불가리아 주간 경제 뉴스( 28 MARCH – 4 APRIL 2008 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 28 MARCH – 4 APRIL 2008 )

 

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

·        Japan lends Bulgaria �230 M for construction of Varna, Bourgas container terminals

·        Container Terminals in Varna, Bourgas need to be ready in 2014

·        Bulgarian banking assets top nation's GDP

·        Finance minister upbeat on macroeconomic outlook

·        Industrial inflation reaches 13.9% in Feb

·        Technologies for energy production from renewable sources are expensive

·        EBRD Provides � 20 M for energy-saving projects in industry

·        Stanishev and Bush meet in private

·        Wheat prices to drop from 2007

·        Portuguese and Bulgarian entrepreneurs sign cooperation agreement

·        KPMG to inspect the approved projects under SAPARD 2007

·        The banks in Bulgaria are hunting for clients

·        Bulgaria's budget surplus reaches BGN 651 M

·        Bulgaria, Romania among 8 countries to join grand highway project

·        EC returns to Bulgaria �104 M

·        Bulgaria in search for bidders to construct Sofia's Underground

·        IFOAM director: Bulgaria's future lies in organic farming

·        Varna-Kavkaz ferryboat line to be launched

 

 

 

 

 

 

 

 

 

INVESTMENTS:

 

·        Bulgaria remains attractive to investors

·        Bulgaria largest investor in Serbia

·        Belgian investors gather on business forum in Plovdiv

·         Gazit-Globe to invest in three projects

·        Investors become forced donors

·        Bulgaria Litex Commerce To Pour 28 Mln Euro into Hotel Complex

·        Albena resort to invest �7 M in own golf playground

·         Orchid Developments named investor of the year by Bulgarian magazine

·        �60 M new ski complex in the Rhodopes to be build

·        Bulgarian retailer Aladin to build �4.6 M mixed-use building in Sofia by 2010

 

 

COMPANIES:

 

·        Companies in Bulgaria receive business superbrands awards

·        Sony оpens a SEEurope call center in Bulgaria

·        Eight new airplane companies to work with Bourgas airport

·        Finnish companies interested in Bulgarian market

·        Companies late with carbon dioxide quotas reports

·        Bulgarian arm of Sisecam to export auto glass in 2010

·        Bulgarian businessman puts up for sale stake in Plovdiv Fair

·        Navigation Maritime Bulgare to be sold within week

·        Unipharm to be traded on stock exchange Kaufland opens BGN 10М store in Blagoevgrad

·        Investors advised to move manufacturing outside Bulgaria capital

·        Sofia to build five underground car parks

 

 

ANALYSIS:

 

·        Doing business in Bulgaria grows riskier

• Maritza-Iztok mines expand, TPP too

 

 

 

 

 

 

 

 

Articles:

 

 

MACROECONOMY:

 

Japan lends Bulgaria �230 M for construction of Varna, Bourgas container terminals

 

Bulgarian Deputy Prime Minister and Foreign Minister Ivailo Kalfin and Japan's Ambassador in Sofia Tsuneharu Takeda Friday signed notes on a 230 million euro loan from the Japan Bank for International Cooperation for construction of container terminals at the ports of Bourgas and Varna.This is the sixth largest such loan to be extended to Bulgaria as part of Japanse Official Development Assistance.After the signing, Kalfin said that the construction and extension of the container terminals in Varna and Bourgas will boost Bulgaria's competitiveness in participating in cross-border transport flows. He added that the project will contribute to the development of this country's passenger shipping.Ambassador Takeda said that the Japanese Government has provided Bulgaria with various forms of assistance approximating an aggregate of 770 million euro.The project should be implemented urgently so as to meet the growing need of cargo handling at the ports of Varna and Bourgas, the diplomat also said. He expressed the hope that all Bulgarian decision-makers will cooperate for the fastest possible ratification of the project by the Bulgarian Parliament.

Container Terminals in Varna, Bourgas need to be ready in 2014

The containerised cargo terminals at the Bulgarian Black Sea ports of Varna and Burgas will be commissioned into operation in October 2014, said transport minister Petar Mutafchiev. The project will receive a 226.14 mln euro loan from the Japan Bank for International Co-operation (JBIC). The two countries should sign the final loan agreement by May 19 with the Bulgarian parliament due to ratify the document by the end of June. The headway on the project allows the to start farming out in early August the first project-related activities. Bulgaria will tender the design, construction and site supervision works and will hire a consultant to select operators for the two cargo terminals. The consultant is expected to be picked by November from a field of three candidates, two nominated by JBIC and one by the Bulgarian side. The design work on the two facilities is expected to take up the whole of 2009. The quay of the Varna terminal will be 500 m long, going 400 m inland. To achieve the planned depth, it is estimated that 420,000 cu m of sediment will have to be dredged out. The terminal will have a 150,000 TEU cargo handling capacity. The new terminal site will have a footprint of 15.7 ha. Mutafchiev said the maximum term for the completion of the construction works is seven years, identical to the grace period of the JBIC loan facility. The format for the concession arrangement for the two ports should be determined in April 2010 followed by the selection of a concessionaire, said Mutafchiev.

 

 

 

Bulgarian banking assets top nation's GDP

The balance sheet assets of the Bulgarian banks has outgrown the nation's GDP, shows data of the central bank circa end-2007. The combined assets of the local lenders stood at 59.1 bln levs towards the back-end of last year while data of the national statistical office released in mid-March put GDP at 56.5 bln levs. By late January 2008, banking assets had dipped below the end-December high but remained just ahead of the GDP figure at over 57 bln levs. The robust lending growth has increased the GDP share of banking loans to 68%. The banks were especially active the last quarter when they added 15% to their gross loans (6 bln levs) with four lenders contributing more than half the growth. Business loans rose by 3.2 bln levs in Q4 2007 to 24.3 bln levs. The segment posted an annualised growth of 71% by the end of 2007. The central bank data shows that the corporate lending segment welcomed another player in 2007: Alpha Bank. The franchise increased its business loans 4.5 times last year from 214 mln to 993 mln levs. United Bulgarian Bank and Raiffeisenbank (Bulgaria) EAD also boosted corporate lending to speed past First Investment Bank which, in turn, outstripped Eurobank EFG Bulgaria. Piraeus Bank Bulgaria also posted a hefty increase in corporate lending last year, up 146%.

Finance minister upbeat on macroeconomic outlook

Full-year inflation in Bulgaria will slow down to 6.9 per cent, Bulgarian Finance Minister Plamen Oresharski told SeeNews corporate newswire, re-iterating the figure targeted in this year's budget.Last year inflation soared into the double digits, closing the year at 12.5 per cent. For the first two months of 2008, cumulative inflation was 2.6 per cent and year-on-year inflation at end-February was 13.2 per cent, according to data from the National Statistics Institute (NSI)."We expect that the harvest will not be as bad as it was last year, that fuel prices will not go up at a rate as high as last year's and that we will not see last year's effect of joining the European Union, that euphoria for higher salaries which do not match productivity," Oresharski said.The minister believes the current account deficit, seen as the main risk to the economic stability alongside inflation, will reach 21.9 per cent of GDP, in line with the previously announced governmental forecasts.Foreign direct investments are also to be on a par with inflows last year, which were at 6.1 billion euro. Asked whether the global financial crisis would have an impact in Bulgaria, Oresharski said the negative effects would be minimal.

Industrial inflation reaches 13.9% in Feb

 

Producer price inflation reached 13.9% in February 2008, year on year, the Bulgarian National Statistical Institute said. The inflation was mainly due to the change in prices in the processing industry, which went up by 15.3%.The biggest rise was registered in food and drink prices, which jumped by a total of 22.6%. Other activities with a relatively big price revision were the manufacture of metal products without machinery and equipment (13.7%), of chemical products (7.6%), and of non-metallic mineral products (7.3%).

 

 

 

 

 

Technologies for energy production from renewable sources are expensive

 

The technologies connected with the renewable energy sources were rather expensive, Velizar Kiryakov, member of the Association of ecologic energy producers, said on the occasion of the forthcoming Fourth Congress for Energy Efficiency, Focus News Agency informs. According to him companies in Bulgaria had no legal obstacles to produces technologies for the use of inexhaustible energy sources, but companies don’t easily share their know how. Veselinka Petrova – Koch, one of the organizers of the congress, said that sun energy in Bulgaria is more intensive than in Germany and that meant that investments would quickly pay back.

 

EBRD Provides � 20 M for energy-saving projects in industry

 

The European Bank for Reconstruction and Development (EBRD) has launched a 20 million euro credit programme on enhancing the energy efficiency of industrial companies' operation, EBRD Director for Bulgaria James Hyslop said on Tuesday.The credits will be extended to two banks, UniCredit Bulbank and United Bulgarian Bank. on their part, the two banks will float credits to private sector companies at favourable interests for the implementation of energy efficiency projects.The programme will be operational by 2009 and is expected to cover 40 projects. Each project wil be financed by the maximum amount of 2.5 million euro. The implementation of the projects should result in 20 per cent reduction of energy costs and greenhouse gas emissions. Free technical assistance and consultations will be provided to the companies when submitting their bids and upon the project implementation. If the project is successful the copmpany will get back 15 per cent of the project value, said Ivan Hinovski of the Enkon Services consultancy company.Companies will reduce three-fold their costs, if they invest in energy-saving activities rather than building up additional facilities, said he.While in Europe households are the biggest energy consumer with a share of 40 per cent, in Bulgaria, it is industry which is the top energy consumer accounting for 39 per cent of the overall energy consumption, said Energy Efficiency Agency Exectuvie Director Tasko Ermenkov.

Stanishev and Bush meet in private

PM Sergei Stanishev met in private US President George Bush during the NATO summit in Bucharest.High-ranking experts form the US Department of Homeland Security will come to Bulgaria next week to discuss the issue of US entry visas for Bulgarians, said Stanishev after the meeting. George Bush confirmed his positive attitude towards visa waiving for Bulgarians.Minister of Foreign Affairs Ivailo Kalfin expects the talks with the experts to be focused on various parameters of the road map, signed by Bulgaria to join the Visa Waiver Program. We expect to frame up a certain concept of an agreement for the Visa Waiver Program and we will insist on working towards that, said Kalfin. Minister Kalfin warned, though, that even if a document is signed that would not mean an automatic lifting of the current visa regime.

 

 

 

 

Wheat prices to drop from 2007

 

This year's starting prices of wheat are expected to be lower than in 2007, Bulgarian Stock Exchange(BSE) CEO Vasil Simov said.The 2007 starting price was 200 US dollars per tonne (before VAT), or around 150 euro at April 2007 exchange rates. This year, final offers for the new harvest are already being made at around 350 leva, or around 180 euro. Last year's harvest is currently trading at 450-500 leva per tonne. This price has levelled off in recent months, as has the price of flour, 700-720 leva per tonne, up from 467 leva/tonne last year.Interestingly, cereal prices went up last summer, while this usually happens in winter, Simov said.Maize went 40 per cent up, from 280-335 leva/tonne in 2007 to 480-485 leva/tonne in March 2008. This is a lower rise than in other EU countries, the BSE said. Around 58.2 million tonnes of maize are expected to be harvested in the EU this year, compared to 47-48 million tonnes in 2007, which is a 13 per cent rise in an 8 per cent larger field area.Sunflower seed prices doubled, from 450 leva in 2007 to 900 leva in 2008, as has sunflower oil, up from 1.30 leva to 2.65 leva/litre wholesale. Bulgarian margarine sunflower and sunflower oil are the cheapest in the EU and in the region,Simov said. Sugar has been firm at around 1.26 leva/kg.

Portuguese and Bulgarian entrepreneurs sign cooperation agreement

Bulgarian small and medium enterprises promotion agency (BSMEPA) and the Association of small and medium enterprises in Portugal (APME – Portugal) will sign a cooperation agreement at the Bulgarian ministry of economy and energy.The two sides under this agreement will be partners in the field of development of the small and medium enterprises. The agreement includes also obligations for exchange of business information. The two sides will further cooperate in the organization of events beneficial to the small and medium enterprises.

KPMG to inspect the approved projects under SAPARD 2007

KPMG-Bulgaria will inspect the approved projects under the SAPARD program (Special accession program for agriculture and rural development) for 2007. This became clear at a public tender of the Bulgarian financial ministry, announced several days ago, informs agro.bg. The European Anti-Fraud Office OLAF demanded from Bulgaria additional audit on the scandal with the SAPARD money until 30 April. This is pointed as the reason for public tender for inspection not to pass under a public procedure but to be given directly to a implementor.KPMG will have to check the approved projects and whether the received money has been spent according to the contracts.

The banks in Bulgaria are hunting for clients

 

For several months now bankers have lured depositors with increasing interests on their savings. Raiffeisenbank Bulgaria offers their clients a three-year deposit the interest on which reaches twelve percent at the end of the period. MKB Unionbank JSC offers 1.5-year deposit with interest for the period of 8.18%. According to data of the Bulgarian National Bank, the average interest rate on the new bank deposits in January was 6.84%."The interests on deposits will be going up, but we will not go to deposit war," UniCredit Bulbank CEO Leon Hampartsumyan said. To his words, the interests on bank loans and deposits will go up by 0.5 or 1% by the end of the year. The popularity of the bank deposits is growing against the background of the crisis at the stock markets, so our bankers expect a fifty-percent increase in the number of bank deposits by the end of the year. At the end of last year, bank deposits in Bulgaria totaled 18.8% billion levs (1euro=1.95levs).UniCredit Bulbank will also announce a new deposit with an annual interest of 8% for the whole term.

Bulgaria's budget surplus reaches BGN 651 M

The surplus to the Budget at the end of February was 651 million levs (1euro=1.95levs), sources from the Finance Ministry told The Standart. About fifteen percent of the planned revenues from taxation for 2008 have already been collected. Experts at the Finance Ministry say that at the end of February, the revenues to the Fisc from taxation reached 2.5 billion levs. Of them, the revenues from corporate tax are the lowest so far - 145 million levs, or only 6.8% of the planned for the year. Most of the companies had to pay their corporate tax for last year by March 31, and most of them waited until the deadline.

 

Bulgaria, Romania among 8 countries to join grand highway project

 

A 7,000-kilometer-long highway, which will connect eight of the Black Sea Economic Cooperation Organization member-states, is to be constructed in the framework of a memorandum to be signed by the countries.Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey and Ukraine are the state that will allocate money from their budgets and national funds to realize the project. EU funds, the European Investment Bank, the European Bank for Reconstruction and Development and the World Bank will also help the motorway's construction.Bulgaria's government is to discuss the memorandum conditions on Wednesday.

EC returns to Bulgaria �104 M

To Bulgaria will be brought back 103,72 million EUR from the direct payments, stated Agriculture Minister Nihat Kabil. He was informed with a letter by the EC, received in the end of last week.The minister explained that there were no ceased sources by the Commission over the programs of the Agriculture Ministry.The EC's certificated agency sees 4 weaknesses of Bulgaria - in the administrative capacity, the need of better book-keeping of sources over market mechanisms, insufficient capacity in regional offices of the Agencies for applying the program for village regions and the need in the internal order of the repaying agency.It is about time Bulgarians to stop to believe that Brussels is one big cash bag and if something is wrong in here the bag is not coming, commented Minister Kabil.

Bulgaria in search for bidders to construct Sofia's Underground

Bulgaria is launching a new tender for an international bidder to build a stretch of its capital's underground railway, the transport ministry said on Wednesday. Sofia's municipality company Metropoliten will accept offers for the construction and overhaul of a 6.5 kilometre, seven-station stretch of the underground by May 27. The stretch should be completed in about four years, Reuters reported. This is the second tender for the section, as the first one was cancelled last month after the offers submitted were well above the planned budget for the work. The Balkan country launched a small section of the Sofia subway in early 1998. It plans to build three railway lines across the capital, where more than 2 million people, or roughly a quarter of Bulgaria's population, live. The transport ministry said the Sofia's subway stretch will be backed by indicative 145 million euro ($226.6 million) of European Union funds. Sofia's underground is expected to become fully operational by 2020.

IFOAM director: Bulgaria's future lies in organic farming

The director of the International Federation of Organic Agriculture Movements's (IFOAM) EU Group Marco Schlueter told a joint press conference Wednesday that Bulgaria's future lies in the production of high-quality delicious food, BTA reported.
Also present at the news conference on organic agriculture (OA) was Deputy Agriculture Minister Dimiter Peichev. Schlueter advised the country to make OA a priority and to increase the area dedicated to it. Currently, 9,370 ha in Bulgaria are dedicated to OA. Schlueter said the number of projects dedicated to OA under the Rural Development Programme also needs to increase. Schlueter also pointed to Bulgaria's potential to increase its market for traditional foodstuffs abroad, such as herbs and yoghurt.It is very important for Bulgaria to keep its organic seeds, fruits and vegetables uncontaminated, Schlueter said. He urged Bulgaria not to grow GM organisms and to retain current legislation restricting this.A total of 164 million leva (around 82 million euro) have been set aside for OA over the 7-year period of the National Plan for OA Development, which aims to increase both supply and demand for organic crops, so that by 2013, 3 per cent of all foodstuffs sold in the country are organically farmed, and 8 per cent of all farmland is dedicated to OA, Peichev said.Agri-environmental payments are one of 22 measures applicable under the Rural Development Programme for 2007-2013. This measure has a budget exceeding 435 million euro. Agri-environmental payments will be available for five years, with 82 per cent of the money coming from the EU and 18 per cent from national co-financing. Depending on the chosen activity, payments per unit of surface area will range between 20 euro and 505 euro a year, Peichev said. Schlueter is in Bulgaria for the IFOAM Board's annual seminar, to be held in Plovdiv on April 3-4.

Varna-Kavkaz ferryboat line to be launched

Bulgaria and Russia will have a direct ferryboat and railroad line between the ports of Varna and Kavkaz, as the Bulgarian Government ratified the agreement with Russia, signed on January 18, 2008. The two countries reached an agreement on the project last April and documents were signed during the visit of Russia's President Vladimir Putin to Bulgaria in January. The ferryboat line will provide direct freight between the two ports.The agreement on the project, prepared by the Council of Ministers, provides the framework and the terms and conditions of the freight between Bulgaria and Russia. The ferryboat line provides an opportunity for interoperability between the two ports. As the agreement is open, third parties are allowed to join in at any time.

 

 

 

INVESTMENTS:

 

 

Bulgaria remains attractive to investors

 

The worldwide liquidity crisis has not affected East-European markets and Bulgaria, Heinz Sernetz, executive director of Raiffeisen Investment Austria, said. Bulgaria will see fresh deals in telecommunications, energy, food processing, and software, Ivaylo Gospodinov, managing director of Raiffeisen Investment Bulgaria, said. He added that the largest deal in 2008 will be Belene nuclear power plant, where Raiffeisen Investment Bulgaria is consultant. An investor for the project will be chosen in a couple of months. Raiffeisen Investment is also interested in participating as consultant on the privatisation of Toplofikatsia-Sofia and Bulgartabac Holding.There will be more mergers and acquisitions in 2008 but their volume will be lower compared to the year before, Gospodinov said. Raiffeisen Investment Bulgaria is preparing four acquisitions with an average volume of between EUR 10 million and EUR 15 million. Foreign investors are interested in companies and projects worth an average of EUR 20 million, Gospodinov said.

 

Bulgaria largest investor in Serbia

 

Bulgarian companies are the largest investors in Serbia, data of the Serbian Chamber of Commerce show. Direct investment by Bulgarian companies in Serbia amounts to EUR 110 million. Some 29 enterprises have been acquired.Businessman Hristo Kovachki is a leading investor in Serbia with 15 factories purchased for EUR 110 million. His team is planning 2 big projects in the next five years: a coal-run thermal power plant of 600 mW and biofuel production from waste material of the canning industry.Another Bulgarian famous in Serbia is the ex-owner of Kremikovtzi, Valentin Zahariev, who is the only Bulgarian entrepreneur in Kosovo.Some 100 representative offices of Bulgarian companies have been registered in Serbia. The attractiveness of Serbia is due to its geographical proximity, as well as its favourable economic environment, Bulgarian investors say.

Belgian investors gather on business forum in Plovdiv

More than 16 Belgian firms, which have invested over 60 million BGN (30 million EUR) in Plovidv and the region, were invited on a common meeting, initiated by Belgian ambassador for Bulgaria Philippe Beke and Plovdiv mayor Slavcho Atanasov. The companies present the interest of different branches as brewery, construction, textile industry, high technology products, service, trade with freeze foods, machine construction and others. Accent during the meeting was put over the conditions of business development in Plovdiv and the region. The investors give high estimate to Plovdiv potential with a view to its location and the population for attracting more investments.The deepening lack of skilled personnel and the inflexible labour market were pointed out among the serious problems in front of the city. According to the participating in the forum the lightening of administrative regimes and the improving of infrastructure in Plovdiv and the region will contribute to the fast economical development.

Gazit-Globe to invest in three projects

 

Israel's leading real estate company Gazit-Globe will invest in three projects in Bulgaria. The land plots have already been acquired and construction will start shortly. Between 200,000 and 350,000 sq. m of offices, trade and entertainment areas will be built.
Gazit-Globe is active in Plovdiv and Sofia. In the capital, it plans two large projects: a trade and office park near the village of Lozen, and a complex with offices, trade and entertainment areas near Botevgradsko Chaussee Blvd. Near Lozen, a 5-hectare plot has been purchased, where construction will span over 600,000 sq. m. Gazit-Globe also owns 11 ha near Botevgradsko Chaussee, on which 180,000 sq. m will be built. A similar project will be carried out in Plovdiv. There the Israeli company owns a 20-hectare plot near the Trakia motorway with construction planned over 200,000 sq. m.

 

Investors become forced donors

 

Today's investors are constantly making donations worth millions of leva in the form of roads and sewerage. This gesture to municipalities is almost mandatory in order to obtain a building permit in Bulgaria. This is even more so for plots, which are about to be included in the construction zones of large cities and resorts. In theory, conductive infrastructure to a new construction site is an obligation of the municipalities but in practice I do not know an investor who relies on that, Metodi Metodiev, co-owner of Varna-based Marma Invest, said. His company is one of the hundreds that start a new construction project each year. In his case, the company has developed a comprehensive architectural plan and regulated the whole plot of 15.6 ha for residential development. The company will have to invest in a water pipeline, sewerage, and a road to the complex, because there is no such infrastructure in the former agricultural land. Thus, the first investor to enter a region provides the infrastructure to those to come afterwards. The more important issue, however, is that the investor is forced to donate this infrastructure to the municipality, after which it collects a fee, including from the investor, for connection to the already built facilities. According to Dimitar Savov, director of investment fund BLD, the value of infrastructure outside the construction borders of towns and villages may reach between 20% and 30% of the value of the entire project. The expenses are also covered by the buyers, because they affect the end prices of properties. In certain cases, those prices may reach up to EUR 50 per sq. m.

Bulgaria Litex Commerce To Pour 28 Mln Euro into Hotel Complex

 

Bulgarian company Litex Commerce will spend some 28 mln euro ($44.2 mln) on the construction of a holiday complex in the central village of Krushuna, said Letnitsa mayor Krasimir Djonev. The complex will feature a five-star hotel, three health complexes and a holiday village. Some of the flats will be rented out and others sold. No golf course will be built close to the complex. The firm acquired a 5.4 ha municipal plot for 930,000 Bulgarian levs ($751,000/475,000 euro). The whole project will sprawl on 10 ha. The construction works will take up four years. Until recently the region suffered from poor infrastructure. By the end of the year, however, it will have new roads funded with 2.3 mln levs ($1.8 mln/1.2 mln euro) from the EU’s SAPARD pre-accession programme.

 

Albena resort to invest �7 M in own golf playground

Albena resort plans to build its own professional golf playground, money.bg informed. The investment will amount on 7 million EUR, the resort director Krasimir Stanev. The playground is about to appear round Rogachevo village over surface of 500 decares. The preliminary design is work of a French architect. The object will be constructed on three stages. The first one - golf academy for training of players, will be realized in two years.

 

Orchid Developments named investor of the year by Bulgarian magazine

 

Bulgarian real estate developer Orchid Developments Group was named Building Investor of the Year by "1 to 1 in Construction" Magazine on Tuesday .The prize was received by Eli Egosi, the advisor to the CEO for Grand Mall Varna, one of the company's biggest projects in Bulgaria."We are very happy about being awarded. We have already invested EUR 200 M in the projects, developed in the country for five years," he said."I think this fact proves our indulgence and strong wish to continue working in Bulgaria," the advisor added.Orchid Developments has already broken ground at the site of the Grand Mall Varna, the company's EUR 107 M investment in Bulgaria's Black Sea port of Varna.The mall is part of the Orchid MultiUse Complex, which will include also 40 000 square meters of office space, and will be completed by end-2009.
Next month the company is to turn the first sod of a 16-storey building to be constructed in the coastal city.

�60 M new ski complex in the Rhodopes to be build

The constructions of ski centre ‘Mechi chal' starts in one month near Chepelate town (Rhodope Mountains). The project is on the amount of 60 million EUR and will be realized in two steps.The first one foresees the building of 4 seat lift with 2,000 skiers capacity. on the first station of the lift will be constructed parking places, restaurant and a hotel.This part of the plan will cost 15 million EUR.The second phase of the complex will start in 2009 when will be continued 35 km long runs for alpine disciplines and ski run.‘Chepelare' shareholding association is main investor of the project.

Bulgarian retailer Aladin to build �4.6 M mixed-use building in Sofia by 2010

 

Bulgarian consumer electronics retailer Aladin on Wednesday said that it will build a 9.0 million levs ($7.2 million/4.6 million euro) mixed-use building in the capital Sofia by January 2010. The construction of the building has already started and should be completed in January 2010," Aladin press relations officer Viktoria Encheva told SeeNews. The six-storey building, with a built-up area of 5,100 square metres, will accommodate offices, a medical centre, shops and a supermarket.Aladin is also building an 80 million levs shopping mall in Pleven, in northern Bulgaria, which should be completed by the spring of 2010. The real estate market in Bulgaria has thrived in the recent years with domestic and foreign investors drawn by prospects for high yields after the country joined the European Union in January 2007.

 

COMPANIES:

 

Companies in Bulgaria receive business superbrands awards

The strongest brands on the Bulgarian market received Wednesday evening the awards at the first edition of Business Superbrands Bulgaria. Superbrands, the world's largest independent arbiter of brands, awarded the companies at an official ceremony in the capital city of Sofia, at which the Energy and Economy Minister Petar Dimitrov was also present.A total of 500 top business brands operating in Bulgaria were selected in an independent Superbrands survey - business weekly Capital was recognised the top domestic brand and Google was named the top global brand.The selection and assessment of brands are universal around the world and consist of two stages - secret vote of the Superbrands board and a representative online vote of a wide range of business professionals.

Sony оpens a SEEurope call center in Bulgaria

The Japanese company Sony opened in Bulgaria a regional call center, which will serve clients of the company in 10 East European countries, informed from the company. Consumers from Bulgaria, Bosnia and Herzegovina, Romania, Macedonia, Slovakia, Slovenia, Serbia, Hungary, Croatia and the Czech Republic can get in real time updated information about products, prices, promotions, compatibility, problems resolution and guarantees.The contact telephone of the call center is 0700 1 SONY (0700 1 7669). The working time of the call center is from 9 am to 7 pm Bulgarian time for the country and from 8 am to 6 pm CET for the other countries. In the Sony Support Center, 12 consultants will serve the clients in 10 national languages. “The client-care is a priority for Sony and does not end with the sale. We would like the current and the potential clients of Sony to be able to get advice and help for products in every moment. The call center will also provide the so important for us feedback, which is important for the future planning of the products.”, comments Angel Kugiiski, regional manager for Albania, Bulgaria, Macedonia, Serbia and Montenegro.

 

Eight new airplane companies to work with Bourgas airport

 

The first tourists for the season will arrive at the airport of Burgas tomorrow, the correspondent of Focus News Agency informed. According to the Executive Director of the airport Kalin Barzov the forthcoming season will be interesting and tense. So far the airport has a 16% growth in flights and they hope this percentage would rise further.
Eight new airline companies have signed contracts with the airport - Air Berlin”, „Air Mediterranee”, „Air Baltiс Corporatiоn”, „Edel Weissair”, „Latcharter Аirlines”, „Swiss Sun”, „Seagle Air” and „Lviv Airlines”.

 

 

 

 

 

 

Finnish companies interested in Bulgarian market

 

Finland will open a trade representative office in Sofia in June 2008, ambassador Kauko Jamsen said during an official visit to Stara Zagora late last week. The decision was taken because of increased interest on the part of Finnish companies in doing business in Bulgaria. Trade between the two countries has almost tripled in the past 18 months, reaching EUR 200 million, Jamsen said. However, the number of Finnish tourists in Bulgaria is decreasing: in 2007, it went down by 25%. This is due to insufficient marketing by Bulgarian tour operators. Still, Bulgaria ranks third among Finns' favourite holiday destinations after Spain and Greece, Jamsen said. Bulgaria is an interesting place for hi-tech producers, as well as for companies in the energy, food processing, tourist, and environmental protection industries, the Finnish ambassador said. He cited as main problems the numerous licence regimes, sluggish tender procedures, the Public Procurement Act, widespread corruption, and the unreformed judicial system.

 

Companies late with carbon dioxide quotas reports

Only 94 out of 175 companies required to do so reported their verified carbon dioxide emissions for 2007 before the April 1 deadline to the Environmental Executive Agency (EEA) at the Ministry of Environment and Water Affairs (MOEW), Bulgarian Industrial Association (BIA) representative Dimitur Brankov told The Sofia Echo on April 2.EEA, MOEW and BIA representatives met on April 1 to discuss the carbon dioxide quotas re-distribution, but given the late reports, the three bodies decided to wait on the firms to submit their filings. Bulgaria's biggest steel mill Kremikovtzi has not filed its data yet, but is expected to do so within days, Brankov said.About 10 other companies, which do not have yet a MOEW permit for carbon dioxide emissions trade, have not submitted their 2007 reports either, but they are preparing them. Some companies that have permits for emissions trade have also been late in filing their data.The carbon dioxide re-distribution could be done in two ways, Brankov said. The first option was to do so in accordance with the data reported for 2007 by the companies. The second alternative, which MOEW supported, is for it to be done according to the plan Bulgaria officially presented to the European Commission (EC).The plan initially proposed that re-distribution was done within two periods: 2007 and 2008/2012 for about 67 million tones of carbon dioxide. EC however approved only about 42 million tones to be distributed.

Bulgarian arm of Sisecam to export auto glass in 2010

Turkish glassworks Sisecam will start exports of auto glass to Eastern Europe once it completes its four new factories near the city of Targovishte, in central Bulgaria, the chief executive of the company's Bulgarian arm Trakia Glass Bulgaria Gulsum Azeri said, as quoted by Dnevnik daily.The company already turned the first sod for the first plant, the executive added.Sisecam announced the $415 million investment, to be spent over the next three years, during the visit of Turkish prime minister Recep Tayyip Erdogan last week. The investment programme of the company since 2004 to date has amounted to $380 million.Trakia Glass Bulgaria now operates four factories, which produces flat, processed glass for the furniture industry, household glass and mirrors. Almost the entire production is destined for export and last year the turnover amounted to $175 million.At present, the factories of Sisecam in Turkey meets 75 per cent of auto glass needs in Turkey. The Bulgarian investment is part of the company's strategy to expand high value-added production abroad, namely in Eastern Europe, according to Azeri. Namely, the glass to be produced in the new Targovishte factories will be with a low emission and energy-saving cover, the executive said.The investment is intended to create 500 new jobs to raise payroll to a total of 2000. The company will send all newcomers to a special training centre. “The goal is to create highly qualified specialists, which we hope to retain with a prospect for long-term employment,” Azeri said. “Trakia Glass has investment plans for 10 to 20 years.”

Bulgarian businessman puts up for sale stake in Plovdiv Fair

Businessman Georgi Gergov said he will sell his majority stake in Paldin Tour Invest, a joint venture that owns 49% in Plovdiv international fair operator.Gergov, together with the Plovdiv city hall, are the sole shareholders in Paldin Tour Invest, holding 75% and 25% respectively.Gergov has approached major businessmen from the capital Sofia and the second-biggest town of Plovdiv with his offer ten days ago, he told Darik Radio on Tuesday.Paldin Tour Invest became a co-owner of Plovdiv international fair a year and a half ago when the government approved a strategy for the development of the state-owned fair operator.

Navigation Maritime Bulgare to be sold within week

Navigation Maritime Bulgare can be privatized next week. It is expected that the Bulgarian ministers will adopt the offer of the only candidate for 70% of the company's shares - KG Maritime Shipping consortium - at their next sitting. The Privatization Agency report is ready but it will be submitted to the Council of Ministers at the next sitting, because PM Sergei Stanishev won't attend today's meeting, well-informed sources told The Standart. The candidate has offered a price of 1.22 billion levs (1euro=1.95levs) plus additional investments.

 

Unipharm to be traded on stock exchange

 

Bulgarian pharmaceutical maker Unipharm will be traded on the Bulgarian Stock Exchange (BSE). on Wednesday the Financial Supervision Commission approved the company's prospectus for offering an issue of 500,000 shares on the regulated market. The shares have a par value of BGN 1. Unipharm deals with medicine production, research and development. The company has its own line of products but it also works under contracts with Sopharma. The main shareholders are three natural persons: Ognyan Donev (38.37%), Ventsislav Stoev (19.25%), and Ognyan Palaveev (12.89%).

 

Kaufland opens BGN 10М store in Blagoevgrad

 

Germany's Kaufland has invested more than EUR 100 million in Bulgaria so far. The 15th store of the chain, which is known for its low prices, was opened in Blagoevgrad. We rely on big turnovers and an expanding network, the manager of Kaufland Bulgaria, Dimitar Spassov, said. The store in Blagoevgrad is located on 4,000 sq. m, has a 280-car parking lot and employs more than 100 workers. The investment amounts to BGN 10 million. Some 80% of the goods are Bulgarian.

 

Investors advised to move manufacturing outside Bulgaria capital

 

The Chief Architect of Bulgaria's capital Sofia Petar Dikov advised investors to relocate their production facilities to the municipalities adjacent to the city in order to alleviate the severe traffic problems. He made this statement at working breakfast meeting entitled "Sofia - New Business Opportunities", which was attended by the Sofia Mayor Boyko Borisov as well. Dikov said the greatest territorial development potential of the Bulgarian capital was in the manufacturing zones around the city. He announced that the fastest-growing region in Sofia was the zone close to Sofia Airport, where a large number of logistics and business centers were under construction. "The credit rating of Sofia has been raised to BB+, and the foreign direct investments there have increased with 27% in 2006 compared to 2005", the Sofia Mayor said before the representatives of various businesses, citing a report by Standard&Poor's. Borisov added that the revenue of Sofia Municipality had increased with BGN 150 M. "Some two million people live here. They move to Sofia because of the better economic conditions, and we are expected to provide enough spots in the kindergartens, and to make better roads. The state must be more committed to these issues", the Sofia Mayor declared. "The city planning in Sofia has been neglected for a long time, and we have been trying to make up for that in the last two years", Petar Dikov said in turn announcing that the record BGN 18 M had been allocated for planning purposes in 2008.

 

Sofia to build five underground car parks

 

Sofia is to launch bids for the construction of five underground car parks, chief architect of the capital Petar Dikov announced on Thursday.The bids will start before the end of the month and the planned parking capacity will amount 4000 places.The municipality already has 20 ready projects for smaller garages, Dikov added.Sofia has a severe parking problem as more than 1,000,000 are cruising the streets of the capital while experts say infrastructure allows half that number.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Doing business in Bulgaria grows riskier

Publication: Standart daily

French-based credit management firm Coface put Bulgaria in its list of countries under surveillance due to the increasing amount of business risk, the credit insurance agency said in a statement on March 30. Coface also downgraded its country risk rating from "A4", which it assigned in January last year, to "A4-".Coface’s rankings, encompassing 165 countries across the world, reflect the trends in three main directions - business climate, economic and financial perspectives, as well as firm policy regarding payments. The countries are classified in seven risk levels: А1, А2, А3, А4, В, С and D, moving from the safest towards the riskiest end of the scale.Rising current account deficit has rendered Bulgarian economy highly dependent on foreign investments and has raised the amount of private foreign debt. It is difficult to curtail the deficit in the short run due to the currency board regime, in which the lev is pegged to the euro, as well as the expected slow-down in FDI inflow, Coface Bulgaria chief executive Kameliya Popova said in the statement.Bulgaria features on Coface watchlist of countries where the business risk is growing, but experts from Coface Bulgaria do not expect this to lead to an actual lowering of the country's rating.Coface forecast a smooth slowdown of the economy, which does not necessarily exclude the option of achieving growth. The best performing sectors in 2008 are likely to be mining and pharmaceutical industries, insurance and financial services, Popova added.Bulgaria's current account deficit rose by 57 per cent last year, climbing to 6.18 billion euro, or the equivalent of 21.6 per cent of gross domestic product (GDP) in 2007, up from 3.93 billion euro or 15.7 per cent of GDP in 2006.Several other countries in the region were put in the surveillance list, as well. Romania’s current ranking was demoted from А4 to А4- in September 2007. Also last year, the three Baltic States (Lithuania, Latvia and Estonia) were also rated as countries exhibiting an increasing risk trend. The United States, United Kingdom and Spain entered the watch-out list in 2007, their development being assessed as inclined to downswing. The ratings of the aforementioned three countries slid from А1 to А1-.These changes are attributed to the global economic meltdown, which is going to preside over in 2008 as well, according to Coface’s annual report. The negative tendency will be felt strongest in the developed industrial countries, whereas the growth of developing markets’ economies in Europe, Asia and Latin America will lose one per cent as a result of the crisis in the US and West Europe. Coface envisages the world economy to grow by three per cent growth in 2008.

 

 

 

 

 

 

 

 

 

 

Maritza-Iztok mines expand, TPP too

Publication: Banker Daily

 

Bulgaria's energy independence is much talked about lately. Rulers explain how the big energy projects such as the Belene N-plant, the South Stream gas pipeline and the Bourgas-Alexandroupolis oil conduit would ensure the country the power resources it needs. But as the BANKER weekly has already written many times, their realization will not result in the promised independence and on the contrary - will increase Bulgaria's dependency on Russian energy sources. Coal deposits are the only significant resource which our country's power engineering has. Almost 57% of Bulgaria's coal is located in the Maritsa-Iztok basin and the concession for its extraction was granted to the state-run company Maritsa-Iztok EAD Mines (the contract with the State was closed in 2005 and the concessioned area is 473,685,540.87 sq m). From the coal produced there the three thermoelectric power plants (TPPs) in the region generate more than 31% of the country's electricity, which proves the important role of coal mining for Bulgaria. In order to increase the output which will allow to expand the energy complex's capacities, in end-March Maritsa-Iztok Mines started to exploit a new deposit in the colliery which according to prospects amounts to 200 million tons but 25 million of them have been already mined, so 175 million tons of coal remain. In fact, that quantity is sufficient to ensure the mines' problem-free operation for several years. According to the company, the preparation of the operation for the utilization of that coal layer will last almost 30 years and more than EUR250MN has been invested in it. The new deposit will allow the coal mining company to increase its production programme. Thus, some 28-32 million tons of coal will be produced this year, up from the 23-plus million tons, mined in 2007. The company's managerial team expects the output to reach 35 million tons in 2010. The increase of coal mining is necessary because according to expectations, Maritsa-Iztok Mines' capacities are expected to considerably expand in two years. The US company AES which is the owner of Maritsa-Iztok 1, will commission two new units with a total capacity of 670 megawatts in 2010. They will not only have sulphur purification installations but their entire construction fully complies with modern ecology standards. The project is worth more than EUR1BN. However, things regarding the biggest power station on the Balkans operating on coal - the state-owned Maritsa-Iztok 2 TPP - are different. Two large-scale projects began at the plant within the last two years. Japan's company Mitsui in a consortium with another big firm from the Far East - Toshiba - are implementing the first project. The activities for the modernization and rehabilitation of the plant's first four units were to be completed by the end of 2007 and the TPP's capacity to be raised from 1440 to 1545 megawatts. However, a number of problems made the repairs longer and the delay of 10 to 18 months already causes the plant stiff ecology fines. The modernization of Enel Maritsa-Iztok 3 was also completed in mid-March. The Italian energy giant Enel is the plant's majority owner. The TPP is practically the only coal plant which satisfies all ecology requirements. After completing all activities on its unit 4, the TPP's capacity will go up from 840 to 904 megawatts. Despite the delays of repairs at the power stations within the energy complex, their aggregate capacity will reach 3,119 megawatts (up from the current 2,400 megawatts). According to Ivan Markov, Director of Maritsa-Iztok Mines, almost 27 million tons of coal will be necessary for the units' proper operation. In fact, that output will be reached still this year, but as we have already explained, the company intends to raise the annual output to 35 million tons. The reason for those intentions is the fact that a consultant should be chosen within two or three months to work out the tender procedure for picking up an investor for a new, 600-megawatt station within the Maritsa-Iztok complex. The idea has been discussed for at least five or six years and several companies have already announced their interest towards the construction of a new plant, among them the American AES, Germany's RWE and E.ON, Italy's Enel, and Bulgaria's Brikel (owned by Hristo Kovachki). The exact location of the new units is not known yet, but among the most suitable places are the sites of Brikel and Maritsa-Iztok 3 TPP (that of Enel). According to preliminary estimates, the project will be worth around EUR1BN. Last spring, a little before resigning as minister of economy and energy, Roumen Ovcharov appointed an interdepartmental panel to work out the terms and the procedure for choosing an investor. Surprisingly, Ivan Markov, Director of Maritsa-Iztok Mines, was chosen to head the group, but he was later on replaced by Kiril Tsochev from the former BSP government of ex-premier Zhan Videnov. A little before Christmas 2007 the experts moved to the Ministry of Economy and Energy a proposal to hold a two-stage tender for an investor. It was projected that companies offering highly efficient technologies for coal combustion would be entitled to bid in the tender. The candidates should have also had a turnover of EUR750MN over the last five years and possess electricity production capacities of 1,000 megawatts. The expert panel proposed as well the future investor to sign a long-term contract with the mines. However, the experts' comprehensive report was not accepted and the ministry decided to entrust the drafting of terms and of the tender procedure itself to an external consultant. No matter who that will be, the proposal will be probably that the new power plant should operate on coal from the Maritsa-Iztok Mines. Besides using the coal from the Maritsa-Iztok Mines as a main fuel for the TPPs, it could be also exported. According to Mr. Markov, the Greek state-run company РРС has shown interest in the purchase of 1-2 million tons of Bulgarian coal for its power plants in the Northern part of the country. The deal is still being prepared, Mr. Markov added, specifying that the interest towards our country's energy resources was due to their better quality than those mined in our southern neighbour. In his words, however, a contract would be probably signed only if PPC agrees to buy also bigger quantities of coal after the mines increase their output in 2010. Last year the Greek company was chosen by the Privatisation Agency (PA) as buyer of the Bobov Dol TPP but the procedure was cancelled and PPC is presently litigating PA's decision at the Supreme Administrative Court (SAC). The lawsuit was considered by a 5-member SAC team in end-March but no ruling has been extended yet. Therefore, the PA invited a new procedure for the plant's sale. The Maritsa-Iztok Mines explained also that if the annual output of coal from them was 35 million tons on average, the available deposits would be exhausted towards the year 2060. Practically, it means that until then a third of the electricity Bulgaria needs will be produced from the country's own energy sources.