불가리아 주요 경제 뉴스( 14 - 21 MARCH 2008 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 14 - 21 MARCH 2008 )

 

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

·        Bulgaria import exceeds the export over 50%

·        Bulgaria to еnter Schengen Zone on March 1, 2011

·        Bulgaria reports 2007 GDP of �28.9 billion

·        Wind generators capacity to total 300 MW by 2010

·        Net FDI inflows surge 64% y/y to �223M in January

·        Privatization Agency reports progress of energy deals in 2007

·        51% of bulgarians support Bourgas-Alexandroupolis oil pipeline

• Regulator with two proposals for gas tariff hike

·        5% growth of tourists in summer season 2008 expected

·        Sofia ranked 54th most expensive city in the world for visitors

·        Bulgarian tourism 43rd in Davos ranking

·        � 120M projects kick off on Black-Sea coast

·        Bulgaria hotels double in the past 2 yеаrs

·        Hotels in Sofia deliver higher returns than malls

·        More bulgarians travel abroad

·        Bulgaria buys two used frigates, mine sweeper from Belgium for �50 M

·        Agricultural land In Bulgaria costs between 200 and 300 leva/decare

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENTS:

 

 

·        PM: Bulgaria moves to cut red tape, improve investment climate

·        Bulgarian power industry is in search of private investors

·        EVN invests BGN 140 M in energy project in Bulgaria

·        Duc to invest up to �40 M in hybrid chicken farms in Bulgaria by 2012

·        Multi-purpose building to be erected in Rousse

·        Concessionaire to invest � 50 M in Varna, Bourgas airports in 2008

·        Bulgaria's MonBat to invest �32.8 M in modernisation, capacity boost by end of 2009

·        New modern yacht port to be constructed in southern Ravda

 

 

 

COMPANIES:

 

 

·        About 100 SMEs to benefit from new financial incentive for knowledge transfer to industry

·        Sopharma CEO announces plans for aggressive expansion abroad

·        Japan's IHI Maritime United to supply components to Bulgaria's Bulyard SI in 10 B Yen (�64 M) deal

• France's Carrefour sells Sofia development to Greek fund

·        Norddeutsche Affinerie takes over Cumerio

·        Veliko Tarnovo utility eyeing biomass, coal options

·        Bulgartabac on BSE

·        Irish investment company wins the best office in Bulgaria award

 

 

 

ANALYSIS:

 

 

·        The global crisis makes Bulgarian export to non-EU countries less profitable

·        Bulgaria's biggest banks

 

 

 

 

 

 

 

 

Articles:

 

 

MACROECONOMY:

 

Bulgaria import exceeds the export over 50%

 

The import of main trade partners to Bulgaria exceeds the export in the first month of 2008w with over 50%, preliminary data of National Statistical Institute shows.Bulgarian economy exported goods for 794 million BGN (397 million EUR), while meanwhile the imported goods are for 1,708 million BGN (850 million EUR).Highest is the export to Syria, followed by the Korean Republic, UAE and Singapore.Among the countries where the export is traditionally high are: Serbia, Russia, Macedonia, China, Georgia, UAE and Turkey.The import data for January show stable superiority over the Russians and Ukrainian than of the Chinese goods.

 

Bulgaria to еnter Schengen Zone on March 1, 2011

 

Bulgaria will join the free Schengen zone on March 1, 2011 year. That was announced by the vice-minister of foreign affairs Milen Keremedchiev.In his words the data is concerted with Romania, though offically the Romanian state insisted this to happen one year later.

 

Bulgaria reports 2007 GDP of �28.9 billion

 

In 2007 the gross domestic product (GDP) was 56,500 million leva, according to current prices (the equivalent of 28,900 million euro). In real terms GDP grew by 6.2 per cent as from 2006, preliminary data of the National Statistical Institute, publicized on Monday, show.GDP was 16,300 million leva in the fourth quarter of 2007 or 2,123.2 leva per capita. This was equivalent to 8,300 million euro or 1,085.6 euro per capita.Calculated in US dollars GDP equalled 12,100 million US dollars or 1,571.9 US dollars in the period under review. It was 6.9 per cent down compared to the like period of 2006. The 2007 gross added value was 46,400 million leva or 6.3 per cent up compared to 2006.The agricultural sector reduced its production activity by 29.7 per cent compared to 2006.The industrial sector accounted for 32.3 per cent of the added value in the economy, which was 1.4 per cent up compared to 2006. In real terms the added value in the industrial sector grew by 14 per cent.The growth in the processing industry was 15.4 per cent, in electricity and heating energy production - 1.2 per cent and in construction - 16.9 per cent. The service sector marked a considerable growth of 7.5 per cent as its relative share in the added value of the economy increased from 60.6 per cent to 61.5 per cent in 2007. NSI reports growth of financial services by 34.3 per cent, hotel and restaurant keeping by 1.8 per cent, trade mediation by 6.6 per cent and transport and communications by 4.3 per cent.

 

 

Wind generators capacity to total 300 MW by 2010

 

The output capacity of wind generators in Bulgaria is expected to total 300 megawatts by 2010, Velizar Kiryakov, President of the Association of Environment-Friendly Energy Producers, said on Thursday. He was speaking at a seminar on the role of the European Structural Funds in developing the renewable energy sector in Bulgaria.In 2005 the country had 13 megawatts of wind generator capacity, which increased to 29 megawatts in 2007. The building of three large wind farms will start within a few months. one of them, at Cape Kaliakra, will be located on the route of migratory birds within the NATURA network of European protected areas, which is why the EU has warned that its construction should be stopped, Kiryakov said. A decision on the matter is to be made by the Ministry of Economy and Energy.According to Kiryakov, the best way to promote the use of renewable energy sources is to introduce preferential prices. The Bulgarian authorities have adopted such a method. The State Commission for Energy and Water Regulation is expected by March 31 to set new preferential prices of electricity generated by renewable energy sources for this year.The price of wind-generated electricity is competitive, ranging between 4 and 5 euro cents per kWh. It is the same as the price of coal-generated electricity, whereas nuclear-generated electricity costs between 5.1 and 6.1 euro cents per kWh, Kiryakov said.The chairman of the National Biofuels Association, Dimiter Zamfirov, said Bulgaria currently has 140,000 tonnes of biodiesel and 20,000 tonnes of bioethanol, but the sale of biofuels decreased drastically in 2007 due to the introduction of 100 per cent excise duty.The requirement to mix mineral fuels with 5 per cent biofuels is not observed, and there is no service to control the process and to take responsibility, Zamfirov said. The Economy and Energy Minister should designate such a controlling body as soon as possible, because otherwise Bulgaria will not meet its goals under the National Development Programme. The Finance Ministry should introduce economic incentives for the mixing of fuels.The Economy and Energy Ministry offers grant schemes for introducing energy-saving technologies and for using renewable energy sources at enterprises, the Ministry's Nikola Lessenski said. The beneficiaries could be any type of enterprises - small, medium or large - provided that the renewable energy sources are used for the enterprise's own needs, and not for sale of electricity. The Ministry will carry out monitoring several years after the facilities become operational.

Net FDI inflows surge 64% y/y to �223M in January

 

Net FDI inflows rose by 64% y/y to EUR 223mn in January covering 30.7% of the CA gap during the month, according to preliminary data of the central bank. The annualised coverage of the CA deficit improved marginally to 95.1% as of the end of January as compared to revised 95% at the end of the last year. Along with January data, the central bank revised earlier released FDI figures for 2006 and 2007 by 37.8% (EUR 1.6bn) and 7.6% (EUR 419mn) respectively. Thus net FDI inflows accounted for 21.1% and 23.2% of GDP in 2006 and 2007 respectively as compared to 16.8% and 19.6% before the revisions. The newly released data improves significantly the coverage of the CA gap by net FDI inflows last year (95%) as compared to 11.1% debt financing of the gap before the revisions. All changes were done on the account of the item errors and omissions which turned negative in 2006 as compared to positive value and almost tripled in 2007 as a result of the revisions.

Privatization Agency reports progress of energy deals in 2007

Privatization Agency (PA) Executive Director Todor Nikolov reported the progress of energy sector deals handled by the PA in 2007 to the National Assembly Energy Committee on Wednesday, BTA reported.The proceeds from the sale of energy companies account for over 80 per cent of the total of 255 million leva (around 130 million euro) agreed in payments last year, he said.The Rousse District Heating Company (DHC) was sold for 149.8 million leva, the Plovdiv DHC for 62.8 million leva, the Varna DHC for 13.3 million leva, and the Sliven DHC for 10.2 million leva with 2.6 million in compensation instruments. The financial position of the Shoumen DHC is so bad that it is unlikely to attract investors' interest, Nikolov said. Meanwhile, the privatization of the Pernik DHU and the Bobov Dol thermal power plant, to the south of Sofia, will take place in 2008.The privatization of the Bobov Dol power station was one of the most difficult contracts handled in 2007, before seven-month-long talks with Greece's Public Power Corporation (PPC) eventually broke down in May, Nikolov explained. The deal failed as the PA was not satisfed with PPC's offer of 70.9 million euro, as well as due to local coal miners' worries that PPC was not providing any guarantees that they would run the plan on locally mined coal.The PA did not even turn to Italy's ENEL after the talks with PPC were terminated on May 8, and the procedure was abandoned on May 31, Nikolov explained, because of a "considerable difference in the amounts offered": ENEL was ready to pay not more than 100,500 euro for the power station.PPC appealed the breakdown of the talks before the Sofia Administrative Court, which rejected the appeals on December 5. The Supreme Administrative Court is expected to render final judgment on the actions brought by the Greek company, Nikolov said.Meanwhile, a new privatization procedure has beeen initiated for Bobov Dol, with a starting bid set at 100 million leva.

51% of bulgarians support Bourgas-Alexandroupolis oil pipeline

There is no place for national referendum on the project Bourgas - Alexandroupolis after the categorical decision of the Parliament, the Minister of Economics and Energy Peter Dimitrov claimed. That comment was on the opposition's proposal of conducting a national referendum on the matter. Dimitrov cited a research, ordered by the Ministry, which claims 51% of the Bulgarians support the project of the oil pipeline construction and only 22% are against 'Bourgas -Alexandroupolis. According to the same inquiry's data, 57% of the Bulgarians accept positive the increased import of energy resources from Russia, as only 20% have declare themselves against this process.

 

Regulator with two proposals for gas tariff hike

The Bulgarian power regulator will cut almost threefold the 32% hike in domestic gas prices requested to take effect April 1 by state-controlled gas distributor Bulgargaz. The State Energy and Water Regulatory Commission has prepared two options for the price increase and is expected to announce its position on Monday. Under the first option, the tariff will increase by 47 levs to 412.20 levs per 1,000 cu m without taxes while the second option envisages an increase of 48.37 levs to 413.47 levs per 1,000 cu m. Bulgargaz sources said the company was told by the regulator it had not certified fuel costs. In filing the tariff hike request, Bulgargaz said it was prompted by the higher price of alternative fuels and oil on the international markets.

5% growth of tourists in summer season 2008 expected

The expected growth of tourist in Bulgaria in the coming summer season is between 3 and 5 %, compared to the last year season.This was prognosticated by Rumen Draganov, director of Institute for analysis and value in tourism.Last year Bulgaria was visited by 7,8 million tourists and excursionists.The increase in coming holiday makers will be mainly due to Romanian and Greek tourists.The impression will remain that the number of tourists is insufficient because of the enormous bed supply.

Sofia ranked 54th most expensive city in the world for visitors

The sharply declining value of the US dollar against the euro and the record high levels reached by the common European currency has made the European cities the most expensive in the world for visitors, the results of the Prices and Earnings survey, conducted by UBS, show. Oslo, London and Copenhagen are still the three most expensive cities in the world, according to the same survey. Dublin is climbing up the ranking boldly challenging the top of the list. Ireland's capital has jumped from the number 13 spot, occupied in 2005, to the number four spot at present, overtaking Zurich.
The sharply declining relative value of the US dollar has pushed US cities down in UBS' global price rankings, and a shopping trip to the USA is now an attractive proposition for Europeans. The dollar has lost nearly 18% of its value against the euro in the last twelve months, which makes New York City a much more affordable place for European shoppers. London is now 26% more expensive than New York City. The depreciation of the U.S. dollar is having a positive effect on some Asian destinations linked to the U.S. currency. Barcelona and Hong Kong were similarly costly in 2006, while at present the Catalonian port city is 22% more expensive than the Chinese one at present. Sofia was also included in the ranking. The appreciation of the euro, which is directly linked to Bulgaria's national currency, makes the capital of the country relatively more expensive compared to the last year. Sofia occupies the number 54 spot among the 71 cities included in the ranking, trailing one spot behind Bogota. Bucharest, the capital of Romania, ranks 56th.Caracas jumped nearly 10 spots up in the ranking and is already nearly as expensive as Singapore.With inflation factors taken into consideration, Sofia ranks 61st in terms of wages, according to the same survey. The net wage level in Sofia stands at only 13.4% of that of the wages in New York City. Sofia ranks 63rd in terms of purchasing power, the same survey shows. The purchasing power of Sofianites stands at 25.4% of that of New Yorkers. Bucharest once again overtakes Sofia with 29.6% purchasing power.

 

 

 

 

 

 

Rank	City	Rank	City
1	Oslo	29	Chicago
2	Copenhagen	30	Nicosia
3	London	31	Athens
4	Dublin	32	Miami
5	Zurich	33	Seoul
6	Stockholm	34	Auckland
7	Helsinki	35	Lisbon
8	Geneva	36	Singapore
9	Paris	37	Caracas
10	Viena	38	Moscow
11	Luxembourg	39	Warsaw
12	Tokyo	40	Dubai
13	Brussels	41	Hong Kong
14	Munich	42	Tel Aviv
15	Lyon	43	Tallinn
16	Amsterdam	44	Ljubljana
17	Frankfurt	45	Sao Paolo
18	New York	46	Rio de Janeiro
19	Toronto	47	Budapest
20	Barcelona	48	Riga
21	Milan	49	Prague
22	Montreal	50	Santiago
23	Berlin	51	Bratislava
24	Madrid	52	Taipei
25	Rome	53	Bogota
26	Sydney	54	Sofia
27	Istanbul	55	Manama
28	Los Angeles	56	Bucharest

* UBS data

Bulgarian tourism 43rd in Davos ranking

Bulgaria ranks 43rd among a total of 130 countries in the second annual tourism competitive power ranking by the Davos International Economic Forum. Bulgaria was highly praised for its human, cultural, and natural resources, where it was placed at 31st position. In terms of its tourism regulatory system, Bulgaria ranked 50th. The state of the local business environment and tourism infrastructure sent it to the 52nd position in this respect. Bulgaria's highest assessment was in terms of health and hygiene in the tourist sector, where the country ranked 12th.

� 120M projects kick off on Black-Sea coast

The construction and reconstruction of water treatment plants for EUR 100-120 million will begin on the Bulgarian Black-Sea coast in a few days, minister of environment and water Djevdet Chakarov said in Bourgas. Projects for at least EUR 300 million will be developed by this year's end. The treatment plants have to be completed in three years, Chakarov added. only municipalities can apply for construction of such facilities.
Projects for water treatment plants can be presented under the environment operative programme and under the programme for development of the rural regions. As much as EUR 1.284 billion will be allocated under the first programme for improving the water network in Bulgaria.

Bulgaria hotels double in the past 2 yеаrs

The number of accommodation facilities in Bulgaria has doubled to 3,300 over the past two years, shows data of the national statistical office for 2007. The total domestic bed capacity is 273,300 beds. Each was booked for an average of 66 days last year, down from 70 days in 2006 and 73 days in 2005. Non-residents booked 12 mln overnights in 2007 versus 6 mln made by Bulgarians. Annual revenues per hotel bed stood at 2,500 levs, up from 2,300 in 2006 and 2,100 in 2005. Each tourist made a booking for 3.8 overnights on average, each overnight generating a revenue of 37.8 levs. The Sofia hotels tallied 735,500 bookings last year. Each of the 12,400 hotel beds in the capital was booked for an average of 109.5 days, yielding close to 10,000 in annual revenues. The average cost per night is 85.6 levs. The average booking last year was for 1.8 days. The Sofia bed capacity increased by 500 last year.

Hotels in Sofia deliver higher returns than malls

Returns on investments in first-class hotels in Sofia were around 8.5 per cent at the end of 2007, thus outstripping the yields generated by office and retail developments, which ranged between 7.5 and 7.85 per cent, respectively, and equaling returns from logistic space, a recent analysis of CB Richard Ellis consultancy, showed on March 10. In terms of yields, Sofia ranked second after Moscow, where returns on hotel investments averaged 9.25 per cent, and was the best-performer among the capitals of the countries across Central and Eastern Europe (CEE). Despite the low occupancy, Moscow's hotel segment is still very attractive, registering the highest levels of revenues fetched by an available room, an indicator called RevPAR, for 2007. Four and five star hotel rooms in the Russian capital are among the most expensive, with prices reaching 483 dollars a night. Bucharest comes third in terms of returns on hotel investments with yields standing at 8 per cent. The number of four and five-star hotels in Bucharest will grow by 50 per cent this year - after the opening of Radisson Bucuresti and Turist Ramada hotels. About 4,000 new hotel rooms are expected to spring up in Romanian capital within the next three years, according to the CB Richard Ellis analysis, cited by the Property Magazine.
All in all, RevPAR in CEE was steadily growing and this accounted for the considerable volume of pipeline projects in the region, CB Richard Ellis consultants said. Generally, in developing markets like CEE, there is a strong correlation between the growth of the office and hotel segments. Most large cities rely primarily on corporate tourism rather than on recreational one, with the exception of Prague and Bucharest, the report said.

More bulgarians travel abroad

Last year Bulgarians traveled abroad 4.515 mln times, which is 8% more than in 2006, the National Statistics Institute reported. 56% of the journeys were on business, 27.52 were organized holiday trips. Each tenth trip was a visit to friends or relatives. Most Bulgarians went to Turkey and Greece - respectively 1.212 mln and 924,000 visits. Next are Serbia and Macedonia with 484,000 and 329,000 visits. The popularity of the Czech Republic and Great Britain increased significantly, with the number of Bulgarians visiting the countries rising 57% and 54% respectively compared with 2006. Greece and Austria were visited by 30% and 28% more Bulgarian last year. While journeys to Luxembourg, Finland and Portugal were less than in 2006. Statistics shows that most Bulgarians travel in August (445,000 people). Other popular months for travel are December, November and September with more than 400,000 journeys. on the other hand, Bulgaria was visited by 7.725 mln foreign citizens last year, which is 3% up from 2006. Most foreign tourist came from Romania, Turkey, Greece and Germany. The number of tourists from Hungary and Poland rose the most, while our country was visited by less Serbians and Macedonians.

Bulgaria buys two used frigates, mine sweeper from Belgium for �50 M

A contract for the delivery of two frigates and a mine sweeper, used by Belgium's navy forces, to the Bulgarian navy forces has been signed, BTA reported citing Belgium's Ministry of Defense. The value of the deal had not been disclosed but it will amount approximately to 50 mln. euros, according to an expert at the Belgian Ministry of Defense. The armed vessels will be delivered to the Bulgarian navy forces and will be able to embark on missions immediately after their arrival in the country. one of the frigates has to be delivered by the end of this summer, while the other frigate and the mine sweeper are scheduled to arrive in the beginning of 2009.

Agricultural land In Bulgaria costs between 200 and 300 leva/decare

Agricultural land in Bulgaria costs between 200 and 300 leva/decare for smaller parcels, according to top execs from four of the most active Bulgarian companies in the sector.
Veselin Petrov, executive director in Elana Property Management told Profit.bg that the average price added some 20% in the past year to 200-280 leva. Larger parcels (over 1,000 decares) are 30% more expensive. “There are plots in the area of Dobrich, for which buyers are paying more than 500 leva/decare,” he added. Radoslav Manolov, Advance Terrafund REIT executive director, said the average price per decare currently tops 300 leva. In his opinion, the price hike this year will come to 20-30%. Ognyan Kalev, CEO of Agro Finance REIT said land in parcels of up to 10 decares costs 260-270 leva/decare. For parcels larger than 10 decare the figures can go up to 290-300 leva. “With plots larger than 20 decares the price goes up to 310-320 leva/decare, and for those larger than 50 decares it is a subject of negotiations.” He also expects a 20-30% increase this year. Svetla Boyanova, executive director Mel Invest REIT, said that in places with low demand agricultural land costs as low as 180 leva/decare, but otherwise, the average for the country is 250-300 leva. “In the area of Dobrich, the price can reach 400-450 leva/decare, she also said. Mrs. Boyanova said agricultural land appreciated by some 25-26% last year.

INVESTMENTS:

 

 

PM: Bulgaria moves to cut red tape, improve investment climate

 

Bulgaria's government has drafted a programme for significantly reducing bureaucratic obstacles for doing businesses in the country by cutting the number of required permits and licences in the next two years, Prime Minister Sergei Stanishev said on Monday. The programme aims to improve the business climate and make it easier to start a business in the European Union newcomer in line with the requirements of the European Commission, Stanishev told a joint conference of government officials and business representatives. Bulgaria has the second best investment climate in Europe after Denmark and aims to climb to the top in 2009, Bulgarian Economy and Energy Minister Petar Dimitrov told the same conference. Bulgaria introduced a flat income tax of 10% as of January 2008 after cutting corporate tax to 10% from 15% in 2007, aiming to attract more foreign investments and enhance business activity. Bulgaria relies on foreign investments to cover its swelling current account shortfall which widened to 21.6% of the country's GDP last year from 15.7% in 2006 mainly due to rising trade deficit. The government expects the current account gap to widen to 21.9% of the projected GDP this year. The government programme also envisages the launch of an on-line information system describing the business regulations administered by the local governments in Bulgaria. Currently only 392 regulations of business activity are legitimate while another 1,151 had been introduced without legal grounds, the chairman of Bulgaran Industrial Association, Bozhidar Danev, told the conference. Bulgarian businessmen have often blamed local authorities for incompetence and deliberate inconsistencies in regulations that create opportunities for corruption, Danev said. In January the European Commission recommended to Bulgaria to urgently strengthen its administrative capacity, and in particular focus on key government functions including regulatory authorities and the judiciary, take rapid measures to cut red tape and shorten procedural delays in order to improve the business environment especially for small and medium-sized enterprises (SMEs) and facilitating business start-ups. Finance Minister Plamen Oresharski said last week Bulgaria will outsource the auditing of projects seeking financing from the European Union to ensure greater transparency after the bloc suspended funding to the country under several programmes over suspected fraud earlier this year.

Bulgarian power industry is in search of private investors

The Bulgarian government strives to modernize  the power industry of Bulgaria. In the future, the capital city of Sofia, which is an important energy transportation center on the Balkans, will rely on Western "know-how" technologies and energy consumption from restorable sources. Both Western and Russian investors will take part in the construction and exploitation of new electric power plants as well as in the management of energy companies, which were owned by the state in the past. Apart from that, Bulgaria's electric supply network needs modernization if the country wants to keep its position of leading electric power exporter in the region. The country has joined Nabucco and South Stream international projects aiming at transportation of Russian gas to Western Europe.

EVN invests BGN 140 M in energy project in Bulgaria

Austria-based energy company EVN plans to invest 140 million levs (about 70 million euro) in a project for "green electricity" generated from renewable energy sources. EVN holds the electricity distribution companies in Plovdiv and Stara Zagora. Thirteen megawatts in the EVN network in Bulgaria is generated by the facilities using renewable energy sources; ten megawatts are generated by wind farms, 2.9 megawatts - by small hydroelectric power plants and 0.11 megawatt - by PV power plants. EVN has received offers for the construction of capacities that will add another 161 megawatts from renewable energy sources to their network and signed preliminary contracts for the construction of capacities generating 104 megawatts of "green electricity". EVN representatives say that the Bulgarian Government should work out a strategy for the development of a "green electricity" network.

Duc to invest up to �40 M in hybrid chicken farms in Bulgaria by 2012

 

French poultry company Duc plans to invest up to 40 million euro ($62 million) by 2012 in new hybrid chicken farms and technologies in Bulgaria, it said on Friday. Duc, which entered Bulgaria in 2007 by investing in 18 local farms, found a market niche in the growing consumer demand for chickens with home-bred qualities, the company said in a statement. Chicken consumption in the south-eastern Europe EU member of 7.7 million is growing by 5,000 tonnes annually and is expected to reach ten kilograms per capita in three years from the current nine kilograms, data of the Bulgarian Agriculture Ministry showed. The breed, a hybrid between broilers and home-bred chickens, was developed 17 years ago in France and named after the French company. The Duc chickens are bred for 56 days, unlike broilers, which are grown for about 40 days. There is only 1.0 pct of fat in the hybrid chickens because they are fed only with vegetable products, 50 pct of which is corn. They are not given any antibiotics, animal fat or growth stimulants.

 

Multi-purpose building to be erected in Rousse

 

Construction of the Grand Plaza multi-purpose complex will start in Rousse within months. The project includes a mall, a sports hall, a hotel and a business centre and was approved by the local municipal council. The value of the sports hall will be EUR 22 million. The whole complex will be worth almost EUR 80 million, the investors said. Grand Plaza is a joint investment of the Rousse municipality and Prista Port, Densi Stroy, and Goti. The total floorage of the buildings in the complex will be 140,000 sq. m.

Concessionaire to invest � 50 M in Varna, Bourgas airports in 2008

 

Varna and Bourgas Airports concessionaire Fraport Twin Star Airport Management will invest a total of 50 million euro in the two airports in 2008, company CEO Andreas Helfer said Monday. About 25 million euro will be invested in each of the airports and this sum includes the first payments of the new terminal buildings of both airports. A procedure for the election of a designer has already been launched and the tender is scheduled for October, Helfer added. Works on the improvement of the road to Terminal 3 of Varna Airport are already underway. Helfer said that Fraport Twin Star Airport Management has received a permission for the renovation of Varna Airport Terminal 1. Helfer said also that the airports expect more tourists from Russia this year. According to him, the number of regular flights to Varna Airport increased significantly, especially in the winter months. For February 2008 only, the number of flights increased 18 per cent.Based on tourist fairs' information, the airport expects that this year the number of passengers served by the airport will be similar to the last year's one of 1.5 million, Varna Airport Director Dimiter Kostadinov said. Varna is welcoming on Monday the first tourists for the new season from Germany. A total of 450 tourists are arriving on flights from Duesseldorf, Berlin and Frankfurt.

Bulgaria's MonBat to invest �32.8 M in modernisation, capacity boost by end of 2009

 

Bulgaria's largest car battery manufacturer MonBat will invest 64.2 million levs ($51.4 million/32.8 million euro) in modernisation and capacity expansion by the end of 2009, it said. The company plans to borrow up to 16 million levs from banks to back its investment programme and use its own funds, leasing contracts and/or a bond issue to finance the rest, MonBat said in a statement issued late on Wednesday. MonBat pans to establish a new factory for traction batteries for power trucks in Dobrich, northeastern Bulgaria, in which it will invest 31 million levs by the end of 2010. The new plant will produce 250,000 batteries in 2009 and will triple its output in the following two years. The company also plans to invest in modernisation of equipment at its existing plants in Dobrich and Montana, in western Bulgaria. It will invest 1.1 million levs to double its capacity for telecommunication stationary batteries to 200,000 by the end of this year and will raise its annual capacity to 3.1 million starter batteries by July 2009 from some 2.2 million now. MonBat will will open a 7.0 million levs battery recycling unit in Serbia in July and a 13.4 million levs recycling plant in Romania in October. It invested a total of 34 million levs last year. In January, MonBat said it expects its earnings to rise to 16.1 million euro in 2008 and to 23.5 million euro in 2009. The company more than doubled its net profit to 17.4 million levs last year, when its revenue rose 83.2% to 144 million levs. Exports generate about 85% of MonBat's revenue. The company exports to Germany, the Netherlands, Ukraine and Bulgaria's neighbours Romania and Serbia. MonBat is majority-owned by Bulgarian lubricants producer Prista Oil. Shares in MonBat, part of the SOFIX blue-chip index of the Sofia bourse, closed at 26 levs on Wednesday, up 0.04%.

New modern yacht port to be constructed in southern Ravda

Super modern yacht port will be built in Ravda seaside village in two years as the project will cost of 30 million EUR, money.bg announced. The port will go 480 meters inside the sea. Its common surface will be over 24, 000 square meters and will accommodate 450 boats. Half of the positions are for sailing vessels over 30 meters.The marine will have modern infrastructure, opportunity for wireless Internet, store-repairing base and shops. The building will start at earliest in the autumn. Businessmen from Dubai and Cyprus have already showed interest in buying yacht-places.This project is part of the construction of luxurious vacation complex ‘Emerald Resort'. According to the previewed estimations, the realization term of the investment plan is round 3 years.Except the yacht port, the new resort will have three tennis courts, basketball and volleyball playground, bowling - discotheque, restaurant and few bars. Over 3,000 people are expected in the active season.  

 

COMPANIES:

 

About 100 SMEs to benefit from new financial incentive for knowledge transfer to industry

 

About a hundred small and medium-sized businesses will be able to benefit from a new scheme for de minimis state aid supporting knowledge transfer to industry. The total amount of the scheme for 2008 is one million leva, head of the Enterprise Policy in the Small and Medium Enterprises Promotion Agency Eli Anavi told a news conference Thursday. Winning applicants will be able to get vouchers of 5,000 or 15,000 leva. The condition for funding is for the applicant to be a production company and for the funds to be used for the solving of a production problem relating to innovations.Once receiving the certificate of the voucher, the company will have to sign an agreement whereby it assigns the solving of the respective problem to a research entity in Bulgaria or another EU member state. The recipient of the funds then needs to submit the contract to the Agency which transfers the amount. If the company was selected to get a voucher for 15,000 leva, it needs to ensure co-financing of 20 per cent. Economy Ministry data show that as few as 10 per cent of innovative SMEs in Bulgaria are in touch with science at the moment.

 

Sopharma CEO announces plans for aggressive expansion abroad

Bulgaria's pharmaceuticals company Sopharma announced plans for aggressive foreign expansion, Ognian Donev, the company's chief executive and chair of the board of directors, told Bloomberg newswire in an interview published on March 12.In 2008 the company is set to buy assets in Romania, Serbia, Ukraine and Poland in what should be an attempt to raise sales and its bottom line.Sopharma targets a 20 per cent increase in revenues and 17 per cent rise in net profit this year, Donev told Bloomberg. Last year, net profit was up 17 per cent to 32 million leva on revenues of 355 million leva, an increase by 72 per cent. This gave the company to a 20 per cent share of the Bulgarian generic drugs market, second only to Iceland-based Actavis Group, which controls 33 per cent of the market, according to Martin Schloh of A.T. Kearney consultancy.“Sopharma is likely to face steeper competition in Poland and Romania, both of which are part of the European Union, with many players on the market,” said Ilian Scarlatov, capital markets director at Sofia International Securities brokerage, as quoted by Bloomberg. “We have yet to see how the Polish project will work out.”Sopharma is the non-financial blue chip on the Bulgarian Stock Exchange with its sectoral exposure spanning pharmaceuticals, real estate, trade, shipping, health insurance and a hospital.Donev would not name which companies targeted by Sopharma's takeover plans. Yet he said that Sopharma was to soon buy a pharmaceutical plant in Serbia, once the local financial regulator gives its assent to the deal.Buying a plant in Ukraine makes economic sense because Sopharma is the second-largest player on the Ukrainian drug supply market. Besides, the company purchased last year Ukraine-based OAO Vitaminy and its facilities are to soon undergo renovation and expansion.Regarding Poland, the Bulgarian company has tied up with local peer Natur Produkt Zdrovit.Donev would not rule out plant purchases in Macedonia and Latvia as well.Sopharma's expansion plans are reasonable in view of the company's export-oriented approach.

Japan's IHI Maritime United to supply components to Bulgaria's Bulyard SI in 10 B Yen (�64 M) deal

 

Japanese IHI Maritime United (IHIMU) will supply ship components to Bulgaria's Bulyard Shipbuilding Industries (Bulyard SI) worth a total of some 10 billion yen ($99.4 million/64 million euro), an official of the Bulgarian company's majority owner said on Friday. There are eight deals for supply of component packages for eight ships of the Future 56 type," Bogomila Hristova, investor relations director of Industrial Holding Bulgaria, which owns 61.5% of Bulyard, told SeeNews. Future 56 is a bulk carrier of 56,000 deadweight tones. Bulyard SI has an order for two ships from Turkey's Diler Shipping and Trading, an order for two ships from the Bulgarian Navy, and the remaining four ships are being negotiated, Hristova said without elaborating. Bulyard SI owns Bulgaria's biggest shipyard located in the Black Sea city of Varna. The ships ordered by Diler Shipping and Trading would cost $41.1 million (26.4 million euro) each, Bulyard SI said earlier. Bulyard SI bought a licence for construction of Future 56 ships from IHIMU in 2007, Hristova said. She declined to comment on the cost of the deal. Shares in Industrial Holding Bulgaria, part of the blue-chip SOFIX index of the Bulgarian Stock Exchange, were traded at 7.867 levs ($6.25/4.02 euro) at 1159 GMT on Friday, down 0.04%.

 

France's Carrefour sells Sofia development to Greek fund

Assos Capital, the Greek real estate investment fund, has shelled out close to 200 mln euro for the multifunctional shopping and entertainment center with an office complex that French retailer Carrefour is building in Sofia, Bulgaria. The French company is selling the land site and the complex that is under construction but will remain as a tenant with one of its hypermarkets. Property market sources said that after the sale of Carrefour Tsaridgradsko, the French company intends to invest in other local large-scale projects for retail and entertainment centers. The experts said Carrefour may be eyeing next one of the projects that will be developed in the vicinity of the Sofia central railway station. That area will accommodate the investment plans of three major investors: Spain's Riofisa and Urbas and the CSIF fund. CSIF is scheduled to start the construction there in 2008 of a 90 mln euro retail park. It recently said it was in talks with potential strategic partners, including Carrefour. Assos Capital intends to complete Carrefour Tsaridgradsko and open it for business by the second half of 2009. The Greek company said the deal is in line with its efforts to become a key investor in retail property in South-east Europe and the Ukraine. Assos Capital is already developing an office scheme in the center of Sofia and a residential property in the Mladost district. In addition to the Carrefour hypermarket, the complex will house around 200 retail outlets - half of which have already been leased, cinema theaters, various eateries and entertainment venues.

Norddeutsche Affinerie takes over Cumerio

German copper producer Norddeutsche Affinerie expects to complete the takeover of Belgian peer Cumerio in mid-April, the company said in a statement. The purchase of 95 per cent of Cumerio's shares will create Europe's largest copper corporation in Europe. Cumerio is among the largest investors in Bulgaria, operating a copper-processing plant in Pirdop, 50km east of Sofia, through its Bulgarian subsidiary, Cumerio Med. Norddeutsche Affinerie first spelled plans to become majority shareholder of Cumerio in June last year. Then it said it was ready to pay $1 billion (640 million euro) for raising its stake in the Belgian company from 30 to 95 per cent. The German company is expected to pay the sum 15 business days after signing the agreement. The merged company will have annual output of one million tonnes of cathode copper and will keep 4 600 officials on the payroll. The two companies have production facilities in Bulgaria, Belgium, Germany, Italy and Switzerland. Copper, widely used in the power and construction industries, has seen its price go up fourfold since 2002.

Veliko Tarnovo utility eyeing biomass, coal options

The gas-fired district heating company in Veliko Tarnovo is evaluating the feasibility and profitability of building power generation facilities running on biomass and coal, said deputy executive director Milcho Mihailov. There is an opportunity to add a small power capacity running on waste timber, said Mihailov. The two studies will be ready within a month at the latest. The utility is owned by local businessman Hristo Kovachki.

Bulgartabac on BSE

The redundant workers will each receive between BGN 30,000 and BGN 36,000 in severance pay, Novinar Daily writes. Minister of Economy and Energetics Petar Dimitrov explained that Bulgartabac would be sold through BSE because this was the most transparent way. Bulgartabac companies in Sofia and Blagoevgrad are still looking for strategic investors.Few months ago at the summit in Hisarya the Government decided that Bulgartabac would be sold to a strategic investor. The likely sale of the two cigarette factories has sparked substantial interest from potential buyers but it is not clear if they are eyeing the company's business or real estate assets. Short after the summit it became clear that the factories in Plovdiv and Stara Zagora are going to bankrupt and have to be shut down. Workers intended to go on strike, but at this week they negotiated Bulgartabac’s privatization thorough BSE.

Irish investment company wins the best office in Bulgaria award

The Sofia office of Irish investment company “West Incorporated” won the first prize in the Office of the Year 2007 contest.The organizer Office Magazine pointed out that the company has combined the best from the office trends in Ireland and Sofia, and has achieved excellent coordination between local and international employees. A special award was given to DSK Bank's for their office on Kaloyan Street in Sofia. The second prize was awarded to In Time courier and logistics services and the third went to Cable tel. A total of 62 companies and organizations participated in the contest, of which a jury selected six finalists.The assessment criteria was defined by designers, computer specialists and HR experts. Companies participated voluntarily by sending an application containing their answers to 40 questions. The jury then visited the office and gave its assessment, BTA reports.

 

 

 

 

 

ANALYSIS:

 

The global crisis makes Bulgarian export to non-EU countries less profitable

Publication: Pari Daily, issue 54, From 18.03.2008

 

The problems of the US economy are affecting the whole world and Bulgaria makes no exception. The total lack of confidence in the global capital markets is deepening the liquidity crisis. The US Federal Reserve and the European Central Bank are doing their best to encourage the economies but to no avail. The record slump of the US dollar in recent months has confused the whole global economy.The consequences for Bulgaria are quite serious. on the one hand, export to non-EU countries becomes less profitable for Bulgarian companies, because they receive cheapening dollars for their goods, while they pay expensive leva to manufacture them. Despite the big distance, Bulgaria's turnover with the USA is substantial: nearly USD 750 million for 2007.The cheap dollar affects the textile business, because the products become more expensive and non-competitive on the global market, Ilko Ilkov, sales director of Diel Sport, said. The textile sector is second in export with 18%. The higher transport costs are also a problem, Ilkov added. on the other hand, the main trade partners of the EU are the USA and Japan. They only pay in dollars, which puts the EU at a disadvantage and hampers export and the European economy as a whole. A lot of the Bulgarian goods exported to the EU are intermediate products that may be scrapped if the EU economy sinks into recession.The money in the economy, however, is never lost: it moves from one place to another. A curious trend observed at present is the transfer of resources from the capital to the commodity market. That is also evidenced by the huge price jumps of wheat, soya, oil, platinum and gold. That in turn triggers substantial inflation in all countries.

 

 

Bulgaria's biggest banks

Publication: www.profit.bg

Bulgaria's top three banks in terms of assets are Unicredit Bulbank, DSK Bank and United Bulgarian Bank, according to statistics of the Bulgarian National Bank.These three also make the highest profits, accounting for 54.58% of the total bank earnings. According to unaudited data, the banking systems' 2007 profit totals 1.144 bln leva (584.9 million euros), or 336 million leva (41.6%) up from 2006. Unicredit Bulbank tops the chart with assets in the amount of 9 billion leva (4.60 billion euros), or 15.38% of the total for the banking system. The lender's 2007 profit came to 253.7 million leva (129.7 million leva), or 22.2% of total earnings of Bulgarian banks. DSK Bank and United Bulgarian Bank posted similar earning figures last year – around 185 million leva (94.58 million euros). DSK Bank's assets, though, exceed those of UBB by some 1.7 billion leva. First Investment Bank is sixth, which makes it the highest ranking public creditor. With assets in the amount of 4.2 billion leva FIB is also the biggest Bulgarian-owned bank. The average ROA of Bulgarian banks stands at 1.94%. BACB has the highest (7.41%), which is largely attributed to the specifics of the sector it operates in. The only Bulgarian bank to end 2007 at a loss is Emporiki. At the end of December 2007, assets of the banking system totaled 59.1 billion leva (30.2 billion euros). Assets rose by 7.2 billion leva (13.8%) in Q4, adding 4.1 billion just in December. The y/y increase came to 16.9 billion leva (40%).

 

Bank	Thousand BGN	Thousand BGN	RoA (Return on Assets)
Unicredit Bulbank	9065733	253704	2,80%
DSK Bank	7848685	185493	2,36%
United Bulgarian Bank	6129586	184936	3,02%
Raiffeissen Bank (Bulgaria)	5979390	95350	1,59%
Eurobank EFG Bulgaria	4377303	50697	1,16%
First Investment Bank	4205076	50065	1,19%
Piraeus Bank Bulgaria	3566983	36271	1,02%
Economic and Investment Bank	1982399	41366	2,09%
Societe Generale Express Bank	1793256	28764	1,60%
Corporate Commercial Bank	1616011	23177	1,43%
Central Cooperative Bank	1565351	20321	1,30%
Alfa Bank- Sofia	1465676	470	0,03%
CB Allianz Bulgaria	1464071	19260	1,32%
CB Investbank	1085721	10262	0,95%
CB MKB Unionbank	1026150	7519	0,73%
Municipal Bank	1013069	13547	1,34%
ProCredit Bank	846658	13425	1,59%
Bulgarian American Credit Bank	689632	51100	7,41%
BNO Pariba – Sofia	549402	10997	2,00%
International Asset Bank	523276	12914	2,47%
City Bank – Sofia	442455	8094	1,83%
Ing Bank – Sofia	403820	10739	2,66%
Tokuda Bank	301326	4098	1,36%
Emporiki Bank – Bulgaria	239225	-1372	-0,57%
НАСЪРЧИТЕЛНА БАНКА	233467	6003	2,57%
Commercial D Bank	223194	1155	0,52%
NLB West-East Bank	196601	3294	1,68%
TeximBank	58994	1083	1,84%
TC Ziraat Bankasi A.S.	40881	826	2,02%
	58933391	1143558	1,94%