불가리아 주요 경제뉴스( 15 – 22 FEBRUARY 2008 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 15 – 22 FEBRUARY 2008 )

 

 

Sections/headline briefs:

 

MACROECONOMY:

 

·        Finance Minister: "Bulgaria not faced with economic crisis"

·        Bulgaria gets � 1 B from EU

·        �900 M for development of Bulgaria rural tourism

·        BGN 1,5 B subsidy for farmers

·        Four months delay in the construction of Danube Bridge 2

·        Germany and Bulgaria to deepen railway cooperation

·        Bulgarian`s incomes grown up with 24% for 2007

·        Bulgaria ranked among top achievers in transposition of EU directives

·        The traffic in Sofia – 12 years ahead of the forecasts

·        �262M plots for construction sold in 2007

·        Construction boom moves to the South of the Black Sea coast - no free place to the north of Bourgas

·        Mall invasion in Bulgaria continues

·        Foreigners buy 30 percent of real estates in Bulgaria

·        Bulgaria does not export electricity to Kosovo

·        Power distributors sign co-operation accord

·        Rightists: Planned energy holding to hike electricity prices in Bulgaria

·        Deloitte outlines vision of Bulgarian energy conglomerate

·        Failure of pipeline referendum in Bulgaria

·        Russia has no enough oil for Bourgas-Alexandroupolis

·        Non-bank loans – a business worth billion

·        Erste Bank: Bulgaria's 67% credit growth highest in CEE In 2007

·        Bulgaria's 2007 soft drinks sales rise 18%

·        Road projects for BGN 300 M prepared

·        Alternative energy investors say hassled by power distributors

·        Economically active population equals 3,472,200 in fourth quarter of 2007

·        Bulgarian goods with eco labels

·        Bulgarian Becomes Vice-President of WB

·        Kosovo's recognition: obstacle to business

 

INVESTMENTS:

 

·        FDI flows up 30% to �5.7 B euro in 2007

·        JV plans USD 3 B megainvestment in real estate

·        Pernik Stadium - like 'Besiktas' and 'Fenerbahce' stadiums

·        Israelis to build logistic center near Plovdiv

·        Austrian companies invest outside Sofia

·        Austria's biggest steel-maker to invest � 5 B in Black Sea region

·        German inverstors interested in Bansko ski resort

·        German Fikon to build bio-fuel factory in Targovishte

·        Vacation complex for � 25 M to be built in Bulgaria's Banya

·        Bulgarian business hunts for brains

·        Enel to build �25M gypsum plant in Bulgaria

·        Vacation complex for USD36 M to be built in Banya

 

 

 

COMPANIES:

 

·        More than 800 companies take part in Agra 2008

·        International market 'Vacation & SPA Expo 2008' opened

·        Kremikovtzi mill cuts loss for 2007 by 87%

·         Kremikovtzi seeks strategic partners

·         Intel-sponsored R&D centre opens at BAS

·        French ophthalmologic company Essilor enters Bulgarian market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Articles:

 

 

MACROECONOMY:

 

Finance Minister: "Bulgaria not faced with economic crisis"

 

Bulgaria is not faced with an economic crisis, Finance Minister Plamen Oresharski said in Parliament on Friday. He said the external economic situation is closely watched because the country is no longer an isolated system. As the national economy is integrated into the EU economy, there are mutual influences, and liquidity problems can be expected in Bulgaria, Oresharski said. The position of the Bulgarian government is very strong in terms of fiscal reserves and current budget position, and the banking sector is quite stable, he said.The current account deficit is a serious matter resulting primarily from the foreign trade deficit. This is a trend which began with the start of economic reforms in 1997, he said.As a result of foreign investment, higher growth rates and income increase, the current account deficit continues to grow, the Minister said. Early estimates put the 2007 current account deficit at 20.5 per cent, which is around the forecast level.

Bulgaria gets � 1 B from EU

Bulgaria has received more than 1 billion euro from the EU during the first year of membership, said on BTV Bulgaria's Minister of Finance, Plamen Oresharski. Bulgaria's fee in the EU budget is 590 million levs (1 euro =1,95 levs).the negative forecasts  that Bulgaria would be nothing more but a EU donor during turned out untrue, said Minister Oresharski and added that about half of the new EU members were in the same situation in 2004. There is no EU money upon distraint, just the approval of some payments is delayed till the review of the road funds is over, explained the Minister. The work on Lyulin highway resumes. In a couple of weeks the next payments may be approved. 

�900 M for development of Bulgaria rural tourism

Three of the measures under the Program for rural development - “Diversification of the non-agricultural activities”, “Support for the creation of micro-enterprises” and “Promotion of tourist activities” were presented within the 'Tourism and Leisure Fair' in Varna.Their total budget for this year is 900 M EUR. The first measure supports rural tourism, local crafts, infrastructure projects and all investments not connected to agriculture.Beneficiaries under this measure can be agricultural producers from the village municipalities. They can get 20% of the project value in advance payment (for projects which are over 50 000 EUR)The second scheme will support traders, physical persons or legal entities while the third scheme will support the municipalities.The grant will be up to 70% from the approved expenses but not more than 200 000 EUR.

BGN 1,5 B subsidy for farmers

At the opening of the exhibition "AGRA 2008" in Plovdiv Fair, Bulgaria's  Minister of Agriculture and Food Supply, Nihat Kabil announced that till the end of the year almost a billion and a half levs (1 euro = 1,95 leva)will be alloted  to the sector of agriculture. This year the farmers will receive over 600 million levs directly from the  EU per hectare besides  the national additional aid for 2008 would be distrubited this year instead of in the beginning of 2009. The application procedure opens on March 1. So far 73 000 farmers have received EU and national funds for 2007, explained the Minister.

Four months delay in the construction of Danube Bridge 2

Nearly four months will be the delay in the construction of Danube Bridge-2, informed Darik radio.The Spanish company, implementor of the project – FSS Construction, has not yet submitted the technical project for approval to the Ministry of regional development and public works.According to the minister of transport Peter Mutafchiev the reason for the delay of the construction is the legislative differences between Bulgaria and Romania. Simeon Evtimov from the ministry of transport claimed that the Spanish company had received permission for construction, which means it has presented a technical project as well. According to Evtimov, what is missing is a working project. This project has not been developed because the access to the construction spot has been delayed due to the conducted geological research on the Romanian shore and on Romanian territory and special temporary permissions were needed to be issued, explained Evtimov.

Germany and Bulgaria to deepen railway cooperation

The Bulgarian minister of transport Peter Mutafchiev met today the vice-president of the German railways “Deutsche bahn” and chairman of the company's executive board Otto Wiesheu. The possibilities for deepening of the cooperation in the field of railway transport between the two countries and for the exchange of experience were among the topics discussed during the meeting, informed the ministry.Later, Otto Wiesheu's program includes meetings with the chairmen of the Bulgarian railway companies Oleg Petkov (Bulgarian state railways - BDZ) and Anton Ginev (“Railway infrastructure” national company). Before flying back to Germany, Wiesheu will visit the International specialized exhibition “Logistic, transport, infrastructure” which is held for second successive year in Inter Expo Center. 120 participant and representatives from renowned companies from 20 countries take part in the exhibition and present new decisions in the sectors: logistics – international and domestic transport, storehouse facilities and equipment, specialized transport means and transport informatics.

Bulgarian`s incomes grown up with 24% for 2007

The average common income of one Bulgarian household in December 2007 has increased to 844.75 BGN (422.37 EUR). This result makes almost 24% raise on yearly base, the National Statistic Institute (NSI) data shows.December common expends on monthly base increase record - breaking to 769.63 BGN (385.30 EUR) compared to 642.35 BGN (321.18 EUR) for November, as the biggest share goes by tradition for food and drinks. The expenses' rising is 19.8% on yearly base, which means Bulgarian expends have raised with 126.91 BGN (63.45 EUR) in a year. As it was one year ago, almost a half of Bulgarian household's incomes come from work salaries (42.3%), and the rest part from pensions (19.7%) and others.The enterprise incomes' share grows (5.1% from common product compared to 4.5% for the previous year).

Bulgaria ranked among top achievers in transposition of EU directives

Bulgaria is among the top achievers in incorporating EU directives into its national law, it emerged on Friday. The Secretariat-General of the European Commission published information, according to which Bulgaria ranks second among the 27 Member States in terms of notification of national measures implementing all directives in force. As many as 1,720 such directives, or 99.77 per cent of the total of 1,724 whose deadline for implementation has passed by February 11, 2008, have been transposed in Bulgarian legislation, BTA reports. Lithuania is ranked first, on 99.98 per cent. The bottom three places are taken by Portugal (97.84 per cent), Luxembourg (97.66 per cent), and Greece (97.19 per cent). European Commission sources commented that the Bulgarian state administration has scored a serious success, which is evidence of excellent coordination in the process of transposition.

The traffic in Sofia – 12 years ahead of the forecasts

The traffic in Sofia has reached levels, forecast in the common city plan for 2020. This shows a research ordered by the municipal company “Metropoliten” with regard to the the extension of the subway. During the peak hours in the morning 10 000 cars and 8 000 people with the public transport enter the city center via “Tsarigradsko shosse” blvd.Over 70% of the residents of the districts “Drujba” and “Maldost” claim that they would use the subway instead of their cars.Meanwhile the environmental ministry announced that Sofia might lose the grant from the ISPA program for water projects. This determined the Minister of Environment and Water Djevdet Chakurov after a meeting with the mayor of Sofia Boiko Borissov. The ISPA money is 58.5 M EUR.The Environmental Ministry accused Sofia municipality on delaying the procedures for acquiring the EU money. The main problem is the unsettled by the municipality ownership on the land through which the equipment will pass. Another reason for the problems was that the business plan and the annex to the concession contract with 'Sofiiska voda' ('Sofia water') had not yet been adopted. During his visit in Brussels the mayor Boiko Borissov had talks with the European commission and was assured that the grant would be paid, commented the chief architect of Sofia Peter Dikov.

�262M plots for construction sold in 2007

 

Construction plots to the total value of EUR 262 million were sold in Bulgaria in 2007, an analysis of the business property market conducted by Real Capital Analytics (RCA) shows. The report includes data about the market of offices, commercial area, industrial properties, hotels and land for such construction worldwide. However, the analysis takes into account only deals exceeding USD 10 million (EUR 6.8 million) in value.
RCA registered ten bigger purchases of construction plots, or more than 30% of all larger deals on the Bulgarian market. The high share of land purchases speaks of continuing development activity. The market of commercial area also remained dynamic with seven deals for EUR 472 million. The volume in the office segment was about half that amount: ten big sales to the total value of EUR 215.7 million. Industrial properties and hotels were the least developed markets.

Construction boom moves to the South of the Black Sea coast - no free place to the north of Bourgas

Construction activity in Bulgaria's largest sea resort - Slanchev Briag (Sunny Beach) is slowly dying away. Unlike other years, the approach of the summer season does not bring herds of cranes and trucks heavy-loaded with construction materials. Any free spot near the coast have been developed. only 17 new buildings are currently being worked on, situated in the western part of the resort - near the Bourgas-Varna road. The place has been so over-developed that anyone who wants to build a new hotel will have to tear down an old one. About 200 hotels will work this summer in the "residential district" as Slanchev Briag is called. The whole region around it has started to resemble a Chinese village - not an inch is left unbuilt from Nessebar to St. Vlas where five new holidays villages and eleven hotels are constructed. Four new and super luxurious hotels will receive tourists in the new town of Nessebar. The lack of undeveloped area near the caost in Nessebar area, forced investors to redirect their intentions southwards. According to Tsarevo Mayor, Petko Arnaudov, 15 new hotels are currently being constructed in the town.  As many hotels are built in Sinemorets. The place that has been for long the favourite hideaway of Bulgarian elite will no longer be able to offer peace and isolation.
 For the last two years investors have been more interested in the northern Black Sea coast, although the season is shorter there. They prefer investing in holiday villages and residential complexes as well as in golf course surrounded by villas that supposedly may attract keen golfers and their families all year round.

Mall invasion in Bulgaria continues

The intensive construction of trade centers and malls tends to continue during the next years, money.bg announced. Such projects will be realized not only in the big cities but also in smaller towns. Presently at different stage of realization are 16 projects of Mall construction throughout the country.Only in Sofia few big projects are previewed - Carrefour Mall, Bulgaria Mall, Serdica Center and Olympian Mall.The expected tendency for the next few years is increased offering of bigger housing estate complexes. The investor's interest is expected to move from central city areas towards satellite villages, closed housing estate complexes and the suburb residential zones.In compare, the housing estates prices in Bulgaria have raised with 34% for the last year. Almost 60% of all issued building permissions in this period are for realization of residential projects.Round 30% of the deals in the sector are made by foreigners. According to analyzers in the next few years will continue the construction of office spaces. 450,000 square meter offices have been built at the moment, as most of them will be finished in the period 2008 - 2011.Most of the new offices are situated round the big city boulevards. The building of offices in the central city parts, though, is hindered by the lack of proper terrains and the intensive road traffic.The experts also expect increasing demand of logistic areas in the next 5 years. This sector is attractive for investments because it is still slightly developed and there is insufficiency of specialized store premises. The specialists claim more that the overbuilding of Bulgarian sea and mountain resorts had already aroused tourists recession. They expect drop in vacation complexes' demand among British and Irish investors. At the expense of that, the interest of Russian and Scandinavian contractors towards such type properties may increase.

 

 

 

Foreigners buy 30 percent of real estates in Bulgaria

Thirty percent of the real estates purchasing contracts in Bulgaria are implemented by foreign investors. And they make 60 percent of all permits, issued by the state for purchasing a real estate property in this country. In 2007, the real estate prices increased with an average of 34 percent and the experts' prognosis for the next two years is  for a smooth 15 to 20-percent increase in the prices of luxury real estates. The figures are taken from a UniCredit Bulbank report. "The main reason for this expectation is because at the moment, real estate owners refrain from selling their properties. They do not sell at the moment, because they hope for quick-profiting at a later stage, when prices would probably go up."Another factor that they are not many, planning to sell, is because the financing from the banks is also likely to increase," reported Martin Gikov," head of Real Estate Department of UniCredit Bulbank."There is no balloon on the real estate market and I don't expect any changes for worse, especially for loans that the bank have already given to its clients," commented Levon Hampartzoumian, CEO and a Chairman of UniCredit Bulbank.Experts believe that the construction of new customers shopping centers as Malls and logistic centers will bloom in the coming years. This tendency is due to the fact that there are not many commercial areas. In Bulgaria, there are 15 sq.m. commercial areas per capita, whereas in Europe, the number is 170 - 180 sq. m. per capita. In Sweden for example, there are 430 sq. m. of commercial area per capita. At the moment 16 new Malls have been planned or undergo construction works and they are due to open in 2009-2010.

Bulgaria does not export electricity to Kosovo

Bulgaria does not export electricity to Kosovo, like Serbian media stated earlier on Wednesday. From local Electro-energy system operator are positive that in the moment Bulgaria is not selling electricity to neither one of the closer countries.Since January 14. the export of electricity from Bulgaria was ceased with an order of Bulgaria's Energy Minister.The ban will remain until March 31 and by then through the country is running only transit electricity.Now through Bulgarian transmission lines is going Romanian electricity for Greece, Macedonia and Serbia.Even if Bulgaria wanted to export electricity to Kosovo it would be impossible because the supply there depends on the will of other state companies.Official demands for import of Bulgarian electricity were not entered by other Balkan states.

Power distributors sign co-operation accord

 

The three power distribution companies in the country - E.ON Bulgaria Networks, CEZ Bulgaria and EVN Bulgaria Power Distribution - signed yesterday a memorandum for cooperation in the field crisis solving activities for ensuring uninterruptible power supplies. The document envisages that each distributor should provide technical assistance (equipment and manpower) on demand to any of the other two peers.Germany ’s energy company E.ON, Czech Electricity Company (CEZ) and Austria ’s power company EVN hold majority stakes in the three power distributors in the country. The state controls minority stakes of 33% in each distributor.

 

 

Rightists: Planned energy holding to hike electricity prices in Bulgaria

Bulgaria's Union of Democratic Forces (UDF) alarmed that the plan of the government to create an energy holding will lead to increase in electricity prices.According to the rightists, the main aim of the plan is to provide centralized control over energy prices and put maximum power over energetics in the hands of the ruling socialists.The decision for establishing an energy holding that will be composed of gas company Bulgargaz, power grid operator NEK, Kozloduy nuclear power plant, Maritza-Iztok II thermal power plant, and the Mini Maritza Iztok (Maritza Iztok mines) was announced on Wednesday.The state will hold a 100% stake in the holding and according to the cabinet, the consolidation aims to restructure the corporate management and supervision of the companies, prepare them for listing on local and international stock exchanges, boost investment potential, and improve credit ratings.

Deloitte outlines vision of Bulgarian energy conglomerate

Bulgaria's planned energy holding company, expected to take over the assets of five state-run energy companies into its fold, would exploit synergies that would make the country's energy sector more competitive in the region, said Jan Skarvil, director of consulting at Deloitte Bulgaria, on February 20 2008.Deloitte was picked by the Bulgarian Ministry of Economy and Energy to explore the feasibility of a mega-energy structure, to be named Bulgarian Energy Holding (BEH) which it presented at a news conference.The future company - with assets estimated at four billion euro, an annual profit of 114 million euro and total installed capacity of 6000 MW - would follow the example of other Central and Eastern European peers, Skarvil said.According to the plans unveiled by the Cabinet, the new entity would incorporate the assets now held by Kozlodui nuclear power plant, power grid operator NEC, gas company Bulgargaz, the country's biggest thermal power plant Maritsa Iztok 2 and the eponymous mines in central Bulgaria. Additionally, through NEC and Bulgargaz, it would hold majority stakes in the planned nuclear power plant at Belene and several big pipeline projects, including South Stream and Bourgas-Alexandroupolis.Similar energy asset consolidations had happened in the Czech Republic, Poland and one was currently underway in Romania, Skarvil added.The reason behind the consolidation, he said, was to build an entity, which would be financially sound and stand a better chance of attracting financing from banks. The loans would, in turn, help upgrade the obsolete infrastructure and, in the longer run, achieve synergies and efficiencies that would make the entity competitive on regional level.The disparate organisational and managerial structures of all five companies forced Deloitte to opt for a phased-out setup of the company. The first stage would entail the creation of a financial holding, whereby the parent company would hold a minority – between 25 and 49 per cent – stake in each of the five companies, with the rest staying with the economy ministry.The financial holding would be in charge of setting strategic objectives, but the individual companies, remaining operationally and legally independent, would decide on ways to achieve them on their own.After synchronising organisational structures, the entity would be ready to act as an operational holding and all companies would be strategically, financially and operationally run by BEH.Bulgarian Economy and Energy Minister Petar Dimitrov, also present at the news conference, declined to give a detailed timeline for the consolidation of the companies into the holding. He did say, however, that the planned bourse listing of the holding would not occur until the holding company became operational, which he expected to happen two years after it was created.

Failure of pipeline referendum in Bulgaria

The referendum in Burgas ‘pro and con ‘ Burgas - Alexandroupolis pipeline failed. The electoral activity on Sunday was round 27%. To be announced as valid (the referendum), more than 50% had to experience their vote of rights.Positive opinion gave 3,25% of the voters (1,654 people). Answer ‘no' gave 96,77% or round 49,500 people from Burgas municipality.Despite the election results, the mayor of the seaside city Dimiter Niukolov said the referendum was successful and all results and technical details will be bestowed to the European Commission.

Russia has no enough oil for Bourgas-Alexandroupolis

The way it started, it will be difficult for the Bourgas-Alexandroupolis project to be implemented and the biggest problem is that in fact there is not enough oil for the pipe. This claimed Iliyan Vassilev, former Bulgarian ambassador in Russia in an interview for Nova TV.Vassilev explained that apart from the environmental issues, which recently have come to the forefront of the public interest similarly important is the issue of the real implementation of the project. According to Vassilev, “Rosneft” itself, based on the announced several days ago data, has not intention to increase the export this year compared to last year, which is worrying exactly for “Bourgas-Alexandroupolis”. “This project will be European only when it gives equal opportunities for transfer of oil to all through the Balkans territory. We lost the chance to negotiate over Kazakh oil, which was important indeed”, commented Vassilev. This has happened during the first stage of the talks on the project when by force of an old habit we have given this away to Russia, “the way we used to delegate the energy security issues to the USSR”. Regarding the Bourgas-Alexandroupolis project referendum which was held yesterday, Ilyan Vassilev claimed that the referendum has political capacity and its implementation was extremely important. “In any case, the majority of the Bulgarians who voted were against and this should be considered”, added Vassilev.

Non-bank loans – a business worth billion

 

The prompt non-bank loans have been gaining popularity recently, with the number of loans in the segment seeing a two-fold rise in 2007. Though there’s no official statistics on the issue, experts estimate the business at nearly BGN 1 billion. According to Assen Yagodin of Eurobank EFG funding in the segment runs up to EUR 400-500 million in 2007. Just to compare though, we should say that the amounts Jet Finance, TBI Credit and UniCredit Consumer Finance have put up on the market over the last 12 months exceed half of these estimates. The cost of these non-bank debts constitutes an annual percentage of the ARE (Annual Rate of Expenses) of nearly 30-40% and sometimes 60% against 10-20% for bank services. And though its quite a profitable business, it still has issues with transparency and accountability. BNB is presently making efforts to collect the annual financial reports of these companies, but it is not always this easy a task. And statistics in this segment are rare.

 

 

Erste Bank: Bulgaria's 67% credit growth highest in CEE In 2007

The credit/deposit ratio in the countries in central and eastern Europe is lowest in Hungary – 127% at the end of 2007, according to research by Erste Group Bank.
Second on this indicator is Romania – 122%. According to the bank's analysts this makes the two countries most vulnerable to the effects of the global mortgage crisis. Bulgaria's ratio stands at 83%, which puts our country in the middle of the list. The ratio is quite different in the countries in southeast Europe, ranging from 61% in Albania to 108% in Croatia and 107% in Serbia. In terms of credit growth our country ranked first in the region in 2007 with a 67% increase, which was mainly due to more loans in the business sector (77% ). Romania is second, with a 64% hike in credits last year. The increase is highest in the sector of household crediting – 83%. However, the number of deposits in Bulgaria and Romania was not growing at such pace, which makes their 2007credit/deposits ratios considerably higher than in 2006. Both countries have high current account deficits which is a reason for worries, Erste Group points out. And while Bulgaria and Romania are attracting significant foreign investments at the moment, their financial future will depend on their ability to lower the current account deficit. In spite of the growing number of credits, their size versus national GDP is still relatively low compared to that of the EU countries, while above the average in CEE. This ratio stands at 86% in Bulgaria, while the average for the 14 countries in CEE surveyed by Erste Bank is 61%. In Romania and Serbia it is 51%, and is even lower in Russia and Poland – 53% and 69% respectively. Croatia and Slovenia have the highest ratios in the CEE – 121% ans 117% respectively.

Bulgaria's 2007 soft drinks sales rise 18%

 

Sales of soft drinks in Bulgaria rose by 18% to some 1.658 billion litres last year, industry data showed on Monday. The 2007 sales are estimated at 1.309 billion levs ($982 million/670 million euro) calculated in current market prices, the Association of Soft Drinks Producers said in a statement. Per capita consumption in the country of 7.7 million people rose by 34 litres to 218 litres. Sales of carbonated soft drinks increased by 20.5% year-on-year, with consumption of light soft drinks registering a 17% growth. Bulgarians are turning to low-calorie drinks in big packages, industry data showed. Consumption of bottled water grew by 15.7%, on the back of a 8.0% rise in the sales of bottled water in 19.4-litre containers. Per capita consumption of bottled waters made up some 95 litres. In 2007 fruit juices posted a 15% rise in sales and their consumption reached 11 litres per capita. The consumption of non-carbonated drinks rose by 15% to 180 million litres. Cold tea and energy drinks are gaining popularity as domestic production is increasing and prices are dropping. Consumption of cold tea rose by 49% and that of energy drinks grew by 73%. Their combined market share is 1.5%.

 

Road projects for BGN 300 M prepared

 

More than 40 projects with a total value of over BGN 300 million have applied for funding under the Regional Development operative programme, regional development and public works minister Assen Gagauzov, said. The bulk of the projects are for the construction of roads. The municipalities, which are beneficiaries under the programme, are well prepared to absorb the funding extended under the programme, Gagauzov said.
A meeting with representatives of the Portuguese companies, which participate in the consortium for the setting up of the Trakia motorway, will be held within the next two weeks, Gagauzov said. The Portuguese companies will have to report whether they have secured funding for the project. The low turnout at the referendum for the Bourgas-Alexandroupolis oil pipeline project, which was held in Bourgas, may be put down to the fact that the people have realised that their votes cannot stop the implementation of the international project, Gagauzov said. The project will feature cutting-edge technologies aimed at preserving the environment of the Bourgas bay area and along the entire route of the oil pipeline, Gagauzov said.

 

Alternative energy investors say hassled by power distributors

Local investors in renewable energy sources (RES) have complained to the Bulgarian energy ministry that the regional power distribution companies are either refusing to plug into their grids new RES facilities or set cumbersome conditions to establish a link. Bulgarian law requires that the power distributors assign priority importance to the inclusion in their networks of RES facilities. The enforcement of RES regulations is hindered by the staff shortage at the energy efficiency and environment directorate of the energy ministry which has the relevant authority, Kostadinka Todorova from the directorate told the parliamentary energy policy committee. The domestic hydro power stations operated at less than full capacity in 2007, leading to a 30% year-on-year decrease in RES power output, said deputy energy minister Valentin Ivanov. Investors have announced plans to install 1,000MW of wind power facilities while projects for geothermal electricity generation are underway in Sandanski, Momin Prohod and Kyustendil, said the official. Pavel Bania, Sapareva Bania and Zlatograd also have geothermal potential.

Economically active population equals 3,472,200 in fourth quarter of 2007

 

The economically active population, aged 15 to 64, equalled 3,472,200 in the fourth quarter if 2007, according to data of the National Statistical Institute (NSI) released on Thursday.The number of employed totalled 3,306,400 people and their relative share of the overall population was 49.8 per cent, of these 55.5 per cent were men and 44.5 per cent were women.In the period under review unemployed were 215,300 and the unemployment coefficient was 6.1 per cent. The unemployment coefficient was higher with women (6.7 per cent) than with men (5.6 per cent). The number of unemployed went down by 73,100 and the unemployment coefficient by 2.3 points year-on-year.Unemployed youth (15 - 24 years) were 43,800. The unemployment coefficient for this age group was 14.5 per cent.

Bulgarian goods with eco labels

 

From now on, goods made in Bulgaria will be able to receive a certificate for trusted, consumer-friendly brands and can carry an EU Eco-Label. The label is a guarantee that, the goods and commodities have been produced according to high ecological standards. Organizers of the projects are Bulgaria's Ministry of Environments and Waters and the Time Foundation. All Bulgarian companies can apply for the certificates, regardless whether or not they are producers, importers or merchandisers, as long as their production or services are ecology-friendly. The application process for obtaining an EU Eco Label can last up to one and a half year and some goods should meet up to 80 different criteria. Main criteria are that the goods are produced with low energy exhaustion, can last longer and are easy to recycle. The cost for the eco certificate varies between 300 and 1,300 euro. The company, which has been granted with the eco certificate will have to pay annual fees that vary from 500 to 2,500 euros.

Bulgarian Becomes Vice-President of WB

 

A Bulgarian has become the vice-president of the World Bank (WB) and will take over the post on March 10, 2008. Kristalina Georgieva was appointed by the President of the WB Robert Zoellick. For the first time a Bulgarian takes so high position in the WB. Kristalina Georgieva started working for the WB in 1993 as an expert in environmental economics. She made a brilliant career to climb up to the post of Strategy Director. She has delivered lectures in some of the world's most prestigious universities.

Kosovo's recognition: obstacle to business

Bulgarian businesses are divided in their projections about the development of investments in Serbia, with a view of the fact that Sofia is expected to recognise Kosovo's independence soon. Most companies do not think that their investments will be jeopardised; they do not expect to be subject to pressure from Serbia and have to withdraw from the market. Businesses hope that the stability will be preserved and plan to increase their investments there. For the time being they all rule out the worst-case scenario: an embargo, blockades and violence. Some companies, however, are reserved about Kosovo's recognition and think that that may seriously affect Bulgaria's investments in and exports through Serbia. Bulgarian starter battery manufacturer Monbat plans to expand its investments in Serbia. Our project for a battery recycling plant was approved by the Serbian government and we will even receive a EUR 2,500 subsidy for every job opened there, the chairman of Monbat's management board, Atanas Bobokov, told the Pari daily. Energy tycoon Hristo Kovachki also has plans for Serbia.
Transport companies do not expect any difficulties at the Serbian customs. Experts, however, say that cargo carriers to South Europe will lose a lot if the Bulgarian-Serbian relations worsen. The winner from that will be Romania, which does not accept Kosovo's independence and will take over the whole traffic.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENTS:

 

 

FDI flows up 30% to �5.7 B euro in 2007

The volume of foreign direct investments (FDI) in Bulgaria last year soared 30 per cent on the year to 5.7 billion euro, Bulgarian National Bank (BNB) said on February 15 2008.The share of FDI as a percentage of the gross domestic product (GDP) rose from 17.4 per cent in 2006 to 19.9 per cent last year.In December 2007 alone, FDI flows were up 11.5 per cent on the year to 556 million euro, whereas in fourth quarter of 2007 it grew by 13.88 per cent year-on-year to 1.57 billion euro.At the same time, the volume of Bulgarian investments abroad climbed to 188 million euro, from 137 million euro the year before. Venture capital attracted last year came in at 3.37 billion euro and formed 59.3 per cent of overall FDI.Revenues from the sale of real estate to foreigners soared to 1.7 billion euro last year. In 2006, the figure was 1.15 billion euro.FDI covered 92.1 per cent of the foreign account gap last year, down from 110.9 per cent in 2006. The current account deficit reached 6.18 billion euro, the equivalent of 21.6 percent of GDP, according to BNB data.The high deficit makes Bulgaria vulnerable to a hard landing should the global credit crunch curtail FDI flow, forcing the Cabinet to maintain a high budget surplus.

JV plans USD 3 B megainvestment in real estate

Bulgaria's Petrol Holding and US Federal Development are preparing the biggest property investment in Bulgaria. The two companies announced plans to invest more than USD 3 billion in real estate in the next ten years. Their plans will be carried out by Federal Bulgaria Management, a recently registered joint venture. The new company is based in Sofia and has regional offices in Varna and Bourgas. The bulk of the investments will be directed to the three cities, where more than 50 projects will be built. The plots are owned by companies of Petrol Holding, including Petrol AD, Naftex Petrol and Eurocapital Bulgaria. The company will build mixed-purpose complexes consisting of offices, shops and residential parts. Federal Bulgaria Management will look for external financing for the large-scale investment. The partnership will allow us to create value on the basis of assets we barely use, the chairman of Petrol Holding's board of directors, Mitko Sabev, said. For the purpose, last year Petrol Holding embarked on an asset restructuring programme and the immovable properties of the subsidiaries were transferred to the holding.

Pernik Stadium - like 'Besiktas' and 'Fenerbahce' stadiums

The Turkish firm, which had designed and constructed the stadiums of ‘Besiktas' and ‘Fenerbahce' in Istanbul will build the Pernik (Sofia area) stadium ‘Metalurg', was announced on a press - conference yesterday.The foreigners promise a modern sport facility and installation, which is about to seat 12,000 audience. The firm is specialized in constructing of stadiums and sectional sport halls.The ‘Metalurg' stadium has quite good technical base. The future modern sport base will be used not only from local, but also from capital teams.The investment will cost round EUR 2 million.

 

Israelis to build logistic center near Plovdiv

A logistic center will be build on an terrain of 330 decares and covered area of 140 000 sq.m, informs sgrada.com.Investor of the project is the Israeli company “AFI Europe”, which already owns three projects for resident complexes in the Bulgarian capital.Currently, the company is not giving any other information about the logistic center than that easy access to Plovdiv airport and to the main roads to Greece and Turkey will be secured.

Austrian companies invest outside Sofia

 

More and more Austrian companies are looking for places for investment outside the capital city. There they find better conditions for development of their business, Austria's commercial attache, Michael Agerer, said in the town of Gorna Oryahovitsa.
Sofia is already clogged by manufacturers and suffers from workforce shortage. Therefore investors are turning their eyes to other regions of Bulgaria. Municipalities in the country provide new development concepts and enough workforce. Gorna Oryahovitsa is a communication and transport hub, which gives it a lot of advantages in attractive Austrian investments, Agerer pointed out. The local sugar mill, Zaharni Zavodi, has a joint venture with Vienna-based Agrana Zucker. The bread plant, Corn, uses Austrian technologies and Saubermacher provides waste-collection services in the municipality. For the past three or four years the Austrian investments in Bulgaria have reached nearly EUR 3 billion. The annual trade turnover between the two countries is about EUR 1 billion.

 

Austria's biggest steel-maker to invest � 5 B in Black Sea region

The Austrian steel-making group Voestalpine confirmed its plan to invest EUR 5 B in a steel plant close to the Black Sea by 2012, Sofia News Agency wrote. It is yet to choose among Bulgaria, Romania, and the Ukraine as the location of the future investment.Representative of the management of Voestalpine visited Bulgaria and met with PM Sergey Stanishev on January 15. The Austrians have directed their attention to the dynamically developing Black Sea region. They are looking for government support since the planned investment is massive and is expected to employ some 25 000 people. The factory is to be built in accordance with global environmental standards.

German inverstors interested in Bansko ski resort

German investors show interest in common projects with Bansko Municipality. This became clear during the visit of German ambassador in Bulgaria Michael Gayer in the resort town.He was accompanied by 12 member delegation of German - Bulgarian Chambers of Industry and Commerce leaded by its president Bertram Rollman.The German businessmen showed interest in the way Bansko develops. The German ambassador engaged himself to lobby for future contacts with similar German towns.It is previewed Bansko businessmen to be connected with firms and together to apply for common projects in infrastructure and culture exchange areas.‘The aim is resources form EU funds to be attracted' the Bansko mayor Alexander Kravarov announced.

 

 

German Fikon to build bio-fuel factory in Targovishte

 

The German firm Fikon intends to build a factory for production of bio-fuels and bio-fuel derivatives (gas, methane, electricity) in the northeastern Bulgarian city of Targovishte. The proposed investment is worth USD 118 Million, and the necessary raw material for the functioning of the factory would be about 300 000 tons per year. The investors intend to use locally grown corn and wheat. About 125 highly-skilled workers are to be hired, and the plant is supposed to be constructed in 14 months. An environment-friendly technology will be used in the production. The German investors chose a plot of 113 decares next to the railway station in Targovishte. The Municipal Economic Development Council in the city approved the German companys offer as a high tech class investment which is also in accordance with Bulgarias agreements with the EU for the production of bio-fuels.

 

Vacation complex for � 25 M to be built in Bulgaria's Banya

 

A new vacation complex will be constructed in the village of Banya close to the Bulgarian mountain resort of Bansko in the Pirin Mountain in southwest Bulgaria. The planned Pirinea Complex will be located on a plot of 16 decares and will have an all-out built-up area of 44 000 square meters. The investment, which is worth EUR 25 M, is a joint project between the British construction company RilaDev headed by Terry Roydon and David Holiday, and the Bulgarian firm Tempo. The four-star hotel will have 110 rooms, and 310 parking spaces located underground. A spa complex of 1500 square meters will be attached to the hotel together with three restaurants, a lobby bar, a healthy bar, barbecue, bowling, a night club. The project also contains conference halls, a business center, a bridge hall, snooker room, ski, golf, and tennis courts. The residential part of the complex will be comprised of five buildings with a total of 147 apartments. The owners are going to be able to lease the apartments with expected annual returns of 7-8%. The construction will be executed by Tempo Stroi Engineering by the summer of 2009, and the complex will be managed by Tempo Holiday and Tempo Property.The British company RilaDev has been in the field of residential construction for more than 20 years in the UK and abroad. Some of its complexes are Balaia GolfVillage and Rocha Brava in Portugal as well as Dom Developments in Warsaw, Poland. The Bulgarian company Tempo unites several branches - Tempo Petrol, Tempo Stroi Engineering, Tempo Building, Tempo Property, and Tempo Holiday.

 

Bulgarian business hunts for brains

 

The Bulgarian business is hunting for brains; some of the biggest corporations have decided to invest considerable funds in science and new technologies. They are going to fund the establishment of four high-tech centers, in which teams of young scientists will be provided with the latest technologies and equipment that they need to develop their projects and conduct researches. This strategy was outlined during a meeting of Education Minister Daniel Vulchev with representatives of big companies and corporations. These high-tech centers will function in the fields of ecology, energy and power engineering, IT and biotechnologies. The housing premises for the think-tanks will be provided by the state, while the researches and the experiments will be financed by the business. The projects will be evaluated by a group of experts of the Ministry of Education. The four centers will provide much needed know-how to the Bulgarian companies. Some of the most promising young scientists in Bulgaria will be employed at the centers. Businessmen promise to pay them astronomically high salaries.

Enel to build �25M gypsum plant in Bulgaria

A project for the setting up of a new plant for the dehydration of gypsum is underway at the Enel Maritsa-Iztok 3 thermal power plant (TPP). The project is estimated at EUR 25 million. The TPP has already obtained an integrated pollution prevention and control permit from the ministry of environment and water for the new facility. The permit was handed to Mike Foster, executive director of Enel Operations Bulgaria AD. The investment will contribute to the more environmentally friendly operation of the TPP, while the permit will enable a more effective waste management at the company. Italy's Enel owns 73% of the capital of the Bulgarian TPP.

Vacation complex for USD36 million to be built in Banya

 

A new vacation complex will be constructed in the village of Banya close to the Bulgarian mountain resort of Bansko in the Pirin Mountain in southwest Bulgaria. The planned Pirinea Complex will be located on a plot of 16 decares and will have an all-out built-up area of 44 000 square meters. The investment, which is worth USD36 million, is a joint project between the British construction company RilaDev headed by Terry Roydon and David Holiday, and the Bulgarian firm Tempo. The four-star hotel will have 110 rooms, and 310 parking spaces located underground. A spa complex of 1500 square meters will be attached to the hotel together with three restaurants, a lobby bar, a healthy bar, barbecue, bowling, a night club. The project also contains conference halls, a business center, a bridge hall, snooker room, ski, golf, and tennis courts. The residential part of the complex will be comprised of five buildings with a total of 147 apartments. The owners are going to be able to lease the apartments with expected annual returns of 7-8%. The construction will be executed by Tempo Stroi Engineering by the summer of 2009.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPANIES:

 

More than 800 companies take part in Agra 2008

Agriculture in Bulgaria is enjoying a renaissance and the specialised Agra 2008 exhibition reflects the resurgence in the sector, the executive director of the Plovdiv fair, Georgi Gergov, said at the opening of the expo. Nearly 40% of the exhibition area is occupied this year, up by some 20%. A total of 821 companies from 40 participate in Agra 2008. This year the expo focuses on new farming machines, leasing schemes and loans for purchase of equipment, and finished research products for sale of the agricultural institutes in Bulgaria. As much as BGN 430,670,293 has been paid so far in subsidies to farmers, minister of agriculture and food supply Nihat Kabil said at the opening of the exhibition. In 2008 they will be able to receive another BGN 440 million from the European funds and BGN 148 million from the state budget. Applications will be accepted from March 1.

International market 'Vacation & SPA Expo 2008' opened

Chairman of State Agency of Tourism (SAT) Anelia Krushkova will open today the international tourism market ‘Vacation & SPA Expo 2008' in the National Palace of Culture (NDK). This is the 25^th, jubilee edition of the expo. More that 320 firms from more than 20 countries from Europe, Asia, Africa and Central America will attend the international tourism market.  Among the debutantes on the traditional tourism expo this year are the representatives of Russia, Cuba, Netherlands and Czech Republic. The foreign stands take 35% of the market's surface.Tourist agencies and hotels, tour-operators,state and branch organizations, municipal and regional associations, SPA and fitness facilities producers are expected to be presented to the visitors of expo. More than 18, 000 have visited the expo last year.SAT will host tourism administrations from whole Southern - Eastern Europe, which gather under Bulgarian representation to discuss the opportunities of tourism sector's development throughout the whole region.  

Kremikovtzi mill cuts loss for 2007 by 87%

Bulgaria's biggest metallurgic mill Kremikovtzi owned by Indian Global Steel Holdings Ltd cut its net loss by 87% in 2007 to 35,9 million BGN (18 million EUR), Reuters reported. The revenue at Kremikovtzi reached 1,63 billion BGN (810 million EUR) in 2007, while spending was 1,67 billion BGN (830 million EUR).The debts of the steelmaker are 1,7 billion BGN (850 million EUR). We remind you that U.S. Steel Corp and two Ukrainian billionaires, Kostyantin Zhevago and Rinat Akhmetov were interested in buying Kremikovtzi.From Reuters explain that the works need 140 million EUR for environmental upgrades and 80 million for working capital.Trade unions have accused Mittal of poor management demand from the government (owner of 25% stakes) to force Pramod out.

 

 

 

 

 

Kremikovtzi seeks strategic partners

Bulgaria's largest steel mill Kremikovtzi said on February 19 2008 it was actively seeking strategic partners and hoped to reach an agreement within three months, investor.bg reported."Majority shareholder Pramod Mittal has already announced his decision to find strategic partners within three months, so that all parties interested in continued production are satisfied," the steelworks said in a letter to the Government, quoted by investor.bg.Guntupalli Jagannadham, appointed chief executive earlier this month, has been tasked to ensure that the company continued operations as normal.Kremikovtzi had its deliveries disrupted shortly last week, when state railways BDZ refused to service the steel mill because of overdue payments, but the two companies have since agreed a schedule of repayment."We understand that [power grid operator] NEC, BDZ and [gas company] Bulgargaz are commercial enterprises, with their own expenditures and problems. Their desire for Kremikovtzi to pay back old debts as soon as possible would get in the way of current commitments," the still mill said, as quoted by investor.bg.Kremikovtzi paid suppliers a total 267 million leva last year, both in old and current servicing fees, but did not disclose how much it still owed.Current debts to suppliers would be paid off within three months if the Cabinet ensured a normal operating environment, and payments on old debts would resume afterward, the steelworks said.Despite its backlog of overdue payments, Kremikovtzi was still an attractive morsel for investors, not least due to the large amount of land it owns in the eastern suburbs of Sofia, which could cost hundreds of millions if real estate developers are allowed to buy it and build on it. Among the parties interested in such an outcome is also the Sofia city hall, which wants the steelworks shut down, arguing it was the single biggest polluter in the city, and the land redeveloped.

Intel-sponsored R&D centre opens at BAS

A new software technology innovation centre opened doors on February 19 2008 at the Institute of Mathematics and Information Technologies of the Bulgarian Academy of Sciences (BAS), Computerworld magazine reported.The hi-tech laboratory is a public-private initiative of chip-maker Intel, the Bulgarian Management and Technologies Institute (BMTI), IT venture capital company NEVEQ and the BAS.“We preferred Bulgaria to Romania for the deployment of the hi-tech centre because we believe in the potential of young talents in this field. We believe in the potential of local entrepreneurs and companies to have set foothold here,” professor Mark Harris, head of Intel Education for Central and Eastern Europe, said.The backbone of the centre comprises four multi-core servers and 35 working stastions, 25 of which are portable. The lab would be used not only by Bulgarian academics, research and development and business people, but peers from South Eastern Europe as well. The long-term goal is to build a regional network for innovations and scientific research in the field of hi-tech and research & development.The “portability” of the laboratory would help to carry out tests and demonstrations, as well as training seminars, in industrial and scientific locations in neighbouring countries, Computerworld said.Universities and academics will be able to use the facilities free of charge and the lab had a wide range of software applications installed, catering to the needs of various groups of end users, chiefly students, entrepreneurs and technical experts. one of the longer-term objectives of the laboratory is to use the theoretical expertise of scientists and the practical experience of businesses, transforming the innovations centre into a business incubator.

French ophthalmologic company Essilor enters Bulgarian market

 

World leader of ophthalmologic products manufacture, French company Essilor International is expanding its presence in Eastern Europe by starting operations in Bulgaria, British PR Newswire Europe LTD's site said on Thursday.The new company of Essilor, Essilor Bulgaria EOOD, has acquired Optimal OOD, which is a distributor of Essilor lens and tools in Bulgaria and  whose sales stand at almost 1million euro. This transaction will allow the French company to strengthen its competitive position in the rapidly developing market of corrective lens, in the progressive lens segment in particular.The company has 15 factories , 270 laboratories and local distribution networks across the world.