불가리아 주요 경제뉴스 ( 21 - 28 MARCH 2008 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 21 - 28 MARCH 2008 )

 

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

·        Kosovo asks for Bulgaria's economic help

·        Kosovo recognition costs Bulgaria � 340 M

·        FM Kalfin: Bulgaria has rather active business contacts with Kosovo

·        Bulgarian businesses fear for their Serbian operations

·        Serbia remains important bussiness partner to Bulgaria

·        Companies set up Bulgarian-Serbian forum

·        Bulgaria trade with Turkey worth USD 4 B

·        Vietnam wants to buy Bulgarian wine

·        Bulgaria exports locomotives for Kosovo and China

·        Bulgaria reduces import of labor force from China

·        Coal extraction begins from richest deposit at Maritza East

·        PPC to buy 0.8M tonnes of coal from Maritza Iztok mines

·        Bulgarian state debt down �36 M in February

·        Bulgaria pays early �275 M debt to World Bank

·        Changes to duty-free trade act passed in Parliament

·        Deadline for carbon dioxide emissions reports

·        Bulgaria's major airports 2007 passenger numbers rise 11%

·        Ambassador El Ghailani Dlimi suggests that Bulgaria resume phosphate import from Morocco

·        �300 M for IT development

·        Bulgaria's 2007 computer hardware market grows 25% to $1.0 B

·        Bulgaria bicycle industry to grow by 40% in 2008

·        Bulgaria launches foreign trade institute

·        Bulgaria to triple biofuel production capacity to 450,000 t by 2011

·        Non-cultivated arable land could provide material for biodiesel production

·        Norway to fund environmental projects of Bulgarian municipalities

 

 

INVESTMENTS:

 

·        Bulgaria's manufacturing FDI falls dramatically

·        Sweden to invest in energy effectiveness in Bulgaria

·        Steel rebars plant to be built in Aitos area

·        �64 M invested in first Business Park in Plovdiv city

·        Germany's ECE Projektmanagement kicks off Varna shopping mall

·        The range of Novo Selo – Bulgaria`s construction El Dorado

·        Turkish 'Trakia Cam' to invest $450 M in Bulgaria

·        German 'Plus' plans to invest �250 M in Bulgaria till 2011

·        Bulgaria's Enemona to invest �16.9 M in new projects

·        Bulgaria's Enemona doubles planned investments in biomass units to �179 M

·        Bulgarian fuel trader Bulmextrade to invest �5.1 M in biodiesel plant

·        Petrol Holding to invest �50 M in new credit card issuing company

·        Masterbuild to develop villa communities near Pomorie

·        Russians invest �30 M close to Golden Sands resort

·        Wind parks to be constructed round Shabla (Northern Seaside)

·        Dutch Corio buys land in Bulgarian capital for �15.7 M

·        Dobrich to build business zone

 

 

COMPANIES:

 

·        Mercedes to test their new models in Bulgaria

·        Daimler Chrysler dealer to open Shumen outlet

·        SAAB steps in Bulgaria

·        Lukoil poised to acquire Petrol assets

·        Fuel retailer Eko Bulgaria to buy 7 Tempo Petrol stations

·        RWE favored for Bulgaria nuclear stake

·        Philip Morris says raises market share in Bulgaria to 9.5%

·        More than 300 000 bulgarians flew with Lufthansa in 2007

·        Unit of Spain's FCC plans to buy Bulgarian waste management company

·        Traditional Wine Expo 'Vinaria 2008' starts in Sofia

·        ‘Stroyko 2000’ Building Expo Opens Doors

 

 

ANALYSIS:

 

·        If rulers are right, prices have gone mad

·        Bulgaria's GDP per capita more than 60% below the EU-27 average

·        NSI: The business climate continues to improve

Articles:

 

 

MACROECONOMY:

 

Kosovo asks for Bulgaria's economic help

"We'll work hard towards the development of Kosovo's economy. We rely on the help of Bulgaria, Croatia and Hungary," Kosovo's President Fatmir Sejdiu and Prime Minister Hashim Thaci told Nikolay Kolev, head of Bulgaria's diplomatic mission in Pristina, and his counterparts from Hungary and Croatia.Thaci and Sejdiu have been informed about the joint declaration of Bulgaria, Hungary and Croatia, in which the three states recognize the independence of Kosovo. The two statesmen have declared their readiness to build a democratic and multiethnic state, Kolev told The Standart. Thaci and Sejdiu confirmed their commitment to work for the European and NATO integration of Kosovo.

Kosovo recognition costs Bulgaria � 340 M

 

Bulgaria might well lose over 340 M EUR after the recognition of independent Kosovo, according to the estimates by Minister of Economy and Energy Peter Dimitrov. This scenario would come true, if exports slide down to the levels of 2006 and Serb investments and tourists ebb, the Minister admitted in an interview with the Bulgarian National Radio. In his opinion, the cabinet's decision to recognize Kosovo would inevitably have a gruesome impact on Bulgaria's economy, however he doesn't rule out that the Serb's retaliation may not be all that severe. In fact, Bulgaria is Serbia's lobby for the EU membership and in recent years cooperation between the two countries has been very active, the Minister underscored. Dimitrov draws a parallel between the liberation of Bulgaria from the Ottoman rule in 1878 and the recent developments in Kosovo. He believes that at that time there was a foreign military intervention and a new state emerged that many of its neighbours didn't quite like. Regardless of the fact, though, this state has now erected monuments to those who helped in labour when it was born, Dimitrov added. According to him, the new state is emerging now in a similar way. It has become a fact and we should realize that to us it is important not to become its foes. There are economic commitments and Bulgaria is doing its best to meet them, yet when it comes to politics, moments come when one has to take a firm stand and side either with one party or the other, Dimitrov concluded.         

 

FM Kalfin: Bulgaria has rather active business contacts with Kosovo

 

The business contacts between Bulgaria and the newly independent Republic of Kosovo are increasingly active. This was announced Saturday by the Foreign Minister Ivailo Kalfin before the Bulgarian private Darik Radio. Kalfin said the economic cooperation between the two states must be developed further. In his words, there are already a large number of Bulgarian businessmen doing business in Kosovo, and respectively, many Kosovar entrepreneurs working with Bulgarian firms. "The Bulgarians Kosovo are dealing mainly with trade, but there are also certain investment opportunities. As far as I know, the Bulgarian businesses are interested in these, and there is also a desire on part of Kosovo to attract Bulgarian investments," Kalfin said. He supported his claim about the dynamic development of the Bulgaria-Kosovo business relations by reminding of the recent visit to Kosovo of the Deputy Economy and Energy Minister Yavor Kuyumdzhiev, who was accompanied by a number of Bulgarian businessmen. The Foreign Minister expressed the readiness of the state to assist in any way necessary the further development of the economic relations between the two states.

 

Bulgarian businesses fear for their Serbian operations

Bulgaria's recognition of Kosovo may undermine business operations in Serbia, Dnevnik daily reported on March 21. Business' primary concern was that Serbia could punish Bulgarian firms by posing illicit barriers to those investors and exporters using Serbia as a transit hub.Such barriers could introduce more red tape, delays in investment and scheduled business operations, as well as a general lack of cooperation from Serbian people themselves.Atanas Bobokov, Prista Oil co-owner and chair of the battery maker Monbat board of directors, said that recognition of Kosovo was an insane move, a severe blow to Orthodox Serbia and probably influenced by strong external pressures. He said that Bulgaria should have waited for another one or two years until Kosovo had passed a constitution and honoured the rights of its ethnic minorities.He also criticised the Bulgarian government for not testing Bulgarian business opinion before recognising Kosovo.The chief executive of Bulgarian River Shipping, Dragomir Kochanov, also said the government's decision was rash. Two thirds of the company's operations depended on its business in Serbia, he said. In particular, all transit shipments to western Europe passed through Serbia.“I hoped for a more reasonable government that could have waited for a while, just as Romania did,” he said. “Nonetheless, I believe that it has taken the most correct decision given the information it had available.”Valentin Zahariev, majority shareholder of mining firm Intertrust Holding and a former owner of Kremikovtzi steel mill, expected that the Serbian state administration may delay approving  Bulgarian business undertakings.“If [during snap parliamentary polls in May] the democratic alliance wins, Bulgarian business will not suffer,” Zahariev said. “If, however, nationalists win they are likely to restrict Serbia's future in Europe as well as pose problems to companies from those countries recognising Kosovo.”Baiko Baikov, the owner of the Bohemia tourist agency and a member of the Association for Bulgarian Tour Operators and Tourist Agencies, said that industry representatives were worried about a potential fall in Serbian tourism to Bulgaria and possible barriers to bus routes in and out of Serbia. Should Serbia impose such obstacles, Bulgarian tour operators would have to search for alternative routes.Evgeni Ivanov, secretary general of the Confederation of Employers and Industrialists, said that recognition of Kosovo stems from state policy. Bulgarian business, in its capacity as taxpayer, is therefore entitled to protection from the state against possible infringements, he said.

Serbia remains important bussiness partner to Bulgaria

Serbia will remain important market and business partner for Bulgaria, despite the arisen pressure between the both countries about the Bulgaria's decision to recognize the independence of Kosovo.That was announced by the chairman of Bulgarian Industrial Association Bojidar Dinev. In Danev's words, Bulgaria is one of the biggest investors in Serbia, as takes the leading position in branches as metallurgy, import and sell of fuels, transport logistics, pharmaceutics industry and others.  The trade balance of Bulgaria with Serbia is extremely good - the common Bulgarian export for Belgrade is on the amount of 583 million USD, which brings to Bulgaria positive balance of 372 million EUR. According to Danev's opinion, the notability of newly recognized Kosovo for Bulgarian business is not quite optimistic. To make business to a country, where the unemployment level is over 43% and the incomes come mainly from social aids and international financial institutions, is really hard.And, although Kosovo takes real pains to attract Bulgarian investors, the disputable new country would hardly be interesting for Bulgarian contractors. ‘Even the Kosovo's market, which population is not more than 2 million people, is not big enough to be attractive for the free Bulgarian financing resources, searching for investment destinations' Dinev considers.  

Companies set up Bulgarian-Serbian forum

Representatives of Bulgaria's business in Serbia signed in Sofia a declaration on the establishment of a Bulgarian-Serbian economic forum. The forum will be registered in both countries within 3 or 4 weeks, Hristo Kovachki, a large investor in Serbia and initiator of the forum, said. According to the NGO, Bulgaria should assist Serbia for fostering more effective business communication between Serbia and the European Union, while Serbia should encourage Bulgarian investments in its economy.

Bulgaria trade with Turkey worth USD 4 B

Bulgaria's annual trade with Turkey presently amounts to USD 4 B, and might reach USD 10 B in the coming years, prime ministers of the two countries predicted during the bilateral business forum on Thursday.Bulgarian PM Stanishev and his Turkish counterpart Erdogan took part in the event, held in Kempinski-Zografski hotel in the framework of Erdogan's official visit to Sofia. PM Stanishev announced that in the last couple of years the bilateral trade had been growing with USD 1 B per year, and was bound to grow further because of the high economic growth and the continuing reforms in both Bulgaria and Turkey. The Turkish PM Erdogan stated his country had serious investments in Bulgaria, and pointed to the company Sisecam, which invested USD 250 M in a factory in the city of Targovishte in northeast Bulgaria.

Vietnam wants to buy Bulgarian wine

Vietnam wants to become one of the most important Bulgarian business partners. The Asian country is willing to buy a large part of Bulgaria's exported wine and rose oil for the region, said  ambassador Pham Quoc Bao. He saw off Solomon Passi, Chairman of the Foreign Policy Commission at the Parliament when the latter left for a visit to Hanoi. In Vietnam Solomon Passi will study the market and the possibility to import Bulgarian goods. "EU allows us to play an important role on that market where they are looking mostly for wine and rose oil, announced Passi. Later Minister of State Administration Nikolay Vasilev and Minister of Labour and Social Policy Emiliya Maslarova will visit Hanoi to sign agreements for cooperation.

 

 

Bulgaria exports locomotives for Kosovo and China

Bulgaria-made locomotives will pull trains in China and Kosovo. Rousse-seated Express Service Company is currently assembling two diesel locomotives for the needs of Kosovar railways. Seemingly this will be the first delivery of Bulgarian equipment for the newly established country. Besides two small electric locomotives were exported to China that will facilitate the complicated movement of motorcars at Beijing airport. This delivery is a part of the large-scale modernization of the airport, anticipating the Olympic Games. The locomotives underwent testing in Germany with positive results and were then transported to China. The Asian country asked for offers for further deliveries of locomotives.

Bulgaria reduces import of labor force from China

The Bulgarian Government have decided to reduce the import of labor force from countries outside the EU, so as to make job positions available to Bulgarian emigrants, who have decided to reestablish themselves here. The citizens of China, Moldova and Syria will be offered labor contracts only on condition that they go back home after the contract expires.This migration strategy is aimed at attracting to Bulgaria not non-EU immigrants, but Bulgarian citizens, who have settled down abroad, sources from the Ministry of Labor and Social Policy told The Standart. This is why, each non-EU citizen, who wants to work in Bulgaria, should go to the Bulgarian embassy in his country and sign a declaration that he or she will come back to his country after the expiration of the labor contract. The citizens of the EU, and Switzerland, as well as the foreigners with a status of permanent residents in Bulgaria will be hired by Bulgarian employers on priority basis.

Coal extraction begins from richest deposit at Maritza East

Extraction of brown coal from the richest deposit at the Maritza East Mines began on Friday, the company's Executive Director Ivan Markov said. The border area between the Troyanovo North and Troyanovo 1 pits was cut open. The coal deposit in this area amounts to 175,000 tonnes. Samples have shown that the coal here is the most shallow and of the best quality. The ash content is only 28 per cent, whereas in other parts of the Maritza East Energy Complex the ash content is up to 45 per cent. The Maritza East Mines has invested over 250 million euro in this large project, BTA reported. After the new capacity is built at the Maritza East Complex, the output will reach 33 million to 35 million tonnes. The Maritza East Mines received an ISO 14 001 certificate on Friday for its effective environmental management system. The Maritza East Mines director told a news conference that he expects the State Commission for Energy and Water Regulation to increase the price of coal by 14.9 per cent as of April 1 or July 1. A consultant will be selected within two or three months to provide bidding consultation for the selection of an investor to build new capacity at the Maritza East Mines on the basis of criteria chosen by the Commission last year.

 

 

 

 

 

PPC to buy 0.8M tonnes of coal from Maritza Iztok mines

Greek energy company PPC plans to buy 0.8 million tonnes of coal from Bulgaria's Maritza Iztok mines, the chief executive of Maritza Iztok mines Ivan Markov said, as quoted in Dnevnik daily. The last batch will be shipped by the end of October this year, he addedTalks on coal purchase have been ongoing for three months, according to Markov. PPC is interested in buying between one and two million tonnes a year. Maritza Iztok mines will be ready to procure seven million tonnes a year but after 2010, Markov said.The purchased coal will feed the company's power plants in northern Greece.The Privatisation Agency (PA) picked the Greek company as buyer of Bobov Dol thermal power plant (TPP) in 2005 but it later recalled its decision. Currently, the Greek company is contesting the agency's decision with the Supreme Administrative Court (SAC). Last week, a five-judge panel from the SAC reviewed the case. A verdict is expected shortly.In related news, the Maritza Iztok mines have called for a 14.09 per cent hike in the lignite coal. The hike could take place either in early April or early July.In addition, the mines are to choose a consultant to draw up a tender for an investor in a new power plant, to be erected at a site within the mine. An inter-departmental group filed the criteria for potential candidate investors with the Ministry of Economy and Energy.According to Markov, PPC is not interested in building a new 600MW coal-fired facility in the complex. Representatives of the Greek company said they needed no plant provided that it would be cheaper to buy coal and enrich the quality of Greek-extracted coal.

Bulgarian state debt down �36 M in February

According to the official register of Finance Ministry, the state debt in the end of February is 5,09 billion EUR, as in nominal ｅxpression the debt has decreased with around 36 million EUR, compared to the last month. The decreasing dues mainly to the done paying during the month. In the end of the accounted period, the state debt's share of the common amount of the GDP turns out to be 16.1%, which means decrease with 0.2% compared to the last month. In the structure of the state debt in the end of the period the internal debts take 31.8% and the external share is 68.2%.In February the Finance Ministry conducted an auction for sell of state treasury obligations on the local market. The approved offers on the auction amount to 30 million BGN (15 million EUR).In connection with the currency composition of the payings the most substantial is the share of those in Euro - 44.8%, followed by those in Bulgarian Levs - 36.5% and in US dollars - 17.4%.  

Bulgaria pays early �275 M debt to World Bank

 

Bulgaria on Tuesday said it has paid early 275 million euro ($428 million) worth of debt owed to the World Bank. The payment will result in a decrease of the amount of debt and improvement of its interest rate structure, thus leading to lower risk of increasing interest expenses in the following years, the Finance Ministry said in a statement. The country repaid early six World Bank loans worth a total 266.9 million euro and $12.8 million (8.2 million euro), interest included, it said. The early payment has been made taking into account the budget performance forecasts for 2008 and the level of the country's fiscal reserve. Bulgaria targets a budget surplus of over 3.0% of GDP this year, aiming to slow the growth of its current account shortfall, which is expected to rise to 21.9% of the projected GDP from 21.8% for 2007 mainly due to the widening trade deficit. Following the early debt payment, Bulgaria's public debt will total 5.1 billion euro, or 17.8% of projected GDP, the statement said. Bulgaria paid early 339.1 million euro worth of debt to the World Bank in 2006.

 

Changes to duty-free trade act passed in Parliament

Duty-free shops on Bulgaria's borders with countries that are not members of the European Union will be closed within three months, according to the amendments to the Duty-Free Trade Act (DFTA) passed on March 20 at first reading in Parliament.The duty-free shops at airports and ports will continue operations. The Government had to decide on the future use of closed sites within a month, according to the amendments bill.After Bulgaria's accession to the European Union, the Duty-Free Trade Act obliged traders to close or move all its duty-free shops from checkpoints bordering EU member states to similar locations on borders of non-EU member states.As a result, a total of 19 sites are currently in the process of being changed to Serbia, Macedonia and Turkey. Last year, Bulgaria had 15 shops whose turnover reached 70 million euro, according to data of the Association of Duty-Free Trade Operators.Parliament is currently reviewing two bills amending the DFTA. According to the first, filed by the opposition, all ground duty-free shops and petrol stations have to be shut down. According to the second bill, filed by the Government, the duty free shops have to be shut down in three months' time, whereas petrol stations on borders will have to close when the billis published in the State Gazette. Closing down the duty-free shops is fraught with a number of lawsuits against the state, because the amendments do not stipulate any compensations to the duty-free operators, whose licenses will be revoked before they expire.

Deadline for carbon dioxide emissions reports

Bulgarian Industrial Association has asked all 175 companies on the country's carbon dioxide emission list to submit their verified reports for 2007 to the Environment Executive Agency no later than March 31, as required by law. The re-distribution of carbon dioxide quotas for 2007 would be carried out based on those reports, as discussed on March 24 by a working group at the Ministry of Environment and Water Affairs, Bulgarian news agency (BTA) reported. The working group will meet again on April 1 to make the final re-distribution decision. Companies that did not submit their monitoring reports on time will receive quotas from the limited amount left after after the re-distribution of quotas to the companies that submit their reports before the deadline. on the list of companies for carbon dioxide quotas distribution are Bulgaria's biggest power plants, including Maritsa Iztok 2 and 3, Varna, Bobov Dol and Rousse-Iztok thermal power plants, Kozlodui nuclear power plants and all heating utilities.

Bulgaria's major airports 2007 passenger numbers rise 11%

 

Passengers on charter and scheduled international flights through Bulgaria's three main airports rose 11% to 5.985 million in 2007, the Bulgarian Airlines Association (BAA) said on Monday. The number of passengers on scheduled international flights rose some 33% to 2.957 million, while the number of people flying on international charter flights fell 4.0% to 3.027 million, BAA said in a report. Scheduled flights are usually from and to the capital Sofia, with only a few to the country's key Black Sea airports of Burgas and Varna, where most of the charter traffic goes. Burgas and Varna are gateways to the country's Black Sea coastal resorts, which attract a rising number of tourists each year. The number of passengers on scheduled international flights through Sofia airport grew 24% to 2.492 million in 2007. The number of passengers carried by international charter flights from and to Burgas rose 7.0% to 1.811 million last year, while the equivalent figure for Varna airport fell 19.5% to 1.065 million people. Charter routes to Sofia carried 153,000 passengers in 2007, up 17%. The three Bulgarian carriers - Bulgaria Air, Hemus Air and Viaggio Air - ran scheduled international flights that carried 28% of the passenger traffic for such flights last year, down from 33% for 2006. They carried 45% of the passengers on international charter flights last year, versus 46% in 2006. Overall, the three domestic airlines held 36.7% of the international flights market last year, compared to 40.6% in 2006. Bulgaria, which joined the European Union in 2007, has been partially excluded from the benefit of the EU's internal aviation market since December 2006 over safety concerns. The EU will decide in the first half of 2008 whether to keep the aviation restrictions, European Commission Vice President and Transport Commissioner Jacques Barrot has said.

 

Ambassador El Ghailani Dlimi suggests that Bulgaria resume phosphate import from Morocco

 

Moroccan Ambassador El Ghailani Dlimi said Bulgaria used to be a long-time importer of phosphates from Morocco and would do well to resume import. He spoke at a news conference at the Union of Bulgarian Journalists (UBJ) on Monday devoted to Morocco's development, external relations and relations with Bulgaria. The ambassador listed information technology, information exchange, amelioration and fishing products, the footwear and leather industries as possible areas of developing bilateral relations in the future.The two countries have signed over 50 agreements in different areas. A new programme for cooperation in education, science and culture in 2008-2010 was signed in January.BTA and the Moroccan news agency MAP have signed an agreement on information exchange. The UBJ and the Association of Moroccan Journalists have drafted a cooperation agreement.Other documents whose drafting is nearing completion are a bilateral agreement on merchant shipping, an additional protocol to the mutual investment protection and promotion agreement and a convention on the transfer of sentenced persons.

�300 M for IT development

The European Union (EU) will grant Bulgaria 300 million euro from the structural funds for the development of information and communication technologies (ICT), deputy chairperson of the State Agency of Information Technologies and Systems (SAITS) Krassimir Simonsky said on March 26. He was speaking at a conference on the development of Balkan trade in Blagoevgrad.Teachers in computer sciences from the American University in Bulgaria and experts in the communication sphere from Serbia, Macedonia and the US attended the conference. Simonsky presented SAITS priorities and goals, as well as the development trends of ICT in Bulgaria during 2007.ICT accounted for 8.4 per cent of Bulgaria’s 2007 gross domestic product (GDP). According to statistics quoted by Simonsky, 70 per cent of the population used mobile services. In Sofia 88 per cent of the population used mobile devices, in the different regions it was 78 per cent, in small towns 66 per cent and 55 per cent in rural areas.The share of people using land line services remained high – 56 per cent in 2007. However, this number is gradually decreasing.Thirty-four per cent of the Bulgarians used the internet in 2007, 28 per cent of which had their own connection at home. This was an increase from the 16 per cent in 2006, Simonsky said. Thirty two per cent of Bulgarians in the different regions used the internet but only five per cent of people in rural areas.According to the statistics, Bulgarians used the internet mainly for checking their emails. The second most common use was for reading online news and collecting information. only five per cent of the local population paid bills over the internet in 2007.There were currently 5000 IT companies in Bulgaria. The majority of their income, 80 per cent, came from contracts with European and American companies.According to Simonsky, one of the weaknesses of the Bulgarian IT market was the lack of locally produced products.During the conference Simonsky also outlined the goals of SAITS, which had been set until 2011. one of them was for ICT to account for 10 per cent of local GDP.Bulgaria has also developed several strategic documents with the aim of creating a framework within which the operational programmes will be developed.According to Simonsky, one of SAITS biggest achievements was the optimisation of the schools’ internet, which is currently the second best in Europe. There were 3200 Bulgarian schools in the network and 2119 had already connected their computers to the common system. Simonsky also said that for Bulgaria, the EU and reaching its standards was a real challenge in the IT sector.

Bulgaria's 2007 computer hardware market grows 25% to $1.0 B

 

Bulgaria's market of computer hardware equipment grew by 25% to $1.0 billion (641 million) last year, as sales of mobile phones, portable computers and video displays surged in the last quarter, Sofia-based market analysts CBN-Pannoff, Stoytcheff & Co said. Supplies of portable computers in the fourth quarter alone exceeded volumes for all of 2006, the company said but quoted no figures. It said the depreciation of the U.S. dollar versus the euro and companies moving production of powerful brands to China, still a predominantly dollar zone, helped the rise. We expect the huge jump in supplies in Q4'2007 to have a negative impact on the import and in some aspects, on the ICT [information and communication technology] business in Q1'2008, because the market can not absorb such amounts," the researcher said in a report. It is very likely sales to slow down and the average sales price and gross margin to drop, it added, saying new players entering the market and fresh funds invested in the hope for fast returns have led to the saturation of the market. CBN-Pannoff, Stoytcheff & Co has previously said it expects the country's computer hardware equipment market is expected to exceed 750 million levs ($598 million/382.4 million euro) in 2008. Bulgaria's ICT market is expected to grow to 3.0 billion euro in 2010 from 2.3 billion euro expected for this year, according to the government's State Agency for Information Technology and Communications.

Bulgaria bicycle industry to grow by 40% in 2008

 

Bulgarian bicycle makers are expecting a 40 per cent jump in production this year, double the initial estimates for 2008, after receiving last week an official permission from Brussels to import parts without paying anti-dumping tariffs. Even though no tariffs were paid to start with, producers had to deposit a bank guarantee, which is no longer required, Velomania spokesman Lyudmil Ouzounov told The Sofia Echo on March 24. Velomania manufactures bikes under the Drag brand. “By taking back the bank guarantees now we will be able to produce much more bicycles, as well as to open many new working places,” Ouzounov said. The bank guarantees deposited by manufacturers was around three million euro, which they expected to receive it back by the end of the week, Dnevnik daily reported. Bulgarian bicycle manufacturers had to file a request with the European Commission to be given a dispensation to import parts without the prohibitive tariffs, Ouzounov said. Because the EU's executive body had to check their claims on location, the process took more than a year and permission was granted only last week. The segment most affected by the decission is the low end of the market - bicycles sold for under 200 leva, or 100 euro. Around 30 to 40 per cent of the parts used for bikes in that category are imported from China. "The more expensive the bike, the less Chinese parts it has,” Ouzounov said. As long as Chinese elements do not exceed 60 per cent of the bicycle price, Bulgarian makers would not have to pay the 48.5 per cent anti-dumping tariff. Bicycle production in Bulgaria last year was 450 000, of which 100 000 sold locally. “Bulgaria is the only EU member state where most bicycles are local production,” Ouzounov said. The rest of its production was exported mainly to the rest of the EU, as well as Russia, Serbia and Macedonia. Bulgaria has six bicycle manufacturers - Cross, Leader-96, Maxcom, Robifir Bike, Velomania and Balkanvelo. Their industry union, the Association of Bicycle Producers in Bulgaria (ABPB) said it expected to make more bicycles in the future, given the increased focus on healthy living and environment in recent years. Bulgaria's location gave it a competitive advantage over China, one of the world leaders in the sector, because it could ship to anywhere in Europe within one week, ABPB representative Evgeni Danev told The Sofia Echo. Bicycles are also gaining ground as an alternative means of transportation in Bulgaria itself, with Sofia city hall allocating 5.3 million leva for building two new bicycle lanes from its budget for 2008.

 

Bulgaria launches foreign trade institute

 

The newly founded Bulgarian Foreign Trade Institute (BFTI) at the Bulgarian Industrial Association (BIA) was presented at a press conference in Sofia on Monday. The purpose of the BFTI is to develop the competitiveness of the Bulgarian economy, and to increase the export capacity of Bulgarian firms.The Manager of BFTI Zhechko Dimitrov announced there were 13 000 export firms in Bulgaria, and if each of these exported additional production worth BGN 100 000, this would mean BGN 1,3 B more in the country's economy. "This is money that apart from revenue for the firms and better salaries for its employees is also going to provide more revenue for the state in the form of taxes", Dimitrov said.The Chair of BIA Bozhidar Danev said the Foreign Trade Institute had to be created due to the fact that Bulgaria's trade balance was negative, and that Bulgaria's exports are composed of energy intensive goods.

Bulgaria to triple biofuel production capacity to 450,000 t by 2011

 

Bulgaria will nearly triple its installed capacity for biofuel production to some 450,000 tonnes a year by 2011, an industry official said on Tuesday. "Currently in Bulgaria there are installed capacities for 140,000 tonnes of biodiesel and 20,000 tonnes of bio ethanol," the chairman of Bulgaria's National Biofuels Association, Dimitar Zamfirov, told SeeNews on the sidelines of a round table discussion on the biofuels market in the EU newcomer. Asked how much biofuels were produced in Bulgaria in 2007, Zamfirov said: "Zero. For us the 3,000 tonnes that were produced in 2007 are equal to zero, compared to the installed capacity." "In 2006 the output of Bulgarian biofuel producers was about 20,000 tonnes," Zamfirov said and added that production and sales of biofuels in Bulgaria had been hit by the lack of a certifying authority for the biofuel content in the mix of oil-derived and green fuels, following the adoption of new legislation introducing lower excise duties for biofuels. Bulgaria, a member of the European Union since January 2007, has to increase the use of biofuels to 5.0% of its total fuel consumption by 2010 and to 10% by 2020 to meet ecological requirements of the bloc. In order to enhance green fuel production, the Bulgarian government has introduced an excise duty on diesel and petrol containing four to five percent of biofuels that is 3.0% lower than excise duty levied on oil-derived fuels. Biofuel producers in Bulgaria are blaming the Economy and Energy Ministry for its failure to nominate an authority that will monitor the biofuel content in the fuel mix, said Zamfirov. For that reason, currently no fuel traders in Bulgaria are mixing oil-derived fuels with biofuels, he added. Economy and Energy Ministry officials were not immediately available to comment. Last year the government said that the consumption of biofuels in Bulgaria will gradually increase to 44,000 tonnes in 2008, 133,000 tonnes in 2010 and 314,000 tonnes in 2020. The consumption of petrol should decrease in parallel to 485,000 tonnes in 2008, 426,000 tonnes in 2010 and 370,000 tonnes in 2020. Some 53% of the motor vehicles in the country of 7.7 million people ran on diesel in 2007, 22% on petrol and 16.6% on propane gas, under official statistics.

Non-cultivated arable land could provide material for biodiesel production

 

A practice of mixing mineral and biofuels has not been established yet although the Renewable Energy Resources and Biofuels Act provides that five per cent of the fuels for transportation purposes should be of enviornmentally friendly origin. Dimiter Zamfirov, Chairman of the National Association of Biofuels, said Tuesday at a roundtable discussion: Law and Biofuels. Bulgaria has undertaken a commitment before the European Commission under which bioproducts - biodiesel and bioethanol - should account for 2 per cent of the fuels used by the end of 2008, Zamfirov recalled. There is no state policy in regards to the production of bioethanol, he observed, adding that local production encounters serious hindrances."The state wants from us to make denaturated bioethanol while traders oppose mixing of mineral fuels with denaturated biofuels," said Radoslav Shounk, Executive Director of the Euroethanol company.Twenty to 35 per cent of the arable land in Bulgaria is not cultivated and could provide materials for large quantities of biodiesel, participants in the discussion said. By the end of 2008 the retail price of fuels is expected to exceed 3 leva/l and Bulgaria could start producing bioethanol and biodiesel rather than importing mineral fuels, the Association said.

Norway to fund environmental projects of Bulgarian municipalities

 

Norway will fund environmental projects of Bulgarian Municipalities, Norwegian Ambassador to Bulgaria Tove Skarstein said Wednesday here. Skarstein presented  the Norwegian Cooperation Programme as well as the financial mechanism of the European Economic Space at a seminar held here. These financial instruments will strengthen relations between the two countries. This is the basis for the establishment of a stable and long-term bilateral cooperation, Skarstein added. She also said that the two programmes operate with a total of 41.5 million euro. Projects in the field of environment, protection of cultural and historical heritage, health care and care for children will be priority funded. The projects submitted should be worth between 250,000 and 5 million euro. A fund within the programmes is envisaged for non-governmental organizations. Their projects could be worth between 25,000 and 250,000 euro. The Norwegian Cooperation Programme is a donor instrument. To receive funding, the Bulgarian applicants should work with a Norwegian counterpart. In this respect, applicants could seek assistance from the Embassy, the association of municipalities in Norway, the Innovation Norway organization. The projects have to be submitted by November and will be approved in Oslo. The financial mechanism of the European Economic Space is a joint instrument of Norway, Island and Lichtenstein. The applicants should submit their projects by April 20. The approval will be carried out in Brussels.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENTS:

 

Bulgaria's manufacturing FDI falls dramatically

Author: Drew Wilson, Electronics Supply & Manufacturing, EE Times Europe

 

Bulgaria's overall foreign direct investment was up substantially in 2007, but manufacturing took a big hit. The country attracted $9B (5.7B Euro) in FDI, up 30 percent from the previous year, according to figures from the Bulgarian National Bank. In addition, FDI accounted for 19.9 percent of GDP compared to 17.4 percent of GDP in 2006. Real estate, construction and the financial sector together accounted for the bulk of the investment while manufacturing fell dramatically. Bulgaria saw only $367M (234M Euro) in manufacturing investment in 2007, down more than 75 percent year-on-year and the lowest amount since 2002, according to preliminary data from the Bulgarian National Bank. Going against the trend is Belgium-based EMS company EPIQ. Last month, the company invested $8.5M (5.5M Euro) in a factory expansion in the city of Botevgrad to manufacture high-temperature sensors for automobiles. EPIQ is the main foreign investor in Bulgaria's electronics sector. The company has a cumulative capital investment of $38.7M (25M Euro) in manufacturing operations that employ 2,500. The Invest in Bulgaria Agency expects 10 percent overall FDI growth in 2008.

Sweden to invest in energy effectiveness in Bulgaria

Sweden intends to construct in Bulgaria objects in the area of energy effectiveness, money.bg announced. During the last 15 years Sweden has improved its common energy effectiveness with 30% and has decreased the losts of electricity by transporting. That was announced by vice-minister of energy and economics Yavor Kuyumdjiev after the meeting ‘Opportunities of cooperation between Bulgaria and Sweden', that conducted in the Ministry building.Kuyumdjiev informed the financing of these projects could become as through the structural funds of EU, so through the Swedish export fund.

 

Steel rebars plant to be built in Aitos area

Sofia-based company Omega will build a plant for steel rebars in the Aitos area. Initial investment in the facility, which will process metal beams, is seen at 15 mln euro. The only byproduct from the manufacturing process is iron oxide dust which will be filtered out. The Danielli production line has an output capacity of 100,000 metric tons. According to the head of the team of experts that assessed the environment impact of the operation, the plant will fully comply with all relevant EU standards.

�64 M invested in first Business Park in Plovdiv city

‘Prime Property BG' invests 64 million EUR in the constructions of the first Business Park in the city of Plovdiv (Central South Bulgaria). The business park will includes 4-5 storey modern buildings with offices and trade areas, underground parking lots, restaurants and supermarkets.It is expected that many companies, most of which foreign will accommodate in Plovdiv's first Business Park that will open many new work places. It is foreseen that the final end of the building sites and the starting exploitation date of the project will be in 2011.The ‘Prime Properties BG' expectations for reversion of investments will be round 30%.Until now the city of Plovdiv posses with industrial parks and smaller business complexes which also includes residential areas.

 

Germany's ECE Projektmanagement kicks off Varna shopping mall scheme

Germany's ECE Projektmanagement, a leading developer of inner city shopping centers in Europe, has launched its third project in Bulgaria, the Cherno More Park shopping mall in Varna, on the Black Sea. The 50,000 sq m footprint of the mall will be located on the site of the former diesel engines factory Vamo near the point where the Hemus motorway enters the Western part of the city. Work on the 150 mln euro development is scheduled for completion by 2010. The two-storey building will house 220 shops, eateries and cafes on a lettable area of 54,000 sq m. Apparel makers will dominate the tenant mix but retail space will also be leased to electronics, sporting gear and food retailers. Several multinational retailers have already shown interest in the project, said Plamen Ilchev, managing director of ECE in Bulgaria. ECE Projektmanagement is already developing two shopping mall schemes in Sofia, Serdika Center and Europe Center Sofia.

The range of Novo Selo – Bulgaria`s construction El Dorado

 

The range of Novo Selo is very likely to become an El dorado for the Bulgarian companies. There is no gold there, but some USD68M will definitely be poured there through US investments in the military base construction. The news about the investment was announced by captain Jake Daystar from the US collaboration office at a meeting with the people in Nova Zagora. The meeting was part of a series of talks with people who live close to the US bases in Bulgaria. The main purpose of the talks is to convince the population of the economic and social benefits that the presence of the US forces close to their homes will bring. Two years ago the US army engineering corps in Europe started to gather information about potential investors able to build new military facilities in Novo Selo and then lease them out to the US army. The plans include construction of residential buildings, a modern training centre, communication systems, warehouses and halls for cart and chain equipment, repair shops, mess-rooms, maintenance equipment, and administrative offices, on a total area of 430,000 sq feet. A contingent of about 2,500 US military officials - officers, sergeants, and soldiers, is expected to live in luxurious buildings, air-conditioned and supplied with all the comfort of an average Bulgarian hotel. A permanent serving staff will be accommodated there, too. Since the buildings will be solid, the experience of local construction companies will be used, the Americans promise. However, they need to meet a series of requirements set by the Department of State. A working team from the US land forces European headquarters in Stuttgart is expected to arrive in Bulgaria in mid-April because of the constructions. The team will talk to representatives of local businesses which show interest in the coming tenders. The chances of the Bulgarian companies will be discussed in Stuttgart two weeks later. The construction works should be completed by 2011. However, this will not be the end of the investments. The plans also include maintenance of the buildings. Experts have calculated that between USD600,000 and USD800,000 are needed annually for refreshing of the buildings in Novo Selo in accordance with the high US standards. The money will come from Washington. Every year the Department of State will launch another USD300,000 to USD500,000 to the country for rehabilitation of the roads and the land equipment which get obsolete fast because of the passing heavy chain and cart armoured equipment. The construction of the Novo Selo infrastructure will start after October 17. It will be preceded by a large-scale Bulgarian-American training, Bulgarian Panther, starting from August 15. About 1,200 military officials will be involved, divided into three US companies and a Bulgarian one. The preparation for the manoeuvres will begin in July. The base camp will be built then and the stationing of the troops in the range area will be carried out in August. A peace-keeping operation is planned to provide training in deactivating explosives, patrolling and searching of buildings, organisation of checkpoints, etc. Meanwhile, Bulgarian and US military officials will fulfil tasks aimed at surviving in battle conditions, rendering first aid, driving in a complicated environment. The Bulgarian company will also be trained to apply US simulation systems - laser covering fire trainer, an artillery support trainer, sets for fighting improvised explosive devices, the MILES and DISE simulation systems. Within the social policy that the US army conducts obligatorily beyond its nation's borders, a repair of kindergartens is planned in the villages of Mokren and Padarevo, in Kotel and in Sliven. Rehabilitation of the community centres in Mokren and Mamarchevo is part of the plans, too. A total amount of USD200M will be invested in the four US bases in Bulgaria - the Novo Selo range, the airports Bezmer and Graf Ignatievo, and the logistic base near the town of Aitos. The agreements signed with the US stipulate that the military sites remain Bulgarian and operate under Bulgarian banner and command. The agreement for their utilisation will last ten years and each country will be allowed to terminate it unilaterally. Between 2,000 and 3,000 US military officials are expected to live in Bulgaria simultaneously, but in periods of rotation their number may go up to 5,000.

Turkish 'Trakia Cam' to invest $450 M in Bulgaria

Turkish glass manufacturer ‘Trakya Cam' announced its intentions to invest $415 million in Bulgaria by 2010. This was reported in a statement of the company to the stock exchange on Thursday, March 27, Reuters revealed. The Turkish glass producer ‘Sisecam' is the majority owner of ‘Trakya Cam'.The news was told at the beginning of the official visit of Turkey's PM Recep Tayyip Erdogan to Bulgaria.

German 'Plus' plans to invest �250 M in Bulgaria till 2011

Plus, part of Germany's Tengelmann group, plans to complete a E250m investment in Bulgaria by 2011, according to corporate communications officer Nicole Dinter. The company plans to build a logistics centre and develop a network of 150 stores across Bulgaria within a five-year period from its entry into the country in 2006. "We intend to open our logistics platform near Sofia in the first quarter of 2009," Dinter said. "At the same time [in the first quarter of 2009] we intend to open approximately 30 discount stores across Bulgaria." The key players on the Bulgarian retail market are local chains Fantastiko, Familia, Evropa, CBA, Piccadilly and 345, and international majors such as German groups Metro, Kaufland, HIT and Billa and Lithuanian retail chain Maxima, operating under the T-Market brand. German discount supermarket chain Lidl is due to open its first Bulgarian store soon and France's Carrefour is expected to enter the country soon.

 

 

 

Bulgaria's Enemona to invest �16.9 M in new heating, real estate projects

 

Bulgarian engineering, construction and energy group Enemona on Tuesday said it plans to invest 33 million levs ($26.3 million/16.9 million euro) in a wood pellet factory, a heating plant and a logistics and business park in the northern city of Lom by the end of 2009. The company will spend 10 million levs on the pellet factory and the heating plant, which should be operational this winter and another 23 million levs will go to the logistics and business centre, to be located close to the port of Lom on the Danube, Enemona said in a statement. Enemona owns 2,500 hectares of agricultural land and 50 hectares of industrial land plots in the municipality of Lom. It owns 15 hectares of land close to the port, part of which can be used for its expansion after a concessionaire is chosen, it said. Bulgaria plans to award a concession for an intermodal freight terminal at the port of Lom by the end of July. Enemona plans to put into operation an energy complex, also in Lom, comprising lignite mines and a coal-fired power plant with an installed capacity of 400 to 600 megawatts, which Enemona officials have estimated to cost up to 1.5 billion levs, in 2012. Based in the northern town of Kozloduy, Enemona started as an engineering company providing services related to the country's sole nuclear power plant located in the same town. It, however, has been expanding its energy business in the hope of capitalising on the sector's prospects for growth. Shares in the company ended 0.3% lower at 17.55 levs in a volume of 10,795 shares on the stock exchange in Sofia on Tuesday.

Bulgaria's Enemona doubles planned investments in biomass units to �179 M

 

Bulgarian engineering, construction and energy group Enemona has more than doubled to up to 350 million levs ($282 million/179 million euro) its planned investments in three biomass units by the end of 2014 as demand turned out to be higher than expected, a company official said on Wednesday. According to estimates based on current prices, the total [value of the projects] is some 300-350 million levs," Enemona's managerial agent Bogdan Prokopiev told SeeNews on the sidelines of a news conference. Enemona plans to put into operation at the end of 2010 a biomass plant with a heating capacity of 50 megawatts in the Danube town of Nikopol, in northern Bulgaria, in which it plans to invest 100 million levs, Prokopiev said. The company initially intended to spend 70 million levs on the unit, which was planned to have a heating capacity of some 30 megawatts. The plant in Nikopol will have electricity generation capacity of 15 megawatts. The planned capacity has been increased because of higher demand, new plants are due to open," Prokopiev said, adding the industrial zone in the northern city of Pleven, close to Nikopol, attracted new business like Spain's Green Fuel Corporacion. The Spanish company plans to build two biofuel plants and supporting facilities in Pleven at a combined cost of 70 million euro ($110.1 million). Enemona will also build cogeneration plants in the cities of Dobrich and Lom in northern Bulgaria, thus bringing the total capacity of the three units to 140 megawatts. The company is in talks with several investment banks and funds investing in renewable energy sources to secure financing for its project in Nikopol, and expects to sign a loan deal by the end of the third quarter, Enemona's corporate policy manager Prokopi Prokopiev told reporters on the sidelines of the same news conference. Enemona expects to shortlist possible lenders or chose one within half a month, Prokopi Prokopiev said. It [the funding which the company will seek for the project in Nikopol] will most probably be 40 million euro," Prokopi Prokopiev said and added one of the banks, with which Enemona is in talks is the European Bank for Reconstruction and Development (EBRD), alongside other European banks and a Japanese one. Based in the northern town of Kozloduy, Enemona started as an engineering company providing services related to the country's sole nuclear power plant located in the same town. It, however, has been expanding its energy business in the hope of capitalising on the sector's prospects for growth. Company shares last traded at 18 levs at 1138 GMT, up 2.6% from the previous close on the stock exchange in Sofia.

Bulgarian fuel trader Bulmextrade to invest �5.1 M in 2008 in biodiesel plant

 

Bulgarian fuel trader Bulmextrade will invest some 10 million levs ($8.0 million/5.1 million euro) into the construction of a biodiesel plant this year, a company executive said on Tuesday. The plant, to be built in the Bulgarian city of Ruse, on the Danube river, will have an installed capacity of 86,000 tonnes per year, Bulmextrade manager George Tchapkanov told reporters. The plant is to become operational in July or August."We will export our products to Romania and Western Europe," Tchapkanov added. Last year the production of biofuels in Bulgaria dropped to 3,000 tonnes from 20,000 tonnes in 2006, the chairman of Bulgaria's National Biofuels Association, Dimitar Zamfirov, said earlier on Tuesday. The reason was the lack of a certifying authority for the biofuel content in the mix of oil-derived and green fuels, following the adoption of new legislation introducing lower excise duties for biofuels. For that reason, currently no fuel traders in Bulgaria are mixing oil-derived fuels with biofuels, Zamfirov said. In order to enhance green fuel production, the Bulgarian government has introduced an excise duty on diesel and petrol containing four to five percent of biofuels that is 3.0% lower than excise duty levied on oil-derived fuels. Bulgaria, a member of the European Union since 2007, has to increase the use of biofuels to 5.0% of its total fuel consumption by 2010 and to 10% by 2020 to meet ecological requirements of the bloc. The country has an installed capacity for 160,000 tonnes of biofuels annually and plans to triple it by 2011.

Bulgaria's Petrol Holding to invest �50 M in new credit card issuing company

 

Bulgaria's Petrol Holding will set up a new card payments company to replace its Transcard credit card issuer and will invest 50 million euro ($77.8 million) in developing its credit card business, it said on Tuesday. Petrol Holding said in a statement it has decided to replace Transcard following alleged wrondoing by Transcard's former board chairman Hristo Georgiev. "The termination of the business operations of Transcard will not affect in any way the adequate functioning and servicing of the existing and future cardholders - individuals and corporations and trade partners," it said. The group will invest 5.0 million levs ($4.0 million/2.6 million euro) in setting up the new card operator, which is the minimum capital required by the Bulgarian central bank to license the new company, it added. The new company, Transcard Payment Services, will take up the credit card payment business of Transcard, which is majority owned by the holding group. "Meanwhile, Petrol Holding will take all the necessary actions to terminate the business of Transcard," it added. The holding group also said it will seek legal action against Georgiev whom it fired last year. Georgiev was not immediately available to comment. The credit cards under the Transcard brand will be issued by the group's subsidiary Transcard Financial Services, in which Petrol Holding will invest 50 million euro to secure the re-issuance of all Transcard credit cards as co-branded TransCard MaterCard cards. Transcard Financial Services, which has been the issuer of the Transcard credit cards for the past two years, also plans to start issuing Visa cards. Petrol Holding (www.petrolholding.bg) was set up in 1995 in Bulgaria's third largest city of Varna, on the Black Sea, as a crude oil and oil products trader. It is the majority owner of the country's largest fuel retailer Petrol. Petrol Holding says it has consolidated assets of 1.5 billion levs and has some 30 subsidiary firms with businesses in the financial services, telecommunications, hospitality and leisure, power generation, aviation, beverages and media sectors.

 

Masterbuild to develop villa communities near Pomorie

Masterbuild, a Burgas area building contractor and property developer, said it will build holiday complexes in the village of Kableshkovo and Medovo, near Pomorie. The Medovo vacation community will have a footprint of 100,000 sq m, accommodating 64 residential buildings with housing units ranging from 95 to 214 sq m. The total build area of the complex will be 16,500 sq m. Masterbuild said work on the Medovo compound should get underway in late March once the financing and planning approval are sorted out. Delivery is seen by the end of 2010. The company will also develop the Golf Village complex near Kableshkovo, an area where a golf resort development is planned to be built. The construction of the Golf Village houses will begin in the fall of 2008 and should be completed by early 2010. The holiday complex will feature entertainment venues, retail outlets, eateries, office building, conference center, spa hotel and indoor and outdoor swimming pools. The two communities will comprise two-storey houses for one, two or three families as well as three-storey apartment buildings. Masterbuild has plans for a similar villa community in the village of Veselie, in coastal municipality Sozopol.

Russians invest �30 M close to Golden Sands resort

The Russian holding “Etalon-LenSpecSMU” announced the start of its first project out of Russia. The company will invest 30 M EUR in an apartment complex on an area of 22 thousand sq. m in close proximity to the Bulgaria Golden Sands resort, informed sgrada.com. The funding will be implemented through credits from foreign banks. The project is expected to be finished by the first quarter of 2009. “Etalon-LenSpecSMU” plans the realization of two more residential projects in Bulgaria and an expansion to Serbia in a short term.

Wind parks to be constructed round Shabla (Northern Seaside)

An extension of the territory, previewed for installation of wind-generators impends in Shabla municipality (Northern East Bulgaria), money.bg announced. The decision is prompted by the big interest of investors in this sphere, the Municipality Council Zdravko Jordanov said. Less than 10 wind generators have been installed to the moment, despite proposals for more than 100 of them have been approved by the local authorities. How much new territory is needed for the production of eco-energy will become clear in 5-6 months.

 

 

 

Dutch Corio buys land in Bulgarian capital for �15.7 M

 

Dutch property developer Corio has bought some 110,000 square metres of land for 15.7 million euro ($24.4 million) in the Bulgarian capital Sofia where it may build a shopping centre, a company official said on Thursday. "The idea is in coming time, maybe, to build a shopping centre there," Corio investor relations manager Jose Mathijssen told SeeNews by phone from Utrecht where the company is based. The land plot is located in a densely-populated and growing part of Sofia, Mathijssen said. She gave no figure on the planned investment and the timeframe for the development of the project. "That's the only step we have taken so far, so we just keep our eyes open for opportunities," she added. Corio (www.corio-eu.com) manages a portfolio of 6.5 billion euro, of which 83% is shopping centres in the Netherlands, France, Italy, Spain and Turkey. The group has plans to further boost its presence and possibily enter new markets. "We are looking to other opportunities, Eastern Europe is a possibility," Mathijssen said. "We are looking at opportunities and they might be in Eastern Europe but they also might be in Western Europe."

 

Dobrich to build business zone

 

More than EUR 120 million will be invested in the construction of a business zone on a former military land plot in Dobrich. According to feasibility studies by Euroconsultants Bulgaria SA, construction may start immediately. The experts proposed construction in two stages. In 2008 and 2009, buildings will be renovated and part of the infrastructure will be built. By 2010, buildings and infrastructure will be completed. Co-financing from EU funds may be used, experts said.Euroconsultants Bulgaria proposed setting up a public-private partnership. The best option is a joint venture between the municipality and an investor. The municipality will own 24% of the capital, and the investor will own 76%. A detailed construction plan has been designed.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPANIES:

 

Mercedes to test their new models in Bulgaria

 

Mercedes will test their new models at the military airport in Gabrovnitsa. Daimler's experts want to turn the former airport into a testing ground for their latest prototypes. So far they have visited the airbase twice and have taken many photos, sources from the Municipality of Gabrovnitsa told The Standart. The military airport was closed down in 2001. It is owned by the Defense Ministry. The Bulgarian Army no longer uses the facility and it will soon be sold, sources from the Public Property Department of the Defense Ministry told the Standart.

 

Daimler Chrysler dealer to open Shumen outlet

Balkan Star Automotive EOOD, the local authorised dealer of Mercedes-Benz, Chrysler, Jeep, Dodge and Mitsubishi, said it will open a sales and service center in Shumen by the end of '08. Earlier this year, the company unveiled a 7 mln euro dealership in Varna. Last year, Balkan Star Automotive generated a turnover of over 500 mln levs from the sale of over 5,000 new and pre-owned motor vehicles and the provision of automotive services, said the company's PRO Teodora Doseva. Sales in the Varna area alone jumped 64% y/y.

SAAB steps in Bulgaria

"Swedish SAAB Group is surveying Bulgaria to define how to develop its business in this country," reported Gunnar Wieslander, State Secretary to the Minister of Trade in the Swedish Foreign Affairs Ministry. Sweden is willing to share its experience with Bulgaria in the spheres of energy efficiency, environment protection, waste recycling and military equipment. Sweden uses human waste for fuel in forty small power plants. Swedish experts presented offset projects with possible investors like SAAB, ABB Group and AstraZeneca. Interest has been shown in the purchase of Gripen aircraft.

 

Lukoil poised to acquire Petrol assets

Fuel distributor Lukoil Bulgaria, owned by Russian oil giant Lukoil, will acquire assets from the portfolio of Petrol, the nation's biggest fuel retailer, it transpires from a notification sent to the local anti-trust authority. Lukoil Bulgaria is seeking regulatory approval to buy the Iliantsi petrol depot in Sofia, a facility owned by Petrol subsidiary Naftex Petrol. Market sources said off the record, that Lukoil has also negotiated the purchase of some Petrol filling stations, a deal that will also require regulatory review. No one at either Lukoil or Petrol was commenting on Wednesday. The Iliantsi facility is licensed in pursuance of the Compulsory Oil and Petroleum Products Reserves Act. It has a storage capacity for 50,000 sq m diesel fuel and 30,000 cu m car petrol. According to the Petrol website, the Iliantsi depot generates the biggest share of its domestic wholesale business. At the moment, 70 Petrol-owned filling stations operate under the Lukoil brand and are stocked by Burgas-based oil refinery Lukoil Neftochim. The chatter about a possible Petrol sale started over the last couple of months after majority owner Petrol Holding increased its stake to over 90% following the transfer of several large blocks of shares, causing the company to be dropped from the SOFIX blue chip index. The management explained that the buyback aimed to shelter the stock from the raging market crisis. In 2007, Petrol disposed of assets not essential for its fuel retail business, including oil depots and land plots in some large cities.

Fuel retailer Eko Bulgaria to buy 7 Tempo Petrol stations

Eko Bulgaria, part of the Greek petrochemicals company Hellenic Petroleum Group, will buy for an undisclosed amount Tempo Petrol, a minor local fuel retailer. The deal is pending approval by the Bulgaria anti-trust watchdog. The regulatory nod, expected in a month at the latest, should not be a problem because Tempo's share of the domestic fuel retail trade is estimated at a scant 1% or less. Tempo is selling seven of its nine filling stations and one fuel repository. The deal carries a price tag of around 10 mln euro, according to industry experts. All transacted assets with the exception of one locations are based in Sofia. Tempo is holding on to its filling station in Sofia residential district Mladost which is believed to account for at least 20% of the value of all Tempo assets. According to unconfirmed reports, Tempo owner Raicho Genov plans to develop redevelop the Mladost site into an office property. Despite its small market reach, Tempo enjoys comparatively strong brand recognition. The Greek owners of the Eko chain intend to pump some 150 mln euro in the expansion of the franchise in Bulgaria. The retailer currently has 50 outlets and a 4% market share which ranks it as the nation's no.5 right after Petrol, Lukoil, Shell and OMV. Hellenic Petroleum plans to double the number of its filling stations in Bulgaria and boost market share to 10%. Eko Bulgaria is in the running to acquire the local Opet/Aygaz business of Turkish conglomerate Koc. It is competing with Rompetrol, Lukoil and OMV.

RWE favored for Bulgaria nuclear stake

German utility RWE is poised to become the key investor in a planned Bulgarian nuclear power plant, a source close to the process said on Monday. The country short-listed RWE and Belgian Electrabel, owned by France's Suez for a 49% stake in the �4.0 billion($6.18 billion) plant at the Danube River town of Belene earlier this month. "RWE is the clear favorite for now," the source, who asked for anonymity, said. "There are talks between the two bidders to see whether they can share the minority stake between them, with RWE having the leading role." Bulgaria wants the 2,000 megawatt nuclear plant to make the country a major electricity exporter in the Balkans again after it was forced to shut communist-era reactors as a condition of joining the European Union.Last week, Bulgarian Economy and Energy Minister Petar Dimitrov said the process is advanced and a winner for a strategic partner in the plant, to be controlled by state owned utility NEK, could be picked within days. He said he expected to see whether the two bidders will sweeten their offers and to determine the stake they would like. The source said RWE has offered about �400 million ($618 million) in investment immediately so that the project to build two 1,000 megawatt reactors starts quickly. The source said the global credit crunch makes the financing of the plant, whose capital cost could reach �6 billion, difficult and RWE's offer has played a vital role. Another source, who also asked for anonymity said RWE was looking into ways to take a partner. Dimitrov has said that NEK would choose a lead manager for the financing of the plant once it picks a strategic partner or partners for the minority stake.Two French banks, Societe Generale and BNP Paribas, have expressed interest in structuring the debt for Belene, sources close to the process have said. Moscow had offered to finance the plant, but Dimitrov said the country was not looking into that option. NEK has contracted Russia's Atomstroiexport, controlled by gas company Gazprom, along with France's Areva and Germany's Siemens to build the plant. The reactors are expected to come online in 2013-2014.

Philip Morris says raises market share in Bulgaria to 9.5%

 

Tobacco giant Philip Morris on Monday said it expanded its market share in EU newcomer Bulgaria to 9.5% from 9.0% in December. According to the data of [global research firm] ACNielsen the market share of Philip Morris on the Bulgarian market in value terms is 9.5%," the Bulgarian unit of Philip Morris said in a statement. Philip Morris Bulgaria has said it seeks to achieve a double-digit market share in 2008. Bulgarian former state monopoly Bulgartabac dominates the local cigarette market. However, it started to gradually lose market share to global majors, which sharply increased their imports to Bulgaria, after the country joined the EU in January. Philip Morris entered the Bulgarian market in July 2006 by launching its Marlboro and Parliament cigarette brands. It sells also its L&M, Assos, Virginia Slims and Bond Street cigarettes in the country.

 

More than 300 000 bulgarians flew with Lufthansa in 2007

 

Despite the big popularity of low-cost airlines, Germany's Lufthansa reported on Tuesday (March 18) a considerable growth in the number of clients along its destinations from and to Bulgaria - 310,000 passengers flew with the air carrier's planes in 2007. According to the company's General Manager for Bulgaria and Albania, Gabor Horvath, their number is expected to go up by more than 10% this year. Lufthansa's market share in our country, reported on the basis of sales, is 16%, which rates it first among foreign airlines in Bulgaria. Mr. Horvat explained as well that in order to maintain the number of passengers' growth a third daily flight from Sofia to Frankfurt will be included in the company's summer timetable, and on March 30 a line to Zurich will be opened via Swiss Air Lines (SWISS), which is within the Lufthansa group. The company's flights from Sofia to other countries are currently 56 in a week. The Miles & Morе programme is another way used by Lufthansa to attract clients. It enabled regular passengers to collect points for free tickets and bonuses. More than 25,000 Bulgarians have already become part of it. The �20M joint project between Lufthansa Technik and Bulgaria Air for the construction of service station for maintenance and repairs of Airbus 320 and Boeing 737 aircraft, will be ready till autumn, Gabor Horvath assures. Three hundred people who will work there have been already hired. They are presently getting the necessary qualification in Germany, Hungary and Ireland. The number of personnel is expected to reach 360 next year. Meanwhile, Aage Dunhaupt, Director of International Communications for Lufthansa Technik AG, announced that the company's 2007 proceeds totalled �22.4BN, and its profit reached �1.7BN, almost double the amount for 2006. The air carrier plans to invest �14BN in the purchase of other planes and another �150M in the renewal of old aircraft.

 

 

 

 

Unit of Spain's FCC plans to buy Bulgarian waste management company

 

Waste management company .A.S.A. International Environmental, part of Spanish-listed Fomento De Construcciones Y Contratas (FCC), plans to buy Bulgarian-registered peer Sheele Bulgaria for an undisclosed sum, Bulgaria's anti-trust body said on Tuesday. The aim of the company .A.S.A. International Environmental is to enter new markets and expand services it offers to its clients," the Commission for Protection of Competition (CPC) said in a statement. A.S.A. International Environmental's director for emerging markets, Erich Padaurek, declined to comment when contacted by SeeNews. The buyer, which intends to acquire the Bulgarian company through its Austrian unit, plans to build waste treatment plants and depots, the CPC said, adding it has approved the planned deal. In southeast Europe .A.S.A. has subsidiaries in Bulgaria, Bosnia and Herzegovina, Croatia, Romania and Serbia. Sheele Bulgaria is fully owned by domestic group RSB, which is 75%-British owned. FCC has taken part in various infrastructure projects in Bulgaria and last year signed a 100 million euro ($156 million) deal for the construction of a bridge over the River Danube, linking the southeast European country with neighbouring Romania.

Traditional Wine Expo 'Vinaria 2008' starts in Sofia

The 16th edition of the International exhibition for viticulture and wine production “Vinaria 2008” starts today at the International Fair in Plovdiv (Bulgaria), informed BTA. 554 countries from 32 countries will take part in the event. Co-organiser of the event is the National Vine and Wine Chamber.The 'Vinaria' exhibition is included in the calendar of the Global association of the exhibition industry – UFI since 1997.“Vinaria” presents the novelties in the field of vine-growing and wine production throughout the world. Every year the event grows in scale and in number of participants. This year it will be opened by the minister of economy and energy Peter Dimitrov. Within the framework of the exhibition, a conference on the development of viticulture in the South East European countries and expansion of the wine market will be conducted.Ministers, vice-ministers and agricultural istitutions from the region will take part in the discussions. 

‘Stroyko 2000’ Building Expo Opens Doors

Over 7000 Bulgarian and foreign firms will present their production on the exposition for architecture, building and furnishing ‘Stroyko 2000', which starts in National Palace of Culture (NDK). The 30^thedition of the forum will be opened today be the vice-minister of regional development and public works Dimcho Mihalevski.‘Stroyko 2000' Expo will be opened every day to April 1.   

 

 

 

 

 

 

 

 

 

ANALYSIS:

 

If rulers are right, prices have gone mad

Publication: Banker Daily

 

Strange things happen with prices in Bulgaria, especially with those of energy. High-ranking and not so high-ranking officials are constantly trying to persuade us there should be no price hike or at the last resort - there will be one, but it will be small and at the expense of that our incomes would increase by more. Let's take for instance Prof. Konstantin Shoushoulov, Chairman of the State Energy and Water Regulatory Commission (SEWRC). In the end of last year the expert said that as of the summer of 2008 electricity prices could even go down and gas would be hiked as planned - twice by some 8-9% each time. Indeed, as of January 1 the price of natural gas was raised by just 9.87% to BGN365.64 per 1,000 cu m, although Bulgargas had demanded a 33% hike. The regulatory body returned the proposal and a few days later the gas company corrected the price increase to 25.46%, but finally got a hike three times lower than initially demanded. Experts the explained to the BANKER weekly that the almost 10% increase completely covers the more expensive natural gas on entering our country, but would influence adversely the gas company's profit. Now, three months later, the situation is being repeated. Some ten days ago Bulgargas demanded a 32.07% hike, justifying its requirement by the lower price of gas, approved by the SEWRC for the first quarter of the year. Prof. Shoushoulov plainly explained that such claims were entirely groundless and should be tangibly reduced. And the Minister of Economy and Energy Peter Dimitrov said "it was not possible for price of fuel to go up by 6% on entering the country and Bulgargas to demand a 32% hike". And while the gas company's experts were calculating again the percentages, it became known that the regulatory commission had already prepared its draft decision for a price increase of natural gas by 13% as of April 1. Such amplitudes between the demanded and permitted price are quite strange and logically comes a suspicion if the two sides have not agreed to stage a somewhat comical play. The gas holding demands a price increase that is three times higher than the SEWRC is inclined to approve, the monopolistic importer does not agree, bringing forth as arguments complicated and secret formulas and international quotations... And afterwards three times lower hikes are announced and everybody is happy. The corrected demand of Bulgargas will be discussed at an open meeting of the SEWRC on March 25 (next Tuesday) and some changes in the scenario are expected this time. We shall probably hear that the three-fold decrease of the demanded gas prices won't be at the expense of a shrinkage of the quantities ordered by the holding as the usual practice is, but anyway it will have to be content with a low profit within some 2-3 per cent. The situation regarding central heating prices is different. The hike this time won't be by the usual 10% or so but by 20 per cent. Prof. Shoushoulov's explanation was that "the tariffs of central heating utilities have not changed since last July and meanwhile natural gas prices have been hiked each quarter". In fact that forecast might not come true and it should not be ruled out that central heating prices would be hiked by a little more than 30% (as the real cost price of heating energy is). Starting from April, water is expected to grow more expensive (and not just in Sofia), three months later there will be another leap in the price of natural gas and respectively central heating, as well as an increase in the price of electricity. It is almost certain that no later than June the scene with the bad companies and the good regulator will be played again, and what is more - in three alternatives - gas, electricity, and water. Of course, the audience should remain convinced that if it wasn't for the good rulers, its game would be up. As a matter of fact, energy prices do not grow in Bulgaria alone but all over the world. However, nobody is giving rosy promises but is making everything he can to counter the leap. Alternative fuels are being sought, deliveries are diversified, profits are reduced... The Bulgarian cabinet made some efforts, too, but in a different direction. By Christmas 2006, Bulgaria had bought Europe's cheapest blue fuel and was paid the highest transit fee (in a world scale). However, 15 months ago the then minister Roumen Ovcharov corrected the 1998 trade agreements, even though they would be valid until 2010. As a result, the price of natural gas for the country went up and the transit fee paid by Gazprom shrank about three times in favour of the Russian gas giant. A new schedule was negotiated according to which gas prices at the entry of the state should be increased twice a year. The percentage of the increase was not made public, but Ovcharov declared that the aim was to raise the tariffs with ease so that they would not hit the industry and the households. As his heir, Peter Dimitrov, explained last week, the increase that was settled amounted to 6 per cent. We should also add the change in the price of alternative oil products included in the formula for Russian natural gas deliveries which is updated every quarter. Therefore, starting from April 1, the price of blue fuel at the Bulgarian border will actually grow by 13% (which will guarantee a 3% profit to Bulgargas again) and the rulers will approve this figure. Then they will approve the next increase in the price of heat, water, electricity...

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bulgaria's GDP per capita more than 60% below the EU-27 average

Publication: www.profit.bg

According to preliminary data on 2006, the GDP per capita measured in terms of purchasing power standards (PPS) in the 27 EU countries varies from 1 to more than 7 times, the National Statistics Institute (NSI) reports. The real GDP per capita index in Luxembourg is more than 2.5 times higher than the average for the EU-27. In Ireland is about 40% higher and in Denmark, The Netherlands, Austria and Belgium it is about 20% above the EU-27 average. The index exceeds the average figures in Great Britain (by 15%), in Finland, Germany and France (by 10%). Italy and Spain are around the average for the EU-27. The figures for Cyprus, Greece and Slovenia are between 5 and 15% lower. GDP is also 20-25% lower in the Czech Republic, Malta and Portugal (by 20-25%), as well as in Estonia, Hungary, Slovakia, Lithuania, Latvia and Poland (between 30% - 50%). The GDP per capita of the two newest EU countries Bulgaria and Romania is more than 60% lower than the EU-27 average. The data is published by Eurostat. It compares the real GDP per capita index measured in terms of purchasing power standards (PPS).

Luxembourg	280	Czech Republic	79
Ireland	144	Malta	77
Holland	131	Portugal	75
Austria	129	Estonia	67
Denmark	127	Hungary	66
Belgium	123	Slovakia	63
Sweden	121	Lithuania	58
Great Britain	118	Latvia	56
Finland	117	Poland	53
Germany	113	Romania	38
France	113	Bulgaria	37
Italy	104	Croatia	50
EU25	104	Turkey	29
Spain	102	Macedonia	27
EU27	100
Cyprus	94	Norway	187
Greece	89	Iceland	134
Slovenia	87	Switzerland	133

 

 

 

 

 

NSI: The business climate continues to improve

In March 2008 the economic conjuncture in the country remained favorable. The total business climate indicator rose for a third consecutive month to 0.5 percentage points above the February level, the National Statistics Institute (NSI) informs.

Industry. In March the composite business climate indicator in industry rose by 1.5 percentage points. It is yet 3.1 percentage points below the long-term maximum for the last 10 years. At the same time, managers' assessments of the present production activity are more moderate compared to those expressed in February. The stocks of finished goods increased in the last month and the production assurance with orders fell slightly as result of the lower domestic demand. The uncertainty in the economic environment and the insufficient domestic demand remain the main problems for the enterprises in the branch. The negative influence of the factor “weakness in economic laws” also increased. The factor “shortage of labor force” was also higher, it was mentioned by 19.3% of enterprises.

Construction. In March the composite business climate indicator in construction did not change. Managers described the present economic conjuncture in the sector as more favorable. As to their prognoses for the next 6 months opinions slightly shift from most optimistic to more moderate. The construction activity was higher compared to February and the prognosis for the next three months are for it to remain higher. Expectations about employment opportunities in the branch are also more optimistic. The main reasons limiting the activity the sector are the competition in the branch, the uncertainty in economic environment and the shortage of labor force. Managers expect selling prices to be on the rise in the next three months.

Retail trade. In March 2008 the composite indicator of business climate in retail trade remained unchanged from previous month. Managers' assessments were positive. 61.9% of managers expect the situation to remain favorable and 36.4% say it is likely to improve. Volumes of sales and orders are not likely to change, according to forecasts. The main factors limiting the activity in the branch continue to be insufficient demand and competition. More than one third of managers in retail trade expect selling prices to rise. This has been a tendency since August 2007.

Service sector. The composite indicator “business climate in service sector” kept its comparatively high level (48.2%) in March 2008, although it decreased slightly (by 0.4 percentage points) compared to February. The manager’s assessments about the present business situation and their forecasts about its development over the next 6 months remained favorable. Competition continues to be the most serious factor limiting the activity (according to 60.4% of the managers). Managers do not expect selling prices to rise in the following three months.