Belene project, financial institutions would be more agreeable to granting a loan. The Bulgarian state has already allotted 600 million euro guarantee for Belene loan.
Regulated power market quota to be raised
Electricity consumption by households and smaller industrial enterprises has risen by 6% since the beginning of October, the chairman of the State Energy and Water Regulation Commission (SEWRC), Konstantin Shushulov, said. The electricity output may turn out insufficient to cover domestic consumption. Therefore the regulated market quota may be raised from 2008, Shushulov added.Bulgaria may face a power shortage, however, if CEZ exports the recently auctioned 200 mW of electricity generated by the Varna thermal power plant. The SEWRC has proposed that the Czech company should sell the quantity on the domestic market. According to Shushulov, CEZ is likely to accept the proposal but the price may be close to that in Greece or even higher. At the auction, the price reached EUR 65 per mW, he pointed out.Power exports may be suspended in the first quarter of 2008 to ensure Bulgaria's energy balance, Shushulov went on to say. However, the decision will be taken by the National Electric Company and the system operator.
Bulgaria to demand Russian guarantees for power project supplies
Top officials from the Bulgarian government will demand at an upcoming meeting with Russian counterparts that Moscow guarantee the oil and natural gas supplies for the Burgas-Alexandroupolis and South Stream projects.Bulgarian ministers of regional development and economy Asen Gagauzov and Petar Dimitrov Wednesday left for an unexpected visit to Moscow where they will meet with Russian economy minister Viktor Hristenko and Gazprom chief Alexei Miler.'We will request guarantees for the supplies at the South Stream entry point. They could be provided either by the Russian side or by Italy's ENI which will own the bulk of the transmitted gas volumes,' said Dimitrov.The route of the South Stream gas pipeline, which will be laid on the bottom of the Black Sea, will depend on whether, once having reached Bulgarian territory, it will head for Italy through Greece or through Macedonia. Sources told Dnevnik that the Russian side has demanded the signing of a declaration on political commitment to the project but Sofia refused, fearing a repeat of the Burgas-Alexandroupolis scenario.Bulgaria's position is unchanged and it states that Bulgarian gas distributor Bulgargaz should have a majority stake in the joint venture it will incorporate with Gazprom for the purposes of the South Stream project.In mid-2007, the Russian gas monopoly and ENI signed an agreement on the implementation of the South Stream project. In its offshore section, the South Stream will cross the Black Sea from the Russian coast of Beregovaya - the same starting point of the Blue Stream pipeline, to the Bulgarian Black Sea coast, with a 900 km pipeline reaching a maximum water depth of more than 2,000 m.
Bulgaria: A difficult tango with Gazprom
Sources of The Standart that took part in the negotiations with the Russian oil giant Gazprom held in Russia defined the meeting as a "tango with Miller." The executive of Gazprom Alexey Miller and his team had hard talks with Bulgaria's Minister of Economy and Energy Peter Dimitrov, his deputy Galina Tosheva, Minister of Regional Development Assen Gagauzov and member of the Management Board of "Bulgargaz" Kiril Gegov. The top agenda was cooperation between Bulgaria and Russia in the implementation of international energy projects. The emphasis was laid on the Bourgas-Alexandroupolis project and Russia's mega South Stream pipeline. Peter Dimitrov asked his Russian colleague Victor Khristenko to control the work of Russian subcontractor Atomstroyexport at the initial stage of Belene nuke construction in Bulgaria. Another issue on the agenda was the payment of the Russian arms production licenses.
Port of Varna-East infrastructure programme discussed by PM and Mayor
The city of Varna will receive state compensation for losing land which is needed for the
construction of new port facilities, Prime Minister Sergei Stanishev said after a meeting with mayor Kiril Yordanov on Wednesday. The project will contribute to the development not only of Varna but that of the whole country, the PM said. He explained that Japan, which is providing the loans for the port project, has requested that all construction take place on public state property. This will mean that the municipality will lose part of its land. The century-old port badly needs modernization and experts have figured out that building a new port is more feasible than upgrading the existing facilities. A container terminal is to be built as part of the new port.What is now the Port of Varna East will turn into a theme park.The Prime Minister also said Wednesday that the privatization of Navigation Maritime Bulgare (NMB) will take place while the company can still be offered for a lucrative sum. He reminded listeners of the sale of the Bulgarian Telecommunications Company (BTC) in 2004, whose price dropped significantly before it was sold (65 per cent of BTC was privatized in 2004 for 230 million euro, only to be re-sold in 2007 to AIG for 1,660 million). The strategy for the de-nationalization of NMB has long been discussed, and the Bulgarian state has a list of requirements guaranteeing that the future buyer ensures the development and prosperity of the company. Despite many potential buyers of NMB coming forward, none has fulfilled these requirements, Stanishev said.
Japan bank to loan-finance Bulgarian sea port terminals
The Japan Bank for International Co-operation will provide a $100 M loan for the construction of containerised cargo terminals in Bulgarian Black Sea ports Varna and Burgas.The loan agreements, approved by the Bulgarian government, will be signed in March 2008, said Bulgarian transport minister Georgi Peterneichev on Thursday.The construction of the terminals will be preceded by the adoption of a general development plan and an environmental impact study.Containerised cargo traffic via Bulgarian territory is expected to double over the next 12 years.The construction of the 29 mln euro intermodal cargo terminal at the Poduyane train station in Sofia will begin in 2008.The conceptual idea for the terminal is ready and is being reviewed by the Sofia municipality.The national infrastructure development strategy envisages intermodal cargo terminals in Ruse and Plovdiv as well.
Bulgarian wines grab medals in Moscow
Bulgarian wines became one of the most desired drinks at an exhibition in Moscow where they were awarded nine medals, Standart newspaper reported on Saturday.Despite being represented by only five companies, Bulgaria tried to get its fame for precious wines in the eyes of the real connoisseurs.Chardonnay of Villa Hissar winery and Merlot, Traminer and Cabernet Sauvignon of Terra Tangra are among the prize-winners at the fair.The event was organized by the Russian National Association of the Alcohol Market Participants and the Italian Interexpo company.
Bulgaria gains �18 M for vineyards from EC
European Commission granted today 510 million EUR help for reconstruction and reforming of European vineyards for current agricultural campaign (2007- 2008). Bulgaria will gain 18 million EUR. ‘The purpose is to adapt producing to demands of market.' announced from EC.The largest sum of money for reconstruction will be granted to Spain- 162, 13 million EUR. Romania gets 25 million, Czech- 10.9, France- 110.6 million, Italy- 101.1 million EUR, Portugal- 34.7 million, Austria- 6.6 million, Greece- 8.7 Million EUR.The granted resources are part of a long standing program, started in 1999 as a decision of European Commission. The enterprise needs support because is victim of a chronic over- producing and is losing market stakes for years.
Bulgarian banks` profit reaches BGN 855 M
Bulgarian banking sector profits reached 855 million leva, or 60 per cent rise on annual basis, over the first nine months of 2007.The record-breaking amounts of loans granted by the banks in July and August 2007 managed to compensate for the more moderate ones in September, Dnevnik daily reported.As a consequence, the amounts of loans and takings for the third quarter of 2007 registered their biggest absolute growth, by 2.8 billion leva, statistics of the Bulgarian National Bank (BNB) show.Another balance index that increased by almost 50 per cent for the period July – September 2007 was the central banks financial funds reserves. The growth resulted from the four per cent rise in the obligatory minimal reserves which banks must maintain at the BNB, introduced in September 2007.According to interest rate statistics announced on November 1 2007, in September household credits marked an insignificant price rise and corporate loans were offered at even lower medium interest rates as compared to the ones in August.In the end of September 2007, credits amounted to 40 billion leva, registering a 7.8 per cent growth for the past three months. Corporate loans increased by 2.2 billion leva and physical entities' credits by 1.3 billion.Main interest rates kept growing in November, reaching 4.26 per cent. As the main interest rates in the country follow those in the euro zone, a rise could be expected in December as well. The European Central Bank was expected to announce another interest rates rise during its meeting in the beginning of November 2007.
BGN 501M EU funding for road rehabilitation
The ministry of regional development and public works has opened the first scheme for the extending of grants under the Regional Development operative programme. The move is aimed at improving the access to the country's main roads through the reconstruction and rehabilitation of second and third-class roads. The budget of the scheme amounts to BGN 501 million. Co-funding from the European Regional Development Fund accounts for a total of BGN 426 million of the figure. The scheme will support projects estimated at between BGN 2 million and BGN 25 million and will remain open until the funds are spent. The National Road Infrastructure Fund (NRIF) is the beneficiary of the funding. The total budget of the programme amounts to EUR 1.162 billion.
Number of foreign tourists up by 9% end-Sep
A total of 6.8 million foreign citizens visited Bulgaria in the first nine months of 2007, up by 8.91% year on year, data of the National Statistical Institute show. The bulk of arrivals, some 3.9 million, were people coming on a trip or vacation. Another 2.2 million were transit passengers.In terms of number of visitors, Romania was the leader. The biggest increase in arrivals was registered from Malta: 105%. Turkish citizens were the main guests from the non-EU countries. The number of tourists from Iceland jumped by 89%.
50% credit growth till the end of 2007
50% growth in the credit sector is expected till the end of 2007 analysts from Credit Centre say.This number will reach 75% for the mortgage loans.One of the reasons for this is the demand for non-purpose mortgage loans most of which are withdrawn for covering old debts.According to the analysis the demand is weaker on year-to-year base. Nevertheless there is an increase in the average credit granting with about 5% due to the increased prices in the real estate sector.Till the end of the month there will be a stronger demand for Christmas promotions and new products. In the context of the promotions the interest rate is decreasing with 0.05% to 0.15%.While in September most of the granted credits were in leva (about 46%), this month the balance euro-leva is recovered.In October the demand for credit was bigger in small towns with a population less than 30 000 people. In these regions the demand continuously grows. Not long ago people from these areas were taking credits with borrowed money or savings, in the last few months they started to show interest for bank capital.The number of granted credits there were 14 000-40 000 leva while more than 90% of the deals are in leva. In comparison to Sofia where the total sum of granted credits reaches 42 560 leva , 2/3 of them in euro.
Business supports flat tax rate introduction
University graduates, managers, business owners, freelancers and people earning over BGN 600 a month support the introduction of a flat tax rate, a survey conducted by Estat research agency shows. The people in the low-income bracket, the pensioners, people with lower education and those living in small towns disapprove of the new tax rate, the survey shows. A total of 48.8% of the respondents oppose the introduction of flat tax rate, while 20.8% support it. Some 39% of the respondents support the introduction of flat tax rate provided there is a tax-exempt minimum without tax breaks. Some 68.8% of the interviewed strongly oppose the introduction of tax on the agricultural land and forests.
Divident tax in Bulgaria to decrease
The Ministry of Finance proposed a reduction in dividend tax by 2 per cent, from 7 to 5 per cent, Pari daily said. There would be a change in the way to estimate the taxable income in case of sales or the exchange of shares or stocks received through non-pecuniary payments.Payment of corporate tax would become more evenly distributed throughout the year. There would be changes in the Corporate Income Taxation Law. Currently the boom in receipts was at the end of March when the annual accountingtakes place, while the advances paid during the year for the past three years remained almost unaltered.Small companies with less than 100 000 leva turnover over the past year would be exempt from advance payments. This would ease tax payments and administration on 146 000 small companies.The lost long term assets would be recognised as tax items at the moment of being lost. The requirement to stop tax redemptions when an asset is not used in the company activities for more than 3 months was abolished. Interests, behind which a distribution of dividends was hidden, would be treated as a hidden distribution of profit.
Greek EFG Eurobank concludes merger of Bulgarian units
Greek banking group EFG Eurobank Ergasias said on Tuesday it concluded the merger of its two Bulgarian units, making it the fifth biggest bank in the country by assets.EFG Eurobank bought 43% in Bulgaria's Post Bank in 2002, acquiring a majority stake two years later. Last year, the group bought 74.26% in DZI Bank for EUR 157.76 M, later raising its stake to over 90%.The new bank will be called Eurobank EFG Bulgaria and will have close to 10% market share, with assets worth BGN 4,56 B as of end-September, overtaking First Investment Bank for fifth place.Eurobank EFG Bulgaria has 264 outlets in the country, making it the third-largest banking network, and it employs more than 3,000 people.It is one of the leading mortgage lenders in Bulgaria with 16% market share and consumer lender with 12%.The group plans to expand to offer additional financial services, including leasing, investment banking, mutual funds, insurance, factoring and real estate, officials have said.With assets worth EUR 63,3 B throughout southeastern Europe, Eurobank EFG Ergasias is one of the biggest regional players on the banking market.
Bulgaria ranks 55 of 150 in World Bank logistics index
Bulgaria ranked 55th in a World Bank index that covers 150 countries, pinpointing the places where it's easy or difficult to ship goods across countries, into and out of ports, and over borders.The bank's new index is based on answers to a questionnaire, submitted by 800 freight-forwarders and express carriers working in the international logistics business.
Countries with "higher overall logistics costs are more likely to miss the opportunities of globalisation," according to lead authors Jean Francois Arvis and Monica Alina Mustra.
"The biggest source of costs is not really transportation cost (such as freight costs), port and handling charges, procedural fees (such as bonds), or even agent fees, and side payments, it is the predictability, the reliability, and the quality of services that are much more important than the cost," said Arvis.Major transport hub Singapore ranked top with a score of 4,19 out of 5, and landlocked Afghanistan was last with a score of 1,21.Bulgaria scored 2,87 points and ranked 55th, above Croatia, Serbia and Macedonia among neighbouring countries, but below Romania and other eastern European EU member states.The overall index is broken down in seven more sub-indexes, namely customs, infrastructure, international shipments, logistics competence, tracking, domestic logistics costs and timeliness.Bulgaria scored highest in tracking and tracing, where it ranked 39th, and timeliness, where it ranked 43rd. It scored worst in infrastructure (64), customs (66) and domestic logistics costs (81).
Bulgaria's Minister of Foreign Affairs: We miss Japanese companies
"There are many foreign investors in Bulgaria, but we miss the Japanese companies," said Bulgaria's Minister of Foreign Affairs Ivailo Kalfin at a meeting with the President of the Japan-Bulgaria Economic Committee and a senior consultant of Ebara Corporation, Kazuyoshi Terashima. Bulgaria's No.1 diplomat invited businessmen from the Country of the Rising Sun to participate in join projects in Bulgaria. Prior to the meeting, Japan's Crown Prince Naruhito gave an audience to Foreign Minister Kalfin in Akasaka Palace. During the official reception, Japan and Bulgaria's state dignitaries approved a bilateral venue to be held in 2009 named "Days of Bulgaria in Japan". Kalfin expressed the country's profound gratitude for Japan's support in the preservation of Bulgarian cultural and historical heritage.
Biggest warehouse deal signed in Bulgaria
Logistics company Kaven Orbico has signed a contract to lease 22,000 sq. m of warehouse space at Industrial Park East near Sofia. This is the biggest deal involving the lease of warehouse space in Bulgaria so far. Industrial Park East will be built on a 55-ha plot in Elin Pelin near Sofia. This is one of the first projects implemented near Sofia, which will offer warehouse and logistics space for lease. This market is underdeveloped in Bulgaria due to the lack of supply, which prompts logistics operators to relay on their own bases. There are more than 1.2 million sq. m of warehouse and industrial space in Sofia but only 160,000 sq. m of it is leasable, Colliers International data show. Kaven Orbico is part of a multinational company specialising in fast moving consumer goods. Orbico, backed by Croatian capitals, set foot in Bulgaria in 2002. The company was registered as Kaven Orbico in 2004, following a merger with Kaven Iradis. The company distributes the products of Procter&Gamble, Philip Morris, Shell lubricants, Mars, and SC Johnson. It also completed a modern logistics centre with a gross built-up area of 12,000 sq. m near the Sofia airport in 2006.
Women's unemployment in Bulgaria close to European standards
Bulgaria's 57.7 per cent employment rate for women of is close to that stipulated by the Lisbon Strategy, Lazar Lazarov of the Labour and Social Policy Ministry said at the unveiling of an international press conference in Sofia on Friday. The Sofia forum is entitled Practical Gender Budgeting and is co-financed by the Ministry and the European Commission.The Lisbon Strategy aims to have 60 per cent of EU women in employment by 2010, and Bulgaria plans its percentage to rise to 59.2 by 2009, Lazarov said. The ministry promotes equal opportunities, and is creating the administrative capacity for implementing this policy. It is finding work in the first place which is a major problem for women in Bulgaria, he noted. Gender budgeting is a major tool for re-moulding the nation's budget policy as it is both a way of redirecting public funds and has a socioeconomic effect on both sexes. Through it, all parties concerned - be they national and local authorities, NGOs or social partners all have different roles in creating equal opportunities. A consulting council has been set up to aid with the issue. The conference aims to foment exchange of experience among Bulgaria, Hungary, Italy, Austria and the Czech Republic. The representative of the Committee on Women's Rights and Gender Equality at the European Commission Marusya Lyubcheva was also present, as was Donka Sokolova of the European Economic and Social Committee.
Women earn 24% less than men in Bulgaria
Bulgarian men receive 24% higher salaries than women, according to a survey presented at an international conference on gender budgeting taking place in Sofia.Education and service sectors are primarily women's territory while IT positions are mainly occupied by men, Ministry of Labor and Social Policy expert Lylia Abadzhieva said.The number of women working in the government administration at local and national level is too low, according to the Gender Project for Bulgaria. Government data shows that after the previous local elections 9% of the mayoral offices are taken up by women, as well as 23% of municipal counselor positions. Abadzhieva explained that a group is considered to have a social impact if it accounts for at least 30% of the country's social life."Bulgaria must take measures against gender inequality and carry out stable law policy concerning the issue," added the expert.The Bulgarian government said it is focusing its efforts on providing incentives for young families on the labor market as part of its policy against gender inequality.
19,000 Bulgarians declare incomes over �750
Round 1,6 million Bulgarians declared official income of 300 BGN (150 EUR) per month, head of Tax Policy Department with the Ministry of Finance, Liudmila Elkova told Standart. only 19,000 Bulgarians pay taxes on salaries more than 1,500 BGN (750 EUR). Elkova added that personal income is an obvious issue of the gray economy.The entering of the 10% flat tax in the beginning of next year will hopefully bring incomes to light. More companies are considering to declare bigger profit and pay higher taxes.On the other hand, every second Bulgarian is against the introduction of the flat tax, says a research. Flat tax is welcomed only by managers and those who get more than 600 BGN (300 EUR) monthly.
Bulgaria and the EU labor market
International conference ‘Tendencies in the EU labor market after the Union's fifth enlargement' takes place on Wednesday and Thursday, November 7-8 in London and Belfast. Bulgarian Embassy of UK organizes the forum. Vice Minister of Foreign Affairs Evgenia Koldanova will participate in the conference.The initiative aims to inform the EU partners for the Bulgarian positions in relation with the EU policy and activities.Bulgarian diplomats will try to popularize the positive image of Bulgaria as complete partner of the EU.The participants will become familiar with the state's policy for labor increase, emigration tendencies among Bulgarian citizens and collaboration with UK institutions.The main theme in Belfast's conference will be ‘Bulgarian membership in EU - challenges and possibilities'.It will be discussed economy perspectives in Bulgaria, presenting of business options in the country and the role of the local authorities for creating investments possibilities in Bulgaria.
First Car Supermarket opens doors in Bulgaria
First car supermarket will be opened in 2009 in Sofia, announced from citybuild.bg
It will be part of a new trade center which is about to be built between capital quarters “Lulin” and “Filipovci”.In the supermarket will be exposed all world famous car marks. Clients could not only look at them, but also to leave the centre with a brand new vehicle.The market will also offer cars second hand.The building of the trade center starts in March 2008. Investor is ‘Trade Park- Sofia' AD, which will put 184 million BGN (92 million EUR) into realizing of this idea. The building will expand on 76 860 square meters built area.Author of the architectural project is famous British designer Rodger Dow, winner of plenty of architectural awards. He will work along with the Bulgarian architect, which is now elected among three candidates by the company owners.The building of the center will be done by a international company and 250 people will be hired for it.
US to be one flight away from Bulgaria
Distances between Bulgaria and the US are getting shorter, reported from the Standart daily.Between the two countries will be established direct air line, announced US Ambassador to Bulgaria John Beyrle.We remind you that Ambassador Beyrle stated yesterday that the US Embassy's main task for 2008 will be to launch direct flights from Bulgaria to the USA.With a view to this, next month American experts will visit our country to estimate Bulgaria's readiness for this direct airline.Bulgaria's Transport Minister, Peter Mutafchiev believes the US experts would appreciate the Bulgarian progress in aviation and also hopes Bulgarian air carriers will resume the direct flights to American airports in the beginning of 2008.The last direct flight to the USA were 7 years ago.
Trakia Highway detours a Thracian sanctuary
A 8000-year-old Thracial tell has changed the route of Trakia highway. It will have to detour the ancient tumulus discovered by the archaeologists between the villages of Devetak and Devetintsi several days ago. The route of Trakia highway has been urgently changed, Tsonya Drazheva, Director of the Bourgas Museum of Archaeology, told The Standart.According to the origianal project, this section of the highway was planned to cross the archaeological site. It's a miracle that black archaeologists left this Thracian sanctuary intact, it is probably keeping precious treasures, experts say.Finds dating back to four different historical ages have been discovered in the area. For a week already archaeologists have been examining the region between Karnobat and Stara Zagora where the new section of the highway will be built. Another five tumuli have been discovered, but they will be moved aside from the future highway.
Key road rehab projects kick off in 2008
Тhe companies that will carry out the rehabilitation and reconstruction of 503 km of second- and third-class roads in 21 regions of Bulgaria have been chosen already. Half of the roads will be repaired next year, the deputy director of the Regional Road Infrastructure Fund, Hassan Hassan, said at a seminar in Sandanski.The construction works will cost approximately BGN 280 million. The amount will be provided by the operative programme for regional development in 2007-13.The passenger and cargo traffic on the rehabilitated roads will increase by 27% by 2015. The time vehicles will save is assessed at EUR 208,000 a year.
Sofia hosts Bulgarian - Czech Business Forum
Bulgarian Chamber of Commerce and Industry organizes Bulgarian - Czech Business forum.The event is by the occasion of the visit of the business delegation that accompanies Czech Republic's Prime Minister Mirek Topolanek.The forum is leaded with the co-operation with Czech's Chamber of Commerce. Bulgarian Foreign Minister Ivailo Kalfin will also attend the conference.Czech companies that operate in the sphere of transport - infrastructure and telemetric, energetic and environment, drinks and media will participate on the business forum.This afternoon Bulgaria's PM Sergei Stanishev will meet his counterparт, after that the Premiers will have a private conversation. After that they will give common press conference in the Ministry of Councils.
30% of Bulgarians use actively internet
More than 30% of Bulgarian citizens are using actively Internet. This year the Inet's consummation is up to 33,3%, says a research of Bulgaria IT Association (BAIT).In 2000 the Internet users were almost 5,4% of Bulgaria's population, 6 years later the users increased to 28,5%, the Monitor daily informs.Experts foresee growth in computers' using for 2007 of 40,1% on annual base and average annual increase of 20,1% until 2011.It is also expected that prices in IT sphere will fall, because the computer's components are getting cheaper and also due to the decline of the custom restrictions.Meanwhile the part of laptops will exceed the desk computers. Bulgarian market of IT services goes to $ 96,8 million.While in 2005 Bulgaria took 15th place in the global services index, in 2007 Bulgaria reached 9th position.
INVESTMENTS:
Yazaki to invest �20 М in Bulgaria over 2 yеаrs
Yazaki, the Japanese producer of electric and electronic systems for the automotive industry, plans to invest 20 mln euro in the plant it is building in Yambol, South-eastern Bulgaria. The electric systems factory should be ready by early 2009. At the beginning of 2007, Yazaki won a sealed-bid tender for a 51,400 sq m municipal plot in Yambol. It paid 411,100 levs and pledged to invest no less than 45 mln levs in production facilities no later than 24 months of the receipt of the construction permit. The Japanese company plans to create 2,685 jobs by Jun 2010.
UK Winlan to invest BGN 184 M in Sofia retail park
Britain's Winlan has announced plans to invest 184 mln levs in Bulgaria's first retail park. The project, which Wednesday received a First Class Investor certificate from Bulgaria's investment promotion authority, will be implement by Retail Park Sofia, 85%-owned by Inland Bulgaria Limited.It has bought 24 ha of land between the capital's Lyulin and Filipovtsi boroughs for 25 mln euro.The location for the retail park, due to open in 2010, was chosen for its proximity to the Lyulin motorway, the Sofia ring road and the general scarcity of such projects in this part of the capital in contrast to its eastern boroughs, said Asen Agov, who owns 5% in Retail Park Sofia.The 77,000 sq m retail park will accommodate several supermarkets as well as furniture, electronics, automobile and apparel hypermarkets. There will be 3,000 parking spaces and a gas station.Cushman&Wakefield will market the lettable space inventory. Rent rates will be significantly lower than those charges by other Sofia malls.The developer will provide 25% of the necessary financing and will borrow the remainder after the property reaches a certain occupancy level.
�20 M to be invested in Varna, Burgas airports 2008
The Bulgarian airports in Varna and Burgas, taken over by Fraport subsidiary Twin Star under a concession arrangement in 2006, will ingest 20 mln euro in investment next year, said Andreas Helfer, executive director of Fraport Twin Star Airport Management. The airport concessionaire plans to purchase new mounted fire equipment, rewire the electricity grids of the two airports and organise staff training courses. The two airports were added to the destinations of 19 new air carriers this past summer. Budget carriers Germanwings, Wizz Air, Centralwings, Sky Europe and Norwegian Air Shuttle all fly to the two coastal airports. Burgas processed 1.9 mln passengers in Jan-Oct while Varna traffic was at 1.5 mln.
Shopping Mall projects are springing across all central and eastern Europe
The considerable increase in consumer spending in the countries in Central and Eastern Europe has triggered a wave of shopping center projects across the region, the Wall Street Journal reports.A total of 1.12 mln sqm of commercial space is expected to be launched into exploitation in Poland alone next year, versus 205,000 sqm this year. This is a nearly five-fold increase, data by Jines Lang LaSalle reveals.614,000 sqm of commercial space will enter into operation in Czech Republic next year, against 400,000 sqm this year.The greatest number of shopping mall projects are being developed in Russia and Poland.The increasing number of projects, however, is hurting the amount of return on investment in such. In the Czech Republic and Poland it is already getting closer to the western average.Shopping malls in Prague bear an average 5% return per year, which is close to the 4.75% in London.This is why investors are eying countries far to the east, as return on investment in such projects there is still higher than in the CEE region.In Romania investment in a shopping centers bears an average 7.5% return per year, and in Bulgaria it is a little higher – 8%, according to Cushman & Wakefiled data.
Investment in Mall Pleven raised to BGN 80 M
Bulgaria's investment agency BAI awarded on Tuesday a class A investment certificate to the planned mall in the town of Pleven in northern Bulgaria.The BGN 80 M investment will be carried out by Aladin EOOD, owned by businessman Aladin Harfan, who also owns the Tehnolux household appliances retailer.The mall will be built on the 10 000 square metres plot that used to host a tobacco factory, and will have a built-up area of 46 800 square metres, including parking spaces.Architectural firm Arhiton will design the mall and Colliers International will handle all real estate brokerage and property management.Aladin EOOD will finance the construction using its own funds and loans, and plans to open the doors of Mall Pleven in spring 2010.The firm plans to invest another BGN 38 M in a mall in the southeastern town of Kardzhali.
BGN 184 M investment in Mall complex in Sofia residential district of Lyulin
Turgovski Park Sofia AD (Trade Park Sofia AD) announced it would invest 184 million leva in the construction of a mall complex in the Sofia residential district of Lyulin.On November 6 2007, InvestBulgaria Agency would award the company first class investor for the project, investor.bg reported.The mall complex would have a footprint of 240 000 sq m and a gross build up area of 76 860 sq m, investor.bg reported. Construction would be launced in March 2008 and would take two years.The project execution would open 2200 work places. Close to 250 people would be hired for the construction of the mall.Local Magnum Bulgaria Gama, associate of Austrian Real 4 You Group is the investor in another mall complex currently being built in Lyulin.
Austria's Palfinger investing �30 M in new Bulgarian plant
Palfinger, the Austrian manufacturer of lifting, loading and handling systems, said it should complete the deployment of its second major investment in Bulgaria by the end of 2008. The company has made significant headway in the construction of a new hydrocylinders factory in the village of Tenevo, in the Yambol region. Palfinger launched its local operations eight years ago on the site of defence company Beta in Cherven Bryag, Northern Bulgaria.In 2002, the Austrian company outsourced its hydrocylinders production to a workshop on the site of the former Sila machine-engineering plant in Tenevo.The launch of the new hydrocylinders factory should double the output capacity, said Palfinger Bulgaria executive director Goran Starcevic.The company opened a new 5 mln euro welding workshop in Cherven Bryag last year. Palfinger has posted a 30% increase in sales from its Bulgarian operations in the past couple of years. Sales topped 55 mln euro in 2006 and should reach 64-65 mln euro this year, said Starcevic.
Mayr-Melnhof to double investments in Nikopol
Austria's Mayr-Melnhof Karton AG will invest BGN 20 million in the cartonboard manufacturing plant near Nikopol by 2010. The funding will be invested mainly in the purchasing of new energy-saving equipment, reducing the quantity of fresh water used in the production process and improving productivity. Mayr-Melnhof acquired the Nikopol plant in 2002 and has made investments for over EUR 15 million so far. The plant started manufacturing raw materials for gypsum cartonboard and testliner. The output of the plant is expected to amount to 60,000 tonnes in 2008. The raw materials for gypsum cartonboard will account for 60% of the figure.
Truststroy to build commercial complex in Bulgaria`s Targovishte
Truststroy Investment, a company owned by two lawyers based in Bulgaria's Targovishte, will turn the first sod of Targovishte's second commercial complex, investor.bg reported on November 8. The three-floor luxury building would adjoin the CBA supermarket and the Mebel Stil Chamber.The building would be ready before the end of next year and would spread on 1900 sq m. Shops would occupy the first two floors and the luxurious offices the third floor. The last floor was to house a panoramic bar.Truststroy Investment had assigned the development work to local entrepreneur Decho Diakov.The mall would provide jobs for at least 30 people and the shops would be sold rather than rented out.The Alexander Stamboliyski boulevard, where the mall would be located, was slated to become Targovishte's trade zone. The construction of an auto salon was slated to begin within days, whereas German retailer Kaufland was slated to start building its new supermarket early next year.
IKEA open first store in Bulgaria
First store of IKEA chain open doors in Bulgaria in 2009.‘Fourlis' association is negotiating for providing a property in Sofia for IKEA's first store. The company plans to open two more stores in Greece until 2010. Fourlis's investments for 2007 reached �71 million. Fourlis Group is one of the leading group of companies in Greece and the Balkans in providing quality consumer durable goods. Their strategy is the expansion through companies focused mainly in retail and secondary in wholesale commerce.
Turkish businessman opens outlet mall in Sofia
The Corecom store in Sofia's Mladost residential district will be remodelled into an outlet mall and renamed to Princess Outlet Center.The outlet mall, due to open for business later this week, will offer discounts in various items of up to 70% on retail prices.The project is financed by the Corecom Princess company owned by Turkish businessman Sudi Ozgan.Ozgan operates hotels under the Princess brand in Sofia and Plovdiv as well as several casinos.Corecom Princess bought the stores of state-owned company Corecom some seven to eight years ago.A second floor has been added to the Corecom store in Mladost to boost floor space to 12,500 sq m.The retail premises of Princess Outlet Center will occupy the first floor of the mall. There customers will shop for discounted items by Adidas, Replay, Rifle, Hot Spot, Mustang, Disney, Guy Laroche and Nortons.The second floor will house an entertainment center and bowling hall. A casino will also be added once the relevant licence is granted.
Bulgaria's president hunts for Qatari investments
Bulgaria's president Georgi Parvanov opened a Bulgarian-Qatari business forum in Doha on Thursday before the end of the first official visit to the emirate.The president offered partnership to thirty Qatari businessmen, taking part in the forum, in the spheres of energetics, infrastructure, arms industry, hi-tech, and tourism. Parvanov noted Bulgaria's economic and political stability, attractive tax legislation and qualified personnel in his attempt to attract Qatari investments.Trade turnover between the two countries is only about quarter of a million US dollars but there are hopes for improvement after agreements on cooperation, including an investment protection accord and a memo for partnership in tourism, were signed in the framework of the Bulgarian delegation's visit.
A memo between the ministries of foreign affairs opens the way for embassies and a direct airline between Bulgaria and Qatar was also on the agenda, said the president. Parvanov expects his host Sheikh Hamad bin Khalifa Al Thani on a return visit to Bulgaria next year.The emir was awarded Bulgaria's highest state order Stara Planina in recognition of his contribution to the release of the six Bulgarian medics, who spent eight years in Lybian prisons in a travesty AIDS case.
COMPANIES:
500 companies participate in construction Expo in Varna
More than 500 companies take part in the 25th edition of ‘Trite Klucha' Expo (The Three Keys) - home, office, villa, informed from 'New Balkan Tours'- main organizers of the event.The exact number of the participants is still unknown. Construction companies from Poland, USA, Greece, Turkey, Sweden and Germany will take part in the expo.The building event will continue till November 12.On the expo that started on Thursday, November 8, will be presented producers and traders in the construction and furnishing field.
Foreign companies delay local projects
One year after Bulgaria joined the EU, the country is still unable to show some progress in tightening the measures against foreign companies delaying the implementation of large-scale projects, a Pari daily check-up shows. Foreign companies seem to have the upper hand when it comes to project deadlines and legal arguments over forfeits. Austrian and Japanese companies have already become notorious for the poor construction quality, deadline violation and legal arguments over forfeits. Brussels recently launch investigations against EU companies that do not comply with the requirements. The management of the companies was replaced in countries where breaches were unravelled.
Austria's Strabag, which is building the new passenger terminal at the Sofia airport, became notorious for the poor quality of its services. The company won the tender for the construction of the terminal with EUR 110 million offer. The first sod on the project was turned in 2002. The actual construction works were delayed by more than three years. Instead of stepping up the work, Strabag had the audacity to demand additional funding to complete the project. The company received additional EUR 4.7 million in 2004.
Strabag demanded further EUR 3 million due to the higher construction material prices. In the meantime the new runway of the Sofia airport showed a serious defect as the asphalt in its eastern part cracked. Strabag initially refused to take responsibility and subsequently blamed the defect on the sub-contractors. The suspended ceiling of the passenger terminal collapsed in 2006. The transport ministry gave Strabag an ultimatum to repair the defect and compensate the costs of the repair works. The terminal building was officially inaugurated in the end of 2006.Strabag was also criticised for the poor quality of the road linking Vidin and Montana, which the company rehabilitated.
Strabag participates in tenders with its Bulgarian unit and subsequently assigns the projects entirely to Bulgarian sub-contractors, experts say. The company hardly wins projects anymore and has decided to pull out of the country. Japan's Taisei Corporation, which is building the underground railway in Sofia, will be fined USD 5 million by the end of November 2007, Velizar Stoilov, deputy mayor of Sofia in charge of transport, said. The fine will be imposed over the one-year delay of the stretch between Bulbank and the crossing between the Evlogi Georgiev and Dragan Tsankov boulevards.
BSE to introduce XETRA trading platform
The Bulgarian Stock Exchange (BSE) has signed an agreement with Deutsche Boerse to implement the XETRA electronic trading system. The introduction of the German trading platform will provide foreign investors with direct access to the Bulgarian capital market. Bulgarian investors will also be able to trade in more than 17,000 financial instruments listed on XETRA. The contract has been singed for a five-year term, while the trade through the new system will start in the middle of 2008. Xetra is an electronic trading platform created for the Frankfurt Stock Exchange in 1977.Nearly 4,600 brokers, as well as brokerage houses from 19 countries are connected to the system worldwide.
All subscribed shares of Trace Group paid
All shares of Trace Group Hold that were subscribed during the initial public offering have been paid already, the company said. As much as BGN 22.1 million has been transferred on account of the company. That is the amount equivalent to the issue value of the 200,000 shares that were offered and subscribed as part of a capital raise move.The issue value of the shares stands at BGN 110.50.The raised capital will secure growth financing to the company. Its public status will improve its popularity among investors, the company said. The shares are expected to be listed for trade on the Bulgarian Stock Exchange in early 2007.
Companies to pay BGN 20,000 a month to owner
The owner of Bulgaria's Nove Holding, Vassil Bozhkov, may add another BGN 14,000 a month to his income. The remuneration will be approved at an extraordinary general meeting of Holding Roads, where he is expected to be appointed to the supervisory board of the road construction company, most probably as a chairman. The meeting will be held on December 11, 2007, according to a notice in the Official Gazette.Bozhkov will get another BGN 6,000 a month as chairman of the supervisory board of another of his companies, Moststroy. The changes will be voted by the shareholders at an extraordinary meeting on December 12, 2007.Both Holding Roads and Moststroy have announced plans to split their shares. The holding will apply a 1:25 ratio, the par value of Moststroy's shares will change from BGN 10 to BGN 1 but the capital will be preserved.
Holding Roads' shares cheapened by 4.89% to BGN 39,042.83 on Friday. Moststroy dropped by 3.37% to an average of BGN 2,556.
France's Carrefour to open 20 hypermarkets in Bulgaria over 7 years
France's Carrefour, Europe's biggest retailer, will open 20 outlets in Bulgaria over the next five to seven years, Jerome Loubere, general manager of Carrefour Marinopoulos, the Greek subsidiary of the French group, said on Monday, November 5.The goal of the company will be to bring its know-how to the Bulgarian retail market, to develop a relationship with local suppliers and offer consumers a top-notch contemporary retail experience, said Loubere.The first local Carrefour opening is planned for the end of 2008 in Burgas, on the Black Sea.The French retailer intends to have outlets in all major Bulgarian cities and in particular Varna, Stara Zagora, Veliko Tarnovo and Plovdiv.Carrefour has signed agreements for the purchase of sites or the lease of retail space with 6-7 companies, said Carrefour Bulgaria general manager Jean Anthonie.There will be at least two Carrefour outlets in the capital Sofia.One of them, with an area of 8,000-9,000 sq m, will be housed in the Carrefour Tzarigradsko mixed-use development on the boulevard of the same name.The complex will consist of three underground and three above-ground levels, housing parking facilities, shops, eateries and various entertainment establishments. The 200 retail outlets will have a combined gross lettable area of over 66,000 sq m. The complex should welcome its first customers in 2009.Loubere stated that the project is developing according to schedule and announced the start of the construction works under the direct management of the chosen main contractor – TERNA Bulgaria.Adjacent to the mixed-use complex will be office buildings.Realty consultants Colliers International, which have the exclusive agency rights, said around 60% of the lettable space has already been snapped up.Carrefour Tzarigradsko will mark the entry of international chains with no previous exposure on the Bulgarian market, said Atanas Garov from Colliers, withholding further information. According to sources close to the project, Carrefour has clinched a deal for Carrefour Tzarigradsko with Inditex, the Spanish retail group that includes brands like Zara, Breshka and Massimo Dutti. Sources from the local property market said Carrefour is also in talks to secure a lease in the Mall Bulgaria development currently under construction on Sofia's Bulgaria boulevard. Carrefour declined to give further details about the plans for their other local stores. The French retailer estimates it would be ringing up 20 mln to 50 mln euro in annual sales in 2009, depending on the number of rollouts, said Loubere. For comparison, the eight local hypermarkets of Metro Cash&Carry, the German chain of self-service wholesale warehouses, posted sales of over 700 mln levs in 2006. The company has began work on its ninth local hypermarket. Carrefour's initial launches here will all be hypermarkets. The company could bring its smaller retail concepts to the Bulgarian market later on, said Loubere.
Bulgarian electrical company Mega El buying cable factory in Macedonia
Sofia based Mega El acquired the majority share of a cable factory in the Macedonian city of Negotino, Dnevnik daily reported. The deal received the nod of approval of the Macedonia Securities Commission on November 1.Mega El acquired 54 per cent of the factory, which was owned by Macedonian business man Boyan Yanev, See News agency reported. The company said it intended to buy the remaining 46 per cent as well, at 25.2 euro (1.550 Macedonian dinars) a share.Mega El designs and builds electricity distribution devices, aerial electro-conductive lines, tunnel and street lighting devices, among others. The company specialises in setting up outdoor cable systems of new and renovated buildings, replacing circuit-breakers and engineering works.Sharp increases in construction works resulted in increased orders for the factory and a turnover growth of over 100 per cent. This had been the reason to invest in a cable factory, representatives of Mega El explained.There were only 5 cable factories in Bulgaria, but they were not for sale and were not looking for external partners. This was the reason why Mega El set its sights on foreign markets. The factory in Negotino produces 12 to 15 thousand tons of cables a year and exports its production mainly in Germany, Croatia, Serbia, Bulgaria and Slovenia.Mega El is not the first Bulgarian company to invest abroad. Large investments in other Balkan countries were made by big companies such as Prista Oil, Monbat, Intertrust Holding, etc.
Sopharma Trading primed for debut on stock exchange
Bulgaria's Sopharma Trading will submit a prospectus for secondary offering of shares by this month's end, the company's executive director, Dimitar Dimitrov, told the Pari daily. The official term for review is three months but if the Financial Supervision Commission approves the prospectus sooner the shares may be listed for trade before this year's end. Investors will be offered 30 million shares with a par value of BGN 1 each. Our investment intermediary, Bulbrokers, is still considering the issue value of the shares, Dimitrov added.Sopharma Trading is the fourth company of the Sopharma group to be listed for trade on the Bulgarian Stock Exchange. The other public companies are Sopharma Logistics, Bulgarska Roza Sevtopolis and Sopharma Estates. Medicine distributor Sopharma Trading held 15.6% of the market in Bulgaria in 2006. The total sales of the company nearly doubled in the third quarter of 2007 to a touch above BGN 62,000. The staff increased by 120 to 570 people.
ANALYSIS:
Foreign minister Kalfin confers with chairman of Japanese chamber of commerce and industry and chief Toshiba official Okamura
Author: BTA
Bulgarian Deputy Prime Minister and Foreign Minister Ivailo Kalfin conferred Tuesday with Chairman of the Japanese Chamber of Commerce and Industry and Chairman of Toshiba Board of Directors Tadashi Okamura, who is also Co-chairman of the EU-Japan Business Dialogue Round Table, the Bulgarian Foreign Ministry said. on Sunday Kalfin opened a four-day official visit to Japan, BTA reports. Kalfin acquainted Okamura with the investment climate and economic situation in Bulgaria and the advantages for the business after his country joined the EU. Kalfin noted that now is the time for the Japanese business and investments to come to Bulgaria as the country is already part of the large European market. The Bulgarian Foreign Minister recalled that Bulgaria's business climate is favourable due to the currency board arrangement in place already ten years, the low unemployment rate, fast economic growth and low taxes. Kalfin said that energy, transport and high technologies are three of the sectors with priority significance for investment. He also stressed the availability of skilled and motivated workforce for these and other sectors of the Bulgarian economy.The two officials shared the view that the future of investment is in small- and medium-sized enterprises. A good example for such an investment is the project of the Japanese Yazaki Corporation which is building a plant for electric cables for the automotive industry in Yambol, Southern Bulgaria. Yazaki invested about 20 million euros in the plant, which is to go into operation in the spring of 2009. Tadashi Okamura listed Toshiba's priorities in Bulgaria, in particular the participation in the project for the rehabilitation of the Maritsa-East II thermo-electric power plant. The Japanese official noted that the Japanese businesses are not sufficiently informed about the new opportunities for investment and business in Bulgaria. The Japanese Chamber of Commerce and Industry is going to provide assistance in the promotion of business contacts and exchange of information between the two countries.
Later in the day Kalfin conferred with Kazuyoshi Terashima, Chairman of the Japanese-Bulgarian Economic Committee and Senior Advisor of Ebara Corporation. The Bulgarian Foreign Minister said that after his country joined the EU, the business operates in a market of nearly 500 million people and by coming to Bulgaria a Japanese company will have a presence also in the EU and in the Balkan region. Kalfin promised that Bulgaria will make available as much information as possible about the new business opportunities. He said that an important priority of the government next year is increasing the resources for research and development. Kalfin invited Japanese companies to take part in joint R&D projects in Bulgaria. Kazuyoshi Terashima said that a promising sector for investment is biofuels and suggested the implementation of a joint project in Bulgaria. He said that Bulgaria is an interesting location for the production of automotive parts, adding that Japan has car-making plants in the EU and the Balkans.Kalfin stressed that Bulgaria maintains excellent trade and economic ties with its neighbours on the Balkans, which he described as a great asset. Another advantage is the fact that Bulgaria borders on the Danube and the Black Sea and that four Pan-European transport corridors go via its territory.
Bulgaria to have EU's lowest flat income tax
Author: Georgi Angleov, Open Society Institute, Pari Daily
Just one year after introducing the lowest profit tax in the EU, Bulgaria will also have the lowest flat income tax rate in the union as of 2008. A 10-percent income tax rate will be levied in the country as of 2008. Macedonia and Albania will be the only countries in the EU where the income tax rate will be as low in 2008.Bulgaria used to lag considerably behind the other countries in the EU in this regard but the situation is already improving, according to Georgi Angelov, senior economist at the Open Society Institute. The flat income tax will not encourage grey economy and will reduce the labour costs. Bulgaria will become more competitive on an international scale, Angelov said. Foreign Companies will be encouraged to start business in the country attracted by the 10-percent corporate and income tax rate. Each country introduces flat tax rates according to its own model. Slovakia, which adopted a 19-percent flat income tax in 2004, was the only country to close all loopholes and revoke all tax breaks, Petar Ganev of the Institute for Market Economics said.Unlike Bulgaria, most European countries have a tax exempt minimum but revoke the statutory expenses. on the contrary, Bulgaria will keep the statutory expenses, but will have no tax exempt minimum as regards to the flat income tax. The tax benefits for voluntary pension insurance and life insurance will also be kept, while there will be no more child benefits and deductions for donations. It is not that easy for all benefits to be revoked. Organised groups are trying to have some of the tax benefits revoked, Angelov said. The reduction of the tax brackets from six to three is a step forward, Angelov added.